Archive for February 12th, 2007

Why Do Companies fail in India

Every week you see advertisement in newspaper from some or other bank auctioning assets of organizations ranging from rolling steel mills to bottling plant. If india is roaring and people are ready to ride the boom why are these small and medium size enterprises not able to sustain and survive. Talking to various people on this aspect especially Mayank Saraf and looking at the industry up for auction closely. It was identified the type of companies which are not succeding are

– Companies started by traders who had capability to sell the items but not able to control the cost of manufacturing them . In the end loosing out due to lack of operational experience.
– Family owned enterprises whose main objective of starting the company was providing employment to all family members. Hence lack of financial planning and irregularities in managing companies funds

– Companies unable to scale up to the demand and due to small size not able to win large orders.

– Firms which are unable to play the credit account recievables cycle right. anywhere in world people will take free ride.

These are some few classifications of companies which tend to fail. Idea of doing this post is to make entreprenuers understand they shouldnt fall in any one of the categories. Though these failing companies in booming economy also provide opportunity to people willing to jump in for the first time to help tide around fortunes of a sinking ship. As no person in distress will refuse call for help. If you are one of those people who still havent found an idea, Go find a failing business in your neighbourhood or community you could help turn around.

Search Technologies – Do we need more search engines

With everyone calling searching on the web googling. It looks like google has become the remote control for internet. Its essential to note that though google has helped really with its algorithm to index the web. But lot of due credit goes to broadband penentration making people realize power of internet. For google they were right company at right place at right time. Now again we are seeing lot of investment happening in search technologies company. For people who feel Search problem is solved think again.

With broadband making Video and Audio accessiability easy. 60-70% network bandwidth share will be taken by these 2 formats. Hence where will index search go. Its fine to search for items which have been tagged or information is sydnicated by authors managing them online. But its important to develop search engine which will scan these mediums for text and word. Example scan your song list for that song stuck in your mind or scan your voice mail to bring up message left by allen from work etc etc. As voice will remain biggest access point to these technologies and all video will again have audio search. Hence any person who is able to create a search for audio can automatically take it to the next level which is video search.

But even textual search needs lot of work as we are yet to see AI mapping of data and neurable quantam acting as decision maker for finding/determining result. Secondly If microsoft is successful in taking search to the OS then machine learning can be another objective which these search engines need to use as knowledge profile will be helpful in deciding result being thrown up.

Audio search and video search is throwing improvement though dont know the audio file searching sites let you search through your own content as well. Secondly if you feel you are too late to join the bandwagon then do keep in mind all these technologies have to be implemented in regional languages which can big money keeping in lets say indian or chinese market which is 1/3 of the word population.

Accel Frontline – my two cents on the organization

Being sunday most of the day is generally spent with friends or researching new business ideas. While trying to create a matrix for the organization to analyze product offerings vs market capitilization. Remembered about and 100 crore IPO of an organization called Accel Frontline. Though their offering was decent keeping in mind valuation 16 times their revenues, the objectives which they wanted to achieve kept most of big fund players away from it. Their 85% business at time of going to IPO if i remember right was comming from IT infrastructure services which is going good keeping in mind more computers more networking are getting installed which means more business for them. Though the money was being asked for creating sales infrastructure and to decrease dependency on IT insfrastructure services with increasing more focus on Enterprise solutions. Primarly the areas their software offerings are targeting : Education and Health. These two are one of the most crowded product offering with no organizations ability to establish clear leadership. Educomp again is targeting a  single  segment which  does not come in direct competition with accel frontline offerings and they are riding high on government program implementation at school level.  Though the stock is currently at time of writing this way above the IPO price company has yet to show sign of maturity and the news recently in market talked about their plans to acquire product IP in banking solutions sector.

Cyberica has been offering Education Sector Services since 2001 but after years of working with indian universities and colleges we would like to share bringing in new client is not so easy in this sector. Problems faced

– Lack of Initative

– People feel website/student portal is just about few HTML pages which can be done by the Computer operator or college students

– 60% of colleges in india are offering technical education hence more the reason not to bring in outside vendor as they feel faculty should be self sufficent

– number of holidays outnumber working days in a year

– unability to differentiate among vendor qualities and price a pressure point.

This leaves most of the companies with not more than 10-15 implementation of a product at universities/colleges.  getting back to accel frontline if they are changing focus from their core product offerings they should bring in research and development wing which does not have lot of mention on their website. As currently the company shows lack of management to analyze which sector will be more fruitful for them and trying to keep infrastructure focus on anything and everything which comes their way. This may be good when an organization is like 20-30 people but once you grow in size and revenues it becomes essential to be clear on engagements and offerings. Idea of this post is not to discourage people to invest in Accel frontline but for those people who are invested in stock to hold on for some time before taking decision on getting out of stock.  By entering Infrastructure management services company has proven ability to bring in new market offerings and capitalize lets see if external product IP can help them change their fortunes from software services.

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February 2007