Financial Daily from THE HINDU group of publications
Saturday, Jan 22, 2005
Industry & Economy
Creating value in services sector `Leadership from manufacturing holds key'
Mr B. Ramalinga Raju (right), Chairman, Satyam Computer Services Ltd, and Mr P.K. Mohapatra, President, Madras Management Association, at the MMA annual convention in Chennai on Friday. - Shaju John
Chennai , Jan. 21
THE structures around creating value in an organisation have changed quite dramatically over the years. In a manufacturing set-up, much of the value creation was done by a hierarchical structure and this has undergone a dramatic change, according to Mr B. Ramalinga Raju, Chairman, Satyam Computer Services Ltd.
Inaugurating the Madras Management Association's two-day annual convention on `Beyond creating value' here on Friday, Mr Raju said the need of the hour was leadership from the manufacturing sector to create value in the services sector.
The concept of individuals doing what they have been asked to do as a professional is losing relevance in the services sector. Satyam, for instance, has adopted a `full lifecycle value-creation model', which involves three concepts - thinking, doing and communicating.
Mr Raju highlighted how Satyam Computer Services had gone through a significant phase of growth and change and had adopted processes and strategies to deal with these. In its growth phase, the company had gone through five different processes of change - from the time it sent professionals to its customers' premises for executing projects, delivering services from a remote environment, taking quality initiatives, extending its global footprint to attaining a leadership position.
He said the knowledge economy demanded that companies put a premium on their soft assets such as brand value and goodwill among customers rather than on hard assets like machines and materials.
Global GDP (gross domestic product) and wealth creation this century will be due to the creation of new products and services.This meant that all existing products and services available will get commoditised, resulting in a fall in prices and reduction in their exchange values.
Mr Raju anticipated a convergence of information technology and biotechnology because both pertained to information science.
Participating in a session on `Customer-centric culture', Mr Pranesh Misra, President and Chief Operating Officer, Lowe India, said the foundation of marketing was in being customer-centric. The steps in building a customer-centric culture included understanding what customers seek, mapping competition, evolving a positioning strategy, bringing the value proposition alive and keeping track of changing needs. Organisations had to communicate internally and externally.
Mr Vijay Sethi, General Manager - Service Quality and Customer Relations, Jet Airways, said companies must realise that customers alone paid their costs and provided profits. No longer is a product a differentiator from a competitor, but it is human touch in the interaction with customers that matters.
From an organisation's perspective, it is important to create leadership at every level. Mistakes have to be tolerated and differences (of opinions) within an organisation must be appreciated. Organisations also have to manage their daily processes, as they were the actual villains in creating dissatisfied customers, he said.
Feedback is an integral part of services and complaints were like gifts - the option is to effectively manage them in order to survive, sustain and grow, Mr Sethi said.
Mr P.K. Mohapatra, President, Madras Management Association, said it was the sustainability of value rather than merely creating it that would help companies survive.
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