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September, 2001 COUNTRY BUZZ |
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LG Soft sets eyes on SW services In a bid to stay focused rather than concentrate on disparate areas, the firm has decided to exit from the hardware and software product sales business Bangalore-based LG Software India, in a major shift in business strategy, plans to focus more on software services. And in line with the new scheme the company is getting out of the hardware and software product sales business. It is also exiting from the domestic B-to-C (business-to-consumer) e-commerce business. Anilesh Seth, who took over as the president and CEO of LG Soft a year ago, says, "At the time of my joining LG Soft, the organisation was into many businesses. These included software services, hardware sales (in India), software product distribution, ERP implementation and a B-to-C venture for the domestic market. It also had plans to start new ventures in areas of VoIP and datacasting. Given the current size of the organisation and the great parentage that we had, we realised there was a tremendous opportunity to emerge as a niche player by leveraging on the expertise gained from the work done for our parent company in cutting-edge technologies. So we decided to stay focused rather than concentrating on too many disparate areas. The change in strategy was warranted due to apparent lack of synergy in various businesses we were into."
LG Soft's strategy for growth is simple: Reinforce its focus on people; get offshore business from LG, especially in niche areas like multimedia, residential gateways and wireless applications, and build niche competency; leverage LG's experience and apply it to the international market; build robust pipeline; and target large deals. "We decided to focus on building a strong software engineering base, empower our people and aim at becoming a niche player rather than having a finger in too many pies," Seth said. As a part of the new strategy, LG Soft will be focusing on two technology areas, namely, the enterprise technology and the convergent technology. The company is planning to concentrate more on the US and European markets for growth. "We are aggressively targeting the US market and are in talks with some large customers. We are also in the process of geographically de-risking our business by establishing a presence in the European market," the CEO of LG Soft said. Debate
rages on e-biz growth The bursting of the dotcom bubble and little or no noise on the B-to-B side has led to the question-was e-business a fad that has passed us by? Or is e-transformation a concept that has just gone through the early part of market research firm Gartner's "hype cycle" and will emerge as a salient business imperative? Studies undertaken by the Confederation of Indian Industry (CII) in association with PricewaterhouseCoopers India (PwC) and NASSCOM and the Boston Consulting Group (BCG) on the e-commerce scenario in the country, however, show a wide gap between key findings. While the CII-PwC study is more conservative at predicting the total value of e-business in India will grow to Rs 55,000 crore by 2005, the NASSCOM-BCG report says that the total transaction volume is expected to grow rapidly to Rs 1,95,000 crore through the same period. Key findings from both the studies indicate that though e-commerce valuations might have crashed, online spending (both B-to-C and B-to-B) has continued to grow. Outlining the pattern of e-business growth in India, Arvind Mahajan, head, Corporate Strategy, PwC, says, "After the initial hype where e-business was looked at a purely revenue-generating alternate business line, Indian companies have reassessed their expectations of e-business. The next two to three years will witness slow investments in this area." The PwC study indicates that Indian corporates can use the power of the Net to correct value chain inefficiencies, devise cost reduction strategies and improve business processes. It is expected that more investments will be made in areas of e-CRM and e-SCM.
According to the CII-PwC study, Indian companies are seen to be maturing in their expectations of benefits e-business can bring to their operations. A large number of organisations were clear that e-business initiatives have to be integrated with current IT systems. Over 70 per cent of respondents had either implemented an ERP or an equivalent system, or were in the process of doing so. According to the study, ERP or an equivalent system is seen as a prerequisite for successful e-business initiative. The NASSCOM-BCG study, while highlighting that e-commerce in India is moving from potential to reality, said the country has the maximum barriers to e-commerce adoption among Asian countries. On one hand a large share of Indian corporates are mobilising to build capabilities for e-commerce, on the other there are vast differences amongst players on their understanding of e-commerce benefits and their readiness to exploit online business opportunities. According to the research, while many businesses are mobilising their capabilities for e-commerce, there are vast variances in the readiness of industry players to Internet-enable their supply chains. For example, BCG estimates that by the end of 2001, some players in the consumer durable industry would have Internet-enabled almost 90 per cent of their procurement and close to 80 per cent of their sales to distributors/dealers, while others would have less than 10 per cent of their suppliers and dealers online. |
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