Impact Of Economic Slowdown On Existing IT Projects

In my last post I discussed the impact of US economical crises on Indian IT firms. In this post, I will discuss the impact of slowdown on the existing projects. Existing projects that are going on since long time or that has been awarded but not started will also have negative impacts of the US slowdown. And not only US slowdown, the world wide economic crises will result in the financial cut down and increased number of firings.

To summarize my thoughts on current developments, I should say that:

1. Fresh negotiations on the payout will take place on downward side. In the view of financial crises, companies will start fresh negotiations on the payout and expenses of existing projects.

2. Kick off dates for the new projects will be delayed.

3. Contracts may takes more time to be awarded as companies will wait for the market to be stable.

4. Start dates will get deferred. Those projects, whose contracts has already been finalized, will face delay in the starting date. These will go on hold as the priorities of the companies has got changed now.

5. Consolidations and mergers of banks like the Bank of America’s buyout of Merill Lynch would lead to the reduced budget for IT spending. Merger will result in the duplication of outsourced deals to domestic IT firms, and consequently truncation of some deals, which will result in loss of revenue.

6. Reduction in on site jobs. Since calling people on site from India costs more to companies, these will prefer to get their work done from offshore.

Manmohan Singh, the Prime Minister of India, yesterday said that India will not remain un-touched with the world wide economic crises. According to him, Indian economy will be badly affected in the long run.

Related Link:

Indian IT Companies and US Crises – Will They Survive?

Everyone has one question in mind – what is the impact of US economical crises on Indian IT companies and Jobs. Though there will be reduction in the jobs and people may get fired, companies will be able to cop the problem and get strengthened over the time.

Most Indian IT companies gets a major portion of their revenue from US market. The BFSI (Banking, Finance, Service and Investment) sector is the major source of revenue for these IT companies like Infosys, Satyam, Wipro and TCS.

The sinking US economy will definitely have adverse effect on these companies. But this effect will take around one month to come into effect. Presently, companies have orders in hand and they are executing projects. But after one month, when payments will be due and there will be delay in payments, Indian IT cos. will come into crises.

US BFSI cos. which are not in a position to make payments for IT department, will start reducing the manpower from their projects. In this situation, Indian cos. will have burns on both sides. They will suffer shortage of funds and there were non-billable people sitting on the bench.

This will be an unhealthy situation. Companies will start firing people as they have to survive. There will be jobless people everywhere. I can see that the situation will be very much the same as that was in 2001-02.

But this will be a second lesson to Indian companies. In the last set-back most companies diversified their clients to Europe and Asia. This time these companies will find new markets. In the long run, this will reduce dependency on one geographical market making the companies more stable and recession-proof.

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Predicting Market Direction Using Put Call Ratio (PCR)

Not sure where the market will head tomorrow? Tired of all those technical analysts? Do your technical analysis in seconds. Predict market sentiments yourself using PCR.

Put Call Ratio commonly called PCR is a simple ratio. This is calculated by dividing total number of put traded by the total number of calls traded on a particular day.

PCR = total number of puts / total number of calls


The average PCR is considered as 0.70. Some considers this as 0.50 but in practice, 0.70 yeilds more accurate results. You may wonder why this is not considered as 1. In any market sellers are always more than buyers. The same is true for stock market. The fund managers pollute the PCR ratio by hedging. Thus the number of calls are always higher than the number of puts. So put and calls are not always same. To adjust this criteria of market, the middle point is takes as 0.70.

You can use following table to check weather market will be weak or strong the next day.

If PCR near 0.70 or grater than 0.70, the market sentiment will be bearish.

If PCR is near 0.50 or less than 0.70, the market is getting strength (being bullish).

If PCR is less than 0.50, the market will be strong the next day (being bearish).

Success in playing options in the market is always dependent on your ability to understand the market sentimen ts. Though there are many factors affecting the market and no body can predict with 100% accuracy, PCR gives fairly good results.

Need more technical details, Read this article from Investopedia.

Financial Calculators

Financial calculators are handy tools that helps you to plan your personal finance. Here is a list of some good calculators.

Compound Interest Calculator

Portfolio Performance Calculator

Compound Annual Growth Rate (Annualized Return)

How Does Inflation Impact My Standard Of Living?

Personal Finance » Calculators

Present Value Calculator

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Rule of 72

Rule of 72

Calculate compound interest right in your head.

Having a phone call from your banker or just calculating your EMI, compound interest is always a rocket science for you. Either you need a scientific calculator or some worksheet application like excel to calculate this. Wait… You can do this right in your head without anything.

I am not joking. Its very simple. As simple as table of six. The technique is using Rule of 72.

Rule of 72 a very useful skill to have because it gives you a lightning fast benchmark to determine how good (or not so good) a potential investment is likely to be.

The rule says that to find the number of years required to double your money at a given interest rate, you just divide the interest rate into 72. For example, if you want to know how long it will take to double your money at eight percent interest, divide 8 into 72 and get 9 years (assuming that the interest is annually compounded, by the way).

As you can see, the “rule” is remarkably accurate, as long as the interest rate is less than about twenty percent; at higher rates the error starts to become significant.

OK. That’s fine. How about calculating the rate of interest?

Just put your head into the reverse gear.

If you want to double your money in six years, just divide 6 into 72 to find that it will require an interest rate of about 12 percent.

Puzzled? Want to know Why the rule of 72 works.

Visit following links:


Money Manager Ex – SQL Query

Money Manager Ex is a personal finance management software. It lets you manage your personal faineance. You can manage  your expenses, investments and stocks using Money Manager Ex. The most appealing feature of this software is custom reports. It lets you run custom queries against its Sqlite database.

In my previous post on Money Manager, I explained its different features. In this post, I will explain how you can get category wise report of your expenses. Money manager manages your accounts in categories and sub-categories. It has many pre-defined categories. Each category is further classified into subcategories. Usually these are sufficient for the general use.

However you can create new category or subcategory easily. One lacking feature of this software is that it does not provide category-wise report of your transactions. You can see transactions summed up by sub-categories however.

To overcome this shortcoming, I wrote a simple SQL statement that allowed me to see the amount I spent on different categories.

SQL to view category-wise report:
The SQL statement to see categori-wise report is written below.

select a.categid, categname, round(sum(transamount),0) amount from checkingaccount_v1 a inner join category_v1 b on a.categid = b.categid group by a.categid having transdate >= ‘2008-06-01’ and transdate < ‘2008-07-01’

The above statement displays amount spent on different categories for the month of June 2008 i.e. between 1st June and 30th June (both inclusive).  You may need to replace the dates i.e. ‘2008-06-01’ and ‘2008-07-01’ as per your requirement.Custom SQL Report option of Money Manage Ex

To execute this statement, select ‘Custom SQL Report’ from the ‘Reports’ menu on the Money Manager. If you cannot see ‘Custom SQL Report’ option, you may need to expend the Reports section by clicking on the ‘+’ sign.

Selecting the ‘Custom SQL Report’ will open a ‘Custom SQL Dialog’ box that will ask you to type the query. Copy and paste above statement into the white box and click on the Run Query. It will show your desired report.

Custom SQL Dialog of Money Manager Ex

If you have any problem running the query, please let me know through comments of this post.

If you need any specific query for your requirement, please put your requirement in the comments and I will be happy to help you out.

Note: In future, I will be writing more SQL queries for MME. If you are interested in these queries, please subscribe the RSS.

Related Post:
Money Manager Ex – Described

Money Manager EX – The Personal Money Manager

Since long time, I was wondering where my money goes. I always run out of budget at the end of every month. And I could not track where all my money goes. So I decided to use a personal money manager. After some Googling, I found a wonderful software called Money Manager Ex. This is a lightweight personal money manager software which is available free of cost.


Money Manager provides some nice features. Below is the summary of the features, I like.

Multiple Bank Account: You can manage multiple bank accounts. It supports two type of accounts – saving/checking and investment. Your investment accounts automatically becomes stock accounts. But it would be nice if I could get third account type – credit account, for my credit cards. However, you can manage credit cards by pretending them to be saving account and entering the opening balance (i.e. outstanding amount) in negative.

Transactions: With Monery Manager Ex, you can enter tentative transactions. I enterd tentative transactions for the month in advance. Then you can categorize the transactions as reconciled, void or follow up.

Repeated Transactions: You can enter repeated transactions and set the frequency, date etc. This saves lots of data entry time.

Transaction Splitting: This is a very useful feature of Money Manager. You can split a transaction in multiple transactions. I enter a lum sump amount at the beginning of the month for home needs. Later on I can split this transaction into different categories. This helps me to manage my budget and always provides me a birds eye view of my finance.

Budgeting: This software allows you to enter budget for a year. Later on you can compare budget with the actual expenses.

Reports: Money Manager Ex provides a handful of useful reports. Some of the reports, I use are:

Where The Money Goes
To Whom The Money Goes
Where The Money Comes From
Budget Performance
Income vs Expenses

Custom Reports: If you are not satisfied with the reports provided with the software, you can use custome SQL reports. This allows you to write SQL statement to generate the report. This is a very noice feature for a developer like me.

Database: Money Manager uses SQLlite database. You can do anything with the database using any SQlite tool like SQLite2008 Pro Enterprise Manager or SQLite 3 Explorer.

Carry Your Money Manager With You

The best feature of the Money Manager is that you can carry it with you. The software is very carefully designed not to use any windows dependency like windows registry or any thing else. You don’t need to install the software on your machine. Keep the software in a pen drive and use it any where, at home or on your office laptop or in a cyber cafe etc.

Related Posts:
Money Manager Ex – SQL Query: to create category-wise expense report.

Need any help on using money manager? Put a comment and I will be happy to help you out.

Salary Negotiation

OK. that’s what we all do it for money… not every one right. This is probably the weakest area for techno savvy guys. They are not good negotiators. Many guys at the first instance smile and say “NEGOTIABLE SIR“. So here are some points:-

√ Do a study of what’s the salary trend? For instance have some kind of baseline. For example what’s the salary trend on number of year of experience? Discuss this with your friends out.

√ Do not mention your expected salary on the resume?

√ Let the employer first make the salary offer. Try to delay the salary discussion till the end.

√ If they say what you expect ? , come with a figure with a little higher end and say negotiable. Remember never say negotiable on something which you have aimed, HR guys will always bring it down. So negotiate on AIMED SALARY + some thing extra.

√ The normal trend is that they look at your current salary and add a little it so that they can pull you in. Do your home work my salary is this much and I expect this much so whatever it is now I will not come below this.

√ Do not be harsh during salary negotiations.

√ It’s good to aim high. For instance I want 1 billion dollars / month but at the same time be realistic.

√ Some companies have those hidden cost attached in salary clarify that rather to be surprised at the first salary package.

√ Many of the companies add extra performance compensation in your basic which can be surprising at times. So have a detail break down. Best is to discuss on hand salary rather than NET.

√ Talk with the employer in what frequency does the hike happen.

√ Take everything in writing , go back to your house and have a look once with a cool head is the offer worth it of what your current employer is giving.

√ Do not forget once you have job in hand you can come back to your current employer for negotiation so keep that thing in mind.

√ Remember the worst part is cribbing after joining the company that your colleague is getting this much. So be careful while interview negotiations or be sportive to be a good negotiator in the next interview.

√ One very important thing the best negotiation ground is not the new company where you are going but the old company which you are leaving. So once you have offer on hand get back to your old employee and show them the offer and then make your next move. It’s my experience that negotiating with the old employer is easy than with the new one….Frankly if approached properly rarely any one will say no. Just do not be aggressive or egoistic that you have an offer on hand.

Top of all some time some things are worth above money :- JOB SATISFACTION. So whatever you negotiate if you think you can get JOB SATISFACTION aspect on higher grounds go for it. I think its worth more than money.