Outsourcee

Giving back

2005-06-13T05:07:00.000-07:00

There is a disquieting story in a recent Indian Express, about how seats in Engineering colleges are being reduced for lack of faculty to teach them.

This brings up two issues in my mind: Quality and Quantity. Of the faculty, of course.

Traditionally, Industry and Academics in India tend to look down on each other. Your average professor or Ph.D student would scorn the idea of actually doing the work which an engineer in a company would do, and the engineer would think the research student is only doing research because he couldn't get a job anywhere. Both stereotypes are partially true, in fact. But it didn't matter, because the demand for teaching faculty in the colleges was much less than employable engineers in industry. And the subjects which the faculty taught moved slowly enough that it was possible to wait till the next editions of textbooks came out and were incorporated into syllabi.

None of these things are true for software in India. Actually, none of those things are true for any engineering discipline in, say, the US, but research and innovation was such a low priority in Indian industry that it used to be all right. But for software, the field is intrinsically fast-moving, and besides we have this sense of really competing with the world here. Hence the interaction between academia and industry is more in this area. In order to sustain the growing demand for software folks, more and more teachers are required - teachers who know what the latest technologies are, who know the hot research topics and the newest theoretic trends.

And this is where, for some time now, the Quality issue of college faculty comes in. From personal experience I can say that the vast majority of people who teach computer science are not up to date with what is going on in the industry. The feeling of inferiority persists - people who can gets jobs programming take them, the ones that are left, teach, feeling they have no other option. I don't include professors in the absolute top institutes - IITs and their sort - but the average college which produces the bulk of the programmers for the IT companies. Since the teachers are not up to date, neither are the students. I remember a particularly inept Databases teacher who brought printouts of Oracle command manuals and dictated them to us as notes. All of our class ultimately learnt databases by ourselves, and then did some fast learning when we were recruited.

If our current crop of teachers is this bad, how are we going to get more of even the same quality, if we want to produce more engineers? Something tells me we're already dredging the bottom here.

A good friend of mine, something of an activist and a brilliant engineer besides other things, took it upon himself to help. He went back to the college he graduated from and offered to teach a subject for a semester. Together with one of his classmates, he went every week to his alma mater and taught the subject to his juniors. He had the benefit of having actually used the subject in his job, so he knew what he was talking about. The exercises he set were practical, the problems were real-life situations he'd faced. He knew which books were really useful.

The net result was that that particular batch learned the subject from a real expert - or atleast someone who really knew the topic. All the classes were packed throughout the semester, and the experiment was a real success. Subsequently, people from that batch came back from their jobs to teach their juniors, too.

It only takes a little bit of effort to solve a problem. You, dear reader, fellow software engineer, have learned a lot of things after you graduated from college and began working. Wouldn't you like that the people who come after you don't have to struggle as much? Wouldn't you like it that the new trainees in your company pick up things quickly, and that they know what's what, right after joining? How much effort does it take to solve the problem reported in that IE story? If not teaching for an entire semester, you could take on a final-year project for your juniors. If not that, you could create web tutorials and question sets and pass them on to someone at your college. If not even that - well, any little bit would help - you know best what can be done.

See a need, fill a need

2005-06-03T07:37:00.000-07:00

A visit to salon.com after quite a while got me this interesting article : The world in the iPod. The writer talks about how chip fabrication units in China are taking away business from American units. There is talk of a "Golden Triangle" : Architecture in the US, Coding/design in India, Fabrication/Assembly in China.

Unfortunately, the conclusion that he comes to seems wrong :

This shift has some people very worried -- and they are not just out-of-work engineers. They fear that advanced R&D follows the physical location of production. If you are a cutting-edge engineer interested in working with innovative new techniques for chip manufacturing, you will be drawn not to Silicon Valley but to the scores of brand new fabs being built in Asia.

The bit in bold (emphasis mine) is the core of the argument, and it is totally wrong. The correct version would be : Advanced R&D follows markets, not production. It's the old principle of "see a need, fill a need" that drives the creation of any successful businesses.

So, for example, the only sort-of successful products made in India are the myriad banking solutions which are deployed all over Indian banks : because those banks were in a position to buy the software and be immediately benefitted by its installation.

What does it mean for us, the Indian programmers? It gives us a vague timeline for when a successful product market can be created here. If we look over what kinds of products would do well here, we see that consumer electronics - especially mobile phones - is the one burgeoning field - far more than any software industry. Today if you write a little app that helps/entertains the Indian mobile phone user, you'll have a winner on your hands. Note the meteoric rise of the "SMS your entries to 8888" type money-making schemes. Note the dozens of ringtone sellers. Write a codec that'll show amazing video on a mobile phone and see the queue of serive providers at your doorstep.

The only part of the software industry that seems to be doing well in India is the Educational software area. Every large bookstore has a shelf full of these CDs now.

But try to make a high-performance Email Server or office suite here. See whether anyone at all is interested. Unless it's something dramatically suitable for the Indian market, it won't sell. The computer software industry in India lives off the US and European markets, not the Indian.

Even though so-called product companies are coming up in India, the software products they make are built for the US markets. Those companies can get wide-based support only if there is a local market - even if niche - for the products. This requires higher computer penetration, mainly.

The good part is that all this is already happening - more and more computers are being sold, and more and more industries are getting interested in computerized solutions for their business practices. It's a matter of time.

An Open Challenge

2005-05-25T06:21:00.000-07:00

A seemingly-unlreated article on Fortune.com drew my attention : The Amazing Do-It-Yourself Economy. The article talks of how much easier it's become for 'amateur' hobbyists to create products - websites, videos, audio, electronics - that are as polished as the professional ones.

One line in particular riles me :
To be fair, all this amateur energy isn't exactly a new force. When exciting technologies emerge, Americans have always pounced and created something original.

What are the rest of us, then? Where are the hordes of desi bloggers, singers, creators, inventors, ready to push their content to the rest of the world?

Well?

Prophecy Fulfilled...sort of.

2005-05-19T05:46:00.000-07:00

At a book exhibition recently, I found a copy of a once-popular book - "The Decline and Fall of the American Programmer", By Edward Yourdon. This book describes how Software jobs are going to move from the USA to India and other outsourcee countries, and what American engineers should do to save their jobs. He also adds an appendix describing the Indian software Industry, and how it is developing.

In case you haven't heard of this book before, it's understandable. This stuff was written back in 1991, fourteen years ago, long before the current brouhaha over the issue! There are lots of things he got wrong, of course, such as suggesting that Americans should use CASE tools to improve their producivity beyond the reach of the Indians.

Nevertheless, it is instructive to read the section on India. The Indian infrastructure he describes feels like a bad dream today. For example :

After learning that my flight from Madras to Bombay would be delayed for four hours, I spent another hour with an NIIT manager trying to call the Bombay office to advise them of the delay. It was fruitless: we could not get a connection. Indians are accustomed to this, and have even accepted the fact that if they make an advance deposit of 5000 rupees, it may still take four years to get a new phone installed. Shrugging, they smile and say, "Actually, it's much better now that it was before..."

Nevertheless, Yourdon is spot on with the path he predicts for the Indian IT Industry. The evolution that it will go through (according to him) goes :

1. Building a reputation by providing cheap programming services on site at the customer's location.
2. Shifting the programming services back to India, with well-specified programs and systems delivered via telecommunications link to the overseas customer.
3. Gradually shifting the emphasis and focus from low-cost services to high-quality services.
4. Shifting from a service industry to a product industry by finding market niches or by providing higher-quality, lower-cost clone products.
5. Finding a try value-added software-intensive product in some application area that encapsulates India's own unique expertise.

Where do you think we are now, 15 years after this brave prediction? I'd say we're pushing for step 3 to happen. As evidence, take this recent story on SearchCIO. It quotes the Chief Strategist of Wipro as stating proudly, "Small companies don't come to Wipro.".

Indeed, we are increasingly seeing a particular type of outsourcing projects move off the radar for larger Indian companies. I mean those projects that came here strictly to save money. The ones that insist on giving only outlying, non-core work to the outsourcees and then paying the lowest possible rates. These projects are beginning to go to Vietnam or Uzbekistan. Indian companies are proud of themselves for taking on only the 'better' quality of work.

Let me state this up front, as an Indian software engineer/outsourcee : This is VERY DANGEROUS if it's happening everywhere in Indian companies. Bad work today, if done properly, leads to good work tomorrow. While the bigger companies, that pay well, cannot fight on price anymore with Vietnam and co., we ought to be seeing a new layer of smaller, tigher, cheaper outsourcees coming up in smaller cities in India now. They should be the places where the bad projects go, not Vietnam. The Indian software industry should not be a single, monolithic block that raises or reduces billing rates together, there needs to be competition - local competition - snapping at their heels. There need to be places where simpler work is done for lower rates by less-experienced people.

This may sound paradoxical : I've been complaining about the bad work that outsourcees do, in nearly every post. But that is one extreme; this is the other. Both are bad. Creating an industry entirely of cheap, billed-rock-bottom programmers that do manual testing was my fear earlier; the new one is having a huge pool of architects doing work at high prices, with no space for newbies or part-timers. We need a proper Ecosystem of all types of engineers.

Such an ecosystem will be essential if we want to move on to the next steps in Yourdon's path.

'Social Networks'

2005-05-11T01:19:00.000-07:00

[This article was published in the Express Careers section of the Indian Express on 5th May 05.]

Social networks: A key to employee retention

The Indian IT industry is now entering the consolidation phase. A large number of companies have established themselves with the customers, and have proven themselves as reliable, low cost outsourcing destinations. Now they must secure their presence in all segments of the software development cycle - design, development, testing, maintenance and support. For this purpose, every company today seeks to grow and create specialized work force in all these areas. Companies also want to establish quality processes, and increase the percentage of experienced employees.

The biggest hurdle faced by all companies is retention of employees. More than ever, engineers are feeling frustrated by the assembly-line style work done by software companies. They repeatedly change companies, trying to find work that suits them, yet finding themselves bored by the monotony of every task. In this job-hopping, companies end up with employees that do not stay long enough to imbibe the company culture and values, and thus are not suitable for higher-end jobs.

Companies usually encourage employees to work as hard as they can, and promise bonuses as incentives. However, beyond a point, money does not serve as a motivating factor. One big factor that creates boredom in the employees' lifestyle is the lack of any extra activities or hobbies in their day. In order to keep employees happy and productive, they need to have some social activities and interest-based interaction with peers regularly.

A good solution to this is to create cultural activity groups within the company. Sub groups can be formed related to various interests such as music, dance, painting, sports, singing, quizzing, or trekking. These groups then hold shows, exhibitions, and competitions at regular intervals, open to all employees.

Alternatively, company-wide parties, movie screenings, dinners and picnics can be organized. These are informal events where people can interact with each other without the formal organizational structure coming in between. People meet their friends, old acquaintances, and spend the evening discussing things other than their jobs.

These activities create a welcome change from work, and give people something to look forward to. In Pune and Bangalore, for example, the IT companies hold yearly inter-IT company quizzes, cricket and football tournaments. These are keenly fought efforts, and the entire software engineer community follows them with interest.

An important effect of such activities is the social bond it creates between employees who have common interests. It creates friendships between people who may sit in different buildings, different departments, and pairs them together in joint activities. The social network of these employees thus improves, and they look forward to meeting other people within the company. In large companies, this is a real boon because otherwise employees get to interact only with people from their own projects and thus feel constricted.

Another effect is the creation of a sense of belongingness. Employees who play, say, cricket for their company feel a sense of pride in belonging to the team. The people who cheer for their teams feel the same sense of pride when their team fights well.

A third effect is the image of the company itself. A company that routinely produces winners of a quiz competition gains a reputation for being a 'smart' company. A company that organizes seminars and conferences gains a reputation as a leader-type.

Last but not the least, these activities create informal channels for people to talk to their supervisors and management teams. Discussions on project environments, quality of work, etc. can take place with no risk, and defuse potential tension.

All these activities create a kind of bonding between the employee and his company. He knows the people there, he is comfortable working there, and he has someone to turn to when he wants activity partners. These factors are just as important as the work environment and technologies in retaining him in the company.

More importantly, such measures cost very little to the company. They definitely cost much less than repeatedly losing qualified employees and retraining new ones. With time and a sensible approach, companies can ensure they minimize their attrition rates and grow with the least possible problems.

Conference Calls

2005-04-26T02:24:00.000-07:00

[As a followup to my previous post, I'm posting a brief tutorial on Conference Call etiquette. This essay was published in mangled and shortened form in the Indian Express a couple of weeks ago.]

Effective Conference Calls

Most software companies in India are service companies with offshore clients. This means that, when one joins the IT industry and is allotted to a project, sooner or later one will be communicating with a US or Europe based customer. Besides E-Mail and Instant Messenger, he will be periodically co-ordinating with the client over the telephone. These are commonly called Conference Calls, because several people from both sides usually join in and resolve all pending matters.

New employees often make mistakes while participating in these Conference Calls. This may have serious consequences. Since the clients usually haven’t met the project members face to face, these calls are the only means they have of judging them. Creating a good impression is a must. Besides this, since the calls are international calls across Time Zones, time needs to be used effectively.

Here is a guide to getting the best results from Conference Calls.

Setting up the call.

1. It is always best to send out an email listing the details of the call well in advance, to prevent misunderstandings. The mail should contain:

- What is the appropriate time and date for the call? Remember that your client is in a different Time Zone. If US-Based, he/she is 9 to 13 hours behind. If Japan or Australia based, he is some hours ahead. Not all the client-side participants need be in the same time zone – they may belong to different offices. So make sure that the timings are convenient to all. When sending out notification for the call, ensure that the local time for each participating office is mentioned explicitly. In the case of the US, remember to take Daylight Savings Time into account.

- Who are the people participating in the call? Make sure that the names of all participating people, from India and all other offices, are mentioned. Also ensure that the email goes to each one of these people.

- What is the number to be called? Different offices have different ways of setting up call numbers. Verify that the correct number is sent to everyone. What is the country/area codes for the numbers? Are any passwords required to connect? Mention these details.

- Agenda for the call. It helps if all participants know the topics to be discussed. They can keep any related data ready if required. It also gives everyone a rough idea of the duration of the call, and whether or not they are really needed for the call.

Keep a printout of the mail handy, to use as a reference during the call.

2. What is the place from where the call will be made? Usually a conference room or a specific cubicle is used. Ensure in advance that the space and the phone instrument will be available.

3. For all agenda items, you can work out in advance the information the client is likely to ask for, and keep it ready.

Making the call

1. Be available online (IM or email) 10 minutes before the call. The client may want to reschedule the call if an emergency comes up.

2. As far as possible, see that all required Indian team members are present in the conference room before the call starts.

3. Designate one person to take the lead in the call. He will

* Make the actual call,
* Introduce himself, and attending team mates.
* When client is ready, start discussion on the points listed in the agenda. The concerned team members can then take over for their own items on the agenda.

4. At any time, if you do not understand what the client is saying, do not interrupt him; wait till he pauses. Then say specifically what it was that you didn’t understand. Request him to repeat the unclear portion.

5. Some new topics, which were not in the agenda, may come up during the call. If not sure about the details of these, do not jump to a hasty decision. Offer to send the details and analysis over email after the call.

6. It is fine for the local team to discuss points that the client has raised, while the call is ongoing. But do not speak in Hindi, Marathi or other languages during the call, even if the listener is Indian. This is very irritating to other participants if they are not familiar with the language. Stick to English. Do not use slang.

7. Designate one person to note down the minutes of the meeting. In particular, action items for team mates as well as clients should be noted, along with the expected time of completion.

8. At the end of the call, read out again the action points, the person responsible for each and the timeframe for them.

Following up

1. Send out the minutes of the meeting by email, to all attending parties as well as any managers who are interested. Most importantly, the minutes should list any decisions taken and all the action item details, as above.

2. When reporting the completion of the action items decided during the call, make a reference to the call itself. Thus in the mail, mention: “As per our discussion in the call of date so-and-so...”

3. Keep the minutes of older calls available on a local web site or newsgroup. This will help new members when they join the project.

Training? Why, wasn't college enough?

2005-04-26T02:16:00.000-07:00

A news story in rediff today says that IT companies consider employee training low priority. I agree. My experience has been that a new employee is expected to 'just know' everything that is required for his job. Often there will be some technical training in the domain of the project, but that is pretty much it. The larger companies even have a couple of months of training sessions, which are supposed to bring even non-computer science graduates up to speed on IT, after which they join alongside their CS-grad brethren in projects. I don't doubt that the technical training they get is decent enough and comprehensive enough to work on the outsourced projects. (Remember my thesis that it is the fringe and 'simpler' part of any project that generaly gets outsourced.)

The area where training usually falls short is the Culture training. I don't mean stuff like which-hand-to-hold-the-fork and what-dress-code-to-be-followed. The working culture of a professional organization is very different from the cool, somewhat laidback environment of a college. The ground rules for interaction with colleagues and customers are more formal and rigid, even though they may not be spelt out explicitly. But these details are usually explained through informal sessions with senior employees in the project, not through any formal training. And this is where new employees usually trip up. Remember that the only way customers know the project team members is through their phone conversations, emails and chat. Special care needs to be taken in this respect. Yet these issues are skipped over entirely in the training sessions, and usually there isn't even any documentation explaining the details that experienced people take for granted.

I will list out the particulars of the unwritten codes of conduct in the next few posts. Comments and additions to the list are always welcome.

"My Job Went to India"

2005-04-13T07:17:00.000-07:00

George sends me this link about a book which so blatantly opportunistic it hurts. It's called "My Job went to India(and all I got was this lousy book.)" Well, atleast he knows the quality of his book beforehand.

The blurb is full of marketing-type gems like "It's time to take control of our careers, and in the process, learn to stay both relevant and employed.", and "You'll learn how to shift your skillset up the value chain, from offshore-ready commodity to one in high demand."

On a more serious note, this book ought to be on every Outsourcee company's library bookshelf. Any Indian manager who is dealing with American clients on a daily basis needs to know the keywords and terminology that reassures the client. And whatever techniques this guy advocates to 'keep current' can be used just as easily by Outsourcee companies too.

Call Centre Theft

2005-04-08T08:06:00.000-07:00

We've read the reports in the news (here, here) about the 'three ex-employees' of Mphasis, Pune, a call centre company stealing money from customers. Rediff is reporting it as a development that could 'bust the BPO boom'.

No one seems to notice the exact methodology that was used. I remember, when I got my PIN number for my bank account, that the instructions specifically said "DO NOT GIVE THIS NUMBER TO ANYONE, NOT EVEN A BANK EMPLOYEE." It sounds like a sensible instruction. How then did these victims give their PIN numbers to some unnamed call centre operator in India? [On a sarcastic note: According to the numerous Slashdot posts on the topic, aren't these Indian call centre workers supposed to be terrible at English, barely understandable, incapable of fixing the simplest problems? Apparently, they aren't so incomprehensible that you wouldn't give them your PIN number, eh?]

So the way in which this incident is being reported is all wrong : It's not a 'misuse of private data', it was a confidence scam. I'm pretty sure this sort of thing happens pretty frequently in the US too. Of course, when it happens there, it can't be turned into an anti-outsourcing story, can it? NASSCOM has come out with the right response to this:

The threat of data theft and misuse is no higher in India than in other countries, including the U.S., according to the National Association of Software and Service Companies in Delhi. The organization maintains that Indian outsourcing companies have adequate security systems in place.

Equal rights for contractors?

2005-03-23T06:38:00.000-08:00

There's a very interesting story/discussion on Slashdot, here.

What they're discussing is, when contractors are hired by an IT company, they are expected to perform as well as regular employees. Why then do they not get the same level of benefits? The discussion currently seems to be talking about American 'contractors', not the Indian outsourcing counterpart. Yet, once an Indian company (say Wipro) takes over a major portion of the work from the outsourcer, once it starts driving the architectural and marketing decision, it is going to to feel entitled to some portion of product revenues, IP benefits, and publicity. This, of course, goes against everything that defines 'outsourcing' today. However, we are moving towards that frontier, slowly but surely.

Lashkar-e-Toiba helps with outsourcing...

2005-03-15T03:53:00.000-08:00

Here's one for the conspiracy theorists.

FACT : a few weeks ago Pakistani Prime Minister Shaukat Aziz made a statement to the effect that they want outsourcing to come to their country as well. In all these years we've never heard a cheep out of them on this issue.

FACT : The immediate reaction of the worldwide community to this statement was something like this blog post. How can anyone consider sending work to Pakistan, they say, when it is so politically unstable and unsafe? The unspoken subtext, of course, is that India, especially South India, is pretty stable and safe.

FACT : 2 weeks after this, members of a terrorist group based in Pakistan are caught in Delhi. According to the police, they were planning to blow up software companies in Bangalore. Immediately after this sequence of events, we have more bomb hoaxes and suchlike at Bangalore.

Discussion Forums everywhere have loads of fun with this. Somewhere, in the mind of some project manager, a seed of doubt is planted about the safety of sending his work to Bangalore. LeT have achieved their aim.
Isn't it funny that these 'attacks' are being planned and given publicity immediately after that statement by Aziz? I mean, it isn't as if the IT industry is doing anything new. Why then would a Pakistani terrorist group target them now?

PS. The 'outsourcing' in the title line isn't the outsourced work that comes to INDIA.

CMM is no longer enough

2005-03-08T02:34:00.000-08:00

In some sense, all the hoopla accorded to the CMM certification was a bad thing for the American industry. Because the certification was fairly open (anyone could apply and get it), and because the standards were well known,the field became level for Indian companies. As of today, the largest concentration of CMM 5 certified companies is in India - a fact gleefully highlighted in every NASSCOM conference. More importantly, it became a useful point for outsourcee companies to use while marketing themselves to potential customers. The initiative in this standards body was entirely pulled away from the Americans - and so we don't see any noises made about CMM by American companies any more.

Now check out a new entity: a "Reference Standards Board" that claims to provide references to 'various outsourcing groups', which allow clients to 'make informed decisions'. This is, in effect, a Black Box that tells American companies to go to so-and-so outsourcee company. A Black Box, because as of now, us outsourcees dont quite know how to make this sort of firm give us a good rating. Smart move. And I dont see any NRI names associated with this thing, so there isn't any automatic bias towards India. So - for example - if Costa Rica lobbies hard and influences this group they will be redirecting all clients there. The one thing we dont know to do is lobby. I hope the firm which NASSCOM hired for this purpose has seen this press release and is sending out feelers.

I have no idea how influential this bunch is. A Google search shows pretty much the same press release splattered all over the web. But there'll be more like this. The game of pulling clients to India gets more interesting - we aren't just trying to talk to clients now, we're also going to be wining and dining these 'Outsourcing Advisors'. Interesting times indeed.

Normalizing the IT Ecosystem

2005-03-03T04:31:00.000-08:00

[A shortened version of this article was published in the Indian Express on the 3rd Mar, 2005. Unfortunately it isn't available online: See the Express Careers section in the paper edition. This is a good article to forward to new readers of the blog, who want to know what it's all about.]

One of the biggest stories in India in recent days has been the development of the IT Industry, powered by BPO (Business Process Outsourcing). The Indian IT Industry is now considered the outsourcing king of the world. This industry has raised India's self-esteem, brought in billions of dollars, and provided employment for lakhs of engineers.

It would be interesting to see the Indian IT Industry as an ecosystem. As in a biological ecosystem, the various components of the industry - Education, Research, Services, Products, Support - are all dependent on each other for survival. The size and strength of each component is determined by the others. An ideal IT ecosystem would find space and opportunity for people of all types of interests - whether developing products, doing research work, managing development teams, supporting existing products, or just coding 9 to 5. The American IT Industry comes very close to this ideal, except for the recent distortions due to outsourcing.

The catalyst for the growth of the IT industry in India, as is well known, was the cost factor: we were able to provide trained engineers to work on IT related tasks at 1/4th or 1/5th the billing rates of engineers from the US or Europe. Besides this our engineers spoke English well. This created a huge market for our services companies. Due to this overriding focus on BPO, the IT industry in India has not grown in a balanced manner. Almost all of the heavyweight companies are Services companies, and the major portion of their work comes from the outsourcing of work by First-world companies, mostly American. We can call them 'Outsourcee' companies. These companies occupy an unnaturally large proportion of space in our IT ecosystem.

No such opportunity was available initially for Indian products companies, so that segment did not take off. It takes up a less-than-normal position in the ecosystem.

This dominance of services-related work has led to the creation of a huge pool of talented software engineers attuned to working in such conditions. These engineers have a fairly safe career - they are insulated from the success or failure of their current projects, because there are always more clients waiting. However, working in an outsourcee company creates a few problems for the engineers:
- The work that is outsourced is usually not core or cutting edge work, so they do not work on the newest technologies. Many projects are entirely about maintenance of legacy systems, for example.
- Because these engineers move from project to project every couple of years, they do not acquire any domain expertise in the area of the project. Thus they remain skilled only in particular coding languages but never in the domain-related concepts.
- Because designing or architect-level work rarely comes to the outsourcee companies, the only career growth path for the engineers is towards technical management - i.e. to become team leads, project managers, and so on. Such posts tend to take the engineer away from his technical work.
Companies need to keep a pool of trained, ready engineers in reserve for sudden expansions of projects. This means that between projects, engineers often find themselves on the bench - often for months at a time.

The outsourcee companies, themselves, also suffer from a few problems:
- Because the billing rates for each engineer are fixed, and clients often negotiate these to rock bottom rates, the only way to improve the company's revenue is to recruit more engineers and get them billed. This makes the overall management more and more difficult with time. This is in sharp contrast to the best product companies, where a small team of dedicated engineers can create wealth of millions of dollars.
- The company's work has very limited momentum. Engineers produce no IP (Intellectual Property) for the company itself, because the products produced are owned by the client. Month after month, the revenue comes only from billing. This means that even if the company has done cutting edge work once, it doesn't help later - the billing must continue somehow.

Most of the above are known problems. However, Outsourcee companies willingly endure them, because the Services business is the least risky among the various types of IT companies in India. So, services companies continue to grow day by day.

All these factors put pressure on the hardcore techies. These are the engineers who view computers and related technology as a passion rather than as a profession. They are the people who do not want to move into management, but want to go ever deeper into the technical aspects, work on the latest technologies, and participate in the creation of new standards. In a balanced IT ecosystem, these people would have left the softer, safer services jobs and moved to cutting edge technology projects in product companies. However, as mentioned earlier, the IT companies in India are largely services-oriented - there are very few products companies here. So there is no ready alternative for them.

Why is that the case? Why have so few products companies come up in India so far? The answer lies in the following reasons:
- Small Indian market. The number of computers per thousand in India is still very low. Products developed exclusively for the Indian market tend to have very low sales. This means that products developed in India for Indians have to be very specialized and pricey. Consider the various banking software applications developed by companies like Infosys and Wipro. These products were possible because the banking sector was amenable to computerization, and a clientele of 5 or 10 large banks, with maintenance contracts, was enough to turn a profit. A smaller company cannot hope to come up with such a product. It depends on large volume sales.
- Exposure to the international market was very low. Since the Indian market is small, products need to be developed for the international market. However, it was difficult for entrepreneurs here to gauge the current trends and keep up with the newest technologies. For a product to be successful, it must fulfill an emerging need. For example, could it have been possible for India to produce a software package for burning CDs? No, because CD writing drives in India became popular many years after they spread in the US and Europe. By then the standards and the market was well established, and several software packages to fill the niche had already been written. Contrast this with ICQ, the Instant Messaging software that came out of Israel in the early 90s, before any other IM was popular. It created a niche which Yahoo Messenger and MSN Messenger later took over.
- No safety net. In places like the US, salary levels are high enough, so saving is easier. Once sufficient savings are in place, it is a low risk to start up a company in ones garage, persuade a few friends to join as partners, and try developing and selling a product for a couple of years. This can go on as long as you have your savings to live on. Besides this the size of the IT industry is much bigger. If your idea doesn't work out, there are scores of companies waiting to recruit you. This was impossible in India, where your average Indian salary didn't permit you the bandwidth to live on your savings for extended periods. Also, India had a much smaller number of companies recruiting.

The tide, however, seems to be turning now. The success stories making the news today are not only the large services companies, but smaller companies developing products and technologies at the cutting edge. These companies are usually run by techies who worked at services companies for a while, then saw a niche they could fill. They are fighting and winning their battles in the international market, giving competition to established American and European companies. So far, the scope of these products and technologies has been small and focused on solving specific problems. But these are the forerunners of larger, mass-market products.

Ironically, it is the growth of outsourcing that has solved most of these problems:
- The size of the Indian market is growing. The number of computer-literate people has grown up sharply, partly because of the good growth of industry and partly because computers are seen as lifestyle products as well.
- Software engineers in the IT industry work on products and services for the international market. They are affected by the newest trends and technologies. This gives them a good idea of the emerging markets. They also have experience of working in large projects, so they are aware of the management and technical issues faced.
- The salaries in the IT industry are fairly high by Indian standards. Today, an engineer, with a few years of work, can very easily save up enough money to run for a few months on his own steam. There are many cases in the newspapers about companies started up in just this way. There are dozens more product ideas that didn't work. The entrepreneurs who tried the experiment generally go back and join some services company - they were never in danger of unemployment.
- The resources required to start an IT company are very low. This was well demonstrated by the rise of IT in India. It just takes a few computers in a spare room and an Internet connection. The revenue earned by a product company is also not proportional to the number of employees - meaning that you do not need to keep recruiting in order to grow.
Because of the above point, a successful product company can afford to pay its employees much higher salaries - a further incentive for people to join up.

A second wave of dissatisfied engineers is also following these entrepreneurs - people who do not want to start up product companies on their own, but want to work in one. Thus the product companies have a steady stream of applicants wanting to join them. Witness the thousands of applications received by the Bangalore centre of Google. These companies do not need to recruit continuously in order to grow, so the supply of engineers is more than the demand. Hence the companies can pick and choose the best engineers - which makes them desirable places to work in for techies.

On the other hand, the services companies, in order to grow, need to recruit at terrific speeds. They are casting their nets ever wider, poaching from each other, creating training programs for people from other disciplines. In their case, the supply of engineers is not enough to meet their demand. Hence as these companies grow, they cannot maintain the technical standard of the employees. This will further push the hardcore techies towards the product companies.

The smarter services companies are taking advantage of their in-house techies to start up product divisions. Again, this is a positive trend, because they can take advantage of the synergy between the products and services divisions to benefit both.

All of these factors lead towards the growth of the products segment of the IT ecosystem. The rise of such companies can be considered as a maturing of the IT industry in India. The ultimate test of the industry would be, when a fresh graduate joins the industry, he should be eventually able to find a job in exactly the kind of work he likes doing.

Afghanistan, Iran, Syria, and... India?

2005-02-17T00:01:00.000-08:00

A good friend just sent me this link, which is a list of the countries which need Airport transit visas if they have a stopover at Germany. This includes known 'terrorist-type' countries. It also includes India. His companys employees usually fly Lufthansa when going to the US to give client-side support. But for the past two weeks, travellers have been harassed by the German airport authorities over this visa. Now they are thinking of shifting to another airline.

Have a look at what this visa allows you to do: "Airport transit visa are only good for short stopovers while you are waiting a few hours for your onward flight in the airport's international transit area. However, hotel accommodation is only available outside the transit area. Please apply for a regular tourist visa if you want to stay at the airport overnight." That means you need this visa if your flight is going to take a one-hour halt, enough for you to maybe take a leak in peace. Indians, apparently, are not trustworthy enough to do that without a visa.

So much for India "rapidly turning into a developed nation", and "the outsourcing king of the world". So much, also, for Germany "wanting Indian engineers to work there". If you want to so much as cross over Germany because you chose a German Airline, you will have to go to their consulate in Mumbai or Delhi and get permission from them.

I would really like to hear more about this. This visa would be required by anyone flying Lufthansa to Europe or the US. Has any reader faced this problem? How hard is it to get this visa, and has anyone been rejected yet? Please spread the word.

The Momentum of IP

2005-02-14T23:58:00.000-08:00

The overlap between Product Revenues and Outsourcing Billing is a very interesting one. In my previous post, I mentioned an entrepreneur, D, who got a services company to build a prototype of his product cheaply. Now, this was cheap for him not only because the billing rates were lower - but also because, once the prototype was ready, the team was simply disbanded. He had his prototype, and he would now need coders only when he wanted to build something more, so why bother paying the outsourcee company?

Suppose now that our D does find a customer, and possibly the customer wants a few minor changes to the product. D would probably come back his favourite outsourcee company, pay billing for a couple of months for a small team, get his changes, and go back happy. He'd earn good revenue from his first customer, possibly sell the same product to several dozens of others, and come back to the outsourcee only when he wants grunt work done.

See anything interesting? The outsourcee company gets money - through billing - only when actual coding or testing is going on. It gets the same money whether the product is a failure or a bestseller. And, it has usually no stake in the IP created. If the product does spectacularly, the customer - the guy who owns the product - can pretty much take it easy until his clientele dries up. The outsourcee company, once the coding is done, must IMMEDIATELY assign the coders to a new project so that their billing goes on. They gain no long term benefit from creating IP for their customers.

Again, if D has a team of 10 people, these 10 people can generate astronomical revenues for the company if the product sells well. The revenues of the outsourcee company are strictly proportional to the number of people billed that month.

I'd like to coin a phrase for this : IP has momentum. If you own IP, if you create IP, you can basically coast along on your created IP as long as a market for it exists. As you accumulate it, a small company can earn bigger and bigger revenues without growing in manpower. You can build on your older IP, like momentum, to push through newer products and (what else) sell new IP.
Outsourcee companies have no IP momentum. At the most, they have reputations that bring new customers. But regardless of whether they built the next Windows last month, if they don't have billing flowing in for this month, their bottom line dips.

One more reason for outsourcee companies to move towards products. If nothing else, having a products division would help the company in the long run.

Outsourcing as opportunity

2005-02-03T06:20:00.000-08:00

There are dozens of sites - here, here, here, and many more - run by disgruntled American workers talking about how outsourcing destroyed their lives, killed their dreams, how to deal with unemployment, etc. Every site talks about how the next job they found paid half their old wages. One site even has a guide on what you can do if you're laid off. This guide says things like "Meet your ward representative", "Put up posters against outsourcing in malls", and suchlike.
I would like to venture another, more practical, suggestion based on personal experience. A couple of years back, I worked on a small project for an American company. Perhaps calling it a company would be a misnomer, because it consisted of just one employee - a techie who was using some portion of his savings to try out an idea. Let me call him D. He got two friends to do the sales work, and he hired our outsourcee company to do the entire product creation. We were about 6 people, 4 in development, and 2 in QA. D came to a profit sharing agreement with our company - once we developed the product, if he is able to sell it, we receive a part of the profits. In return, while actually creating the product, we work for a very low amount.
The work went on for some months, while D and his friends looked around for potential customers. Eventually, our work was done, we had a working prototype in place, and the 'project', as far as our company was concerned, was done. The team went on to do other projects. D now has a working, demonstrable, prototype of his project idea which he got for next to free. If he finds a customer, our company will get a portion of the profits.
If D had tried to start up a garage company in the US to implement his idea, he would have had to find a bunch of geeks willing to work for free - because he didnt have the money to pay them. Alternately, he would've had to work for years to write the prototype himself. This way, in a matter of months he had a prototype ready, while he was free to explore the market.
It probably takes some personal contacts or hard marketing to get an outsourcee company to agree to a deal like this. But if you can get through that stage, you can get your product idea implemented for real cheap - by the same company, maybe, who took your job. Everything that worked against you when you were an employee - cheap labour, excellent English, IIT-grads, Fast learners - now helps you when you're the brain behind a product idea.
Every techie, I am sure, has some viable product ideas. Outsourcing provides her the means of getting from idea to product cheaply. This has been proven again and again - your boss, who laid you off, has put his faith in the same technique. What stops you from starting up your own firm now?

PS. To the owner of DisplacedTechies, that place where all the jobs are going is Bangalore, not Bangladore. Know your enemy.

A Short followup to the previous post

2005-02-02T22:14:00.000-08:00

See this post on the DisplacedTechies blog. The blog is run by, who else, an American IT worker displaced by outsourcing. Agreed that The West Wing is basically a mirror of the government's status, and the episode talked of discusses the outsourcing debate during the presidential election. It still underlines the 'popular culture' aspect of this debate.
It would be interesting to hear from you all on this. Have you seen any more mentions of outsourcing in American music, movies, soap operas, books?

Outsourcing as popular culture

2005-01-26T23:46:00.000-08:00

Most superhero movies have a bit where the hero has suddenly become famous, become a topic of conversation for the common man. The older Superman movies used Newspaper headlines as a way of showing this. The newer ones have TV interviews, street singers, etc. for the same purpose. The idea is to show that a meme, a concept, is now a topic of discussion not only for the directly affected, but for society at large. I'd like to add Shock Jock abuse - and articles about it - to this category. It's one more indicator that the common American knows and has an opinion about the Debate Over Outsourcing.
Of course, one could argue that the debate became a part of American popular culture the moment it became an 'emotional' issue during the Presidential election. Election campaigns tend to focus on issues that evoke reactions from the common man - you won't find Bush promising "No more GOTOs" in his election speech. By that yardstick, outsourcing ranks among Iraq and Bin Laden as a part of popular culture in the US today.
The Shock Jock stunts - and many more like it, including the usual descriptions on Slashdot of terrible call-centre experiences - point to the fact that the debate is not (was it ever?) a technical or economic one. Never mind that Outsourcing is a necessity in this age, or that it often helps the company; it's 'in' to treat it as a threat to the country.
Expect more stupid stunts in the years to come. My guesses: A comedy movie depicting an unemployed tech worker who goes to Bangalore to destroy an outsourcing company. A couple lines in hip-hop songs, something like "Outsource my a**!" Hacker novels - maybe even movies - depicting an Indian as the bad guy. T-Shirts with smartie comments have already begun to be popular.
Characters in Soap Operas losing their jobs to outsourcing, and emotional hand-wringing following.

More Hyperbole from Bush... and encouragement from The Register

2005-01-24T06:02:00.000-08:00

Yet another item in the American media about how Bush is going to stop
outsourcing. Atleast, that is what the title and the first paragraph says.
Then, possibly, the spokesman notices that there are some Filipino guys
sitting in the audience and goes on to retract his statements : “I don’t
expect the sudden pullout by [US] companies from the Philippines. Outsourcing is obviously a growing trend in this country. American companies are trying to lower cost and they focus on the bottomline,” Chandler said. Rrright...
Anyway, it would be interesting to see where this goes. I cannot imagine a tax break that would substitute for getting a workforce at 1/4th the cost. And as I mentioned in a previous article, if you really make outsourcing unprofitable in the US, a bunch of European and Japanese companies are going to walk all over the US. No US company will let that happen if it can help it - so they will be putting pressure on Bush to make some tiny face-saving laws against outsourcing that dont matter at all.
It is a little weird that most of the Pro-Outsourcing reports, like this one, are coming in from Europe, while the Anti- rhetoric is being spouted in the US. I'd welcome any thoughts on why the social climate of the EU is so in favour (when the percentage of the outsourcing is much less there). The occasional protests by displaced workers are all but drowned out by the "every Euro outsourced gains 1.x Euros to the EU" type stories. Strange.

India's REAL competitor

2005-01-18T07:21:00.000-08:00

I find myself amused, and a little confused, by this little article . It proclaims that the latest country to join - and lead - the outsourcing bandwagon is tiny Costa Rica. Amusement because of the specious reasons the writer gives to justify his view (and because Costa Rica has a total population of about 40 lakhs). Confusion because the intent - the real intent - of the article is unclear. Two American consultancy companies are glorified as moving to Costa Rica, but the total manpower they have there is about 130 people. The article says Intel, Motorola, and 'other smaller firms' have low-cost work being done in CR, but no figures or details are mentioned, so we have no way of verifying. For all we know they may have five teenagers packing the chips in plastic cases.

They found a guy willing to say that "Wages in India are lower, but Costa Rica's advantages outweigh the slightly higher costs". The advantage, by the way, is "U.S. executives tire of long flights back and forth from India or China along with language barriers". Right, guys, that long daily commute to Bangalore is really taxing, eh? And of course Spanish is less of a barrier than British English.

The professed intent is definitely bullshit. This article is not about any general trend towards CR. It was written either to advertise the two companies mentioned("we're better than the others, we dont go to India, only to CR"), or to try to attract investment in CR. Any guesses?

"India and Costa Rica are the hottest spots now," said Joanne Rainey, owner of Southwest Outsource Purchasing LLC, "China is getting a little saturated."
ROTFLMAO. So remember, Indian Express, ToI, Rediff - our real competitor is Costa Rica, not China.

Creating your niche

2005-01-17T04:45:00.000-08:00

Fine, so you're working in an outsourcee company, your company is growing at a good rate, you might get promoted into middle management any day now, and you think this is the time to do something about the direction your career is going in. After all, dont we all know that us outsourcees always get the low-end projects, are considered el-cheapo programmer farms? I've talked before of some brave souls starting up product companies in India as a way of 'moving up the value chain'. That is fine if you want to branch off - but what about the rest of us who want to stay in our jobs but want to be getting better work?

As I mentioned in my previous post, the outsourcing market in India is beginning to mature - companies are beginning to think beyond the baseline - the pay package - in getting work and attracting talent. For some time now there have been attempts to distinguish ones company from the others, to create USPs. Most of these attempts have been so lame that they fooled no one. Witness the rush of outsourcees to grab the CMM certifications - even a casual looking around most of those companies shows that the certification was for name only, a bullet point to be added to the marketing brochure of the company. Fortunately, now that billing rates in India have gone up a little, companies have the bandwidth to hire professional HR people, who can create effective campaigns. That may lead to better work coming in. But this is all upper-management stuff. What about the rest of us? How do we get better work for ourselves?

What we can do as members of projects within such companies, is to figure out which kinds of jobs dont yet come to us, and then try to grab those. This applies especially to those who dont want their careers created/destroyed by managements. A thoroughly self-indulgent article in ComputerWorld magazine pointed me to a possible approach. This is an extension of the facts I laid out in my "We dont need domain knowledge" post.

Read that ComputerWorld article, print it out, and stick it up somewhere prominent. This is the exact image which we need to create for ourselves if we are to get better work. The article smugly assures American readers that "Being extremely productive, innovative and capable of solving the most challenging problems" will help keep their jobs from being outsourced. This, of course, is a two-edged sword. If you can show yourself as being the same, you've won part of the game. But the crux of the article is about having domain knowledge: "... know the business well, have helped invent and/or implement technologies that give the company its competitive advantage, and have an advanced knowledge of the technologies that are most important for the company's current success and future prospects."

And that, boys and girls, is what you need to do to raise your price. Your managers have no reason to help you with this. But you, as someone who wants to really get the core part of the project, are going to have to replace/supplant those people who fit the description in this article. Identify these people, and work in the same domain and with the same mindset. That's the only way you can get the good work. Your career as a part of your outsourcers project has to take precedence over your career as an employee of the outsourcee company. [Of course, this assumes that you really like the company you're doing the project for, and want to stay with it.] This involves getting atleast some domain knowledge - you will have to be able to give suggestions and ideas for the project as a whole. Outsourcing companies usually are willing to give project documentation - that is a good starting point. But you'll have to go beyond that.

Try this exercise. The next time you have a problem with your work and need to Google for it, note the nationalities of the people asking and answering similar questions on the newsgroups. 8 times out of ten, the people asking the questions are Indian, with email addresses indicating that they're working for outsourcees, and almost all the productive replies are by Americans or Europeans, who seem to be working at product companies or with standards organisations. Ask yourself, why can't you be the person answering such questions? Why must you only be asking them? That is a good indicator of where you are on the totem pole. Those "indispensible workers" described in the article are comfortable enough with the technology to answer questions by random people on the newsgroups. Try to do the same. It teaches you to think outside the box of your project.

The next level would be to try to get into standards-making forums, or atleast into expert groups on the domain of your choice. You get to talk to people as good as or better than you, and you get to think about the domain as a malleable, open-ended area instead of following standards blindly. Admittedly, getting to this level will require some management backing. If possible, create a 'expert' group on the domain within the company, formally or informally, so you atleast have someone to talk to about the field.

It is shameful how few of us are involved in any kind of research or standards activity. Its probably because the management policies of most outsourcee companies dont specify any incentive for such involvement. But as I said, relying on your management for your career is not going to help you. You have to do it yourself. At the least, you have to be aware of the research activity, enough to understand the directions your project is taking.

Once you are at this level, you're effectively at the same level as the 'indispensible' employees of the outsourcer company. And that is the level from which you can ask for and get the core, hi-tech work you crave.

"The Managing Director himself welcomed my parents"

2005-01-06T03:40:00.000-08:00

A good friend forwarded me this article on Forbes : To hire a son, woo his parents.

Interpreting this story in the larger context raises interesting questions. Are software companies getting so desperate to retain people now? I dont think so - given that the quality of work in outsourcee companies does not rise above a certain level (see my earlier posts for an explanation), companies would actually encourage some amount of attrition. So the purpose of this rigmarole cannot be just to reduce attrition as claimed.

Reminds me of a conversation I had with a manager-type, a while ago. He said that the sign of a maturing market is that the USPs of the competing product move away from money. Advertisements begin to talk about quality, dependability, patriotism, and other such waffle. The idea is to differentiate ones product from the others - when the customer doesnt care about what it costs.

It is likely that this move by Sierra is an attempt to create a aura of Quality and Caring around itself, as an attempt to draw attention away from the USP of outsourcee companies so far - salary. Note that Sierra, an American company, is paying less than Satyam, an Indian one. Even so, it is getting good people to join it. Companies are now saying, "Yeah, well, we're paying you less, but check out the amazing atmosphere we have!" Google, for example, has been using this strategy to advantage in its hiring efforts, and the Bangalore/Hyderabad market is now catching on.

The next logical conclusion would be : Salaries in the outsourcee industry must have reached their highest possible range for now, otherwise Sierra would just have increased salaries to get the best people.

Happy New Year

2004-12-03T06:31:00.000-08:00

Well people, I'm going on vacation for the rest of December. Life has taken a number of surprising twists and turns over the past two years; one of the strangest chapters in this story is going to end next week. Beyond that, I will need time off to reconcile myself to the changed state of affairs. Hence the long hiatus. I'll be back in January with, hopefully, my mind cleared up and with some idea of where I want to go next.
Here's wishing all of you a very Happy New Year in advance. Party like there's no tomorrow, people!

In case any of you havent read the *other* one of my blogs, here they are:

Inside-out Brain

Outsourcee

"Innovation doesnt matter much in India"

2004-11-30T04:28:00.000-08:00

This is a reply to a very pertinent comment made by Aditya, to my last post.

>I am not sure whether we are ready to say India stands for Innovation. Well, I have seen innovation doesn't matter much.
>We are a country ruled by money, short term gains impair us from seeing long term visions.

Aditya, *every* country is ruled by money. The only reason some countries seem to have more innovations is that the cost of taking a risk there is much less.
In the US (I assume that you're copmparing India with the US) it has been possible to start up a garage company, try to implement your idea, live off one's savings for a while, and abandon the whole thing in a year if it doesnt work out. The moment one thought his idea wasnt working he could forget it and jump into a job waiting for him. There're jobs in plenty waiting. What is the result of this freedom? Ten thousand people start up little firms. 5 of them have good ideas, good people and good marketing, and survive to become the next Microsoft. The remaining go back to some job.
This was not the case in India. Leaving a secure job was unthinkable here till recently, because it was difficult to find another one. Besides, the hassles of starting a business scared anyone without contacts (anyone else watches Office Office here? :) ) You didn't have ten thousand people in a position to take a risk on their idea. That's why, as you say, we had to concentrate on the short term.
Now, look at the situation today of an average software engineer in an outsourcing company in India. He's been earning decently for the past few years and has probably got some savings. He is up to date on the markets, and has ideas on what might work. Best of all, with the BPO boom, he knows there are a half-dozen jobs waiting for him if his idea doesnt work. It's the ideal climate. And there are millions of these people, all wanting to do something big. Of all of them, there will be atleast some who will try it and make it. My mom used to say "Bhookhe pety bhajan na hoye", meaning you cant chant hymns on an emtpy stomach. You cant think of long term visions unless your short term status is resolved. And it is being resolved, for more and more people.
To prove my theory, I point you to the number of new innovative products that came out of the US during the recent downturn. It was way, way less than what you'd expect. (okay, I cant give you number, but as a fellow techie you know what I mean) Why was that? Because the risk associated with leaving your job was way too high. Also, your savings were not enough to let you start your company. What has happened in the US to techies since those 3-odd years was about the same as the Indian economy since forever, more or less.

>To make money you don't have to be creative. Just keep your eye and ears open. When you spot someone's innovative idea, copy it, mass produce it, market it.

Agreed, agreed, agreed. You might say the same thing for Microsoft - google for all those things like Windows and Excel which they copied off other innovative people. Microsoft's genius is in packaging, not just innovation. So what's wrong with that? Happens everywhere. Packaging and selling is an integral part of having a product, not just dreaming up ideas. If you think Indians are good at it, more power to us.

>In software industry, guys with ideas aren't valued. Guys who get more work from client are.

This is the problem with Passive voice - you havent stated "guys with ideas arent valued" by WHOM. That makes all the difference. Your statement is true if you're talking of managers of Outsourcee companies doing the valuing. I mean delivering to the client makes their company run, so of course they're value such people. It is false for companies that live on ideas, like the startups owned by people who left their jobs and took risks on their own ideas.

I know, I know, these startups are few and far between. But they're no longer considered crackpot ideas - as the Rediff article proves, they are considered A Good Thing To Try. Now more than ever is the time to use your experience to try out your own idea.

Virtual Windsock

2004-11-23T23:02:00.000-08:00

Rediff has an series of article on Indians starting up their own companies and making innovative products. The first is here :How to succeed, Whizlabs style.
This sort of vindicates my last post, about product companies becoming the new trend. Not the fact of the company existing - but the fact that the trend is considered newsworthy by Rediff :). You are going to see this sort of articles by the dozen in all the papers soon.

PS. I've been remiss in updating this blog for a while now. Thank you to all the concerned messages you sent. The main reason was this competition I'm entering : Stories around the Coffee Table. I'm almost done with my entry, wish me luck!

The Great Migration

2004-11-10T04:21:00.000-08:00

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A Happy Diwali and New Year to all of you!
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A friend of mine, who was assigned to my project after joining my company, got fed up with the work in about 6 months. He originally wanted to work in embedded systems, and had heard that my company had a couple of projects in that area. But there wasnt space in those projects, and there was an 'urgent requirement' in mine, so he landed up here. To make things worse, he was put into the QE section because that's where the requirement was - even though he didnt want to do it.
Six months of testing drove him up the wall, and he quit. When I asked him where his new job was, he replied that he didnt have one yet. But he had a good idea of what he wanted from his new job - he wanted to work in a small company, he wanted to work in embedded systems, and the company had to be a PRODUCT company. He'd seen enough of service/consultancy type companies to realize their problems. After leaving work, he bought a couple of books on embedded systems, learnt about the field, and started applying to companies that fit his criteria. Happily, he found a job in a company he liked, in a few months.
This story would have probably ended differently if it had been 10 years ago. Our hero would have eventually joined some other service company, because nearly every software company in India then was a service company. And he would have been ridiculed by friends and colleagues for being impractical. That isnt the case today.
My friend isnt the only one. More and more people are realizing that there's no such thing as a techie career in a service company. Many of them are also realizing that if there's no company working in the area they like, it doesnt mean the end of the road - it means an unfilled niche. They are using the experiences they gained from their outsourcee days to start up their company and do what they like. And they're finding people like themselves who want to work in just such a setup.
All this reminds me of the way service companies mushroomed all over India, about 5 or 6 years ago. Ambitious kids who wanted to start their own business left big service companies, took some clients with them, and started their own garage service companies. Darwin helped separate the good managers from the bad ones, and a big crop of service companies came up. We're seeing the results now. The sad part is, the bad managers of those days, the ones who couldnt run a company and eventually joined a bigger one, were probably very good technically. But the environment was not favourable for product development, so they couldn't go anywhere else.
Ironically, all the hype around outsourcing today has given Indians the confidence to think they can create their own product. The American media, which used to project India as a land of dhoti-clad paupers drinking tea, now talks of us a super-intelligent programmers who are comparable to Americans. It makes India software products much, much easier to sell.
As a result of the Indian Geek's dissatisfaction with outsourcing, and of the environment putting him in a favourable light, he thinks of himself as deserving a better deal. And the more adventurous ones of his ilk go out and start a tiny garage product company. The less adventurous ones wait till the company is established, then think of joining it. They dont want the domain knowledge gained from their current project to go to waste. But even the most timid of them will eventually notice that their friends in such product companies are doing better intelectually and financially than they is. And they *will* eventually want to move, if they're capable of it.
Look around you. While service companies are growing more and more desperate to grow in size without taking on complex work, product companies are creating ever more relevant technologies. The former are now hiring anyone who can use a computer, and training him to be an obedient code monkey. And the latter are coolly hiring the best people in the market - because the best people are sick of being faceless, replaceable workers in service companies. The supply of jobs in product companies is less than the people trying to get them. And the other way around for service companies.
Here's a third angle. Ten years ago, if you wanted people in India with enough experience and knowledge to develop a product, you'd have a hard time finding them. But since the outsourcing boom began, computer science graduates are everywhere. Thes guys have been working for the past few years. And today, if you want a clutch of people with very specific domain knowledge, you will find them. A few months of working with you, and they'll be a world beating team.
To summarize : The market for Indian products is developing. The would-be entrepreneurs have worked long enough to be a part of the world market and decide to develop products for it. The workforce to implement these new products is being created in outsourcee companies.
Expect to see outsourcing become the second-grade industry it is, soon. Expect to see product companies take the limelight. Soon.

Effect of the US Election

2004-11-07T21:41:00.000-08:00

BTW : Blogger's been acting weird the past few days - wouldn't let me post anything. Hope to catch up with my writing this week.

Now back to our scheduled feature :
-----------

Matter Bhai raised an interesting question in his comment to the previous post. I'm sure this thought is on many minds right now - How does the recent election affect the outsourcing scenario in India?

Let me say at the outset that I'm not very conversant with the finer points of the Republican and Democrats' election promises, beyond their stands on outsourcing. I do know that Kerry gained some brownie points with the public by promising to shut down outsourcing; but he had to back off later. In case he'd won, he would probably have had to back off even more, and things would have pretty much remained the same. Let me explain.

I'm reminded of an old editorial cartoon, published shortly after Bush Sr.'s appointment as president. He's surrounded by a bewildering array of levers, buttons, switches, leading off into all sorts of machinery. The machinery is labelled "US Government", and Bush is having a hard time managing it. He says, "Gosh, all this looked so easy when I was one of the cogs!"

The short of it is, running a government involves a lot of things - many more than making election promises. I'd guess that keeping the economy running smoothly figures in the top ten. The recent rise of outsourcing was never a political decision. It was always an economic choice, and is partly responsible for the US economy doing reasonably well after the 2000-01 slump.

If a company is outsourcing to India, and thus producing software in half the time and in lower budget, it gains an edge over it's competitors. Which company would agree to stop this outsourcing? And if the outsourcing is stopped in the US, European competitors would then have the advantage. In my mind, a consortium of big, tax-paying companies has more influence in government policies than a few jobless workers walking around with placards.

This means that whoever is running the US government (assuming he wants to stay in power) will have to keep the companies happy. If Kerry had stepped into the Presidents shoes, he'd have found that stopping outsourcing would have gotten him into bad trouble, and wriggled out of it. To answer your question - I don't think the recent election will make any difference to the outsourcing scene. Outsourcing is a reliable method by which a company can reduce its costs (never mind the details I talk about in other essays here). As long as there's market competition, as long as sending work to India helps a company, it will happen in one form or the other.

Mulford quoth

2004-11-02T04:18:00.000-08:00

Here's an interview with the US ambassador to India, David Mulford, on the eve of the US Elections. Mulford talks of a lot of things, including the public debate in the US over the loss of jobs due to outsourcing. Interesting reading.

A relevant quote for our blog:

Because, at the moment, we are outsourcing jobs lower down the spectrum. If that begins to change—it probably will to some extent because of India’s great competence and tremendous human talent resource pool, as well as other countries—it will probably become something of an issue in the future. But it will be a different kind of an issue, I think. And, it’ll demand stronger education, training and so on. And it will be better prepared for it.

Division of Labour

2004-10-25T07:30:00.000-07:00

Over the past couple of months, I've been detailing some of the problems that come up in the outsourcing process. There are many more such issues, and I'll get to them as we go on. But I wanted to put in some thoughts on what conditions actually support outsourcing. We all know from newspaper reports and net articles how many companies are saving oodles of money by outsourcing, how the fiendishly intelligent and hardworking Indian workers are stealing US jobs. The underlying assumption now is that any white collar job can be outsourced (see http://blogs.law.harvard.edu/philg/2004/09/19#a6113 for a far out example). That is not true. There are very specific criteria that need to be met to achieve successful outsourcing.

Most of the problems I've outlined in my previous posts come up due to some wrong factor somewhere in the setup. I know it's impossible to get an completely perfect situation, but let me try explains the one most important factor (IMHO) that goes towards creating that situation : Neat demarcations of work. Organized division of tasks into in-housed and outsourced sections. If you can just do this one thing properly, your outsourcing project has a chance of going through.

Let me explain with a recent example from my company. The Development team of a project in the US has a pool of about 15 people. There are about 4 codeline branches, and the allocation of these people into these branches is fluid. The managers for each codeline are mostly fixed. When a customer requires a set of features or some bug fixes, URGENT, in a new patch for its installation, this info goes to the manager for that codeline. He looks to see who from the pool is free. There may be two or three 'regulars' for this codeline, and if they can handle this demand, all is fine. Else, he gets a few people from other branches allocated temporarily to his branch, and they all chalk out warplans, and roll out the new features in a couple of weeks time. During this period, inputs from the customer keep coming in, and temporary solutions which they propose to the customer keep getting rejected or modified, so each of the team could come to work the next morning to find himself working on something totally different - or even that he's now on another, even more urgent, codeline. Entire team is pumped up, totally into the code, and the manager is right there with them, co-ordinating everything. [Sadly, this is a pretty common situation in product companies]

Now these guys think, 24-hour productivity would be great, we could handle client requests even faster. Let's outsource some of our work. So, they hire 3 or 4 guys from a consultancy company in India, bring them to their office for a few weeks until they understand the bare basics of the code, then send them back. The outsourcers think, We'll start these guys working on small bugs initially, then move them onto bigger and bigger issues, until they're as good as we are. All set, right?

Wrong. Note that we're missing the most important piece here - the neat distribution of work. That means, even though our Indian team member has been given his work to do, the job is still controlled by the manager on the US side to an alarming extent. What happens is that, the manager, while going home, goes over the set of tasks he has, selects a few of them, and mails the Indian guys to do overnight.

The next morning he comes to work and finds his clients now want the team to do task Y instead of X, as scheduled yesterday. Hurriedly he IMs the Indian guys to say, "Stop the work you were doing yesterday, start work on this Y now." The Indians give him the status on the tasks they've been working on all day (Indian Time), which he duly notes. They are to go back to these tasks when things quieten down.

Except things never do quieten down in bleeding-edge product companies, do they? Over the next weeks and months, the co-ordination between the client's changing demands and the tasks allotted to the outsourcee team takes up more and more of the managers time. He's spending like half his day in clearing the outsourcee people's doubts and making sure they're up to date with the client's requirements - since they cant deal with the client themselves. If there's a manager devoted to the outsourcees, then the time is taken up in co-ordination between this manager and the other managers.

In short, the co-ordination and teamwork that is possible when an entire team sits in one office, in one time zone, is impossible if you have some people sitting at the other end of the world. Time and again, this simple factor has frustrated people on both sides of the globe, and led to the end of otherwise good outsourcing efforts.

The only solution here is to reduce the amount of co-ordination itself. And this can be achieved by proper division of work. Ideally, the work should be split such that the people in the outsourcee company do not depend on the outsourcer for any input - they only need report their status periodically, and present the outsourcer with the finished program when done. This is where software processes come into play - if properly used. They help define the work exactly, so that both sides can read the documentation and know exactly how much work is being passed on, how much effort is going to be needed to do it, how many people, etc. etc. This should be the only time when the manager frantically calls up the outsourcee people - to clear up doubts about the work assignment. Thereafter, the manager just keeps reading the status reports to make sure things are going right, and co-ordinates scheduling changes if the original schedule wasn't accurate enough. So the manager, at times, does spend hours of his time talking to the outsourcees. But that's when things go wrong, not in the normal course of things.

In precis form : The less the normal day to day co-ordination needed between outsourcer and outsourcee, the more chances are that the project will succeed.

An example: The famous Call Center jobs being transferred to India. Think about this a bit : How often does your normal call center operator get his routine changed through intervention of the American management folks? Hardly, hardly ever. The call center operation is almost self contained, all that goes from there to the outsourcer is a weekly report giving statistics. The American manager only works at a macro level, chalking out overall strategies.

Now go back to the URL above and see the idea the author proposes : Outsourcing University administration. Can this task be neatly demarcated so as to require minimal interaction with clients? Hardly. The task consists entirely of interaction with clients and other wings of administration. The idea is doomed even before it begins.

We dont need no steenkin' domain knowledge

2004-10-18T06:14:00.000-07:00

"Domain Knowledge is what makes you a player"

Very recently, a colleague of mine was told this by a visiting client: "This C++ and java knowledge is all fine. But to really be a contributor, you need to learn about the domain you work in. Learn Domain1, and Domain2, read the mailing lists on those topics, ask questions and help drive those areas! Only then will you become a player in this profession."

Which is all fine, my colleague tells me, except that in the space of the past year or so, he's worked on three different projects, in three different domains. This was because the first project shut down suddenly (the clientside team's budget was exhausted) and the second project was a pilot that didnt find any customers. And there are any number of factors that could go into him changing the current project too. Which has left him with no inclination to study the Domain areas pointed out by the client.

This sort of thing happens if you were working with a product company, too. People working at, say, Microsoft do get shunted to different projects. But I dont think the way this sort of thing is handled at outsourcee companies is anything like those transfers. In a product company, there is some guiding principle on the kind of work you do. Microsoft is unlikely to make you work in Solaris. Oracle isnt going to make you write Image Processing tools. Even when moved from one project to another, the business principles that guide the movement are consistent across the company. They reflect some broad policy changes and focus shifts. In fact, your shifting has a lot to do with the domain wou work in.

Your typical outsourcee company has nothing like a guiding policy, or (if they can swing it) nothing like an area of specialization. It takes on whatever work comes its way. In whatever domain, platform, language, or duration. It knows that the relationship is going to be built up slowly, with simple work coming its way to start with. There is enough time for its employees to grow into the work. And when an employee is shifted, what usually happens is that the shift is because of budgetary constraints of the client, or urgent needs of some new client. There's no guarantee that the domains of both projects are the same... or even the platforms, languages, anything at all! The only requirement to join the new project is usually good analytical skills, computer science theory, and familiarity with the new programmming language.

So given that he could be shifted out of the project at any time, and that the domain knowledge he gets might never get used in life again, what incentive exists for an outsourcee employee to acquire more than the projects requirement? If he's lucky and stays in one project for several years, working his way into the core of the product, he'll pick up the domain skills. But at the outset, there's no professional motivation to be anything more than a code monkey.

A boss I worked under, years ago, once told me to develop domain skills in some area, any area I liked. It neednt be project related. It would give me some satisfaction as I went on. I followed his advice for a while. Today that stuff I learned is hardly ever used in my current project. I could, of course, continue to update myself in my chosen area, but that would have be done on my own time - my client wants every minute of my productive time for their work. And I do not ever see domain expertise being a reason for my getting some work (remember my point about about only easily-learnable work coming to outsourcee companies?). So why should I be putting in time into learning anything, when I can work overtime for my client, and get a promotion by fixing his bugs faster?

I'll say this again for those people who've done it : It is possible to become a domain expert here. You might be in one project for years. You might decide to put in an hour a day into following the mailing lists. You might really love some field enough to keep track without telling your boss. But all these are your own efforts. The company doesnt gain from them, so the company will not invest in them. Your average employee of an outsourcee company is not a domain expert on anything, except maybe some programming languages. Nor does the work that comes to him require domain expertise, mostly, so it fits fine.

A friend of mine recently realized this while on assignment at a client's site. He came back and told his boss, that it didnt look like we were ever going to get any core work. Him and his team mates would be doing only peripheral work that required no domain skills. The boss's reply was, "That works for us - keeps things manageable." Q.E.D.

P.S. Thanks for all your good wishes when I was off sick. This article was written partly before and partly during my off period, so it might be a bit disjointed. Still makes the point clear, I hope.

Off Sick

2004-10-10T21:41:00.000-07:00

Hi People,
There havent been any updates to the blog in a while, and there's a simgle-word, foolproof explanation - Typhoid. I've got it, that is.
Managed to drag myself out of bed for half a day of work today, and will be hopefully coming up with updates more often now.

Another one flies the coop

2004-09-29T08:00:00.000-07:00

Yet another one of my close friends - who joined the company around the same time I did - left today, to join another outsourcee company. I've lost count of the people who joined my firm, became friends, and then left -for their MS, for other jobs, for startups, to get married and raise kids, one or two for family business, whatever. I'm still here for non-work related reasons, in case you were wondering. This is the new kind of friends circle - individual people changing every year or so, the group never having an employee who's been in the company for many years.
My current groups of friends are all my project mates. They're the ones I spend the most time with, so they're the ones I discuss most of my life with. I dont know which of them are going to be in the company a year from now.
I have another, broader group, people who have remained friends in spite of not even being in my city or country any more. The only interaction with them is through email or IM. Your average IT worker probably types more stuff into IM or email than he does into vi. For many people, whole weeks go by without any interaction with friends except by IM. It's probably the reason why IT sorts are really enthusiastic about some sport - badminton, trekking, cricket - which requires them to spend time with each other.
In spite of all efforts, programmers are probably the groups who spend the least time in social activities. It's very rare to develop close friendships, even rarer to find people who share your interests and who happen to be around for long enough to develop such friendship. So when it happens, it's amazing.

And when it ends, it's hard to imagine what it feels like, for those who dont work in IT.

Fare well, pal.

IM Vs. Blogging

2004-09-23T07:27:00.000-07:00

The past few days have been very interesting. Nearly everyone I know (and others, whom I dont know that well) have IM'ed me, or caught up with me near the water cooler to give me his/her opinions on this blog. I could probably count the time I spent arguing with these guys in days. (If you need to wonder if I might be referring to YOU, then you're probably right)

I'm all for the immediacy of IM as opposing to the static art of composing emails and articles. But guys, if you have something to add to the discussion, give it to me in a form I can put up on the blog! Chat transcripts dont make for good blog posts. A couple of paragraphs where you've put together your arguments is much better, and I guarantee that it'll be published for everyone to think about.

I don't want stuff that agrees with me. Since I'm acting the part of a doomsayer, I'd be more than happy to get positive refutations of my arguments. I would be overjoyed to get convincing details of India's dominance. But please, PLEASE, write it out in an honest way and send it to me in one piece. Eloquence is not a requirement, just honest, logical arguments. From your IMs and discussions, I know you're capable of that much.

Divided Loyalties

2004-09-21T08:02:00.000-07:00

Sorry for a title that sounds like a Mills & Boon novel, but I could think of no better phrase for a very common situation that occurs in outsourcee companies. I'm talking in detail about one of the factors that prevent employees from "giving their 100%", as I mentioned in an earlier article.

While talking to a colleague today, we got onto the topic of promotions. This was his opinion: "It doesnt matter if the client sues u, if ur boss is happy, ur on ur way." Which is kinda wierd, because if you are writing software, and the person for whom you're writing it doesnt like it, you ought to be in a very bad position. But that isnt, often, the case in an outsourcee company.

Very few companies do proper "360 degree appraisals". By which I mean, appraisals in which the client, the person who is paying for a project, gets to give his opinion on a person who's working on that project. Feedback from the client, if any, comes in the form of mails sent to the team lead, or his manager. Those mails, of course, come only in extraordinary circumstances: either the guy is doing really, really badly, or extremely well. How to interpret that feedback, too, is up to the team lead.

This means that the person who decides a programmers future, his promotions, his pay, is not the person who is most qualified to judge his work : the client. Granted, there may be any number of circumstances where a person does good work, but it isnt visible to the client. But that doesnt make anyone else *more* capable of judging our programmer. So our hero has to make sure he doesnt get into his team lead's bad books, if he wants to get ahead. I've personally seen situations where people did amazing technical work, which was appreciated by the client, too, but because they'd annoyed their team lead for some reason, they were given bad ratings in their appraisals.

I know exactly what everyone's thinking right now: Sucking up to your boss happens in all companies, not just in outsourcee ones. True, it does happen. But look at how rarely, in normal companies, a programmer interacts with a client. The people who interact with clients, Sales types or site engineers, are defined by the work they do. They arent the people who write the code. Come appraisal time, they are judged only by how well they handled the clients. Programmers are judged by how well they coded as per their bosses' instructions. But in outsourcee companies, programmers are judged by how well they interacted with their boss, when the meat of their work came from a different person, the client, and was only superficially handled by their boss.

Also remember that we're talking of programming, where the output of a whole day's work could be 5 lines of amazing code. It could solve all the client's problems, but your team lead, who hasnt spent as much time on the problem as you and the client have, cant see the complexity of the problem.

In short: Make sure your boss is happy with your work. Make sure he knows why you came in late, or why you couldn't deliver on time. It doesnt much matter if your client isnt convinced. Its your boss who is going to be promoting you, make sure you explain everything to him. You have to make sure he knows what you've achieved. Code doesnt speak for itself.

Your typical "Offshore outsourcing" debate

2004-09-20T08:40:00.000-07:00

This article - Offshore outsourcing - perfectly illustrates the typical debate on the net about outsourcing. The major portion of the participants are Americans. They'll be about evenly split between "outsourcing is an economic reality, lets face it", and " CEOs are selling our country and living standards down the drain for money". Maybe, if this were on Slashdot, there'll be a few Indians gloating about how much work is inevitably coming to India.
Fear not, Americans! While a lot of the simpler coding jobs are moving to India, I dont see us taking over your country for some years to come. There are several things that need to happen before then. Dont worry, going by the trends, Indians are beginning to realize that just doing outsourced work does not move them into any sort of competition with the companies actually doing the creative stuff.
I've been facing criticism over the past few days for being a pessimistic SoB and using the language Americans use about us : code-monkeys, software coolies, what have you. So let me try to list out the things that'll make me shut up and agree that India's a real competitor in the global arena :

- Software products marked with Indian brands are marketed by Indians worldwide. They may be made by Vietnamese for all I care : the branding has to be Indian and the revenue earned by selling them has to go into Indian products.

- Standards forming bodies like the IEEE, W3C, etc have significant Indian presence. I dont mean NRIs, I mean Indians working for Indian companies, who will use the standards they make in their products.

- Indian Technological patents and proof-of-concepts of these patents are comparable to the best of whatever the best is at the time.

I hope you get the drift.

[ I'm still thinking over this one. Comment away, but realize that I'll be further adding to this post soon. ]

Paid-for article on Rediff?

2004-09-14T07:13:00.000-07:00

Look through this article on Rediff : India, the world's high-end IT hub too

From the scarce number of companies referred to by this article, and the conspicious absence of the bigger names in the field, the article sounds like a veiled advertisement for this iSoft-whatsis. For my money, they're targeting developers whom they want to recruit.

Mainly, this is an attempt to attract people who have realized the stuff I've talked about over the past weeks, and who are now looking for alternative careers. Jumping to a product company is always risky in the Indian environment, so this company is offering a half-assed compromise between the two : We develop proper products (i.e. here you could become a highly paid pure techie), but these products are developed for some outsourcing company. The idea might just work, but everything is against it.

"Give your 100%"

2004-09-13T08:41:00.000-07:00

The comment I got for my last post (What do I want to achieve?) was so to-the-point that I need to reply to it. Read the comment first; I'm not quoting all of it here.

You start with that part of your work where you can afford to compromise on quality and where your business secrets (core work) are not given away. You start the partership. Slowly, if the outsourcee people are good, you start putting more faith into your partner. You start giving more important/core work.

Right. And let me say this : What you're describing is no different from the path which any employee of any company goes through: as a freshie, he's given simple work. Then as he learns about the project, he's given bigger chunks. Eventually, he's working on core parts of the project.
All else being equal, this is what would happen eventually to you, the guy who's working on a clients project while being an employee of an outsourcee company. But is all else equal? I've seen people who have achieved this, no doubt. There are people who have become core contributors to their client's projects, people who are respected by the clientside employees as one of their own. Though the ratio is less compared to that of code monkeys (as you rightly say), it does happen.

Now. Tell me : how much of this progress is due to the outsourcee's help, and how much due to the individual's? I say from personal experience that the people who are core contributors have done it on their own steam. They are driven individuals who have bucked the system of their company and fought to be allowed to contribute more to their client. Solely because they're employees of the outsourcee company, working for a separate client, they are pulled back in several ways from contributing their 100% to the client's project. I think this calls for examples. Here's a few ways in which outsourcee companies pull back their employees:

- The promotion/managership trap. I've mentioned this before. The client company doesnt really have control over the promotion path of the employee, right? All it can do is to give bonuses, and commend the employee in its appraisal contribution. And what happens if the employee gets a good rating from the client? He becomes in charge of a team - he gets a promotion, or a raise, and becomes a manager for the project. The team keeps increasing until he cant contribute any more. One of my friends, who went through this experience, describes it as "5% real work, 95% donkeywork managing kids." He eventually forced his division bosses to appoint a proper manager for his growing team, so he could concentrate on his work.

- "Processes". Note the statistics touted by the Indian outsourcee companies. Most of the CMM level 3,4,5, whatever, companies are in India. This is a level of software processed above what most client companies have. Now, I'm not saying Software Processes are a bad thing. But their primary purpose is to ease flow of information between the client and the outsourcee team. Instead, processes are used as a marketing weapon. A project proposal from an outsourcee company to a potential client will have : "Our company has CMM level 5, so we are better suited for doing your work." I remember, in the days when this trend was just starting up, a startup client split up some work between my group and another CMM level 5 company. We went through an entire design, implementation and testing cycle, in the time that the other company took to follow its processes and get a proper proposal to the client. There are reverse-type examples too: when the client wants to follow some processes and the outsourcee has different ideas. What I'm saying is that processes are supposed to be in tune with the client, and should be used to get the project done better, rather than solely as a marketing tool.

- The dreaded "Company Participation" Question. When all is said and done, you're still an employee of the Outsourcee company, not of the client. You have have given your 100% to the client, and have worked on the core architecture. But what have you done for your own company? Have you participated in the other company-related activities? Your duties, in a typical Outsourcee-type company may range from attending and organizing seminars, joining umpteen 'work groups', helping the HR department out in recruiting people, and God knows what else. It doesnt matter if you actually spend all your time working on the client's work - brownie points are deducted from your rating during appraisal time because you didnt spend some time in "improving" your company.

I can think of more problems. But I think my point has been made. Your own company pulls you back from working on par with those guys in your client company. If you let yourself go with the flow, you end up with the career path I described in a previous post.

And how many people talk about this sort of stuff?

What do I want to achieve?

2004-09-10T08:18:00.000-07:00

I'm answering Feedback No. 6 first because it helps further clarify my position:

My take on the subject is that we all have our own destinies. Why do we do these jobs?

Read the Bhagavad Gita...

Has the US forced these jobs on us? Why should the US offer us technically challenging work? Why do we expect them to treat us as first class citizens in the industry? The beggars are seldom the choosers.

Right. I totally agree with you. And this is why I claim that the work we do isnt as good as the client's work.

And considering the bad state of our economy, government, general living standard of country and the attitude of all of us, look at what the outsourcing has done to our life? If outsourcing was not to happen, what would happen to us? What would we end up doing?
What would be our standard of living?

Agreed, agreed, and agreed. I earn more than my Dad did when he had 6 odd years of experience, and people in my company routinely fly to Malaysia and buy expensive Apartments. We are helping the Indian economy to grow, and triggering other sectors as well. But. In this blog, I am not comparing our jobs with the old-economy type jobs in India, but with the jobs similarly qualified people in the "Outsourcer countries" get. This may be an unfair comparision considering the country we live in. But people are making this exact same comparison and saying that we are at the same level as the Outsourcers. See the Feedback No.s 1 and 2 below : They illustrate the common mindset of the Outsourcee public, of the Indian media, of a lot of Indian officialdom, who say: "We are really competing with the Americans on common ground now."

Though I understand that the primary intention of the blog is to paint the other side of the outsourcing picture, what is its main point? What do you want to arrive at?

In a word : the truth. As I mentioned above, Indian public opinion today is that due to Outsourcing, we are rapidly gaining on the Americans. It is felt that a person fresh out of college today in India can expect to get the same kind of career that his counterpart in the US does. People say the outsourcing companies are among the world's top X companies, and the work people do there, the way they are run, is the best possible. The panicky reports in US media about job losses help fuel that feeling.
My contention is that outsourcee companies are a long way away from making serious contributions to World industry. Indian Outsourcee companies are nowhere near world standards - not only in the quality of work they do, but the way they are managed, the options available to their employees. This stuff is subtle. It doesnt show up in newspaper interviews, it doesnt get discussed openly.
When a college graduate joins such a company, he's only seen all the glowing media reports, he hasnt seen all the details I'm writing about. I want people to know the problems they'll face when they make a career in an Outsourcee company.
Recognizing a problem is the first step to fixing it. If enough people read, understand, and participate in this discussion, they are armed to see such problems and think of solutions. I do not claim to be an expert. I cant hand out magic potions that'll make everything all right. It'll have to be a joint brainstorming session.
This requires you, my readers, to ask me tough questions, and force me to clarify my points, and for you to spread the ideas to your friends so more people understand what I'm talking about. So shoot!

Feedback (so far)

2004-09-09T09:05:00.000-07:00

Feedback No. 1:

The entire article is working on a premise that only low end work is outsourced.
This is changing sooner than you can think.
The company where I work, has completly outsourced new development to BSL.
Windows XP home edition is developed in India.
Oracle 10g (Parts of it are developed in India).
So that argument is flawed.
We are getting there in terms of being customer centric and writing good code but we have some way to go.

Feedback No. 2:
[Building on FB1]

Yep,
We, in India,are developing the Turnkey Solution for Kuwait Stock Exchange and Muscat Stock Exchange and all companies that qualified for the last round were Indian.....:)

Feedback No. 3:

Q for outsourcee ...

What is the effect of all the noise on an outsourcee? On morale? Including call center ones?

When we had people going for Y2K problem, many people were critical and called them 'code coolies'. Those people have now spread out and are doing themselves and India good.

How do outsourcee feel when called code coolies? Does it makes you feel let down or push back at these people or don't care?

If the feeling different than when people in US are critical? Does it makes you feel important or push back at these people or don't care?

Feedback No. 4:
[More general questions, typical stuff asked by Americans]

Are you a swaet shop worker?
Does your employer squeeze your nuts dry?
Are you allowed right to talk back?
In US it is all about freedom, why you let them oppress you ?
Are all computer programmer high caste people?

Feedback No. 5:
[An Indian working in US asks :]

1. i wonder if i come back people will bitch about me .. like i say something and they will be .. sala US say aaya hai ... thnks he is hero
2. My old company, MNC-with-Indian-branch, was like that ... we had to fight bak not to be treated like 'naukar' .. it had a strong lala company attitude we had to fight ... now people tell me that attitute is spreading ... really?

Feedback No. 6:

Just got a chance to read your outsourcee blog. Its wonderful. I wish I could write and maintain my impressions about my job like you do. I'm sure your impressions about your job will change over time as your job profile itself would change. But this is fantastic. Keep it up.

My take on the subject is that we all have our own destinies. Why do we do these jobs? Has the US forced these jobs on us? Why should the US offer us technically challenging work? Why do we expect them to treat us as first class citizens in the industry? The beggars are seldom the choosers.

And considering the bad state of our economy, government, general living standard of country and the attitude of all of us, look at what the outsourcing has done to our life? If outsourcing was not to happen, what would happen to us? What would we end up doing? What would be our standard of living?

Though I understand that the primary intention of the blog is to paint the other side of the outsourcing picture, what is its main point? What do you want to arrive at?

A Belated Definition

2004-09-09T08:59:00.000-07:00

I was going to give replies to all the people who've asked me questions and given suggestions, but then I realized I havent defined 'Outsourcing' for the purposes of this column. I hang my head in shame and offer these few lines as repentance:

Outsourcing: This is when one company contracts another company to do the formers work. Usually, the former (hereafter referred to as the Outsourcer, or client) pays money to the latter (the Outsourcee) in lieu of the work.

The scope of this column is limited to the outsourcing done for intangible 'software'. That means I'm not going to talk about outsourcing of manufacturing work, like how Nike shoes are produced in China. I'm going to talk about computer software, about legal documents being processed, about Call centres, about X-rays being scanned by doctors, and so on. Software of all kinds.

I'm not talking about a company setting up a branch in another place because its cheaper. As long as the work stays within in the same company, it isnt outsourcing. In case this definition gets shady, I'll use the following test: Whose name is on the final product? If at all times, the persons who worked on the product are employees of the same company whose name is on the product, then it ISNT outsourcing.
[Thinking of more caveats and clarifications overnight - comments are invited]

Now, given this definition, lets tackle the questions we have. I am posting the questions, suggestions etc which I have so far, in my next post. Replies and related questions are invited. I am going to be editing these posts over the next day or so, answering them as best as I can.

The career path of an outsourcee

2004-09-02T08:04:00.000-07:00

This post builds on the type-of-work post I wrote earlier.

The kind of work that comes to outsourcee companies is typically the lower end kind of work, which doesnt teach you much, and which people on the client's side want to skip in favour of better work. The moment 'good' or interesting work comes up for the client company, it will be taken up by the people there, and the uninteresting work they were doing earlier goes to the outsourcees. Or else, when the load is suddenly too much to handle, new people are added hastily to the outsourcee team, and the new guys have to learn the code on the fly.

What does this mean for the average outsourcee? It means:

- Depending on the need of the moment, a new college graduate can get assigned to the same project, and same work, as a person with loads of experience.

- Client companies are reluctant to give technically demanding or "deep" work to the outsourcees. They also know that the team could change, expand, or shrink at any time, so they dont want to be left with incomplete work.

- Generally, the work that is outsourced is work that can be picked up with a month or so of starting. So, within a month of joining, the fresh college graduate is working along his experienced colleague and delivering at almost the same pace.

- The type of tasks that require experience and system knowledge are very few, and you're lucky if you get that stuff. So, if you have a bunch of fresh college graduates, you will be able to deliver maybe 80% of the work thats given you. The remaining 20%, maybe, requires knowledge of the platforms or of the domain. Some of it, too, can be done by bright performers out of those same college kids.

Now think about this: Take two people, once who is fresh out of college, and thus will take up a junior post (i.e. less money), and another who has been working for several years, and is a 'senior programmer', (i.e. more money).

When recruited as team member, both these people are going to get the same kind of work. The experienced guy will pick it up in a week. The kid will take a month. But at the end of the month, they're almost on par, because the work doesnt require much experience.

Now suppose you only had to recruit one of them? Which one would you take?

The fresh graduate, of course! Because he's doing the same work for much less money! And the months' pick up time is easily taken care of by marking him as a trainee and making him billable after a month.

So now, why would any 'consultancy company' want experienced people on its payrolls at all? Think a while about it.

There are many such companies today, which have a bulk of their employees fresh out of college. Companies proudly declare themselves to be "young" companies. The press releases say," The average age of our employees is just 24 years!" implying that it's a dynamic young environment to work in. And like factories, these companies go through sets of employees, working with them for a few years, then refusing to pay more to them as their experience increases, so that people leave automatically.

So where do the experienced people from such consultancies go? To the only posts which are open to them : Managers. Today, in any outsourcee company in India, experience is equated with managerial skills. A person with 3 or 4 years experience is supposed to handle teams of 5-10 people, a person with 7-10 years of experience handles departments of 25 people, old fogeys with 15 years of experience handle entire divisions and are responsible for business development.

It takes a moment to see how big a farce this is. How does programming for 3 years qualify you to manage a team of eager college graduates? How does managing a couple of such teams prepare you for handling business relations with customers?

In traditional companies, managers are people who have management degrees. Engineers are people who have technical degrees. People do cross over, but it is not a compulsion. You can become a pretty senior, well respected engineer. Not so in outsourcee companies.

Because the work itself is not that complicated, there is no technical-level promotion path. There are no system architects, or product design in-charges, or technological consultants in outsourcee companies. There are only two types of work: Entry-level work, i.e. programming, the work you learned in college; and management of bigger and bigger teams, which you are supposed to magically pick up. Hardly any manager is supposed to code, so you are shut out of the field which you are most interested in.

If you're lucky, and have some aptitude for management, you wind up managing a huge division of coders. If not, you code for a few years, then as a promotion, become a manager of a project team. Then you do so-so with this team, trying to micromanage each team member and solving their technical issues. The team never grows because of your efforts. If it does, it's because there is lots of code-monkey type work at the client's end. Once the project stops, or you get sick of it, you start again with another project.

This, incidentally, explains why Indian outsourcee companies are getting stuck in a rut. It takes people with company-building visions at the top, to move the company forward. Often, the head of the company is such a person. But everyone under him is a techie who worked his ass off in bigger and bigger projects until he got to a "business development" type of position. Thankfully, some of the companies are realizing this and recruiting people with some management and brand-building experience to figure out what to do next.

'US will collapse without outsourcing'

2004-08-31T22:46:00.000-07:00

Here's a book written about the '2nd class employee' bias which Indians face as outsourcees and even as immigrant employees:
'US will collapse without outsourcing' - Sify.com

A Short Parable

2004-08-31T05:24:00.000-07:00

I've never actually heard of this study being performed, but my guess is that if it ever gets done the results will be what I'm expecting.

Our test subjects are interviewers. We ask them to interview two people. In each case, the interview should be short, not more than 5 minutes.

Now our 'candidate' walks in, wearing unobtrusive formal wear. He answers the techie questions of the interviewer. When he is asked the salary he is expecting, he answers something like "15 thousand dollars per month." Our interviewer has been asked not to haggle, so the interview ends here.

The next day, the SAME GUY again walks to be interviewed, wearing the SAME SHIRT, and wearing makeup, so the interviewer doesn't know it is him. Once again the interview goes on for 5 minutes. At the end, when asked about his expected pay, the candidate replies, "3 thousand dollars", or something similar.

Now here's the funny bit. A few days later, we ask our 'interviewer' just one question about the two candidates : "Which of your two candidates wore a better-quality SHIRT?"

And here's my guess as to what will happen. 90% of the interviewers are going to say, "The first one, the one who asked for 15 thousand dollars."

-----

What am I trying to say? I'm saying that if even if you are as good as person X, and are doing work of the same kind, you will be automatically considered 'inferior' if you work for less money than X. And if everyone knows that the primary reason you got the job was because you are doing it for much, much less than person X, it is taken for granted that you're a 2nd class employee.

Disclaimer : As is usual with parables and the morals to be derived from them, both are exaggerated versions of real life.

Call centres, love life don't mix

2004-08-31T03:33:00.000-07:00

Interesting article about some of the hidden effects of working at a call centre : Call centres, love life don't mix.

While this isnt central to the direction of this blog, it serves as an indication that before going in for a career of such a nature, one needs to know more about it than the pay package.

The work we do

2004-08-28T05:26:00.000-07:00

By the standards of the company I work for, I'm an old fogey. I've been working at programming for nearly 7 years now. I'll try to explain the way the work has evolved over these years.

1998 was about the end of the period where the whole concept of outsourcing was just taking off. My company has been around for about 15 years now, but the 90's was a period where American companies did their outsourcing for one of two reasons:

- The founder/influential-person of the company was an Indian, and he wanted to give something back to his country. The quality of the work varied. Usually this reason was coupled with one of the other two.

- The company was a garage-type company who was really strapped for cash. It got some funding by way of VCs, but wanted to make that money last. Oh, and someone in that company was either Indian or knew Indians. This sort of project was the most fun to work on, because substantial portions of the heavy-duty, core technical work came here. But you never knew how long it would last, because funding could run out anytime, and the products were hardly ever marketed very well. People on the other side were basically trying to get a new product idea working.

- The company was a large company which wanted to have "24-hour operations" i.e., when problems arose at night time in the US, they'd have a bunch of guys here in India to handle it. This work was the most frustrating kind of work, because it usually involved babysitting critical and delicate applications. And the outsourcees had to really put in a fight to be considered capable of taking on bigger roles.

But overall, if you'll look over the work that came here, you'll see that the work that the US workers, did, and the work that the outsourcees did, was about the same quality. Generally, the outsourcees were treated as part of the company, and were often called over in times of crises. Several ended up joining their clients, since they already knew all about the code.

Fast forward to today.

The years of 2000-02 are considered the worst ever for the software industry. We'll go into the reasons later. But the net effect was that work was hard to come by for American programmers, and by extension, for outsourcees. Any company that didnt have a sound, sustainable business model went out of business. The bad times went on till almost the end of 2002, when American CEOs began to look at outsourcing in a different light. It could be a way to help them out of their crises. And the net result is :

90% of the work that gets outsourced today, does so for one reason alone: MONEY. There's a mental calculation that goes on in everyone's head: This job is done by persons who take $X as salary. There are people in India who can do this job, at $Y. And there are hidden costs, like so :

- The Indian guy, who is after all cheaper, is going to do this job at half, or one-third the speed of our American guy. So, is $Y, multipled by 2 or 3, still less than $X ?

- We could outsource the immediate manager for this team of outsourcees. He too would be cheaper, and could handle part of the day to day pressure. This guy, though, would come in addition to the manger we already have in our company.

- We have to stand those Indians' accents. We have to bear their weird working culture. We have to figure out their emails. [ This is usually why the contact person at the client side, for most outsourcees, is an NRI-type ]

If all these costs are bearable, the outsourcing project starts up. The process has been well documented by now; there are magazines, websites, consultancy groups, who profess to show the innocent unwary American where he could make mistakes while giving work to the wily brown guys.

The effect of this process? The outsourcee is not a proper member of the company he works for. If he's lucky, he is called a contractor and gets a listing in the HR directory. If not, he reports to a local manager who is the 'face' of the outsourcee team for the client. So he is hardly ever involved in the planning and customer-requirements stages of the product. All he gets is a bunch of small tasks doled out by either the client-contact-person, or his manager. He never knows more than the current set of targets. In fact, he doesnt need to know much about the domain he's working in - he is just a code monkey.

Another effect is that now there's a big difference in the attitude of the client towards the hapless outsourcee. The work that gets outsourced is now driven only by money, vis-a-vis the relative ease of picking it up and doing it quickly. Hence, "dirty work", which people dont like doing, is the first to be outsourced. The donkey work of manual testing, fixing nasty bugs that dont teach you anything, writing testing frameworks, running performance tests are 90% of the work you'll find done at any Indian 'IT consultancy company'.

Dont get me wrong: Outsourcing, in the long run, is a step up for the average Indian programmer. He gets to work with companies that are leaders. In the near future, the smart people who learned enough from the outsourced work will start up technology firms, and make products that really compete. But that is something that'll happen in spite of the management of the outsourcee companies, not because of it.

More on who is to blame, exactly, in next post.

Saturday

2004-08-28T04:59:00.000-07:00

So this is a Saturday aftenoon, and I'm sitting here in the office wondering why I came here in the first place. Mostly its because I have to go see a movie in the evening, so I figured I could get to the office first, see if I have a mail from my client.

I dont. Either he was shell-shocked by the bugfix I proposed to him, or he's still laughing his ass off. Or maybe he was "working from home" yesterday, which meant he connected to the net and did whatever management he does from the comfort of his armchair. Either way, I have no response from him, so I am not sure how he wants me to proceed.

Welcome to the daily dilemma of the outsourcee.

Yes, I'm defining that word now. An 'outsourcer' is an (usually American) employer who decided to get some of his work done by cheaper programmers from cheaper countries, like India. I, an outsourcee, am the person at the other end of the transaction. I'm the guy who comes to work every day and does whatever said outsourcer (or manager working in outsourcing company) has assigned to me. The Indian guy who's 'stealing the american jobs away'. There are thousands like me. I cant say with honesty that I'm talking on behalf of all of them, but just being able to talk about my job and what I deal with, is enough for me, for now.