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Smart Cities : More Questions Than Answers

Published May 17, 2015 by vishalvkale

SMART CITY
A ‘smart city’ is an urban region that is highly advanced in terms of overall infrastructure, sustainable real estate, communications and market viability. It is a city where information technology is the principal infrastructure and the basis for providing essential services to residents. A Smart City, should have Power, Water, Cleanliness, Seamless Information, 24/7 Utility Services, WiFi zones, Recreational Spaces, Waste Management, Connectivity in transport as well as communication, Speedy Service, Transparency and Accountability etc.

While there are good points & it is also a good and needed step, but…. firstly, it doesnt take into account the realities of the Indian Demography, Polity, Bureaucracy, Governance and Systems. it doesnt take into account the Indian Economy, and its doesnt take into account the status of the real estate sector, as also any number of other realities that beset the Indian Economy.


ECONOMIC STRUCTURE

Economic output by the entire corporate contributes just 18% or thereabouts to the Indian Economy. The rest is Agriculture, and unorganised sector. A smart city implies high doses of technological capability, which scores upon scores of our companies do not possess, and the gap is too large for them to plug, given the history and the monetary requirements. Other nations enjoy economies of scale and can produce whatever we can at cheaper rates. If we keep a purchase local condition, we are finished before we start, like the FDI in retail brouhaha.


If we cant compete in a commodity like Stainless Steel, it is foolish to believe we can compete in high-tech sectors. We have skills aplenty; they have the economies of scale, which is what is needed. For that, we have to dismantle a large part of our taxation structure, which is inverted in more than a few categories.



Next, how do you fit in the small variables like the thelaa-gaadis, small eateries, roadside stores etc – all the things that define a lovely Indian City in a Smart City concept? Is it clear? What happens to these small support services? They are a cultural reality; I wouldnt be caught dead in a 5-star; too stuffy and showy for my taste, Give me the fantastic Idli-Vada at Sion Station; given a choice, I would eat Idli Vada over those showy dishes in a Marriott any day! The point is that these minor details need to be idenitified and clarified before we start, or we run the risk of overzealous officials banning or relegating such activities to the backburner, leading to loss of livelihood to thousands, and an erosion of uniqueness and attractiveness as well.



Next, Sustainable Real Estate. End of Story. Take a gander at the real estate market in India. It is controlled and cartelised, beset by crime and corruption. TIll last year, prices were holding in Urban India depsite their being a 50% vacancy rate of unsold inventory. What happens when the Smart City Ball gets rolling? Sustainable? That it isnt. Valuations will go through the roof, and that is a fact. 


It completely ignores the structure of the Economy, which is characterised by small entrepreneurs. I would like to understand how the small entrepreneur with 50000 seed capital can make a mark in your smart cities. These ventures are capital intensive, and import oriented, which is the real reason why everyone from China to USA is agog; they see $$$$Kaching$$$$! Study the incomparable report on the Indian Economy by Prof Vaidyanathan – India, Uninc; it gives figures from Government sources and introduces you to the real India.


There are two data points available : 5th Economic Survey, 2005 and NSSO 2011, Both tell the same story: Smart Cities are nothing but a fantasy. They are premature, they are the future, but very premature. The Idea is right, but a decade or two too early. As per the first, there are 41.83 Million establishments in India; 76% of these worked without any power; employing 100.9 Million; 46% were own account establishments. As per NSSO 2011, 66% were OAE; retail trade slipped from 42% to 30% and ,manufacturing grew from 23% to 31%. Own Account Establishments were 60% of retail, 72% of Manufacturing, and 63% of service. Contribution to the GDP : between 46-58%.


Given the Smart City definition, a good number of them don’t fit – and largely for no fault of theirs. These organizations do not have the money to upgrade – they will upgrade eventually : a process that is currently underway. That is the time these concepts can work. And this will happen in tandem with improvements in education etc basic facilities in India, not before.

PRIORITIES & REQUIREMENTS

What does the nation require? Research shows that nearly 93Million of our farmers are losing 800-odd per crop; data shows the level of poverty in our nation; consumption trends corroborate, with the top 10% growing at a rate of 3% as opposed to 1% consumption growth for the bottom 40%. Farmer suicides are going up; the economic fundamentals are shaky; the global economy is in unprecedented turmoil, and all we can think of is Smart Cities? Our Armed Forces are in dire need of funds; and all we can think of is Smart Cities? We spend the lowest in GDP terms on Education, Defence and Health, and all we can think of are Smart Cities?



We dont need Smart Cities, We need Schools, Colleges, Primary Health Centers, Rockets, Mortars, Fighter Aircraft, Missiles, Satellites, Seed Research, Irrigation, Water Purity for Agriculture, Extension Workers to teach our Small and Marginal Farmers, Redoing our Duty and Taxation Structures, Fair prices for farmers at farm-gate, cement or pukka roads, etc etc. A smart city can come after that.



Besides, a Smart City requires – data connection. We in India have average & unreliable speeds of around 1,5mbps; the developed nations have a speed of upwards of 22mbps. They have high penetration of credit and debit cards and acceptability of online commerce; we dont. India has precisely 73Million broadband connections – this is including individuals with a double connection; I have three. Less than 69Million Indians consume more than 512mbps of data on a monthly basis; and cashless transactions are unknown outside the protected environs of top places.


The logic is sound, I clearly stated that concept is needed – but a decade or two too early. This will work in a relatively corruption-free atmosphere, where the Land issues are under control. That we dont have. Next, this works in economic reality which enable the above, which again we dont have, as I have been at pains to point out.


The shift to the small cities will not happen in the industrial sector; the vast majority – upto 90% – of the actual producers are concentrated in only a select few agglomerations, namely Mumbai, Delhi, Chennai, followed by Kolkata, Bangalore, Pune, Ahmedabad. Other second-level sites are Nashik, Meerut, Hyderabad, Coimbatore, Ludhiana, Kanpur, Rajkot,Surat. No one else comes even close to these cities, although Jaipur, Chandigarh, Hissar, Nagpur and a couple others do try hard. These are further populated by small enterprises.



The shift will not happen from these established centers; there is in existence an ecosystem that now is impossible to replace,. with manufacturing facilities being deeply interlinked with their vendors and suppliers who have now set up in the same or nearby areas. In B2B industries, a symbiotic relationship has started with the consumers and the manufacturers sometimes co-located, or located within 8-10Kms of each other.



The proof is in the manifest failure of industrial areas in other wannabe metros, like Indore and Bhopal, which have simple failed to take off. They remain consumption and trading centers, not producers, despite an incredible level of support given to them by successive Governments. The failure of Bhilai to rise as a comparable center to even Nagpur, let alone Surat & Rajkot, is a case in point.


MY FEAR
We are only exacerbating the rural-urban divide. As on date, few Urban Indians show the same level of passion for rural development, which is the only thing we need. Rest will take care of itself! We are asking people to focus their valuable- sorry, waste their valuable time on cities, where the conditions are utopic in comparison to villages and that is a fact! Large numbers of villagers would willingly settle for facilities comparable to our current “stupid cities” and that is also undeniable.


No amount of planning will overcome the serious objections there are, some of which are enlisted below. I dont buy visions; they are a dime a dozen. I buy execution – call it my sales instinct, but I am not impressed by Grand Visions without a proper execution document, which contains detailed studies & steps.  And this is not made after finalising the plan; that is stupid, blunt and straight. Typically, that is to be visualised before finalising the plan and the execution.



Where is that plan? If it exists, why isnt it in the public domain? Where is the detail on what exactly a “Smart City” means in practical terms – real world terms, not meaningless jargon, which even I can write, given I am a part-techie and a part-telecom / business person to boot?????? Give a person time and opportunity, and out comes a logical sounding plan! That is dead easy; doesnt require any great skill whatsoever. What will be the mode of transport in a Smart City? Residence and Commercial Areas? Connectivity in Roads? Size of internal roads? Drainage?



What will be the connectivity in terms of data and communication? What technology will be adopted? How will the technologies communicate with the other “stupid’ cities? What will it cost the residents?What happens to the slums? Or doesnt the concept apply to the slums? If they are in a smart city, they should be smart slums too! Each city has bylanes with crowded marketplaces; these are the epicenter of business in India, commanding a lion’s share of the business volume pan-India. What does this mean for them? What is in it for them?



How will rural India benefit? Please give specifics : not general statements like find jobs, or employment generation. Jobs in which industry, at what level paying what? Where will they stay? Where will the land come from? What will it do to land prices? How will you ensure proper settlement for dues – and if you think this is not important, I can produce 40 years worth of terrifying tales of neglect? How will you ensure Land Mafia is controlled – without real and serious administrative reform which no government – AAP apart- has shown any appetite for?



A Smart City means Power, Water round the clock, Where will that come from? We dont have enough power now, wont have for another 2 decades. Who will sacrifice their power for these Smart Cities? And why should any stupid city sacrifice even one kilowatt for a smart city, pray tell? Where will water come from? Any number of cities are seriously water deficient. Where is the plan for all this?????????



A Smart City implies a certain level of data connection backbone; which we dont have, and wont for a minimum 5-10 years more. It also means seamless information availability. How will you ensure that, given the various data collection points, formats, protocols? When your land records are not computerised? When any number of public facilities are not online fully, and there are no plans for them either? When you still have no common information system in the Government? When there is a redundancy in several documents?  I could go on and on… Where is the real plan?


Why does this generate this level of interest? Why doesnt the question of farmer suicides, famers earnings, rural facilities, etc generate the same level of attention, interest, passion in Urban Indians? Arent they Indians? What is being done for them, pray tell? We are still focussing on cities, not on the villages where the situation is decidedly bad. Why hasnt the same level of euphoria, the same level of passion, the same vision, the same money been generated for setting things right in Rural India? The government is hard selling this concept abroad, showcasing our development, whereas we require basic steps like Education, Health, Governance and Defence!



What it should have done is launched rural programmes with the same fervor, passion, vision and attention – which is not the case. We have finite resources both in terms of money as well as other aspects. How we spend those resources is the key.

In point of fact, Smart Cities is the last thing we need; we dont have the ground realities even in urban India for it, and that is a fact. Not one person anywhere in India has even tried to meet the serious and potent objections being raised by any number of people; and are focussing on the vision. 




Remember : Great plans fail on execution as, among other reasons, it turns out that the ground realities did not support the plan in the first place.



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The Screen As A Strategy : Understanding The Internet

Published April 29, 2015 by vishalvkale

I closed the previous article {found here : Understanding The Internet : Reaching Into The Gut Of Existing Systems} with a statement that few organizations truly understand how to use the 5-21” space of the screen;  this article looks at this aspect in a little more detail. A great many companies use the customer-facing aspects of the internet as merely another tool to communicate and connect, completely ignoring the full power of the internet ecosystem.
The Screen, first of all, is mistakenly defined as just a mere device that displays, or acts as a window, disseminating information to your prospects and customers, and the general audience. The screen is more of a doorway, a portal that transports – or has the ability to – transport your customer into a world of constantly interacting stakeholders in your product, your company and your addressable market segment. If that doesn’t scare you as a Brand Manager, as a Marketer, and as a Sales Professional, high time it did.
Before the internet ecosystem evolved, the touchpoints a customer had for interfacing with your products were limited – The Shop, Company Offices, Other Customers who were limited to those who were met personally, Media, Competitors and a few more. But cut to today and that has undergone a sea-change, with the potential ability of the customer connect having increased to almost infinity, with the feasibility of getting exposed to and influenced by a much larger array of touchpoints, viewpoints, opinions – as well as both positive and negative customer feedback and experiences
It stands to reason that in the changed environment of freer flow of information & increased touchpoints, the customer communication has to change from a one-sided monologue to more of an engagement with the customer. The reason is straightforward – a greater number of touchpoints mean larger information volume and interactions, contrarian opinions, noise and greater scope for replaceable products to engage with prospective customers, as well as greater potential of the medium to enhance audience experiences.
Thus far, we are on established management jargon, which is spouted by a good number of companies. Only a select few organizations manage to actually convert the monologue with an active engagement; very very few, in fact. For, a large majority of the sites I visit, at least in India, still adhere to the old style of communication; little effort is made to enhance the customer experience, and make it more rewarding and meaningful. In some cases, the customer experience is actually negative in many ways. The reason this is not showing in sales is either due to the price differential; products are cheaper on the Ecommerce sites, or due to other attendant disadvantages.
Let me illustrate with 2 examples : one B2C and one B2B. The internet is so vast, that it is not feasible for me to cover more in a blog post; neither is it advisable. In B2C, let us take books. Why does a customer buy a book online? There are two reasons : Price, and Convenience, which has lead to galloping sales at online book stores. But halt a moment, and analyse in depth. And, instead of asking what does the internet give you, ask what does a book stall give you? Reverse your viewpoint for a minute!
In a book store, you can get a feel of the book, you can flip its pages – which is pretty damned important if you are reading a new author, or a serious topic; you can easily compare similar books or two options on the same subject. Furthermore, you can far more easily spot new books; the interface is much bigger than a small screen; in a store, you are exposed to 4 walls crammed with books, which  make for easy discovery.
To compete with this, you have the price-offs and the convenience factor of the small screen; till date there has been on attempt at going beyond this. Reviews do not count in the age of the convergence of technology; it is simple enough a task to look a book’s reviews on your smartphone and purchase offline! The offline stores are also now becoming more nimble, willingly offering discounts to regular customers, and other small facilities, like getting selected books for them. They are now allowing customers to sit on sofas in comfort, and browse books to their heart’s content – in other words, they have added several value-additions to the customer interface, making for a much more rewarding experience
And that is where the digital players are not doing anything : trying to make the customer interface more rewarding. Sure, this will be expensive, time-consuming and demanding; but it will have to be done sooner or later. Currently, you are not facing the pain as the market is untapped, and there is a scorching growth pace, that is hiding the underbelly. All are advised to study Telecom, and how its ARPU fell, and draw parallels and extrapolate to the future, with penetration at higher levels. That is a reality every industry has to face.
In our example, a moments’ thought and you can spot any number of ways that the customer experience can be made more rewarding. You can facilitate browsing titles – and the usage of technology can ensure that the browsing experience in online stores will be leagues ahead of the offline experience, as you can offer targeted searches in the book’s content. Author-searches, cross-selling opportunities, specific searches of interest – all of which can make the customer experience exceptionally powerful.
You cannot match the dexterity and ease of new book discovery in offline stores; but you can work around this issue by offering other advantages. You can offer first 1o pages downloads free, as an example. You can look at facilitating direct interactions with the author, fan pages, discussion forums; you can facilitate book searches and book discovery in a much wider database, and can give options for time of delivery if book not in stock {beyond the current We Will Get In Touch When In Stock} and so on and so forth.
All this can be achieved at the touch of a button for the customer, which cannot be matched by the offline store. The current model of price-driven sales online is already driving a deep schism into offline models, leading to a massive backlash by offline models, who are competing with extraordinary tenacity and dexterity, and are in the process not only maintaining relevance, but actually winning back lost ground.
And all because the online people aren’t using the full power of the medium; and that is because the pain isn’t showing in the numbers, as the high growth rate is ensuring the new customers are greater than Churn. As I said, learn from Telecom : there will come a time when Churn will exceed new customers. And no one can say how far away that time is, given the stunningly scorching growth rates in this industry.
In the next article, I shall take a look at the B2B marketplace, as well as some interesting entirely avoidable mistakes made by the best of them in this trade in both the B2B and B2C Space. 

UNDERSTANDING THE INTERNET : Reaching Into The Gut Of Existing Systems

Published April 17, 2015 by vishalvkale

UNDERSTANDING THE INTERNET : Reaching Into The Gut Of Existing Systems



At first glance, the title – understanding the internet – seems an anachronism, something out of place in the modern world, where the internet is ubiquitous, at least among the educated classes; and is rising fast in the rest of the people. You only have to look around to see people using the internet, gaining from it, and being completely comfortable with this medium.

And yet, that is precisely what my contention is : that this medium is actually the least understood, and in just about everything. The potential of this medium is being felt in just about every human endeavour, and as I have observed before, its raw power to reach into the gut of existing models is only just being felt across industries. What is this raw power I am referring to? And why is it the least understood medium?

The average person comes across individual levels or layers of the internet at various times; this interaction is in two distinct areas in terms of purpose of usage : Personal, & Business / Professional. On a personal level, we come across Facebook and Twitter, News Apps, Online Shopping portals, and many more sites targeted at the individual; traditional classification extends to such terms as Social Media, News Portals, and so on and so forth. But, on a professional level, depending upon our profession, we similarly interact with many sites and types of portals like dedicated B2B or B2E portals and other sites – which include the above listed personal sites!

If the above sounds confused or disorienting, let me clarify : my point, simply put, is that we need to reverse our outlook; when we think of the internet, all of us think of it from the lens our personal interaction on the internet, even when looking at the professional aspects. We always think of how the internet has reduced distances, made price discovery easier, information dissemination faster and borderless, made customer contact easier and so on – in other words, looking at it Point-To-Point, individually or lacking a systems perspective

The internet is all that, and much much more. We need to turn it around 180 degrees, and look at it from a business perspective, from a strategic perspective and a systems perspective to understand the raw power, as well as appreciate how little we understand this medium, or just how wrong we have been. This has profound implications for all businesses, as we shall see.

Reaching Into The Gut Of Existing Systems
Let us start at a very basic level – the simple point-to-point interaction. Consider pricing – in any market, it is now common for a customer to compare prices with the internet; it is equally common for a customer to compare prices across geographies. This applies to retailers and distributors as well; meaning, quite simply, that price differentials within the same market will go the way of the typewriter. What all team managers, especially senior managers, tend to forget is that this also applies to your teams, which is now stunningly well connected internally.
It has always been a simple sales tactic, that of differential pricing, which in an earlier era, was nearly undetectable, given the low interconnectivity between the constituent customer profiles and the channel partners / retail / Your own team members. This at times unhealthy practice gave results while harming the system and leading to a leak of corporate money, and harm to many a top performer and talent, as needless discounts are given;  in the current era of Facebook + LinkedIn + Whatsapp + Email + Mobile Telephones, this is just not tenable, as people are way too interconnected at each level of the business ecosystem – making for easy discovery of the stated underhanded tactics.
The combination of just these 5 – Whatsapp, LinkedIn, Facebook, Email and Mobile is hard to beat. You can share information over the mobile – back it up with proof of pricing by the simple expedient of a mail or a Whatsapp photograph, or look and compare online and offline prices with ease, given the penetration of the Mobile Internet. Convergence of technologies at its very, very best.
From a systems perspective, this means that the old tactic of having differential prices for varied distributors and geographies is now a much more challenging task, given the convergence of technologies and gadgets, and ease of connection. It has meant unhindered flow of information across and within markets, ensuring that the price differential gets easily exposed. This is driven by the entire interconnected ecosystem, as employees and the channel connect with each other with ease over various media; customer openly voice opinion on the internet etc.  
What most companies further do not understand is this : there is an increasing push-back from the retail end of the business as well as from teams, who are now converging into interest groups and power fora, and getting together to force companies and managers to alter their short-term tactics of differential pricing within the same channel as well as across channels. This is a direct result of the free flow of information wrought by the internet, the mobile and the entire information ecosystem.
And that is what I meant by stating reversing from an outward looking perspective of how the internet is changing the business environment and making life easier for businesses. That way is a strictly personal look – you are essentially analyzing the advantage you have as a professional. What needs to be done is analyse the entire impact from a systems perspective, from the perspective of not the Manager, but the entire business. In other words – get into the shoes of the Business, not the shoes of the person managing the business.
And that is the most critical learning, and the real power – we aren’t talking about just the internet, we shouldn’t be thinking about just the internet, but rather the entire ecosystem – The Internet, The Computer System, The Mobile, The Falling Cost of Access, The Fast Rising Usage. We should further be looking at it holistically, and from a dispassionate analytical perspective, and changing the operating style as the market changes all around you.
In simple terms, the entire basis of business, the entire basis of doing business on the ground is changing fast, driven by a vastly changed ecosystem. And managements just aren’t in sync with this simple reality. What has happened is, quite simply, the entire bedrock on which internal systems are based has vanished almost overnight, contributing to an exponential rise in pressure on employees, managers, systems and organizations alike, as they failed to change with the times…
There are many other parameters – like the impact on the simple things  – like telling the truth, or stretching the truth; and how the internet ecosystem is setting about revealing the truth and making lying impossible for organizations; or the simple fact that even some of the most tech-savvy organizations don’t understand the 14-21” screen, and how it is to be used for maximum impact, or indeed how to strategically use it… which is the subject of the next article in the Digital Series, of which this is the third…