NEWS 9th September

RCom gets Rs 1,400cr order from HDFC Bank to build data centre
New Delhi: Reliance Communications on Thursday said it has received a Rs 1,400 crore order from financial lender HDFC Bank for construction and maintenance of a data centre. The project is the largest-ever outsourced in this sector and the implementation period will span 15 years, Reliance Communications said in a statement. The data centre will house equipment having highest the computing power in the industry, which will require special engineering expertise to manage and minimise the consumption of power. Reliance will set up the facility in stages. The first phase of the data centre will be ready in a year and the entire project will be complete in two years. It also plans to use the facility as a cloud computing centre, as the size of the cloud computing market in India is expected to grow to Rs 7,000 crore by 2015, the company said. "The enterprise environment is changing from large footprint, low power consumption computing equipment to high computing, high power consuming equipment with a small footprint. This facility will be the first of this size to cater to this kind of requirement," Reliance Global Enterprise Business President and CEO Punit Garg said....

At MTNL, perform or face pay cuts

Mumbai: State-run telecom major Mahanagar Telephone Nigam Limited (MTNL) has taken a tough stand on the employees performance issue. The companys top management has warned employees that there may be a cut in pay in future if they fail to improve their performance as per the companys expectations. We have been warned by our chairman to work hard with a motivation to improve our performance, failing which we may face a pay cut of around 20-30 per cent in the future, a senior official told The Indian Express. MTNL chairman and managing director, Kuldip Singh, confirmed the move, but declined to comment on the percentage of pay cut. The move is to bring out motivation among employees to work hard for the company and generate revenues. As far as pay cut is concerned, we dont want to do until and unless there is compelling situation for us in the future, Singh said.

6th September

Indian MNCs like Marico, Emami, Tech Mahindra, Godrej and others facing cultural shocks, diversity in Africa
NEW DELHI: Indian MNCs that have embarked on anAfrican expedition are getting a true taste of adventure when dealing with the local talent. For Marico's executive vice-president and HR head Ashutosh Telang, the challenge presented itself three years ago, at a formal interaction with employees in South Africa. An attempt to get the employees to speak up about the issues they faced was met with silence. Telang then hit upon an ice-breaker: he asked the employees to draw pictures of how their respective teams were doing, and the idea worked. This was more than a paradigm shift for Telang: back home, he was used to "hearing" from employees. "In India, you get such a breadth and depth of responses," he says. That day, Telang learnt a fundamental lesson, like most other HR heads in companies that have chased the gold mine of opportunity in Africa: talent was wired differently there. Weekends are sacrosanct to most African employees, the pace of working is slower than it is in India, and education and skill levels are lower. Besides, there are a host of cultural differences to deal with. Over a decade, Indian companies have pumped in $33 billion in Africa, lured by untapped natural resources, and the opportunities for investment in everything from infrastructure, agriculture and real estate to tourism, education and healthcare. Trade between India and Africa could touch $70 billion by 2015. "Africa is a goldmine for everyone who wants to grow," says Prashant Goenka, director, international marketing division, Emami, which has a presence in north, central and east Africa. In 2010-11, the company registered 100% growth in the continent, and has hired locals and people from India who are familiar with the African market. But what Goenka learnt early was that unlike in India, where employees are on call 24x7, in Africa the workday begins at 7 am and ends at 4pm. The culture can be a bit of a shock, initially, and understanding it could take a while. Africa has varying geographical and governance systems, and assimilation of multiple ethnicities is key to any HR policy. "It is critical to build a mature leadership to deal with this complexity," says Telang. Swati Patwardhan, HR manager at Godrej, got her first surprise in the way South Africans worked during her stint in the country. She found that in factories and offices, playing music or singing while working was a given, something one couldn't imagine in India. Even incorporate offices, she would find a small radio next to the laptop or PC. "Music is critical to their productivity," says Patwardhan. Attitudes toward money are different too. "Indians save and live for tomorrow. In Africa, they live for the day.

KPMG, Wipro, Essar, Igate-Patni use KPMG Predictive Index, Neural Network, Engagement Hypothesis, Five C and Three Circle Tool to predict employee's exit, engagement
BANGALORE: Consulting firm KPMG has recently created a crystal ball. Called the KPMG Predictive Index, it can foretell when an employee will resign. A typical warning sign: A senior manager asks his secretary to check if his stocks have matured, or wants to know how much leave he has left. The secretary logs in to check, and this alerts the Index that the employee's query could be to check his waiting period before he joins the competitor. "The tool is right seven out of 10 times for junior employees, eight out of 10 times for middle management and nine out of 10 times for the top brass," says Ganesh Shermon, people and practice head for KPMG. Artificial intelligence has been in use for the past three years and nearly 15 companies from the information technology to the telecom and retail sectors have asked KPMG to implement it. Most companies would give an arm and a leg for a sure-shot way to predict whether an employee will stay or go. The reasoning is that with a competitive market making it possible for employees to hold multiple offer letters, intensive training efforts and investments are often laid to waste. "All other methods are useless. Exit interviews, for example, never reveal the truth because no one wants to ruin their relationship with the company" adds Shermon. ALERT TO SIGNALS As statistical tools gain in sophistication, algorithms and business intelligence can now predict an employee's exit even before he puts in his papers. Some of these have alert signals. A green alert on an employee shows he is satisfied, an amber one means he needs help and red one gets the manager to drop everything and sort out thorny issues. The idea is always to spot the weak link before it snaps - and this could either be in the form of a spouse getting a transfer or a loan repayment. Developed by firms like SAP, IBM and Oracle, these tools are considered to be the next step in workforce management. Analytics tools can also predict customer behaviour, buying patterns, the number of promotions that will be rolled out in the next few years in a company, or even the consequences of retirement. IT company Wipro, which is battling a high attrition of 23%, has implemented Neural Network, which uses artificial intelligence to map out disgruntled employees over the past two quarters. The Network contains data relating to thousands of employees, and includes their profiles, salary levels, appraisals and projects they have worked upon. Along with the existing workforce, profiles of employees who have left the company and their reasons for doing so are also part of the tool's learning process. Although the tool does not detect the reason, it sends a red alert to the manager, who then kicks off methods to salvage another departure. "We know we are on the right track because attrition in the group under red alert is twice that outside the group, which proves we have zeroed in on the right people," says Saurabh Govil, senior VP at Wipro Technologies

5th sept

India's F1 race attracts big sponsor roll call

India's Hero automotive group is the latest business house to join the list of corporate sponsors backing next month's inaugural Indian Formula 1 Grand Prix race. Hero, controlled by the billionaire Munjal family, announced on Friday it would sponsor driver Narain Karthikeyan and the Hispania Racing Team (HRT) in the October 30 race. The events main sponsor is telecoms giant Bharti Airtel, part of Sunil B. Mittals Bharti Group. The race venue, the 5.14 km Buddh circuit in the satellite city of Greater Noida about 40km from the capital New Delhi, has been built by construction tycoon Jaiprakash Gaurs Jaypee Group. The 120,000-capacity race track is the centrepiece of the groups Jaypee Greens Sports City real estate development. Karthikeyan is yet to score a point in this years F1 championship, but he will carry the weight of expectations of millions of Indian F1 fans. Another Indian driver in the mix is Karun Chandhok, who is a reserve for the Lotus-Renault team and may get a start. He drove in the German GP earlier this year, but like Karthikeyan has no championship points. The Indian business house with the highest exposure to the F1 race is Vijay Mallyas UB Group, which promotes its Kingfisher beer, aviation and lifestyle brand via Mallyas long-standing interest in sports. Mallya, a flamboyant billionaire known as the king of good times set up his Force India F1 team in 2007 when he bought the former Spyker F1 team for 88 million euros ($117 million) in partnership with Michael Mol, the Spyker F1 director. The team, which runs on Mercedes-Benz engines, has scored 32 points so far this year through drivers Adrian Sutil and Paul di Resta, to rank seventh in the constructors championship. When the Indian Grand Prix was in its early stages last year, Mallya said nothing would give him more pleasure than a podium finish at the inaugural event. In Mallyas view, Indias economic growth and its young, aspirational demographic profile make it an attractive new destination for the competitive, high-technology sport of F1 a view shared by the Gaur family, Mittals Bharti Group and now Munjals Hero brand. Other Indian business houses including Tata and Mukesh Ambanis Reliance Industries also are involved in F1 sponsorship. The Mahindra group, which makes everything from SUVs to two-

wheelers, tractors and heavy trucks, has a team entered in this years MotoGP motorcycle series, and would like nothing better than to have an Indian MotoGP race at the Buddh circuit next year. For 26 years Hero, led by group founder Brijmohan L. Munjal and his son Pawan Kant Munjal, was in a partnership with Japans Honda to make motorcycles and scooters for the Indian market. That joint venture, known as Hero Honda, propelled the company to global leadership in the twowheeler segment, reaching peak sales of 5.4 million units in the 2010-11 financial year. But the two groups decided at the end of 2010 they would part ways, with Honda opting to tackle the Indian market on its own terms. Hero bought out Hondas share in the joint venture, and last month the Munjal family renamed the company Hero MotoCorp. Pankaj Munjal, the nephew of the groups founder and managing director of its Hero Motors unit, said on Friday (September 2) that endorsing Karthikeyan for the inaugural Indian Grand Prix reflected Heros core values of pursuing excellence, speed, growth and innovation. The biggest investor in the race is the Gaur family, via its Jaypee Group. In addition to the $400 million racetrack that sits alongside the groups new Yamuna Expressway from New Delhi, the Gaurs have built a 1000-hectare sports city made up of luxury apartments, a golf course, a 100,000-seat cricket stadium, hockey ground, training academy and other sports facilities. For years, the Gaur family has wanted to bring F1 to India. In 2009, its flagship Jaypee Group signed a 10-year deal with the controlling body for F1 racing, the Federation Internationale de lAutomobile (FIA), to build the circuit and conduct the event, through its Jaypee Sports International arm. Last year, the FIA approved the addition of an Indian Grand Prix to the 2011 F1 calendar, and last week FIA inspector Charlie Whiting signed off on the new Buddh international circuit. The track was designed by German architect Herman Tilke, who has been responsible for a number of new F1 circuits around the world. The event is expected to attract a large TV audience and organisers are confident of a full house of 120,000 spectators on the main race day, even with the relatively high entry prices. Tickets for the event went on sale on August 20, in a price range of 2500 to 35,000 rupees ($51-$717). A full house is worth about $26 million in ticket revenue. But there is also a chance of disruption from farmers angry over land acquisitions in the area. Road access to the F1 track is via the Yamuna Expressway, a controversial 165-km tollroad that the Jaypee Group is building to link Delhi and Noida with the tourist city of Agra, the home of the Taj Mahal. The full six-lane road is not due to open until the end of this year, but a section between Noida and Greater Noida will be in use for the race day weekend. Some farmers have protested about the way the Uttar Pradesh government handled land purchases along the expressway route and have threatened action on race day.

Jaiprakash Gaur told Indian media recently that his group had nothing to do with the land acquisition, but there was confusion about the companys involvement. We prefer to remain silent. Time will clear the fog, he told the Indian Express last month. Gaurs eldest son Manoj is executive chairman of the Jaypee Groups listed flagship Jaiprakash Associates Ltd and has a similar role with subsidiary Jaypee Infratech. Gaurs other sons Sunny and Sameer are directors of group companies and daughter Rita Dixit is an executive general manager. Saemeer is also managing director of Jaypee Sports International.

Reliance Communications units merger to render 700 staff jobless 5 sep

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NEW DELHI: Reliance Communications, India's second largest telco by subscribers, is merging its three business divisions, a move that will make about 10% of its 7,000 executives redundant and result inredeployment of another 2,000 employees to 'field functions'. The telco will collapse its existing business units that are carved out geographically - North, South and East - into a single entity reporting to a chief operating officer, who will be recruited from outside by month-end, executives with direct knowledge of the developments told ET. All support functions such as customer services, IT operations, networks and products, among others, will be moved to a newly-created 'services division'. After restructuring, about 75% of the RCOM's employees will do 'field roles' to drive sales execution as against 60% currently. RCOM now joins Bharti Airtel and Tata Teleservices who recently carried out major restructuring exercises by merging business verticals and reducing employee headcount. All telcos are focusing on cost-cutting measures to boost efficiencies as they fight multiple challenges of high debt burdens, slowing growth and high marketing spends amid cut-price tariffs. RCOM chief executive (wireless) Sayed Safawi said the telco was undertaking a 'structural rationalisation, including organisational de-layering, and making few key changes the leadership team'. "Eventually it may result in significant slimming of the organisation as a whole, especially at the back-end functional level, though the potential number impact is yet to be assessed," he said and clarified that the 'restructuring was not about head count rationalisation, but getting right resources at right places'. The company's northern region head Nilanjan Mukherjee will head the newly-created services division. Its current head of southern operations CS Rana has opted for 'superannuation', while Vivek Garg , who is incharge of the east, will be assigned a new role internally. Safawi dismissed as 'rumours', the market buzz that Bharti Airtel's former president for mobile services Atul Bindal may be headed to RCOM. The company recently reported a 37% fall in profit for the three months ended June 2011, its eighth straight quarterly fall and it remains weighed down by debt of over Rs 33,6000 crore. It recently raised tariffs in 19 of the 22 regions by 20%. Safawi said that company's debt would come down 50% after the sale of Reliance Infratel, its tower arm,

and added that the full impact of the tariff hikes would be felt during the next two quarters. The restructuring, he said, would also help the company increase its focus on new revenue streams such as data, 3G, mobile commerce, among others, he added. RCOM is also increasing its number of regional hubs to 12 by making Mumbai a separate unit and all hubs will now report to the new COO. "Each hub CEO manages businesses worth more than Rs 1,000 crore - these 12 hub heads are being empowered to lead wireless business like geographic CEOs," Safawi said.