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Thursday, Jul 05, 2007
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Tamil Nadu

Stress on business flexibility

Special Correspondent

“This will be the new turf on which wars will be fought”

— Photo: K.V. Srinivasan

TIPS FOR SUCCESS: (From left): N. Mohanakrishnan, Conference Chairman, CII, Kumar Narayanan of IBM Global Business Services and B.V.R. Mohan Reddy, deputy chairman, CII, at a conference in Chennai on Wednesday.

CHENNAI: Companies should make their businesses more flexible instead of spending all their money on operational efficiency and product innovation if they are to survive the next decade, according to Kumar Narayanan, partner, Industrial and Distribution Sectors of IBM Global Business Services (Asia-Pacific region).

Delivering the keynote address at a conference on ‘Current trends in achieving global competitiveness by integrated use of technology,’ organised by the Confederation of Indian Industry here on Wednesday, Mr. Narayanan said “business flexibility” effectively summed up the IBM’s Global CEO Survey 2006-07 of global companies of the size $2 billion-50 billion.

Citing automobiles, he said only the companies that had made their businesses flexible — by componentising their businesses into smaller, more nimble units — had made profits in recent years. “The trend will continue over the next decade. This will be the new turf on which wars will be fought.”

Petro China

Later, in an interaction with reporters, Mr. Naryanan illustrated business flexibility by citing the example of Petro China, China’s largest oil and gas producer. The company had succeeded in componentising into small and nimble units for each of its States. The Indian public sector oil companies could follow suit.

N. Mohanakrishnan, conference chairman, CII Southern Region, and deputy chairman B.V.R. Mohan Reddy spoke. The speakers also expressed concern over the steel price and its impact on heavy and automobile industries. Mr. Narayanan said steel prices were 20 per cent higher than in China. But, it was ironical that 40 per cent of iron ore was being exported to China from India. Nearly 60 per cent of the costs in automobile and heavy industries were spent on raw materials, and the price differential on steel was choking the industries.

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