A Hindu BusinessLine report quotes Milind Kharat, Chairman and Managing Director of United India Insurance as saying that he is not aware of any company within India and abroad offering such a combo project. Read more.
United India Insurance Company Limited, a public sector general insurance company, wants to offer its customers life insurance product. The company is reportedly in talks with Life Insurance Corporation of India, India's largest life insurance company, to explore the opportunity to co-create a combo product which can provide both general insurance and life insurance.
A Hindu BusinessLine report quotes Milind Kharat, Chairman and Managing Director of United India Insurance as saying that he is not aware of any company within India and abroad offering such a combo project. Read more.
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The Indian and global hospitality chains are taking co-creative partnerships such as management contract, franchising, leasing and licensing, for expanding their presence in metros, tier I and tier II cities in India. The underlying aspect of these arrangements, “asset-light strategy”, has it that the independent investor owns the property and the brand holder owns the operations. The industry is all for partnerships between brand and land owners as that make business sense. High Land Cost Prohibits Budget Hotels from Investing in Real Estate High land cost prohibits budget hotels from investing in real estate. It costs anywhere from Rs 18 to 40 lakhs to build a budget hotel room – this estimate excludes the land cost. Land owners know they cannot design and build hotels, which calls for a high level of expertise. Even if they do, marketing them is difficult, as most travelers are looking for branded accommodation at affordable cost. Ginger Hotel’s Chief Executive P K Mohankumar, explains the win-win in an interview to The Hindu BusinessLine: “In places such as Guruvayor, there are many big wedding halls, but no accompanying facility for lodging, especially in the branded hotel category. In many of these places families own large pieces of land, but they don’t have the bandwidth to design and architect a hotel.” For Luxury Hotels, Brand is Asset and Not Real State The luxury hotels, on the other hand, can afford to buy land but they think that investment in real estate is not very strategic to their business. Says Mr Dilip Puri, Managing Director – India, Starwood Hotels and Resorts, one of the largest operators of four and five star hotels in the world, in this interview: “We invest in building brands. The brand philosophy is important to us simply because that’s all we are. We spend millions of marketing dollars in building awareness for the brand and that’s where my investment is. Not in real estate.” Starwood is planning to take its current India number of 36 hotels to 100 by 2015. In the luxury hotels segment, the property owners are also looking for the brand’s ability to market, distribution, strength of loyalty programs, and operating capabilities. Some of the other hotel chains that are keen on the asset-light strategy are Marriott (which is going to have 50 hotels), Tata’s Gateway Hotels (looking to create 50 hotels in the next three years), Park boutique hotels, and Hilton Hotel. The new core competency Apart from brand building, the ability to convince land owners for partnerships is proving to be the new competency for hospitality that can hardly think of building their own properties any more.
Ginger’s Mohankumar tells that his company is focusing on conversion of existing operations, management contract route, and franchise option but forging partnerships is not easy. “There are thousands of hotels in the budget segment in the unorganised sector. To convince them to take up the Ginger brand and be part of the organised sector, is a challenge. Especially in the south, this market is highly mature, unlike the north or east. But most family-run hotels are now facing the heat with branded hotels entering the market.” Starwood, which has about nine brands including St. Regis, Sheraton, Le Meridien and Aloft, lets the land owners and building promoters to decide on what brand they want to have. “But for us, the most important is to make sure that it is the right place, the right partner and the right product. Often, there are some trade-offs, simply because we don’t find that commonality of objectives between what the owners are looking for and what we are. Some people tell us they want to build St. Regis (Starwood’s most premium hotel) in a Tier II town. Clearly, it’s not going to work. So, I should first look at whether the owner is looking for ROE or ROI, ROE being return on ego. Very often, owners get into building hotels as it is a status symbol to own one, maybe because they are in the real estate business. If that happens, to them big is beautiful. They may want a big, opulent hotel. Often, that opulence may not suit the chosen brand. Because, to provide the consistency of a brand you can’t have one hotel which has a 10,000 sq. ft. lobby, and another which has a 2,000 sq. ft. lobby,” says Puri. Last year India had over 700 million domestic travelers. The number of international business travelers is on the rise. Travelers from these two segments look for value for money that the budget hotels offer. According to HVS, hotel consultancy and valuation specialist, there is a requirement to add about 50,000 to 70,000 rooms in the budget and economy segment in India. This segment accounted for 50 per cent of the branded hotels category under construction in 2012. Hotels that invest in required managerial expertise in excelling partnerships with individual land owners, building promoters, construction companies, can be expected to grow well in the Indian market Mr Vaibhav Tewari, CMO, Microland Microland, one of the leading IT infrastructure services companies in India, and Zinnov, a management consulting firm, have recently authored a joint white paper titled, "Driving Innovation through Co-creation" (PDF file). India CoCreates brings an exclusive interview with Mr Vaibhav Tewari, Chief Marketing Officer, Microland on how his company pursues co-creation in infrastructure management services. Mr Tewari is responsible for global marketing and services strategy functions of the company. He started his career with Saint-Gobain and then spent two years with Citibank. Mr Tewari co-founded and served as the President for iSeva, a leading Business Process Outsourcing Company and grew it to 2000+ employees prior to it being acquired by a US company. Subsequently he co-founded and ran o2s360, a B2B distributor loyalty and coupon management software company for four years prior to joining Microland. In this interview, Mr Tewari shares his views what it takes for co-creation and how co-creation produces innovation in the industry. Excerpts: How do you define co-creation? Why do we need it in IT infrastructure management?
The co-creation model goes beyond the conventional service provider model. In Infrastructure management, co-creation aims to leverage the best of capabilities of customer, technology partners and service providers. I would say co-creation is the next step of collaboration. It is about working with the customer and partner ecosystem to jointly charter new territories. In the co-creation approach, the service provider, the technology partner and the client organization need to take a strategic view of the initiatives. The service provider should be trusted with as much access as possible to customer’s environment, stakeholders and business problems. Co-creation assumes more significance in infrastructure management because it is typically a mission critical and 24/7 service. There is no possibility of operating in an off-line or test mode. Hence, every incident or ticket is critical. One is only as good as the last ticket. This calls for extraordinary service delivery capabilities and collaboration with the client and the ecosystem of technology partners. In our context, co-creation calls for world class self-service and automation environments for the clients’ IT infrastructure needs. In the service sector, software services industry in general, appears to be one of the early adopters of co-creation model. What do you think are the reasons or enablers? Software services sector has grown rapidly in the last two decades or so. Given the large volume of work they outsource, customers have looked at engaging multiple service providers. In that scenario, multiple service providers have to work towards completing a larger goal, and hence co-creation has become an imperative. Secondly, service providers, attempt to strengthen their capacities and competencies through interactions and relationships with customers so as to improve the value creation processes. It therefore becomes important that they come together to create a model that will be of importance for the two of them to make progress. This cements new approaches to service design and management, to service engineering and service experiences, and to service operations and service marketing. The fact that we have many collaborative technologies available to us and the fact that we have the ability to collect feedback, react and respond to customer's needs with multiple partners helped us pioneer the concept of co-creation. What do you think are the distinct features or indicators – such as self-service of IT infrastructure needs – of co-creation in IT infrastructure management services? Since the last few years, there has been a significant shift that transitions enterprise IT from the backend to the front end. The enterprise IT is now more and more mobile, virtual and Cloud-enabled. Consumerization of IT is compelling the CIO’s to relook at the way their IT is designed and consumed. With increased adoption of telecommuting by the global workforce, the way enterprises managed the technology usage by its workforce has undergone a paradigm shift. With Cloud, self-service has become a lot more critical. Users can ask for and get the computing power through self-service the way they book their flight tickets. If the first generation of computer technologies helped businesses to drive up efficiency and productivity, the emerging technologies have come to be the competitive edge for businesses. With such disruptive trends and convergence in information and communication technology (ICT), enterprises have to find new ways to monitor, provision and manage their IT in an innovative, effective and secure manner. End-user satisfaction is becoming lot more critical now. Co-creation plays a critical role in this scenario, working around automation, providing computing powers for users, running pilot projects for customers and helping them in adopting emerging technologies. The solutions that help optimize and standardize operational processes and help transform the way in which IT infrastructure management services are delivered to the global organization in the most optimized operating model could be some of the highlights of co-creation. How receptive are customers (Global In-house Centres), to the idea of co-creation of infrastructure management services? What benefits do they see? In the current context, with economic uncertainty and consumerization of IT, CIOs are under tremendous pressure to deliver enhanced end-user experience and improved competitive advantage to the business. IT is expected to enable business growth, improve agility & capability and improve service experience while optimizing IT budgets at the same time. The CIOs are expected to transform the way services are delivered to their end-users as well as transform the technology landscape (by adopting emerging technologies) within the constraints of their budgets. Co-creation could well become an approach for GICs to influence the future of IT infrastructure service delivery in their enterprises. As a specialist IT infrastructure Management Services company, Microland has been collaborating with its customers since its first engagement. The core DNA of the organization is geared towards collaboration. Microland works on the three enablers of co-creation: trust, access and transparency. We strive to create a condition of mutual trust as a first step. The trust factor surfaces from the fact that Microland has the capability of large scale service provider and the flexibility and agility of a niche service provider. This has also ensured an average client retention tenure of more than 10 years. Unparalleled access for customers to Microland’s multi-device, multi-technology IT labs 24/7 to enable proof of concepts, simulation of environments for testing is a good lever. Our focus on transparency engenders an environment of trust among our clients. Further collaborating with the client and putting in place a joint governance framework strengthens the co-creation approach. This ensures that operational initiatives are reviewed regularly and a partnership roadmap is jointly developed and strategic initiatives are discussed collaboratively. Value delivered to Microland GICs includes lower TCOs, better IT business alignment and superior performance. The benefits could span from service providers making upfront investments in return for long term relationships and opening up all their systems, processes, tools and tap the best talent for the benefit of the customer. Best practices that service providers have accrued over years from different customers can be well leveraged. Co-creation helps GICs in achieving their twin objectives of keeping the lights on and being innovative simultaneously as co-creation offers a highly promising and more holistic, approach to value creation. The GICs should endeavor to provide the service provider with as much access as possible to its environment, stakeholders and problem statement. Further, the process for approvals, SLAs, costs and objectives should be made transparent to the service provider so that they can develop the trust required to make investments in the relationship. The same approach indeed applies to the service providers as well. How co-creation helps infrastructure management service providers like Microland innovate, while still “keeping the lights on”? Co-creation offers a highly promising and more holistic approach to value creation. As I said, co-creation is the next step of collaboration. It is about working with the client and partner ecosystem to jointly charter virgin territories of end user experience and business goals. It is about building or creating business solutions in the context of the new paradigm. Innovation is no more considered a value addition. It is now a service delivery imperative. As compared to other services (R&D, IT, BPO/ KPO), the impact of emerging technologies is profound and complicated as far as infrastructure services are concerned. Enterprise IT cannot be a provider of point solutions anymore: instead, they should be able to deliver integrated services across the complex spectrum of physical, virtual, mobile and Cloud enabled IT infrastructure. They need to proactively invest and innovate in devising IT infrastructure solutions to deliver on the changing business and technology demands. Therefore co-creation turns out to be an innovative approach for enterprises, whereby customers can leverage best practices that service providers have accrued over years from different customers. While, service providers will open up all their systems, processes, tools and top talent for the benefit of the customer, they will also make upfront investment in return for long term relationships. Close to the heels of Barista-Penguin tieup, India's largest retail coffee chain, Cafe Coffee Day, has struck a deal with Westland Books to make the latter's popular titles available in its select outlets in Chennai. Soon, as many as 300 of over 1300 retail outlets of Cafe Coffee Day will offer Westland Books' bestsellers. While, books help coffee chains enhance the in-store experience of customers, coffee chains also share rentals, one of the major cost factors of retail coffee chains, with publishers. As books are mood enhancers the hospitality sector finds publishing houses as co-creators of customer experience. "There is an idea to reach out to salons such as Lakme, since there are woman who tend to read magazines at such places and books can become a part of the exercise," Mr Gautam Padmanabhan, CEO, Westland Books was quoted saying. Another innovative collaboration around books comes from 'The Books on Prescription' scheme in England, where British Library (BL) and Reading Agency (RA) are asking general practitioners to prescribe self help books to patients "with mild to moderate mental health concerns". BL and RA would make sure that about 30-odd prescription titles will be available in all local libraries for the patients to borrow and read. Cross-industry collaboration involving India's mobile technology companies and banks have been producing an interesting array of digital cash transfer, withdrawal and payment innovations in the recent times. Many of the innovations are too small and niche that they can be called "one-percent innovation dots". They are one percent innovations as the innovations, in their initial stage, contribute not more than one percent - or less - to the innovating company's turnover. They are innovation dots because they, in their current form, cannot be taken up for mainstream adoption without connecting them up with other technology/business developments in due course. India CoCreates presents three such innovations that were launched in the recent times: 1) Mobile Payment of Auto Fare, 2) Mobile Enabled Cash Transfer through ATMs, and 3) Mobile Cash Transfer through Business Correspondence Model. Mobile Enabled Cash Transfer through ATMs Innovator: IndusInd Bank Region: Select Centres in India One-percent Innovation Dot: Enabling customers to withdraw or transfer cash via mobile all banks to withdraw cash from ATMs using mobile phones (without using a debit card) How does it work: By using a mobile application, the IndusInd bank customer can send a PIN (“remitter PIN") to the mobile number of the receiver. The receiver can simply withdraw the transferred money from select IndusInd Bank ATMs by following instructions sent to his/her mobile number. The sender has to be the customer of IndusInd bank but the receiver does not need to be a customer of any bank. In Future: IndusInd Bank believes that this solution could help intra and inter-city money transfer simple, quick and effective. For more details, click here Mobile Payment of Auto FareImage credit: Federal Bank Innovator: Federal Bank Region: Kochi, Irikkur (Kerala) and Chandigarh One-percent Innovation Dot: Enabling passengers to pay auto fair using mobile phones How does it work: Passengers with an account in any bank can send text message via their mobile phones to their banks mentioning the exact auto fare. Within seconds they and the auto drivers would receive message, confirming the cash-less settlement of micro payments as less as one rupee! End of the day, auto drivers visit the nearest Federal Bank’s branch to collect payments made by passengers. Federal Bank uses its Interbank Mobile Payment Service and the support of National Payment Corporation of India to provide this service. In Future: Federal Bank is planning to extend this services to chemists, general stores and churches. For more information, click here. Mobile Cash Transfer via Business Correspondents Innovators: ICICI Bank and Aircel Region: Chennai and Tirunelveli One-percent Innovation Dot: Enabling migrant employees to transfer cash to their family members using mobile phone and business correspondents. How does it work: Migrant employee deposits money at ICICI-Airtel outlet in one of 13 outlets in T.Nagar, Chennai, where a large number of migrants from Tirunelveli, a tier-III city, work in retail stores. The receiver in Tirunelveli gets an sms. Upon showing the text message to the 30-odd business correspondent located in prominent places in and around Tirunelveli, they can receive the payment instantly. In Future: ICICI-Aircel are planning to identify places in West Bengal, Bihar and Assam that send a large number of workers to other places. For more details click here. Banks and mobile companies believe that their innovations hold the promise of becoming major revenue channels, and even if they will prove to have inherent limitations, they would still lead to the development of the next disruptive solution in the domain of digital payment in future.
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