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:

• Visa fee hike: Indian cos will become more competitive, says Murthy
• US visa fee hike wont affect Indian IT
• India outsourcers angered by US job visa hike
• India may join China over US visa row
• US visa move to hit Indian IT firms
• India's top employers in private sector
• Mohan's viewpoint Cutter IT: EA's Role in Outsourcing: Retaining Technical Expertise

Marketing Indian Drugs to Americans: Globalization of Drug industry

Helen Coster blogs on Forbes.com 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?

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.

Musings on free agents

Anyone who happens to be a sports critique –and most Americans claim to be one – wouldn’t have missed the recent drama over the free agent, LeBron James signing up with Miami heats after being courted by several NBA franchises in a high profile televised drama. Though I wouldn't claim to be an armchair sports enthusiast, even I couldn’t stay away from the news that was in the headline for almost a week.

This idea of a free-agent being courted for his rock-star abilities brought back thoughts of earlier research on the topic when I first read Daniel Pink’s book Free Agent Nation. This was over six years ago and I also wrote a couple of articles on the topic then (links below). A lot has happened, even in the world of technology management that is redefining the role of free-agents.

• Continuing economic downturn. Major economies around the globe are still struggling to get over the slump. Unemployment continues to be high in many western economies, and anti-globalization sentiment continues be fueled by the media. In some economies, protectionism also means tightening of immigration controls and restrictions on free movement of goods and services across national boundaries. If there is a silver, lining it is in the tech sector. Tech companies are looking beyond the slump and are beginning to invest for the future. Even other non-tech companies are beginning to increase their tech spending, albeit selectively, in preparing for the economic recovery. Sourcing and offshoring continues to grow, reflecting in steady growth and earnings being posted by tech services companies. (WSJ: Strong 1Q Earnings Hopes Buoy IT Stocks).
• Globalization and maturing of offshoring: Maturing of offshoring IT services has meant that organizations are no longer trudging through unchartered waters when it comes to defining processes to manage globally distributed teams, and managing projects across time zones and cultures. Sure, operational challenges remain, but the best practices are also maturing. What this means is that there is lesser need for "strategic thinkers" to define newer business processes but a greater need for managers who can orchestrate and execute to the speck.

The trends are leading many to think that the role of free agent is not ‘truly free’ to market. A knowledge of organizational dynamics, constraints and culture is as important as the managerial ability one brings to the table. Offshoring vendors are looking to groom managers who understand their internal processes and culture, while poaching specialist ‘talent’ that can execute, leading to a high turnover among service companies, especially in mature offshoring markets like India.

Given the two trends – continuing economic downturn and maturing offshoring IT services – I have been reflecting on the role of free agents in this sector. Personally, I continue to enjoy my role as an Enterprise Architecture Consultant, enjoying the variety of moving from gig-to-gig, advising clients on complex problems and helping them see ‘outside the box.’ In a sense, Ienjoy being a free-agent while continuing to draw a paycheck from my employer. A hybrid free-agent if you will.

Reflecting on LeBron James’ drama, one wonders if we are likely to see true-free agents in the tech sector anytime soon?

• Wikipedia: Free Agent
• From Organization Man to Free Agent - Mohan's article in IEEE
• The transition to a free agent - Mohan's article in Working Abroad - Express Computer
• Is your beef with LeBron James, or free agency? ESPN
• The LeBron Free Agency Countdown Ticks Onward

Career mistake: Is anti-sourcing viewpoint a Career-limiting-move for a seasoned technology professional?

Basab, a former Infosys executive recently posted a query on his blog: Why is Local Hiring in Offshore Services so Sparse? The post also generated several comments, most from those in the sourcing industry, who sounded like hiring managers who had failed in their attempts at scaling up hiring of locals in the west.

I would extend Basab's query to ask if anti-sourcing viewpoint a Career-limiting-move for a seasoned technology professional in the west?

A while ago, I posted my two cents on the topic online, based on my observations from inside the industry and also inputs I gave to my former colleagues and acquaintances about internal dynamics at Indian software service firms, their recruitment strategies.

At a more rudimentary level, lack of local hiring may also have something to do with the hunger of 'Kids' in India and China, eager to explore global opportunities

During a seminar on globalization that I attended nearly a decade ago, the late Prof. C.K Prahalad gave a keynote address where he talked about some of the key drivers. An example he quoted stood out. While explaining the tenacity of Indian professionals, he alluded to the fact that the real edge of people from India and other developing economies moving to the west to participate in global projects was their cultural adaptability forced by the economic disparity between their home countries and the client countries. Prof. Prahalad gave an example of "a kid fresh from engineering college in a small town, say Tumkur, in South India" more than willing to relocate to any corner of the globe with minimal lead time. The ‘kid,’ said Prahalad, needed little cultural re-orientation or insights, and was motivated enough to travel with just his passport stamped with a visa, a few technical manuals, the address of the motel and client and some traveler’s checks.

Nearly a decade after I heard Prof Prahalad's talk, the Indian services industry has grown exponentially, employing over two million in India, many of them “kids” a few years out of college; the example he quoted still holds true. The fact is that offshoring has become a widely accepted business practice. So much so that one doesn’t even need a book (including my ) to guide one through the nuances.

While this has happened, some technologists and professionals in the west still cling on to the notion that offshoring is a passing fad, which is also probably a reason why Local Hiring in Offshore Services sparse. Let us take the example of James McGovern. I have been following his blog on technology and Enterprise Architecture for a while. He is certainly opinionated – as any good blogger should be – and has shared his views on a wide ranging topics. However, when it comes to sourcing, especially offshoring, his views have been bordering on protectionism and nationalism. Sometimes ignoring the general business practice. The past few of James’ blog posts have been on his career mistakes. One reason James does not address in his list: are professionals like him ignoring opportunities in sourcing managing because of their personal views on protectionism and globalization?

- Mohan

Links:

• My Book: Offshoring IT Services (Amazon Kindle version)
• EA's Role in Outsourcing: Retaining Technical Expertise (Cutter newsletter)
• How Enterprise Architects Can Enable Strategic Global Sourcing (Cutter IT Journal)

The business of spying and Business Intelligence

Last week the American news was all abuzz with the arrest of a ring of Russian Suspects' leading "Unremarkable Lives" among Americans in the suburbia. NYT article describes the arrest thus

"On June 27, 2010, 10 people in Yonkers, Boston and northern Virginia were arrested and accused of being part of a Russian espionage ring, living under false names and deep cover in a patient scheme to penetrate what one coded message called American "policy making circles." The next day, an 11th accused member of the ring was arrested at an airport in Cyprus while trying to leave for Budapest. . . The arrests were the result of an F.B.I. investigation that began at least seven years ago."

The media a field day, all the more since the story had all ingredients of a racy spy novel “A ring of 10 Russian moles right out of a Cold War spy novel was smashed yesterday - and among those busted was a flame-haired, 007- worthy beauty who flitted from high-profile parties to top-secret meetings around Manhattan.” Including an international ring to it (Russin spies using a British Passport in America!)

In an ironic twist, the American Central Intelligence Agency was celebrating 4th of July with a remembrance of Agency U-2 Pilots: Hervey Stockman “On July 4, 1956, Hervey Stockman piloted a U-2 through the skies over the Soviet Union (re: Front page of CIA website). I was intrigued by the existence of Foreign Agents Registration Act, "The Foreign Agents Registration Act is a United States law passed in 1938 requiring that agents representing the interests of foreign powers be properly identified to the American public." I wonder if Mr. Stockman, while spying over Russia had to register with the Russian government as a "Foreign Agent"

Growing up in India, I recall the Indian media having a field day over stories of Pakistani spy rings busted every so often. A saga that continues to this day: A few months ago, media was buzzing with sordid details of the arrest of an Indian diplomat, Madhuri Gupta, accused of spying for Pakistan while stationed in Pakistan. A real cloak-and-dagger if you will.

Switching gears, espionage is very much present in the business world, aided by sophisticated Information Technology and techniques, also called “Business Intelligence.” I remember being fascinated by the story of corporate espionage chronicled in novel The Informant that I read a few years ago. And then, there is the not-so-glamorous Intelligence gathering that we come across in the corporate world. Just a few examples in the software services sector that we regularly encounter:

· Who got the highest share of the bonus this quarter?
· Gathering information on a colleague who might be looking out for a new job . . . and passing on that ‘Intelligence” to your boss
· Getting access to the recommendations of the “Strategy Planning” exercise done by your competitor for the Director/VP that your firm works closely with
· Finding details – financials - of a proposal being submitted by a competing vendor
· The list could go on . . .

international business management: White guys wanted

I heard a small program on China on the radio (NPR) during a recent drive back from work. Later that night, I goggled and read with fascination the article in The Atlantic "Rent A White Guy: Confessions of a Fake Businessman from Beijing" .

In the article, Mitch Moxley, a freelance writer who lives in Beijing, discovers that merely being a White Guy in China, who can dress well in a suite qualifies him to opportunities including being paid to be a fake American businessman.

Many of us in the global workforce know anecdotally that being American, and white is certainly an big pre-qualifier, especially while being considered for certain opportunities. The article went on to reinforce that view.

The article reminded me of many anecdotes from the past, including a (white) British colleague proudly proclaiming how he got a cool tax-free-six-figure consulting gig as a system administrator for a client in the middle-east because: the client wanted to see a “few white guys” onsite even though most of the actual sysadmin work was being done offshore in India.

We would like to think that the world is flattening - even this phrase has a flat ring to it now – and global opportunities are there for the taking, especially for those globally mobile. However, when it comes to international business, Moxley demonstrates that there is an element of reverse-racism that hard to shed.

Ps: the opinions and anecdotes in this blog are just that: personal observations from the trenches. Nothing more.

Other articles, blogs on the topic

• Getting Hired in a Flat World
• Rent a White Guy - LOL and SMH
• Rent-a-white-guy for your Chinese business meeting - Boing Boing
• Rent a White Guy China Digital Times (CDT)
• Markets in Everything: Rent a white guy edition
• Rent a White Guy – Expat - My Telegraph