Saturday, August 21, 2010

Rhetoric vs reality: Global body shops, chop shops and sweat shops

A week after U.S. legislator Charles Schumer called Infosys a “chop shop,” setting off a wave of outrage in India, he clarified that he meant that firms like Infosys are “body shops.” Senator Schumer clarified In the tech industry, these firms are sometimes known as ‘body shops’ and that’s what I should have said.” Having spent much of my working life in the technology services industry across the globe, such statements by politicians don’t really surprise me, but the media in India and America seems to have had its share of fun ‘analyzing the stories. Another related story was that of the hike in fee for US Work Visa (H1 visas). This again lead to interviews with industry gurus who had views and counter views on the impact of the hike. Visas and travel are an integral cost of doing business for offshoring firms. Such cost do go up over a period of time. Again me thinks: So what's the big deal?

In all the rhetoric, the politicians and analysts quoted in the media seem to have forgotten a basic fact: While Indian service firms Infosys, TCS and Wipro pioneered Global Delivery model and offshoring, it is the western and American software service giants including IBM, Accenture, HP and others that have taken to it like ducks to water. I guess most poeple outside the software services industry didn’t realize IBM was among the top public sector employers in India, employing over a hundred thousand people (WSJ: Is Big Blue India’s New Big Boss?)

With Big Blue is getting bigger in India should Senator Schumer go after them too and include IBM in his next speech as a chop shop, body shop, or sweat shop?!

Fact is that the software Services industry, whether co-located in a geography continues to be labor intensive. Automation of software development continues to be the holy grail of Software Engineering though better tools and techniques continue to emerge. Software development and maintenance requires an army of programmers, developers, analysts and managers.

Politics and rhetoric aside, software services industry is more globalized than most analysts and journalists realize. For those of us in the industry however, this is not much of a surprise. Case in point, James McGovern, an Enterprise Architect with a Fortune 500 Insurance firm used to be a rabid outsourcing critic. In the past few blog posts, one can see a much more pragmatic voice on offshoring emerging. (Re: The Secret Relationship between Enterprise Architecture and Outsourcing)

Blogs and Links:

Sunday, August 15, 2010

Marketing Indian Drugs to Americans: Globalization of Drug industry

Helen Coster blogs on about “Marketing Indian Drugs to Americans,” featuring Hayden Hamilton who discovered a business niche by importing Indian drugs to America. While the story makes for an interesting read, many of us observing the globalization of Indian drug industry are bound to think, big deal! Why? Indian drugs have long been exported, sometimes with a lot of controversy.

Case in point is the controversy over Indian drug makers supplying AIDS drugs in Africa at a fraction of cost of western-branded drugs. (S.Africa to buy cheaper AIDS drugs despite opposition – Reuters)

The globalization of drug industry has had some un-intended consequences including the outsourcing of Clinical Trials, a tactic the drug industry claims will enable lowering cost of drug discovery. (Re: Should Clinical Trials Be Outsourced?)

Indians traveling overseas, including Indian immigrants in the west have long known that cheaper, generic Indian drugs are as effective as the much more expensive branded western medicines. Many make it a practice to load up on their supplies during trips to India, which brings us back to the story of Marketing Indian Drugs to Americans.

If there are no barriers to entry in shipping such individual prescriptions from India to customers in the US and elsewhere, why are a lot more players not in the fray?

Monday, August 9, 2010

Travel woes: Murphy ’s Law and ripple effect

Frequent travelers are intimate with Murphy ’s Law and realize that when things go wrong, they can go wrong in the worst possible way. This was the case with my recent travel to India, perhaps an excuse for the recent blog posting hiatus.

With the frequency of air-travel I have been doing in the past few years, one would imagine I am always prepared for the worst case. Not so.

This began during my recent trip from SFO to Bangalore by United/Lufthansa. The 747 in SFO (UA 900 on 22nd July) was readying for takeoff when the pilot announced that there was a warning in the fuel-pump and the aircraft would be back at the gate for ground technicians to check things out. Sure, safety first! Back at the gate in SFO, they realized that the problem wouldn’t be fixed in the next half-hour or so and asked passengers to deplane.

I took my carry-on and headed back to the lounge where they announced that flight 900 would be delayed by more than 7 hours. This essentially meant that I would miss my connecting flight from Frankfurt to Bangalore the next morning so I stood in the queue to talk to the agent for a possible rebooking. Turns out most of the flights out of SFO that evening had either left or were so close to boarding that my luggage wouldn’t be offloaded from the 747 in time. I agreed to the offer for rebooking on an Emirates flight the next day and asked for my checked-in luggage to be rerouted. The airline also offered me a night’s stay at a local hotel in SFO.

Before heading for my hotel, I realized that the flight I was rebooked in was not in the same class as my original ticketing and I went to the Lufthansa counter at the airport, where the agent rebooked me on a Lufthansa flight the next day. Seems, Lufthansa and United are code-share partners and prefer to book/rebook passengers. I was okay as the (new) travel time was similar and my mileage status would be protected.

So far so good. Flight delayed, lost one day (24 hours), but at least got to get a night’s rest before the trip.

On landing in Bangalore, I discovered that my baggage wasn’t on my flight. If you think waiting at a baggage carousel is an excruciating experience, magnify it many times if you wait for an hour-and-half, hoping to collect the last bag at the carousel and the belt finally stops and you realize your bags haven’t arrived. A bit more of a hassle if you happen to be traveling international since you need to fill in a detailed customs form and think of a “plan B” of managing without your luggage for the next few days Mine was delivered to me by Lufthansa three days later.

I was reflecting if there is a lesson in all this? I guess if you are a frequent traveler, and even if you are not, there is not much you can do if stuck by Murphy ’s Law, one can’t do much but to grin and suck it up. Knowing that there is a remote possibility that one could be separated from checked in baggage for an extended period of time, should one load up on carry-on baggage? Probably, probably not.

In all this, one has to commend the professionalism of airline staff that has to deal with such ‘mini crisis’ more frequently than most of us can imagine. On the flight 900 from SFO that was delayed by over 7 hours, my guess is that over half the passengers were connecting onward from Frankfurt. A good bet is that they had connecting (onward) flights within the next few hours after the scheduled arrival and would certainly have missed their connections. The staff in SFO, and probably in Frankfurt had their hands full that night, trying their best to ensure passengers got from A-to-B.

Similarly for the lost luggage. When my suitcases were finally delivered to me, I realized why there was mixup. On top of the United luggage tag, was stuck the Emirates tag for the next day. … and an express sticker in the side with my Lufthansa flight details, which was easy to miss. Put that down to human error. Tracking and delivering my lost baggage from half-way around the globe? Plus one for customer service.