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Thursday, October 14, 2010

It is a Commodity ...Everything

In recent times I have noticed something strange, and I am sure many of you would be concurring as well.

Everything is becoming commodity, even intangibles like services.

Let me start with education, a bachelor’s degree these days is akin to high school. It really does not add any value, in terms of work or growth. I would say that as a graduate I would not have hired myself, into any work/organization. The basic skills, are lacking, and today I saw the same with a new with a new recruit I had to spend some time with.

Disheartenment and disillusionment are the first things I notice in someone fresh out of college. I would say less than 1 % of your technical knowledge is actually used in engineering setups, at least in manufacturing and production, electronics I am told is different, at least ST Microelectronics work needs some good knowledge of chip design.

For instance, piping needs you to be just a good visualizer, and some common sense as to how you can or cannot put a pipe. Materials, operations and inventory, are all to do with people handling (I can hear the SCM team across, shouting some choice words, typical)

Enter post graduation, most opt for business, with only a few going more technical. It is normally perceived that a business education open a lot of doors (Banks, and more banks!!).

But unfortunately, post graduation is also passé, as banks have shifted from their basic function. The traditional source of revenue for a bank, is borrow low lend high, and make money on the differential(credit).

Alas, now most banks are resorting to quickie profits on the stock market, I heard most of the foreign banks major chunk of profits comes from, well some form of trading.

So when you enter the market, there is a lot of data, and of course lots of whiz kids with advanced degrees in mathematics, who are trying to automate everything, even arbitrage opportunities.For instance consider algorithmic trading - a nice description I read for it somewhere is that it is the same, as cooking an exotic dish but with the chef as a Robot, everything is technically correct, but the taste isn’t there.

But obviously there is a limit to automation, all fancy terms and ratios can be generated but you need someone to physically do that, so in enter analysts.

No names, but some people working as analysts have resorted to counting the number of hits of ctrl+c, and ctrl+v, in their present work, 600, is what I am told is the average daily count for these two functions.

Ye Ignoramus...................... if it is stock market for business......... it have to be Wall Street, and........... if it has to be Wall Street it has to be ………..more malai on the milk.

And now comes the malai……… CFA, FRM, GARCH.

My acquaintances pursuing these courses say that most of the knowledge or learning is the same, it is just a rehash for someone who has done masters in finance, but all the same you have to do it. Because when you meet a potential client it would look good if you have a Mr. X - B.Tech, MBA, CFA, FRM ...ding and dong.

From a service providers viewpoint the differentiation is additional degrees on its human resources……… and now look at most of the banks…. they have the same engineers, same MBAs, and now the same CFAs and FRMs.

So, now a service also has been commoditized. What next…? Where is the differentiation?

Answer – People……..and relationships!!

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