Cost increase and Value enhancement blues

08.25.12-value-chart-graph-up
It is a very common scene in industry where employees are paid annual increase and bonus for doing probably the same work next year. In most of the cases the increase is higher than the inflation adjustment.

This means that the cost for doing the job would increase year on year just because the employees involved in doing the work continue to do the same work year on year and keep getting salaries and benefits increase beyond the inflation year on year.


“This is a caution to all those who choose to become cozy with the existing situation because this situation may not last for too long. The value has to be enhanced every time. “


In theory, this would mean that the cost of a service or good would increase year on year even though the value for the same has not increased in customer’s perspective. There is another parallel track where it is observed that a service or product gets refreshed or innovated making the previous one redundant or with diminished value. Classic examples are the pagers, typewriters and post offices.

Such refresh of technology and processes results in job losses and social issues only to be buried under the wave of something good coming in next. While this is a good thing to happen, it is a clear indication that any entity involved in doing some service or delivering goods will have to keep improving to keep the value quotient intact or enhanced. If someone fails to do, it is clear that the refresh cycle is becoming short every time.
While it took Lehman Brothers one century to go down , Auto Giants of Detroit kneeling in front of cheaper and better Japanese rivals in fifty years, the connected world is making the refresh cycle as quick as few months or at most a couple of years.

This is a caution to all those who choose to become cozy with the existing situation because this situation may not last for too long. The value has to be enhanced every time.

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Picture Credits : kjmotorsports,For representational purposes only

Alok Kumar

Alok Kumar is Managing Partner of SRKay Consulting group, a private equity company, nurturing innovative ventures. Alok also serves on the board of ICCL (Indian Clearing Corporation Limited - A subsidiary of BSE- Bombay Stock Exchange) as an external advisor for technology and information security. Prior to this, Alok had been Managing Director of Sears IT & Management Services India Private Limited (SHI) since its inception in December 2009 and served in the same position till very recently. Having been in senior IT management positions in Fortune 500 companies, Alok has won several national and international awards. Alok is instrumental in planning and setting up SHI and thereafter growing it to a multi-locational thousand-plus people organization. Over the last five years, with his strategic vision, Alok helped SHI grow roots in India, develop and support technology applications and infrastructure across core mainframe, cutting edge e-Commerce and big data technologies. With his unique people-oriented transformational leadership style, Alok turned SHI into one of the most valued investments of Sears, garnering great ROIs, and creating value much beyond cost arbitrage. Under his tutelage, SHI has filed two patents and is recognized widely for its best practices in various areas, the latter, currently featured in Indian Institute of Management (IIM) case studies. SHI also became a CMMI Level 3, PCMM Level 3, and ISO 20000 certified organization. Alok is a widely acclaimed corporate leader in India today. He regularly participates and leads various forums as a keynote speaker and is an author of several books in different genres. Alok has several awards to his credit. He is particularly known in the industry for his people management skills and innovative ideas in improving the productivity of employees through unique people practices. He has been credited with the following industry awards: ¬ Emerging Leader of the Year award 2013 by IndiasGreatest.com ¬ Game Changer CEO of the Year 2013 (SHRM) ¬ CIO 100 - The Bold CIOs - 2008 (Reliance Infosolutions) ¬ CIO - Ones to Watch Award 2008 (Reliance Industries) ¬ Extended Manager Award - CIOL 2004 (Tata Teleservices) As an able leader of SHI, Alok got SHI recognized widely in the industry with the following several awards: ¬ CII Award for HR Best Practices in 2014 ¬ Global Excellence in Outsourcing Award - AIOP (Phoenix 2013) ¬ IT Innovation Award (Design & Engineering) - Computer Society of India 2012 ¬ Golden Company of the Year - Economic Times 2011-12 ¬ 7th Employer Branding Awards - World HRD Congress (Mumbai, India) 2013: • ‘Asia’s Best Employer’ Award • ‘Best HR Strategy’ in line with business • HR Leadership Award • Talent Management Award by Bloomberg TV India ¬ Employer Branding Awards - World HRD Congress (Singapore, Asia) 2013: • 7th rank in ‘Asia’s Best Employer’ award • Award for ‘Best HR Strategy’ in line with the business • HR Leadership Award Other recognitions: Alok had served on the distinguished panel of NASSCOM's GIC (Global In-house Centers) National Council members. The council members play a key role in major initiatives of the industry and include the torch bearers of IT industry as panel members. Books and Papers: Alok is an established author, with three books to his credit. Alok’s third and latest book, a novel, “The Spy from Unaula” is a 2015 publication. A handwriting analysis enthusiast, Alok collaborated with his wife Nandani on the book, “Handwriting Speaks” in 2006. “Value Sourcing – Future of IT Outsourcing” was co-authored with Keith Sherwell (currently CIO, Altice USA) and was released in 2013. Alok also researched and published two whitepapers: a. “Creating next generation captives” talks about the best practices that are helping generate higher value from the IT company captives.

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