GuruMantras™

Blood Bank Management System

2009-07-19T22:50:00.005+05:30

BLOOD BANK MANAGEMENT SYSTEM

(Coin the Future)

India's blood banking system has serious Shortcomings. The gap between demand and supply of blood is continuously widening. The actual collection of blood is only 60% of the annual demand. A study conducted by the National AIDS Control Organization (NACO), regarding blood banking services in India has revealed many shortcomings, including the decentralized nature of blood services, a shortage of human, technological and financial resources and a deficit in the availability of blood, especially from voluntary donors and non-remunerated blood donors.

Paradoxically, very few blood banks are operating to their full capacity. Inappropriate use of blood and wastage is not an un-common occurrence. Even during an emergency, the onus is on the patient's relatives to arrange for replacement of blood. India has many blood banks, all functioning in a decentralized fashion. In the current system, there is no tool to find number of blood donors of the required blood group in current time and place, there is no interaction between blood banks, no exchange of blood or its components, or best practices, there is no integration of Web launching with all the above mentioned facilities.

In order to explore all these issues an efficient blood bank management system (BBMS) is required, with the aim of ensuring that every patient has access to an adequate quantity of safe blood. BBMS is a complete blood bank management solution that covers all the activities of a blood bank with Geographic Information System (GIS).

The aim of this paper is to create a GIS application that covers some of the blood bank management issues related to particular region. The application is designed to achieve the analysis of the spatial distribution of donors, which shows how GIS can be used quickly to locate the blood donors of the required blood group near to a given blood bank location on a GIS based map of regions. It creates a GIS based database to determine and visualize catchments of donors to a particular blood bank. All these are available on a web application including finding nearest blood bank with the availability of the required group of blood at right time and right place. It develops a computerized supply chain management and distribution system.

This web based blood bank service portal also provides awareness generation to facilitate the coordination between the need of blood during emergency, arrangement of blood donors and blood banks. This system will help the citizens in finding the availability of blood, service directory, FAQ for citizens, online donor registration and Awareness generation.

How it works? This integrated system will have a centralized office. People who are willing to donate blood will voluntarily register online with their blood group, location and other details. The Centralized office will maintain all the data of interested donors segregated by location and blood group along with the local community blood banks. The Centralized office will be networked with all the partner health centers/hospitals and blood banks so that real time information can be transferred.

When a requirement for blood comes to a partner hospital immediately the information is transmitted to the centralized office which performs two transactions, it sends a message to all individual volunteers in that particular area/location having that similar blood group, it sends a message to all the community blood banks present in that area with rapid feedback action.

All partner hospitals/health centers are classified into three categories A, B & C based on the fees charged by them to their patients and accordingly we will be charging them for the blood. This purposeful discrimination in terms of pricing is done in order to cater to the needs of the society which includes all rich and poor.

For the Complete Research Paper email: akshay@gurumantras.in

Akshay V Jain Khanter

2009-06-06T17:24:00.001+05:30

GuruMantras ™ of Contingency Planning

(He who fails to prepare, prepares to fail)

All businesses and organizations are prone to serious incidents that can prevent it from continuing normal operations. This can range from a flood, fire, natural calamity to a serious computer malfunction or Information Security breakdown.

The management of the organization has a responsibility to recover from such incidents in the minimum amount of time, with minimum disruption and at minimum cost. This requires careful preparation and planning and thus brings in the law of contingency planning some times also known as "Back-up plans", "Worst-case scenario plans" or "Plan B".

The guru mantra here is that it is important for an organization to take the development and maintenance of the disaster recovery plan seriously. It is not one of those tasks that can be left until everyone has time to deal with it. A serious incident can affect the organization at any time including the very next minute.

A contingency plan is developed by a team representing people from all functional areas or departments of an organization. If the organization is large enough, a formal project needs to be carried out.

The first step in contingency planning is to prepare a comprehensive list of the potentially serious incidents that could affect the normal operations of the business. This list should include all possible incidents no matter how remote the likelihood of their occurrence. Against each item listed the manager should examine the probability. Each incident should also be rated for potential impact severity level. From this information, it will become much easier to frame the plan in the context of the real needs of the organization.

Once the initial assessment stage has been completed, the structure of the plan can be established. The plan will contain a range of milestones to move the organization from its disrupted status to reinforcing it to its normal operations.

The first important milestone is the process which deals with the immediate aftermath of the disaster. This may involve the emergency services or other specialists who are trained to deal with extreme situations. The next stage is to determine which critical business functions need to be resumed and in what order. It will also highlight and identify key individuals who should be familiar with their duties under the plan.

Once this plan has been developed it must be subjected to rigorous testing. The testing process itself must be properly planned and should be carried out in a suitable environment to reproduce authentic conditions to check its feasibility. The test procedures should be documented and the results recorded. This is important to ensure that feedback is obtained for fine tuning the Plan.

The plan must always be kept up to date and applicable to current business circumstances. This means that any changes to the business process or changes to the relative importance of each part of the business process must be properly reflected within the plan.

Organizations must set up a separate department and someone must be assigned responsibility for ensuring that the plan is maintained and updated regularly and should therefore ensure that information concerning changes to the business process is properly communicated. Any changes or amendments made to the plan must be fully tested and proper communication should be made to all the people involved with it.

Akshay V Jain Khanter

CEO - GuruMantras™

GuruMantras™ of SWOT

2009-05-08T14:53:00.003+05:30

SWOT (Strengths, Weaknesses, Opportunities, and Threats) a tool well known to all of us, but many fail to use. It is a tool meant more to provide a general or detailed snapshot of a company's health. Every business needs a tune up periodically to diagnose and fix what’s a bit worn, what’s on the verge of breaking down, or what’s already broken and needs replacement--so that you can keep the business humming--even better than it has in the past.

SWOT offers professional managers an effective evaluative technique to aid the decision making process. It may not find the solution for you, but it will ensure that issues are: identified, classified and prioritized clearly, showing the problem in terms of key underlying issues.

For any business, it is impossible that the business be its own critic. SWOT forces an objective analysis of a company's position comparing it with its competitors and the marketplace. Simultaneously, an effective SWOT analysis will help a business determine in which areas it is succeeding, allowing it to allocate more resources in such a way as to maintain its position and concentrate on its core competence. A systematic analysis using the SWOT framework will help you to focus your activities into areas where you are strong, and where the greatest opportunities lie.

Some might argue that when the economic situation itself is not good how any theoretical tool like SWOT can help a business from sinking. The guru mantra here would be that no doubt the current economic downturn is impacting business more traumatically then ever before. But look around. A high percentage of U.S. businesses are surviving the pain, and many are even thriving. Winners typically win not by sticking with their past game plans--but rather by focusing on some new thing(s) that are under their control. During depressed economic times, there are still lots of winners.

The reason for many companies collapsing is not restricted to the economic turmoil alone. Another very important factor was that all these giant corporations had a bagful of businesses out of which losses from a few bad ones eat up the profit of the rest of the profitable businesses thus resulting in selling the good businesses for peanuts whereas they were unable to find suitors to sell their bad businesses even by offering some peanuts.

The right strategy should have been to look at the organizations current performance (strengths and weaknesses) and factors in the external environment (opportunities and threats) that might have affected the organizations present & future. Once the attributes for each of the sections had been identified it would have been possible to determine the point of balance. Thus helping in eventually arriving at a position where the point of balance of strengths versus weaknesses and opportunities versus threats could have been plotted together.

You can develop the basic analysis of SWOT in a brainstorming session with members of your company, or by yourself if you are a one-person shop. The business of management today is characterized by complex issues and continuous change. Frequently the related decisions and actions are characterized by trying to understand the complexity of the issues involved so that an appropriate decision can be made. In doing so, ideas can be shared between managers and even integrated into a wider picture for subsequent analysis.

SWOT analysis is a dynamic process of decision making with many applications in organizations and other applied fields. The need of using this tool in our personal lives and our day to day activities is also as important as the uses illustrated above. Today, every recruiter wants to know from you in verbal your strengths and weakness more then your qualification and it is for you to analyze the opportunities and threats that you would face if you got recruited in that organization.

Akshay V Jain Khanter

CEO - GuruMantras™

GuruMantras™ of Root Cause Analysis

2009-03-03T14:30:00.002+05:30

“Things are not always what they seem”

All organizations have problems that plague their operations, reduce profits, and create customer dissatisfaction. Most organizations try to fix these problems quickly without ever finding what caused them in the first place, making the problems reappear. Over the years a number of quality control & improvement programs have been introduced, which mainly aim at reducing the number of defects produced or to emphasize the value of defect-free processes or performance. Some of these programs are Zero Defects, Quality Circles, Six Sigma, TQM etc. The basic theme of all these programs are remarkably similar that is “Do it right the very first time” Many organizations use these tools to tackle all their problems related to operations & production irrespective of whether they create any value.

In addition to the techniques listed above, Root Cause Analysis can be a powerful tool to help determine current obstacles for improvement, as well as identify those particular areas in which operations/process improvements might produce the greatest benefit. Root cause analysis is the process of finding and eliminating the cause, which would prevent the problem from returning. Only when the root cause is identified and eliminated can the problem be solved. As the name implies, root cause is that most basic reason due to which a problem has (or could) occur.

Root Cause Analysis helps identify what, how and why something happened, thus preventing recurrence. It is a tool for Effective problem solving because this methodology could be applied in generic fashion to almost any problem. Effective root cause analysis is one of the most necessary step involved in developing and implementing a viable productivity and quality improvement program.

Root Cause Analysis is a tool designed to help in identifying not only what and how an event occurred, but also why it happened. Only when investigators are able to determine why an event or failure occurred will they be able to specify workable corrective measures that could help prevent future events of the same type. Root causes are underlying causes. The investigator’s goal should be to identify specific underlying causes. The more specific the investigator can be about why an event occurred, the easier it will be for him to arrive at recommendations that will prevent recurrence.

For the problem solving process to be effective, the root cause evaluation must therefore uncover and correct the situation’s root cause, not just treat the symptom(s). As discussed earlier, root cause analysis is the process of getting to the root of a problem & its source. If problems are not properly analyzed, removed or rectified then they may again reappear. Perhaps more ominously, they can spread to other areas.

Root Cause Analysis can be done with the help of a simple and effective 4 step process:
1. Data collection.
2. Data Analysis.
3. Root cause identification.
4. Recommendation generation and implementation

We often mistake apparent cause of any problem as the root cause. An apparent cause is one which represents the immediate or obvious reason for a problem and many a times the cause to the problem occurs to a reason we are totally unaware of thus neglecting the real actual root cause.

Root Cause Analysis in terms of business could well be defined as “Identification of the underlying cause(s) of specific areas of deficiency in business processes” and otherwise also root cause analysis is such a tool which could be used in our everyday life thus resulting in understanding people, situation and ourselves better.

Akshay V jain Khanter

CEO - GuruMantras™

GuruMantras™ of Strategic Intelligence

GuruMantras™ of Emotional Intelligence

GuruMantras™ of Opportunities in Recession

GuruMantras™ of Strategic Intelligence

2009-02-05T22:17:00.002+05:30

Strategic Intelligence (STRATINT) is a concept associated with Military & Defense planning. It is this intelligence which was used more during the Cold War & World War II. According to Pentagon, headquarters of the United States Department of Defense, strategic intelligence is defined as “Intelligence that is required for the formulation of strategy, policy, and military plans and operations at national and theater levels” Defense systems of various nations develop strategic intelligence involving a simultaneous and complex study of various factors impacting the country’s security, based on which an elaborate and long-term plan is chalked out. In the above context the recent terror strikes in Mumbai puts a question mark on the strategic intelligence polices of our country.

We certainly cannot argue with the above views of use of strategic intelligence in developing defense & military plans, but is this the only valid use of STRATINT? Why limit strategic intelligence to departments of defense & military, why not to expand the horizons of STRATINT to the challenging corporate world of Business.

If strategic intelligence were applied to business it could well be defined as “Strategic Intelligence is the specific form of analysis which pertains to the collection, processing and dissemination of intelligence by all the departments of Business for formulation of policies & plans at the top management level” This processed information given by the various departments is quite different from the usual Bottom-Up approach followed by organisations. Intelligence over here means the sum of what is known, integrated with new information, and then finally interpreted for its meaning.

Intelligence is often described in terms of where and why it is being done and is an ongoing process that evaluates and controls the business and the industries in which the company is involved; assesses its competitors and sets goals and strategies to meet all existing and potential competitors; and then reassesses each strategy annually or quarterly [i.e. regularly] to determine how it has been implemented and whether it has succeeded or needs replacement by a new strategy to meet changed circumstances, new technology, new competitors, a new economic environment, or a new social, financial, or political environment.

By the late 70s people had started to notice how successful Japanese industry had become. In industry after industry, including steel, watches, ship building, cameras, autos, and electronics, the Japanese were surpassing American and European companies. One of the main reasons behind this exponential growth was the process oriented approach coupled with strategy formulations, though not exactly strategic intelligence, but the Japanese where the first to adopt the policy of best practices & bench marking which was later followed by the West.The code of practice for strategic intelligence has been fully developed and successfully tested for several years now. Like most routines and protocals, it needs constant maintainence and fine-tuning, but the reality is that it (the process) works well. Strategic intelligence involves the application of the management processes like strategy formulation, strategy implementation & strategy evaluation to obtain the desired results. Each of these management functions has been the subject of extensive writing & research by renowned scholars and practioners and has been covered in various management books. Since full coverage of these management functions is beyond the scope of this thesis, I have focussed only on factors that help in strategic intelligence creation

Akshay V Jain Khanter
CEO - GuruMantras™

Surviving Recession

GuruMantras™ of Opportunities in Recession

2009-02-04T21:07:00.003+05:30

Geography thought us that when the sun sets in one part of the world it means that it is time to rise in another part of the world. It is time that we put this great saying in the context of the world economy. Today, USA is facing one of its most dreadful episode in terms of economic slowdown. The biggest recession in America is surely on the cards keeping in mind the power packed last fiscal which saw some of the major financial giants like Lehman Brothers, Merrill Lynch, AIG, Morgan Stanley, Freddie Mac, Fannie Mae etc. going bust.

If the losses and the write offs are anything to go with then many of these companies and the other corporations which will soon follow their peers would take years to revive themselves & restructure their balance sheets. The recent developments show that the phase of consolidation has just started with either the government interventions or corporate buyouts. A slowdown or recession always starts from the banking & financial sector but slowly & gradually spreads to all the other sectors including the basic and key industries.

Today with the fall of some of the biggest brands in the world of finance and business in America and the other developed nations; many of us might be feeling the heat and are hesitant in making decisions. My guru mantra to all would be not to worry and panic – but it is our time to rise to the occasion and shine. We need to seize this opportunity and show the world what we are capable of. When Indian brains working in the US can help build these companies into giant corporations then why not for our own nation. It is time for a reverse brain drain.

If India wants to be in the big league and a super power by 2020 then this is one of the best opportunities to grow and show the world what we are capable of. India today needs growth in a consistent pattern and we all are responsible in achieving it. The acquisition of Corus, Jaguar & Land rover, Imperial energy, Novelis etc is a start to this new era of Indian cross border M&A.
In the short term, we might feel the ripple effects of what has happened in US. But instead of getting worried & crib over this whole saga, we should look at finding opportunities in this global crisis. If the reports of several economic agencies is to go by then India would be the least affected nation by this global turmoil. China is going to be in trouble as they have large amounts of exports to these western economies – we fortunately don’t and are basically driven by domestic growth story. We need to seize this opportunity keeping in mind the mistakes of these high profile institutions and learn a quick lesson from them.

In the coming future Indian corporations will get ample opportunities to buy in to these global corporations as they go up for sale and for this as a famous proverb goes “A closed mouth catches no flies” meaning one has to always be in a lookout for opportunities only then can success be yours. When the sun sets in one part of the world – it means that it is rising in another part. It is time for a new dawn, and even though we might have darkness for some time but very soon the sun is going to rise. Happy India Shining

Akshay V Jain Khanter
CEO - GuruMantras™

GuruMantras of Emotional Intelligence

Risk Management in Recession

2009-01-29T13:36:00.003+05:30

RISK MANAGEMENT is a structured approach to managing uncertainty related to a threat, which can be caused by either the internal or the external sources. Risk management as a subject on a whole has flourished a lot in the past few years. The objective of risk management is to reduce different risks related to a preselected domain to a level of sustainability. Let us put this tool of risk management in the perspective of finance.

It is really a pity to see the creators of this prolific concept (risk management) struggling to implement themselves. The best consultants and the best economists too could not save US from the trouble they are in. The open declaration by George Bush confirming that US is in for some serious crisis, rubs salt to the already bruised wound. The brains, which created the concept of risk management and made it available to the developing nations themselves failed to understand the need of its use in their home country.

Let us take a simple example of the above concept and understand its implications. Imagine having Rs 2 lakh in your bank account, no regular income, yet buying a house worth Rs 65 lakh, in the hope of selling it for a higher price. Even if the price of the house fell by just five per cent (that is Rs 3 lakh), you will go bankrupt. This is what Lehman Brothers did; with around USD 20 billion they went and bought assets worth over USD 600 billion. Isn’t it suicidal and simply foolish?

Investment should always be done in pursuit of a goal and not just to pool in your surplus funds without a proper planning process. It is important to ascertain what you want from your investment. It is important to analyze the risk associated with any pre-selected domain; it could be even an individual.

A thumb rule for individuals would be to borrow only if repayment is financially comfortable; you should always look at keeping EMIs within 30 per cent of your monthly income. Today, access to loans is as easy as they can be; in this respect there is one person whom I really respect and he is Warren Buffet. He has been living in the same old and ordinary house for the last 30 years; he still drives a medium-sized car and leads an extremely simple ‘middle class’ life. If that’s all it takes for the richest man on earth to be happy, why do all of us need to take extra stress so we can get things which aren’t even essential? The best way to enjoy wealth creation is by adding the right proportion of health creation. It is time we put on our thinking cap.

Akshay V Jain Khanter

CEO - GuruMantras™

GuruMantras of Emotional Intelligence

2009-01-13T21:27:00.001+05:30

GuruMantras of EI!

Emotional intelligence (EI) or Emotional Quotient (EQ) is one of the most important ideas to hit the business world in recent years. It is based on the notion that the ability of managers to understand their own emotions, and those of the people they work with, is the key to better business performance. Research suggests it is responsible for as much as 80% of the "success" in our lives, both personal and professional.

If Intelligence Quotient (IQ) comes from the head then Emotional Quotient (EQ) comes from the heart. EQ is not about the victory of heart over head, but it is about empathizing with people around you in order to win them & their hearts, which will in turn give access to their head. According to a scientific study it is found that more then IQ, your emotional awareness and abilities to handle feelings will determine your success and happiness in all walks of life.

EI in simple words could be defined as “The ability, capacity, or skill to perceive, assess, and manage the emotions of one's self, of others, and of groups to succeed in coping with environmental demands and pressures”. I think the broadest way to use EI is to look at it as an important component of a person's interpersonal skills. According to a renowned psychologist, Daniel Goleman, the main components of EI are self-awareness, relationship management, social awareness and self-management.

Self-awareness - the ability to read one's emotions and recognize their impact while using gut feelings to guide decisions.
Self-management - involves controlling one's emotions and impulses and adapting to changing circumstances.
Social awareness — the ability to sense, understand, and react to others' emotions while understanding social networks.
Relationship management — the ability to inspire, influence, and develop others while managing conflict.

EI is one of the foremost requirements and a core competency of leadership. Leaders are one’s who should be able to influence & motivate people. If leaders are not aware of themselves, others and the environment, they lack EI. How can they influence people around them? The modern workplace is characterized by open communication, team work, and a mutual respect among employees and their supervisors. Possessing emotional intelligence allows managers to better understand and motivate people they supervise.

EI helps leaders in becoming more optimistic, resilient and focused. Successful EI initiatives have been linked to greater productivity, increased sales, employee happiness and customer satisfaction. In these trying economic times focus on EI is the key, but like any other change it takes commitment and practice to develop these skills.

Team leaders who take their time to get to know and really listen to their employees are utilizing emotional intelligence as a management strategy, whether or not they realize they are doing so. Most employees respond best to managers who treat them as individuals who deserve respect. When you take time to focus on an employees' needs and make yourself accessible to them, you’re using EI. We all have traits of EI within us but how we portray and put to use is a million dollar question.

A balanced diet of Emotional Quotient (EQ), Spiritual Quotient (SQ) & Intelligence Quotient (IQ) is the GuruMantra for being a successful person in all walks of life.
Wish you all a Very Happy New Year ahead, with lots of Luck, Heath, Wealth and Prosperity.

Akshay V Jain Khanter

CEO - GuruMantras

The above columnist was recognized with the Best Entrepreneur Award (youth category) by DSI. He is also acknowledged as the Best Manager, Bangalore University; Best CEO, Manipal University and the youngest entrepreneur to be nominated for the Hottest Startups Award by TATA & NEN.

ASSET ALLOCATION

2009-01-10T14:02:00.000+05:30

ASSET ALLOCATION

Is putting all your eggs in one basket the right thing?
This age old saying couldn’t be more apt when it comes to investments. Your portfolio needs a diversification and it can’t be done better then by using the technique of “Asset Allocation”

Asset allocation is about diversifying your portfolio among different asset classes like Equity, Debt, Art, Gold, Real Estate etc. It helps to optimize the risk-return balance of your portfolio. It ensures that the poor performance of any one asset does not penalize your entire portfolio and your financial goal.

The process of determining which mix of assets to hold in your portfolio is a very important and a personal decision. The asset allocation that works best for you at any given point in your life will depend largely on your time horizon, your ability to tolerate risk, financial goal & age

To get the maximum benefit of reducing your risk through diversification, spread your portfolio across different assets whose returns are not 100% correlated. Different assets should ideally span across different asset classes such as fixed income, equity shares etc. as well as different investment options within these asset classes e.g. within equity shares your exposure should be to companies in different sectors; or within fixed income investments it could be partly government risk and partly corporate risk

Each asset class has different levels of potential risk and reward - which when combined together, can create a diversified and balanced portfolio. Investing across several asset classes can add diversification and help manage risk. Adjusting the mix of asset types – your asset allocation strategy – can have a significant impact on your ability to reach investment goals. Inherent in asset allocation is the idea that the best performing asset varies from year to year and is not easily predictable. Therefore having a mixture of asset classes is more likely to meet your goals.
There are many ways in which the asset allocation of a person can be done. The simplest of them all is with reference to the age of an individual. The below chart shows the asset allocation based on two main asset classes namely equity & debt.

In 1986 Brinson, Singer and Beebower did a comprehensive study on 91 large US Pension Funds. The study concluded that a funds long term performance and returns is 91.5% based on the asset allocation of the fund.

By
Mr. Akshay V Jain Khanter BBM, (MCom), (MBA), PGDFM, PGDMM
CEO – GuruMantras

www.gurumantras.in
Email: akshayvjain@gmail.com, akshay@gurumantras.in

How fresh MBAs can beat the job market recession

2009-01-10T14:01:00.000+05:30

How fresh MBAs can beat the job market recession

WHILE BASIC theoretical education cannot be ignored, it remains difficult for management professionals to take a firm stand in the job market which is currently facing an economic turmoil. While corporate opportunities for freshers and jobs are drying up, what is it, which will make the freshers crack a punch with the companies? What should a management graduate be equipped with, in order to create a brand for himself?

The following tips have been enlisted below which a management grad should be armed with, so that the corporate organisation can afford to splurge on them:
Confidence & Attitude: The right confidence and attitude is required to accomplish a stand in this competitive job market.
Adopt a realistic approach in your expectations: When a job is offered to you, with a reasonable salary, accept it. Today corporates are adopting ‘SINK or SWIM’ approach wherein focus is on ‘Survival of the Fittest’.
Self assessment and Self Appraisal: This is a critical factor as it helps to start assessing and equipping oneself with well honed skills.
Mastery of non-academic skills: a) Communication b) Inter-personal skills c) Leadership development.
Relationship building and Networking is the current mantra for creating opportunities.
Proficient time and people management skills as time and people wait for none.
Cross cultural and cross functional team building skills is essential as we are knitting the world into a global village.
Business etiquettes are vital in the current global scenario, as professionalism in every activity performed is keenly watched.
3P’s: a) Professional resume b) Polished presentation skills c) Professional image.
Last but not the least, the enthusiasm and ability to contribute to the company’s success.
The bottom line is that the new global economy has spawned a business environment that is extremely challenging, ever changing and fiercely competitive. Therefore, in such a go-go economy this equation best describes the dynamics of today’s business world:
EDUCATION+OPPURTUNITY+PERFORMANCE = SUCCESS

The above columnist is acknowledged as the Best Manager of Bangalore University & Best CEO of Manipal University. He is also the youngest entrepreneur to be nominated for the Hottest Startups Award by TATA & NEN.

By
Mr. Akshay V Jain Khanter BBM, (MCom), (MBA), PGDFM, PGDMM
CEO – GuruMantras

Website: www.gurumantras.in
Email: akshayvjain@gmail.com, akshay@gurumantras.in

Risk Management

2009-01-10T14:00:00.000+05:30

RISK MANAGEMENT

Risk management is a structured approach to managing uncertainty related to a threat which can be caused by either the internal or the external sources. Risk management as a subject on a whole has flourished a lot in the past few years. The objective of risk management is to reduce different risks related to a preselected domain to a level of sustainability. Let us put this tool of risk management in the perspective of finance.

It is really a pity to see the creators of this prolific concept (risk management) struggling to implement themselves. The best consultants and the best economists too could not save US from the trouble they are in. The open declaration by Mr. George Bush confirming that US is in for some serious crisis, rubs salt to the already bruised wound. The brains which created the concept of risk management and made it available to the developing nations themselves failed to understand the need of its use in their home country.

Let us take a simple example of the above concept and understand its implications. Imagine having Rs 2 lakh in your bank account, no regular income, yet buying a house worth Rs 65 lakh, in the hope of selling it for a higher price. Even if the price of the house fell by just 5 per cent (that is Rs 3 lakh), you will go bankrupt. This is what Lehman Brothers did; with around USD 20 billion they went and bought assets worth over USD 600 billion. Isn't it suicidal and simply foolish?

Investment should always be done with the objective of achieving goals and not just to pool in your surplus funds without a proper planning process. It is very important to ask a question to oneself, What do you want from your investments?. It is very important to analyze the risk associated with any pre-selected domain; it could be even an individual also.

A thumb rule for individuals would be to borrow only if repayment is financially comfortable; you should always look at keeping EMI’s within 30% of your monthly income. Today, access to loans is as easy as they can be, in this respect there is one person whom I really respect – Warren Buffet. He still lives in the same old & ordinary house for the last 30 years, still drives his own medium sized car and leads an extremely simple ‘middle class' life. If that’s all it takes for the richest man on earth to be happy, why do all of us need to take extra stress just so that we can get things which aren’t even essential. The best way to enjoy wealth creation is by adding the right proportion of health creation. It is time we pull our thinking caps out…..

The above columnist is acknowledged as the Best Manager of Bangalore University & Best CEO of Manipal University. He is also the youngest entrepreneur to be nominated for the Hottest Startups Award by TATA & NEN.

By
Mr. Akshay V Jain Khanter BBM, (MCom), (MBA), PGDFM, PGDMM
CEO – GuruMantras

Website: www.gurumantras.in
Email: akshayvjain@gmail.com, akshay@gurumantras.in

When the sun sets in one part of the world

2008-12-08T19:00:00.000+05:30

Geography thought us that when the sun sets in one part of the world it means that it is time to rise in another part of the world. It is time that we put this great saying in the context of the world economy. Today, USA is facing one of its most dreadful episode in terms of economic slowdown. A recession in America is surely on the cards keeping in mind the power packed last fortnight which saw some of the major financial giants like Lehman Brothers, Merrill Lynch, AIG, Morgan Stanley, Freddie Mac, Fannie Mae etc. going bust.If the losses and the write offs are anything to go with then many of these companies and the other corporations which will soon follow their peers would take years to revive themselves & restructure their balance sheets. The recent developments show that the phase of consolidation has just started with either the government interventions or corporate buyouts. A slowdown or recession always starts from the banking & financial sector but slowly & gradually spreads to all the other sectors including the basic and key industries. Today with the fall of some of the biggest brands in the world of finance and business in America and the other developed nations; many of us might be feeling the heat and are hesitant in making decisions. My mantra to all would be not to worry and panic – but it is our time to rise to the occasion and shine. We need to seize this opportunity and show the world what we are capable of. When Indian brains working in the US can help build these companies into giant corporations then why not for our own nation. It is time for a reverse brain drain. If India wants to be in the big league and a super power by 2020 then this is one of the best opportunities to grow and show the world what we are capable of. India today needs growth in a consistent pattern and we all are responsible in achieving it. The acquisition of Corus, Jaguar & Land rover, Imperial energy, Novelis etc is a start to this new era of Indian cross border M&A.In the short term, we might feel the ripple effects of what has happened in US. But instead of getting worried & crib over this whole saga, we should look at finding opportunities in this global crisis. If the reports of several economic agencies is to go by then India would be the least affected nation by this global turmoil. China is going to be in trouble as they have large amounts of exports to these western economies – we fortunately don’t and are basically driven by domestic growth story. We need to seize this opportunity keeping in mind the mistakes of these high profile institutions and learn a quick lesson from them.In the coming future Indian corporations will get ample opportunities to buy in to these global corporations as they go up for sale and for this as a famous proverb goes “A closed mouth catches no flies” meaning one has to always be in a lookout for opportunities only then can success be yours. When the sun sets in one part of the world – it means that it is rising in another part. It is time for a new dawn, and even though we might have darkness for some time but very soon the sun is going to rise. Happy India Shining

Mark 2 Market - An Accounting Methodology

2008-12-08T18:57:00.000+05:30

MARK TO MARKET

Mark-to-market, an accounting rule that has undoubtedly played a significant role in the subprime mortgage crisis. This principle of accountimg has played a major hand in spoiling the rosy, window dressed, financially modelled balance sheets of many giant companies across the 7 continents.

Mark-to-market is an accounting methodology of assigning a value to a position held in a financial instrument based on the current market price for the instrument or similar instruments. Mark to market is a concept under, which you are declaring the actual value of your assets at the market rates. It’s quite a good and healthy concept which brings out the real characteristic value of the asset.

Let us say, I have purchased some 100 stock two years back at Rs 20 and so at the time of purchases, value of my asset was Rs 2000(Rs 20x100=Rs2000). But, suppose as on today, the market value of my stock has declined to Rs 10, then today I am holding assets worth Rs 1000 (Rs10x100=Rs1000) only. If I had taken a loan from a bank of Rs 2000 by surrendering those 200 shares to bank, then today the bank will be facing shortfall in its security value as it has advanced Rs 2000 against a security of Rs 1000 only (present value). So in that case, the bank will immediately call the balance (the margin) from me and I have to make provision out of my present income for the call of my bank. If I am not paying my loan and the bank is forced to sell my share in the market then, the bank will incur a loss of Rs 1000 and the bank needs to provide Rs 1000 for that loss, which means that the bank only has to reduce Rs 1000 from its profit and for the accounting year that Rs 1000 will be termed as loss.

This is actually what has happened with Bear Stearns, Lehman Brothers & our very own ICICI Bank (UK Subsidiary). The exposure or the mortgages, to which these banks /financial institutions had financed, have been depreciated in its market value and to that extent the banks/companies have to provide for. Provision of any amount hits only the companies’ net profit. Hence, provision arising due to mark to market is not notional; rather it is real.

It is due to this accounting principle that the crisis has occurred but it is also due to this rule that we are able to find the real potential and the current situations of the companies. Sub prime was not a situation which erupted over night but it was something which was incubating for a long time and the window dressed balance sheets never revealed the actual situation.

The losses revealed as part of other incomes by many companies is also a gift of M2M. These losses include negative returns from company investments, wrong choice of FOREX hedging products etc. In the last quarter many companies declared losses in the other incomes category which is more then double its declared net profit.

M2M helps in differentiating between the companies based on its asset value and real valuations, therefore rather then cribbing over this accounting rule we should follow this as an indicator to find the real health of the companies.

The above columnist is acknowledged as the Best Manager of Bangalore University & Best CEO of Manipal University. He is also the youngest entrepreneur to be nominated for the Hottest Startups Award by TATA & NEN.

By
Mr. Akshay V Jain Khanter BBM, (MCom), (MBA), PGDFM, PGDMM
CEO – GuruMantras

Website: www.gurumantras.in
Email: akshayvjain@gmail.com, akshay@gurumantras.in

2008-09-02T20:49:00.000+05:30

INTRODUCTION

2008-01-05T21:56:00.002+05:30

Mr. Akshay V Jain Khanter is the founder promoter of GuruMantras. He is a Wealth Manager by profession and a professional trainer for corporate and academics. Before starting GuruMantras, Mr. Akshay was associated with companies like Kotak Securities, Kotak Wealth Management & ICICI Prudential (Priority Circle). Mr. Akshay Completed his BBM from the prestigious St Josephs College of Commerce. His overall qualification includes BBM, MBA, (MLM), (MCom), PGDMM, PGDFM & DRD; he is also currently pursuing his CFP. He has also completed various professional certifications related to finance and stock markets.

Mr. Akshay was recognized with the Best Entrepreneur Award (youth category) by DSI. He is also acknowledged as the Best Manager, Bangalore University; Best CEO, Manipal University and the youngest entrepreneur to be nominated for the Hottest Startups Award by TATA & NEN. He is a member of the Banking, Finance, Economic Affairs and Capital Markets Committee of Federation of Karnataka Chamber of Commerce & Industry (FKCCI). He is also a regular guest columnist in many Industrial Journals & Blogs.