paulson generates business for consulting firms

Henry Paulson, the US Treasury Secretary, will create huge business opportunity for consulting firms with his proposed regulation. It's the broadest reform of oversight in the financial markets since the aftermath of the Great Depression.

Businesses are amenable to the same as it will streamline the regulation to avoid such fiascos such as Bear Sterns. It will result in reduced profits but will reduce risk of persecution later.

This regulation translates into a huge opportunity for the consulting firms because both the Fed as well as the commercial sector will have a run for becoming ready for the new era! Consulting firms will flash their accelerators to get the business. As time will be of importance, the billing rates will be at a premium.

robbed by the FCC...

Yes, the American consumers consumers were robbed by the FCC from cheaper Internet-access and communication charges. Instead, the FCC ended up making the two telecom giants get a tighter grip on the consumers than ever before with the spectrum auction's results.

Mobile-phone companies have long opposed open access. Verizon even sued the FCC last year in a bid to block a move toward open access. It failed, then did an about-face, promising to open its network to third-party devices and applications in the future.

Verizon wireless was awarded the largest chunk of the spectrum auction and also, allowed to make a decision about accessibility to its spectrum by others. This is not in line with what Google tried to petition against.

The Economist notes:
"ONE of the dirtiest tricks played on American consumers is the way their country’s mobile-phone companies force them to use phones sold through the companies’ stores, then lock them into two-year contracts with punitive cancellation fees. Asians and Europeans—who can take their mobiles from one provider to another, and use them on different networks around the world—shake their heads in amazement at Americans’ meek acceptance of such anti-competitive practices."

As it is the interest-rate cuts have been making me skeptical about allowance for market forces to thrive by themselves. The spectrum auction fiasco further disturbs me as bureaucratic intervention and incestuous relationships have created this broad daylight robbery from the consumers!

PE firms must deploy ITIL v3 in their portfolio companies

Recently, an article of mine was published on thinkingstreet.com here.


ITIL v3’s business service management approach makes it the best fit for adoption by private equity (PE) firm for deploying in their portfolio companies in order to enhance the value of their portfolio.

The prime objective of a PE firm is to obtain controlling interest in a target company and restructure the target company over a period of 3-7 years such that its value enhances and sell it once the market value is more. It can be reasonably concluded that the value of the PE firms is a function of value of their portfolio companies.

This objective is achieved by deploying best management practices and cutting on flab in the operations of the target company. Usually, in a PE firm, a partnership’s investment activities can be divided into four stages: selecting investments, structuring investments, monitoring investments, and exiting investments .

ITIL v3 fits well at the stages of structuring investments and monitoring investments. The PE firms can leverage the best practices in the only written IT Operations’ guide. The beginning of a v3 project is resource intensive. However, it starts yielding benefits within 6-12 quarters depending on how it was deployed.

The prime reason that v3 is a good fit for PE is due to its business service management approach for the IT services. Besides, v3 introduces the much needed dimension of Financial Management and portfolio approach, a dimension that was missing from the earlier versions but was of high significance. The address to value creation, value capture, and value networks makes it well-aligned with the objectives of the PE firm.

The concept of market spaces discussed in V3 helps the IT department think beyond the immediate internal customer. If the IT arm of a particular portfolio company can start providing services to external customers, the value of the portfolio company will be enhanced.

Also, V3 adopts a lifecycle approach, which is pragmatic as compared to the earlier modular approach, which discounted the fact that the business place is constantly evolving and that IT needs to adapt. When a portfolio company is being restructured by a PE firm, there are significant changes, which can be addressed on the IT side only by a lifecycle approach.

On one hand, most of the IT shops find V3 abstruse and hence, either delay the adoption and/or are too busy putting out fires in order to adopt it. V3 will act as a shaman between those who worlds. The resistance is easier to overcome in case of a PE portfolio company than in case of a regular company. The structuring of the organization is in such a way that the partners can exert significant pressure to get initiatives off the ground quickly. Besides, the managers of the portfolio companies must not oppose the adoption of v3 in these environments as they gain an experience, which sells for a higher rate in the market, if they can prove a successful deployment.

If I were a stakeholder in the third version (popularly known as v3), I would pitch it to the PE firms, in order to have increased adoption for my Operations’ guide.

US recession is a boon for service providers well-entrenched in India

Recession in US puts Indian firm on a good footing for leveraging the relatively inexpensive image of their services ! The economies of scale established by leading firms entrenched in India is remarkable.

The usual principal-agent issues impede these firms from making off-shoring decisions. Indian service providers have demonstrated good capabilities around the same in the past. After initial doubt, outsourcing had gained ground in last 5 years. Further, the contracts are up for renewals. We will see large bout of negotiations for the renewal of contracts and further large proportions of sourcing.

eSCM - Sourcing Capability Model encompasses all the sourcing issues and the Indian service providers are rapidly climbing the ladders of the eSCM capability levels. You must check out on the eSCM website for the list of the Indian firms.

Currently, the leading Indian service providers are making offers that are hard to refuse. No wonder - when the doom-gloom about the R-word started, progressive companies such as Infosys started booking the 30-seconds-slots on CNBC in the US.

From the vantage point that I am looking at, this recession is a boon for the Indian Services, in general, and software services, in particular.