T&M Industry in India : Mapping the Procurement Professionals mind!

We continue to face major Economic pressure points today ,as our Current Account Defecit and fiscal deficit remains high.Our ability to fund the populist Government schemes is highly limited and the ratio of external debt to the GDP mounts because of tepid growth quarter over quarter.We have hit to the 10 quarters low as far as the growth deceleration is concerned.Imagine this country is like a typical Company where our growth is getting highly dependent on the external factors of our Sales booming and so the Profits must improve depending on better execution of orders and efficiently managing the cash and all costs-variable as well as the fixed.Likewise our capex and opex are maintained at a level to derive the better reasonable return on our equity/assets. Today this is under severe strain because of deficits on the trade account as well as the fiscal account.Only Growth can tackle these problems like Sales turnaround helps in a Sales Organisation.

This is what leads to the basic question of Growth in sales coming because of Leverage,and Asset Productivity.Our T&M companies in India have huge asset base in terms of smart and youthful manpower.Many of these T&M companies,particularly the MNCs and their channel partners have a huge cache of cash generated over the last decade! All these assets can be creatively utilised for leveraging the growth,and the industry overall can be big lever of prosperity ahead.Also many MNCs have a natural advantage today,as the INR is weakening against major currencies and is expected to decline till at least two to three quarters.These companies can help their own cause if they help the Indian market by announcing FDI allocation for the same products which they sold over last decade.Their companys local sales forecasters can help them with this pipeline visibility!

Turning the attention to buy side of the equation our Procurement of T&M needs to undergo paradigm change.Smart professionals need to take over from sarkari babus and officers mentality.They have to strike strategic advantage to their organisations (saving foreign exchange,operational knowledge sharing ,deferred payments on capex/opex conversion etc).They have to move from L1 syndrome totally and help organisations improve on the larger efficiencies and efficacy of procurement.T&M companies can sure take advantage of their product line and customers opportunities in this fiscal.

T&M Industry in India:Scale,Integration and Market Leadership needed!

For last several blogs we had been discussing how we can utilise the challenging time today to put several actions in our different activities so that the pace of T&M industry in India does not get broken and we can take a smoother ride.

The tough times really need tough measures and we need to enter an area where the T&M industry finds itself beyond its comfort zone,and where it has never invested sufficient resources of labor and knowledge workers. I recall the development of ADA software platform of Eighties in the US where a similar impasse was to occur in the hardware/software integration in Government programs.The industry responded by stretching allocations beyond normal that time.The programs itself were not successful as far as the original intent was meant,but the industry was inspired to run several multiple alliances and JVs in sevesal fields contiguous to the field!

I think seeing the last several generations of T&M professionals in the Country and the Regions in Asiapac, we feel some sort of test of time is going on here.Management of alliances is taking energy toll and integration of disparate cultures of business, geneti codes and geographies is the issue to focus.It is getting even more complex,when these T&M companies try to emulate the 'number of feet on the street ' success seen at big IT companies majors : like Cisco, IBM, Nokia etc.Cohesion and well integrated team does not happen in isolation, by a white knight approach or even parachuting some leaders from somewhere into the Company concerned.

For the T&M companies,managing partnerships becomes very crucial and critical.Good Pragmatic leaders have to tread a very fine line.They have to have a "trust but verify" approach and be ready for changing mid course. Managers must be prepared for "When the facts change- I change situation on the fly.Actually Management of partner ecosystem is a sort of General Management(with sales bias ) of course, where flexibility,integration of disparate interest group,flexibility and platitudes are all on the test of fire.We need in the T&M companies today these scaling,entrepreneurial and instinctive Leaderships this Fiscal.

T&M Industry in India : FY14 must see Defense oriented FDI now!

GDP Growth slowing, Fiscal Deficit, Trade account issues can all be taken very well by the one Mega sector of the Indian Economy.This sector is Defense. Sector budget currently is around 200,000Cr  and really becomes important where trade deficit because of import sensitivity is very crucial.This is a sector which is also purely expenditure driven with indirect benefits happening to the other sectors if local manufacturing can be triggered by the Global FDI.India needs newer technology in this strategic sector,and the limit of 26% is a big drag on it for Global players to come in.


Most of the leading Consulting Companies and Investment Banks are readying their Pitch Books to present all possible Indian and International investors for really leveraging this through FDI driven local manufacturing and technology assimilation.Because of larger macro picture,there is possibility that this time in FY14 we will see the cap moving to 49% if not higher.The implications to our manufacturing jobs,the sector and the GDP can be tremendous if long term foreign investment moves to India.Cascading effect to the T&M equipment sales and growth will be very significant.Since we are contemplating large capex and followon offsetting, software,services and support T&M equipment to boot.

Since the triggers of all these are current account deficit,import sensitive purchase and defense purchase policy related processes, the impact on jobs can be also positive for local industry.It is one sector where the immediate gains can be had as for the next five to ten years the Defense Requirement is expected to grow and the geo-political requirement expects India not to let up.I think after a gap of almost 40 years we should see big ticket purchases happening here for Electronic and so the derivative T&M equipment as well.

T&M Industry in India : Will FY 14 see the Basics of Network Management and measurement?

TESTING TOOLS,  ACCESS  , AUTOMATION ,NETWORK MEASUREMENTS  & NETWORK
MANAGEMENT  are competitors or partners?


We are seeing increasing clamour of new technology becoming a new source of competition and corporate rivalry as more and more networks are being rolled out.The typical situation in India is that we have been seeing a drop in growth of new subscribers and the revenue from the Voice services we are simultaneously seeing a fillip in rollout of advanced technologies too. So, the Quality,Productivity and Profitability of both the new and old networks is under scanner.The T&M once again has to respond to this challenge.The decision is not going to be taken by the CTO or even the CFO in isolation but Business has to drive the T&M procurement challenge !

Deployment phase generally involves the installation related long-term analysis of pre-defined test procedures and sequence stored on the test templates.Portables need to be deployed for most of the measurements.Ease of use and robustness become the key here.During the maintenance phase the same thing is turned to baseline or out of the baseline measurements are needed,Tributaries are monitored and full glance remote control and unambiguous quality assesment done by the Automation based systems.This actually becomes more of Management than just Measurement described earlier.

Areas in common between management and measurements are found in the field of monitoring systems and statistical analysis & prediction.And actually the impact of these on opex determines our view on what and how much of both will be invested in.We may have either of these operating philosophy-either use a method outside the system or integrate the testing in to the system.Separate measurements are needed to detect the faults in the manufacturers products,but the inbuilt test systems are more powerful and less expensive.However the flexibility is more in out of system Portables type of T&M.

Todays scenario in India requires us to go back to these basics when 4G technology is at the threshold of deployment, new networks are getting into the mainstream of tornado,and yet the opex and capex need to be managed in such a way we dont make T&M becoming drag on the Business !

T&M Industry in India : FY14 can be the year of Interface/Interoperability Testing ?

IDEA  OF ENSURING AUTHENTIC  INTERFACE / INTEROPERABILITY  TESTING

The Big Picture objectives of  our T&M Industry is primarily  to help create the Ecosystems where the QUALTY , PRODUCTIVITY', CONFORMANCE  and PERFORMANCE  aspects of the User industry can be improved and assured. Such an entity or an organisation has to be created in India either through Regulatory Framework in different sectors or can be developed to augment so that an existing setup can go up to highest level of Credibility and Reference. Since T&M industry serves many sectors of our Economy it is important we prioritise, and focus on those sectors with immediate and high impact on Society and Consumer protection. In this blog posting I will Cover Telecom related needs of such an organisation.

Most of the T&M techniques and Quality in Data and Voice Networks is done through test and measurement of Electronics Equipment.The Test & Management of the Networks Interfaces and Interoperability is realised by the Collaborative efforts of Industry , Test Labs and Staff , Global Standards Organisation and National Governments adhering to agreed norms for that sector.While we have these organisations in some fragmented form,and bits and pieces in Telecom we  the Integrated approach hasnt been tried successfully.

In this blog we will bring out the key objectives of such an organisation,so that it is Vendor Neutral,Technology Current, on par with Indian and Global Standards of Performance & Conformance ,Academia  and Regulator. Industry Users, the Standards Body and other stakeholders
will be part of this organisation. Organisationally it had to be autonomous in its working and can be a Society on the lines of CDoT  or some variant. It will have its own Board to manage and direct its activities and draw people from Technology Industry, Administrative background and Legal and Corporate  Law expertise.

Such an organisation will have other components to it,and we will discuss these in some subsequent blogs.However one thing is clear that such an organisation is overdue and FY14 could be and should be the year of its Logical Founding & implementation.


 

T&M Industry in India : Ideating for FY 14

So, the new financial year FY14 is here. We continue to watch major sectors intently.Some good news in Telecom ( Cooperation between major Corporates announced !) started the new year.As well as the Prime Minister taking a very motivating instance in front of India Inc. While  I am happy for the renewed optimism ,both our real Economy and Capital Economy doesnt give lot of inspiring indication.Globally the US Economy is getting stabilised with 2% solid growth.This growth may trigger hope to our own tech sector on the services side!

There is always a big risk when one tries to think some curative ideas for newer growth possibilities.But let me be the bad boy and suggest the T&M sector a fresh approach to generate sales through what I call -Enterprise Test Integration, ETI - approach.This is proposed for both Manufacturing and Deployment Projects but more for Manufacturing standpoint.Manufacturing in Electronics and Telecom really is somewhere in between R&D and Field Service segments of T&M.This is not penetrated on a Systemic Basis. By that what I mean is the Sales guy is still boxed in the mentality of selling boxes to individual users,but not thinking of the total factory as the T&M buyer -the Boxes plus the Softwares, Services and Test Management - for the total enterprise.The T&M sales guy along with the other solution architects needs to adopt "Total Manufacturing Test Solution" as the pitch rather than the Boxes to drive maximum Enterprise Share rather than selling
Boxes alone.

I firmly believe that T&M in India is exposing itself to various gaps in selling approach as these professionals are highly stuck up with portable boxes.They havent groomed themselves to what are the Business Issues of a Manufacturer? How a T&M sales guy can bring in newer skills from his support stable ( IT integration, third party hardware and software and other vendors in rhythm) to offer superior ETI package for them. This will automatically wrap bigger revenues for T&M industry and reduce pains for the customer. Let us hope we see some success in FY14 for ETI based selling.
I will be very keen to assist finding their first such customer ! 

T&M Industry in India : A precursor to FY14.....

As we discussed in the previous few blog postings ,the T&M industry revenues in the year winding down today have seen tepid growth. Overall the revenues growth was tepid with few bright spots and the odd big deals closing on the Mega Defence and Telecom Sectors. The Defence particularly the Army and Naval units were able to procure large no. of handheld and portable instruments,even though there was this cutback on huge budget of approx 193 K Cr. Likewise some deals on the 4G deployment were squeezed into this FY . Some of these deals came really by the skin of the teeth and had a long suspense of uncertainty!

Now what could be the prospects and outlook for the FY 14  ahead of us,just the week starting Monday? We have also to remember the crucial nature of this decade we anticipated right in the beginning of  FY11. And the churning is happening as we write this post.Many small acquisitions are being done by top 4 companies Globally and more is expected. I reckon that more than the M&A activity what is likely to happen change of architectures,standards evolution and fusion of Digital Techniques and FPGA in a wider range of frequency instruments. This off course will lead to smaller blade size in the modulars, new formats of ATEs and progressive use of USB and super-USB in portables.

We will see yet another change in the market place and channel realignment. And this will be through productivity increase with numbers of feet on the street and technology both.Now that has lot of consequences for manpower development and deployment. Propelling online sales will happen because we in general are facing lot of logistics issues on global delivery and connectivity. E-Commerce will be catching on in our very protected ( rather insular market of T&M) space. I expect at least 1-2 international chains sprucing up the chain to handle portable deliveries this way.More than probable will be one of them will be an European chain. Watch this space for FY 14 . Bye for now FY13.