Friday, March 14, 2008

“Namma Metro”- Is it a Boon or Bane?


I spend 90 minutes on a bus or 60 minutes on motorcycle making the 18.5-kilometer commute to work in traffic-snarled Bangalore, India's technology hub everyday. Traffic now crawls along at an average speed of 10 kilometers an hour during the morning and evening rush hours.

Now I believe relief is on the way, a $1.5 billion rail system “namma metro” being built in the city will change my life. The Metro will be a boon for people like us. The state-owned Bangalore Metro Rail says that it may be overwhelmed by the time the first train leaves the station in 2011. The amount of time you spend on the roads is stressful. It has done wonders in Delhi and Calcutta. It will definitely be of a great help to Bangalore, a growing metro. I may not be wrong if I say it will help to reduce traffic and travel time in the already crowed city. Secondly, the reduction in traffic will cut down vehicular pollution thereby silently contributing to the reduction of global warming. Since the Metro runs on electricity, it will hardly emit any of the greenhouse gases directly. So, we will also be helping the Bangalore Metro Rail Corporation Limited (BMRCL) earn a fortune by trading carbon credits.

However, sometimes I feel that I may be disappointed. The statistics show the metro rail in Delhi has eased only 30-35% of the traffic problems. Metro rail might help in easing the traffic problems only if proper planning is done. It needs to evaluate what is the traffic rate between various places. What is the profile of people traveling e.g. will a CEO of a company travel by metro? Is there enough space for a station or will it just add to the congestion and unnecessary slaughter of the greenery? In Delhi, it did not prove to be a success because of the status attached to it and in the same context; it might not work in Bangalore either.

Once the Metro is up and running in Bangalore it must carry all necessary features of regular escalators and ramps to facilitate more and more people and not only the young but also the aged and physically challenged. It can be successful because of its exceptional reach, speed and convenience to anyone who takes it as a pleasure ride rather than it being a peak hour alternate transit system.

By Vikash Ranjan

Tuesday, March 11, 2008

‘Pay- For-Performance’ Making Its Way To Schools And Colleges

I recently came across the novel ‘Pay-For-Performance’ concept in educational institutions, which set me thinking.

The ‘Pay- For-Performance’ is a business mantra where an employee is paid or given a pay hike based on his performance. But now it is not only related to work but has made its way to schools and colleges. Though not a new concept, it was always prevalent in one way or the other, with good performers getting good scores, grades and ranks. At times, special performance was also acknowledged by special recognitions and rewards.

But now in the schools, the Pay-For Performance has taken its literal meaning with cash rewards. Most of the schools, colleges, and companies are exploiting this business mantra in one way or the other to help improve the child’s performance. For example, a good performance could be traded in for a free McDonald's Happy Meal where a child gets burger-and-fries combo. Even Exxon/Mobil-funded a program in some states in the US like Arkansas, Alabama, Connecticut, Kentucky, Massachusetts, Virginia and Washington where students get $100 for each passing grade on advanced placement (AP) college-prep exams. Some of the schools gave the students a chance to win an iPod, movie tickets, or a dinner for two, among various other prizes. Some schools in suburban Atlanta have programs that would pay 8th- and 11th-grade students $8 an hour (which is more than federal minimum wage of $5.85.) for a 15-week ’Learn & Earn’ after-school study program.

Well, it is great to experiment and use ideas that have worked, especially if it’s for a good cause as for adding to someone’s performance. But what worrisome is that is it right to use business fundamentals in educational system where one works on sales, growth and profits and the other is to understand the fundamentals of life.

The companies paying students for their performance – are they really appreciating them or is it just another marketing tool for them?
The prizes in form of iPods and televisions – are they not making students run after materialistic things?
The use of cash rewards – is this not a bribe wrapped in an innovative way?

Though its true ‘Pay-for–Performance’ encourages employees to give their best but
the work environment, the nature of job, trainings, and the job satisfaction actually adds to their performance and productivity. The more I think, I feel cash rewards would attract students and in short term may help them to perform but it is only a sound educational system, which can help them to learn and grow.

By Vinita

What’s the next step of retailing…?

During my visit to a Big Bazaar departmental store last week, I got a feel of a vegetable market where vendors try to sell vegetables by yelling the cost of their product… the same was the condition here where the sales person was selling the groceries by ringing a bell and bellowing the lowest price and discounts. I was stunned and it made me to think, is this of the trend coming up in Indian retail? Or is this a consequence of competition where retailers have to yell and shout about the discounts they offer? On the other hand, is it a strategy to attract their target segment? When it comes to organized retail, which accounts for hardly four per cent of the total retail market and is pegged to grow to $64 billion by 2015, is trying a variety of methods ranging from discount stores to supermarket to hypermarkets to specialty chains, and most players appear to be gravitating towards the hypermarket format. Can you imagine the intensity of competition five years down the line?

The major players like Pantaloon to RPG to Piramals or the Tatas are working to exploit this model, which is perceived by consumers as more value enhancing. However, in the long run, the strategy most likely to succeed is a more balanced multi-format strategy that will help the retailers adapt to the different shopping patterns that exist within the country and even within regions. Here again, merely copying global trends will not help. On the other hand, a research found that single-format players generated higher shareholder value than multi-format ones. Some feel a combination of cash-and-carry and neighborhood stores, as in a hub-and-spokes model can be a good bet. As of now, India needs a lot of room for experimentation on part of the retailers. Currently, there are no cut-and-dried solutions when it comes to fixing on the right retail format.
Finally, with the flush of the retail boom, the elimination of traditional intermediaries are bringing windfall gains (as well bringing much-needed relief to the producers), and few years down the line, even this source is going to dry out as competition intensifies and margins come under pressure. What would set the survivors apart from those who are forced to sell out (or go belly-up) will be differentiators like location, value-added services (convenience), private labels and customer loyalty programmes, other than price. Going further in the last, the retailer-manufacturer tie-ups, state-of-the-art supply chain infrastructure, global sourcing and scale will be a key factor. If experience in other markets is anything to go by, will be an ability to read shifting trends…and then again what next?
By Sonal