gci-planning for it

8/3/2019 GCI-Planning for IT

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Strategic Planning of Information

Systems - An

organisational study

Industry Scope : Music Manufacturing

and Marketingof Pre-recorded

Audio cassettes


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Acknowledgements

We thank Mr. J.K.Moitra, Mr.S.G.Gupta, Mr.Bhaskar Ghosh and other

employees of Gramophone Company of India for spending their valuable time

and sharing their knowledge with us.


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CONTENTS

Why we chose to study the music industry?.................................................................4The Industry..................................................................................................................4

Gramophone Company of India (GCI) Limited..........................................................8

The RPG Group..........................................................................................................8

In business of:.............................................................................................................8

The rebirth of GCI:.....................................................................................................8

The Organisation Structure (in part)..........................................................................9

The competitors........................................................................................................10

The segments............................................................................................................10

Applying the CSF framework ....................................................................................11IT at GCI.....................................................................................................................13

Compiling the Repertoire ...........................................................................................14

Reviving the Masters ...............................................................................................14

Conversion...............................................................................................................14

Using IT................................................................................................................16

Making the databases...............................................................................................17

Using IT................................................................................................................18

Creating new Compilations......................................................................................19

Using IT................................................................................................................20

Human Resources.......................................................................................................20

Using IT................................................................................................................21

Distribution.................................................................................................................21

Using IT................................................................................................................21

Technology..................................................................................................................24

Using IT ...............................................................................................................24

Applying the Knowledge Management Framework..................................................25

Using IT ...............................................................................................................26


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Why we chose to study the music industry?

The uniqueness of the music industry is its knowledge and taste driven consumer

demand. Unlike other manufacturing industries where it is the consumers who ask for

what they want and they get it, music listeners are largely given what the artists have

to offer. Of course, listeners have the right to choose the kind of music they listen to,

but have very less opportunity to demand all right combinations they want. This

peculiarity would affect the success of a firm in this industry.

Additionally a manufacturing firm may mostly be constrained by the question of

feasibility that may arise when introducing creativity. Music industry thrives on

creativity.

Information in a creativity and knowledge-based industry is quite different from those

of a process-based industry. The analysis of the information requirements of a firm in

this industry would require a different perspective.

The Industry

The global music market is $38 billion. Indian music market is about 1% of it (1700crore rupees). Music industry has shown a growth rate of 2-5% in volume terms and

9-10% in terms of value. Inspite of this low volume, medium growth, companies in

the Indian music industry are very optimistic. There are quite a few reasons for this

optimism:

1. Wide variety of music

India, being a land of polarised culture has an enormous wealth of a wide range of

music. The presence of Carnatic, Hindustani, Ghazal, Devotional and Folk has

sustained the music industry till the 60s. (It is needless to mention that the film music

of the earlier era was largely derived from them). The 80s saw a sudden boom in the

film music. The liberalisation of the 90s brought with it additions to the existing

variety (western rap, indipop, etc.).


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2. The changing attitude

The digital distribution of music via the Internet has caught the entire music industry

worldwide by storm. It promises to create a potentially lucrative new market with

opportunities and threats co-existing in the new trading environment. Unlike today's

dominant and simple cassette and compact disc format, digital change is not a defined

product, but a broad and complex wave of new sales channels and opportunities.

One of the biggest setbacks that the companies have faced is the absence of exclusive

showrooms. Retailers stock cassettes and CDs of all companies keeping in mind the

varied tastes of the consumers .The other setback is that the rights of a film music can be

purchased only by a single company. The introduction of music retailing through outletssuch as Landmark, Planet-M, Music World, Groove, High Hat has changed the attitude of

the middle and the upper class towards music shopping.

3. The inevitable boom

In the 70s and 80s when the radio was a very popular media in the country, AIR (a

monopolist then) had the unmatched advantage of access to rights of different kinds

of music. The reasons the larger reach and AIR - a ministerial organisation can

easily acquire the music. For instance, even today the 1965 United Nations

Conference Inauguration concert by Smt.M.S.Subbulakshmi is being relayed on the

National Channel of AIR. So is a wide variety of film music. In fact, film producers

and music directors would largely want their music to be relayed on AIR a low cost

- wide coverage promotion indeed! This also creates a wide awareness and expands

the market. It is indeed very surprising to note that no music company has ever looked

upon AIR as a competitor to its sales.

It must also be remembered that most of the Indian folk music was popularized by theradio and the television. These media have also acted as success ladders for many of

the classical music artistes. Satellite Private music channels increase the number of

music hours available to the listeners/viewers and help them sample the music and

determine whether they like or dislike it.

4. The NRI connection

The dot.coms have come. So have online music stores. Saregama, easybuymusic, rediff

-they seem to be carving a niche for themselves. With 10 million ex-pats spending $55


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million on Indian music, they are 13% of the Indian market. An evident example of this

support is the sales of Sonys Vande Mataram (non-film music) - 4 lakh copies in 27

countries. It is surprising tastes vary across countries, so should the marketing strategy

employed. Even this market is not free from the invaders. Piracy forms 40% of this

market. The factor that differentiates the NRI market from the home market is its high

value. CDs account for a larger portion of this market.

Piracy in the music Industry

The term piracy is generally used to describe the deliberate infringement of copyright

on a commercial scale.

The problem of piracy has arisen with the rapid advance of technology. New

techniques of printing, recording and fixation of broadcast or recorded programs have

emerged, making it easy for the pirates to carry on their illegal activities. Piracy is an

illegal and criminal activity.

Music Piracy basically refers to three kinds of activities:

1.Counterfeiting:

This is the unauthorized copying of the sound as well as artwork, trademark, label and

packaging of the original recording. The aim is to mislead the consumer into thinking

that they are buying the genuine product.

2. Pirate Recordings:

These are unauthorized duplications of music from legitimate recordings for

commercial gain. Pirated CDs or music cassettes may be compilations such as 'Top

Ten', 'Bollywood Hits' or a combination of hit titles of different music companies. The

packing and presentation of a pirate copy does not usually resemble a legitimate

commercial release.

3. Bootlegging:

This is recording, duplication and sale of a performance such as a live concert or

broadcast without the permission of the artist or the Record Company which may beentitled to control the recording rights of the artists performances.


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Piracy of music is an extensive business internationally. The Indian Music Industry

association (IMI) has successfully reduced piracy from a massive 50% to 30%. The

IMI has as its members most of the players of the music industry. Gramophone

Company of India and Magnasound are two of the active members of the association.

The following table highlights the sale of pirated units in comparison to the volumes

of legitimate units sold.

YEAR LEGITIMATE

(million units)

PIRATED

(million units)

TOTAL

(million units)

1996 353 152 505

1997 406 174 580

1998 414 180 594

2000* 500 150 650

2003* 650 200 850

(* Estimated)


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Gramophone Company of India (GCI) Limited

The Indian music industry has quite a few large players and among them GCI has

been the oldest and the most popular one. Luckily for us the head office of GCI and

its factory are situated at Calcutta (Dum Dum). This helped us in procuring required

information from the right people in the organisation.

The RPG Group

Headed by RP Goenka, assisted by HP Goenka and Sanjiv Goenka

In business of:

Power

Tyres

Retail

Communication

Life Science

Financial Services

Chemicals & Specialty

The rebirth of GCI:

The company was formed in 1901 and was functioning well, thriving in the ever-

growing music industry. It commanded a high monopoly until mid 80s when, it was

attacked by the coming of the innumerable small music companies and the increasing

levels of pirate recordings. The invention of new kinds of music hardware, the stereo

systems, the home dubbing systems and the availability of such hardware at reducedprices largely affected the growth of the company. In fact, by 1993, GCI had an

accumulated loss of rupees 27 crores owing to low volumes and high overheads. So,

the onus of convincing the shareholders of the companys future prospects had to be

borne by the management. This meant not only writing-off of the losses and retrieving

the company from BIFR, but also beginning to show profits in its P&L account.

To effect this, the company adopted the following measures:

1. conversion of debt to equity(reduced interest cost)

2. fresh issue of shares(contraction of equity )


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3. reduction in manpower

4. increase in capacity(2.3 to 3.66 crore units)

But amidst all these changes, a change in attitude to match the new requirements of

the industry was the most important.

The new management team with Rama Prasad Goenka, who had additionally acquired

Thorn EMIs stake in GCI, discovered the golden egg in their hatchet. This new found

treasure was the chest of 1.5 lakh albums that GCI had left mostly undisturbed at its

Dum Dum factory. If only they could cash in on these gems

Not that they had not discovered their treasure trove earlier, but not many facilities

were available to convert and improvise the music to suit the modern hardware

requirements. The absence of competition was a major factor which did not push GCI

into looking inwards to discover the treasure.

A large part of this catalogue has been amortised over the years leading to GCI not

incurring any huge cost. The main investment that any music company makes is in the

royalty that it pays the creators or in acquiring the rights to the film music. To

breakeven the cost of royalty, the music company would try to achieve reasonablyhigh volumes immediately after the launch. On the contrary, Classical tapes and CDs

are higher priced due to low sales expected. In GCIs case, even if it didnt produce

any new music, it could still make profits by merely reproducing its old albums.

The Organisation Structure (in part)

R e g i o l

F i n a n c e i

V P - C o m i l

R e g i o l

M k t g M

V P - M k

& S a l e

C h i e f T e i l

O f f i c e

V P - P

& Q u a l i

R e g i o l

H R T e

V P - H u

R e s o u

V P - I n f i

T e c h n o l

C h a i r m


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The competitors

NAME CASSETTES

(figures in

'000s)

CD'S

(figures

in '000s)

TURNOVER

(Rs crore)

CATALOGUE

(total albums)

SPECIALITY

HMV 3000 300 120 150000 Old Hindi films

Magnasound 1000 5 20.57 1242 Indipop,regional,

classical

T-Series 5000 300 350 NA Devotional,films

Tips 2500 50 100 3112 Films

Polygram 1500 25 NA NA Films,pop

Venus 2500 50 41 4000 Films

BMG Crescendo 27 982 Indipop

Music today NA NA NA NA Indian classical

In each category of music, GCI faces different competitors.

The segments

The reason for this kind of classification is the enormous volumes that the film musiccommands in the market. A look at the pie below would reveal a comparison of each

of the above categories.

O l d i e s N e w R e

F i l m M

C l a s s i c D e v o t i I n d i p o G h a z a I n t e r n a t

N o n - F i l m

M u s i c - C a s s


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The film music until the 80s and the classical music in India share a lot of similarities.

Most of the film music then borrowed a lot from the classical music. In fact, music

directors were expected to be well versed in the classical front and the artists

themselves were often stage performers of the classical music.

The targeted customer segment is the middle class affordable income category, which

share the Indian taste for music and appreciates the essence in the oldies. In the

early part of the century, GCI was a monopoly in the industry. The albums released

during the period were entirely the property of GCI with rights to recreate and

compile in any form or manner preferred. The music during this age was largely from

the above mentioned categories.

Applying the CSF framework

Our conversation with the company executives and VPs revealed a CSF tree quite

different from what we had originally imagined. The success of the firm largely

depended on their ability to reap the maximum from their vast storehouse of pastreleases. Additionally the distribution network was expected to be a well-maintained

one, which ensured rapid delivery of the demanded product and efficient handling of

the product. Low levels of inventory were a factor the company has long expected to

achieve. There were also other factors that the company considered very important to

their survival and growth in the industry. The following tree exhibits all.

63%12%

6%

9%

5% 5%

Film

Pop

Classical

Devotional

International

Others


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D i g i t i s i E q u i p

T e c h

I n v e n

D i s t r i

T r a i n i n g lK n o w l e

H u m a

D a t a b a s lR e t r i e v a l I

C a t a l

C S F


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IT at GCI

Music has been an area where computers have played a major role in changing the

existing setups to a new improved means of deriving the pleasure of listening to good,

enjoyable music. The coming of Digital technology has aided this transition a lot but

has increased the expectations of the listener. The listener now wants clear,

disturbance-free music. The user also looks for choice - option to choose what kind

of music he wants to listen to and which instrument in an album should be better

heard.

To compete with the new music firms in the industry, GCI has to update its

technology, introduce the use of computers to make better music and deliver whatthe customer wants.

The use of computers at GCI can be classified under two heads:

Technical and

Operational

The technical usage includes

-Transferring existing repertoire to new audio recording systems

- Improving the repertoire to enable easy compilations

- Making Compilations from multiple albums

On the other hand operational usage includes

- Efficiently handling the daily operations of the offices

- Analysing the sales of the regions and the firm as a whole

- Controlling the inventory levels at the different locations

- Maintaining the Distribution network effectively

- Monitoring the financial transactions between offices

- Tracking the status and the movement of raw materials at outsourced units

Yet it is surprising that the management at GCI rarely uses IT for decision making.

The reason for this may be the aging top management who is rather closed and

insecure. Adding to their fears are those of the people lower down the ladder who had

been with the company during its trying years and who share this insecurity of the top

management.


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GCIs core competency largely lies in Compiling the Repertoire, though they do cash

in onNew Releases.

Compiling the Repertoire

This includes

Reviving the Masters

Conversion of the Masters from Analog to Digital

Computerising the catalogue

Creating new compilations

Reviving the Masters

The process of cleaning the available positives, checking to see if they are in a

replayable condition. This is largely done by personnel who are well versed in the

handling the traditional gramophone equipment.

Conversion

Special converters are used to create the analog music, which is not suitable for the

modern music hardware especially, the CD players, to digital versions. Digital Music

is advantageous over analog in the following:

1. Distortion

2. Frequency Response

3. Signal to Noise Ratio

4. Customer-friendliness


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Distortion is high in analog and very low in digital.

Analog Signal

Analog

Amplifier

Faded Signal Amplified Signal

NoiseAmplified Noise

Noise amplified on analog lines; eliminated on digital service

Data has a better chance of being received

correctly. The repeater has removed the

noise so that the noise does not interfere

with the data transmitted

Digital

Repeater

Noise


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Frequency response

The output lost in an analog version is +/- 3 dB and that in a digital version is +/- 0.5

dB.

Signal-to-noise ratio

The ratio of the power in the message signal to the power in the noise signal is known

as the signal-to-noise ratio (SNR). It is usual to express this ratio as a logarithm. The

unit ratio is 1 decibel (dB). Good quality digital music systems have SNR of around

90 dB (+2 to 87) compared to analog systems which have a SNR of around 60 dB

(+2 to -57).

Customer Friendliness

Digital Audio recorded on CDs and DVD are robust and easy to handle. They have a

longer life than cassettes. The hardware used for CDs involves a laser beam unlike a

magnetic head in tapes, which is more prone to damage due to environmental factors.

A recording of 60 minutes (90 minutes in the case of thinner tapes), is common in a

tape whereas a recording of upto 74 minutes in a CD and upto 2 hours in a DVD.

Using IT

The process includes removal of noise or distortions such as

Hissing

Clicks

Crackling

10K100

Frequency (in Hz)

Digital

Analog

Loss of Frequency

Ou

tpu

t


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Hissing refers to the tape noise or record noise that is heard on the movement of the

head or the pin of the hardware. Hissing may very often be heard in the background

through out the music.

Clicks occur due to sudden random tap sounds that are caused due to dents in the

record or other external disturbances.

Crackling sounds are often because of voice cracking. When records are often very

old and tapes have been played many a time, the voice in the music may have

crackling sounds. The absence of good recording systems when the music was

originally recorded or the variations in the manner in which it was originally played

and it is played today could give rise to crackling sounds.

Dehissing, Declicking, Decrackling, Equalisation (which involves replacing the

removed frequencies with the corrected ones) are performed on the music using PC-

based or Macintosh sonic solutions. This is then transferred to DAT. The DAT is

used to make the master CD using specialised hi-frequency CD-writers. This is the

application of digital for improving the product.

The conversion process began in the mid-nineties and developed in a rapid pace only

in 98-99. The unavailability of good quality software and the hesitation of themanagement to allocate adequate funds for this purpose were major hurdles for the

conversion process. The process is also time-consuming and requires expert

personnel.

Unlike earlier, Studio recording (the live ones) is being done digitally these days.

Of course, there is a limit to the benefits derived from digitisation. The main

disadvantage is that it is very costly. It would hence be infeasible to use digital master

for low orders. Analog music is more profitable than digital for orders of around 300

units.

Making the databases

GCI has a massive collection of music beginning with the early 1900s till date. This

includes Devotional, Classical, Folk, Regional, Film, and English, to the recent

Indipop. It has been a tradition at GCI to make and maintain lists and details of each

of the songs recorded at their studios. These lists are compiled at the end of each year


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and a book made so as to aid future reference of the repertoire. The nearly 2,00,000

volumes at GCI has been numbered and neatly classified. Yet, Bengal as it may be,

many of the annual catalogues and sometimes the masters themselves, are missing.

The positives, metal records fortunately, are very often well preserved, though

sometimes the outer cardboard covers are termite-bitten! Of course, minor scratches

and dents in the records are removable.

GCI has now ventured into computersing the data that is available on this large

volume of records which is their STRENGTH. The company can capitalise on this

comparative advantage and compilations from this would make their cash registers

overflow. Manual searching and choosing the right combinations would not only be

tedious, but would also require a high level of expertise, knowledge and of course, an

ear for music. It is quite possible that the company is short of people with this kind of

knowledge, and hence, computerisation is the only solution.

Using IT

The large databases that are created and maintained contain the following

information:

Song Database

For films

Serial Number, Category, Film-Title, Release Date, Banner, Language, Label,

Producer, Director, Music Director, Star Casts, Condition of the Master, Song-titles,

Artists, Duration, Theme, Mood, song number, song, time, side (sideA/sideB) of the

cassette, lyricist of the song, artistes of the song.

For Classical

Serial Number, Category, Label, Recording Date, Condition of the Master, album,

vocal/instrumental, language, hindustani/carnatic, Main Artist, Accompaniments,

accompanists, Ragas, Talas, Duration.


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Agreement Database

A complete list of all the clauses of the agreements made with the producer of the film

or the artists are maintained so as to avoid any infringements that may arise when new

compilations are made from the existing catalogues. The company may need to revise

certain agreements with clauses relating to sales over the internet or satellite systems

to be added.

Royalty Database

Most music recording agreements contain royalty clauses that promise to pay the

artists or the producer a certain percentage of the sale value of a particular cassette.

For instance an agreement may state that Lata Mangeshkar is to be given Rs.1.25 for

every cassette of Hey Meri Watan Ki Logon sold. The company has to keep track

of the number of individual albums sold and the respective proportions that have to be

given to the individual artists. Computers have helped the company automate this

process and speed up the entire operation. The Royalty database contains options to

store payments to individual artists and producers. IT has reduced the work manifold,

displacing many a person, but may have brought in quite a few technically qualified,

trained personnel to handle the operations.

Creating new Compilations

Using the large databases, the personnel in the Artistes & Repertoire department (A&

R) create combinations of various albums. This is done mainly with an intuition and

their expertise and feel of the market needs. Compilations may be:

a. Thematic Compilations (Melancholy, Love, etc.)

b. Artist Compilations (Kishore kumar, Lata Mangeshkar, S.P.Balasubramanian etc)

c. Film Compilations (Abhimaan and Anand)

It must be mentioned that GCI looks at it as a means of reducing the high levels of

piracy in the industry. As mentioned earlier in the report, piracy thrives mostly due

to two reasons:

Price of the product Availability of the preferred choice


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A compilation album would contain songs from more than one film or more than one

raga of an artist. This would mean the listener is actually getting more for the price he

pays. The company has already recovered most of its costs from the first launch of

the product and recreating from the repertoire would in effect mean only an additional

manufacturing cost and some royalty payments.

Very often compilation choices are made after ample analysis of the right

combinations. In many cases known customers are even asked for compilation

suggestions to get a feel of the market tastes. The entire department of A & R work

and rework on a compilation choice until it is perfected. Ultimately the customer gets

a product that meets his exact requirements.

Using IT

The compilations earlier were done using the knowledge of the creator. For example,

if I knew there was a song in Abhimaan which was based on the theme love and

there was one more in Anand and then one more in Guide, and so on....., I would go

ahead and make a Love songs of the 60s & 70s album. But with the use of IT, I

would largely be not required, as any person who saw a possible hit-theme could do a

random search on the Theme field and his screen would be filled with all songs

which were composed on a love theme. This process has hence reduced the time

taken to factor down the choices. Of course making use of the parameters mentioned

above, it would also be possible for the user to see if a particular song can be retrieved

from the repertoire or not (in terms of quality of the master).

Human Resources

The creation and maintenance of the catalogues and the databases requires

professionals. GCI has made conscious effort to train the personnel by importingthe experts from the developers of the software and by sending their team to the

respective developers sites. The company has also collaborated with ARENA of

Aptech, which educates the personnel on the basic multimedia techniques. But GCI

believes that expertise comes through experience and there can be no replacement for

On-the-job training.


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Using IT

GCI has also been subjected to the usual trauma of Resistance to Change amongemployees. The company is celebrating its centenary next year and the flab it carries

with it is enormous. Unionism, the companys visit to the BIFR, the recovery from

the bad times have all left the employees with a strong level of insecurity. This

insecurity has pushed them to resist any kind of external and technological influences.

Computerisation is no exception. The factory workers have an attitude of this

machine is going to replace me, and the middle management and top management

look at it as I have the experience and the knowledge, I dont want to share it. The

sufferers the young personnel who wish to capitalise on the expertise and vast

knowledge of the oldies in the firm. Creating and maintaining the huge databases

would make no sense if one cannot reap the benefits of compilations. The

compilations require more of intuition and field-knowledge than mere computer

search and match skills. Many of the forward-thinking employees are trying to get

the best from the aging top management and are hoping to succeed in the near future.

Distribution

The current setup of the Distribution system in GCI is as shown in the figure givenbelow. In the manual system earlier followed, the wholesaler places an order with the

local office of GCI who in turn contacts the regional office (at Madras, Delhi,

Calcutta or Bombay) and requests a stock transfer. The regional offices check the

stocks at the local offices (For e.g., the Pune, Ahmedabad, Nagpur controlled by the

office at Bombay) and arrange an intra-regional stock transfer. The obvious reason

for this being lesser transportation time and cost. If stocks are unavailable in any of

the local offices, the regional office then requests replenishment from the factory at

Dum Dum. As a last resort the factory resorts to a re-run of the album itself.

Using IT

The system has been computerised in the mid 90s, to aid the middle managers at the

regional office to monitor the daily stock levels. The FoxPro systems at local offices

maintain the data of Sales, Stocks, Receipts from wholesalers, Accounts, Indent

Generation, Customer orders etc. (largely a Transaction Processing System-TPS)

The personnel then send the dbf as an attachment over the e-mail facility available


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at the end of the day. The regional offices are provided with an ORACLE based MIS

system, which generates various reports and schedules for their everyday functioning.

GCI also has a proposed system in which the management is planning to introduce the

concept of RDC (Regional Distribution Centres) which eliminate the local offices and

retain only a single office at the regional level which maintains stocks for the whole

region. This ensures low inventory levels and hence reduced locked-in working

capital for the management. An online distribution management network with the

wholesalers is a thought for the future.

The CD distribution on the other hand functions in a different manner. The CD

manufacturing is outsourced to companies such as Sagarika in Bombay and

Ahmedabad. These manufacturers supply the finished CDs directly to each regional

office on receipt of the schedule from the head office at Dum Dum. The setup is

expected to change once GCIs own CD manufacturing plant is installed in the

western region.


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DUM-DUM FACTORYREGIONAL OFFICEBOMBAY

REGIONAL OFFICE

DELHI

REGIONAL OFFICE

CALCUTTA

REGIONAL OFFICE

MADRAS

Local Offices


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Technology

The company has identified technology as one of their main CSFs. In the world of

music, hardware and software are changing in a pace faster than what a flabby

company like GCI can keep up with. It is important for GCI to update itself with the

latest technology in the field to keep in pace with its competitors. Reproducing from

its huge catalogue also commands the use of hi-technology equipment.

Using IT

With the coming of the internet and MP3, it is also in the best interests of GCI to

implement internet based music stores and downloadable sites. GCIs subsidiary

RPG Music International has launched a site saregama.com, which aids distribution

of, selected CDs and cassettes in the United States and United Kingdom. The

company is looking at customer-preferred compilations that give options to the

customer to make his choice of songs mounted on a single CD/Cassette. This would

require a complete, well-maintained database, excellent equipment and a well-

developed distribution network. It calls for a huge investment and a forward-thinking

management, which unfortunately GCI lacks. Yet the newcomers look at the future

as a bright one hoping that the attitude of the people will change in course of time.


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Applying the Knowledge Management Framework

The music industry has three factors of utmost consideration:

1. Knowledge2. Human Resources

3. Technology

Knowledge in a music firm relates to the musical capabilities of the artists whose

music is recorded and the ability of the recording personnel to tap the right potential.

To any firm in this industry, capitalising on its available and acquirable knowledge is

the most important function. Hence cultivating an internal system for knowledge

transfer is also important.

Just to quote an example: For a large firm like GCI, which is sitting on a huge

bundle of past and prospective cash-earners, it is important to keep recreating that

music on newer and newer albums (cassettes).

In most cases, compilation ideas arise from the A & R section who work with a large

(almost complete) database which contains the past releases and the music that is

available in the Dum Dum warehouse. Of course a mere Combination Permutation

would give the complete set. But then, looking at the huge volumes and the widevariety we would instantaneously conclude it would be a futile wasteful effort to

attempt to do that. On the other hand, applying ones knowledge of the taste of the

customer, analysing the existing compilations, the volume of sales of the cassettes

sold would provide us some input to deciding if a particular cassette would be a box-

office hit.

Identification of the right music rests on the individuals knowledge and his/her

ability to concretise it. It is hence a conversion of Tacit to Explicit knowledge:

Tacit knowledge Explicit Knowledge

Clearly understood Clearly articulated

Experience Rationality

Simultaneous Interactions Sequential


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The most important knowledge conversion process with respect to GCI is

TACIT EXPLICIT.

GCI has to externalise the knowledge that is possessed by its personnel and mould the

firm to benefit from this knowledge.

Using IT

The human resource aspect involved in this externalisation process is the most

important one. Introducing IT included educating the concerned people with the

newer technologies and ensuring they are comfortable in using them. The resistance

to the usage of new technology can be overcome by conducting regular discussions on

the merits of applying this technology. It is often helpful if one set of people actually

see another use and benefit from this technology.

The A&R department employees find a major use for IT in creating and releasing newcompilations. This, itself, is an ample inducement for the rest. But it would be a

EXPLICIT

TACIT EXPLICIT

TACIT

Externalisation

Com

bin

at i

on

Soc

iali

sa

t ion

Knowledge

Conversion

Internalisation


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deterrent to the experienced people to use IT, if the newer entrants simply arrive at the

compilation choices without involving the judgement of the oldies.

The middle level managers such as the Sales and Marketing managers use IT

applications to decide as to what kind of products (cassettes) are suited for the

particular region and what should be the initial stock levels at each local office. This

is largely done by looking at past data of sales of each category of music and similar

releases. This is the MIS at the regional offices.

An aging top management has a vast storehouse of knowledge developed from field

experience. The major portion of this knowledge is left unused and untouched due to

the lack of initiative and lack of pressure to capitalise on them. There is also an

insecurity of job that comes to play. This fear can only be removed by the continuous

and regular support provided by the management. Encouragement to the personnel to

learn new technology and providing them with sufficient opportunities is important.

GCI is moving in this direction. Yet it would take it some time before it is firmly set

on this ground and the maximum benefits are derived from it.


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Bibliography

The music industry:

Articles from Business Journals: April 1999 to February 2000

History of World Music, John Walt

Industry report on the music industry in India by Ms.Jasmeet Walia, Symbiosis

Institute of Foreign trade, Pune

The firm:

Articles from Business Journals:April 1999 to February 2000

In-depth interview with the employees of GCI

The knowledge management framework (source: Nonaka & Takeuchi, Rao &

Prakash, Dataquest, September, 1999)

gci-planning for it

Documents