The cell phone breaks the myth of mass customization

In the nineties, the prevailing wisdom was that there were several products that lends itself to mass customization with its attendant benefits. Key benefits included accelerated learning curves, cost advantage and time to market.

However, with some of the MNCs, more specifically companies like Nokia are finding out that if they have to crack open the huge markets in the developing world, they would have to do the opposite. The article describes the travels and discoveries of Nokia’s “human behavior researcher” and makes interesting reading about how the cell phone has just not revolutionized micro eceonomies and markets, but also how people’s expectations about product attributes are changing.

One cultural anthropologist mentioned to me that even in developing economies and even if the market segment is the typical BOP (Bottom of the pyramid) there are different and distinct cluster benefits that users are looking for. For instance, in India there are clearly 14 different product attributes that users are looking for, including some who want the cell phone to function as an emergency light source. In China, it is about 11 and in Philippines it is about 8. In Philippines, airtime is also used as a currency. This article alludes to that particular application and hence the cell phone has become a banking terminal.

Nokia India has been very successful especially in India because it pays a lot of attention to these kind of trends and their success has been documented here.

I guess this just proves that mass customization was yet another passing fad.

Tags: Nokia, cell phone, mass customization, bottom of the pyramid, product attributes

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Wave 3 model for Indian IT service providers

Sudhakar Ram of Mastek writes an interesting perspective on the growth options for Indian IT service providers here.

While I agree with his basic premise that most shifts are non-linear, and that they follow the S-Curve, it is not clear what the Wave 3 work would be! He just characterized that as strategic, value-added and non-linear. The examples that he gives — frameworks, components etc. don’t lend themselves to easy monetization. And I guess, that’s one aspect of the dilemma.

The other aspect of the dilemma is that some of the Indian IT service providers did attempt to move up the value chain by providing consulting services. Companies like Infosys and Satyam went that route only to discover that there are critical tensions between managing a IT service outfit and a consulting fit under the same umbrella. The measurement metrics like productivity, bill rates, price realization, competitive positioning done typically by the IT service provider cannot be applied in the same way to consulting. The net result has been that most of the standalone consulting teams in these companies have more or less disappeared.

Hence while there’s an opportunity and a business imperative to move to Wave 3, I am not sure whether the Indian IT service providers can overcome the execution handicaps.

Tags: Outsourcing, growth, critical tension, execution

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