Thursday, August 21, 2014

If I were 22 today

If I were 22 today, I would use the following principles as guidelines while planning my career.
1. I would build experience in stages starting from specific functional experience, widening out to high depth in one functional area and good understanding of other functional areas, so that a broad understanding of the end-to-end process of value delivery transactions is arrived at. Once end-to-end process is understood broadly, I would focus on deepening the understanding to identify how value gets generated (what is important and why) in the process. This typically takes years, unless one has help from books and mentoring.
2. Building technical skills is not enough. Communication, social, interpersonal, conceptual, relationship-building skills also need to be honed. I would leverage all opportunities to develop these skills
3. I would learn to identify and manage internal and external stakeholders in proposing and delivering end-to-end value delivery transactions. This involves planning, making and keeping committments, building and maintaining trust with people. It involves failing and learing from failures. Unless someone has failed substantiallly and learnt from it, Senior management normally do not trust that person with the most complex value delivery transactions. At the same time there is no better teacher than failure, so from 22 onwards I would volunteer for the most complex value delivery transactions and manage them very carefully independently or under guidance from seniors. I would try to learn from my own experience as well as that of my peers and seniors. One lives only once and the most you learn directly or indirectly from real life, the probablity of your success goes up. Being able to handle failure and bounce back from them is a very valuable asset. So do big things, fail early and learn quickly. In case you succeed from doing big things, you get the experience any way. But until you have had some degree of failure and learnt from it, don't trust your understanding of your limitations and manage them carefuly.
4. Careers are not built by shining independently. It is built by carrying people along. Team work and leadership is best learnt and honed by doing. Books, courses and mentoring are not enough. Being able to leverage others to do bigger and bigger things well is the most important thing to learn.
5. Sharpening the saw in the sense of keeping the skill set relevant is a top priority throughout career. If employer does not invest in me, then I need to invest in myself.
6. Milking a legacy skillset without preparing for the day when somebody moves my cheese is not smart career management.
Those of you who are 22 today, hope this helps. Please ask me on prataptambay@hotmail.com if you have questions.
--- Pratap Tambay

B2B Relationship Management

The Dwyer, Schurr and Oh model of Buyer-Seller relationships describes 5 phases in the development of B2B relationships (1) awareness, (2) exploration, (3) expansion (4) commitment, and (5) dissolution. While the exact roadmap varies, the high level topography of the relationship can be represented in the following diagram.


The dynamics of the relationship vary depending on the phase of the relationship. The value derived by both parties in a good relationship increases as the relationship deepens. This deepening of relationships involves building of personal trust between representatives of the seller and the representatives of the buyer which at an aggregate results in organizational trust between the two organizations. The primary job of B2B relationship managers is to understand the phase of the relationship and work towards building and maintaining organizational trust. Such trust presupposes value, so clarity on how value can be created for stakeholders on either side through the relationship is a key skill. Transactions involving promises of value followed by actual delivery of value help in building trust in the processes, products, people. As trust increases, the need and cost of transactions decrease (less redundant QC and governance, less wastage of negotiation time and costs, tighter integration between respective organization processes, products, people) to maximize end-to-end value delivered to customers of buyer. So the skill to consistently make and deliver on promises of value is a key skill for relationship managers.
But sometimes there are problems originating in either organization which slowly destroy trust, increasing transaction cost, reducing value delivered. Typically this happens when either the consistency of promises of value and actual value delivered decreases or when the communication around this misses the wood for the trees. I have faced this kind of situation multiple times. In each case, inevitably the solution is to go back to basics. Understand what value means to each stakeholder, improve consistency of promises made and actual delivery of those promises and communication regarding all these. Typically once the minimal repair is done, even if both parties restart talking together and agree a roadmap of the remaining repair (another promise), the executives on both side relax and if the roadmap is delivered, the relationship heals. Most relationships go through ups and downs and all the above happen to varying degrees over these ups and downs. I have had the good fortune to have turned around multiple customer relationships that I have worked on.
But there is one other aspect of buyer-seller relationships which needs attention. As described above, increasing trust increases integration between buyer and seller. There is then a need and opportunity for the seller to understand more and more of the buyers business and vice versa. This is a positive feedback loop and kickstarting it requires a particular level of trust to be reached as well as a particular level of competency to develop, without which the relationship cannot grow further. However if the trust and competency develops, it becomes neccessary and possible to work together to define joint go-to-market plans to benefit both parties. I have not had the good fortune yet to see any relationship go to this level successfully. It is my goal to reach this level with atleast a few of my clients over the next few years.

Facing BIG opportunities/risks in Career

I started my first proper job in Mumbai with the treasury of ICICI, a large Indian Project Finance Provider (those days), as a money market trader with additional responsibility for the interface to IT department. I left ICICI to build a treasury software product. I joined Logica to build a retail banking software product and moved to manage a money market trading software product at Trigyn. The first Career Curveball (#careercurveballs) came through while at Trigyn.
I was headhunted by VC's to join a startup called 3Genesis trying to wireless enable enterprises using 3G technologies. The offer was far too attractive, but potentially changing my sharp focus on financial services. I thought a lot and took it up. My experience of working in a typical startup, where everything is questioned every fortnight and everyone pulls their weight comes from there. While this experience added value, we were far too ahead of the game and had to move into hard core telecom software for the survival of the company. I suddenly was out of place, the guy with least immediately relevant background. My wife bought me a book on Telecom networks by Raj Pandya proactively and that set me on a journey. I read voraciously day and night asking lots of questions to whoever could answer. The speed at which I picked up deep Telecom impressed the current CTO of Techmahindra (Raju Wadalkar) so much that he nominated me as external examiner for 2 M.Tech Theses of IIT Bombay related to networks. I was as excited about the Parlay API's in Telecom then as I am excited today about OASIS in Insurance. Within in a short while I led from the front with the Parlay API's in winning two large complex projects and delivering one large complex product development and implementation project successfully. We retrained the J2EE experts I had hired into C++ and Telecom and delivered successfully disproving multiple nay-sayers. The product built then went on to huge number of other installations around the world. Unfortunately making software was easier than making money and I did not make much money as my huge ESOP became toilet paper.
But I think this experience has left me with the confidence to learn any new domain quickly and handle large complex projects, which was very useful when I joined NITL with little insurance domain experience. While the NIIT Technologies CEO had some doubt whether I was an appropriate hire, I was confident due to above experience. In fact, learning insurance was far too easy compared to learning Telecom because I have learnt how to learn a domain quickly. Essentially it involves understanding the key concepts/entities, relationships, business-flows/cycles and the the skill primarily lies in asking the right questions to the right sources with finding the answers being the easier part in the age of Internet. It is the ability to ask the right questions that enables faster and better learning.
It is due to the above Career Curveball that I today have a good understanding of BFSI, Telecom and Retail (I learnt that at iGate by dealing with CPW and Ladbrokes) domains. The human mind is amazing, the more you know the easier it becomes to learn something new.
So my message to you is to to take up that BIG opportunity even if you have some doubt in your mind and put in your heart into succeeding at it. You will learn a lot and it will help you in more than one way over the short and long run. Running away at the first sign of problems is never a recipe for success in any walk of life. Face the unknown in your career with courage as advised in the Psalm of life.

Implementing Governance, Risk Management and Compliance

This is my second article on this topic. I would recommend reading the previous article to understand GRC in its full context before reading this one.
Implementing GRC in an enterprise starts with asking the following questions at increasing levels of granularity.
  1. What are the stages of the business life-cycle for this enterprise
  2. For each stage of the business life-cycle
  • How is value generated at that stage of the business life-cycle for various stakeholders?
  • Which stakeholders play what roles in that stage and what are their stakeholder governance concerns during that stage. How do managers stay informed and in control, how do they engage stakeholders and how do they maintain end-to-end audit trail while addressing the stakeholder governance concerns during that stage?
  • What are the potential risk sources and risks to the business value generated at that stage of the business life-cycle? What the ways of managing these risks? Which stakeholders play what roles in risk management and what are their governance concerns during that stage of the business life cycle? How do managers stay informed and in control, how do they engage stakeholders and how do they maintain end-to-end audit trail while addressing the stakeholder governance concerns during that stage?
  • What are the internal and external policies, regulations and guidelines applicable at this stage of the business life cycle? What are the actions needed to comply and record compliance? Which stakeholders will play what roles in compliance in that stage and what are their governance concerns during this stage of the business life cycle? How do managers stay informed and in control, how do they engage stakeholders and how do they maintain end-to-end audit trail while addressing the stakeholder governance concerns during that stage?
The enterprise will have a strategy, processes, technology and people suitable to its its vision and mission. Using the answers to the above questions, GRC implementation is the process of instrumenting this strategy, processes, technology and people of the enterprise so that managers can stay informed about relevant information at each stage of business life cycle, engage stakeholders as needed to understand and address their concerns through the structured stakeholder governance and maintain end-to-end audit trail. GRC implementation may involve elements of technology, but is almost always never fully automatable.
In commercial insurance, the high level business life-cycle starts with submission management, which involves stakeholder interest checks for insureds, risk measurement process elements and compliance checks for insureds initially followed by governed (i.e. based on board approved policies and guidelines which are in compliance with stakeholder perspectives as well as external regulations and guidelines) risk selection, pricing (and potentially risk management), policy issue and reserving decisions which in turn trigger revenue, claims and risk management processes during the life of the insured insurance policy. The revenue recognition processes, the claims management processes and the risk management processes also operate based on board approved policies and guidelines and I will not detail them here. The process by which board approved policies and guidelines are applied (with to-and-fro information and decision flows from the point of underwriting to the board and its delegates) and the process by which these policies and guidelines are evolved to address the concerns of multiple stakeholders of the insurance enterprise in real-time or otherwise are the subject matter of GRC. If GRC has been implemented properly, the insurance enterprise is constantly tracking the risk sources in its business environment and adapting the enterprise to manage the risks from them through the information and decision flows referrred before.
The key variables of GRC implementations are the number of control points in the business life-cycle, the frequency (of the information-decision flows from the control point through the GRC process to managers representing the stakeholders and managing the engagement and governance process with them related to the information-decision flows), the degree of automation of these control points and information-decision flows, and the granularity of the control points and information-decision flows. The number and degree of delegates (and duration/comprehensiveness of delegation) of the stakeholders between the control points and the actual stakeholders is also an important variable which also influences the quality of GRC.
Similar to my description in this article, enteprises are "systems" designed to operate in particular scenarios. GRC processes are customised to expected scenarios. It is important to continuously monitor the data coming through the control points to see whether the enterprise (strategy, processes, technology, people) needs to be redesigned to fit the evolving business scenarios if they have changed a lot. These could be positive scenarios where there are opportunities in the environment to launch new product/services, diversity, forward/backward integrate else they might be negative scenarios where organization needs to rework its core business proposition to survive or choose to wind-up. In such cases, the control points and GRC process may needs to change. Continuous scanning of the environment is something that has been occuring in unstructured manner till now. With GRC there is now a mechanism of doing this better.
If you are an insurer in UK and would like to discuss implementing GRC for your organization with me, please write to prataptambay@hotmail.com

Data driven competitive advantage: Implications for consumers and enterprises

The industrial age started with competitive advantage deriving primarily from the advantages in manufacturing products/services cheaply and with good quality and selling them to consumers (usually in a vertically and horizontally integrated single enterprise). It evolved as the enterprise split away into value chains of smaller specialized enterprises to reduce cost and improve quality while collaborating to deliver the end product to the consumer. The next step was flexible high-quality manufacturing and value chain management to introduce product/services customized to various customer segments and their fickle demand as well as management of this demand through marketing and advertising which too had evolved over the previous steps. Now we have reached the next stage of this logical evolution. Now the information about customer needs and wants as they evolve is the biggest asset.
Consumers are voluntarily sharing information about themselves with various enterprises, who then (may optionally) share this information with other enterprises. We all have signed such contracts on the Internet or on paper. Sometimes such information is involuntarily provided consciously/unconsciously by consumers to enterprises (and through them to other enterprises). Sometimes such information is plain stolen and utilized by enterprises for profit making purposes. Management of this information stream, its analysis and strategic decision-making based on such analysis are driving actions across entire value chains in most industries. Essentially the primary drivers of competitive advantage in this new new world are
The ability to derive non-linear profits through leverage of high-end computing resources to gather, analyze data (about people and machines) to drive actions through the value chain is visible in multiple enterprises...Amazon and Netflix being the poster boys, but these practices are spreading through all industries and enterprises.
No human currently alive knows for sure what and how much information other humans/enteprises are now holding about him/her. One does not even keep track of how much rights over one's own information one has signed away to other humans/enterprises. Control over inferences possible from discrete information pieces is even more difficult to track. Such information and inferences are used to influence subsequent decisions. Some of my friends have expressed how our decisions and actions are being influenced day-in and day-out raising doubts about whether we are free in any meaningful manner. It is due to this that data protection regulations are becoming stricter to protect consumers, their data/information and through it - their freedom.
Data is the primary source of competitive advantage in the Internet economy. Protecting it properly is important for survival and growth. The expenses and ceremonies around data can only rise at the current moment. All industries (including offshoring and outsourcing industries) need to evolve rapidly to remain viable in face of these expenses and ceremonies.

Non and multi model reality, decisions, failures

I read an interesting article today about the "The problem with risk models". It triggered a variety of thoughts in me.
Humans experience the world through conceptual models of it. The Buddha is said to have described how to experience the world as-it-is (i.e. without models I assume). But I don't even understand what that means. So for practical purposes, human experience is all about models of the world. Science and Mathematics both build and use models (structures/frameworks). Science builds theories (models) to explain the world and scientific revolutions (a la Thomas Kuhn) update these models towards higher accuracy. The models to explain different aspects of human experience are different from each other and are essentially "local" to that area of experience. There is no one theory/model explaining how to bake the best bread as well as explain gravitation in the universe. This is the nature of the game. Humans build models based on experiences determined by location and time.
Human actions depend on the mental models by which humans evaluate their options and choose among them. These mental models are based on the individuals experience or his learning from the experience of others (past/present) and contain multiple assumptions (not all validated/validatable). A common feature among them is that they are biased by human experience.But reality is not constrained by the presence or absence of a human to experience it and there is always enough reality never experienced by any one human or those that he/she has had occassion to learn from. Essentially the models are based on limited experience and are speculations that they are representative enough for that scale, time and type of experience. Essentially models have gaps by default. They are useful ways of dealing with reality, but one needs to stay aware of the potential realities that the model does not help in thinking about, since there almost always are such potential realities. Essentially one needs to understand the limitations of one's models at all times, else one tends to fool oneself far too easily with dire consequences.
Now let us consider using a model. Most models are useful "most of the time". It is the remaining time where the model is not useful, but the case in question has high impact that really matters. Not knowing the "region" of experience in which a particular model is useful as different from the "region" of experience where it is not, is a key part of knowing the model and using it correctly. Using multiple models to manage a complex area of experience where one model is better for one area and not for other is sensible, but requires more skill and care. Till knowledge advances and one model applicable to the entire complex area of experience becomes available, such multi-model approaches are unavoidable. Oversimplifying reality assumed by choosing just one model is risky.
Now consider models driving actions of humans. Actions of one human triggers same/different actions by different humans. Sometimes such action chains are consciously designed (and constitute "systems" in a loose sense) and may have feedback loops too triggering same/different actions by humans who originated some of the actions. Such "systems" cause correlations between actions of different humans (some of which may be related to the reasons explored in the article referrred above). Most of the time feedback loops in such "systems" sort themselves out, but sometimes they do not causing "system failures". There are real correlations and spurious correlations between actions of various humans and only some "systems" really exist. Different "systems" of humanity have different drivers for the correlations between constituents. But most of the time these "systems" are consciously or unconsciously designed to work "most-of-the-time" and little attention is paid to identifying and preventing failure scenarios. Humanity is still learning to understand how to identify and prevent potential failures in time in most of its key systems.
Previously most public systems evolved and were hardly designed. Now many public systems are designed and their evolution is governed consciously. But humanity's understanding of the process of design and management of such systems is in its infancy. As Internet pervades more and more living and non-living things on this earth, the number of drivers of correlations between human actions is set to increase due to increasing number of conscious or unconsciously designed human "systems". As this happens, unless humanity learns to identify, understand and manage these "systems" better, we are sure to have multiple crisis which we do not understand. We increasingly inhabit a world which is becoming more and more complex and unless our understanding of it evolves with newer concepts and tools to identify, understand and manage "systems" at social and global level, we are set to undergo a period of unprecendented turmoil.
I talk about some of these issues in my other article but unfortunately there is little consciousness among humans of the changed nature of our common existence as humanity continues in its reverie. But I contend that this reverie will soon be broken and a frantic struggle to make sense of an increasingly complex world will start soon.
Pratap Tambay
2nd August 2014

IT Services and Enterprise Risk Management

IT services instrument nearly all operations of many enterprises in in-sourced or outsourced manners. They connect the people and processes to operate the enterprise. Those who provide IT services (typically IT department) understand the (real-life and potential) end-to-end business scenarios (that the enterprise faces and is equipped to handle) better than most other enterprise staff. Yet in most enterprises, risk management is a function much seperated from the IT department. This seems to be a legacy of a silo-based risk management approach (i.e. focused on isolated portions of the business) rather than the modern approach of taking an enterprise-wide view of risk. As managing enterprise wide risk in an increasingly dynamic business environment becomes more and more important for sustenance and growth of enterprises, this legacy is no longer appropriate. As the business environment becomes more and more volatile, loose integration between the enterprise risk management department and IT department means less flexible, less granular and less frequent measurement and management of enterprise risk. Due to this, IMHO a tighter integration between enterprise risk management department and IT department will maximize business value.
1. The recent events in the airline industry where commercial flights (MH370, MH17 and AH5017) had accidents in regions of extreme events due to war-like situations and atmosphere indicating the need for commercial airlines to integrate enterprise risk management into their operational decision making processes and systems. But it is clear that risks due to geological events (e.g.Icelandic volcanic cloud), Terrorism (9-11) are also risks that need to be monitored closely and in near real-time. The world is a much more dynamic place increasingly. The advent of newer technologies like drones makes the world more and more dynamic and risky. There is no alternative to managing risk more aggresively than before.
2. Business agility is a gospel which has been preached for some time now as the need for the hour as a response to the dynamism of the business environment. Yet the priorities of outsourcing and offshoring continue to be centred around saving money with little attention to business continuity and resilience. Most businesses are not organized to respond quickly to risks of various kinds (Climate Change, Techology). Their people, technologies, processes are mired in the old less-dynamic and risky world.
3. Managing the increased risk level at the level of making provisions (and pricing them into the sale prices) and taking actions to eliminate, reduce, transfer risks to ensure longer term sustainability of the business needs to be baked into the enterprise, people, IT and business process architectures.
It is no longer ok for IT services to be divorced from risk management. Enterprises and their IT service providers need to integrate enterprise risk management into the core of their activities in a much more real-time manner than before.
This is increasingly mandatory for survival and growth in the brave new world.
Regards
Pratap Tambay
prataptambay@hotmail.com

What are the lead indicators to project failure?

Project failure means not meeting planned schedule, effort and quality goals. This definition is important because unless a project plan (including RAID) has been reviewed, approved and baselined for feasibility, it is not a good basis to evaluate failure against. The process of review, approval and baselining the project plan (including RAID) also includes reviews of estimates including contingencies. It is important to have done all that is possible based on the information available to ensure that the plan is sound and grounded in reality.
  • Most of the time it is possible to plan in detail only for a portion of the entire project and the rest of the plan may be sketchy till initial portion of plan generates the information to plan subsequent phases. This is the nature of the game. One must plan what one can and generate RAID items for the rest. As the project progresses, the RAID items get resolved and the rest of the plan fructifies. In such cases, one tries to design the project to generate maximum information at the earliest (POC et al) and agrees commercials which take less risk till this information is generated. Only after this information is generated, bigger committments are made. Even in such cases, the committments may include risk margins and vary in terms of commercial models.
  • Sometime despite every effort by PM, the quality of information inputs to planning may be of such poor quality that the project is doomed to fail from the beginning itself. We will ignore this case, since in real life one never commits to execute the project till adequate information of adequate quality is available to make a good quality plan to generate the business outcomes and benefits needed by customer.
Once one has done all the above, has a good plan and one has started executing it, what are the lead indicators to failure? Before discussing the lead indicators, let me make a few points which determine the high level context of these lead indicators.
  1. Every project will have a critical path determining its duration and other paths will have some tolerance. Similarly the resources for the project will have some availability amounting to base targetted effort and some tolerance for the availability (i.e. contingency). Similarly quality goals for individual deliverables will have some tolerance to meet overall quality goals for project.
  2. As each week passes, the project tracking process tracks each planned task to completion in terms of duration, effort and quality. Every week this results in a project level measure of duration, effort and quality and a measure of remaining duration, remaining effort, overall gap with respect to target quality.
  3. Every week project manager and steering board monitors whether the remaining scope of work can be delivered in the remaining effort such that the overall quality target can be met. This involves looking at possibility of speeding up tasks on critical path by deploying more resources. It involves looking at possibility of reducing effort by leveraging automation or better design requiring lower effort or descoping non-critical items in consultation with customer. It involves improving quality towards target quality by deploying more resources to fix and test defects. Sometimes the plan may change without milestones changing in which case it need not get communicated to client. Sometimes intermediate non-critical milestone dates may change to maintain critical subsequent milestone dates. The latter may need discussion with client. I have generally found customers quite understanding in such cases as long as your explanations are sound and based on reality.
  4. Moving in the above manner one completes the project to meet schedule, effort and quality goals or else sometimes it is neccessary to change critical milestone dates (or split scope and leave some work for later milestone date), increase cost or reduce quality criteria for acceptance. While these may look like failure, depending on the context, it may not be viewed as failure and a lot depends on how it is presented. IMHO true failure is when the project is canned and/or overshoots client budget and/or significantly missed internal GM target.
Given the above flow of project life cycles, I think the most important variables in the project are schedule variance, effort variance, quality variance - at task levels and at various aggregations thereof. The root causes for these can vary a lot, but taken together, if the trend and outlook of these variances is increasing, then something is wrong and needs investigation to track back to planned goals. If the trend and outlook of the variances is increasing and investigation reveals that there is no easy way to recover to planned goals, failure is probable, but one needs to be careful in making the prediction based on sound analysis as described below.
From experience, schedule and effort variance caused by wrong estimations are easier to recover in commercial IT projects. It mostly requires deploying more and skilled resources respectively. If this is possible, more PM's and delivery heads do this or else negotiate with customer for delay (essentially declare failure). However in my experience, quality variance is much more nuanced to figure and its influence on the other two variances is very also significant for drawing right conclusions.
  • If quality variance at a particular stage is high, most of the time it is possible to spend more effort to reduce the variance and depending on the skill of the resource deployed the impact on effort and schedule variance will vary. Essentially the number of defects in each stage determines the impact on effort (and potentially schedule)
  • However if the defect trend and outlook in the life-cycle is such that the number of defects increases with each stage of the life cycle, then it indicates something deeply wrong at some earlier stage. Sometimes it is possible to quickly identify the root cause in the earlier stage and complete the rework for subsequent stages till the current stages without significantly impacting effort and schedule. At other times, this is not possible and failure is the right prediction. Sometimes it is not possible to identify a root cause in an earlier stage and in such case, projecting the additional effort to meet quality targets might trigger the failure prediction. Of course depending on the commercial construct underlying the delivery, the method of dealing with the failure may vary.
So in essence, simply stated if the trend and outlook of schedule, effort and quality variances accross stages of the project are high and non-decreasing, project failure is the most likely outcome. But this prediction needs to be made carefully depending on whether there is/are a deeper cause(s) inferred.

Is this future already here?

I read somewhere that the future is some measure is already present right now. It seems like a meaningless tall claim, but it is actually a deep insight into the nature of reality. For every potential future, some element of here-and-now reality contains its seed. In that sense, the future is already here. Let me describe one critical element of what is happening
1. Internet is connecting humans and things to each other.
2. Systems spanning multiple nodes (user-layer-nodes, business-layer-nodes, data-layer-nodes and the cloud-layer-nodes that each of these can access) process data originally sourced from multiple nodes of the above Internet through online/offline interfaces of various kinds to make/support decisions and/or actions at multiple nodes of the Internet.
3. Security, Availability, Scalability and various other attributes of above systems are dependent on footprint/nature of the nodes and interconnections in the sub-network as well as the interconnections of the sub-network with the wider Internet in addition to human factors
4. The diversity of technologies in the Internet gives different levels of control and vulnerabilities to different nodes and the distribution of these levels changes with time.
5. Policing/monitoring the Internet is practically impossible in any substantial sense due to which no one can be sure whether the current assumptions of humanities ways of life and work(systems of ownership of money and property in particular) are at threat.
6. Humanity made one mess by moving away from a gold standard of money to paper money and this was exacerbated by digitizing money and property ownership. Using physical power or forgery/fraud to usurp money/property did not die out with digitization. Usurping money/property by using computing and/or physical power and/or trojan horse fraud to break digital security remains possible.
7. Trusting ANY expert that a particular system for money/property is safe has become difficult at any one time. And trusting that even if a system is safe for now, that it will remain so has become difficult. No one really knows who can do what at any one given time.
8. My wife formally studied Trust at Birkbeck College, London university as part of her M.Res. (Management Course). Discussing with her, I have become aware of various types of trust. Based on my study of Anthropology, Computing and Finance, I am sharply aware of how trust shapes human relationships, social-life, computer systems and financial institutions like banks.
9. We all know how loss of trust in banks cause runs on bank and how sometimes this can exacerbate into loss of trust in the financial systems. We all know how loss of trust causes problems in human relationships and social life.
10. As financial institutions, personal relationships and social lives digitize and move online (driven by mutlple IT/BPO players like my own employer) to derive competitive advantage, we learn to trust systems with all our secrets and wealth. Many people are doing so much online that they hardly use Pen and Paper and their handwriting is becoming poor. Many people are putting their photos, blog-posts, documents online, hardly keeping physical copies. Many people are keeping their money/stocks/land-registry online with/without choice. All of this is intermediated by trust in systems in general.
11. What will happen if humanity loses trust on systems due to various reasons alluded above? Are we capable of going back without problems to a non-digital way of living and working at all. Does humanity have a backup? Given the kind of technologies easily available to create forgeries/fraud, physical means of securing money/property may no longer work. Will physical/technology power be the only way of protecting our money/property as a backup if humanity loses trust in systems?
12. I contend that the Internet is like the financial system and it is possible to lose trust in it. We have not had any widespread crisis of this type yet. But I am sure that this is possible and we will have multiple such crisis in the future.
13. In the final analysis, it is not a good idea to put too much trust in systems. It is desirable to retain the ability to live and work in non-digital means where the trust for social lives and systems of property are maintained in systems of human trust, else we risk total breakdown of humanities ways of living and working if systems go amok. I have described some ways in which systems can go amok on my blog and my experience in IT tells me that humanities ability to engineer and manage large scale and scope systems is in its infancy.
14. If systems go amok and most of humanities ways of life and work are impacted, humanity will suffer massively as I have indicated in my blog. I experience this everyday when I walk through the mess of multiple toys left by my twin daughters in our living room. I am never sure if touching something will make noise, cause motion or trigger some speech/song or some light show. Life in a mess of systems which have changed the cause-effect relationship on earth will not be different in essence.
In some measure, this possible future may already be here. Is it? What do you think?

Saturday, August 16, 2014

Toilets versus Social Justice

I have compared elsewhere the dogmatic espousal of the Jallianwala baug massacre as India's justification for the abolishment of the Raj to the significantly more heinous massacre of dalits at Tsundur, which has gone unpunished to this date and about which Indian media chooses to write little. One wonders why PM Modi focused on toilets in his independence day speech, instead of focusing on social justice to women and dalits (i.e. implementation of laws relevant to cases like Tsundur in letter and spirit). Toilet shortage and problems due to it are a symptoms of a deeper problem whose root cause is social injustice. Toilets are an inadequate replacement for social justice.

To illustrate the point, I would like compare the much applauded Dandi March by Gandhi to the much less applauded Mahad Satyagraha by Ambedkar. The significance of an event is never to be measured by the amount of the overt ceremony and pomp, but by what the event represents. Gandhi chose to break the law related to making salt to assert his opposition to the injustice of the Brtish rule. His choice was strategic and much applauded then and now by his multitudes. But consider Ambedkars choice of breaking the the unwritten "law" related to water to assert his opposition to the injustice of the Hindu rule. Water is much more primary to human life than Salt. Man can survive and thrive without salt. There are enough pages on the Internet which advise people to live lives without consuming salt. Salt is not neccessary. It is a luxury. But water? Water is a neccessity for human life. The British were merely making it difficult to have a luxury item. But Hindu rules were making it difficult for dalits to get water a neccessity for human life. Even today there are enough wells and temples where dalits are prohibited. Restricting people from god and water is crime against humanity and god. The Mahad satyagraha was more significant than the Dandi march for this reason. The need to revolt against social injustice has not gone away despite independence from British as evidenced by the injustice at Tsundur (among many other cases).

As I have mentioned elsewhere, the "moderates" among the freedom fighters who advocated dealing with the social inequality among Indians before seeking abolishment of British rule were the extremists. And those "extremists" among the freedom fighted who advocated abolishing British rule first were the moderates, because the social inequality has persisted for so many years. Perhaps they never intended to rid India of this social inequality. That was probably the reason for denying separate electorates and giving reservations through the Pune pact thereby denying true representation in the democratic decision making structures. That also is the reason why there is so much lip-service (just like the so called moderates of freedom struggle) to social priorities, but the country continues to focus on expanding the pie for non-dalits. As the control of India has moved from government and public sector to private sector, the need for representation through reservation (or something else) is being summarily ignored putting social justice on a negative trajectory.

As we are now back within the rule of Hindutva - a facade for those who continue to believe that Hindu social organisation is just, it is important to remember the significance of Ambedkar's choice. Modi is basically continuing the tradition of lip-service with which Hindu India has always reacted to Ambedkars Mahad Satyagraha. All Modi needs to do is make Ambedkar's law and constitution work. But instead he wants to build toilets. His track record for social justice in Gujarat is pathetic and so there is little reason to be misled by his new found love for the Buddha, Ashoka and those suffering from lack of toilets. A toilet building Mai-Baap government is Congresi (also Hindu with minor difference in essentials) politics by a new name - expanding cake for have's while shouting about improving basic things for have-nots. Making laws work is more neccessary, but that will hurt his constituents - so he will not do it just like Congress did not.

Anyone who wants to criticize me for giving less priority to toilets, should read about Tsundur judgement first and then think about criticizing my anger over the priority given to Toilets.

For god's sake - make the laws work. Hang the guilty.

Monday, June 16, 2014

Evolution of industry IT architectures

Each large system has component nodes which connect with each other (for de-centralised architectures) or a central node (in decentralised architectures). Circuit-switching hard-wires the connections making it difficult to change if a new way of connecting components is required for new behaviour required during system evolution. Circuit-switched connections come in many flavours, but fortunately is easy to distinguish from Packet-switching which always enables easy tear-down and re-wiring of connections. Simplistically described message/event oriented connections tend to be packet switched. But words tend to mislead and one must be careful. The same type of architecture can be recursively present for each component among its sub-components. It is only when this kind of packet-switched connectivity is present down till at respective levels the core threads/processes basically switch messages of different aggregations, that one can really saw that the application is truely packet-switched. An IT architecture of this nature that is highly configurable and better suited for evolution, since new functionally can be grafted into the existing network with minor intervention.

With Machine-to-Machine communication and digitization, the flow of data in various industries will move from its current circuit-switched nature to a packet-switched nature. Circuit-switched data is less suitable for evolutionary changes, while Packet-switched data can evolve more easily to deliver the value that Circuit-switched data can provide and more importantly go beyond it.

There are different wireless and wired messaging technologies and protocols at different levels of aggregations. Various industries need to carefully design their respective message stuctures at various levels of these technologies and design the industy IT architectures at that level of aggregation in terms of configurable processing of these messages to achieve industry outcomes at that level. This needs to be done as an extension of the OSI model to higher levels of aggregations. It is only by doing it this properly that the complexity of the processing architecture can be made coarse-grained enough to be viewed explicitly enough to be separately made optimizable based on higher order observations.


In today's world, in the transportation sector, is there any justification for each moving transportation device (car, bus, train, plane) to not publish a stream of its geocodes? Actually every moving object inside the above device publishing its co-ordinates at each level with information being aggregated centrally makes better sense. Most industries have circuit-switched core data items unneccessarily. Packet switching location and other types of data can generate better value in most industries. With M2M and digitization, most industry IT architectures will evolve towards this by default

Saturday, June 14, 2014

Do we really have an option for avoiding a police state future in face of technology?

I have written multiple times on my blog about the invasive and pervasive nature of the Technosphere around humanity and how its invasiveness and pervasiveness is only going to increase. Long ago I gave a talk which started with the following lines from "Dover Beach" by Matthew Arnold

Ah, love, let us be true
To one another! for the world, which seems
To lie before us like a land of dreams,
So various, so beautiful, so new,
Hath really neither joy, nor love, nor light,
Nor certitude, nor peace, nor help for pain;
And we are here as on a darkling plain
Swept with confused alarms of struggle and flight,
Where ignorant armies clash by night.


I spoke about how

"Every War that was fought
Was once a thought that someone thought
And if he/she had not thought that thought
They would not have fought"


This was part of a debate at IISc on the topic "If you want peace, be prepared for war" and I was speaking in favour of the topic

Different partititions of humanity live in different thought streams. The barriers between these partitions have become porous. Many positive and negative assumptions are being questioned. This means a period of instability at the least till (and if) sense prevails overall and peace returns. In the interim, the risk that the periods of instability can escalate into near-extinction scenarios for humanity or quasi-war type loss scenarios for health, life and property.

I think I spoke with conviction that day and my speech was well appreciated. I spoke with conviction that day because I concluded with saying something that the Buddha himself has asked people to do. Unless each human wages war with himself/herself, the prospects for lasting peace for that person are low. I write about this in my song "Dhamma ahe Bhimrao Maza" which I sang in the following youtube link with one error. In this song towards the end, I talk about how people fighting injustice first need to fight and win battles with themselves before fighting external battles. There can be no lasting resolution of any significant problem of humanity unless each human fights the war within effectively. Based on my limited understanding of the implications of the Buddha's message, I think that the prospects for a lasting peace among all humans are remote, since getting all humans to fight and win the battle within is remote.

This might sound idealistic and academic, but considering that human thought drives human speech and actions and technology magnifies the impact of this speech and actions manifold, is it surprising if I am worried about the implications for peace among humans? I can see how dramatically minor mistaken/willful speech and actions spread like wild fire through human to human social networks triggering actions involving human-to-machine and machine-to-machine networks to all the networks connecting humanity. In the past, michief remained localised more easily, now nothing remains localised. As I think about the 13 billion hits on NDTV during Indian election results day and as I wonder about the number of billions watching/following the England soccer game in Brazil tonight, I can see that the nature of the distribution of humanities attention is changing. Driven by attention/TRP seeking media and varying degree of access to different technologies to different humans,the speed and diversity with which a thought in one part of the world can trigger speech and action in another part of the world has increased. The number of types of thoughts which reach each individual impacting his/her thoughts, speech, actions has changed. But it is not obvious that these thoughts have become more peaceful yet

I do not like Government to control social life too much, but given
1. The technological means we are placing with multiple people
2. The multi-farious direct/indirect reusability of these technologies into means for destroying health, life, property
3. The growing number of unintended/unregulated aspects of the usage of technologies
Do we really have an option for avoiding a police state future in face of technology?


Sunday, January 26, 2014

How humanity is creating its own misery and how to stop creating more misery

Humanity (through government, public and private sectors) is making wrong developmental choices on behalf of living beings by only using financial value-add as a measure to compare between alterative ends. Such choices theoretically ought to get made based on the maximum longer term financial and non-financial value-add to the maximum number of living beings(through long term impact on living beings, their surroundings and their relationships).

Unfortunately these decisions get made more on the basis of short term tangible impact of the choice on the (sometimes sub-group of) local people, their relationships and their surroundings.

The foolish criteria of "cost of financial capital", which is used to guide investment decision making is hopelessly inadequate due to its miserable short termism and subvertibility. This measure focused only hides the selfishness in the intangible (non-financial at decision time, but strategic and financially relevant in the long term) impacts of investment decisions on living beings. In a highly interconnected world, where every individuals actions impact outcomes for all others, what is the sense in letting individuals, firms and government make choices based on whether they can fund the action cheaply with respect to the benefits they get (irrespective of the impact on other individuals, firms and governments and more importantly the environment and universe)? As humanity we need better mechanisms...


The capitalism of Adam Smith, which posits that self-interest constitutes a method of social organisation, around the current means of investment for production and the subsequent distribution of the needs of humanity is a bit flawed. Till all humans correctly understand their enlightened self-interest, Adam Smith's capitalism is vulnerable to subservsion by empire-building ignorant humans and groups of humans, who do not understand how their ignorance causes their own misery and that of the rest of humanity.

Potential solution

Trusting unenlightened humans or groups of human, without adequate education and training and sensitivity with the best interests of humanity is dangerous. Putting too much trust in systems and procedures to guard against the risk is not the solution.

There is a need to raise the purity of intentions, skill of implementing intentions and knowledge of how actions compare in purity and skill at all points of time.

There is need for more meritorious people at the top who get there through sequences of meritorious deeds, who actually think through the long term costs-benefits for maximum good and happiness of maximum people. And their allocative actions (i.e. choices of projects) can ensure allocation of right work and compensation to people who work on these projects, while keeping the longer term interests of these project staff too in mind

Wednesday, January 15, 2014

Guerilla banking versus Gorilla banking: The potential of community-centric bank‏ing

Today the popular legal structure for large commercial entities is “publicly
ownership” along with stock market listing. While there are benefits of this
legal structure, their limitations are increasingly becoming apparent. These
limitations include

1. Agency problems
a. Managers stealing value from owners
b. Managers robbing Peter (one owner) to appease Paul (another owner)

2. Decreasing trust of stock market prices as representative of underlying
value

3. The stock market has allowed investors to "vote with their feet" on key
management decisions. But there is no known mechanism yet to enable
investors to increase their participation in operational decision making.

4. The mass ownership reduces the ability of firms to distinguish them
selves. Masses in human history have rarely understood complex value
propositions and so the stock markets have homogenized firms and made them
very short term focused

With rapid urbanization of the global village, customers want high touch
relationships. Given the level of anonymity and impersonal behaviours germane
to modern urban life, many urban communities are trying to create the
delightful community life common in rural areas. That enables them to
increase the quality and experience of life itself.

In this context, organizing retail financial service providers as
cooperative or mutual societies is better than organizing them as
proprietorship, partnerships or as the typical publicly owned companies.
Organizing this way allows retail customers to access financial services
customized to the community that they choose to be part of. We define call
such entities as community-centric banks. The benefits of knowing each other
help in improving the customers experience and helps in reducing operational
and financial risks, including agency problems. This operating and financial
efficiency is currently not visible in the stock market prices and hence
does not get the related hype associated with typical publicly owned firms’
at least yet. Nevertheless such community store-fronts are becoming
resellers of the financial services originated by the billion dollar gorilla
banks. It is one direction that global BFSI industry is evolving towards -
pushed by IT, customer preferences, financial efficiency and operational
efficiency.

The private/public limited companies or proprietorships/partnerships
nowadays were enabled by the older technological level of the world. Pushed
too far, we now have stock prices unrelated to underlying value, excessive
short term orientation by very short tenure CEOs. The hugely popular stock
market type of corporate ownership gives higher liquidity in exchange for a
short term orientation. The short term orientation creates most of the risk
management problems in financial service providers and complex algorithms
are a poor way of managing these problems. Secondly profits are removed from
the business periodically in this form of ownership.

IT can be leveraged in operations and risk management with higher level of
benefits and less number of drawbacks from the viewpoint of the customers of
community banks.

1. Profits are re-invested into the business. There is not need to pay
dividends.

Community banks can use IT to leverage this inherent cost advantage against
competition.

2. Due to local nature and small scale, risks are lower and easier to manage
through operational relationship-leverage systems and procedures...rather
than over-dependence on abstract statistical models.

a. People usually understand the credit rating of their neighbours better
than those of people 2 cities away.
b. And statistics models can hardly be trusted in a continuously changing
world for any real and/or large scale decision making.

Essentially community banks are less risky and have lower cost of managing
risks, due to the above reasons - a significant competitive advantage.

3. Customer preferences can be aggregated and used to customize offerings
and operational procedures while preserving bank-end choice in the wholesale
markets. To preserve that choice, they have to operate like guerrilla's who
typically leverage their knowledge of their local terrains to fight against
larger adversaries.

This remains the key competitive advantage of community banks

The small and medium scale nature of this market makes it a delicious pie
that IT services companies could easily bite into...and leverage for rapid
growth. In many ways this is an idea whose time has come. In many areas of
modern life, institutions which are leveraging technology in ways sensitive
to the various stakeholders are becoming more and more like co-operative
societies. The NHS is a prime and recent non-banking example that I know of.
The travel industry has been like this for a long time now. In the United
Kingdom, we believe that the building society sector is best equipped to
become community banks and derive competitive advantage by leveraging
information technology to engage their target communities in a mutually
enriching pursuit of shared values going beyond money.

Tuesday, December 24, 2013

Free riders in the dalit movement

As I have described elsewhere, the dalit movement involves the daily struggle that dalits engage in the schools, colleges, farms, factories, offices, markets, whereby they rebel through excellence in their work to confront the prejudices. This is what the manifesto of the common Ambedkarite specifies as represented in the plethora of Ambedkar statues set up by common Ambedkarites all around the country. Essentially the Ambedkarite revolution involves rebellion through legally compliant excellent work under the constitution laid down by Ambedkar. There is nothing more needed to confront the wrong stereotypes burnt into the minds and hearts of many non-dalit Indians. It is by confronting these stereotypes that lasting social change will happen in India. Else we will merely have Gandhian token change. It is through such Ambedkarite excellence that the wealth of the dalit communities will expand and the inequalities with respect to the non-dalits will reduce. Essentially the common Ambedkarites will legally earn this wealth by growing Indian pie, rather than using non-ethical or violent means, which will be dangerous for India. The glass ceilings will be stressed through each stone (example) hurled at it by the common Ambedkarite with trust and sincerity of effort.

But as I mentioned above, there are free riding dalits, who do not want to engage in the above struggle to redeem the dalit identities in the eyes of remaining Indians, while solving the problems of the dalit community. These come in two varieties.
  • One category use benefits that their dalit identities give them under the Indian constitution, but hides this identity in later life, preventing the direct challenging of stereotypes that can result from the respective excellence that they achieve in their lives. I like to call them the Harijans. Some of  these Harijans do not achieve high stations in their life because they have fallen prey to the stereotypes about dalits, do not believe enough in themselves and do not try to achieve excellence which can cure their feelings of inadequacy which result from these stereotypes which they also believe. Other Harijans achieve high stations in their life, but do not assert their dalit identities in order to avoid creating problems in their respective social lives due to the negative aspects of these identities. This category typically uses "sanskritization" type of upward social mobility and denies any connection to Ambedkar and dalits. They are fanatic about compliance with their sanskritized identity and equally fanatic about rejecting their dalit origin.
  • The second category does not use benefits that their dalit identities give them under the Indian constitution and hide this identity in later life, preventing the direct challenging of stereotypes that can result from the respective excellence that they achieve in their lives. This category also tends to be Harijan and does not identify with Ambedkar.
I call both the above categories as free riders because both are potential beneficiaries of the revolution led by the common Ambedkarites but do not contribute to its success. After all, even if these two categories of dalits do not emphasise their dalit identities, there always are enough people who remain aware of these. These people feel that their sanskritized location in caste hierarchies are acceptable and they don't try to destroy the prejudices that this hierarchy derived on the chance of birth have embedded in Indian minds and hearts. It is the common Ambedkarites who through the manifesto described above will be destroying the prejudices that these caste hierarchies have burnt into Indian heart and minds. When the prejudices vanish, the matrimonial columns will depict this along with various other benefits that will accrue to all dalits (free riders included).

Mancur Olson described how rational choice meant that every social movement will have its share of free riders. Essentially every social movement pursues obtainment of public goods through collective action. But the very nature of public goods is that their benefits accrue even to those who did not participate in the collective action. There is an entire literature describing how individuals make the decision whether to participate in the collective action. My favourite example is Klandermans(1984).

The dalit movement needs to think hard about how to reduce the free riders by increasing the social pressure for solidarity as well as raising the profile of successful common Ambedkarites. As common Ambedkarites show case the ability to not hide their dalit identity and yet succeed significantly against prejudice in education, employment and enterprise, the number of free riders will reduce.

Bhimrao Ramji Ambedkar. May his tribe increase... (A la Abou Ben Adam)

Pratap Tambay
A Common Ambedkarite.