On day 1 of Manthan 2018, students had an interactive session with Mr. Vivek Law. Mr. Law is the founder, CEO, and editor-in-chief of The Money Mile. He is also Co-president of Keiretsu forum in Delhi-NCR and Bangalore. Mr. Law started off his career as a crime reporter and since then have worked with organizations such as TV Today Ltd, Bloomberg TV, CNBC-TV 18, Economic Times, Business Standard and Financial Express as Editor. He has a rich industrial experience of 23 years and his areas of expertise include, but are not limited to, financial literacy, investigating economic crime, consumer protection, and the stock market.
Mr. Law began the session by giving a brief introduction about himself and shared some insights from his life’s journey. After working for 12 years in newspaper, Mr. Law shifted his career to magazine work and joined India Today, where he tried more writing on finance. In 2004, he again shifted the career path, this time to television. In 2017, Mr. Law launched a digital video platform for finance, called The MoneyMile. The aim of the session was to create a basic idea among the students about the importance and need for investment. Mr. Law said that the investment habits of the ultra-rich in the country are totally in contrast with the habits of the rest of India. 93% of the ultra rich invests in equities in comparison to others, which is one of the reasons why the rich always stay rich. Investing is not about telling one not to spend. Mr. Law expressed his opinion that one should start investing when they have the luxury of money, which is right from the time they start earning. Mr. Law said that, if there’s one thing that can change someone’s life, it is the compounding power of money. Unless and until the investment is not getting the power of compounding, it’s impossible to create wealth.
In the second half of the session, Mr. Law talked about the importance of setting a goal before venturing into investment. He asked the students to put the goals down, such as child education or health or retirement and choose a scheme for investment with these goals in mind. Mr. Law is of the opinion that one need not invest in multiple schemes. It’s always safe to choose one particular scheme or at times, a few select schemes across categories for investment. Talking about the risks associated with investing in equities, Mr. Law said that no one knows what is going to happen in the stock market and charting can help only to an extent. The trend in India is that we buy equities when prices are high and disposes of when the price is low or when the market falls. When one goes into the stock market without realizing how much risk they can take, loss occurs.
On 3rd March, 2018, Ms. Archana Newaskar, Director-IT, IQVIA, engaged the students of TAPMI in an invigorating discussion on the scope and opportunities in the IT sector. She initiated the discussion by saying that the global IT industry is predominantly present in regions like United States of America and Asia Pacific followed by UK and other geographies of the world. “There is in fact”, she said “a global growth of 5% year on year in IT”. The crucial part of IT is managing workforce, working under senior management and being able to get the task done in time. Networking, experimenting, planning and transparency helps us in getting work done quickly and effectively. One of the key focus areas of coming year would be Cloud, Blockchain, Internet of Things, Automation, Artificial Intelligence, etc.
Talking about automation she explained that some of the highly susceptible areas of workforce replacement are domains of data processing and predictive analysis. Jobs like managing others and unpredictable physical work are difficult to be automated and therefore are less threatened by automation. Some barriers however, which automation faces infrastructure needs, organization size, technical feasibility, scarcity of skill, cost of workers, social acceptance and overall value proposition.
India is the leader in providing Offshore Business Services followed closely by China. Reasons for India being the leader are that we are demographically perfect to position our technical excellence and we make better geographical partners to international firms compared to other nearby countries. Various digital initiatives have been taken by the government like universal mobile phone connectivity, automation of delivery of government services, free wi-fi services in large cities, digital lockers and setting up fiber-optic network across the nation.
Talking about hiring in IT industry, the fueling of growth is majorly due to lack of skilled and competent workforce. Firms like people who are trained in soft skills, have an experience in emerging areas like IoT, AI, etc. and those who are competitive and energetic to bridge their skill gaps. Critical soft skills like teamwork, communication, integrity, conflict resolution, negotiation, leadership, adaptability and communication are very important in the IT industry.
Ending on a note that the IT industry provides bread and butter to a huge population she discussed the opportunities available in it such as those of an Analyst, Research Associate, Content Writer, HR Professional, Finance Professional, Project Manager, Consultant, Marketing & Sales Executive, Business Development Expert, etc. and mentioned how it provides exciting roles for management graduates.
An interaction between the local entrepreneurs and industry experts was held on the 10th of February 2018 at T.A. Pai Management Institute as part of the marketing conclave M-Power 2018. This unique experience gave the local entrepreneurs an opportunity to discuss issues and concerns about their industry with the industry experts. The event was graced with dignitaries from various parts of the industry, like Mr. Mahesh Kanchan- VP, sales and marketing, Carlsberg, Mr Vikram Ahluwalia- SRM diagnostics, Mr Rajeev Ranjan- Director Sales, DSM Foods, Ms. Ritika Rajpal- Assisstant General Manager, L’Oréal, Mr Pawan Pandey- Category Head, Dabur, Mr Vikas Gupta- Head-Foods, Liberty Oil Mills, Mr S Sunil Kumar- Business Director, Henkel Adhesives, and the Platform for Women Empower Register represented by Ms. Sadhna Mallya- social activist and entrepreneur.
Mr. Mahesh Kanchan opened the discussion by mentioning that only 5% of food is consumed in the packaged and ground form the remaining 95% is sold loose and unbranded. He elaborated that there was a huge opportunity in the food and beverage sector. The government, he mentioned, was promoting agro-based food processing which was leading to an improvement in the quality and therefore an increase in the food life. He then quipped that the concept of a national player was a myth and that being local and hyper-local can make an entrepreneur a lot of money. Keeping a tab on consumer consumption behavior is important, he concluded.
Mr. Rajiv Ranjan mentioned the dominance of local players in snack food. He pointed out that understanding consumer behavior, points of competitive advantage and converting observation to insights is what would make a huge impact for entrepreneurs. Ms. Mallya mentioned that 90% women despite having resources do nothing, it was important to motivate these women to work from around 62 villages. Mr. Kumar added that gathering the extra produce from all the houses and branding them as fresh produce and then selling them in localities would be a good idea. It would not need any branding or money for investment. He reasoned that if people start earning the extra money they would be motivated to earn more. Mr. Gupta suggested that they should register on Amazon or Flipkart so that their product would be shown on their pages across the country.
The issues that were discussed ranged from the packaging of homegrown Udupi recipes that gave restaurant experience at home to utilizing the high tuna demand in the western world by exporting canned tuna. The experts also discussed the online and offline sale of cotton fabric as well as sharing the success story of the textile markets of Coimbatore. Mr. Mahesh suggested the selling of cold press virgin olive oil and juices as a private label so that they can garner a profit, while Mr. Ranjan warned about the competitiveness of the coconut oil market. A wide range other issues were brought forward to the experts and each of them was discussed to help the local entrepreneurs.
Mr. Ahluwalia stressed that a distribution set up was required with sharp metrics to decide the success of a pilot project in the first six months. Benchmarks had to be set and people had to understand how to promote and advertise their products. Mr. Kanchan ended the discussion by asserting that an entrepreneur had to understand the POD of their product. They needed to understand what the people needed and give them something that was better. Only then, he reasoned, would people chose someone local instead of the big brands.
Mr. Shaik Mohammed Haneef from ICRA enlightened the students about the various types of credit ratings and how it is evaluated from the point of view of ICRA in his session on ‘Credit Rating Perspective’. He stated that ICRA majorly evaluates and provides credit ratings and non-credit ratings which are used by clients for understanding a corporate’s credit state.
He elaborated and explained on various credit ratings such as SME Rating, bank loans, infrastructure projects, and commercial papers. He also put some light on non-credit ratings such as real estate grading, solar grading, ESCO (Energy Services Company) grading which is used to understand energy efficiency, and vendor rating.
Mr. Haneef further elaborated on the four different sources of risk such as industry risk, business risk, financial risk, and management risk. He later gave a practical understanding of the risks to the students through the ICRA website followed by answering some intuitive questions by the students on the same.
The topic being discussed in the guest lecture was operational risk. Mr. Taneja explained to the students the concept of operational risk using Basel Committee’s existing definition. It is basically the loss that is incurred due to failed internal processes, people, and systems or from external events. He also explained that individual banks can adopt their own definitions of operational risk if the minimum elements in the Committee’s definition are included. A key takeaway from the discussion was that operational risk is inevitable and cannot be zero.
Mr. Taneja briefly spoke about internal & external fraud, employee & workplace safety, clients, products and business practices, and process management. He emphasized the importance of operational risk indicators. These indicators are vital in identifying potential losses and tend to be specific to organizations. They refer to lagging/ex-post measures and information on events that have already taken place (examples include failed trades, settlement errors). It is up to the risk managers to transform lagging into leading indicators. This process can be carried out by changing the focus of the indicators or even by adding new information. Thus, the focus of these indicators could be changed to highlight issues that are still outstanding or remain open after a specified period of time. The transformation of these processes is difficult to implement in reality. He went on to explain three types of risks namely:
- Legal risk – It is included in operational risk. It refers to the risk of disruption to operations due to unenforceable contracts, lawsuits, adverse judgments and legal proceedings.
- Reputation risk – Although this type of risk isn’t usually considered, reputation risk is very critical to a business. It refers to negative public opinion. A fall in a company’s reputation can result in liquidity difficulties and falling share prices.
- Business or strategy risk – It arises from an adverse shift in the assumptions, goals and other features that underpin a strategy.
The next part of the lecture was about the latest trends and approaches. Mr. Taneja spoke of the relevance of frameworks, advanced analytics, strategic planning, stakeholder feedback, advanced management approach and the need to forecast “black swan” events. Post the discussion, Mr. Taneja answered questions which were along the lines of operational risk, risk management, and its applicability. He was able to explain the concept exceedingly well because he was able to relate it to real life examples in corporate organizations and financial institutions.