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Thursday, January 08, 2009

Time-Bomb Management

The automotive industry is 113 years old and along that way, came many best practices for business. And today most of them are complaining. In fact, even with so much of exposure to the business, the Malaysian automotive industry once was almost going for the scrap.

It seemed like Satyam may not be alone, like many the company had no choice but to move forward and bear all sort of business risks, including inflating accounts and absorbing more credits to trade time and financial marginal gains for a bigger hope tomorrow. But too bad the medicine didn't work.

The first thing that came to my mind is that it is easier to start a business and bring it forward to glory; what needed are passions and cash flow.

But it is harder to maintain a business in the long run.

The commercial software industry is 34 years old (Microsoft),Satyam is 22 years old.

This goes on to suggest that software outsourcing is not everything pretty, it is always interim and cash flow. But having cash flow is essential to the growth of the business.

The next generation of entrepreneurs have to take this as an educational case study.. Suddenly, it seemed like India is having too much ICT, computer software and hardware professionals and now they are probably looking for a way out.

What will this contribute towards our immediate expectation ?

  • With USA slowing down as well, my guess that Indian ICT professionals will be interested to gain entry into Malaysia and Singapore.
  • Malaysia outsourcing business may gain significant benefits in the short term and hopefully that will contribute some to the ICT industry in Malaysia.
  • But the slowing down of USA and India (as main contractors) may also affect the sales of outsourcing in Malaysia, because not many people are buying. Let's not forget that other countries in areas such as latin America also have software outsourcing capabilities, they term it as "near shoring", with this, it doesn't seem like Malaysia outsourcing is going to get a lot of business but we may be able to have a lot of people waiting for work to do.
  • Project management, software management and human resource management may gain significant edge in the short term given that now there are more heads to manage and less numbers to look at. This is one area that Malaysia can focus on actually.

I think that Satyam has been waiting for the right time to announce this fraud and thanks to the financial crisis in the USA. Same goes to many other companies who would take opportunity to lay off employees.

The world needs to create a brand new world-economy or some sort of culture to absorb all these gaps as described by Satyam's founder B. Ramalinga Raju and I think many more will not agree more with him.

With the USA economy crisis, the world is not getting poorer, but the existing economy is; existing businesses are. Business people and entrepreneurs need to think about potential time bombs and this is not just some sort of enlightenment, it is a mandatory action. Someday your number will be up.

And just like software development, theory may not resonance well with actual codes. If it is not proven, it may be a time-bomb.

Time-bomb management is a new skill we all need to acquire.

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