It’s been quite some time since the Indian manager has been able to approach a new year with unflinching optimism. The year 2013 might just be different. Not convinced? Here’s a list of things that could make life easier for the Indian manager this year. Read on and you will change your mind.
As a new business manager, the first thing you must be in tune with is the state of macroeconomics and microeconomics. If early indications are anything to go by, 2013 looks decidedly better than 2012.
The winter session of Parliament has proved fruitful with policy decisions being pushed through, including extremely conscientious ones such as foreign direct investment (FDI) in retail. Chief financial officers (CFOs) of companies across sectors are watching this trend with interest as it means a general improvement of the macro environment and a reinstallation of faith in the Indian economy. They are hoping for the momentum to gather steam in 2013.
This could possibly be the last Budget that the UPA government’s finance minister announces ahead of the Lok Sabha elections of 2014. It can be the Budget that either sets the industry for or against the government. Against this backdrop, companies are hopeful of the Budget being lined with sops for the industry in the form of more tax-saving options, duty cuts, exemptions etc.
Softening interest rates
A high interest rate regime is seen as a major reason for the current slowdown in the economy. CFOs are hopeful that interest rates will start softening in 2013. This should ease considerable pressure on businesses. This could have a cascading effect — increasing disposable incomes and improving the consumer’s spending power. These factors could work to push up demand.
Input costs easing
With inflationary pressures easing, companies are looking forward to a fall in input costs. This should put the pricing power back in the hands of CFOs, who expect better margins this year. When input costs rise, companies respond quickly by hiking product prices. But when raw material costs fall, companies don’t always pass benefits to the customer. In the short term, this will also help CFOs loosen the purse strings in terms of new launches, marketing and advertising.
The rupee is seen as getting stronger this year on foreign capital inflows. For consumers, a weak rupee means higher prices because it raises costs of raw materials for companies. Last year, an area where consumers felt the maximum pinch was in the fuel price hike. Already analysts are saying the worst could be over for India Inc.
While the overall economy looks to be in better shape, at the organisation level too, the manager today is much better placed with smarter tools and key lessons from the past. Take a company’s IT backbone. There are five technology trends that can make the manager’s life easy in the new year.
We are at an inflection point where the delivery and consumption of technology and its business model are being redefined. The way infrastructure is built, applications are developed, and information is delivered, are changing. According to an HP study, in 2013 cloud computing will shift from delivering small, consumer-focused services to sustaining secure, predictable and reliable enterprise-scale workloads. The emergence of cloud-based services will help CIOs buy capacity as and when required and will also help in scaling up without investing in headcount.
Virtualisation of desktops
IDC says virtualisation of desktops is an important trend that will continue to make life of the manager easy in the coming year. Virtual desktops can help managers cut cost dramatically. It liberates IT staff and drives mobility. Virtualisation can help businesses pursue brand new opportunities.
In an age when changing customer sentiments play out over the web, phone calls and emails, big data will be the important tool for the smart manager. The new era of converged storage will provide a modern design approach built from the ground up for the needs of virtualisation, cloud, and massive content pools. Managers will be expected to adopt data analytics tools to understand their customers, identify trends and make accurate forecasts.
Data centre services
On the network side, managers can benefit from world-class data service centres that rent out space and capacity. IDC says outsourcing data centre services can dramatically cut costs and allow CIOs to have a ready infrastructure to store and back up data. In 2013, managers can continue to benefit from scaling up without impacting capital investment by outsourcing data centres.
This year will see the use of new training modules, incorporating concepts of social media and cloud computing. HR can grab this opportunity to create competitive advantages for organisations. This may include competency-based talent sourcing wherein the selection is based on having the right talent on the right job and at the opportune time.
So, the manager has a better economy and better data to back up decision-making.
With more people accessing the web through a mobile phone than through a computer, we can expect to see greater use of mobile devices to carry out transactions, pay bills, shop and interact with organisations.
The Bring Your Own Device (BYOD) phenomenon — where employees bring to work devices they have purchased themselves — will continue to gain momentum. Agreed, it’s a challenge allowing employees to take advantage of powerful personal devices while ensuring control and security of company information and applications, but the line between personal and business use of devices is blurring. It has become almost impossible to separate social and work use of devices and prevent people from sharing information.
The consumer connect
The most crucial lesson that marketers learnt in 2012 is that there is no such thing as a mass consumer and that means they cannot mass market. It was no surprise to see customers briefing the tailor (read marketer) on stitching specifications for clothes in Vodafone’s Made for you’ ads. Today, in categories such as telecom, online travel, FMCG, etc, holding on to consumer’s attention is a tough challenge. So what is the way around? Many marketers went back to the consumer and asked them for suggestions.
As a corollary, many crowd sourcing platforms and tools sprung up. Marketers are not simply asking consumers to offer suggestions on logo or pack design. They are suggesting communication ideas and offering cues on how to reach them. Next step? Product development? Don’t be surprised—it’s already happening.
More confidence in self
“You cannot rely on just one source of data in marketing research.” These were the last words of the old-fashioned media planner who was executed by the new crop of TAM clerks. The dead will rise in the new year. And why not? Both clients and advertising agencies have had problems with the research methodologies of external agencies. To a certain extent, both can be blamed for this as it made the way things function simpler. The good thing is media agencies have realised the severity of the situation and set the ball rolling for a change in the latter half of 2012 by building internal capabilities for research. With more digitised homes in 2013, the year will see advertisers, agencies and broadcasters collaborate for robust research.
Best of both worlds
Advertising has truly become an equal opportunity business. With independent agencies like Scarecrow and Curry-Nation proving their mettle, today clients are more open to exploring partnerships beyond global ad networks. In fact, independent agencies are giving the networks a run for their money. Creative pitches will see participation from a healthy mix of networks and desi creative hotshops. Advertisers will benefit from this healthy competition by achieving better creative output within modest media spends. This will make agencies invest in talent and focus on multi-disciplinary training so executives could have knowledge on areas other than their core competency.
While the average agency commission is still as low as 2 per cent of media billings, the industry is optimistic about achieving 5 per cent by the end of this year. Eventually, better remuneration will be reinvested in bringing quality talent onboard. With the government easing the way for FDI in certain sectors, retail advertising is expected to take off on a big way. But only agencies and marketers that are nimble and think on their feet will be able to reap the benefits.
Rise of the collective consciousness
We live in a wired world where national icons are created and cast aside in a day. Brands have to be in sync with this new reality. With on-ground innovations, many companies (P&G, Tata etc) have successfully created revolution for their brands, making them a part of consumers’ collective consciousness. The right use of social media for sales, marketing and customer service will be a game changer for consumer brands in 2013.
No last-mile headache
Delivery is often the make-or-break factor when it comes to running a successful e-commerce venture. The cost of shipping, the time taken to deliver, and delivery methods all decide whether the customer will come back to you or not. Amazon, for instance, set a trend by offering free two-day shipping with its prime membership. Now shoppers are opening up to placing orders with retailers and getting their package delivered to an alternate location. If this takes off in India, the last-mile headache will be a thing of the past for online retailers.
The last few years would have drilled the idea of thinking frugal — in resource management, in product development, in marketing deployment... you name it. This kind of thinking is going to be a key differentiator in the years to come. A frugal mindset is essential in a manager to drive volumes and achieve profitability. Managers have learnt to take decisions keeping in mind the various costs, strike a balance between automations and manual involvements, should one buy or make etc.
Even until a few years ago retailers spent a lot of time trying to make their online stores look and act like their brick-and-mortar stores. Now they’ve sort of reversed course. The challenge, as they see it, is in extending that online shopping experience — characterised by personalisation, interactivity and layered with data — into a physical environment. 2013 will see the beginning of seamless integration of the offline and the online experiences.
This is the new buzz in corporate circles in India today. This is the new generation, the generation of people born after the 1990s that is expected to enter the workforce over the next few years. This workforce will be highly flexible and versatile in terms of the new-age technology. It is up to the smart manager to get the best out of them.
Not to be a downer or anything, but, in conclusion, blind optimism is not enough to see us through. Let’s just hope the positive mood that we begin the year with is channelled into sound business strategy.