VP Insurance of CTS Visits SPJIMR-Mumbai for Guest Lecture
- http://www.coolavenues.com | 7th FEB, 2007

Mr. Michael Nemeth, VP-Insurance of CTS visited SPJIMR for a Guest Lecture on 7th February 2007. Mr. Nemeth has 27 years of experience in the insurance industry with a diverse background in both 'Property and Casualty Lines' of business and 'Life and Annuity Lines' of business.

He has extensive experience in consulting, outsourcing, business development and software package development, with a strong track record of building new business units.

Mr. Nemeth recently authored an article on 'Overcoming Intuition: Flying Lessons for Offshore Outsourcing Management'. In this article, he talks on 'Beyond Management by Intuition'. On his visit to SPJIMR, he delivered a talk on the same. The following is the summary of his talk to the students.

Mr. Nemeth started the lecture by sharing his perspectives on IT revolution over the years. He said that the first phase marked a missionary zeal among the IT services organizations to convince clients about the proofs of concepts. They were getting the work that used to be done by independent vendors. They were typically harvesting the low hanging fruits in their domain of work. This first phase of IT revolution is over. Currently, we are at the start of the second phase of IT revolution. The question in the minds of the clients these days is how to get strategic leverage out of the offerings from companies like CTS.

Second revolution is going to be counterintuitive, said Mr. Nemeth. Over the last 10 years, the objective of outsourcing has been to save money. This is akin to dieting for the sake of reducing one's grocery bill. A good outsourcing program achieves strategic objectives. Labor cost arbitrage is only a minor part of the contribution. Today, the big ticket deals are in the area of rationalizing application portfolio for the client. We need to tell the client what applications can be pruned, upgraded, and also advice them regarding the inclusion of strategic applications.

Clients need partners to transform the business by applying technical and business skills. Billing rates only reflect our unit costs but the customer cost is known only after the project is completed. So billing rates are not costs, Performance is. No Cost Benefit Analysis can be done if the business value of the IT solutions is not known upfront. We need to increase the performance and there need not be a decrease in billing rates.