Conclave on Union Budget 2010-11

Continuing the tradition, a Discussion on Union Budget 2010-11 was organized by T A Pai Management Institute (TAPMI) on 5th March, 2010. Finance Forum of TAPMI with support of the faculties, staff members and students was instrumental in making the event a grand success. Among the panelists were Prof Avinash Paranjape, Mr. K. Ananthanarayan Pai who is a CA and Prof Rajiv V Shah. Prof Paranjape gave macro economic implications of the budget. Mr. K Ananthanarayan Pai gave a detailed insight of the Tax Proposals made in the budget 2010 and Prof Rajiv V Shah gave a briefing about the Direct Tax Code (DTC) and Goods and Service Tax (GST) code.

Prof Paranjape started off the discussion by saying that the budget has undergone a huge change from a mere accounting exercise in 1980’s and 90’s to more of a strategic and policy oriented. He stressed on the failure of the past budgets in the inclusion of all the sections of the society. The bottom 25% of the population is always being bypassed by the reform policies and measures. He put forth the question, “What can be done to make the government deliver what it intends to deliver?” According to him, significant thrust should be on the social sector projects to create income generating capacity. Projects like NREGA should not be looked as a Revenue Expenditure projects as substantial amount goes towards building capital assets which boosts the economy in the long-run. Prof Paranjape was of the view that the current budget is mainly inflationary. He emphasized that Finance Minister has done a balancing act by giving a deep cut in expenditure growth and giving more disposable income in the hands of people.

Mr. Pai began his speech with a beautiful story to emphasize that Capitalism is the way forward. He gave a 360 degree view of how the ever accumulating deficits will pose a serious threat to the future of the economy.  Appreciating the amendments made in the current law codes to allow conversion of closely held firms to LLPs, he said the move will be buoyant for the economy and bring in uniformity in taxation.

Prof Rajiv Shah said that the union budget 2010-11 was mainly a “status quo” kind of Budget. He said it is a sort of an intermediary budget before DTC gets implemented in 2011. He also laid emphasis on the fact that DTC is mainly doing away with the exemption to remove the previous anomalies and make things simple.

The session was followed by a short question answer session with audience posing a myriad of questions to the speakers. The question answer session was followed by a vote of thanks and awarding the speakers with a token of appreciation.

– Finance Forum

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Lean IT

“The lean approach is enabling us to take on extra business more easily as we know we have the flexibility to provide a greater range of services.” – Ian Cooley – Service Delivery Manager (Operations), SMC, Infrastructure Services, Fujitsu.

“Lean” is a manufacturing methodology which focuses on streamlining processes,   increasing process efficiency, and eliminating waste. Lean principles have been almost internalized in the all process in world class manufacturing firms. In fact dominance of Japanese car makers over US car makers is attributed mainly to the Japanese car maker’s religious adherence to lean principles.

Why a manufacturing principle “Lean” is gaining importance in IT industry. Two reasons can be attributed to this unusual phenomenon.  One the IT has become internal part of value delivery system of many organizations and their spending on IT is increasing day by day as more and more processes are going online.  Second, the current downturn has forced many companies to reduce their IT outsourcing expenditure. Both of these reasons had made the IT service providers take refuge in Lean principles to deliver more at less cost.

To streamline the processes and increase the efficiency following principles1 can be followed:

· Define IT in terms of the services/products it is expected to deliver.

· Streamline IT capabilities by service/product.

· Ensure that processes and information flow.

· Help the business pull value from IT.

· Monitor and measure IT’s delivery for continuous improvement.

Waste in manufacturing industry is defined any process or feature in the product which does not add any value to the customer. In IT two most important wastes are the “defects” (popularly known as Bugs) and “waiting time for response”. According to IEEE2 Defects can be defined as “Anything observed in the documentation or operation of software that deviates from expectations based on previously verified software products or reference documents”. How costly defects are can be measured from the fact that every IT company has testing teams in all projects which are most of times as big as development teams in the same projects. But if the defects are minimized at development level only, then time and cost on testing will defiantly reduce.

One of the major reasons for defects is miscommunication, lack of communication . This problem of communication can happen at any stage and cause defect at later stage. If there is no proper and detailed requirement gathering, then software is bound to have defect at later stage. By reducing the layers of communication and following standardized documentation  process can help in optimizing the communication process which in turn can help in reducing the defects  due to communication.

The second biggest contributor in waste is response time during any process of development. For example, Business analyst (BA) wait for the clients response during gathering the requirements stage, Developers  wait for the response from  BAs during development, Testers wait for the clarifications from BAs or Developers. Many times BAs, Developers and Testers wait for the approval from their leads to move to next stage. Many projects have work force which is spread across continent. Especially the Leads (Project leaders) are many times at onsite location. So response from them also contributes to the increase in response time. Reducing these response times by defining clear flow of information and time limit for each response can help in reducing the waste. Now day’s companies are using value stream mapping to get rid of activities and processes that don’t add value, such as repeated duplicate information requests, escalations, duplicate data entry and insufficient resolution.

Many people from IT industry argue that Lean or any Operations management principles like “Lean principles” can not be applied to a highly customized service industry like IT. But point is however customized the service may be, it has many repetitive processes. And wherever repetitive process comes,  “Lean principles” can help in reducing cost and making each step or process more value adding to the final product.

References:

1. Alexander Peters, A principal analyst at Forrester Research Inc

2.Institute of Electrical and Electronics Engineers

– Sumit Saurabh (Batch 2009-11)