About Me

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Always fascinated by the paradox presented in Hesse's Magister Ludi between the worlds of the spirt and of the flesh, I left academia after completing the coursework for a Ph.D. in English Literature for a career in Information Technology consulting, foresaking Shakespeare, Byron, and Fitzgerald for Turing, Iverson, and Date. Soon thereafter, I, like Tom and Laura's father, the telephone lineman, fell in love with long distance. In the years that followed, I plied my craft in places strange and far, including Riyadh, London, Hong Kong, Tokyo, Sarajevo, and (most pleasantly) Nice. Returning to my native America after many years abroad, I have found it dramatically changed, not necessarily for the better. Now I practice my trade more sedately, traveling to such exotic places as St. Louis, Atlanta, and Hartford. But, as Mr. Buffett reminds us, "there's still so much to be done." So hearkening back to Tom's absent father... if the phone doesn't ring, it's me.
Showing posts with label outsourcing. Show all posts
Showing posts with label outsourcing. Show all posts

Thursday, April 26, 2007

Orangutans are Skeptical

Many, years ago I reviewed a work of the brilliant French philologist,
George Dumezil, The Destiny of a King, for a small, scholarly publication. In it, Dumezil continued to explore the underlying thesis of his most significant scholarship, the tripartite division of Indo-European society into priests, warriors, and farmers. The Indo-Europeans, as their name implies, were the ancestors of the Aryan culture that drove the Dravidians in the subcontinent to the south and east and the indigenous European populations of Picts, Basque, etc. to the extremities of modern day Europe.

Originating in the Caucasian steppes, the Indo-Europeans swept west into Europe and southeast through the Khyber Pass, their mastery of the horse giving them sway over all who stood against them. Dumezil explored the structure of their society through the remnants and clues he found in their mythologies, including the trinities of Mitra, Indra, and the Asvin in the Hindu pantheon and Odin, Thor, and Freya in the Norse. Subsequent scholars have further suggested that the agricultural class portrayed by Dumezil were not indigenous to the nomadic Indo-Europeans, but were rather the peoples subjugated by warrior-like Caucasians.

And, as Mr. Buffet says, "And some things never change. Hit it boys!"


It’s always seemed to me that this division between the Indo-European warrior and agricultural classes has persisted in many professions into modern times, including my own, Information Technology (IT). Right now in the U.S. there are two categories of professionals within IT, consultants (warrior class), who typically service multiple clients for short durations and across multiple technologies and varied geographies, and IT career professionals (agricultural class), who normally work within a single (or limited number of) organization(s) over longer periods of time and focus upon a narrower range of technologies and methodologies within limited geographies.

The role of the consultant is to instigate change in the community, through workflow rationalization, technological innovation, or resource reduction. The role of the career professional is to perpetuate the status quo, by accomplishing the actual work that needs to be done within the organization. The consultant essentially culls the herd, through the elimination of redundancies and inefficiencies, while the career professional perpetuates and sustains the herd, through the generation and accomplishment of work.

As is often the case in life, the characteristics of the nature of the work performed are reflected in the personalities of those perform that work. Consultants tend to be self-centered “nomads,” who relish the Monday through Friday travel, who are absorbed by their work, and who often don’t have ties of kith and kin. Career professionals are often “nesters,” whose emphasis is on family and friends rather than work and consider traveling one or two weeks a year a major inconvenience.

If you read my profile, you will know where I fall on this spectrum of work and personality. The idea of going to the same office every day, seeing the same people every day, working with the same problems/technologies, every day, and coming home to the same 30 year fixed mortgage, 2.1 kids, 1.9 pets, and
3.7 neighors every day would convince me very quickly that Hemingway found the right solution. This was brought home to me about three years ago when I had a client in Northern NJ.

The client is a very large financial services company, based in a small, rich suburban area in NJ approximately 40 miles due west of NYC, for whom I was leading a conversion of their systems from one pre-historic database system to a slightly-less prehistoric database system. The executive sponsor was an affable Italian-American in his late 50’s who held the overblown title of “Director” (he was really simply a line manager) and had worked for the company (the SAME company!) for 35 years! The client Project Manager was a very nice woman, a “Manager,” who celebrated her 25th year with the company while we were completing the engagement. Others had been there 18 years, 15 years, etc. The most junior, a spinster from Scandinavia, had just completed her 14th year.

35 years!

While the first two in this cast of characters had their own offices, the remainder worked, as is common in today’s corporate America, in their little cubicles. They decorated these with distinctions of their own identities, as if, without the pictures, mementoes, trinkets, they would lose all sense of their lives, their purpose, their selves. The screen savers all proudly displayed shots of their children or grand-children.

35 years performing the same work!

Every day, with 2-3 weeks off for vacation, they drive to the same facility, see the same colleagues, perform the same (generally speaking) type of work, and drive home. They strive mightily to destroy any remaining embers of youthful exuberance, of strange cultures and exotic places, of freedom and travel, love of culture, history, scotch,or strange (wo)men.

35 years eating at the same company cafeteria!

All of this was brought forcibly back to me recently as I was leaving another client’s site, this one a Wall Street bank, walking past the cubicle nests neatly ordered with the same square footage and the same size “walls,” Each was decorated with the compulsory trinkets, as cat’s define their own territory by urinating along the boundaries. Each represented an expression of the identity their owners could only find in the external objects representing their history, their accomplishments, their progeny.

35 years seeing the same people every day!

And here I was, the consultant doing what consultants do. This particular engagement involves measuring the amount and type of work associated with testing specific types of changes to the client’s large-scale software applications in order to outsource that work to cheaper resources. In other words, my job is to oust these people from their cubicles, their identities, their lives—to make them aware that there is a harsh world outside their comfortable nests by pushing them out to be on their own.

No 36th year for you! Come back next life!

In need of a scotch (after all, it’s always after noon somewhere in the world) and feeling a bit melancholy about life, the universe, and all the fish, I proceeded toward the exit and the “A” train. But, of a sudden, my mood was broken by an epiphany generated by my ipod selection on my morning commute combined with an image on a screen saver. Like a drunken sailor, I began to quietly sing the lyrics that came to me not from subway walls, but from a lcd display. As I was passing, a monitor popped up a shot, possibly taken from National Geographic or something similar, of a pair of orangutans playing in what appeared to be a fairly dense forest. And, in a revelation, the answer to the character of these nesters, part of the grand puzzle of the universe, came to me in the lyrics of Paul Simon…

Orangutans are skeptical
Of changes in their cages,
And the zookeeper is very fond of rum.


Hell, 35 years and you might be fond of rum as well!

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Thursday, March 22, 2007

News: Outsourcing to India Losing its Charm

New Delhi: India as a ‘plum outsourcing destination’ is losing its brand value thanks to deteriorating quality, substandard work, and increasing costs. According to a latest survey by global management consulting firm A T Kearney—the total compensation costs for office services employees in India, China, the Philippines, and other offshore hot-spots increased as much as 40 per cent in 2006.

Labour cost advantage associated with offshoring information technology services to countries like
India, China and the Philippines, is declining says the survey. At the same time, key emerging markets continue to improve their attractiveness in terms of access to talent, industry experience, quality certifications and their regulatory of environment.


More at IBN link



I've worked with and for outsourcing/offshoring companies, working directly with clients who have chosen this path for their IT. The problems created by these practices often outweigh the advantages created.
Cost savings almost always drive the decision to offshore selected IT functions as, currently, an Indian working offshore costs the end client approximately $30/hour total package, while an "equivalent" American employee can cost between $50 - $75/hour, including overhead and benefits. On the surface, this certainly looks attractive, but then the hidden costs, all of which are derived from communication or the lack thereof, begin to emerge, including:
  • Translation of business requirements - This has traditionally been a problem in IT, as programmers are often not conversant with the details of the business they are modeling. With a staff of Indian programmers whose native language is other than English, the problems are magnified and additional time (and, therefore, money) is required for this task
  • Remote communication - Managers tradtionally manage face-to-face, something that's impossible in the offshore model. Managing staff remotely requires significant adjustments in a business' entire managerial model. Networks and the internet, the great enablers of offshoring, have accomplished what air-conditioning did for Florida, providing e-mail, document sharing, and video-conferencing to address this requirement. However, effectively utilizing the tools requires significant adjustment in style
  • Time zones and other logistics - Most Indian data centers/campuses are +9.5 - +10.5 hours ahead of EST. This means that when it's 9:00 AM in NYC, it's 7:30 PM in Hydrabad. Moreover, most Indian IT employees travel to work by bus, thereby constraining and, given the quality of the bus service in India, reducing their working hours. This simply makes the communication challenges worse
All of these factors increase the cost of offshoring. Many offshore companies have responded to these issues by including in their model a significant onshore component of personnel to effectively act as intermediate managers. However, these personnel end up costing $75-$85/hour due, in part, to the costs of transportation and housing, thereby negating much, if not all, of the associated cost advantage.

Interestingly enough, the article also notes pressure on the model mounting from the other direction. As demand has increased and Indian inflation has raised the cost of living, wage pressures are eroding the key advantage of the offshore model, costs. Indian programmers are demanding and getting higher wages which, given that the existing margins are not huge, must be passed onto the client. In the last seven years, I can remember when $22.50/hour was the standard charge for an Analyst; now, it's risen to at least $27.50 and will rise further and more rapidly as these competing pressures mount.

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