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What is Affiliate Marketing and What Kinds of Businesses Can it Help?

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In today’s highly digitised world, an opportunity of making money anytime anywhere with zero investment cannot be turned down. Affiliates can promote products and services to earn a commission through affiliate marketing. The affiliate chooses a product or a service of their niche and promotes it on different platforms to get a share of the revenue earned through the transaction.

digital marketing course

The sales in affiliate marketing are observed from one website to another via affiliate connections and links. It is a very impressive way of facilitating sales and generating income through online marketing platforms. One can effectively learn the concept of affiliate marketing with the help of a MarTech course that walks one through the whole procedure of affiliate marketing.

Read on and understand the step-by-step guide to affiliate marketing to fetch a better understanding of how it can benefit businesses. 

What is Affiliate Marketing?

Affiliate marketing is the practice of earning money online. It works effectively on a pay-per-recommendation basis which means an affiliate will earn a commission every time a customer makes a purchase using the link or coupon code. It is basically concerned with recommendations and the purchases that have been made on those recommendations. An affiliate marketer also assists the business and works inherently to increase sales as a part of the sales strategy.

However, the affiliate marketer earns through the sales of the product which has been influenced by his recommendation. Here, the idea is to refer to a product or a service through various means of social media platforms and websites like blog posts, Instagram posts etc. Every time a consumer makes a purchase using the special referral link or code linked to their recommendation, the affiliate gets paid a commission. 

In the age of social media, affiliate marketing is a great opportunity, especially for the young generations. It is completely a performance-based opportunity and if it is done properly it results in the effective generation of income and aids profit for the affiliate. It also helps to diversify the revenue sources of the already existing organisation. 

What Kinds of Businesses can Benefit from Affiliate Marketing?

Affiliate links are adaptable enough as all kinds of businesses can use them to their advantage. This approach functions by sharing the referral links and codes with popular individuals and social media influencers in exchange for compensation for promoting their company. 

However, small businesses and startups are the best kind of business as they can benefit the most from affiliate marketing. This is because such businesses cannot invest a huge amount of funds in marketing and advertisement. So affiliate marketing proves to be a great option for them. 

Here is a list of the kinds of businesses that can use affiliate marketing and that can prosper by extracting benefits from it:

E-Commerce companies

This is a very popular form of business in today’s world. Affiliate marketing structure is mostly used by e-commerce websites like Amazon, Myntra, Flipkart etc. It helps such businesses to promote their products and services absolutely free of cost and they also become successful in attracting a large pool of customers. 

This approach saves the time and money that the company puts into planning advertisement strategies and funding them. Just the suggestions of the affiliate marketers are enough to convince potential customers to avail the products and services of The E-Commerce companies.

Consumer goods 

Businesses that deal with consumer goods such as electronic items, fashion clothes, home appliances and so on also benefit a lot from this mode of marketing. It helps the business dealing in consumer goods to sell the physical products in a more viable way. It saves such companies a lot of money that they put into advertising and paid campaigns. 

Promoting consumer goods with paid campaigns and advertisements involves a large amount of money. Affiliate marketing is a great approach if a company does not have a large number of funds to market its products in front of a huge pool of audience.

Travel companies 

Affiliate marketing is a strategy used by many travel agencies, hotels, and airlines to market their products and services. The affiliate makes it very easy for the brands to reach out to a dynamic variety of audiences. Travel and hotel business is all about gathering consumers and affiliate marketing is one of the best ways of doing that.

As more people will become aware of travel agencies, airline companies and hotel brands they will think of availing of their services. This will automatically be the result of the recommendations of the affiliate marketers. Hence, the companies get the desired results without investing a single penny.

Finance Companies 

Various financial institutions also need some kind of promotion to reach out to people. The most common financial institutions that use affiliate marketing strategies are private-sector banks and institutions that provide consultancy services. It saves the funds that they put into advertising their services.

Financial institutions have grown very popular as people are indulging more in making investments. In such a scenario the common people need good financial advisors. To increase the popularity of Financial institutions, affiliate marketers promote their services so that they can effectively reach out to the audience at large.

Digital products

Organisations that carry out the business of digital products such as software, online courses, music applications, e-books etc use the strategy of affiliate marketing. It enormously lowers their marketing cost and tends to bring a large pool of consumers.

When everything is getting digitised, the best way to market digital products is to use a new form of marketing rather than sticking to the traditional advertising mode.  Advertising as a means of marketing is a fruitful affair but it is somewhat costly. On the contrary, affiliate marketers make the job of the marketing team of the company slightly easy as they do not have to strategise and invest more into marketing.

Conclusion

Affiliate marketing is an incredibly simple procedure that can be carried out through product reviews, blog posts, connecting to social media, conducting webinars, and referral links on websites and many other platforms. It is a new marketing frontier that is just waiting to be explored. If you want to become a marketing expert and join the exploration then sign up for the Advanced Certification In Digital Marketing And MarTech, IIT Roorkee by Imarticus.

The digital marketing IIT Roorkee certification course can be your best pick for learning the core concept of marketing. It will benefit you a lot to get a stronghold in the comparative marketing world.

Why do Businesses Fail Due to Cash Flow Problems?

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Cash flows and valuation problems are common issues that businesses face, and there can be many factors in a business’s failure. Cash flow refers to the amount of cash that a business has on hand to cover its expenses and pay its bills. 

When a business experiences cash flow problems, it means that it doesn’t have enough cash to meet its financial obligations, which can lead to a host of problems, including missed payments, defaulted loans, and ultimately, business failure. In this article, we will explore various reasons why businesses may fail due to cash flow problems and discuss strategies that businesses can use to avoid this outcome.

Importance of Cash Flow in an Organisation

Cash flow is an essential aspect of any organisation’s financial health, as it reflects the amount of cash that is generated and spent during a particular period. Businesses need to maintain positive cash flow because it enables them to cover their expenses, pay off their debts, and invest in growth opportunities. These are some important cash flows in an organisation:

Meeting Expenses: Cash flow is critical for meeting the day-to-day expenses of the organisation, such as salaries, rent, utilities, and inventory. Without adequate cash flow, businesses may struggle to pay their bills and may need to rely on short-term loans or credit to cover their expenses. 

Managing Debt: Cash flow is also important for managing debt. If a business has a negative cash flow, it may struggle to make loan payments, which can lead to missed payments, penalties, and damage to the business’s credit rating. 

Investing in Growth Opportunities: Positive cash flow allows businesses to invest in growth opportunities, such as expanding their product lines or entering new markets. These investments can help to increase revenue and profits over time. 

Forecasting Future Financial Needs: By tracking their cash flow, businesses can forecast their future financial needs, which can help them plan for upcoming expenses and avoid cash flow problems. 

Attracting Investors: Positive cash flow is also attractive to investors, as it signals that the business is financially stable and has a solid foundation for growth. 

Overall, cash flow is essential for the day-to-day operations and long-term success of any organisation. Maintaining positive cash flow allows businesses to meet their financial obligations, manage debt, invest in growth opportunities, and attract investors.

Consequences of Cash Flows and Valuation Problems

Cash flows and valuation problems can have serious consequences for businesses. Negative cash flow can lead to missed payments, defaulted loans, and ultimately, bankruptcy. 

Additionally, reduced or inaccurate valuations can make it difficult for businesses to attract investors or obtain financing. A business’s valuation is based on a range of factors, including its revenue, profits, and cash flow.

If a business experiences cash flow problems, its Organizational Behaviour Management in valuation may decline, as investors and potential buyers will be less willing to pay a premium for a business that is struggling financially. Businesses need to maintain positive cash flow and accurately reflect their financial health to avoid these consequences and maintain a strong valuation.

Strategies to Avoid Cash Flow Problems

Cash flow problems can be a major challenge for businesses of all sizes, but some strategies can be implemented to avoid or mitigate them. Some effective strategies to avoid cash flow 

problems in a business are:

Create a cash flow forecast: Developing a cash flow forecast is an essential part of cash flow management. It allows businesses to understand their projected cash inflows and outflows, identify potential shortfalls, and take necessary steps to address them.

Reduce payment terms: Shortening payment terms for customers can improve cash flow by speeding up cash inflows. Businesses can consider offering early payment discounts or incentives to encourage customers to pay their bills sooner.

Monitor expenses: Monitoring expenses is critical to maintaining positive cash flow. Businesses should regularly review their expenses and identify areas where they can cut costs without compromising the quality of their products or services.

Implement cash flow management tools: Utilising cash flow management tools can help businesses manage their cash flow effectively. There are several tools available, such as cash flow forecasting software and cloud-based accounting systems that can help businesses track their cash flow in real-time. 

Diversify revenue streams: Relying on a single product or service can be risky. Businesses should explore diversifying their revenue streams to reduce their dependence on a single source of income.

Consider debt financing alternatives: Over-Reliance on debt financing can lead to cash flow problems. Businesses should consider alternative financing options, such as equity financing or crowdfunding, to avoid taking on too much debt. 

Negotiate payment terms with vendors: Negotiating payment terms with vendors can help businesses manage their cash flow by delaying cash outflows. Businesses can explore options such as extended payment terms or instalment payments to help manage their cash flow.

By implementing these strategies, businesses can avoid or mitigate cash flow problems and maintain a healthy cash flow. It is important for businesses to regularly review and assess their cash flow management practices to ensure they remain effective and sustainable.

Conclusion

We have established that a business cannot function without proper cash flow. Aspirants with good knowledge of managing cash flow have a bright future awaiting them, and in their luck, Imarticus has partnered with the Indian Institute of Management (IIM) Lucknow to offer its students a Global Senior Leadership Programme of 11 months that will teach them all about cash flow, Organizational Behavior Management (OBM) and much more.

What is Performance Analytics? How does it help businesses?

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All industries big or small, largely focus on analysing their performance to drive better business outcomes and accelerate growth through a method called performance analytics. Business performance evaluation involves assessing a company’s ability to achieve its goals and generate profits from the resources it utilises.

 

The evaluation of business performance is crucial for companies to remain competitive and successful. By regularly monitoring and analysing KPIs, businesses can identify potential issues before they become major problems and take corrective actions to improve their performance. Performance analytics is thus an integral part of business management and students who take up a BBA in Business Analytics have a thorough understanding of it.

There are various tools that professionals use to do performance analysis of businesses. One can seek employment in several capacities such as a business analyst, data analyst, or information security analyst if one wants to take up performance analytics. 

What is Performance Analytics?

All businesses must analyse the performance of their companies, whether it is positive or negative. This analysis is usually done by taking into account some indicators. Decision-makers, with the help of these indicators, are able to identify areas of deficiency in performance and make informed decisions on how to enhance those specific areas.

One of the key benefits of performance analytics is that it enables businesses to focus on the things that matter most. By providing insights into the most critical KPIs, businesses can prioritise their efforts and resources toward achieving their goals. Performance analytics also connects people across different departments and levels of the organisation and enables them to work together towards a common objective.

How Does Performance Analytics Help Businesses?

There are numerous ways performance analytics helps in business management. Here is how:

  • Businesses can improve their operations by using performance metrics to identify areas where they are not meeting their desired performance levels. After identifying such gaps they design better ways to address those problems that keep them from achieving the desired results.

  • Through performance analytics, businesses can detect bottlenecks in their processes and streamline their operations, improving efficiency.

  • Organisational growth is powered by HR and performance metrics, as structured HR data and analytical reports facilitate data-driven decision-making that informs future growth strategies. By leveraging project-wise performance analytics, businesses can identify their talent strength across projects and develop plans for the future and allocate responsibilities accordingly.

  • By analysing the market and consumer behaviour over time, businesses can determine if their product is meeting consumer demands and identify new opportunities for growth. It is important to track all the changes that have made an impact on the consumer base, economic conditions, market demand or supply adjustments, and any modifications made to the marketing plan.

  • By analysing performance metrics, businesses can identify areas where resources are being underutilised or over-utilised and adjust accordingly, leading to better resource allocation and cost savings.

What are the types of performance analytics?

There are mainly 5 types of performance analytics methods that are usually used by businesses. Here is a brief account of each of them:

Prescriptive Analysis

Prescriptive analysis is a kind of analytics that makes use of machine learning techniques, statistical algorithms and data to provide recommendations on what actions should be taken to achieve a specific outcome.  

Prescriptive analytics not only predicts what is likely to happen but also suggests specific actions to optimise the outcome. This type of analysis is particularly useful in complex business scenarios where there are many variables and also numerous possible outcomes. 

Diagnostic Analysis 

Diagnostic analysis is a type of analytics that aims at diagnosing the root cause of a problem. It involves examining data and analysing it to uncover the reasons behind a particular trend or behaviour. 

By utilising techniques such as drill-downs, data mining, data discovery, and correlations, businesses can gain a better understanding of the factors that are driving a particular trend or behaviour.

Companies often use diagnostic analysis in quality control and risk management so as to maintain high standards and prevent errors or failures.

Predictive Analysis

Predictive analytical tools aid in making future predictions by utilising historical data to identify patterns and assess their likelihood of recurring. The process typically involves gathering and analysing large datasets, developing predictive models, and using those models to make informed predictions about future events or behaviours.

Predictive analysis is used in a variety of fields, including business, healthcare, finance, and marketing, to forecast customer behaviour, identify potential risks or opportunities, and optimise decision-making. 

Cognitive Analysis

A cognitive analysis is a process of using artificial intelligence and machine learning techniques to simulate human thought processes and understand complex data. It involves using natural language processing, image recognition, and other AI technologies to analyse unstructured data. 

Cognitive analytics can help anticipate potential outcomes and suggest ways to manage them if conditions change. This can aid in decision-making and enable businesses to be better prepared for various scenarios. 

Descriptive analysis

Descriptive analysis is a statistical analysis technique that involves the summarisation and description of the characteristics of a dataset. Descriptive analysis can identify patterns and trends in the data, which can help to uncover insights and inform decision-making.

Conclusion

If you want to set your foot in the field of Business Analytics, you should consider taking up the BBA in Business Analytics program by Imarticus Learning. The BBA in Business Analytics is an ideal program for individuals who wish to develop a comprehensive understanding of the practical application of analytics in developing effective business strategies. 

This course is designed to equip students with the necessary skills and knowledge to excel in the contemporary data-driven business landscape. It focuses on enabling students to leverage the right combination of data analytics, insights, and strategies to achieve superior business outcomes.

Importance of Blockchain Technologies in the Financial Sector

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Blockchain technology is a distributed, decentralised digital ledger that offers a safe, transparent method of keeping track of transactions. Blockchain technology is being utilised in the financial industry to provide a more effective and reliable system for managing financial transactions, such as payments, remittances, and settlements. 

Financial organisations may use blockchain to lower transaction costs, improve transparency, and reduce the chance of fraud and mistakes. Additionally, peer-to-peer transactions are made possible by blockchain-based cryptocurrencies like Bitcoin, providing an alternative to fiat money.

Benefits of Blockchain Technology in Finance

The financial sector may benefit from blockchain technology in several ways, namely:

The fact that all transactions are recorded in a decentralised, immutable ledger, first provides improved security and transparency. This lowers the possibility of fraud and fosters greater party confidence. 

Second, by doing away with middlemen and lowering transaction costs, blockchain technology makes cross-border payments and settlements quicker and more affordable. 

Third, it streamlines back-office operations and lessens the need for manual processes, resulting in better efficiency and automation. 

Fourth, the development of new financial instruments and the democratisation of access to financial services are made possible by blockchain technology. 

Finally, blockchain-based cryptocurrencies provide consumers with a better way to manage their money and a safer means to hold and transfer value than conventional currencies.

Challenges of Blockchain Technology in the Financial Sector

The following are some of the common challenges that blockchain technology in the finance sector is facing:

  • Regulatory uncertainty- Financial institutions confront regulatory concerns and compliance difficulties since the regulatory environment for blockchain-based financial products and services is still developing.
  • Interoperability- The inability of various blockchain networks and platforms to communicate with one another can lead to inefficiencies and reduce the potential advantages of the technology.
  • Scalability- Blockchain networks may have trouble processing big numbers of transactions, which leads to longer processing times and more expensive fees.
  • Security issues-Cyber threats and hacking are still concerns, even if blockchain is thought to be more secure than the conventional system.
  • Governance- To guarantee that all users adhere to the network’s rules and standards, decentralised blockchain networks need strong governance structures.
  • Integration- Integrating blockchain technology with legacy systems: Integrating blockchain technology with current legacy systems can be difficult and expensive.
  • Energy consumption-  The proof-of-work consensus algorithm employed by many blockchain networks consumes much energy and may harm the environment. 

Application of Blockchain in Finance

Blockchain technology has numerous applications in the financial sector, including:

  • Payments and remittances- It can facilitate faster and cheaper cross-border payments and remittances by eliminating intermediaries and reducing transaction costs.
  • Smart contracts- These contracts are automatic self-executing contracts that ensure that the terms of an agreement are enforced. Blockchain technology can enable the creation of secure and transparent smart contracts that can streamline the execution of financial agreements.
  • Identity verification- It can enable secure and decentralised identity verification, which can help prevent fraud and reduce compliance costs.
  • Trade finance- It can enable the digitization of trade finance processes, such as letters of credit and bills of lading, which can reduce processing times and costs.
  • Asset management- It can enable the creation of secure and transparent digital asset management systems, which can reduce the risk of fraud and increase efficiency.
  • Know Your Customer (KYC)- It can enable secure and decentralised KYC processes, which can help financial institutions comply with regulatory requirements while reducing costs and improving customer experience.
  • Cryptocurrencies and digital assets- It is the backbone of cryptocurrencies and digital assets, which offer an alternative to traditional currencies and financial assets.

Real-World Examples of Blockchain in Finance

Here are some real-world examples of blockchain technology being used in the financial sector:

  • Ripple- Ripple is a blockchain-based payment protocol that enables real-time, cross-border payments. It is used by some financial institutions, including Standard Chartered.
  • JPMorgan Chase- JPMorgan Chase has developed its blockchain platform, Quorum, which is being used to streamline back-office processes and improve settlement times.
  • Mastercard- Mastercard has developed a blockchain-based platform for processing payments between merchants and their customers, which is being used by some major retailers.
  • Nasdaq- Nasdaq has developed a blockchain-based platform for trading shares in private companies, which enables faster and more efficient trading and settlement.
  • HSBC- Using a single blockchain platform, HSBC has used blockchain technology to complete the first-ever trade finance transaction single blockchain platform. 
  • Visa- Visa has partnered with blockchain startup Chain to develop a blockchain-based platform for processing cross-border payments. The platform is being used by some financial institutions, including Fidelity Investments.

Future of Blockchain in Finance

Blockchain technology has a very bright future in the world of finance. Blockchain is anticipated to be widely used by financial institutions in the years to come given its promise to improve efficiency, security, and transparency.

Enhanced automation, increased security, the rise of digital assets, interoperability and standardisation, legal clarity, and the development of decentralised finance will be characteristics of the financial applications of blockchain in the future. Blockchain technology can revolutionise the financial industry and open new avenues for safe, efficient, and transparent financial innovation.

Blockchain Technology in India

The Indian banking sector is becoming more and more interested in and using blockchain technology. Due to the potential for money laundering and security threats, the Reserve Bank of India (RBI) has forbidden banks and other regulated companies from conducting business with cryptocurrencies. The government has been looking at the possibility of blockchain technology for additional applications, including supply chain management, identity management, and land registry.

Axis Bank’s cooperation with Ripple and the trade finance platform from ICICI Bank are just two examples of how big Indian banks have used blockchain technology. Blockchain technology is also being investigated for use in insurance, supply chain management, and peer-to-peer lending, in addition to banking. We may expect to see more general acceptance and innovation as technology continues to advance.

Conclusion

Blockchain technology has the potential to revolutionise the financial industry by boosting security, efficiency, and transparency. Many financial organisations are investigating and deploying blockchain technologies despite difficulties. 

The MBA in Fintech programme offered by Imarticus Learning can give students a thorough grasp of how technology and finance interact. Through a blended learning approach of projects and case studies that are pertinent to the business, students of MBA in Fintech will get hands-on experience with cutting-edge fintech technologies and skills needed to succeed in the financial industry!

What is Material Procurement and Why is it One of the Most Important Aspects of SCM?

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Supply Chain Management (SCM) is a critical component of any business, as it affects everything from production and manufacturing to delivery and customer satisfaction.

Material procurement is one of the most noteworthy aspects of supply chain management strategy, as it directly affects a company’s ability to meet customer demand and maintain a competitive advantage in the market.

In this blog, we will explore why material procurement is so important and what businesses need to know in order to ensure the success of their procurement process management. 

What is Material Procurement?

global chief supply chain management course

Material procurement refers to the process of acquiring raw materials, supplies, and components needed for production and manufacturing.

 It’s a critical function that ensures that a business has the resources it needs to operate efficiently and effectively. In this blog, we’ll discuss the various stages involved in material procurement and what businesses need to know to get the best results from their procurement processes.

 The first stage of material procurement is the identification of the raw materials, supplies, and components required for production.

 This stage involves determining the quantity, quality, and specifications of the materials needed, as well as the time frame for delivery. It is crucial to consider the long-term demand for the materials, as well as the potential for fluctuations in the market.

 The second stage of material procurement is the sourcing of the materials. Procurement process management involves researching potential suppliers, evaluating their offers, and selecting the best option based on a number of factors, such as price, quality, delivery time, and reliability.

 Businesses can choose to source materials directly from suppliers or through intermediaries such as wholesalers or distributors. In some cases, businesses may even choose to produce the materials in-house.

 The third stage of material procurement is the negotiation of the terms and conditions of the agreement with the supplier.

 This stage involves establishing the price, delivery terms, payment terms, and any other relevant conditions.

It’s important to ensure that the agreement is legally binding and that all parties understand the terms of the agreement.

 The fourth stage of material procurement is the placement of the order and the delivery of the materials.

 This stage involves communicating the order to the supplier, arranging for the delivery of the materials, and receiving and storing the materials in a secure and controlled manner.

 It’s important to have a system in place for tracking the delivery of materials, as well as for tracking the inventory of materials once they have been received.

 One of the key factors in successful material procurement process management is having accurate and up-to-date information about the materials being procured.

 This includes information about the materials themselves, such as their specifications and quality, as well as information about the suppliers, such as their financial stability and delivery times.

 Having access to this information allows businesses to make informed decisions about which materials to purchase and from whom.

 Another important factor in material procurement has a system in place for tracking and managing the procurement process.

 This can include using software or other technology to manage the process, as well as having clear procedures and processes in place for tracking and monitoring the delivery of materials and the payment of suppliers.

 This can help to ensure that the procurement process runs smoothly and that the materials are delivered on time and within budget. 

Why is Material Procurement one of the most important aspects of SCM?

Supply chain management strategy is important for businesses to have a reliable and efficient procurement process in place in order to ensure that they have access to the required materials when they need them.

 Without effective material procurement, a business may face challenges such as stock shortages, production disruptions, and late deliveries, all of which can negatively impact the company’s bottom line.

 One of the key reasons why material procurement is so important is that it directly affects a company’s ability to meet customer demand. If a company is unable to secure the materials it needs to produce its products, it will not be able to meet customer demand and may lose market share to its competitors.

 Additionally, if the procurement process is not efficient and well-organised, the company may struggle to keep up with customer demand, leading to long lead times and frustrated customers.

 Another reason why material procurement is so important is that it affects the cost of production. The cost of raw materials can have a significant impact on a company’s overall production costs and, therefore, its profitability. By optimising the procurement process and securing the best possible prices for raw materials, companies can reduce their production costs and improve their bottom line.

 Additionally, by having a well-managed procurement process in place, businesses can avoid overstocking or understocking materials, both of which can be costly and disruptive.

 Material procurement also plays a key role in risk management. The procurement process involves sourcing materials from suppliers, and it is essential for businesses to choose suppliers that are reliable and financially stable.

 If a supplier goes bankrupt or experiences financial difficulties, it can impact the delivery of materials and disrupt the production process. By carefully selecting suppliers and regularly monitoring their financial stability, businesses can minimise the risk of supply chain disruptions and ensure that they have access to the materials they need to meet customer demand.

Conclusion

In conclusion, material procurement is a critical function for businesses in a variety of industries. It involves several stages, including the identification of materials, sourcing, negotiation, and delivery.

To be successful, businesses need to have a supply chain management strategy which holds accurate information about the materials being procured, a system for tracking and managing the procurement process, and an awareness of the environmental and social implications of the procurement process.

By taking these factors into account, if your ambition is to become a chief supply chain officer, you can opt for Imarticus’ IIM supply chain management course. This programme offers all the resources that you need to learn to operate effectively and efficiently and to contribute to a sustainable future.

9 Alternate Careers for Accounting and Finance Professionals in India

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Accounting and banking are two of the most popular professions among finance graduates. A banking or accounting career is lucrative, with great potential for growth. 

Investment Banking course

Finance, however, has numerous opportunities that finance graduates are unaware of. With competition for banking jobs increasing, the number of finance professionals seeking careers off the beaten path is rising. Read about alternate career paths that finance professionals can pursue in this article.

9 alternate career options for finance graduates

From financial journalism to trading, here are nine alternate sectors where professionals can build a career in finance in India.

  • Management Consulting

This career is made for you if you have an MBA in finance. Management consultants create solutions to business problems and oversee the overall management of the different departments of a company. Their insights help make strategic decisions and improve the company’s performance.

Management consultants need the know-how to navigate a company’s financial decisions. They create forecasting models, analyse financial data and communicate their inferences to their colleagues and employees.

  • Finance Journalism

Becoming a financial journalist is a unique career path for finance graduates. A financial journalist’s role is to research events in economy and commerce and relay this information to his/her audience.

It is a great career for individuals who have an interest in the field of media and journalism. Financial journalists require verbal and written skills, along with a deep understanding of finance and commerce.

  • Investment Banking

Investment banking is another career option for finance professionals. The primary role of investment bankers is to secure funding for businesses and agencies and act as financial advisors. They also oversee mergers and acquisitions on behalf of their company.

To become an investment banker, a finance professional needs to have financial modelling and analytical skills. They also require strong people skills and the ability to work well under pressure.

  • Entrepreneurship

Business-minded finance professionals can choose the entrepreneurial route. They may offer their financial services on a contractual or freelance basis to multiple companies.

Finance graduates can enrol in courses such as financial analytics, big data or taxation to specialise in a specific niche. Besides financial know-how, this career path requires a go-getter mindset with excellent interpersonal skills.

  • Stockbroking

A career as a stockbroker or stock trader is best for the people who like to be their own boss. They trade in bonds, shares and precious metals like gold and may work as freelancers for companies.

Being a broker is a high-risk job with the potential to have high pay-offs when done right. One has to be highly disciplined and determined to become a successful stock trader.

  • Risk Management

Risk management is one of the most lucrative careers for finance and accounting graduates on this list. A risk manager formulates policies to eliminate risk and losses for his/her company and modifies existing risk management policies.

They work in various industries, including real estate, SCM, education and human resources. To become a risk manager, an individual must have a background in accounting and knowledge of the latest analytics and forecasting technologies.

  • Finance Educator

If you have a knack for simplifying complex finance concepts and teaching them to others, then being an educator in the finance domain might be the job for you. As a finance professor, an individual is responsible for moulding the next generation of finance professionals.

To become a finance professor, individuals need a finance degree (master’s degree or higher) and communication and interpersonal skills. They need to be compassionate with a desire to provide the best possible education to their students.

  • Actuary

Being an actuary is another alternate career option for accounting graduates. They utilise financial statistics and mathematics to gauge the impact of decisions and unforeseen events on the company. They are also crucial to the operation of insurance companies.

Actuaries require strong mathematical and analytical skills with a keen sense of business and finance. They also need communication and soft skills to interact with their clients.

  • Production Management

Production management is a unique career for finance and accounting professionals passionate about the entertainment industry. Production managers look after the financial side of theatre, TV and film production. They manage payroll, create production budgets and track regular expenses.

Versatility and multi-tasking skills are a must for this fast-paced job. Some finance professionals may choose to become freelance production managers on a contractual basis.

Conclusion

Gone are the days when banking and accounting were your only options for a career in finance in India. From investment banking to production management, there is an abundance of opportunities for finance graduates.

Are you looking to pursue an exciting career in finance? If yes, then check out the Certified Investment Banking Operations Professional (CIBOP) programme by Imarticus Learning. This investment banker course covers the derivatives market, trading, and foreign exchange, helping you kickstart your dream career.

Why is Financial Valuation Important During Mergers and Acquitions?

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What is Financial Valuation? 

Financial valuation plays a pivotal role in mergers and acquisitions (M&A). It involves determining the worth of a target company and evaluating its financial performance, assets, liabilities, and future earnings potential. 

Financial valuation provides critical insights that guide decision-making, negotiation, and pricing in M&A transactions. This article will explore the importance of economic valuation in M&A and its significance for successful deal-making.

Importance of Financial Valuation in Mergers and Acquisitions

Financial valuation play in important role in mergers and acquisitions (M&A) for several reasons:

Determining Fair Value

Financial valuation is integral to M&A transactions as it helps determine a fair value for the companies involved. It entails analysing financial statements, assets, liabilities, and other economic factors to determine a justifiable price for the deal. It ensures the transaction is transparent and equitable for all parties concerned.

Assessing Financial Health

Evaluating the financial value of a target company offers practical insights into its financial well-being. This evaluation allows the acquiring company to assess the financial performance, profitability, cash flow, and other critical financial metrics of the target company. 

This assessment plays an important role in understanding the economic opportunities and risks linked with the acquisition.

Pricing and Negotiating

Financial valuation plays a crucial role in establishing the appropriate acquisition price for the target company. It employs various valuation methodologies to determine a justifiable fee based on economic forecasts, market comparables, and other relevant factors. Obtaining favourable valuations is critical to negotiating good terms and conditions in an M&A transaction.

Compliance with Regulations

Financial valuation ensures compliance with regulatory requirements during M&A transactions. Many jurisdictions have specific financial reporting and valuation regulations for M&A deals. 

Accurate economic valuation ensures compliance with these regulations, mitigates legal and regulatory risks, and ensures a smooth and successful M&A transaction.

Investment Decision-Making

Financial valuation plays a crucial role in the investment decision-making process for the acquiring company. It helps test the potential return on investment (ROI) based on the financial projections and expected synergies. 

This information is essential in making informed investment decisions and assessing the economic feasibility and viability of the M&A transaction.

Approaches and Methods of Financial Valuation in Mergers and Acquisitions

When valuing a company during a merger or acquisition (M&A), several methods can provide insight into its worth. Let’s explore three general approaches: the cost approach, the market approach, and the discounted cash flow (DCF) approach.

Approaches

The Cost Approach

Estimating a company’s value based on its balance sheet is a common starting point in the cost approach for financial valuation. But, adjustments may be necessary to align the balance sheet items with the current market value. 

Unlisted intangible assets on the balance sheet must be accounted for to get a more accurate valuation.

The Market Approach

The market approach involves comparing the actual sales of similar businesses within a relevant timeframe. While private companies may not be required to disclose M&A transactions, access to proprietary remote databases for a fee can provide valuable data for comparison.

The Discounted Cash Flow (DCF) Approach

The DCF approach estimates a company’s value using its expected future cash flows. Cash flow projections are the foundation for the organisation’s valuation in a DCF analysis. This approach considers the time value of money and the risk associated with the expected cash flows.

Methods

Net Asset Valuation

Deducting a company’s liabilities from its total assets is a straightforward way to evaluate its value. This technique is beneficial for established organisations with a wealth of assets, such as those in the manufacturing or property sectors. Nevertheless, this method should take into account the company’s potential for future earnings.

Dividend Growth Model

The dividend growth model suggests that a company’s market value is based on the current value of its future dividends. This approach is similar to the discounted cash flow method.

“Football Field” Chart

The “Football Field” chart is a useful tool for quickly comparing a company’s valuation across multiple methodologies, including comparative analysis, precedent analysis, and discounted cash flow analysis. This approach provides a broader view of a company’s value.

Precedent Analysis

The precedent analysis is a valuation method based on comparable transactions in an industry. It may incorporate EBITA and revenue multipliers or any other multiple that the evaluator prefers.

Revenue Multiples

A common method for valuing a company is using revenue multiples. This approach is useful when comparing companies with different profit levels but similar margins, products, markets, and competition.

EBITDA Calculation

EBITDA is a financial metric that measures a company’s operating profitability by excluding non-operating costs such as interest, taxes, devaluation, and amortisation. It’s generally used to evaluate a company’s financial soundness and performance.

P/E Ratio (Price Earnings)

To determine a company’s value using the P/E ratio, its value is divided by its tax post-profits. The after-tax profit is then multiplied by a suitable multiple to arrive at the company’s value. Subtracting any debt and adding surplus cash gives the equity value.

Revenue Multiple

The utilisation of revenue multiple valuations is a customary approach to evaluating a company’s worth. It is a useful metric for comparing organisations that have varying profit levels but share similar margins, products, markets, and competition.

Comparable Analysis

A comparative analysis involves valuing two companies with the same metrics and comparing their valuation multiples. This method often involves creating benchmarks for comparison.

Challenges and Considerations in Financial Valuation for Mergers and Acquisitions

Here are some challenges and considerations to keep in mind when conducting the financial valuation for mergers and acquisitions (M&A):

Subjectivity: Valuation is not an exact science and involves subjective judgments. Different valuation methods can yield different results, and valuers may have different assumptions and inputs that can impact the valuation outcome.

Data availability and reliability: The availability and reliability of financial data, including historical financial statements and projections, can impact the accuracy and reliability of the valuation. Only complete or accurate financial data can lead to flawed valuation conclusions.

Uncertain future performance: Estimating the future performance of the target company can be challenging, as it involves making assumptions about future market conditions, competitive landscape, and internal factors that may impact the company’s financial performance.

Legal and regulatory considerations: Valuation for M&A should consider legal and regulatory concerns, such as compliance with applicable laws, regulations, and accounting standards. Consider these factors to avoid legal and financial risks.

Timing and negotiation dynamics: M&A transactions are time-sensitive and subject to negotiation dynamics between parties. The valuation may be influenced by negotiation leverage, deal structure, and transaction timing, which can impact the final valuation outcome.

Market conditions: External market conditions, such as economic trends, industry dynamics, and market sentiment, can impact the valuation of the target company. Changes in market conditions during the valuation process can affect the accuracy of the valuation.

Professional judgment and expertise: Financial valuation requires professional judgment and expertise. The qualifications and experience of the valuer, as well as their understanding of the target company’s industry, competitive landscape, and financial performance, can impact the accuracy and reliability of the valuation.

Financial reporting implications: Valuation for M&A can have financial reporting implications, such as purchase price allocation and goodwill impairment testing, which may need compliance with accounting standards and reporting requirements.

Conclusion

Financial valuation is crucial in M&A as it guides decision-making, evaluates target company worthiness, and informs investment decisions.

For a successful career in financial services and capital markets, consider IIM Lucknow’s Advanced Management Program in Financial Services and Capital Markets course, offering comprehensive training in economic valuation and other key finance areas. Visit Imarticus Learning for more information on a career with IIM Lucknow.

The future of MBA education: Trends and predictions

Posted on by Imarticus Learning

Changes in MBA in India

Management has changed its gears since the COVID-19 pandemic started to eat up jobs and create inflation. The pre-covid MBA Trends in India have changed and for you to remain in the game, it is important to get on board with the Future of MBA In India. The management industry has changed a lot with the introduction of AI and machine learning in every nook and cranny. The terminologies have changed and so have the tools. Organisations across the world are dealing with a talent crunch that can adapt to changing situations accordingly. There are also major upheavals, fluctuations and increased unpredictability and thus let’s get acquainted with MBA trends in India.

Top MBA Trends in India

Demand for online and part-time programs

MBA programs have seen immense demand across the world and India is no exception. Every university and institute has seen increased competitiveness in the admission process. Many universities have hopped on the Future of MBA in India and are offering online courses.

There is more demand for self-paced programs as it gives the flexibility to the students to work while they upgrade their skillset. It also helps the students to work on two degrees simultaneously.

According to a report by the Graduate Management Admission Council’s 2020 Applicant Survey, the number of applications to self-paced or part-time MBA programs has increased by up to 53%. Along with this, the demand for flexible MBA programs has grown by 48.6%. It is during this period, that the demand for online MBA programs has grown by around 43.5%.

Increased competition

With this volume of applications, there is a dearth of seats in good MBA programs. The bar for examinations and the screening process has gone up. One of the MBA trends in India is increased competitiveness. The seats are set to be pricier and scarce with the increased demand for better MBA programs. This will also lead to the demand for courses that offers industry experience.

Salary trends

The median salary of management professionals has increased despite the slump seen in other industries worldwide. Since companies have understood the need for strong management during turbulent times, the demand and salary of management professionals have increased significantly. MBA trends in India point towards a further increase in salaries of management professionals which could be a good sign for those pursuing MBA programs.

Future of MBA in India

More entrepreneurs opting for MBA

With everyone wishing to start their business, the demand for MBA programs is set to increase among a budding generation of entrepreneurs. The stigma against MBA programs being just a higher education degree has changed and entrepreneurs are opting for better market knowledge. Entrepreneurs can now learn market analysis, product placement and marketing with MBA programs.

Since most new businesses start in the family or are a solo take, entrepreneurs need to do everything by themselves. This could push the Future of MBA in India towards more entrepreneur-oriented curriculums and flexible programs.

AI and Machine learning in MBA programs

With the introduction of ChatGPT, everyone is scared of losing their jobs to AI, but the story for management is different. The 2023 MBA trends in India are leaning towards the utilisation of more AI tools and machine learning skills in programs. Since AI aims to make work easier, MBA programs are set to offer more AI-based tools in their curriculum to keep the students’ industry relevant.

Why choose Imarticus Learning?

Imarticus Learning brings MBA In Fintech in collaboration with Geeta University.

The curriculum curated by Imarticus Learning in association with Geeta University has been deemed as new-age and industry aligned by industry leaders. It includes topics like:

Basics such as principles, accounting, HR Management, organisational behaviour

Operations and supply chain

Information system management

Fintech in banking and finance

Entrepreneurship

Blockchain and applications

Cryptocurrencies

Cloud computing

Business research

Project management

Automation

Machine learning in fintech

AI in fintech

Fintech in payment and lending

You will get to work on capstone projects that enable the students to link their projects to issues of community and utilise their learning experience. You will also get the skill enhancement certifications and benefits of a digitally-enabled campus.

Along with this, the MBA program offers summer internships in top companies. After the completion of the program, you will also get career support that includes placement. Career support also includes mock interview sessions, resume-building classes and more.

Imarticus Learning has worked to get more than 56000 students placed and enable 45,000+ career transitions. That is not all. To provide the best assistance in the competitive job market for our learners, we have collaborated with more than 500 industry leaders as our partners for maximum placement opportunities.

Our alumni work at:

Deloitte

Genpact

Accenture

Infosys

KPMG

IBM

Capgemini

Goldman Sachs

Cognizant

Standard Chartered

Wipro

Moody’s analytics

Check out more about the MBA course here.

Can a financial analysis course grow your career? Read to find out

Posted on by Imarticus Learning

Are you seeking to take your career in finance to the next level? Consider enrolling in a financial analysis course! These courses will teach you the skills to analyze financial data, make informed decisions, and provide valuable insights to your organization. 

With a focus on practical applications and real-world examples, this course can give you the knowledge and confidence to advance your career and impact your company’s bottom line.

The number of financial analyst jobs is predicted to increase by 9% from 2021 to 2031, faster than most other jobs. Over the next ten years, around 32,000 job opportunities for financial analysts will be available each year. Keep reading to find out about this great course!

Why should you opt for a financial analysis career? 

A career in financial analysis can be an excellent choice for those who enjoy working with numbers, analyzing data, and making strategic decisions. Economic analysts are crucial in helping businesses and organizations make sound financial decisions by analyzing financial data, creating reports, and providing recommendations to stakeholders.

Financial Analyst Courses

Financial analysis has become even more critical in the current economic climate as companies must make informed decisions to survive and thrive. It has led to a high demand for skilled financial analysts who can effectively analyze and interpret complex financial data and communicate their findings to decision-makers.

Overall, a job in financial analysis can be exciting and pays well too. You get to work in a fast-paced setting where you can keep learning and improving your skills.

Is a financial analysis course worth investing in for career development? 

Yes, a financial analysis course can be a valuable investment for career development. 

Here are eight points to consider:

  • Improved Financial Literacy: 

A financial analysis course can enhance financial literacy, which is essential in many job roles. It can help you understand financial statements, modeling, and various financial metrics, leading to a more comprehensive understanding of financial data.

  • Career Advancement: 

With improved financial literacy, you may qualify for more senior-level positions that require financial expertise. Completing a financial analysis course can demonstrate your knowledge of finance and make you a more competitive candidate for promotions and new job opportunities.

  • Competitive Advantage: 

A financial analysis course can give you competitive leverage in the job market, especially in finance, accounting, and consulting, where financial analysis is vital. Employers are more likely to hire or promote someone with specialized skills in finance and research.

  • Networking Opportunities: 

Taking a financial analysis course allows you to connect with other professionals in your field, providing an opportunity to build relationships that can lead to new jobs, partnerships, and mentorship.

  • Practical Skills: 

Many financial analysis courses offer practical training in financial modeling, financial statement analysis, and other essential skills required for finance roles. You can use these skills right away in real-life situations, and they can improve your performance at work.

  • Understanding of Investment Strategies: 

Financial analysis courses often cover various investment strategies, including fundamental and technical analysis. This understanding can help you make better investment decisions and analyze market trends to identify opportunities.

  • Professional Development: 

Investing in a financial analysis course shows a commitment to your professional development, which employers highly value. It demonstrates your willingness to improve your skills and take on new challenges.

  • Increased Earning Potential: 

Improved financial literacy and specialized skills in financial analysis can increase your earning potential. It can help you negotiate better salaries, bonuses, and other benefits, leading to better financial stability and security.

Tips for finding a financial analysis course suitable to your career needs!

When looking for a financial analysis course that suits your career needs, there are a few tips to keep in mind:

  1. Consider the course content: Look for a course that covers the topics you need to learn or improve on. The plan should cover financial statement analysis, forecasting, and valuation techniques.
  2. Check the instructor’s experience: Ensure that the course instructor has relevant experience and knowledge in financial analysis. You can check their credentials, work experience, and reviews from previous students.
  3. Course format and delivery: Consider the course format and delivery method, whether online or in-person. Ensure that the delivery method suits your learning style and schedule.
  4. Accreditation and recognition: Check if the course is accredited and recognized by reputable organizations, which adds credibility to the plan and can enhance your career prospects.

Considering these tips, you can find a financial analysis course that meets your career needs and helps you achieve your goals.

Conclusion:

Investing in a financial analysis course can be a valuable career development investment. If you are rooting for the best financial analysis courses online, connect with the professionals at Imarticus Learning! 

What are Layer 2 blockchains?

Posted on by Imarticus Learning

Layer 2 blockchains are protocols that are constructed on top of existing blockchain networks (Bitcoin, Ethereum, etc.). They aim to increase scalability and enhance the speed of the underlying blockchain by offloading a part of the computing or transaction processing from the main chain, hence decreasing additional transaction costs.

Layer 2 blockchains are often considered a remedy to the scalability issues of blockchain networks since they permit larger transaction volumes and faster confirmation times without impacting the underlying main chain’s security and decentralisation characteristics. They are used in a variety of applications such as non-fungible tokens (NFTs), decentralised finance (DeFi), gaming, and other services where low transaction costs and fast transaction throughputs are essential for user acceptance and usability. 

How Do Layer 2 Blockchains Operate?

Layer 2 blockchains often run independently of the main chain but depend on the consensus and security procedures of the main chain. They employ different approaches to offload computing and transactions off the main chain and further process them in an improved and flexible manner (state channels, plasma chains, sidechains, or rollups). 

The layer 2 solutions have the potential to greatly enhance transaction throughput, lower transaction costs, and improve the general blockchain user experience. 

Why are Layer 2 Blockchains Important? 

Overall, layer 2 blockchains are important because they offer scalable, user-friendly, and cost-effective solutions to some of the key challenges facing blockchain networks, driving wider adoption of blockchain technology and fostering innovation in the industry. Layer 2 blockchains are crucial for many reasons. They have been illustrated below:-

  • Scalability: This is one of the major issues for many blockchain networks like Bitcoin and Ethereum. Layer 2 blockchains address this issue by outsourcing certain aspects of the computing or transaction processing away from the main chain, allowing for faster verification times and greater transaction volumes. This increase in scalability allows blockchain networks to accommodate an increase in users and transactions, making them feasible for practical applications requiring high transaction throughput. 
  • Reduce Transaction Costs: During high demand, there have been high transaction costs in various blockchain networks. Layer 2 blockchains can help ease this problem by processing transactions off-chain or sidechains and lowering the burden on the main chain, which results in cheaper transaction fees for users. Blockchain applications with Layer 2 can hence be made less expensive and appealing in the process. 
  • Enhanced User Experience: Layer 2 blockchains have the potential to significantly enhance the user experience of blockchain-based applications. Layer 2 solutions offer quicker and cheaper transactions. They help lessen the burden and transaction costs on the main chain and make blockchain-based services more accessible and user-friendly. 
  • Flexibility and Innovation: Layer 2 blockchains provide a flexible platform for blockchain development and experimentation. Developers may create and deploy their own layer 2 solutions, each with its own set of design options and trade-offs that enable optimisation and customisation for specific use cases. This adaptability supports creativity and a wide environment of layer 2 solutions, that promote innovation in this sector. 
  • Security and decentralisation: Layer 2 blockchains frequently depend on the main chain’s protection and consensus methods, which gives a better level of security than some alternative off-chain options. This guarantees that layer 2 solutions monitor decentralisation and the unreliable nature of blockchain technology while striving to boost both speed and scalability.

Role of Layer 2 Blockchains in Cloud Computing

Layer 2 blockchains are not often employed in cloud computing applications, although they are gradually and steadily being accepted in cloud-based services. The following are a few possible applications for layer 2 blockchains in cloud computing:-

  • Layer 2 blockchains might be used to develop autonomous cloud storage systems where data is archived in a decentralised way, offering enhanced safety, privacy, and dependability. 
  • Layer 2 blockchains can be used to build decentralised markets or orchestrate cloud computing resources, thanks to their flexibility and compatibility. 
  • Layer 2 blockchains may have great potential in securing and authenticating data in cloud computing, whereby transactions relating to data exchanges or processing may be stored on the blockchain to provide consistency and end-to-end transparency.

It should be noted that the usage of layer 2 blockchains in cloud computing applications may vary based on the unique requirements, rules, and technical breakthroughs in the sector. To properly comprehend the potential effect of layer 2 blockchain application in cloud computing, more research and real-world implementations are being conducted.

Conclusion

We all know that blockchains are digital ledger technologies that cannot be manipulated or hijacked, however, layer 2 blockchains increase the safety and security features of blockchain networks even further. Layer 2 blockchains also help increase the speed and rate of transactions.

To summarise, layer 2 blockchains are important because they provide enhanced flexibility, security, confidentiality, decentralisation, connectivity, and affordability. In cloud computation, it is also being which may open up new possibilities for decentralised cloud computing applications and be beneficial to the industry’s advancement.

With that being said, we can already conclude that fintech is one of the most lucrative career choices in recent times. Fintech (financial technology) may provide rewarding job prospects for those with the necessary abilities, expertise, and desire. The fintech industry’s fast expansion and evolution, driven by technology improvements, changing consumer tastes, and regulatory changes, has generated a demand for talented people in a variety of fields. 

To get started, you can join a reliable Fintech certification course offered by Imarticus Learning. The Professional Certificate In Fintech can help you learn everything you need to know about blockchain technology and other financial technologies. Enrol now to become a skilled fintech professional who is job-ready for the current market.

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