'Global Executive Panel' is a platform that brings some of the best 'thought leaders' of the industry together to discuss and envision some of the emerging trends and futuristic challenges of the IT business.

Effective transformation, in a world with accelerating change marked by disruption is driving businesses to collaborate across the ecosystem. Hear from global industry leaders on the disruptions that are driving transformation, what collaborative transformation means to them and what should the CIO do to maximize gains.

Abstract

Businesses today are greatly influenced by the existing and emerging disruptions in the marketplace. This inaugural session of ‘Global Executive Panel’ focuses on ‘disruptions in the marketplace’ and seeks to understand from some of the very senior market leaders how they see these ‘disruptions’ in their respective industries. What impact do these disruptions make in the marketplace and their role in bringing ‘transformation’? What role do collaboration, partners, and end-users play in solving these disruptions? The panelists concluded that consumer disruption, volume disruption and technology disruption are the three major types of disruptions that are shaking the industries in one form or the other. Companies need to focus more on collaborative business models rather than command and control to successfully tackle disruptions emerging across the globe.

Discussion

Vineet Nayar: We talk about a lot of disruptions in the marketplace that are driving transformation. Could you share with us your perception? Wim, could you take off on this please.

Wim Elfrink: Good morning! First of all I want to say that I think that Vineet has done a fantastic job in getting us here together. Disruptions, you know that I represent Cisco on this panel and you know a very collaborative approach that we have with HCL. You know, disruption in Cisco's life is almost imbedded in our culture and our genetic way of how we go to market. The company is now 20 years old so at my age, I start saying 20 years young, and we have a run rate of around 40 billion. We have created $200 billion of market capitalization so something worked out. If you see from a disruptive point of view, it was really for us the big differentiator is and Vineet talked about sustainable differentiators. You first have to have a vision and our vision has always been for 20 years consistently, the network will change the way we work, live, play, and learn, and I think most people agree on that now and secondly we always believed that you should never compete in a given market. We always looked at inflection points at disruptions and to give you an example, we started as plumbers. We have been plumbers for 20 years and have made us rich. We started with networking, with routing, with switching, but we went in, for instance voice market when voice became a packet in the network and that was a disruption from a technology point of view. Secondly, the same with security, the same now with storage, the same now with imaging, and when we bought Scientific Atlanta, a lot of people said what are you doing, are you going to play a role in set-top boxes, but we bought it because of the intellectual property to get imaging in the network and this is what we see as disruptive trends. I think at the moment, we are facing a new disruption in the industry and disruption that is based around globalization and it is for the first time in history that 70% of the world's population is growing with a GDP of more than 7% and it is not the US and it is not Europe. And so the reason, enormous growth potential in emerging markets. They see the network as the fourth utility and if you are developing nation, you want to make your nation more competitive, you want to make your nation and industry, having to educate your people, you can build a network for e-governance to connect and to educate your people. We are at the end of innovation because all these emerging countries will be green fields and you know always that God was able to create the world in seven days, because there was no installed base, you will see a lot of new business models erupting from this side of the world and I think that the only way to get through this will be collaboration that we have to learn as American companies, I represent Cisco here to go from commanding control, to go to collaboration team work, technology enabled and that team work I think is symbolized in the way, we have set our relationship with HCL. I will give you some examples later, but we do things like risk sharing and developments. We have a 360 relationship and in the industry to form consortiums to go to market. I think is going to be the real disruptor. I moved to Bangalore in January as the first executive in Cisco. I took my wife, my two kids, and my three dogs, and I live in Bangalore now on the ground here, because I believe in the future of this country and specifically in the future of this country to be a hub for globalization. With 5 hour flights you can go over the 70% of the world's population, great partners, a very cooperative government, and specifically and that's where I want to stop my first introduction, Vineet, don't get worried, very nice people, people who can cooperate and people with whom you can collaborate.

Vineet Nayar: Thank you, so that's a very interesting point which you bring in that most of the time we look at Cisco, talking disruption and in form of technology. But you are bringing an interesting point - you are bringing the country as disruptions, you are looking at investing in country which originates disruptions, you are looking at reversing the trends, inverting the pyramid.

John, what is SAP view on disruptions in the marketplace?

John Nugent: SAP continues to grow is presence here in India. We are investing in the growth story a great growth story of India. We have over 5000 people here in India. We continue to grow this business or population here by over 30% and it is one of our top three fastest growing markets, so this is the place to be. We are taking all of our top talent, top executives, primarily within US and other sides and bringing them to India, similar to what Cisco is doing to take advantage of the great growth story here. Just another couple of comments would be that certainly in the best selling book, The World Is Flat, I am sure many of you have read that book, Thomas Friedman talks about how globalization has radically altered core economic and competitive concepts. Companies right here in India, companies in China, companies in the Philippines, etc., are becoming part of these vast global integrated value changes because companies today have the ability to go ahead and outsource anything. They can outsource any business activity, they can outsource any business function that they want, any resource to any other part of the country or of the world. So we are seeing a shift taking place. We are seeing a shift away from this linear value chain concept where I need to own all the resources and assets and moving to a collaborated business network where we would rely on the business network resources, the business networks, business processes etc., and I will speak more to that in the next segment.

Let me just put one last comment. In addition to globalization, we certainly see rapid commodization as a disrupter and certainly the immense connectivity power of the internet. You bring these three together, certainly it is a disrupter but there are also three great opportunities that we can leverage through a collaborative business network.

Vineet Nayar: Tony, does this make sense or is this a lot of hype being created to make more money out of CIOs or CTOs. Do we really need o care about this?

Tony McCarthy: Thank you Vineet! It's not hype, it's real. The India focus of both our captive and non-captive resource now represents the single and largest percentage of GTO resource in the world. It is the single largest resource pool of our pools in GTO.

When talking about disruptions in the market place, obviously in the financial services industry, we have seen volume cause us to do things differently. When I began in this industry, 20 plus years ago, we see right now in most major products about a 100 fold increase in volume over those 20 years. It goes at about 10 times every 10 years. It's not linear, its plateaus, but for when I started in the mid to late 80s, it's about 100 times volume from where we were. If it goes at that pace, that is a disruption that leads often and regularly to reevaluating the approach you have taken to address the business needs. How do you deal with the powers of today's computers? How do you form collaborative networks to really figure out the right place to apply value? The value chain is an important thing to understand and that is an ongoing challenge that we certainly face inside of Deutsche Bank.

In 2007, there are three significant things that I have seen that are disruptions that we have had to stay focused on. No. 1 is just a shear power, the demands of computing. They have once snuck up on us. They snuck up on many of our competitors were seen with high performance computing and these 1000, 2000, 10,000 binary farms, incredible power consumption from these. Most data centers were never equipped to handle. It's forcing us to think on the fly as to how to deal with that is that, the challenge goes forward. Secondly in the late February and early March time-frame, we saw China drop 8% in one day. That caused a major stress on our system environment for probably three weeks, but most notably the combination of high volume with high volatility really to test it, the infrastructures and how many of the applications have been written, not just in our environment but in many other firms. We saw the New York Stock Exchange, not quoted out properly for 16 minutes. It was absolutely linked to volume and volatility issue that they faced in how they get actually, how they architected their platforms and then finally as you heard from Hermann the subprime mortgage situations. Complexity is a reality in our industry. It is going to continue to be there. It will be moving northward rather than southward so those require a better risk environments to be in place to handle that complexity but it also means you must be ready for disruptive events like the one that we saw in August which have had ripple of effects in our entire environment, so all these challenges, all these disruptions are the types of things that we are looking at. We are looking at collaboration with our partners for and as we have talked at great lengths with HCL about and I will talk more about that later.

Tony, there is only one conclusion which I draw There is not so much disruption in our industry but in the last one year has been very very disruptive.

Now, EMI is a great example of lots of disruption in both the businesses. So what's your view on the disruptive trends in the market?

James Anderson: To explain the disruptions that are taking place, let me quickly portray simply what the music industry comprises. On one hand, you have got artists; we create obviously music in the various forms of creative content. We then have managers and agents who represent them, because usually artists are businessmen or businesswomen. So they are people who represent them from a commercial viewpoint. You then have music companies in their various forms and then you have media, and all the various commercial activities that take place around the media. You have retail, and then you have the ultimate consumer. Let me choose three examples from the disruption viewpoint. What is happening to help you understand some of the challenges that the music industry itself is trying to tackle and face. I think the first one that I would draw on is traditionally that chain of events was very simple one and it was predominantly controlled one because of the physical media and as all of you are aware and all of you participated, the digitization of that has exploded that choice. So that is the first major disruption where effectively the players that are no longer in control of distribution in the traditional manner that they were for 50-60 may be even 100 years if you go right back to the formation of music industry as itself, so that is the first one.

The second disruption that is happening is the business model. You gave from the very hard one to complete that which is free to pay for, and you can see where the vested interests in all those different participants lie, or where they prefer to be, but the reality is that those business models are changing on what would appear on a monthly basis and that presents us with the real challenges of how do you respond to those changes and which ones do you respond to, so that is the second disruption is the variety of business models.

The third disruption is really one that probably everyone in this room is facing is that the consumer is increasingly in control of the choice or the way in which they want to get serviced or indeed the convenience in which they get serviced and that force there is very much in the forefront of what is happening in music because they are driving the activities in those form of disruptions that I just mentioned. And there is an extra twist in the creative industry where the artist and the consumer is getting blurred. So we have all witnessed the YouTube, we have all witnessed that phenomenon where each one of us have secretly hidden in us the desire to be an artist, now whether it is just our family who want to watch it or millions of people is the choice that we now have and that is another force, disruptive force, that also happened but I will allude to in the collaboration theme in a moment.

Vineet Nayar: Very good! So what we are seeing, we are seeing a different perspective altogether where end user is the core where the disruption is being driven.

You can not have disruption without Microsoft. So what's Microsoft's view on disruption?

Jason (Microsoft): ...What are the major transformation we are seeing right now is that transformational services that have put the customer in charge of the information they want. Now the customers have much more choice in terms of what they get to do and how they stitch it together across the wide vast array of technologies. And so this disruption, really I agree with Vineet that these disruptions create opportunities and these opportunities have competitive advantage. Now we see a world where the customer needs to be in-charge of their relationship with the companies that they have, in very meaningful ways across the full spectrum of their lifecycle with the company. So whenever you engaged a plan with the customer, when you sell to the customer, when you service that customer and when you support that customer and the competitive differentiation in that world is now being viewed with self-service based technologies. And that is the substantial differentiator. When we will look at some of our colleagues at Amazon.com, for example, if we look at telcos, if we look at banks, customers are now in charge of their relationship with those companies. They are able to work through that lifecycle without having talked to humans and in real great companies you are seeing transfers of technology to humans through one transfer so that they can be online and when they need additional help, people can get involved. And the differentiation of that technology is pretty substantial at Microsoft and as we look forward, we see this fusion of IT capabilities and software services in products as a major differentiator.

Microsoft now is in a transformation where we see many product people joining IT, where a lot of the information about customers is harnessed in line of business systems. In our partnership with HCL, we are moving forward to create some of that differentiation for Microsoft.

Vineet Nayar: Thanks Jason, So Peter I want to get that perspective because that is the biggest platform. From a sourcing point of view you have seen a lot of people responding to disruptions. In sourcing itself what kind of disruptions are there?

Peter Bendor-Samuel: So what are the disruptions we have from a sourcing perspective? I think the big disruption here that we are finding is similar to what I heard from Microsoft and from EMI. There was a change in role going on in the world. We had Microsoft saying customers are changing their role. We had EMI saying, you have got different control going on in terms of free and different players interacting differently. That is what we are seeing the sourcing world and the changing role that we see going on. There the models are well understood or becoming well understood, arbitrage is becoming well understood and what we are starting to see is that much like how technology has changed its role, it has become more and more adopted into the fabric of business. We see sourcing having the same effect and that is in effect very disruptive in terms of how traditional relationships get fabricated and then get managed on-going. We are seeing as the sourcing relationships, as the ecosystems that we are putting together have more effect on our day to day how we run our businesses. They are no longer just so the back office, or sort of the data center or the apps group and as we extend them and we integrate them in our market strategies. We see the opportunity or the need for them to be integrated and the people who are making the decisions, who is making, how these relationships are structured, in much the same way, we see both the commoditization and a value component happening. So we talked to Deutsche Bank. You have got this volume issue. Same things are happening in sourcing. We have a large component of this which is in fact being commoditized and being standardized and driven out on a volume perspective just like you have inter trading schemes and the volume is building, building, and building and the necessity for clear understandable standards is happening. At the same time networks encounter to the need for this tight integration that we have in more transformational components. So we have these two factors that in some ways are putting stress on the industry. We have this requirement to be more intimate and for business people to be more involved. At the same time, we have to stand this component for scale and ramping this up which requires us to cut down the international costs. So those are the forms of disruption that are really changing how people think and prosecute their sourcing activities.

Vineet Nayar: Thank you Peter! So we have consumer disruption, the volume disruption and technology disruption.

Wim, we all understand this disruption in some common shape. Is collaboration a way to respond to this? At Cisco, what you are thinking on this? How are you thinking CIOs, CTOs should use Cisco's technologies or use collaboration to respond to these disruptions? What Cisco is thinking on this?

Wim Elfrink: Yes, there are some clear trends that is we all see. The future power is with the consumer and I think Cisco also being an enterprise costumer that is a big disruption that we have to face. In place of going to our sweet spots where we put the network central, I think that Web 2.0 and all these social networking trends and the human network as we call us is a great opportunity and if you then talk about collaboration, like I said American Companies have to learn to go from commanding control to collaboration and team work. A lot of innovation will come from consumers and a lot of innovation will come out of this part of the world, because I think we all agreed in that a lot of new business models will emerge. If you think about East here, 200 million people will be urbanized, 200 million people will start say building houses and cities and the cities will be built to smart cities with a connectivity and ability for new services and 200 million people will start shopping, will open up the bank accounts, and you can't do it in the traditional ways.

I am not a CIO and I think at the moment, being a CIO is one of the most complex jobs, because you have to dare to make choices and that we all agreed that everybody is consolidating the number of players that you have to dare to make the best. You have to dare to make your choice that who is a vendor and who is the partner, and I think in the industry, the role between a vendor and a partner is going to be too distinguished differences. A partner should add value, should have some thought leadership, should organize meetings like here, bring great people together, and exchange best practices. So for the CIO to lead to transformation, because we talked about transformation and we talked about different business models, service oriented architectures, you have to make your choices and you have to dare to make your best, on vendors and on partners. I think a lot will go in to be around what I would call co-creation. You can't do it alone. You have to pick the thought leadership out of collaboration then you have to make your choices between vendors, partners and you have to start co-creating. In the industry, we will have to learn how to co-compete, because overlaps are so obvious, there will be areas where vendors will collaborate, will compete but the overriding principle for me in the lead of collaboration and transformation with CIO's is that you have to dare to make your best. Consolidate the number of partners you work with, build deep relationships, build customer intimacy, and really explore the best of that collaboration from I would call it at the globalization of the mind. I think globalization is all going to be now, not so much about the cheapest anymore, it's not about the cost and labor arbitrage, and it is not about call centers just or R&D development. It is about how you can globalize the brains. How can you pick up the innovation of different markets, of different players, of different partners and how can you make something out of that to transform your business and create value for your customers.

Vineet Nayar: Very well said, but I am going to push you a little bit more on this because you raised a very interesting point. You were saying, it is no more about cost but it is about search for brains, or search for talents across or search for value added collaboration. Explain this a little more. Explain why are you saying it is not about cost but about value and let me go to the third question straight away, because you made a very interesting comment is therefore why should we think value and not cost and if that is the way, what are the three things we should do as CIOs and CTOs to leverage this thought which you are putting on the table.

Wim Elfrink: So you talked about sustainable differentiators. I think we all agreed that, you know that the cost advantage is not a sustainable differentiator. It is a bonus. It is something you can capture. You can benefit on but it will be very high to see it as a sustainable differentiator. So for me it is more about the value creation and that's the way I look at India and being here as a second head office for us because it is basically going to be about the innovation. It is going to be about the growth and it is going to be about the talents. Where will the future sourcing come from and for CIOs, if I look at our own CIO in Cisco, Rebecca Jacobi, she is consolidating the number of partners, the vendors we work with. Because for the CEO, his mindset is all about profitable growth, about new markets, about catering of new business models, about globalization, and if the CIO will just focus on cost, she would completely miss her job. Because she has to create value to enable the priorities of the CEO and those values that she has to create are commercial platforms. New ways of building customer intimacy are new ways to capture the innovation coming from the consumer. That is probably going to be one of the biggest disruptors. The future innovation is not coming from the enterprise company anymore. It will come from the consumer and Web 2.0 collaborative models, the human network, Wikipedia and Second Life. If I see the way my boy of 12 is using IT, it's probably the way of the future and CIOs have to embrace that and be able to make that value, so unified communications, collaboration, globalization of the brain, and creating value would be my strong recommendation to go for.

Vineet Nayar: Fantastic! That is a very interesting point. Now John, you are in the center of so called hope. Companies like you are supposed to solve this ever increasing complexity on one side and cost on the other side. What are your views? What SAP's views on this? How are you looking at disruptions? How are you planning to solve this? Where does collaboration, customers and other partners relationship fits in?

John Nugent: I think what we are seeing from my earlier comments moving from this linear value chain where the companies think that they don't need to own all the customer touch points, all the assets, all the business processes in moving to this collaborative business network where the value now comes not just from what you can bring to the marketplace but the value comes from your network, picking the best brains in the network and making them part of your collaborative business network. The ability to bring even more value to your customers, wrap more value around your customers because of power of your business network but that's only going to happen if we have technology that can help enable that, and of course, at SAP we are a technology company. So as our customers are looking to increase their overall value by assembling the best brains in their business network, the first thing that CIOs need to be worried about is getting their own house in order. They need to figure out about how they go ahead and move away from this fragmented data world, move away from these fragmented business processes that they have these fragmented IT systems and to unify their own world, so they can collaborate within their own four walls of the company having end-to-end streamline business processes across all functions in a company, all the visions across the entire enterprise, so obviously SAP being the leader in business applications. We provide an SOA-based suite of business applications, very important an SOA-based suite of applications. That sits on an SOA-based business process platform. And the real magic here, ladies and gentleman, is the suite allows you to go ahead and connect inside your four walls. The power of the business process platform that fully SOA enabled, it enables you to go ahead and expose your business processes to those of your business network. It allows you to embed your business processes in with the business processes of the members of your business network, because your customers don't want a fragmented approach to delivering product and services to them. They also want a seamless integrated approach in dealing with them and having a business process platform that SOA base, you will be able to take multiple business activities across multiple partners within your business network and let that appeared to the customers, one seamless integrated set of business activities.

Vineet Nayar: Tony, you know the same problem, right? In terms of disruptions that are there and your industry is facing more than anybody else, how were you thinking about responding to these disruptions and where does collaboration fit into your scheme of thinking?

Tony McCarthy: So we have a very similar view again to two of my colleagues who just spoke on this about the challenges and really looking at the value network to identify where we need to play and where we should be partnering with third parties. In our industry, buzzwords are used a lot, right? We often talk about the pursuit of alpha in our industry which is really beating market expectation and certainly when it comes to the overall performance of the bank, have you done better than you would have, have to taken your money and invested in US T-Bills or something of that nature, so the same applies in IT. IT people coming into my shop are constantly wanting to provide alpha to their business partners, something above and beyond what the business partner expects in terms of new software, the functionality of that software, how that software can help their business, but we also had these other challenges. The challenges of legacy, these challenges of market disruptions and dislocations and really before you can ever pursue alpha, you need to first make sure you are achieving beta which gives the market what they have asked you to give them and in our case, give the business, what the business expects. In order to achieve beta, you have got to kind of go through a very fairly clear step functions in terms of what your priorities are. First and foremost make sure you have a motivated work force. A lot of us what we are dealing with post the bubble in the early 2000 and the dotcom era and these collaborative technologies are people wanting to do things differently. They want to work from home. They want to work in different collaborative networks. So figuring out, how to optimize your response to that without completely changing what you stand for in terms of an organization. Secondly then is delivering stable platforms. It in itself is a pretty big challenge. Why you are trying to give the business what it needs in terms of new innovations, new products, moving out complex technologies, how do you maintain stability and all these other stuff and this is really where collaboration takes in. Again as you heard from Hermann, we just engaged in a long-term relationship with HCL around providing support services to a big portion of our application portfolio. This was a very conscious move on our part, very strategic one on our part. Really recognizing that our ability to deliver the beta. The market expectation of performance in order to ever achieve any type of an alpha contribution can only be achieved if we work with someone to take off of our plates, some of the huge burden we face. We are trying to manage literally thousands of applications on a day in day out basis.

We often see with third party a strategic partner such as yours, everyone wants to go into the changed space. The new development space and you folks are no different. You would always come to me telling me what you wanted to do for me, rather than listening to what my problems were and my problems were that we had this big application environment that needed to be supported and by the way, the new development opportunity in our firm in the area that Hermann is responsible for represents about 10% of the spend in our environment and the ongoing maintenance represents about 90%, so why are you pursuing the 10% rather than pursuing the 90%. I think that was the hammer that you talked about and that I think over the last year has evolved very nicely into a very collaborative discussion and one again where a big part of our portfolio of applications now, you will be taking over responsibility for. It's fantastic for us because it frees our people up to begin focusing on many of the new innovations that are coming around in our business. In 2007, we will probably see an excess of 700 new products introduced into the market place and they all require IT people to work with the business to figure how to model these products, what are the right applications to use for them and if they are burdened with in needing to deal with applications falling over which they will when you are seeing volumes as we have talked about complexity and other disruptions, we will never make progress on getting there, so having struck this partnership with you is advantageous to us. It's advantageous to you because as Hermann talked about the market place is going to continue to evolve and one of the opportunities that we think is in the market is at some point in time, operational services will become commoditized to the firm or firms who have actually figured out how to standardize with SOA and another types of tools in the market and who can offer a commercial service but you need to know the business and you need to understand how this environment really operates and by having the opportunity to manage the application portfolio like it puts you in a very good position to potentially pursue that avenue at some point in time. It frees us up. It is a very good commercial decision for us and again it's one particular point around collaboration with third parties.

Vineet Nayar: So this is very important because Tony introduced this whole concept at least in my mind that run the business and changing the business need different focuses and run the business needs a completely different kind of frameworks, IP, you need to commoditize it more and more and the offering which you have to go back to the customer is not that give me application maintenance or infrastructure maintenance, but the fact that you need to commoditize it and move forward; so some of you who are looking at disruption, Tony, if I am right, disruption is not only about new application disruption, it's also the way you run your existing application. So the run of the business disruption is what you are talking about.

Tony McCarthy: Exactly, and it is very strategic.

Vineet Nayar: Okay, so let's come to the EMI, and I think next to banking you, your business model is completely threatened if you talk about disruptions. What is collaboration? Is collaboration the answers? Is technology the answer? IS change the business the answer? How are you thinking in your industry to response to these disruptions?

James Anderson: Let me give you three examples where I think collaboration has really changed. Digitization is forcing, it's really the kind of common theme of that first disruption and it is happening both internally, at the level of collaboration as well as externally with different partners, and let me draw on three examples. Our artist community is increasingly demanding collaborative practices whether that be the transparency in the way which we share information, the speed by which we share that information with them, particularly with the evolving business models that I mentioned earlier, they want to be able to see what is working, not working from an artistic as well as from a commercial business viewpoint, so that is one form of collaboration and that is changing probably 50-60 years of business practices but at the speed of every six weeks, so that is what I allude to from a DNA type of perspective of challenge. The second area which I mentioned a little bit in the disruption is the collaboration with consumers. The music industry has not been used to dealing with millions of people. It has dealt with hundreds if not may be up to a maximum of thousands of entities but now it is dealing with 100s of millions of entities all of which want to license or use in some form or manner, content that has some sort of compensation scheme to go back to the people who originally created it from an artistic view point, so that level of collaboration is an immense mountain for us to climb and what that leads you to in terms of the third theme and third example is for the first time in the history of the industry which is quite an insular industry in the last five or six years is to deal across industry. Five years ago, the music industry didn't have many dealings with the telecom environment other than having telephones for employees and that was the extent of the collaboration. Now they are one of the biggest retail partners and service partners that we deal with. The likes of Yahoo, YouTube, all the names that we are very familiar with, are all people that we have to now work with day in, day out and at great speed because of the digitalization that is happening and that level of collaboration is just exploded which for an industry there is no use to it, gets to the DNA of how do you cope with that and manage that and increasingly on a global basis, because it is not really a regional or local issue anymore and so there are probably the three big forces that from a collaborative view point we are trying to handle simultaneously a great speed as well as just the earlier speaker trying to keep the old ship running day-to-day to be able to move to this new world safely.

Vineet Nayar: Very good! So, Peter, what is your advice to CIOs, CTOs should take in enhancing its ability to respond to disruptions through collaboration. What is your advice to us to respond to this environment?

Peter Bendor-Samuel: I think we have got a dilemma here. We hear of Deutsche Bank talking about a provider situation. That is not a partner situation, I am sorry. He said, "Do something for me, be right, be there, be there all the time." I bet you he was concerned about price too. Ok, that is the provider situation. I hear about SAP. I hear him talking about partnership, but I hear them wrestling with provider problems. Cisco is great disruptive entity into itself. I hear him talking more about partnership issues, so what is the problem here as we apply this to ourselves. We have got a partner and we have got a provider problem. They are different problems. We want to use the same people to do partner and provider. We heard I think a false construct earlier. In fact, you have a false construct in your literature here. You have another session on is it provider or partner. Here is what I am going to tell you. It is provider and partner, but we are dealing with different things. We have to got to stop thinking about it. This is coming to India for value or coming to India for cost. I am sorry, we come here for both issues. We have got to balance those and we deal with them differently and I think the point I am going to make to you now is I think we have got to change the framework here. First one is opt, we should look for value and not for cost. We should look for value. We should look for iteration and ideas and not for performance. Anyone here, if we don't get performance, it doesn't work, it doesn't go costly. Can you raise your hand? Can you live in this environment? No one!

We all have to have a provider relationship. We are all providers at one level to other people and the rules of the game around that are very clear. It is the scalability rules, right? It's got to be there or I got to get it at the right price, it's got to work darn it, right? And the way I address that is in one way, at the same time, we have this dimensions, I need new ideas. I have changes in roles and responsibilities. I have markets. I have technologies. These rascals here, here we go, we got two of the great disruptive entities in the world, ERP, changing constantly and casually throwing out these concepts, SOA, right? It is just the casual concept of completely potentially very disruptive way of us thinking about technology and he is throwing it around like his loose change. Here we have got Cisco, right? The guys, who kind of change the way we think, play through the network and what we were talking about is the ability to bring new ideas, work intimately, experiment together, and then at the same time, the same peoples have to be there with the SOA on time at the right price. So I think we need change in terms of discussion about not, is it provider or is it partner but how do we deal with it and how do we move from one world to the other world and back again and in a seamless effortless way, so there's my challenge for you.

Vineet Nayar: So Peter, you left us with a question which is very interesting in terms of definition of provider versus partner. So I am going to get a few other people from the audience to participate who believe have an interesting perspective for this.

David Skinner from Boeing, what's your view on collaboration or partnership or risk sharing or whatever heard so far?

David Skinner (Boeing): What we have learnt through Boeing in the partnership is when you are engaged at a collaborative level as we all are, that there are challenges and how you face those challenges and how you face those challenges and how you work through those challenges is really what the core fabric of that business relationship is and what it will be in the future. So our experience with HCL was we engaged in that, we had some difficult definitions where they were trying to be a provider at a global level for products and services that we needed in Boeing. Then we have done great over nearly about 75-80 years now in the aerospace industry and we know how to integrate technologies like IT and the engineering as manifested by the 787, going from a metal airplane to a composite. We understand how to do business at a global market - 60-65% of our business in the commercial level is done globally. So we understand all that. The issue is when you have a global partner acting like a provider that is where you run into challenges and through the experience with HCL, we were able to work through that and get them to understand that they are truly a partner. Boeing could not be successful in the 787 program without HCL. We had a vested interest in making sure HCL was successful so Boeing could be successful. That is the definition of a partner. Both have to succeed or both will fail. That is my viewpoint.

Vineet Nayar: Thank you very much! That's very interesting! Very well said!

Akhil, (from Pratt & Whitney) you are from similar industry. What's your on this?

Akhil Bhandari (Pratt & Whitney): Pratt & Whitney is also a disruptive entity. We have brought to market an aircraft engine, which will bring down the price of a business jet to about 1.25 million from today being at 20 million. So the new very light jets, which are being produced, they will be in the order of 1.2 to 2.5 million. And these jets are going to disrupt the aerospace industry. And to give you just an idea that in the first 70 years of Pratt history and I represent Pratt Canada which is the entity which produces business jets, regional jets under turbo products. In the first 70 years, we have about 40,000 engines out there flying. In the next 10 years, we will have 40,000 more. So that dramatically changes the way we operate and the way we operate today will have to be significantly different in terms of globalization, in terms of the business partners that we have to engage to operate and collaborative network is going to be the way of life for us.

Vineet Nayar: Okay, Thank you very much. Retail industry is very very interesting. I would to bring Neale Chinery from Dixons. You are in a very interesting business where about 70-80% of your profits happens in a two days time. That's a really tough environment. How you view collaboration and what's your views on disruptions?

Neale Chinery (Dixons): I guess the disruption for us comes in a number of forms. Many through, I guess the products, the average cost process going down and the challenges around the peak period where we do kind of 80% of that profit in four to six weeks and so we need partners in place there who are going to work with us to ensure that through that critical trading environments, we perform it efficiently, and I guess to the Deutsche Bank point, so the support of our system is more important to us and more strategic to us I guess in that sense than developing systems.

Vineet Nayar: You agree this point, to run the business is far more critical than...

Neil: Run the business for us is far more critical especially through the key training period and we need partners in place to collaborate with us to ensure that we work together to ensure that is the most successful part of it.