Saturday, December 15, 2012

What are Reverse Mortgages ?

A normal mortgage is where a home owner takes a loan against property where the lender pays the borrower only a fixed percentage (60-70%) upfront . In case of Reverse mortgages, the house/property owner surrenders the title of the property to the lender. The lender in return does not pay the entire sum but a regular amount per month for an agreed duration during which the owner of the property continues to use the property. On the death of the owner and the spouse, die during the period of the RM scheme, the lender will sell the property, take its share and distribute the rest among the heirs. The reverse mortgage is named thus because the payment stream is “reversed.” Instead of making monthly payments to a lender, as with a regular mortgage, a lender makes payments to you.

Usually, RMs are available to those above a specific age, say 60 years. The aim is to convert an immovable asset, like property into an income-generating one while continuing to use it. The amount of income is predetermined as is the contract period. If the property-owner outlives the agreement period, the monthly payments will stop. How is the income for property-owner determined? There are three crucial factors property value, the period of the payout and the rate. The property is evaluated by professionals employed by the lender, and revalued after a period of time and the fixed income amounts are changed accordingly. In countries where the geriatric population is rising (such as Japan and Western Europe), RMs are popular. However, while it looks simple, lenders expose themselves to certain risks thanks to a variety of factors such as mortality, interest rates and real estate price changes. For the property owner signing away the roof over his head creates fears of loss of asset, eviction and inability to bequeath property. Besides, the legal, taxation and other regulatory aspects are still not clear.

Advantages of RM:
It helps you maintain your financial independence and standard of living
Allows you to remain in your home and retain ownership till you or your spouse is alive
Disadvantages of RM
The options can be confusing
They may be costlier than Loan against property

Friday, December 7, 2012

Effective Presentations

There are four essential steps to take to ensure that presentations in different situations are successful and effective. They are Preparation, Gaining and keeping attention, maintaining interest and closing positively.

  • Informal presentations
  1. Define the desired outcome ( check out support of key team members, if appropriate).
  2. Set the agenda ( circulate if appropriate).
  3. Gather the data.
  4. Spell out the benefits.
  5. Summarize financial justification.
Effective Presentation Techniques Help you stay ahead of competition
  • Formal presentations
  1. Check out the venue and set up (numbers attending, lay-out, equipment available etc, and so on).
  2. Check time available for your presentation and how you will be introduced.
  3. Check out who will attend and get background on them.
  4. Rehearse your presentation (and check on slides, and so on).
  5. Expect to be nervous (but remember that nerves will fade after a few minutes).
  6. Try to meet attendees before your session so that you will know them.
  • Gaining and keeping attention

  1. Informal presentations / meetings

    • Fix the best (most convenient / distraction free ) place.
    • Only start when you have the complete attention of others.
    • Agree start and finish times.
    • Ensure there are no interruptions.

  2. Formal presentations / meetings
  • Make sure the audience is ready and seated before you start.
  • Deliver your opening sentence positively to command attention.
  • Maintaining interest
a. Informal presentations / meetings
  • Don’t waffle; stick to the point.
  • Involve other people.
  • Focus on good news and benefits.
  • Mention key opportunities / results / issues
  • Convince by showing financial justification
  • Talk with conviction.
b. Formal presentations
  • Tell people why the subject is important to them.
  • Tell them the topics you will cover
  • Advise them of the decision / approval you expect, if appropriate.
  • Use flip-charts/slides/computer presentations/videos to hold audience
  • Use key words on slides.
  • Don’t read your presentation.
  • Demonstrate your own conviction and enthusiasm in words, voice and gesture.
  • Spell out benefits.
  • Present factual evidence ( not opinions).
  • Demonstrate financial justification.
  • Show that potential problems have been identified and overcome.
  • Handle questions as arranged and authoritatively.

IV. Closing positively

a. Informal presentations / meetings
i. Close with agreement to the outcome you want
ii. Agree who will do what by then
iii. If there is no agreement, try to ensure that some positive action is taken towards your goal.

b. Formal presentations / meetings
i. Ask for the approval, order or action you want to conclude your presentation.

V. General advise on presentations
a. Rehearse, rehearse and rehearse

b. Use slides or flip-charts, if possible
i. Help structure presentation.
ii. Allow audience to focus on key points.
iii. Let you look at audience while elaborating on the key points.
iv. Keep information on each slide to a minimum (20 words or fewer figures).
v. Make sure type of slides is big enough to be seen clearly.
vi. Show slides in correct order (and number them).
vii. Use visual stimulus, such as cartoons.

c. Work on your presentation style
i. Entertain your audience with anecdotes, illustrations, and examples.
ii. Vary your voice (tone and level).
iii. Use jokes sparingly if at all.
iv. Avoid bad language, risqué jokes, and so on.
v. Avoid excessive walking about or extravagant gestures.
vi. Involve your audience; let them question you, but also question them; don’t hold on to fixed ideas, listen.
vii. Let them hear, see and does; lecture, visual aids, worked examples/syndicate discussions, and so on.
viii. Don’t apologise.
ix. Relax.

Saturday, December 1, 2012

Vegetable Hakka Noodles

Interesting variation of veg hakka noodles :-)
1 packet - Maggi noodles
french beans some carrots some spring onions
1 tsp - maggi taste maker
2 to 3 tsp - soya sauce
salt to taste
8 tbsps - oil
soya and chilli sauce to taste

  1. Wash the vegetables. and cut them in strings and fine stips
  2. Boil the noodles with sufficient water, some salt and 1 tbsp. of oil till the noodles are soft. Drain out the water.Pour some cold water (2-3 glasses) so that they do not stick together.
  3. Heat oil in a sufficiently big kadai, add the chopped onions and fry on a medium flame till they are transparent.Add the vegetables, Maggi and salt to taste.
  4. Cook on a medium flame till the vegetables are tender but also crunchy.
  5. Add the noodles, sauces and finely chopped greens.
  6. Mix well. Simmer for 5-10 minutes.
  7. Serve hot. 
PS : Forgot to take the snap , next time i will :-)

Wednesday, April 11, 2012

The Business Case for Business Process Outsourcing

  • Cost Cutting
Process outsourcing has been used for times in memorial to enhance shareholder value via controlling costs and avoiding capital expenditures associated with purchase of new systems and up gradation. These savings can then be channeled into core areas of the company. Various studies have indicated that for every one dollar invested in BPOs across India, the value derived by the US economy is between $12-14. The best example for this is in the field of pharma research and development where firms can reduce the cost of developing a new drug, currently estimated at between $600 million and $900 million by as much as $200 million if development work is outsourced to India.
  • Improving efficiency and productivity
Conventionally, executives spend 80 percent of their time in management of details and only 20 percent on formulating strategies. But the scenario is remarkably different when the business process is outsourced. Once a process is successfully outsourced, the ratio can be easily reversed. In such situations, executives get more time. This saved time helps them tremendously to explore new revenue areas, accelerate other projects and focus on their customers. This, beyond doubt, leads to productivity improvements. Outsourcing provides access to proprietary workflow systems, process reengineering skills and innovative staffing and delivery models, coupled with world-class technology and assurance of best practices delivered by experts which leads to productivity improvements without compromising on quality.

  • Focus on Core Competency
The current business scenario worldwide dictates that a successful company must have great core processes to just to stay in the game. Outsourcing is the only way a company can use its time and money on these vital processes and get better performance for non-core functions.

Tuesday, March 27, 2012

A brief history of Business Process Outsourcing in India

Business Process Outsourcing is a structured arrangement between an organization and an outsourcing partner to perform services, otherwise conducted in-house. The provider of the outsourced services takes primary responsibility of ensuring the process works and delivers the required results as expected by the organization. Thus Business Process Outsourcing represents a new paradigm for international trade in services.

In 1968, an Indian government working group on computers said, “Software development would seem to have a very high employment potential in a country like India … the value added in the case of software, is very large.” Ironically the same report framed a policy of “self-sufficiency” that arrested the development of the IT industry. Restrictive rules and regulations imposed severe restrictions on imports of hardware and software. Even IBM quit the country in 1978 due to laws that disallowed foreigners from owing more than 40% equity stake in an Indian firm. 

Sanity returned to the system only in 1986 with new policies which liberalized access to software and associated hardware. The software technology parks of the 1990’s led the way to opening newer technology domains such as Business Process Outsourcing agencies. India’s tryst with process outsourcing began in the mid 1990s with GE setting up a Business Process Outsourcing facility in Gurgaon. Some of the other early birds were companies such as American Express and British Airways.

Initially low-end work such as data entry and call centre activity was outsourced to India. With increasing confidence of the companies, value added work such as processing of accounts and other non-core functions came to India. The success of these early pioneers encouraged a host of others to set up their own back office operations in India. Banks such as Citibank, HSBC and Standard Chartered and other companies such as Dell and Hewlett Packard set up their own captive operations. Indian software majors such as Infosys, Wipro and Satyam were a bit late to join the BPO party. The scene has since shifted to transaction processing.

Wednesday, March 7, 2012

Organizations as organisms

In Images of Organization Gareth Morgan utilizes the eight metaphors namely organizations viewed as: machines, organisms, brains, cultures, political systems, psychic prisons, transformation systems, and instruments of domination, in concert with each other to explain organizations.Organizations as organisms is my effort at looking at images of organization and associating it with real life examples. Mind you this was a MBA paper written by a 25 year old for whom Organizations as organisms were places of possible recruitment and much has changed since than but the gist remains the same.

Organism metaphor

The organism metaphor mainly deals with the organization's survival and its ability to grow and change in response to its environment. Various parallels can be drawn between an organization and an organism.


An organizations culture is the set of values, norms guiding beliefs and understandings that are shared by organization’s members and taught to new members as correct. Living organisms also tend to share common beliefs and guidelines. Take for example a herd of deer which share the common understanding that a lion is dangerous and they must flee as soon as they sense one near them. If one comes to the top of the food pyramid to humans, then culture and social norms become even more apparent. An individual human being is taught or learns values and culture from his/her environment, just as an organization does in response to its internal and external environment. Thus with respect to culture the organism metaphor talks about the adaptability culture of an organization.

Life Cycle

Organisms tend to have a definite life cycle from birth to aging and death. Similarly organizations also have a comparable life cycle depending on the industry in which they are present. An organization may continue to exist even after the people within it have moved away – attrition, turnover, retirement, etc

Consider the example of a CRT monitor manufacturer. The industry as a whole is highly mature and as LCD displays get cheaper the CRT monitor will surely become obsolete. When this happens, the CRT monitor industry will die and so will the monitor manufacturing organization.

Every living organism on this planet is governed by Sir Charles Darwin’s theory of survival of the fittest. Organizations also tend to struggle for their survival against changes in both their internal and external environment.

‘Survival of the fittest’ through trait selection is how Darwin explained how organisms respond to environmental changes over generations. Organizations compete with their peers. Unlike organisms, organizations do not have the advantage of time and must respond quickly to changes in their environment which means a stress on decentralization. Since authority to make decisions gets spread, managers can respond quicker to the changes.

For example Zenith has to compete with the likes of Dell, HCL, Acer and HP-Compaq in the desktop PC market. Since it uses low costs rather then high quality to compete with its competitors, Zenith must respond quickly to any new launches of desktops by the competition to ensure that its products sell in the market.

Large multi-cell organisms have distinct parts doing specialized jobs. Similarly an organization also has a definite structure both in terms of physical artifacts as well as the social setup. An organization has distinct departments or functions such as an accountants section would handle finance related issues while R&D department would look into product development. 

Just as an organism requires food and drink to survive so does an organization which needs continuous inputs of raw materials and manpower to survive. 

  • “The Technostructure Viewed with Morgan's Metaphors”,
< >
  • Max McKeown, “What is your organization like?”, Jun2006,

Friday, February 24, 2012

A look into Air Deccans IT infrastructure

The Air Deccan IT infrastructure is centered on two major components namely IT infrastructure to support the E ticketing CRS setup and the Air Deccan operational setup. The IT team as of March 31, 2006 included 35 staff located in Bangalore. Air Deccan has also adopted several other IT measures aimed at reducing costs and improving its operational efficiencies:
  • Use of open-source software where appropriate, including for firewalls and e-mail servers
  • Reduction of long-distance and local telephone costs through implementation of voice over Internet protocol (VOIP) and other technologies
  • Implementation of Intranet to help streamline corporate communications
E ticketing CRS setup

The Air Deccan CRS is accessible to all consumers through the AirDeccan website, The website is Verisign-certified secure for e-commerce purposes. Air Deccan has established two fully redundant online payment gateways and data links to help ensure both security and continuity of service for its website customers.

Air Deccan’s CRS resides on servers hosted at InterGlobe’s data centre located in Gurgaon which offers complete redundancy in power, fire suppression, network connectivity and security. The servers are connected with redundant Internet connections leased from BSNL and Bharti, as well as by HCL wireless loop to help maximize network availability. Connectivity is maintained using an automated router that switches from a primary BSNL connection to a backup Bharti connection in case of failure. If both the leased connections fail then the HCL wireless loop is used to keep the site live.
The network connectivity is continuously monitored by a 24/7/365 support team at InterGlobe, HCL and Air Deccan to avoid downtime. To further help maintain security, the Air Deccan servers are kept isolated from other networks and a Cisco Pix 515e Firewall and LINUX firewall has been installed to extend network security.

Backup procedures include routine database, transaction log and website and server log backups. HCL provides double or triple redundancy to all crucial connectivity links and triple-redundancy for “last-mile” applications and Air Deccan’s data servers.

Air Deccan operational setup
The IT infrastructure also allows Air Deccan to provide web connectivity for all points of sale, including direct Internet customers, call centre customers and airports via telephone or leased line or, in some parts of the country V-SAT link. This connectivity has allowed Air Deccan to do away with SITA1 lines, which are relatively expensive communications links used by other airlines to keep in touch with their check-in and other airport operations. Internet-based airport connectivity has allowed Air Deccan to expand its airport operations quickly and inexpensively into smaller towns. Compare this to airlines using SITA who find it difficult to expand where SITA lines are not available.

Sunday, February 19, 2012

Contract hiring

As the environment becomes more competitive for a company, the resulting cost pressures normally lead to an increased tendency of the firm to hire and fire workers as per the market demand. This just-in-time contract hiring policy has many problems associated with it.
Loss of security
A major problem is the loss of security which a company offers to its workers in the form of health, legal rights and retirement benefits. Independent workers face lower earnings, fewer benefits and legal rights, truncated career paths, and dimmer prospects for retirement income security. 

A company is less likely to send/impart training at its own cost to temporary workers. Thus they will not receive expensive training which is needed by them to keep abreast of technological developments so as to enable them to secure good jobs in the future. Instead they would have to spend from their own pockets to gain access to newer training and skill development. Thus HRM training function may shift from the company to the independent workforce. 

Training becomes even more relevant when newer technologies get introduced within the company. Since the independent worker can simply be replaced by a more competent independent worker.

Saturday, February 18, 2012

Is the independent workforce strategy a viable option? Implications on HRM


Offshoring1 simply means that a firm hires local employees abroad to do jobs previously done by the company’s in-house domestic employees. Here the role of the HR department in identifying high quality, low cost talent abroad and to provide the necessary background data on things like wage rates, working conditions and productivity becomes pivotal. The HR manager also needs to make sure that there is an effective supervisory and management structure in place to manage the offshore workers. Recruitment, retention, compensation, T&D and appraisal – jobs traditionally done by the HR department hence will have to grow to compensate for the increased distances involved with offshoring.


Simply put, outsourcing is the contracting of a third party to manage a business process more effectively and efficiently than can be done in-house. The key idea behind this is that organizations can free-up resources involved in support functions2 so as to improve the performance of core functions. The improved performance resulting from this is also expected to outweigh the loss of control associated with outsourcing.

Outsourcing tends to be a uniquely HR-dependent activity as now instead of the HRM domain being restricted to a given company , the HR manager have to deal with a host of companies each having their own and generally unique culture and environment. Thus in such a scenario, the HRM function of people management is now becoming that of vendor management and change management for the outsourcing company while the vendor’s HRM would add client management to the already long list of HRM tasks namely recruitment, training and development, retention,…

Change management
Change management would involve generating organizational readiness to receive and sustain the change associated with outsourcing. This involves
  1. Identifying appropriate leadership to oversee and mange the outsourcing effort
  2. Creating a transition management plan that identifies activities to be transferred to the vendor
  3. Developing a conflict resolution structure to take care of client-vendor and internal employee conflicts.
  4. Having appropriate matrices and reporting framework in place to measure effectiveness of the outsourcing arrangement.
Shift from transactional and traditional HRM activities to transformational
India today has virtually become the back office of the world with a large number of companies outsourcing their non-core functions to India. These non-core functions include transactional3 activities such as benefits administration, record keeping and employee services and traditional activities such as Recruitment and selection, training, compensation and employee relations. This shift has lead to a company’s HRM department looking at the transformational part that is cultural change and strategic redirection and renewal even more than in the past.

Focus on Output
Any SHRM initiative always focuses on directing the individual, behaviors, culture, subsystem and environment blocks towards achieving a desired output (goal, mission, vision) .Outsourcing also focuses on the output of the process without the additional burden of the remaining five blocks which get outsourced to the service provider.

Implications on organizations
The impacts of outsourcing are not limited to the economic domain. There are also organizational implications, such as loss of control over how an outsourced activity is carried out or a service is delivered. The organization may become dependent on the external service provider and thereby lose strategic flexibility which in turn may harm its long term goals.

Another major area which is hit is the organizations culture. Partial4 outsourcing will result in the employees retained within the firm having fewer opportunities to gain broad experience and have less career chances (Greer et al., 1999)5. This means that motivation levels would reduce. Thus HRM would have to be present to reduce attrition.

Knowledge process outsourcing (KPO) even though currently in its nascent stage is the path that most experts predict the Indian BPO industry will move in the future. This will result in highly specialized knowledge based organizations specializing in one or more fields such as finance, training, etc. Thus the organization will move from a cost center to a profit center with each individual KPO employee contributing towards revenue generation giving the individual a clear sense of the value they provide.

Technology and HR
Technology and the internet have enabled the outsourcing of HR activities such as pay slip generation, retirement planning, etc. This is only possible because specialist service providers can now have real time, internet based access to their employer’s database. Technology also brings with it the demons of hacking, cracking and leakage of information as has been seen via various scandals in the BPO industry. This means that the company’s culture and subsystem will have to be tailored to meet these challenges.

Virtual team
Outsourcing also means that the lead time for training and development of new employees is extremely low as the service provider already has trained professionals and support infrastructure in place. Thus virtual teams7 can be easily setup whose lifespan is as long as the contract exists between the outsourcer and the BPO. This in turn would mean a cultural disconnect would exist the minds of the workers.

So Will SHRM continue in an independent workforce environment?

Strategic HRM refers to the overall direction the organization wishes to pursue in order to achieve its goals through people. A company’s intellectual capital such as experience and technical know how is a major source of its competitive advantage. It is also the employees of the company who implement the strategic plan of the company.

Thus it can be argued that if people get outsourced there is every chance that strategic HRM may itself get outsourced out of the company. However the points explained above clearly show that despite people moving out of the organization, HRM will continue to remain an integral part of an organizations structure.

1 Gary Dessler, Human resource management, 10th edition, Prentice Hall, 2006
2 Hiring an outsource service provider to manage low-level, non-core operations cuts off a considerable sum from the budget allocated for in-house recruitment, hiring and training of manpower
3 Noe et al, “Human Resource Management :Gaining a competitive advantage”, Chap016.ppt
4 Certain activities are retained within the organization while others are outsourced
5 Rachel Anderson, “Outsourcing - disruption and de-motivation, or an energized workforce?”,
6 Peter Bamfield , “Outsourcing - now's the time”, Dec 1999,<>
 7 Rob Aalders, “IT outsourcing : making IT work”, 2002,
8 Susan N. Houseman, “The Policy Implications of Nonstandard Work Arrangements”, 1999,

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