Slowing Down, no Intentions to Stop

This month has been exceptionally busy for me and I had almost no time to put against anything but my day job, unsurprisingly so my blogging debt started to grow at a pretty good pace. There were a plenty of articles published in the blogs I follow, many industry news worth discussion knocked on the doors daily, and despite serious slowing down in the rate of posts I saw a notable increase in traffic.

When it comes to blogging I face a few serious challenges, first of course being ESL. As a matter of fact ESL has been a huge mental obstacle to overcome, it took a lot of internal and external pushing before I could step over the fact that I won’t be able write to even my own standards of quality needless to say to the benchmarks established in technical blogosphere by top notch professionals.

Other ones were concerns so typical for a techie:

  • I can talk at rate of 100 words a minute with occasional gusts of 250, but when I put my thoughts on paper the productivity drops 100 fold.
  • Talking towards invisible audience and literally no feedback and total absence of control over that audience really freaks me out.
  • Concerns about spilling the beans in so many aspects of our work and educating vendors and competitors.
  • Copyright / IP concerns. Many of the items I cover related to projects I’ve done as work for hire – how far can I push that envelope without compromising my integrity – which is by far one of the most important aspect of our professional image
  • Position concerns – what if I change my opinion tomorrow? Image concerns, and many many others…

Of course like anyone else I also have to deal with shortage hours in a day, occasional writer’s blocks and gazillion of other challenges any blogger deals with.

When I realized how much time blogging is going to take from my day and how unproductive I was my visceral reaction was to follow my management approach: do what you do the best – delegate the rest. And I decided to hire a ghost writer. In theory it appeared like a great idea – I just tell a ghost writer what I think about a particular topic and s/he will write it up… In theory there is no difference between theory and practice, in practice there is. My fabulous idea did not work out, not for the lack of offers though:

I put a project request on several freelancing sites (see those plus more on my list of places to find freelancers). I got more offers that I could look at in just a few days. The price varied from $2 to $50 an hour. Many of writers who replied to my post did not even red the post, some did not understand it. The remaining minority either asked for rates I could not possibly afford or after a brief discussion with me bailed out. After I went though ~100 bids there were a couple still standing, and they only made me realize that time-wise I won’t see any savings and the only thing I could benefit by using a ghost writer would be grammar, SEO, and other important yet secondary aspects.

So I ended up in square one with a notebook in my laps blogging away while BARTing. The last couple months brought more and more to my plate. Isn’t it strange that poor economy, slower business and a fewer opportunities do not mean less work? So even my office commute doesn’t offer much time for pragmatic outsourcing. But I have no intentions to stop, at least yet. There is still so much to cover…

Japanese Car Invasion vs. Offshore Outsourcing

In the early 1950s a small number of Americans began purchasing foreign cars after military personnel brought home unique vehicles at the end of their tours overseas. At roughly the same time the Japanese, in need of cash to re-build their country after World War II, went from exporting cheap household products and novelty items to heavy machinery and automobiles, both much more profitable.

In the mid-fifties, the Japanese Ministry of International Trade (MITI) and Industry provided strong incentives to manufacturers to produce a “people’s car”. In the mid-sixties, in order to increase Japan’s competitiveness in the world car market, MITI engineered a number of mergers of car manufacturers. In many ways, the modern Japanese motor vehicle industry was the creation of the Japanese Ministry of International Trade and Industry (MITI). Nissan acquired the Prince Motor Company and Toyota merged with Hino and Daihatsu. The results were spectacular – in 1962, Japan was the sixth largest vehicle manufacturer in the world and by 1967 it was the second largest.

Initially Americans, who had become used to the poor quality, but cheap, Japanese products, did not take Japanese cars seriously. But Toyota, Honda and other Japanese companies worked hard to change the perception and the `products; top level engineering design combined with new techniques and mythologies such as TQM and Lean Manufacturing produced less expensive and higher quality vehicles. To a growing number of Americans Japanese cars started making a lot of sense.

In meanwhile with the oil embargo of 1973, along with the strict pollution controls and safety regulations imposed by the U.S. Government, American manufacturers turned to cost savings resorting to building poor quality, poorly engineered automobiles. While American automotive industry was entering a self-inflicted death spiral Japanese engineers and workers continuing producing better and better cars. Inevitably Japan surpassed the US to become the largest manufacturer in 1980. And, then in less than two decades “For the first time since the early 1930s, General Motors cannot call itself the world’s largest automaker. Its sales fell behind Toyota in 2008, a year when G.M. celebrated its 100th anniversary and narrowly avoided a bankruptcy filing amid a significant downturn in the economy.

If you call the USA your home chances are you know that many factors played in that half a century long story of failure – inflated comp. packages of the industry execs, the unions, the cost of healthcare – just to name a few. It doesn’t make it any easier though to see the companies that produced Mustang, Corvette, Caravan and many other trendsetting and groundbreaking automobiles crumble to pieces.

Another very similar story started unraveling in front of our eyes in the early 90s. This time it affected many industries in a horizontal fashion. This time invasion initially came from several countries with India leading the pack. The invasion was going on multiple fronts and affected other countries beside US. It is called many names with Business Process Outsourcing (BPO) being the most popular. BPO covers many aspects of business with Information Technology being one of the prime targets.

In large degree India was perfectly positioned for a blitzkrieg: a great multitude of factors were there to ensure that invasion is fast, massive and irreversible: English, sheer numbers of qualified resources, cultural proximity, ease of migration, huge difference in the standards of living, and so on. Y2K craze presented a perfect opportunity for dramatic expansion… Considering the pace of the invasion and the circumstances it is amazing that the US IT industry is still around. Fortunately for many of us a few things went wrong and we still have our IT jobs… Some of those (mis)fortunate events had their roots in India some in the consumer countries, some are still going on at the same pace, some increased in influence, some faded away. Let me mention just few the most notable ones:

  • As with almost any gold rush activity “take money and run” (TM&R) attitude prevails. Many outsourcing businesses are proud of being profitable from the day one. Funny enough, that is one of strong indications of exactly the attitude. Being profitable from the day one typically means no substantial initial investment and/or exorbitant margins – both being clear symptoms of TM&R. TM&R attitude inevitably lowers customer loyalty and creates negative drumbeat; it is one of major reasons behind “bad name” of outsourcing.
  • Historically many offshore shops were created by “intermediaries” people with strong connections in say India and business connections in the States. I’ve seen many of those companies in mid 90s doing exceptionally well, some of them even made it to the top of lists such as INC 500. Underneath the marketing collateral they were just labor brokers connecting “human resources” with hungry resource consumers. The brokers were naturally interested only in “putting buns in the seats” and that was another contributor to the offshoring “bad name”.
  • Surging demand on the IT services created a tremendous opportunity for entrepreneurial minds of all sorts. All kinds of entrepreneurs went after huge profits whether they had skills or not… What happened in the offshoring industry during mid 90s makes me think of backyard steel furnaces of The Great Leap Forward. Every one and their brother were opening outsourcing outfits. To no surprise the results were akin to slabs of pig iron. And who was there to tell the difference between pig iron and carbon steel?
  • Ranking IT services is far from a trivial task for many reasons. One of the fundamental problems is that low quality of IT service could be hidden for years before it is recognized, think for example about billions of lines of code that had to be rewritten to deal with Y2K issues, many of them were written in 70s and 80s… Another inherit problem is “fox guarding the henhouse” so typical for large IT implementations. One more, very significant, is obscurity of IT issues for many business users; that one alone creates unlimited safe heaven for mediocrity and makes objective ranking exceptionally difficult if not impossible.
  • Fueled by great demand and lack of selectivity in the market offshore offering was gaining volume fast and by all means possible. Inevitably the quality of goods sold was dropping at similar rate. Lowering the bar affected the entire industry, even the most exclusive educational centers and other time-proven benchmarks of quality stopped working. For example not long time ago I had to fire a consultant for incompetence; it’s not such an unusual nowadays. Yet in this case it was, my team was stunned with the degree of his incompetence which was especially surprising considering that he had a masters degree from IIT.
  • As they say if you take a barrel of honey and mix it with a gallon of garbage you have a barrel of garbage. Despite large number of high quality of resources the overall quality of offshoring team was far from impressive and inevitably the quality of the services rendered by those teams was far from perfect. While many vendors recognized the problem and stared putting processes in place to ensure meeting reasonable expectations the “bad name” was building up. Producing redundant inefficient code was now attributed not to individual programs but to Indian developers as whole. New clichés were firmly established in the industry.
  • IT offshoring was there to fill in a burning need so despite the mediocre quality of the product the demand for it was not going down. Offshoring issues and challenges were bounced around mainly deep in the trenches and kitchens. The decision makers, movers and shakers were on a purchasing spree sometimes going offshore against any sense, outsourcing for the sake of outsourcing or just with no rhyme or reason. Call it a user error but nevertheless it contributed to offshoring large scale failures and “bad name” in a huge degree and cost buyers and their countries enormous amount of resources in out of pocket expenses, erosion of work force, and loss of knowledge pool…

All these (mis)fortunate events generally result in decrease in quality of services and productivity of resources with one common denominator – cost. However the difference in standards of living and thus average wages continues to be dramatic allowing offshore vendors still successfully compete in the market. However it is much more balanced competition than the one that delivered mortal blow to the US automotive industry. Engaging IT resources from allover the world in order to address needs of local organizations continues to be one of many powerful tools in hands of VPEs, CIOs and other IT execs. It is highly unlikely for offshore resources to displace or ruin local IT industry. Yet empty houses of Detroit should ring as rude reminders of fragility rather than invincibility of the IT industry as well.

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Offshore Millionaire

I am very much surprised with Slumdog Millionaire taking Oscar’s Gold. As far as I am concerned it’s very much a mediocre tearjerker with a few very good scenes, plenty of mediocre ones and few ones on a border line of plagiarism. If you are at all interested in what slums are rent the City of God… well I am not the Academy member and that was not the point I wanted to make. What I wanted to say is that the movie in many ways insinuates that slums are India’s past, and those who survived can work in call centers, speak perfect English and offer crest smile of Hollywood proportion. You would be hard pressed to find something further from the truth. On one of my recent trips to India I got a dubious pleasure of observing slums through the cab window for about two hours while getting to downtown from the airport. I was out there right after the monsoon season so it was not just stinking piles of garbage they were steaming stinking piles and per my driver and guide those were far from the worst parts. Doing business in 3rd world countries is not for the faint of heart. For some Americans the sheer sight of slums and widespread destitution could be too much to handle, so be careful who you send for onsite visits…

25 Random Things that Can Hurt You

Opening disclaimer – this post has zero relevance to offshore outsourcing, so proceed at your own risk ;) I put it here as this site gives me a chance to reach out to the audience I respect and hopefully stop some of people you know from hurting themselves…

A couple days ago a friend of mine tagged me with Facebook’s “25 Random Things About Me” chain letter; a day or so later another one of those tags hit my email. Naturally the topic came up in one of random office conversations, as it turned out I was far not the only one asked to write a few things just ‘cause our friends want to learn about us… The idea to write this post came up after David, one of my engineering directors, mentioned that responding to the tag can really hurt you.

“Just random 25 things!?” you might ask. Yes, very much so, and let me point out just a couple most obvious ways it could happen:

  • Identity theft or identity fraud. That is a common crime that can have substantial financial and emotional consequences. Having been the victim of one I can point out a few immediate consequences – ruined credit score, calls from collection agencies asking me for the money I never owed, police reports, back and force with credit agencies…
  • On-line fraud and direct theft, with money disappearing from your bank, investment account, IRA or 401k fund… Chances are that if you are reading this post you are using on-line banking and can imagine what could happen that if someone can get hold of your ID and password.
  • Well, if someone with bad intentions gets hold of your ID and password they can raise all kinds of havoc in your life even if steeling money is not their cup of tea – think about being locked out of your email, Facebook profile, strange post showing up in your blogs…

What is the connection between 25 random things and identity theft or loss of your password? It is much more straight forward than you might think.

Not too many people put their SSN or mother’s maiden name in the Facebook essays.. yet here are examples of random things I found in my friends notes and in public blogs:

  • I was born in town called Mars but that doesn’t make me Martian
  • I have no creativity – I called my first dog Spot
  • If I could I would move to Barcelona for the rest of my life

Doesn’t those remind you of password retrieval questions? “What city you were born in?”, “What was your first pet’s name?”, “What is your favorite city?”

Thank you for sharing that you snort when you laugh and even more so for giving me enough information to get into your bank account!

Another door which publishing private information opens to a malicious intent is related to the current methods of authentication. Before you establish your account with some secure systems they must authenticate you or identify that “you are who you say you are”. There is a method of doing that which is considered an acceptable standard in the healthcare and financial industries. It is based on asking you a number of random questions that apparently only you would know answers to – “What color was your 1993 Chevrolet Lumina?”, “What year did you graduate from the medical school?”, and so on. If you answer right say to 5 out 7 questions the system deems you as a match and grants you the access permission.

Thank you Dr. B. Raggar for giving me enough information to spoof you (pretend to be you) and sign up for electronic prescription system! Now I can finally get myself enough of a painkiller without begging for it.

Thank you, my dear friend Liz Wiener! Of course I would never hurt you! We had such a great time when we met once in Sugar Bawl… Plus knowing a few private things about you helped only slightly. Yet now with VPN access into the brokerage you work at should give me a few insights for my treading activities.

Please keep in mind – identity theft is usually a crime of opportunity, so you may be victimized simply because your information is available. And even if you are paranoid it doesn’t mean nobody is following you… especially if you are on Tweeter.

Closing disclaimer – my company specializes in software and services for the HealthCare industry, so most of us deal with issues of privacy and security on ongoing basis, most of us much more than we care to. I authored over 50 security policies and went through number of audits and scans. I am very sensitive to this topic and I might sound boring. Yet, this is serious. Please be careful which what you put out there. Avoid posting personal data in any public forums; attackers may be able to piece together information from a variety of sources over time, in case if you are still in doubt please take a look Guidelines for Publishing Information Online for authoritative opinion …

And please spread the word!

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Kicking off a Body Language Discussion

I have been planning on putting together a few posts on body language for quite some time now. This topic is exceptionally important in any business / environment. The knowledge and understanding of body language is essential to any kind of communications, and when it comes to negotiations, conflict resolution, dealing with difficult people it is absolutely critical. There are many books and studies written on this topic, there are some simple common sense techniques, there are more advanced and powerful ones. In general reading and using body language is not a trivial task and the complexity of it goes up tenfold when you find yourself working with people from different cultures. But did anyone say that offshore was easy?

Anyway, I am not yet ready to cover this topic – still doing some research and compiling my notes and materials I gathered over years. The reason I decided to mention it today is not to put a stake in the ground, it somewhat a comical one. A few minutes ago I saw a picture of Illinois Gov. Rod Blagojevich on yahoo news. The body language in the picture stroke me as a classical stance of well trained used car salesman – “Would I ever lie to you!?” So I could not resist the temptation to put it here and ask you for ideas of a caption for the picture.

APTOPIX Illinois Governor Impeachment

Satyam Chairman Admits Huge Fraud

Satyam Chief Admits Huge Fraud … wow, you do not see those thing so often, and you wish you never did. I guess that puts Satyam’s chairman, Ramalinga Raju in the big league side by side with Madoff. I have done a lot of business with Satyam and am quite saddened by the news. Actually, Satyam has been under close scrutiny for quite some time now, especially after reports that the company had been banned from World Bank contracts for installing spy software on some World Bank computers. Satyam denied the accusation but in December, the World Bank confirmed without elaboration on the cause that Satyam had been banned. Also in December, Satyam’s investors revolted after the company proposed buying two firms with ties to Mr. Raju’s sons… Those deals were in fact a last-gasp attempt to fill a hole in its finances, falsely inflated for years by its founder and chairman. Inevitably stocks plunged closing at 39.95 or 78% down reminding everyone about Enron.

I still have a few friends working in the company and hope that these events do not affect them too harshly. The IT job market is far from perfect and who knows what is going to happen with gazillions of contracts Satyam had in the USA. Cisco already announced that “The recent unfortunate developments unfolding at Satyam are not expected to have any material impact for Cisco. At this point, we would not like to comment further and have full confidence in the government and regulatory authorities to address this matter as appropriate.” But what does it really mean in terms of the work which has been outsourced to Satyam; will all the contractors stay? Will they move on in a manner Arthur Andersen auditors ended up in KPMG? Or outsourcing altogether takes a huge hit?

It’s difficult to make any predictions now. I am afraid that this event will have profound and lasting negative impact on outsourcing in general as well as the entire Indian economy.

Is there any silver lining? Well, I am sure that there will be a lot of new business flowing to other top tire vendors across the world. Some smaller providers might get a chance to gain new business and get their hands on good employees in the feeding frenzy that’s likely to follow. And many companies on the buyer side will rethink their outsourcing policies and probably use this opportunity to renegotiate the contracts.

Outsourcing in the Light of Bribe Payers Index

Have someone offered you some funny smelling incentive package to close an offshoring deal? You may not be alone…  I just run across an interesting article, not specific to offshore outsourcing but very relevant though. Bribe Paying Export Countries by Daniel Workman talks about some unusual stats – “The 2008 Bribe Payers Index ranks the likelihood of importers receiving illegal monetary incentives from leading export countries.”  Here are the highlights

Countries Most Likely To Offer Payola

Final results from the 2008 Transparency International survey rank export companies from Russia, China, Mexico and India as most likely to bribe.

1. Russia … 5.9 (33% more likely to bribe than Canada or Belgium)
2. China …6.5 (26.1% more likely)
3. Mexico … 6.6 (25% more likely)
4. India … 6.8 (22.5% more likely)
5. Brazil … 7.4 (15.9% more likely)

Countries Least Likely To Grant Illegal Incentives

The BPI survey ranked Canada and Belgium as home to exporting firms perceived as more ethical and therefore apt to avoid illegal payoffs.

1. Canada … 8.8
2. Belgium … 8.8
3. Switzerland … 8.7 (1.1% more likely to bribe than Canada or Belgium)
4. Netherlands … 8.7 (1.1% more likely)
5. United Kingdom … 8.6 (2.3% more likely)

See more figures and supporting material in the original article TI Report: Emerging economic giants show high levels of corporate bribery overseas.