Communication – The barrier and the bridge

Posted by on Jan 24, 2011 in EPM World, Marketing, Branding, Project Management, Self-employment | 0 comments

There are two perpetual processes that happen within us.  The first one breathing which is a life long process and which happens involuntarily whether we are in sleep or awake.

The second one communication.  We communicate with people around us or communicate within our-self when we are not in sleep.  Besides, we also keep communicating unconsciously in our dreams during our sleep.  Dreams may not be regular, but dreams are a sort of communication with the unknown things and depths.

While breathing gives us life, communication makes our life.  While we have nothing to do with the process of breathing unless during the time of Yoga or Meditation, it is the process and act of communication that we have every thing to do with.  All the words like who, whom, when, what, how much, and where apply to communication like:

  • what to communicate
  • where to communicate
  • how to communicate
  • how much to communicate
  • when to communicate
  • who to communicate with whom

These observations play a vital role during our interactions with the God, parents, spouse, elders, children,  colleagues, senior colleagues, strangers and many others.  Over communication to our-self and within our-self (introversion) is also undesirable.

Communication as we all know is passive, active, verbal, oral, written, bodily, multilingual, multilevel, and multidimensional.  Communication should always be precise, concise and tender.  Atharva Veda says communication should be soft and tender worded.

We achieve our personal and professional objectives through communication.  Right communication wins over a girl friend.  We know what happens if the same goes wrong.  A project is achieved through communication.  Whether it is a meeting, written document, drawing, diagram, visual piece, dispute, argument, trust, secrecy.  Every thing is a communication.  Project management consists of only these things or more related.  Thus, if we are able to maintain right and precise communication we can achieve successful projects.  One can become a successful professional.

A composed, cool and pointed communication can win over your enemies.  The content of your communication how much ever precise and contextual it may be, it will not bring in desired results when conveyed in anger or outbursts.

Every other situation which went wrong or which went right has some thing to do with our communication.  It could be personal relations or professional interactions.  A Doctor’s kind word works better than the vials he inject, an empathetic tone acts as a succor, a magic word makes the project team more productive, and a silent communication with the God can give us an eternal peace.

There is always some thing to correct in our communication as life is a perpetual learning process and we need to live our life in peace and harmony.

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Savings in Project Cost

Posted by on Jan 20, 2011 in EPM World, Project Management, Self-employment, Start-up business | 0 comments

One of the most important aspects of starting any business is determining the project cost.  The profitability performance of entire project is based on the accurate calculation of project cost and savings in the very project cost.  Because, the project cost is the base to determine as to how much money the owner should invest and how much he should mobilize in the form of loan or co-promoter’s equity.  This element is addressed as debt and equity ratio.  Once we have clear understanding of debt & equity, we will be able to draw the cost of capital i.e. the interest rate for own equity and loan amount.  High interest rate and longer amortization tenure will cause considerable cash outflow for the loan tenure.  If the business is a slow revenue model, it would cause strain on the short-term capital.  Besides, it could also contribute in the late break-even, negative DSCR, lesser IRR and even negative NPV.

How to fix project cost?  What are the determining heads of expenses in the project cost?  How to optimize project cost?  What should be the right investment for the project?

Any given project at the outset will have following expenses before the project goes into commercial stage.

  • Cost of infrastructure
  • Deposits  towards  buildings or franchisee
  • Legal & Professional fee
  • Costs towards obtaining licenses & permits
  • Setup and installation costs
  • Pre-operative expenses
  • Working capital
  • Business launch and promotion
  • Contingency

It is imperative that we save costs in each of the above items.  For example:

  1. It is possible to save cost on the infrastructure by exploring phase-wise deployment of infrastructure, leasing of buildings in place of construction of own building, outsourcing services like packaging, maintenance, logistics, or even certain amount of product spares.
  2. If it is franchisee based business, it is possible to negotiate for deferred payment of franchisee deposits or fee or revenue based sharing totally avoiding the franchisee deposit.
  3. It is important to identify a right consultant who is economical and who could also advise on the total economics of the project.
  4. Licenses or permits which are not vital for initial project commencement could be deferred based on the dependent activity phase.
  5. Procurement of equipment, machinery, software, hardware or any such things should be carefully decided where the procurement cost absorbs the setup, installation and annual maintenance. With respect to Software, it is very important to practically assess the licensing requirement.  Procurement as a whole is a professional job and it should be done by an experienced team member who could bring in savings in terms of taxes, delivery time, and value added benefits.
  6. The other major savings could be in pre-operative and launching expenses.  This is always contextual and depending upon the type of business, the amount of PR or exposure required to the project, there could be considerable savings against this head.
  7. The contingency amount should be judiciously decided so that we don’t block the borrowings while we end up paying the interest costs for the unused amount.

Besides the above, the very major saving is effective management of project schedules and production schedules.  Delayed project schedule would always result in the budget overheads.  This is a common phenomenon in the government projects.

The right investment for a project is always contextual and the major consideration should be early recovery where-after one could always bring in more investments for expansion or capacity upgradation.

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Service deficiency

Posted by on Jan 7, 2011 in Business, EPM World, Project Management | 0 comments

There has been a tremendous shift in the business towards customer service.  Usage of technology, logistics, and PR are the main approaches.  However, there is a major discontentment and feeling of betrayal in the customers owing to inadequate service quality, disregard to accountability, least value accorded to  customer’s money.  Besides, there are ways of bullying the customer w.r.t pricing, hidden terms and conditions.  This is more prevalent in financial products, health care products, insurance products, telecom products, automotive sector and realty sector.  Today’s consumer spends his major earnings on these products viz., health care, loans, investments, insurance, mobile, car and housing.  This amply proves to what extent an average customer undergoes loss of his hard earned income.

The big businesses just wants to see their bulged balance sheets.  They outsource several of business processes like customer service, marketing and technology to an external agency.  The sales and marketing personnel in the organisation are driven by rising target levels.  The production or service infrastructure doesn’t get scaled up to the required levels.  Quality control is entirely ignored.  Thus the consumer is obviously at the receiving level of all these deficiencies in the product or service consumption.

Why does it happen with us in India?  Why are the business owners here unconcerned about the lapses?  The reason is simply the individual attitude.  He or she, the business owner doesn’t bear a clean personality or genuine sense.  The attitude is similar to that of a butcher who don’t hold a twinge of feeling to slaughter an animal.  The main concern of business owner is number game to beat their own targets or to beat competitor targets.  They await just to announce big results periodically.  Expand the same attitude in the form of one more business venture.

That is the reason why consumer in India believes more of a foreign stuff.  The elite community hardly bother to shop local things be it cars, cosmetics, confectionery, electronic appliances, interiors and many more.

The Indian born business owners whether it is TATA, Reliance, Birla or Future Group should learn to treat their business as a hospitality sector where customer is held at high esteem with due service and extending value for money.

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Risk in business

Posted by on Jan 1, 2011 in Business, EPM World, Project Management | 0 comments

Risk is the first word and the thing that prospective entrepreneurs wouldn’t like to hear or face in their venture.  How does risk arise? Where from risk arise? and What exactly is the risk?  Risk in business could crop up majorly from:

(a)  Commercial unviability of the project.

(b)  Inappropriate or insufficient management processes.

(c)  Mismatched marketing or total absence of marketing and business development measures.

(d)  Misplacement of human resources, under utilization of human resources.

(e)  Under utilization of production or service capacity.

(f)  Insufficient working capital which might impact production, morale of human resources, stakeholders’ confidence, and missing delivery schedules.

(g)  Imprudent financial management.

(i)  Unfounded planning and strategies or delivery mechanism.

In one of the cases, I have found an entrepreneur who was adamant on gaining business even without a name and legal identity to his venture, with nil investment on marketing, promotion, with mismatched marketing resources who were ignorant of the business model, with absolutely nil inventories to serve any prospective order, unproven delivery mechanism and dangerously lack of self-confidence in his own business model.  He felt that spending on any of the above processes would be risky and he was waiting for a client before he commit his investment.  This, however, is a rare incident where risk is felt too sensitively.

Any time the onus would be on the business owner who should stride cautiously in every walk of his business cycle or business decisions.

My suggestion would be that the prospective entrepreneurs or existing businesses who are not able to do well should study themselves and go for honest due diligence of their business idea or model so that risk could be mitigated before it is too late.

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Project Management

Posted by on Mar 20, 2010 in EPM World, Project Management | 0 comments

I find a gradual change in Hyderabad. Working professionals started giving increased focus on skill development. Businesses started realizing on the professional processes and utilization of technology. In the last one month I have interacted with several aspirants who would like to acquire professional project management skills. The reason could be to improve career prospects or compete the process requirements of the projects.

Personally, I believe in documentation in official processes. I don’t attempt any official / professional tasks without a proper paper work. There are so many plans of mine that have not been executed. It doesn’t stop me to develop any of my ideas into plans. This is the true start for any Project.

During several of my interactions with students, employees and entrepreneurs I always have indicated the importance of project plan. Documentation and project plan will act as a mirror to the future outcome.

Several organizations go unrecognized as they fall short in documentation. There are several organizations who hog the limelight with a little achievement. Documentation whether it is project plan, methodologies or communication with stakeholders plays vital role in the identity and operational efficiency of the organization.

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