Pricing - One of the things I learnt at ISB

Albeit a brief aberration in my student life, I was pretty sure that I have come to ISB to venture back into the Services Outsourcing industry or venture into the Retail industry, basically to leverage my past experience. Hence I was very clear in some of the topics that I wanted to learn.

Amongst them, learning some basics of Marketing was on top of the list. I always wanted to equip myself with the basic tools of Marketing and the MBA did help me in that. As I said in my previous post I will try to list down how an MBA has helped me in my job. Here is one example (not completely representative but pretty close)

As part of my current role our clients were looking to optimize their outsourcing contract with us and wanted our views on how we can assist them in deriving maximum value from us. This is where the idea of moving from a FTE (Full time Employee) based pricing to a TXP - Transaction Based Pricing was toyed with. We ended up proposing a very nice working model of the this approach which helped our clients pay only as and when they use our services and not pay for the extra bandwidth. This will give them a chance to save the dollars they were spending on the unutilized bandwidth. We on the other hand will get a good forecast of the revenue ahead and will help us drive our productivity better

My learnings at ISB really helped me during all of this amazing exercise. The Constrained Optimization principles helped in determining the Transaction Price. The Principles of Value based pricing (versus Cost Plus Pricing) helped us tie the actual benefits to the client. This also gave our client a clear price to charge back to its business users and gain more transparency. This was one assignment where I really put to use the various principles that I learnt in ISB proving once again that the time invested in ISB was worth it.

Anand's Answers to my Questions

While I have been posting the quintessential question of how an MBA helps, there have already been a few who have shared their perspective on the same.... So here is the take from my fellow CA + MBA friend. Enjoy

Back from Dormancy - ISB Solstice effect?

I decided to act on my New Year Resolution ...... so my first post (or Question) on Life After ISB

....the story shall move on

If Looney Spam can spam .... I mean "blog" or "Brag" why should I be far behind?
So welcome to Looney Spam and I hope to revive my writing skills once again :)

ISB - Stats with Bob Stine

Our Statistics professor for the first half of the First Term was Robert Stine - one of the wittiest person I have ever met.

One day when he was teaching in the class and someone's cell phone rang. He just blurted "Say Hi to Mom" in the middle of whatever he was saying and carried on as if nothing happened.

Here are some of the funniest one liners that he used in his class - courtesy Deepak

What is this life at ISB?

Today when I came home in the afternoon and saw my daughter watch the squirrels play in the jungle behind my accomodation at ISB, I felt sad.

Till that time, I had never noticed the squirrels who are my immediate neighbours. It reminded me of the W.H. Davies poem - Leisure

What is this life if, full of care,
We have no time to stand and stare.
No time to stand beneath the boughs
And stare as long as sheep or cows.
No time to see, when woods we pass,
Where squirrels hide their nuts in grass.
No time to see, in broad daylight,
Streams full of stars, like skies at night.
No time to turn at Beauty's glance,
And watch her feet, how they can dance.
No time to wait till her mouth can
Enrich that smile her eyes began.
A poor life this if, full of care,
We have no time to stand and stare.

So goes the life at ISB - and still you do not get the greatest grades :-(

Why MBA ? Why ISB ?

Of late I am receiving a lot of queries on whether people with 8+ years of experience (or 7+) do MBA? Whether ISB is the best place for it? Is not IIM A better?

Doing MBA or not is a very personal decision and the reasons why one would take up business education in his / her career will differ. Hence I (or for that matter anyone) cannot give a concrete answer on whether MBA will help in any career or not.

I would rather pen down the reasons and the logic why I chose to do MBA at this stage and why ISB:

My take on this was very simple.

In IT (from where I came) nowadays position (leadership) is more a function of time than anything else. However that is the same reason why we see so many not so deserving candidates getting positions of power and authority more because there is no alternative (I call it the TINA factor).

Business Management requires to have a holistic picture and the decision making has to be in line with that holistic view. For example, I as an Engagement Manager may feel that continuing work in my current account is the best option, without realizing that I may not be adding value to the organization. I may also as a manager hold on to resources and under utilize them rather than release them for more productive and profitable use. I have worked under some of the best managers and have also seen some not so good apples in the industry.

I have seen so many PLs, PM, and Relationship managers who have no clue if their project is doing good or not (in financial terms, customer satisfaction etc). Many times I had to explain to people in leadership position that we are here to make money PERIOD. Many managers do not understand the importance of margins, up sell, cross sell etc. I being a CA always viewed everything from a financial angle (which is a myopic view as well). I realized that I am missing the holistic picture.

There were two ways to mitigate that gap. Read up or Go back to School. For me Go Back to School was a better option because I wanted to learn in the right fashion and understand the concepts and perspectives. The next question was - Full time or Part time - and the answer for me was Full Time - If this (managing) is what I intend to do going forward I cannot take half measures. The next question was One Year or Two Years - I decided for one year because I think the 8 years of exp has given me the basics on which I can build up. The final decision to choose ISB was simple. It is the best school in its category across the world. The visiting faculty profiles are great !!

Hence I thought that I do not want to become an incomplete manager. If I want to lead or manage I need to have all the right tools.

ISB was my first choice and here I am.

You all too need to do some more thinking on why you want to MBA and then make the choice. I was also helped immensely by others in this decision making. The decision took 2 years to materialize. So it was not something that suddenly popped up in my head and I jumped into it.

MBA can make sense at any level as long as it makes sense to you.