Volume 1, 2013 dattva Consult Club, Indian Institute of Management, Ahmedabad STRATEGY MARKETING BUSINESS WORKSHOPS FINANCE POLICY MERGERS ANALYTICS ORGANIZ3= ANUFACTURING DISCUSSIONS PUBLICATIO COUNTING SALES HR TRANSFOR/, THE CLIENT IT COST GOVERNA, / RISK OPTIMIZATIE/ THE INDUSTRY THE CONSULTANT THE FIRMStrategic Partner am BMGT Unlocking Potential. Delivering Results STRATEGIZE INNOVATE reakthrough Management Group International (BMGI), a global consulting firm, partner organizations to transform their business performance with a strong focus on delivering results. BMGT enables businesses solve strategie, organizational and process problems, Headquartered in the US, BMGI has developed a loyal clientele that today exceeds 200 active clients comprising more than 400 engagements delivered by about 200 full-time consultants spread across offices across the globe. BMGI has partnered with organizations in various s stages of their business life cycles and has SOLVE PROBLEM delivered cumulative benefits to its clients worth several billion dollars withan ROI of 5:1 to 20:1. In India, BMGI is located in Mumbsi, Our clients include leading Fortune 1000 Global companies and other Indian companies from diverse industries such as financial services, IT/ITES, airlines, chemicals, FMCG, discrete TRANSFORM manufacturing, telecommunications, petrochemical, textiles, healthcare & energy: Some of our global clients include Hitachi, Siemens, Philips, Unilever, DeBeers, Avis Budget Group, TNT Express, General Dynamics to namea few. Some of the Indian clients that BMGI has worked with include amongst others Asian Paints, ABG Group, Cognizant, Daimler Benz, Franklin Templeton, HDFC Bank, HUL, ITC, John Deere, Kraft Foods, Piramal Healthcare, Reliance Industries, Sudarshan Chemicals, Vodafone and Volkswagen. Cem nO San age GT STE RUIN oe NOL 7 11 Court, Nariman Point, Mumbai 400021, rerults@BMGladia.comdattva| 1M Alum From the Coordinator’s Desk Dear Readers, the annual magazine of the Consult Club of ed to present to you the first edition of Tattva Inthe first edition, we have focused on four prima ‘which is undoubtedly the most important the consultant and t aspects of consulting. The first section is called ‘the Client? spect of the consulting project. The other three sections include the firm, industry. Our club members have interviewed industry experts, id cians and have also used their own experiences to capture diverse perspectives and bring to you these articles which cover a range of topics and indus pior consultants a business acader We wish to thank our statesic p } Management Group I al, India. In particular, we would like to extend our gratitude towards Mr. Naresh T. Raisinghani, CEO, BMGI India for his support and insights throughout the process of launching this magazine. nity to thank our contributors from ar we swish fo thank some key people fr ck Poddar, Parner, AT. Kearney; Mr. Siddharth Pathak, A/T. ~ Keamey; Mr. Avijit Mohapatra, A’T. Keamey; Mi. Vikas Parekh, Boston Consulting Group; Mi. Shubhang Shankar, Boston Consulting Group; Mi. Saket Kabra, Boston Consulting Group; Mr. aibal Chakraborty, Booz and Company; Mr. Rahul Venkatiaj, McKinsey and Cos Mr, Mayur Gohil, ITC Limited; Mr. Tushit Sen, Deutsche Bank; Mr. Brij Bhushan, Nexus Venture Parmers; Dr. Ra fr. Rahul Singh, IMACS and Ms. Richa Sharma, Cognizant Technology Solutions. Our spec eminent professors at IIM-Ahmiedabad: Prof, 8. Manikutty for his key insights, Prof. Sunil Sharma and Prof, L. Gumunathan for their help in shaping the anticles, dustry, academia and the student the industry for their valuable We would ako like to take this opport TM-Ahmedabad. In partic contiibution to our maga Me. Nishant Nischal, A. Inaddition, we would like to mention Mr. Ashutosh Sinha, AT. Keaney for his cont the magazine, Ashutosh was the coordinator of consult club during 2012- consult chub team of 2012-13 for their support, pution in conceptualizing 3. We would also like to thank the entire We would be glad to hear your thoughts, suggestions and feedback on the magvzine. Please send in your valuable comments.at consultclub@imahd.ernet.in ‘Thanks, Kirtika Sharma Coordinator, Consult Club, IIM-Ahmedabad (on behalf of the entire team of Tattva)dattva| 11M Abmedabac From the Editor’s Desk Dear Readers, Aswe | h inputs have enabled us «0 like to thank BMGI, our st of IM Ahmed: for their overwhelming support to our m wich the first edit s Consult Chul It thanks to the industry and the acad 2 of Taitva, on beh: we would like to extend our azine. Their valuable w together a rich assortment of insights into today’s business landscape. We would also -gic partners, for their valuable contribution at every step. ‘The consult gspacein to make th ding services; bu has grown rapidly over the last 20 years, with the C businesses more robust and competitive. ng cydes are getting lo ny slowing down, the nature of consulting is also char {Os of top firms engaging m In the current scen 1 competition is getting tougher. W ving cota is Coming off many years of easy growth, consulting, firms now have to woxk hander to keep clients happy. In addition, there isan increased focus o ideas in addition to chalking out stategic plans. plementation of Our club members have interviewed industry experts, senior consultants and business acadeni current trends the industty, some members have shared f they have highlighted the involvement of consulting industry in these sectors. The collection covers a wide LFMCG and oil & gas, to newe enjoy the eclectic blend of ideas put together by our team. We would be glad 10 receive your feedba help us improve our subsequent issues. ans to find ont the the Indian consulting industry and various bu ss sectors. Having worked for a brief period in. ic industrial sectors—i ge of industries — from well-cstablish ones stich as e-businesses. We sincerely hope you K that would Regards Eaditing Team The Team Coordinator: Editing Team: Design Coordinator: intika Sharma Achyuth Sanjay Anubhav Bhattacharjee Ashima Setia Krittika Adhikary Design Team: Sachin Bharadwaj Arushie Mangla Satvik Dudeja Mani Mahesh Garg Meenakshi ii Tattva 2013dattva| 11M Aline the dattva of consulting The Client The Consultant 27 Consultant a Leader 02 Consulting for 16 Consulting in Financial Regulation Supply Chain Management as 29 Transition from IIMA to Consulting 82 Difficult Communication within Consulting Teams 04 Consulting for Technology sector 19 Consulting in Oil & Gas Sector 06 Consulting Opportunities in FMCG sulting vs 08 Political Consulting {ygitional 34 Top 5 B-School Myths about Management Consulting 10 Consulting for PSUs Consulting in India 28 Leading the 12 Consulting for SMEs Learning Revolution 35 kifectve Commu Offshore Consulting Teams ion in 14 Development Consulting Sector The Firm The Industry 88 Result Linked Fees for Consultants: 48 Wanted: Strategy Trends and Implications = Dead or Alive 40 Increasing Focus on 50 BPO and IT service Implementation in Consulting providers compete in Consulting 48 Emerging Trends in ome Consulting 52 The Rise and Rise of Big Data 45. Consulting across Boundaries iii Tatva 2013 —_—S—dattva| 11M Abmedabad the dattva of consulting The Client The Consultant 02 Consulting for 16 Consulting in 27 Consultan Financial Regulation ‘Supply Chain aa Leads Management 04 Consulting for seme’ 29 ‘Transition from Technology sector 19 Consulting in TIMA to Consulting Oil & Gas Sector 06 Consulting 82 Dillicult Opportunitics in FMCG QL E-Business Communication within Consulting vs Traditional 10 Consulting for PSUs Consulting in India ; Consulting Teams 08 Political Consulting 34 Top 5 B-School Myths about Management Consulting 28 Leading the 12 Consulting for SMEs Learning Revolution ‘fective Communication in 14 Development Offshore Consulting Consulting Sector ‘Teams The Firm The Industry 38 Result Linked Fees for Consultants: 48 Wanted: trates; Trends and Implications = Dead or Alive 40 Increasing Focus on 50 BPO and IT service Implementation in Consulting providers compete in Consulting 43 Emerging Trends in " Consulting 52 The Rise and Rise of Big Data 45 Consulting across Boundaries 01 Tatva 2013 —_—S—dattva | UM Ahmedabad Implementing Regulations in Financial Institutions: Role of Consulting Industry Ashima Setia BOC CRU MC Uh cou Income division of Deutsche PEERY een oe cecerrpeomenp ct te Peso oat cight years of experi Financial Markets. Her ee ee Seer ot ars ce in the Poe ere crea ince is, fulfilling regu S latory requirements has been the prime concem of most banks. Th regulations have already allected key units of banks, such as risk manage ment and technology, and they st fu services industry. to © every seams fina In onder to conform to the regulatory requirements, banks are following a ed, methodical appro approach is not akways clea very dedic But th In general, the right approach and key areas of focus would vary atc of imple consulting picture. As experts in stage th Mo ntation, Itis here 1 industry comes legy, project design and leaders process ccan bring to such large interna projects. Many are engagng constl- tants to fulfil these interim needs. Ana identi mplementat need Focus. jempt has been made here to where the banks are in tens nd which What are the key concerns of banks in implementing the Dodd-Frank and Basel III regulations? Due to new regth Basel IIL, there’s a lot of push on the banks to maintain specified capital ratios. In addition, Dodd-Frank is trying to make OTC markets more transparent it is tying to reduce the alization, ns, especially ¢ 200 new regue the entire fune- lations around almost tioning of banks. Thus, the scale of impact is quite large. Second, some of the changes are deadline-oriented. So, Danks need to implement these the most ellicie changes mer the given time frame. What specific to the capital markets divi- sions of banks? are the major changes Individually, wading desks are diecily impacted in terms of functi 1s However, be argin ire tions, leverage not c of the stricter ents of new regue 1 contracts is getting ses might not look as lier. One profitable as ¢ impact is that overthe-counter (OTO) itself is becoming simpler. E-g., some of the fixed income contracts are getting more ed. In addition, common OTC contracts would 20 through central clearing, just like the ed contracts standardi I yymnore, because of the counterparty 3K involved in centyal transactions, > trades cannot be bil the system ns (which are instintions), clients, authorised participants (which, are banks/ anger financial institutions) id the Clearing House, called the y (CCP). CCPS i ask them for margins. Going forward, banks would need to ind stall t0 central clea face banks, technology inves provide So how are banks planning to implement these changes? ‘The changes need to be brought about in a phased manner, starting simple with derivatives contracts. central inflation ready moved 10 clearing, Swaptions and swaps will move neat, thus covering a large chunk of OTC transactions. Ideally, ab source clearing to another pa clearing panty is someone (for example, another bank, not provide the facilities fo would not want to y-Ithe dlse 02 Tata 2013dattva| 1M Ahmedabad Moreover, the client would prefer to trade and clear the contract through the same bank because of ope tional simplicity, As a result, banks would need to expand their capabili- ties around clearing. What implications could these changes have for the OTC deriva- tives world? Clearing a costs to siart with. In the absence of regulation, it is just a supporting business. No bank would id to do it, But regula ude it an essential component of the workflow. Plus, it is a value addition for clients, They would prefer to do business with the b that offer clearing services. T siart with, only the big banks would be able to provide thi ve. In Il the ba ook to offer clearing: of OTC world. s a business involves high the long ks would 'sthe future Before a bank decides whether to add clearing facility toa business, it is necessary to consider the market of the bank in the bu profitability, and the P&L impact from the clearing facility. Feasibility Of sustaining si lity should, therefore, be assessed. sha 3s, its ‘What is the impact of regulatory changes on structured flow business? Exotic products are hedged with simpler instruments, stich as cash and bonds. The individual wading. desks are charged money t0 keep instruments (since they use the Due to bank’s balance sheet). increased regulator increasing, AS a result, the share of exotie products in the business is reducing. the 03° Tattva 2013 Central Clearing es appetite on the asset side. Instead, oth clients and banks are avoiding complexity and are moving on to the flow products How are banks positior selves to. cam profits in scenario? ‘Once banks have met their regulator capital requirements, each business would calculate its capital and retur Banks might eventually get out of ret pit » UBS | ned income business. They would focus on their strengths, It won't be profitable for every bank to invest in all busi Insinesses where on capital is Are there any new risks that might arise because of this implementa- tion? There are teams in every bank managing counterparty risk for th entire bank (called _CPM/CVA). Earlier, they were at the forefront. However, in the exchange driven world, transactions are over-collatera ized, and the ints risk, now is liquidity. Banks need to ensure that they have sufficient cash and liquid asse squirements, Fe instance, for the clearing business, the Central Clearing, Paity would ask banks for margin at t-0, and banks will ask the client for the same at 1. Thus, we night funding visk. ‘There are liquidity s- mentioned Support Annex (CSA) for each and implementing them proper become very important. Hence, going r would be a lot of focus rade, has How are we coping with costs? Where are we looking to invest? ofl:shor of the Through » make better use Consolidation of businesses ing and bonus caps fe som consolidation, we ¢ of resources that are commion to to or more businesses. By introducing, bonus caps, the regulators are in a w helping us reduce costs. In terms of investments, systems & IT would be mentioned Phe focus is more the focus. plexity is ve provi wt, efficient and low-cost so teclmology would clean achieving these goal help us incattva IIM Ahmedabad Consulting for Technology Sector Rakshit Aganwal SST etc EI VET oy Sernre cate aU ONY Tn lice. His key-interest areas are Petey Pea nema leveraging internet and mobile Prior to joining Nexus, he bu Prem eet sesa tere Soom: Ere mers ncn products. Before that, he was a PT Deu e ecSOe TT oan New Delhi, where he advised Renee eit aero renee een etet Pome ner ouieeameTn oss Pee nenmecroneent terre €Open source and collaborative develop- ment are emerging from the fringes and becoming the norms in the industry. 9? 6 The most overarching trend is that of the boundaries between enterprise and technology blurring - the ‘consumerisation’ of IT.99 Q: Could you tell us about some of the latest trends in technology- sector? I think we are in a very Pl ‘Technology sector can be divided into 2 main areas (a) Enterprise and. (b) Co evesting se of the technology industry. mer On the enterprise front, cloud com puting and virtualization (not just of servers but of storage and network as ch well) axe v0 fandame that have proved to be gum in the industy. These two develop- ments are disrupting the entire stack - from chipseis to application lave with the wellset incumbents such as Intel, Oracle MSFT being chal by new stich as Hadoop, Google, ete. The channel for enterprise tecmology products is changing from the old model of top-dowm adoption by the CTO/CIO, to the new model of bottomarp sales loption by end users, ic. operations — dep Phe traditional methods of 1 management and application devel- opment are undergoing rapid wans- fommation, and the tools _of developi changing. Open source and collaborative devel- the Hinges sofiware are opmentare emerging fro industry. Proliferation of data, espe- cially in the unstructured format via aeated the Big wave which has impacted both consumers and busi- nesses. ‘This is the primary reason why we are seeing a lot of activity in this space, with several start-ups tnying to simplify and democratize the process of crunching dat insights. It is no longer as somethi privilege of big comp pockets. that is the nies with deep On the ble devices are in the inf stages, and are likely (0 How up some interesting applications. Simi- larly, the future of met will be connecting devices (he ‘internet of things’), with all smart pabling communi on between its users and hence making our lives easier. [ will not be surprised if we center the world where we don't need ‘todo’ lists, rather, some- thing (maybe your watch!) und Is and does it on your behalf ‘The most overarching tend is that of the boundaries between enterprise and technology blurring ~ the ‘con sumerisation’ of IT. With BYOD. (Bring Your Own Device) and hi expectations of what a good produ looks like, the enterprise world is becoming more and more const Q What kind of valueaddition do consulting firms bring to the table? Can you give us some examples? 04 © Tauva 2013dattva| 11M Ahmedabad A. consulting firm usually’ brings increased focus and plays out differs cnt strategie scenarios for its clients. It sits closely with th to assess the market opportunity for lient’s product or sewiee. For example at Bain we worked with a leading technology company in the valley for multiple years, helping them across multiple verticals technology to assess fature poten of various technology wends. consumerisation of IT and impact of BYOD on the profit pool of the company Jhouse team, Another example was where a technological manuf vvas trying to min npactof coud-computing, Bain helped the client by first assessing the adoption of public cloud for different work- loads and, helping him modify and tweak the offerings accordingly. leadin cturer ize the hence, Q; How is it different from con- sulting for other sectors? What are some of the unique challenges that a consulting firm faces in the technology sector? ‘The between the tech sector and other sectors would be the faster evolution of the market in the fommer, rela tively spea dynamics change within a span of few years, presenting tmique chal lenges for most fundamental differ he whole m: consulting firms for whom it is essential that they be abreast with the latex technology trends, You probably need more depth (in technology sector) to be a successful consulting firm in it, and prior experience in this particular sector helps a mup-up time lot. From a consult firm’s perspeetiv is much more in techy as compared t0 other plogy sector 05 Tattva 2013 il] believe that general skills are jcal and a musth for a strategy consulting fi Deing said, 1 problem-solving Q How does a consulting firm address that challenge? sting experts for typically has technology firms also tend to \ssignmients sectors. The assign people on tech for longer durations, say about a year, The ng mIOTe frequent exposure to the team and help them absorb the dynamics of technology sector a is to bi ‘They also engage in assessment of sector by publishing many Point of view (POV) docu ¢ is to allow the ersiand how the sector is developing even if it ng on a live assignment, which standing of the market and enables them to be seen asa thought continuously refines the Q: Which do you think is better for solving it: TT-focused consult- ing firms or a pure-play strategy consulting firm that operates across all domains and sectors? It strongly depends on the nature of the assignment. Ifthe cent needs a strong technical advisory or has a nvoalving a tecl nological component, firm a ated to an IT company might prove better. However if the 1 question that the elient faces is str tesicin nature, then pure-play strat sic consulting firms might add more value, Strategy ing firms bring ‘bigpieture thinking’ to the table, and try to integrate the eli technology offering to meet the ket const broad Q. What are the major differ- ences between the Indian context and western world? How mature or nascent is consulting for tech- nology industry in India? In India, technological product companies are few but. growing Most of the consulting th is for the T ‘currently services sector. It may be for a smooth merger, orgunizational. structuring, developing a 5-yr plan and so on, In the West however, a lot more 1s happens on the t ogy and core product like the before ole The m evolved as compared to India. Nev= cetheless I must confess that the sit- wing, with a lot of companies opening up who will then need es on a range of al sta Ket there is much more tion. here is cha slobal issues in their Q. Coming to your current role, do investors hire extemal consult- ing firms to help the startups (carly stage or late stage)? Are there any synergies between the investors and consulting firms that are not yet exploited? Not really. If that were the case, it me: not doing a good job (aughs). We typically invest in id hence not nauch synergy between jage_ companies iting and However as company progresses and need external help across functions: ‘operations, strategy, growth etc. lll westing firms.dattva| 1M Ahmedabad Consulting Opportunities in the FMCG Sector Rohit Sharma he booming FMCG India has greasn steadily in spite of volatility in the markets. With rising ector int disposable omes, evolving consumer lifestyles, growth of modern trade, greater awareness of products/brands and availability of Q der going a distinct phase of strategie rethink to be better aligned with the sing demands of the new In this competitive ature sector, flooded with nati ne channels, the industy is eversincn consun and intemational brands, innovatio (across product development, marke ing, people policies and manufactur ing practices) would be the key differentiator to delight the consumer whilst staying competitive. Consulting firms can play a vital role in helping, the FMCG majors realize this objec tive. ‘Trends in the Indian FMCG Sector ‘The Cons by the Indian expansion of global firms in developing markets will stistain the growth story of the FMCG sector in India, This great opportunity has also ushered-in great challenges. for the firms in the sector, which can das Strategic and ng dew s andthe cre be broadly clas Tactical/Operationa Strategic Opportunities For Consult Firms Mergers & Acquis tions on organi growth vis crs and acquis with ge number of smaller players operating in many pockets of the country. The locale reach, understanding of tastes and preferences and distribution st of some of these smaller p leled. Consult effectively by could advising the majors on the r gies fo stay competitive and anarket-shares in such Developmem Of New SKUG) And Benchmarking Competitor SKU() Development of SKUs and benchmarking competitor SKUs at the right price is another trend in the India With an onslaught of conglomerate diversification of major FMCG fir there has been a sharp © the need for product diffe “This has necessitated develop R&D centres by most of th majors, namely, HUL, P&G and ITC, Keresting sector. nitiation. tof However, tremendous opportunities in the form of intellectual. property (products, categories, pack-styles) wed by global majors exist, which can be leveraged in the Indian contest. Consult fimms, with their global networks and repositories of inform ing ably equipped to. enable 1 lead times to markets and develop a changing products by s. Other clated areas of inte context the need for Indianization of ngs by global majors, helping firms develop products catering to multiple making the competi eve offer fomer segment relevant. ‘Tactical & Operational Opportuni- ties Creative HR Policies for Unionized Emplosees ‘The manufactur India is confionted with ally in th and Bihar belts. The pt nultiple arios, legal implications, futher complicates the employeemployer d ‘Therefore, there is an acute need to lionism, esp evohe creative HR policies to addiess this situation. Antomating Operations Apa ciencies, there is from enhancing process. strong impetus on automating various systems and pro cesses int mmmufacturing and ware- housing. Since FMCG firms operate ovrmargin, high volumes model, high productivity is paramount. With the uncertainty in the HR environ- ment from uncertainty in the labo ning business continuity, enhanced-consistent quality and higher productivity. Therefore, this is ca that would offer tremendous opportunities in the mie!-to-long term. Strategic Cost Ma wering different operat nother area that FMCG focusing-on to rationalize their cost structures. whils._ ens Engineering Sustainability ability has become an integral 06 Tata 2013dattva| 11M Ahmedabad part of the corporate philosophies of most FMCG inajors in India topdown by th respective ir CSR initiatives and with an eye on the esea lating power tarifls/frequent_power ies, FMCG firms like HUL and set ambitions targets of ntial portion of their able sources. Both vesting heavily in Wind and Solar energy and will continue to do so in the short-to-mid term, This presents an opportunity: for consuliing firms to engage with FMOG majors in formulating optimal inabile comporate teams. As part of energy from HUL and I strategies to achieve these sus ity objectives re also eval- ‘This apart, FMCG finns uuating options and investing in ways and_means of bec net water positive and dispatching ze10 solid waste, Overall, sustainability is one of or FMCG the thrust areas for the firms in India and would continue to offer opportunities to the consulting, firms to engage with the FMCG sector. CGMP Implementation Especially relevant to the food- processing industry, GMP (current Good Manufacturing Practices) is another fundamental shilt in the FMCG sector's approach to manufac tuning. With the uncertainty in the n nent and stringent implementation of GMP norms by the USFDA, ICG firms are pro- actively upgrading their manufa ing setups to adhere 10 cGMP guidelines. ‘This includes changes in the operating procedures, retrofitting product-contact: surface . appli- cation of foodgrade paints and tation 07 Tattva 2013, Inthe mid-temn, this could becom increasingly important a ment as Indi of engage- n majors inerease their export shares and o% bility of requirements ng to the possie ctment of similar legal in Inia. Supply Chain: Market pping the Rural With about 70% of India’s population and roughly 50% of India’s GDP, th rural market is an opportunity that still remains to be tapped by most FMCC players. With the exception of IT