The Citnezine
  A newsletter from the Srini Raju Centre for IT and the Networked Economy (SRITNE)
  Volume 1, Issue 1, April 2009

 Indian School of Business
The Citnezine
 Industry Connect

Chat with Hari Kumar, Managing Director of Deloitte US in India 

Hari KumarFrom the time William Welch Deloitte was hired to audit Great Western Railway in 1849, Deloitte has been in the business of helping clients. How has the industry changed over time and what are some of the big factors driving the change?

Since its inception Deloitte has been serving Fortune 500 clients in Audit and Tax. Only in the last 40 years we have expanded our market offerings into consulting and recently into Financial Advisory.

Every 5-10 years, there have been major incidents impacting world markets. In the last decade, it has been globalisation – the growing integration of economies and societies around the world. Recent rapid economic growth in Brazil, Russia, India, and China (BRIC) has been a positive aspect of globalisation. These countries are now strong on the supply as well as on the demand side of the economic scales. .

Upcoming Events
Pacific-Asia Conference on Information Systems (PACIS) comes to India for the first time! A premier IS conference in the Pacific-Asia region, PACIS, hosted by SRITNE@ISB, serves to provide a platform to researchers and practitioners in the field of information technology to share their research findings and practices.


Conference dates: July 10-12, 2009


www.isb.edu/citne/pacis2009

What has the journey been like for Deloitte in India? Are Indian companies more open to outsourcing?

There are two Deloitte organisations in India. Deloitte India has been operational in the country for the last 60-70 years. Deloitte US organisation in India has been here for close to nine years. We initially came to India for cost arbitrage. But over the years, it has changed to the value our people bring to engagements and clients. Deloitte in India has seen growth in double-digits each year for the last 3 years. I expect it will be the same this year too.

Many Indian business houses, more than outsourcing, are globalising. Despite the Indian population figures, the market for goods or services is limited to a smaller section of the masses, limiting their growth in India. In addition, the cost structure is low, making entry into the global markets easier. This is the same successful model Japanese companies adopted in the 60s and 70s.

In light of recent events at Satyam, how does Deloitte deal with the issue of Ethics and Integrity?

Ethics is critical and integral to our business. Three years ago we made Ethics & Compliance our number one priority. We believe we are the leaders for ethics in the workplace in the world. We subscribe to a zero tolerance policy. For example, as a partner, I have to maintain independence at all times. That means, for eg: I cannot own stock in any company anywhere in the world that we work with or audit for.
Faculty Research

Firms as Incubators of Open Source Software
Professor Amit Mehra

Amit Mehra is an Assistant Professor of Information Systems at the Indian School of Business. He holds a PhD and MS in Management Science from the W E Simon Graduate School of Business Administration, University of Rochester. His research interests lie in open source software, electronic commerce and product planning.

Many successful open source projects have been developed by programmers who were employed by firms but worked on the open source projects on the side due to economic incentives like career improvement benefits. Such side work may be a good thing for the employing firms too if they get some strategic value from the open source software and/ or if the productivity of the programmers on these projects improves due to learning by doing effects. However, the programmers may work more or less on these projects than what is best for the firms. To manage the programmers' effort the firms set appropriate employment policies and incentives. These policies and career concerns then together govern the programmers' effort allocation between the open source and proprietary projects. We examine this relationship using a variant of the principal agent model. We derive and characterise the optimal employment contracts and show that firms either offer a bonus for only one of the two projects or do not offer any bonuses. But if attractive alternate employment opportunities are available, they change their strategy and may offer bonuses for both projects simultaneously.
Student Research Project

Identifying the optimal mix of 3G VAS service bundle and pricing strategy for Indian telecom service providers.
(By Students 09: Anshuman Banerjee, Deepti Singh, Faculty advisor: Professor Gireesh Shrimali)

The primary focus of our research work is to answer a key question – “How a Telecom Service Provider in India can increase its Average Revenue per User from its existing user base by rolling 3G VAS services?” To answer this question, we did primary and secondary market analysis and identified an Optimal Bundle of 3G VAS mobile services along with a Pricing Strategy for Telecom Service Providers to extract the maximum Average Revenue per User (ARPU). 5 main customer segmant were identified.

Cluster 1

Young (22 - 28 years) Medium Income (9 – 14 lacs) Basic Degree Holders interested in Music and Games and basic usage of Internet and Location Based Services.

Cluster 2

Young (28 – 32 yrs) High Income (12 – 17 lacs) Mostly Male Workaholics who use Mobile primarily to keep in touch with work. They are highly sensitive and value services like Mobile Payments.
Cluster 3

Young (28 – 31 yrs) Medium Income (10 – 15 lacs) Well Educated, Price Sensitive, Mostly Female Professionals interested in Work and Social Networking.
Cluster 4 Middle Aged (32 – 40 yrs) Very Well Paid (17 – 25 lacs), Well Educated, Mostly Female Professionals interested in Internet, Entertainment and value Convenience. Can be considered as a Segment with Balanced Interests.
Cluster 5 Middle Aged (31 – 36 yrs) Moderately Paid, Price Insensitive Early Adopters interested in Internet, Payments, Location Based Services and Multimedia Features to keep in touch with Family and Work.


Recommendations Based on Segmentation
A course like Green Technology and Sustainable Enterprise is not part of course curriculum at even the highest ranked globally acclaimed b-schools. Even though today most people are well aware of issues to do with climate change, most of us don’t know how we can address this issue through the business we do. Besides quelling such misconceptions and looking at various technological and financial solutions that can help make systemic and positive environmental change, the course also looked on topics to do with carbon markets and trading, energy saving, cradle-to-cradle product design, waste management, recycling and green supply chains among many other things. The other reason we loved the course was because of the industry guest speaker sessions that were organised as part of the course. This gave us not only first-hand experience on those practicing and monetising sustainability in their organisations but also on the challenges they face

                                      - By Rajarshi Ray,
                                        Class of 2009
  • Early Adopters are not young people but are middle aged, who spend a lot of time on travel. Thus, there exists a certain degree of correlation between Early Adoption and Degree of Mobility amongst the respondent population. This segment is most viable for mobile TV.
  • Mobile payment, mobile internet and mobile music have almost universal appeal across all segments of the respondents.
  • Multimedia services on the mobile have a strong appeal to a particular segment (Cluster 2) and can be exploited better by bundling it with Internet.
  • Social networking services on the mobile have a strong appeal to a particular segment (Cluster 3) and can be exploited by bundling it with Internet

Hence rolling optimal 3G VAS bundles for each user segments is not only a Point of difference strategy to respond to competition and increase ARPU but also to retain customer loyalty, For example, in the conjoint analysis done to identify the customer’ willingness to pay for the optimal bundle, Cluster 1 as the target segment and identified optimal bundle for the target segment as – 3G VAS offer bundle of “Music, GPS based services, Gaming, unlimited TV channels on Mobile” at price Rs 499.
Contacts   Research

Ravi Bapna - Executive Director, ravi_bapna@isb.edu
Reema Gupta - Associate Director, reema_gupta@isb.edu
Arun Kumar - Senior Executive, arun_kumar@isb.edu

Faculty:
Amit Mehra, PhD
Rochester University
Nishtha Langer, PhD
Carnegie Mellon University
Gireesh Shrimali, PhD
Stanford University
Deepa Mani, PhD
University of Texas at Austin

To know more about SRITNE please contact
sritne@isb.edu

SRITNE promotes analytical, empirical and filed experiment oriented partnerships between researchers and industry. We have formalised three different models of engaging with our industry partners.

Field Research: A study to predict the changing nature of the IT function towards the key themes of business and IT alignment and strategic vendor management.

Customer Research: SRITNE is working with IT vendors to
identify new business models that would expand the use of IT in especially the SME sector of emerging markets.

Case studies: SRITNE focusses on the emerging markets for use at the ISB and beyond showcasing success (or lack of) in using IT towards strategic advantage.