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  POLITICS & GOVERNANCE[2001 onwards] POLITICS & GOVERNANCE[1996-2000] MOVIESMUSICSPORTSBUSINESSNATIONAL SECURITYINTERNATIONAL AFFAIRSINFOTECHSOCIETYSTYLELIVETRAVELSCIENCEELECTION'99ELECTIONS '98 | ||
'The slump was a natural correction'USA, 21 May, 2001: Reknowned Professor Mohanbir Sawhney, considered one of the world's most knowledgeable persons on e-commerce, spoke about his latest book, Seven steps to Nirvana. He also gave a positive outlook to the current slump in the market, calling it a correction that was necessary and predicting that 'sanity' would return soon.Srinivas : anyone out there Mohan Sawhney : Yes, this is Mohan Sawhney. Sorry about the glitch in getting started. I'm ready to take questions. Srinivas : Hello professor Mohan Sawhney : Hello, Srinivas. What's your question? eBiz : Do you think that eCommerce is nothing more than just a bubble? Mohan Sawhney : You need to be careful to distinguish between the potential of e-business to make businesses more efficient (which is real) and the Internet as a business (dot coms), which are far closer to the bubble. Srinivas : Which way do you think eBusiness is heading Mohan Sawhney : Well, that's a broad question. I think we have swung from one extreme (hype) to another extreme (gloom), and we will settle somewhere in the middle. So I see a positive uptick coming. ashwani : I was discussing this with a chat colleague. well, we started working on a marketplace last year, but this economy thing happened and we got discouraged. I was curious to know what you think about this slump Mohan Sawhney : The slump was a natural correction - things had gotten too far with the risk being transferred to the public markets by VCs, and unproven companies being taken public. It had to end sometime. But, sanity will return.. Srinivas : How long would you think will it take for the uptick Mohan Sawhney : I see the bottom in the third quarter, with an uptick in spending beginning early next year. Of course, analysts and experts have a poor track record! Kumar : I am interested to know how an MBA degree can help me get into e-business? Mohan Sawhney : It will help you to understand the fundamentals of business - finance, accounting, strategy, marketing. And I think many entrepreneurs forgot fundamentals in the dot com mania... ashwani : I can imagine all those analysts beating down themselves for missed numbers Mohan Sawhney : Not really. They just change their tunes and move on. There is very little accountability - think of Blodget and Mary Meeker... Srinivas : I am planning getting into an MIS program with Ecommerce specialization. DO you think it will help after the uptick Mohan Sawhney : I would get a solid foundation in technology and how it impacts business. So focus on the MIS part, and make sure you are learning business fundamentals, not faddish e-commerce courses. ashwani : congratulations on the new book, Professor Mohan Sawhney : Thanks, Ashwini. Samir : So are you an analyst or an expert ? Mohan Sawhney : That's a loaded question! I plead guilty, regardless! eBiz : Prof Sawhney, do you mean to say that there is no hope for Internet as a business? Can't it be a customer acquisition tool for retailers (just like phones are for mail-order companies)? Mohan Sawhney : Yes, but as PART of a larger multi-channel strategy. The economics of a stand-alone Internet business are far less compelling. Hybrid models will win in the long run. And the Internet will become just another channel in the mix. Jay : Mr. Sawhney, how many books have you written? Mohan Sawhney : Two recent ones - one I co-authored (Seven Steps to Nirvana), and one I co-edited (TechVenture). Both were launched last month. ashwani : Professor, is this still a good time to talk about improved supply-chain efficiences and marketplaces and so on. I have read through plenty of your articles on your website about the next generation marketplaces and eHubs. Mohan Sawhney : Absolutely. The key difference - instead of focusing on transactions, we need to focus on collaboration. And instead of public marketplaces, we need to think about private networks with existing strategic suppliers nad channel partners. Srinivas : What do you think is the best way to go about to build a career in EBusiness. I am an ecommerce architect and planning on taking some management courses Mohan Sawhney : I would start with a consulting organization, and then slowly work my way into a corporate career in e-business. The big shift in the past year is that big companies have some interesting e-business jobs. So you don't HAVE to go to a startup. Samir : What do you think about ISB for MBA ? Mohan Sawhney : The idea is compelling, and the backers and founders have impressive credentials. The real challenge is to recruit world-classs faculty. It will take a few years for ISB to find its feet. But its the best thing going in India at the moment. Kumar : Dr.Sawhney... how much / how many international comapnies are interested in outsourcing to India for intelectual property, which I keep reading you referencing in your articles? Mohan Sawhney : Outsourcing to India will slowly grow from the "low-end" call center/medical transcription business to more important mission-critical operations functions. But it will take time to build credibility and reliabiliy. Also, connectivity has to improve (VSNL monopoly). eBiz : Then I am curious to know what do you think is the future of companies like EthnicGrocers? Mohan Sawhney : Its a tough battle. EG is struggling, like many of its peers. Its really hard to make a pure e-commerce play work. The economics are very tough. Even Amazon can't do it... Samir : Where do you see the next product segment in ecommerce world ? Mohan Sawhney : Collaboative commerce - collaborative design, collaborative sourcing, and so on. Srinivas : I am working for a startup now. I think you might have heard of Rediff Valucom Mohan Sawhney : Yes, I have heard of them. ValuCom brings Rediff much-needed top-line revenues. My concern - how sustainable are the margins in ValuCom's business going forward? ashwani : But such a concept of private networks conflicts with open-ended Hubs where new buyers and sellers will be able to correspond irrepective of boundaries or currencies. Do you think such trade boundaries will collapese over time (OR) enterprises will protect their supply-sell networks and correspond to very limited number of business partners ?? Mohan Sawhney : Very good question. Both will happen. Private networks will co-exist with public markets, and will serve different purposes (strategic sourcing versus transactional sourcing). No one mechanism will win out completely. Jay : What is the future of the Internet? Mohan Sawhney : Think of electricity. Like electricity, the Internet will become part of the fabric of business, and we won't talk about it as a separate business any more. E-commerce will eventually become commerce. Paradoxically, the more ubiquitous the Net becomes, the more invisible it will become... Srinivas : Dr Sawhney I live in Arlington Hts. Can I get some consultation/ guidance in person from you. Mohan Sawhney : As best as time will allow. Please send me an e-mail. Kumar : Dr.sawhney... Why are Indian manufactures not able to compete with the chineese manufactures in the International market? Mohan Sawhney : Inefficiencies in the factor markets - duties, inefficient infrastructure, and insufficient scale. I am not too sanguine about the ability of India to compete with China with the WTO relaxation. We are at a serious disadvantage on costs.. jagan : Dr. Sawhney,In an article you've said India can play a service provider role to the world. But, Do you think that Indian B2B e-hubs can really withstand the tests and pressure now and become successful players in the future ? How do you rate indian B2B e-hubs in comparision with other Asian e-hubs?Jagan form Chennai, India Mohan Sawhney : I think B2B hubs in India have an uphill battle ahead of them. All the problems that US B2B hubs faced affect them too, but in addition, they have to deal with lower automation levels and smaller scale. So I think Indian companies should look at IT-enabled services for the WORLD market, instead of the Indian market, which remains small for the forseeable future. Hobbes : Hello Mohan Mohan Sawhney : Hello! Kumar : Dr.Sawhney... Are American companies presently outsourcing Engineering/Designing part of their business process? Mohan Sawhney : I'm starting to see some early successes here. Engineering design is an important market for India, where we can marry CAD skills with outsourcing to become the "Design center" for the world. Again, you need to build confidence over time, one customer at a time. But the economics are compelling, and we have the skills in India. Srinivas : Dr Sawhney I am planning to move back to India or Singapore to pursue my career further. DO you think it is a wise move Mohan Sawhney : I'd have to know more about your specific situation and skills. There are opportunities everywhere for skilled people, but you have to think about the lifestyle trade-offs. eBiz : What do you think are the top 3 lessons can one learn from the Internet bubble and its aftermath? Mohan Sawhney : Focus on the customer value proposition, not greed as a basis for a business. It's a long way from a customer's eyeballs to her wallet.True successes on the Net will be things that you can't do without the Net (eBay), not "cheaper, better, faster" ideas (like eToys). jagan : Dr.Sawhney,Thank you for answering my earlier questionOne of the bottlenecks for the growth of B2B e-commerce is the lack of Payment system. What are the possible solutions available no w and the future Mohan Sawhney : On the business side, we will see players like eCredit.com collaborate with Indian financial institutions like ICICI and HFDC. On the consumer side, its a more difficult process, and we may see some creative avenues (I recall the Gujarati "Angadias", as an example!). Joe : Is your book available in bookstores? Mohan Sawhney : Yes, it is available in bookstores and on Amazon.com. Sijo : Do you think that globalisation is another way of "colonolisation"? What I mean is that the global powers make advantage of their power, may be the background, education, experience etc. against the under privilaged? Do you think that it is really good for India? Mohan Sawhney : Well, you can make arguments on both sides of this. In the short run, globalization exposes the weaknesses of protected economies like India, and does open the possibility of exploitation. but in the long run, India will definitely be a winner here. Americans are scared of Indian human capital and its competitiveness! Jay : Mr. Sawhney, how did you get the title for the new book? Mohan Sawhney : Good question. The book deals with "e-transformation" and "e-volution". And Nirvana is the outcome of a personal evolution process. That's the tongue-in-cheek reason for the title. I also wanted to hint about the use of metaphors and Indian fables that are sprinked througought the book! Joe : What do you think of Dipak Jain being named dean at Kellogg? Mohan Sawhney : Its a wonderful thing, and makes all Indians proud. Dipak is my mentor, and I think he will be an excellent Dean at Kellogg. ashwani : Professor, yourself being a renowned educator, do you think Indian education is suited for the next age or do we have to make creative changes to make it suitable ?? I am highly skeptical of the cramming methodology, but as we are finding out, we are the best in the world in intelligence. Mohan Sawhney : Indian education has to evolve with the times. We don't encourage creativity and problem solving to the extent we should. And we need to infuse a stronger work-ethic among our students. But our fundamentals are sound, and that is one of the few things we can thank the British for.. Nageswar : Dr. Don't you think most of the existing problems in India can be diluted by integrating whole of India on a low cost common network and replacing computers with low cost equivalent equipment. We have no shortage of knowledge and manpower to do this. Your comments?? Mohan Sawhney : Indeed, low cost access (possibly throuhg public-access places) is the solution. But the Center and the States would have to agree upon how the costs would be shared for development and operations. Sriram : Dr. Sawhney,What are the aspirations of the class of 2001 in terms of employment since tech companies are taking such a beating? Are they going to traditionals like IBM & McKinsey or is tech still popular? Mohan Sawhney : Tech interest is down, as one would expect. It was unreasonably high last year. Consulting is back with a vengance, and so are large companies who are perceived as "getting it". eBiz : Who do you think should work with a startup or even contemplate starting a startup? Mohan Sawhney : It takes a very strong tolerance for risk. Not more than 10% of the population has what it takes. I think the number of entrepreneurs and people working for startups was articifically inflated when the rewards were high and the risk not obvious. I think we will see fewer enterepreneurs, but probably better entrepreneurs now... nanea : There has been a strong feeling regarding the demise of online advertising as a major revenue making force. What is your view on this and future of online advertising? Mohan Sawhney : Online advertising as it stands has a grim future (banner advertising). But there are some innovative new forms of "contextual advertising" that C|Net and others are coming up with. More details on this are on my web site www.mohansawhney.com eBiz : Its interesting to note that you talk about starting eBiz career with a consulting org. The biz world really doesn't seem to care about consulting background except for strategic planning. Isn't it? Mohan Sawhney : That's why I see it as a *stepping stone*. At some point, you DO need to get operating experience, if you want to be taken seriously. ashwani : I had to say this in response to your answer about work-ethic-- based on your experience here and in India, what do you think are the primary reasons in India still lagging in the world in spite of superior human capital. Mohan Sawhney : Human capital is *raw material*. To fully capitalize on it, you need a good environment, a good work ethic, and well-paid teachers. Not all of these things are ideal in the Indian higher education system. Kumar : Dr.Sawhney... If e-business is moving towards collaborative business, who will be taking the intiative to make it happen? The traditional brick & mortor companies or that new economy click & mortor companies? Mohan Sawhney : Traditional companies. I was talking today to Rajiv Gupta, the head of e-Services at HP. They are doing interesting stuff here, both in terms of what they are developing, and what they are using internally. Other leaders include Wal*mart, GE, and Eastman chemical. Then there are technology companies like Agile, Atlas Commerce, Bowstreet, and so on.. jagan : Dr. Sawhney,Hope Gujarathis play a role in e-payment!What are the reasons for the lack in Standards in B2B markets? The biggies are not for it though there are few organisations attempting to implement themlike xml.org Mohan Sawhney : Standards take time to develop, and there is a real danger of fragmentation of standards. XML schema will evolve, but there are a number of vested interests that need to be reconciled in each industry before we can all agree. The standard "openness" versus "control" issue is at play.. Sriram : Do you think that the indian population is depriving itself of its fullest potential due to generationally instilled aspirations of being doctors & engineers? I am asking you from the point of an educator Mohan Sawhney : Its not a bad thing to be an engineer or a doctor. But I agree that there is life beyond these narrow definitions of successful education. I'm an engineer, because I got into IIT. Not because I had any interest in engineering. A criminal waste, but I needed engineering as "Social Security". Americans are far more creative in career choices, but that's because you won't starve as a psychologist or a musician in USA. You would in India, at least when I was growing up. This situation will change, as more opportunities emerge.. eBiz : Prof Sawhney, thanks for pointing out need for "good work ethic". Any thoughts on how to improve it? What do we need to do as a community, individual or company? Mohan Sawhney : As a community, we need to reward hard work, and not be ashamed of hard work. At IIT, we were considered smart not if we got good grades, but if we got good grades *without* studying. Being seen studying or working hard was "not cool". And we were trained to "beat the system". These are all deeply rooted mindsets that we will have to change. hardik : In extension to an earlier question, what are the revenue sources for B2b Exchanges, I would think if transactions alone were revenue generators, currently there are not enough transactions to make a reasonable profit ? your thoughts ? Mohan Sawhney : Folks - 3 more answers, and then I have to go!The key to revenues is value-added services. These will come from system integration, finance, credit, logistics, and other services. They won't be based on transaction fees. Samir : What do you think of Microsoft's .Net Strategy ? Mohan Sawhney : Even Microsoft doesn't know the answer to this question, I think. Compelling idea, but mostly vaporwar at this point. Kumar : Dr.Sawhney... In future will Traditional companies be playing a major role in giving a shape to the new new economy (as SAP puts it)? Mohan Sawhney : Absolutely. Although its ironic how long it took SAP to get its act together. But they do control a very important franchise, and when all is said and done, SAP, PeopleSoft, Siebel, and I2 will emerge as victors.. wert : What do you think about the remote servicesmarket? Vinod Khosla talks about it being thenext big wave? Examples includes HR services, etcover the net Mohan Sawhney : Absolutely. I wrote an essay called "Powered By India" in Business World in September, which articulated these ideas. I've shared them with Vinod. Sriram : Talking about workethic, I am currently in Toronto, born & raised here. You know as much as the Indian community tries here, its still considered 3rd rate among other ethnic groups in Canada. In America, Indians have broken through the glass ceiling. Any comment? Mohan Sawhney : I think its a stereotype that's based on the fact that Canadian migration occurred earlier than US, and initial waves of immigration to Canada was less professionals. This will change - all you need is some prominent success stories and role models. wert : Mohan, picking up on the remote services marketwhat segments do you think are ripe for India-basedcompanies? Mohan Sawhney : Here are some:Remote technical supportArchitctural designLegal servicesEngineering designTutoring and e-learningRemote plant operations/production planning. Mohan Sawhney : OK folks, I need to sign off. Thanks for participating, and for your questions. Remember to take a look at the book - www.7stepstonirvana.com, and my web site for more details www.mohansawhney.com.Its been a pleasure chatting with you!
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