Innovation through Technology
- Business India December, 2007

Traditionally companies used to get their payments from their vendors/distributors in advance or on delivery or after a pre-determined time depending on the terms of credit. With business going global and outsourcing becoming an accepted norm, managing suppliers of raw materials, semi-processed goods and distributors spread across various countries managing the various processes involved in the entire process becomes an Herculean task. Financial Supply Chain is all about reducing the gap between supplies and payment. The book highlights how banks and companies can, leveraging on the advances in technology, collaborate to provide solutions.  And in the process cutting down inefficiencies in the traditional systems and free working capital locked up during transaction periods to productive use.

Written by Sanjay Dalmia, an ex-banker who is now the CEO of the Pune-based company, CashTech, the book looks at the evolving trends in the banking sector and how the facilitators of capital can embrace technology to innovate and grab market share in a highly competitive field. Some of the legal hurdles faced in the convergence of physical trade and electronic commerce have also been highlighted. These include the issue of stamp duty collected by the government departments in the originating country. While this is still a hazy area, the author explains that legal processes are in their infancy and will take time to stabilise when driven by maturity of business practices. He prophesies that for the early explorer the risks and rewards are commensurate with each other. Some of the key aspects of the model law on electronic commerce in general, countries which have provided legal sanctity to this law by implementing provision, have also been provided by way of exhibits at the end of the book.

Replete with practical illustrations several of the early movers both in and outside the banking sector have been profiled to drive home the point about collaborative offerings and how they can be effectively used. A chapter on case studies will be particularly useful to Indian companies, many of which are increasingly expanding their footprints overseas.

While corporates will undoubtedly benefit, some of the solutions can be effectively used by housing finance societies, utility collections as also any organisation for facilitating salary payments.