New Media, Marketing and Entrepreneurship

As the Official Blogger for the NASSCOM Friday’s 2.0, many people ask me, that I would surely have a plethora of knowledge with me, as I have the opportunity to attend all the sessions and also since I LIVE blog the sessions, I must be highly attentive.

Today I again am excited to bring forth the high worth and value knowledge which gets created at the NASSCOM EMERGE Friday’s 2.0 and am glad to be making it alive for all of you who could not be present at the session, though we would love to have more participation along and expand the community.

Today we have Ulrich Bäumer, Partner, Osborne Clarke and BITKOM representative and Asha-Maria Sharma, Senior Manager, Service Industries, Germany Trade and Invest GmbH, giving us an insight into the German ICT environment and business verticals for partnership as identified by Germany Trade And Investment (GTAI) for Indian companies and important aspects of What works and what doesn’t in M&A, overview of the legal and practical ways of doing business in Germany.

The room is full and well, its interesting to know how many people in the room want to understand the German market. So we have the session with a brief introduction on what Germany Trade and Invest is.

• Promoting Germany’s advantages as a prime location for foreign investors in hi-tech industries
• Collecting and processing economic data and information about industries, tender procedures, legaal frameworks etc.

Interestingly, the investors consultancy part of the company, is into much diversified scope:

• Renewable Energies and Resources
• Chemicals and Healthcare
• Mechanical and Electronic
• Service Industries

We are now getting to know what it is all about being in Germany, with the geographical location to the travel time. To know how blackberry and Vodafone and such large companies are actually settling in Germany. Pros and Cons of different places for your business ill be different and you need to understand that, with relevance to your business.

We are talking clusters in Germany now, I am interested to know this space, as its pretty big a space in India as well and some really interesting work is on with respect to them.

Germany offers different incentive packages to re-imburse an investment project’s expenditures

With the market volume of above 133 billion Euros Germany’s ICT industry ranks second in Europe. These are interesting figures. in 2008 German companies closed a good number of BPO and IT deals, hence there is a plenty of space.

Germany is the most lucrative software market in Europe, accounting for 26.1% of the EU market value. We are talking about the diversification of software market in Germany.

There is a good presence of the SME industry in Germany and it could surely be of interest to many of you

Talking Green!

Green ideas in IT and Green through IT, is what we are working on this and should you have products under this umbrella, you should definitely explore Germany.

Software Security is one area which we are really concerned about. We have had cases with data loses with social networks and as anyone, we Germans are surely much sensitive about our personal information, hence there is good space in the domain. Embedded systems market is of a fairly good size in Germany and you will also find clusters in the Southern part related to the domain.

Germany has by far the highest number of internet users in Europe creating large potential for business

• E-commerce
• Gaming market
• Online Advertising

I am personally amazed with the numbers on the slides, especially for the gaming and online advertising, which is showing a huge surge. German companies are moving from Print to Online.

• Market growth areas: Green IT + E-Energy + E-health
• Mobil apps: Increase in non-voice-services
• Embedded systems
• IT Services and Software

And now we are talking about the automotive industry in Germany, which to mention also is the home for Mercedez. The small manufacturers are spread across Germany and there is no one hub/ cluster.

I suggest the best way to get in touch is to attend conferences and other events to know the suppliers and other specific information you require about your business.

And now we have Ulrich, thanking everyone in the room, for whom this is the 12th visit to India. I advise SME’s in Germany also to get to India. And Ulrich shares the agenda for the session:

Interestingly we are going to discuss, Co-operation between Indian and German Companies. We have a very different law in Germany and its completely different in almost every way than what you have in India. Hence you need to understand the basic laws which are very important before you sign up your first customer in India.

You must definitely thank your peer Indian IT companies, who ventured into Germany 10-15 years back, coz they had to persuade German people, for the price and quality and hence for you guys its easier now to reach out to the German companies, which buy Indian IT not just because of the price, but for the quality as well.

So we have started with the introduction for the Law company which is Osborne Clarke. Very ineresting to know how many people they have helped set up in Germany. There are surely some very interesting and Big Indian names on the list that we have on screen.

Co-operation in Germany

• Merger
• Acquisition
• JV
• Partnership
• Build Operate Transfer – It Outsourcing
• Indo-German Strategic Alliance

Many of our M&A’s have been extremely successful and have been running for 10-15 years. Ulrich is sharing the previous success stories that they have created, and these also include some real big Indian corporate names.

So now we are discussing Common Law and Civil Laws in Germany which are surely an absolute necessity for you to set up in Germany.

Common Law (inductive)

Problem -> Judgement -> Ratio decidendi

Civil Law (deductive)

Statute -> Problem -> Application

I am very impressed with the way, Ulrich has simply explained the entire difference between the Common and Civil Laws and how can you in simple measures look at what you can expect when you reach the German shores, or establish out of India. Ulrich is very interestingly raised the awareness of the people in the room and sure all are all ears!

Now we are getting an insight into the European Legal System. Well, sure the German Law is definitely different from how we operate in India. And now gets answered the question, of many a people who wanted to know about Branch offices and how to set them up in Germany.

The outsourcing market is growing in Germany and I think in 2010 the curve will continue to grow up

Good to see how the Indian IT Services industry has grown and set foot in Germany. And well this figure has raised since 2007. Service providers have now crossed out to the other side.

Have you ever thought about off-shoring: 27% of the part said to this that they have larger projects already LIVE which have been off-shored. If we do off-shoring, we do it to India, is what the 67% of the people who answered this sample survey said. Some really interesting figures, being shared by Ulrich.

I personally dont see a single Chinese company, to overtake any of the large Indian IT service companies. China will NOT be a challenge in the near future for the Indian ITeS market.

In the Non Voice market, I dont see players as large as those in India, challenging the Indian players.

Language barrier is a comfort issue, in my experience it has been like: 80% of the deals across the table have happened in English. Its always good to have a native speaker, but its not a necessity.

Ulrich again shares the 8 key issues which you can face in your outsourcing contract in Germany.

• warranty
• Liability
• Acceptance
• Delay
• Change requests
• etc.

Talking about warranty, liability and guaranty. Well, yes the entire room is interested in this conversation. Ulrich presents the whole idea of liability with very simply presented examples. Well liability without any limitation under German law, implies fully, if you have not mentioned anything about it in your contract. Eyes get raised at such a point.

The data protection laws in Germany are surely something to learn from. The labour laws are surely pretty strict in Germany. The session is interactive and there are good questions coming from the audience.

And now we end with the session with the audience still very interested and questions pouring in with respect to IPR and other related to the IT services.

Its been a good session and I feel good to know about Business in Germany, thanks to Asha and Ulrich for their precious time.

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So, we have Ms. Kiran Mazumdar Shaw post lunch at The Leaders In India 2009. I have always admired Kiran as a woman entrepreneur. She has proven words with actions! My respects Mam

Talkign about the Global Biotech sector Kiran says that it is a business size of over 90 billion dollars globally. Each of the past decades have triggered a new growth of innovation. Interesting to know how the entire Biotech industry has evolved over time. Though Ihave not really understood the Biotech industry much, but sure, I am intrigued!

My own journey of Biocon has been that of experimenting and learning! I call myself an accidental entrepreneur!

I was always interested in brewing. I have had to overcome countless challenges over decades. We started small with simple technologies we built and also partnering has helped me build my own entrepreneurial vision. I started my entrepreneurial journey when I had the provilige of starting India’s first Biotech company, which had its own large number of challenges. People were very skeptical of success and at my time, India was still a developing company and we had sub-optimal structure that we have today and it was the time of the license raj than today. I was a 25 yearold first generation woman entrepreneur!

All I had was foolish courage!

There was no access to VC all I could avail of was very expensive debt based funding which I accepted. I was very driven by green technology at that time. But there were very few takers at that time and one of the BIG challenges I had was, the space I was getting into, was based on one very important need, which is: high quality uniterrupted power supply which India does not have even today.

I started my business from scratch opting for less evolved technology. We focused on a niche opportunity, as I had to be very real about the infrastructure and the environment I was working in. I always knew that India was a very small market for me and hence I had to operate in a niche which gave me some kind of advantage. Also in my starting years, what helped me was, I started this as a JV with a small Irish partner, and they provided me with assistance to market, my product to Global markets and this is what helped my business started.

Up until 1980′s we were still loners in Biotech in India

It was really abotu building this company step by painful step and slowly the Biotech sector started gaining acceptance in India when the govt realized the importance. Creating the skill based that we need to drive this industry has paid us fairly well in time. Thankfully because of the success of the IT and software sector, the VC had taken root in India. Since this happened, we started looking towards VC funding, when we tried to scale up. It also allowed to develop sophisticated products and I was able to compete due to our cost base.

By late 1990′s I had a fermentation unit which could handle all sorts of enzymes

The cluster effect that had started in Bangalore really helped us. the boom in Bangalore had many innovative start-ups in the space which also helped the entire industry as such and hence we were benefited. We had international players coming into India setting up operations which helped gain confidence and many are now building scale into what they were doing. Biocon had started gaining market leadership in the niche segment we were looking at.

As an entrepreneur I felt that enzyme segment was going to be limiting to our growth and we had to take some hard decisions

We hence applied our technology to develop into bio-pharmaceuticals. We were the first to cut across the IP barriers hence defining new opportunities.

“We are the world’s first and only company i manufacturing Insulin and Insulin analogs and I am proud to say that”

Overtime we have become bolder in saying that lets innovate in the Bio-pharmaceuticals now. We can today afford to innovate, we can afford to build programs around new products. Innovation in the field of Bio-tech is something we must surely take very seriously. We tend to opt for low risk services and generic versions of drugs and vaccines.

In India the cost of risk is very affordable and hence we must back innovation

What is happening to companies in the western world, is an opportunity for us. I think India really has a good opportunity to cash on in what is happening in the western world. There is a whole new emerging opportunity in Bio-generics. We will pursue Innovation led mantra to grow and that is really my goal as a company and myself as an entrepreneur! All along e have constantly challeneged ourselves and tracked new technologies.

An important learning that I have learned as an entrepreneur is challenging the status quo and moving ahead

We are trying to develop world’s first Oral insulin and its going to be a game changer for us, if it happens

We have really made a lot of conscious effort in partnering with companies, which has actually helped us leapfrog, and it has been a great business tactic for us. In our journey there is one inflection point, I had a tough and emotional call to make! Enzyme was going no where as we were not really investing enough in it, the reason being we had limited resources. And hence we finally said, we must dis-invest and divested into our competition and they have invested and grown this business fr more than we were doing it at that stage. But we surely benefited out of the IP and knowledge we had built over time. We bought a company in Germanhy which will help us start our operations in Europe.

We have started building global scale in our businesses

Our strategy has been always to develop products, leveraging India’s cost base and using affordability as our competitive edge and we are determined to do it at an affordable rate.

My message to other companies from developing world(s) is, who are stretching hard to fight against odds, we have:

• Dont hesitate to partner when you want to pursue certain business opportunities, it allows you to grow faster
• Its important to start simple and start local, be realistic about matching your skill sets w.r.t technologies you are trying to develop

I started my life as a brewmaster looking to brew beer, your journey can take you anywhere, but your life should be an inspiring hope

It was great to listen to you Ms. Mazumdar Shaw as usual! The fire of entrepreneurship has surely gotten a needed kick from you!

Now we have the session int he Q&A mode!

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Praveen Rajpaul, talks about Innovation and how FICCI is helping organizations to improve their productivity and how innovation is changing the riles of the game.

Innovation distinguishes between a LEADER and a follower says Mr. Rajpaul

What do you need for innovation? Its an Idea!

1. Incremental
2. Revolutionary
3. Disruptive
4. Game changer

Unless we have all these sorts if ideas, we wont’ further. But how do you generate such ideas? Is there a process? Can we make it simple? How can we simplify the process of generating the ideas? Puts forth Mr. Rajpaul to the gathering!

Golden Principles of Innovation:

1. COMBINE
   1. products
   2. proceesses
   3. technologies
   4. disciplines
   5. capabilities
   6. arts and science
2. REVERSE
   1. conventions
   2. business models
   3. products
   4. processes
   5. Orthodoxing
3. ELIMINATE
4. ADJUST
   1. Cost
   2. Time
   3. Space
5. DIVIDE
   1. Handling
   2. Transportation
   3. Space
6. SUBSTITUTE
   1. Greener
   2. Lighter
   3. Faster
   4. Better
   5. Stronger
   6. Smarter
7. UTILIZE
   1. Talent
   2. Brand
   3. Networks
   4. Waste
   5. Harmful effects
8. MODIFY
   1. Designs
   2. Eco friendly
   3. Energy efficient
9. UNLOCK CREATIVITY
   1. Passion

Well, there have been some real fantastic principles, that we have seen over time and some real fantastic concepts, which may be workable and may be just vague at the same time. But good to see innovatoin in my lifetime!

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So here I am Live blogging the Day two of Leaders In India 2009, with the first keynote being delivered by Mr. Adi Godrej.

I am sure this is going to be a great learning session with immense value for all present.

Our group has a fairly long history, we are 112 years old, Our sales turnover is a little over a 100 billion rupees

Interestingly Adi is sharing keen information about the Godrej business and they have grown till date. In 1991 we clearly felt that we had to give a boost to our competitiveness. We partnered global companies in our existing businesses, which were GE and P&G as Joint Ventures, though they dont’ continue today.

We learnt a lot from these great International organizations, which we have implemented over the years and they have learnt a lot about India, from us

Each of our companies and businesses, has a non family managing director or president who runs the company, I am surely interested in learning this.  We have a rather strict rule which has that only professionally qualified family members can join the business.

I am the third generation in the business and the fourth has already been inducted into the business

One of the major values we believe in is, that people are our strongest assets. We go out of our way to LIVE the value that people are our strongest assets. We have a constitution of a young executive board, one’s with great future potential and their job is to look at strategy, corporate governance, HRD etc, and then advice the Group CEO’s. Hence we get a tremendous bottom up response. I am very intrigued with the learning from Mr. Godrej.

Being a family business, as a professional and entrepreneur, I am so glad to hear and learn about the functioning of the Godrej group and how it is constituted at various levels. Very interestingly the structure provides the company a very strong bottom up feedback in runnign the company and in my view provides them with a great leadership development tool, creating a very scalable structure.

We have very emphatic programs on diversity within the group

Whenever we have emphasized diversity, the talent we get is much better than the average, Eg: if you go out of the way to recruit strong women, you get great talent, in cases much better than men. We have a very strong E-MBA program within the group. People who have not yet done a management degree, are eligible and promoted to do so. We insist on a 5 day learning schedule.

I myself make sure that I at least spend 30 days a year for learning

We follow a process of forced ranking in our group, we force ranks into non-performers and extra-ordinary achievers. The bottom non-performers which we get everytime in ranking, as it is relative. What this process doe sin a country like India is to strongly improve the working of the team, as everybody does good to work to be in the top 20 per cent.

I get evaluated by my sub-ordinates on a 360 degree basis regularly, and this is only a self evaluation tool

We re-assess our portfolio on a very regular basis and in the last years we have had several strategic acquisitions. We hired a British branding partner called Interbrand to re-launch our brand and it helped us great way in re-positioning our brand and leverage the brand asset value and equity towards achieving growth!

Interestingly we have Mr. Godrej talking about the various succession plans in the company.  Talking about succession planning, Mr. Godrej talks about what if you tomorrow come down a bus, well, we are planned for it, and I remember having the similar conversation with a friend, while running an Incubation Consulting company.

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So now we have a power panel talking about recession and the current scenario and the road ahead being moderated by Steve Tappin, chair, LII 2009.

What’s happening at the Global credit Markets?

Theres’ no doubt that the US and UK are going to see slow growth and hence if you look at where the growth would really be, well, India, China are in the race. We did go through difficult times in Q1, but now we are introducing the concept of reverse integration. We are manufacturing products at price points which make sense to the masses int he country. Hence we are focusing on a whole new market segment to look at.

Corporations like us have to better how to work with the governments around the world. We as an institution have to get better at doing this as the funds today really are with the governments. We have realized that in some markets its better to partner with exsiting organizations to achieve the right and fast growth.

Now we have the Airlines industry being represented and what we are discussin are the cycles in the airlines industry. Global recession and fuel prices, have hit the industry pretyt badly. Now how do you weather a downturn like that?

I believe, what you need to do is have a very detail and deep customer focus. If you listen to your customer right, you kind of know the bad weather for which you could well be prepared. You hence start thinking on what best can be done with the customers hence delivering and creating the right value. In any industry if you do your homework and understand where the world economy is going will help you a lot.

One of the reasons the Indian airline industry is losing 1.5 billion dollars is the Me-too syndrome!

And now we are discussing the remittance industry and interesting to note that the trends in this industry are still increasing. And what we did as a company is get the slow down much faster and quickly, hence we looked at strategic growth options. We as an organization grew and looked at our corporate strategy, aligning it with the growth and then we looked at investments. We had the following two crucial pieces with us:

1. Communicating with our stakeholders
2. Being progressive and Aggressive than the industry – high level of execution

And now we have the IT Services business being represented from the panel and interesting to note that the comopany went ahead to drive growth within and external to the organization.

We went to our top 50 customers and understood their issues and problems and had our swot teams helping clients and helping them grow their businesses

We went to our partners to look at how we could get the right pricing models for our customers and finally we went to unions in the EU, and supported the cause of outsourcing which highly supported us in generating new business than cutting on any sources/ costs

And now we are in the Q&A mode in the panel discussion, which will be open to public view next. Interesting to share the notes here, we are discussing the defence industry as an opportunity in India. Tejpreet from GE remarks that the new and innovative products which will come, will be from India and China and emerging economies now rather than the west and this will drive growth of the market in the west.

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