How important is it to look the part? A long time ago I was in a meeting with a seasoned Investment Banker when a colleague of mine walked into the room, introduced himself and walked back out. Later on in the day, I asked him why he left so suddenly – he had earlier expressed a desire to be introduced to her when the opportunity arose. He said, “Was she the banker you spoke of, she didn’t really look it? So am not sure if I want to introduce her to the client.” Shallow? Absolutely. True? Sadly yes.
The fact is perceptions matter.
Even if you don’t believe in keeping up appearances and prefer to let your work do the talking, the clothes you wear help you exude confidence, which is why fashion is so powerful. Gone are the days when Power Dressing just meant a pant or skirt suit or a boring grey suit and a blue tie. Times are changing. This can puzzle people. Students at our investment banking courses in Mumbai often ask us, “So what exactly is power dressing?” prompting us to write this piece.
Power dressing means clothing or accessorizing that increases your confidence.
The last few years have seen women heading towards a streamlined, tailored look. Accessories have become fashionable and everything is in the details be it a bright pink shoe under grey trousers or a red handbag with a white jacket. We are fortunate to live in a world where anything goes. But there are some rules, and then some popular myths.
Rule – Be Comfortable
A lot of people feel that Indian clothing cannot be powerful and yet feel conscious while wearing a skirt. Wearing a short skirt and a woolen jacket will only have you tugging at your hemlines and sweating at the armpits. Power dressing means impeccable dressing, not uncomfortable dressing. That means structured neat clothing. If you don’t like showing skin, wear trousers or a long pencil skirt. Find the Indian weather too hot for heavy suits, wear linen. It’s breathable and available in a variety of colors.
Myth – Power dressing applies solely to western clothes
Not true. A Nehru collar tunic with a silk scarf over black trousers and a gorgeous cotton sari or a light Kanjivaram, with pleats held together by a simple brooch. When in doubt, check out Chanda Kochar, she’s always well dressed.
- Power dressing is in the details – The opposite of power dressing is sloppy dressing. Men – watch that crease in front; it needs to be as sharp as a blade. Shine your shoes, iron your shirt. The exact same ensemble changes drastically if your collars are neat, the shirt is ironed and the shoes look good
- Be unique, we are not in school anymore – Men, bring out the cufflinks and the interesting pairs of socks. Women now’s the time to accessorize but be careful. Have only one thing stand out. I said pink shoes but not pink shoes and a neon orange top
- Get your hair right – A good hair day can make anything you wear stand out. You can skip a lot of shopping if you invest in a good haircut. And not to be greasy. Greasy hair equals dirty hair. Get rid of the oil. A significant part of the working environment is spent in groups. Imagine being stuck in an air-conditioned room for four hours with the smell of amla hair oil
- Respect the environment – When going for a site visit to Raipur, understand your environment. It’s going to be hot and it’s going to be more conservative. That doesn’t mean you don a potato sack. It means you rethink the heels and try a pair of trousers instead of a skirt
- Be professional – No matter what environment you are in, be professional. That means you make sure your clothes align with what you do
Faculty that deliver our investment banking courses in Mumbai spend substantial time with our students guiding them on these points that will help them both with their placements and future career growth. We encourage students to spend time on what they wear to work. An average person spends 10 hours a day at work, that’s 60 hours a week and essentially most of your waking lifetime. Doesn’t it make more sense to spend time on what you wear to work than to a wedding that you will possibly spend only an hour at?
Interviewing has changed a lot in the last few years. Ten years ago, interviews comprised going through your resume. Applicants were prepared for personal questions like ‘Tell me about yourself’ and “What are your strengths and weaknesses?”
Those days are long gone. Interviews in the finance sector are a grueling mental workout. It’s much like preparing for an exam and it makes sense.
Companies are going to pay you to be efficient and they are hiring you to make sure you can do the job. Hiring is a costly process. It requires time on the part of both the HR and line management. They take time out to interview you and then discuss the interview internally. That is time taken out of the business. Their time is expensive and ergo, the process needs to yield fruit. This is why you need to approach your finance interview like you would a marathon and not a sprint. Start well in advance and realize that these opportunities are hard to come by. Wasting them is not an option.
Finance interviews today are usually divided into the following:
- An aptitude test – much like a GMAT, which tests your analytical and mathematical skills
- A domain interview – to test your finance knowledge and your analytical skills
- A personal interview – to gauge communication and organizational fit
- A group discussion – a topic is given to a group and the group is asked to debate it
While there may be many more rounds, the above can be taken as the minimum.
Preparing for an Aptitude Test
- Practice, Practice, and Practice
At Imarticus, we have a weekend aptitude test sessions where students are taught how to take them. After that, students are advised to practice every day. The India Bix site is a good place to practice.
Finance Domain Interview Tips
- Study, study, study
- Divide your study into parts
Be prepared for the kind of questions you can get on various topics. Here are a set of sample questions to give you an idea of the kind of questions you can expect.
- Walk me through a cash flow statement
- How does FCFE flow from Net Income?
- Consolidate the two balance sheets
- Here are three financial statements. Now calculate ratios
- ROCE and ROE related questions
- Discounted Cash Flow (DCF): We say Earnings Before Interest and Tax (1-tax) + depreciation/amortization- changes in working capital – capital expenditure. So should the amount of tax deducted be the actual amount paid or the one that is before giving the effect of interest?
- What is WACC? How is it calculated?
- What are the ways to value a company?
- What are the problems with DCF valuation technique?
Equity Research (If it is an Equity Research Role)
- Pitch me a stock
- What is your investing strategy?
- Give me three undervalued stocks
- Do you believe the Sensex is fairly valued at this point? What is the Price/earnings of the Sensex?
Mergers and Acquisition (If it is an M&A job)
- Walk me through the M&A process
- What is the difference between the buy side and the sell side and how does it matter for a banker
- What is an LBO?
- Talk to me about the Indian M&A market
- Describe the latest deal that piqued your interest
- Why M&A?
- How would you go about researching a new industry
- What is winner’s curse?
- How many litres of paint are sold in Mumbai every year
- Why Finance?
- What interests you about Investment Banking?
- What area of finance interests you? Be prepared for questions in this area?
The Personal Interview
- Walk me through your resume
- Talk about a time where you were disappointed with what you achieved. Tell me how you handled it?
- Tell me about a time you led a team?
- Are you ready to work the long hours?
- If you have included interests like tennis, basketball, music, reading and so on, be prepared to back them up. For instance, if you are interested in tennis, make sure you know the rankings, a little bit about your favourite players and your own tennis routine.
Don’t take anything in your resume for granted. Be prepared to back everything.
These are only examples of what can be asked. There are numerous websites that can help you prepare. Imarticus Learning has an entire Interview Test Preparation short course. We take mock interviews to make sure you are ready for your interview. Students are videoed so that they can understand what they are doing wrong.
The Parliament of India recently released its Union budget and with the same, there have been a lot of good indications, both for the economy as well as the banking sector. While the country seems to be steadily progressing towards economic growth, the popular vibe among the present generation is an absolute fascination of the west. This is one of the reasons why many professionals, in various industries like Finance, Medicine, Analytics or Engineering and the likes, look to get highly qualified, in order to settle in on the job that they love the work in. This has encouraged the popularity of professional training courses, which are way more industry relevant as compared to the academic courses.
While it is a general notion that is reiterated time and again that you must find a job which you absolutely love doing. This idea for a lot of people gets attached to the more tangible concept of place, as many of the professionals, look to get hired in various foreign countries, in order to get the right kind of job. This is probably why you would see a lot of career websites, promoting different foreign countries, as the best and happiest place to work in. But then again, there are a lot of cities within India as well, with a prominent newspaper ranking Jaipur as the happiest city to live in, there are quite a few others, including the golden quadrangle with their metropolitan areas.So if you are looking for a great city to work in, weve curated a list of some of the happiest cities you can work in. This list basically is based on numerous surveys conducted, highlighting aspects like the happiness factor, compensations, work environment, employee- manager relationships and so on.
Many residents of Chandigarh have time and again agreed to the fact that this city, makes for a great place to live in and thus by extension to be employed in. The many reasons cited would be a sound financial status of the people there, as well as great infrastructural development throughout.
Lucknow has gone on to be the second city to make it into the happiest places to live in list. The people residing in this city highly cherish their needs and desires and consider the same, their source of happiness. With a perfect mixture of the multinational and domestic companies, it makes for a great place to be employed in.
The capital of India, apart from being extremely advanced in terms of infrastructure, it also houses headquarters of a number of nationalized banks, corporate financial institutions, private and public firms, making it the go-to place for all those professionals looking to leverage their career prospects.
How could the economic capital of India, not be a part of this list at all? Apart from being the part of the state that pays the most tax, it also has a thriving financial sector full of top ranking investment banks as well as commercial banks, various companies, which is no wonder why people come here to work.
So now you know, all you have to do now is take your pick! Do you think your city deserves to be on this list? Tell us why!
In our last post we looked at why companies use investment bankers to sell or buy assets. In this post we try and understand what happens once a company decides to use an Investment Banker. What happens next?
Well they first need to look for a banker. So let’s go back to our earlier example taking the government’s stake sale in its Stuuti companies. Before they decided to shortlist Citibank, ICICI and HDFC, they hold a beauty parade where every banker worth their salt ‘parades’ their wares and offerings during a ‘pitch.’
Quite often you’ll find Investment Banking analyst friends working late on Saturday evening. When you ask them why, it’s quite likely they’ll utter the dreaded words, ‘pitch document’. The Pitch Document is the bread of Investment Banking, it’s the pizza base of that great Margerita. Without a great pitch document, all you are left with are handful of deals you managed to wing through your bosses contacts and even then you’re going to have to pitch for the deal. So what is a pitch document? It is a meeting backed up by a document where a banker convinces you, the client, why they are the best team to sell your asset. How do they do it?
The easiest way to explain this is to liken it to selling a pencil. If I have to sell you a pencil, what would I say? I need to tell you why this pencil is better than all the other pencils out there. I also need to tell you why this pencil costs as much as it does. For that I need to know what goes inside the pencil, how much those cost etc. If I need to sell the pencil on your behalf because you are my ‘client’ I need to know everything YOU know about the pencil. The price I sell the pencil at is the ‘value’ of the pencil. I have to explain to you what that value is and how I arrived at that value. I need to convince you I know everything there is to know about pencils, pencil making, the pencil industry, competing pencils so I can sell this pencil better than anyone else out there. So a usual Pitch Document consists of five elements.
1. Establishing my credentials – how many pencils have I sold before and to whom. Whose pencils have I sold and my expertise in selling these pencils. Perhaps I have someone who used to work in pencil manufacturing, Steadler maybe or Apsara, and knows the nuances of pencil making, has the inside track if you will.
2. Company Overview– I tell you a little bit about your company to show you that I know about your pencils. It’s a little counterintuitive I know but it shows I’ve done my homework and know what makes your pencils tick. I might also use this opportunity to tell you any risks I foresee with selling this pencil. Perhaps the pencil has an eraser that’s of an older technology or uses too much wood etc
3. Industry Overview– Here I showcase how much I know about pencils in general, trends in pencil making, what drives pencils usage, opportunities and risks in pencils which will help me forecast the market for pencils and therefore my clients potential market which will flow down to profitability and cashflows
4. Valuation– Once I have cashflows and industry numbers I put together the pencil’s valuation using both cashflows (DCF) as well as the value multiples of other pencils (Comparable PE and EV/EBITDA, EV/Sales multiples )in the market along with the value of what other pencils have been sold at in the past (Transaction multiples)
5. Potential Buyers of your pencil. Using my considerable industry knowledge I tell you who would be most interested in buying your pencil.
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Interview Prep is a critical element of our course FMVC (Financial modeling and valuation), one of India’s leading programs for learning Financial Modeling and Valuation. Financial Modeling and Valuation is imperative for careers in Corporate Finance, be it Investment Banking, Private Equity, Equity Research or even start up’s.
In fact in this day and age, every start up needs to have a head of Finance that can help create business models, project cashflow and create financial models that help in fund raising. While the career options post FMVC are varied, most people find it extremely hard to crack the interview process in Investment Banking and Private Equity because a significant part of the interview is dedicated to questions on Financial Modeling and Valuation. So here are a list of actual questions that got asked in Investment Banking and Private Equity interview, as it pertains to Financial Modeling and Valuation.
Private Equity Interview Questions
- What is IRR? What is the formula and how do you calculate it? A company worth 100mn today is sold for 500mn after 5 yrs so what is the IRR for this investment.
- What is more expensive debt or equity? And why?
- How do you forecast the various aspects of the financial statement?
A leading boutique investment bank
- Run me through DCF & cash flow.
- What is Working Capital & how do we forecast it?
- If a company’s book value is 10 mn & it is been sold @ 12 mn, what would be the effect on three financial statements
- How do you calculate EV? EV/EBITDA multiple?
- Difference between the P/E multiple and the EV/EBITDA multiple.
- What is EBITDA and how do you find it?
- What is included in COGS?
- What is percentage by Sales method?
- What are SG&A expenses? Give examples.
- Is factory labor expenses a part of SG&A expenses or COGS? Why?
- What is Gross Profit? How do you calculate it?
- Difference between Gross Profit and EBITDA?
- What is operating profit?
- Explain how you do a DCF.
- How do you get to FCFF?
- How do you get to FCFE?
- Difference between FCFF and FCFE.
- What is WACC? How do you calculate it?
- How do you find cost of equity?
- How do you calculate Beta?
- What is risk free rate of return? How do get it?
- What is equity risk premium?
- In the CAPM formula how did you arrive at the market return figure?
- Why does an increase in Working capital assets reduce your cash flow from operations?
- Why does an increase in Working capital liabilities increase your cash flow from operations?
- Does an increase in debt increase or decrease the value of the company?
Our FMVC course includes actual mock interviews along with a sample question bank of
over a 200 questions to help you crack the interview process. This is in addition to a comprehensive resume writing and interview prep program and career counseling sessions. For more details please contact 02261419595/ 8108600055
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by Zenobia Sethna.
More women than men start out in Financial Services but, as they progress, the majority fall out, especially at middle management level, when other priorities like family and kids beckon. This leaves almost all of the top jobs in the hands of men. According to a PWC global report in 2013, women comprise nearly 60% of employees in the financial services industry, but only 19% progress through the leadership ranks to senior level roles. The few that do break through and assume senior leadership positions usually take the firm to new heights of success. Meet the top three most influential women that are at the helm of India’s leading banks.
Arundhati is Chair-managing director of one of the Big Four banks of India, State Bank of India, and listed as the 30th Most Powerful Woman in the world by Forbes in 2015. Arundhati has been with SBI for over 4 decades, and her loyal services was rewarded when SBI made her the youngest and the first female chairperson She also introduced a two-year sabbatical policy for women in the company, which will help women at SBI have a better work life balance. A true role model for all.
Wise Words: The greatest lesson I have learnt is that you have to create a good reputation for yourself for people to appreciate you.
CEO and Managing Director of ICICI Bank, Chanda Kochhar is one of the success pillars of the retail business of the bank in India. Under her watchful eye, ICICI Bank has grown in scale and has won numerous awards including Best Retail Bank in India, thanks in no small part to the many initiatives she has taken to simplify and diversify banking. Forbes listed Chanda Kochhar as 35th most powerful women in the word in 2015. She has been with for ICICI Bank for 30 years and has proved herself as a strong leader not just in India, but also globally.
Wise Words: I chose to be a working wife and mother. Why should I compromise on either?
Shikha is CEO and Managing Director of India’s largest bank (assets) in the private sector, Axis Bank. With more than three decades of experience in the financial sector, she has worked for big institutions including ICICI Bank and JP Morgan & Co. As Shikha joined Axis Bank in 2009, the bank’s stock upsurged by 90% and its assets grew by 30% in the financial year 2012-13. A leader adept at dealing with change, she has focused on transforming Axis Bank into a bank with strengths across a wide range of Corporate and Retail Banking products.
Wise Words: You should do things that you believe in. There has to be a fine balance between listening to people and taking decisions.
By Zenobia Sethna & Shrey Mehta, BLinC
In today’s world, the way most of us borrow money is by going to the bank, or any NBFC, filling out a lot of paperwork, putting up significant collateral, and praying repeatedly that the loan gets approved; at an exorbitant rate of interest way above the going rate. Similarly, the way most of us save money is by depositing money in a bank at an interest rate which barely beats inflation. Isn’t it ironic? The very same bank which lends you money at, say 16%, offers you only 10% on your deposits. This leaves the bank with a significant profit of 6%, which is more than enough to cover their expenses.
This is the way that things have always been going, until someone somewhere thought ‘Hey, why let the middleman (the bank) take such a big piece of the pie? Why not directly let the lender lend to the borrower at more attractive rates?’ And that is the basic idea which gave birth to debt crowd-funding. Investors (lenders) can directly interact with borrowers and decide rates which are satisfactory for both parties, with the marketplace taking a relatively small commission as opposed to banks and other NBFCs, which took a huge spread at the cost of the borrowers and lenders.
While crowd-funding is a relatively new concept taught in investment banking courses in India, it has reached great heights. In 2015, global crowd-funding is estimated to be worth $34.4 bn, which is more than the global VC market, pegged at $30 bn. Of this $34 bn, debt crowd-funding accounts for 73%, or $25.1 bn, making it the most popular method of crowd-funding.
The debt crowd-funding market was worth only about $3.4 bn in 2013, after which it grew by an astonishing 223% to $11.08 bn in 2014, and since then it is estimated to grow 126% to $25.1 billion for 2015. As the figures illustrate, not only is the debt crowd-funding market very huge, but it is set to become even huger and grow at rates which far outweigh any other industries.
Why is debt crowd-funding so successful across the globe? It is successful because it provides various benefits to both borrowers and lenders.
There are potentially lower fees through debt crowd-funding, as compared to taking loans from banks and other financial institutions. Also, borrowers can potentially get loans for lower interest rates than the prevailing rates in the market. Similarly, lenders can get higher interest rates on the amounts they invest. Not to forget, the entire process is very easy and convenient, and is a lot faster than traditional borrowing methods. As it happens in the real world and explained in school of investment banking, the element of defaults on loans cannot be ignored. Bearing this in mind, many sites have kept aside a separate provision to cover defaults, in the rare case that defaults take place. Lastly, debt crowd-funding websites have been around for quite some time, which means that there are many such sites which borrowers and lenders can make use of, to increase their chances of a successful transaction.
Why did the crowd-funding market grow so exponentially in 2014? The strong growth in 2014 was partly due to the rise of Asia as a major crowd-funding region. Asian crowd-funding volumes grew by a whooping 320%, to $3.4 billion raised. That puts the region slightly ahead of Europe ($3.26 billion) as the second-biggest region by crowd-funding volume. North America continued to lead the world in crowd-funding volumes, growing by 145 percent and raising a total of $9.46 billion. South America, Oceania and Africa grew 167%, 59% and 101% respectively.
As you’d expect, USA has the most established debt crowd-funding market, as compared to any other countries. In fact, 59% of global crowd-funding activity takes place in the US, making it the biggest player geographically. The biggest P2P lending site, LendingClub, too is American. In the crowd-funding space, there’s a lot more debt crowd-funding sites, as compared to equity crowd-funding sites – this is because equity crowd-funding platforms are subject to various legal regulations and financial reporting requirements.
So who are the biggest players in the US? Two of the biggest players not only in the US, but in the world, are LendingClub and Prosper.
LendingClub: It is the first P2P lending company to be publicly listed by registering its securities with the SEC and also to allow loan trading in the secondary market. As of June 30, 2015, the platform has originated $11.1 billion in loans. On December 10, 2014, the company raised almost $900 million in the largest U.S. Technology IPO of 2014. In fact, its current market cap is $5.51 bn (as of 10th November, 2015) and its revenue was 213 million USD (for the fiscal year ended December 31, 2014).
Prosper: Prosper Marketplace is America’s first peer-to-peer lending marketplace, with more than 2.2 million members and over $5 billion in funded loans.
It has raised $354 mn in 12 rounds of funding and has acquired BillGuard (a personal finance analytics company) and American HealthCare Lending ($21 mn) (a financial services company servicing healthcare providers and patients worldwide), both in 2015, and invested in Bottlenose in 2012.
Moving on to Europe, most of the top players come from the UK or Germany. Even within this, there’s deeper fragmentation, with most of UK’s crowd-funding activity originating from London. Thus the market is highly scattered, with the biggest European P2P Lending sites originating from the biggest countries in Europe.
1) FundingCircle: One of the biggest crowd-funding platforms in the U.K., Funding Circle has loaned £906 million to SMEs since its launch in August 2010. The U.K. government, already using the platform, will lend a total of £20 million to SMEs through it. Small businesses can seek loans ranging from £5,000 to £1 million from multiple crowdfunders. There are currently over 44,000 lenders registered on the website
2) Zopa: This London-based P2P lender offers loans of up to £10,000 where individual borrowers deal directly with lenders. Zopa categorizes borrowers based on their credit grades and lenders can offer terms and amount of money based on the category of the borrower.
3) Ratesetter: Also London-based, Ratesetter is the first to have introduced the concept of a “provision fund” into P2P lending. This fund is generated from borrowers’ payment of a “credit rate” fee and is used to diversify risk in the form of a reimbursement to lenders in the event of a late payment or payment default.
4) Auxmoney: Based in Dusseldorf, Germany, this peer-to-peer loan marketplace raised $12 million in funding just this March. It allows private consumers to get personal loans from private investors between €1,000 and €20,000. Over 11,000 projects, collectively valued at over €50 million, have been financed through this platform.
Like most concepts, debt crowd-funding too has a lot of potential in India. This is particularly because India has relatively higher interest rates compared to the rest of the world. Also, as discussed above, there’s huge spreads taken by the bank, giving low rates to lenders, but charging high rates to borrowers. In addition, many NBFCs offer loans at far higher rates than banks. This is why debt crowd-funding has a high scope of success in India, as there is a real need for this in the Indian economy.
So who are the biggest players in the debt crowd-funding space in India? Some of them are:
Faircent: Faircent is an Indian P2P Lending website, started in 2013. Faircent has raised $4.25 mn in 3 rounds of funding. Between August 2014 to August 2015, they have had over Rs 1.25 crore of money lent through the platform; over 12,500 borrowers and 2,500 lenders are registered on the platform, committing over Rs 2.6 crores. They also have a run rate of over Rs 40 lakh per month.
The company is targeting over Rs. 800-1000 crores of disbursement in the next three to four years. By 2016, the Indian loan market is expected to reach a size of Rs 21,980.6 billion with a CAGR of 18.7 per cent.
LendenClub: LendenClub is a peer to peer lending platform founded in 2014.It connects wealthy investors with creditworthy borrowers. The site has 254 registered lenders and 313 registered borrowers, with 0% of defaults.
iLend: iLend started with a Seed funding of 40 Lakh from Singapore based Angaros group. Dipamkara Web Ventures Pvt Ltd is the parent company
Dhanax: Dhanax provides loans for business use, focusing on small businesses. It provides loans based on financial strength of the firm and the ability to pay back the loans. They have funded over Rs. 10 crores of loans till date.
CapitalFloat: Capital Float is an online platform that provides working capital finance to SMEs in India. It has raised $16 mn of funding over 3 rounds.
What does the Future Hold?
Thus, debt crowd-funding, an already hugely successful phenomenon across the globe, has potential to continue registering triple digit growth, the way it has in the past. Developing economies, particularly Asia, have been growing at a huge rate, and are forecasted to continue the pace, as there is a real need for this in these areas.
This phenomenon of crowd-funding is a natural progression towards market efficiency, and is a thereby a force to be reckoned with. We will see many new types of players entering in the financial sector that we have not seen before. Many existing players will be forced to change their business models and undergo business analyst training while many proactive ones will ride the wave. Many niche sub-sectors will emerge (such as real estate crowd-funding).
Regulations will play a key role in shaping the speed of adoption in different countries. Countries such as the UK are leading the way in this regard and are more likely to set the guiding tone for regulating this industry.
They are not just for engineers and IT departments — analysts could come from just about anywhere
Big data has been constructively cast as “the new oil” and held up as the economic counterbalance to America’s sinking developed sector. As oil did at the beginning of the last century, big data is going to drive economies in the centuries ahead. But it may not do so in the way that many people think it will. This Oil is even more productive because it’s a never ending fuel to the new horizons of IT industry brimming across the globe.
“Advances in software, interface designs, and things like that will make it easier to analyze big data in the future,” says Dr. Betsy Page Sigman, a professor at Georgetown University’s McDonough School of Business and an expert on technology and information systems. “So it won’t be as big of a technological hurdle. The more important thing for companies will be to have a lot of people that understand not just how to produce statistics and analytics, but understand how to make better decisions because they have this information.” Not just that, there is an emerging trend of data analytics positions in India, there is a boom in business analytics training across various cities likes Mumbai, Bangalore and various other metro cities as well.
Part of this shift will simply require the retooling of existing jobs, but there is also a new class of positions and skills emerging as well. Spohrer says, positions like “chief data officer” and other “data scientists, data researcher, data technology head” that will become more common within existing companies, both large and small. These jobs won’t necessarily be occupied by deep analytics-types, but by non-data professionals educated and experienced in their chosen industry while also skilled in the use of big data tools.
As with oil, companies know data is out there in large quantities and that it’s not enough to simply know where it is — it has to be extracted, refined, and delivered in a usable format to be valuable. And like the energy economy before it, the data economy needs dedicated people — 4.4 million of them by 2015 in the IT field alone, according to an oft-cited Gartner Research analysis.
But here the similarities end. The oil patch has never had much trouble finding and training enough roughnecks to get oil out of the ground, but training up skilled big data professionals is a different enterprise entirely. In the U.S. alone, a McKinsey & Company report projects a shortfall of between 140,000 and 190,000 “deep analytical” big data professionals by 2018 — that is, people with highly technical skills in machine learning, statistics, and/or computer science, the actual hands-on big data people that know how to crunch huge data sets into meaningful information.
Academically, big data is playing a role in decidedly non-data disciplines, like some portions of the social sciences and humanities, says Jim Spohrer, computer scientist and director of IBM’s Global University Relations Programs. It will increasingly become integral in medical research, various kinds of product development and modeling, and all types of research science. To remain competitive, companies will require professionals at all levels that fundamentally grasp big data concepts and know how to use them to their advantage. But what’s often overlooked in this dim projection of the big data labor market is that the impact of big data on employment goes far deeper than the deep analytics and IT fields. Companies need professionals at all levels that are not necessarily schooled in deep analytics but are nonetheless big data-savvy. These professionals don’t need degrees in computer science or statistics. It’s been a general trend in India otherwise to acquire technical degrees of BE, B. Tech before any further advancement in skill development in any fields, let alone data Analytics. But data analytics training now suffices for a good beginning in Data related domain. But even if it is packaged along with a good degree and any other tags it can add to additional amount in any given package. A VP at management consulting and technology advisory outfit Booz Allen Hamilton recently told Information Week that the company has had great success bringing physicists and music majors onto data science teams — creative thinkers who know less about computer science and more about how to look at big data problems in a different way. Though companies and economies will certainly need data scientists to manage their massive databases and information technology teams to support them, to a far greater degree they’ll need professionals knowledgeable and creative enough to leverage big data to the greatest possible advantage.
Any employment bump tied to the proliferation of big data analytics won’t be confined to IT departments or even to dedicated “data divisions” that emerge within companies. And it isn’t just big data specialists like data scientists and statisticians that stand to benefit from this boom. Big data opportunities are already being exploited in data-centered pursuits like risk management, marketing and research science, but the applications are virtually limitless. Existing companies will expand as they deploy more big data resources — both human and technological — to leverage big data to their advantage. But the space to watch isn’t necessarily existing companies reorganizing to embrace big data, but the emerging big data industry where deep analytical job growth is likely to make its biggest economic impacts. As with so many other specialized endeavors that fall outside the purview of core business — things like advertising and marketing, the latter of which is itself being completely transformed by big data analytics — many big data applications will be farmed out to outside contractors who specialize in big data analysis and problem solving, Sigman says. Scores of big data startups are already emerging (largely with the help of venture capital) to meet this demand, including MapR, ParStream, ScaleArc, and Cloudant. The ones who are able to best meet their customers’ data analytics needs are poised to become home to many of those many millions jobs big data will generate over the next few years.
Source- Fortune & Investopedia
Ananya Pandey – Senior Counselor, Imarticus Learning
Relax yourself at your workplace with yoga
Practicing yoga in the office can be fun, innovative and relaxing with many long-term benefits. Long hours on the computer can cause strain to your shoulder, neck and the back muscles, resulting in stiffness and aggravates tension. This can also impact your ability to function efficiently and impacts your overall quality of life
Multiple organisations have started understanding the need for similar physical activities to enhance the life-style factor of its employees to ensure effectiveness at work as well.
Office yoga comprises of a sequence of simple exercises you can perform effortlessly any time and any day.
Making office yoga exercises a part of your routine can work wonders as they wipe away body pain, fatigue and tension and increase overall muscle strength and flexibility, keeping you fresh and revitalised through the day. The exercises don’t demand much time, and can be done in spurts throughout the day, sparing you from unnecessary discomfort in the long run.
Here are a few routines, which are quick and very effective
Suggestion: If you are wearing tight, uncomfortable footwear remove them before starting the stretches. You may also wish to loosen your tie and belt.
Backbend in chair :
Begin by sitting in a non-rolling chair with shoulders relaxed. The back and butt should be flat against the back of the chair. Reach back and place hands behind the chair. Arch backwards in chair but do not come up off the chair; remain seated. Hold for 10-30 seconds.
Forward fold in desk chair :
Begin by sitting in the chair with feet shoulder width apart. Lean forward, as if to touch your toes. Take a few deep breaths and return to a seated, upright position. This stretches the spine. Hold for 10-30 seconds.
Chair twist at desk :
Begin by sitting in chair with feet shoulder width apart. Cross the left foot over the right knee. The right hand should rest on the left knee and the left hand on the chair back. Twist your torso to the left and hold. This is a great stretch for the spine. Hold for 10-30 seconds. Repeat on the right side.
Seated downward dog :
Begin by sitting in the chair with feet shoulder width apart. Place both arms out in front and lean forward into the desk. This stretches the spine and arms. Hold for 10-30 seconds. To stretch the legs at the same time, bring the left foot up onto the right thigh, as shown in the picture. Repeat for the right leg.
Temple Rub :
Keep your elbows on your desk and place your hands on your temples. With small circular motions gently rub your temples first clockwise and then anti-clockwise. Do this for 10 – 15 long deep breaths.
As another IFAP batch comes to a close and yet another begins, we look back on some of the more technical aspects of the Financial Analysis course. Along with intermediate and advanced excel sessions, which cover Goal Seek, V look up and Macros, Financial Modeling is one of our key technical classes and unique element of the Imarticus Financial Analyst Program.
Analysts throw around the word ‘Financial Modeling’ a lot. You ask them what they’re doing as they are buried deep in music and excel sheets and they respond – I’m building a model. You go – huh? Is it forecasting; is it inputting data?
What is Financial Modeling?
Here’s my definition adapted from the one Wikipedia gives you. Financial Modeling is the process of building an abstract representation that simulates the variability and outcome of a real life financial situation.
Let’s break the definitions down. What do you mean by abstract? We are not talking about Paul Klee here but a summary representation of a situation or a transaction. We are summarizing a financial situation into an excel sheet and creating enough sensitivities and variables within that sheet to simulate outcomes which will help us arrive at a solution – more often an answer to the question. Should I invest? Should I merge? Should I make? Should I buy?
Financial models vary in complexity and can be anything from a single sheet DCF calculation to a complex derivative valuation or leveraged buyout model.
In the fields of accounting, finance and valuation, models are used in the areas of business valuation, especially discounted cash flow, but including other valuation problems; Scenario planning and management decision making (“what is”; “what if”; “what has to be done”); Capital budgeting; Cost of capital (i.e. WACC) calculations; financial statement analysis (including of operating- and finance leases, and R&D); Project finance; and of course Mergers and Acquisitions (i.e. estimating the future performance of combined entities)
Effectiveness of Financial Modeling
The effectiveness of a financial model can be distilled into three major elements:
Quality of input data – If the base historical data used to anchor forecasts is incorrect, it is obviously going to lead to misleading answers
Assumptions/drivers used to forecast information – Understanding the dynamics of businesses or products are critical to building assumptions. For instance, if you want to understand the viability of the car business, it’s important to understand population growth and perhaps the trend of family car ratios and built in flexibility to see what would happen if ratios changed.
Model design and hygiene – Even if your data is perfect and your assumptions are spot on, your model fails if it’s cumbersome and clumsy. For instance, hard coded cells need to be a different color from formulae cells.
Once IFAP students learn how to analyze base data in Level 1, and Value in Level 2, they are taught the basics of building assumptions and understanding business drivers through a variety of Corporate Strategy frameworks.
During the technical class they are taken through models and taught model design and hygiene, assumption worksheet design.
Limitations of financial models
While robust models help to understand possible outcomes by building in drivers we know, it fails to build in the unexpected. A great example of this was the 2008 crisis where no model seemed to take into consideration what would happen if housing prices fell. It was an assumption that housing and land appreciate, forever and ever.
Two, no manager should rely on a model without considering the subjective elements that go into any transaction. It’s hard to model in behavior. So the synergy model we built for an M&A transaction takes no consideration of integration issues, leading to overvaluation of an asset.
Finally, Confucius did say, ‘Study the past if you would define the future’, history has shown us that it is not a guarantee, so while a robust financial model can greatly help simulate possible outcomes helping us arrive at a conclusion, it cannot be the sole factor on which a decision is made.