The Hindu Business Line : A case study on risks from rapid growth

Chennai, March 24 As the first Indian bank to provide Internet banking, to securitise microfinance portfolios, to make simultaneous equity offering in three markets (US, India and Japan), to introduce bill payment facility on ATMs, and to auction non-performing assets, ICICI Bank finds commendatory mention, as ‘stellar’ performance, in C.K. Prahalad’s new book, ‘The New Age of Innovation’. Such growth and increase in scope, however, also carry ‘seeds of risk,’ he observes.

The robustness of the ICT (information and communication technology) enterprise architecture must allow not only for rapid change but also for compliance, cautions the soon-to-be-released book, co-written by M.S. Krishnan ( www.tatamcgrawhill.com).

The risks are around three parameters, the authors identify. One, as the number of customers and vendors increases, how can ICICI Bank retain its ‘N=1 and R=G orientation,’ they query?

The equations (called ‘the two emerging pillars of innovation in all businesses’) are explained in the book’s intro.

“We are moving to a world in which value is determined by one consumer-cocreated experience at a time. We will call this phenomenon N=1,” the authors declare. The other ‘pillar’ is ‘R=G,’ which refers to the trend towards ‘access to resources from multiple sources (either local or global), and not just from the firm and its subsidiaries.’

Information systems

Resuming the ICICI case study, the second point in the ‘word of caution’ section is the question about the information systems in the bank.

“Can the architecture of the ICT system automatically identify all the cross-impacts of any single change to a single sub-process such as minimum balance requirements?” Prahalad and Krishnan wonder.

As the systems become complex because of the variety of products and services, as well as the choices that individuals can exercise, the architecture of the system must automatically sense and adjust itself, they advise.

“Can the system self-monitor? Will ICICI face the same challenges that legacy systems face?”

Social infrastructure

And the third question that the book poses is whether social infrastructure can keep pace with the rate of change: “As the battle for talent in India intensifies, what is the quality control process for retaining the best talent and protecting the company’s culture?”

A chapter titled ‘dynamic reconfiguration of talent’ speaks of the ICICI-NIIT tie-up to generate talent.

Creating talent

“In partnership with NIIT, the largest computer skills training institute in the country, ICICI rolled out a certificate programme to tap college graduates across multiple disciplines ranging from science and mathematics to liberal arts,” reads a snatch.

While the bank provided the course content, NIIT worked on the training methodologies and used its network of thousands of affiliated training centres to deliver the programme.

“The graduates could go to any bank of their choice. ICICI created a large pool of well-trained people… growing in number from 18,000 to 38,000 in the last two years.”

ICICI Bank has been used as an illustration because its strategy is still evolving, the authors reason.

“And its competitive advantage both in India and increasingly in its global operations is based on its deep understanding of the business models and its links with business processes.”

http://BookPeek.blogspot.com

More Stories on : Books | ICICI Bank Ltd

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
TCS to provide e-signature platform to Prudential

Rupee gains on dollar selling

Housing loans: Chidambaram happy with banks’ response

RBI asks corporates to source funds locally

Dena Bank raises Rs 106 cr in bonds

Bonds fall on inflation data

PNB to raise Rs 500 cr via upper tier-II bonds

Children reverse mortgage plans of parents

Call rates close higher

RBI modifies fund transfer system

Bengal co-op bank seeks clarifications on farm loan waiver scheme

A case study on risks from rapid growth