Climbing the offshoring ladder

CIOL article has a nice section about the difference between OPD and OSD. That is Outsourced Product Development vs generic Outsourced Software Development for you.

In the industry that is obsessed with 3-letter abbreviations it seems very appropriate to write it that way. 

What Does It Take to Get IT Outsourcers to Innovate?

Excellent article in CIO.com about how IT Outsourcers can be innovative.

I loved some of the practical comments that explained why it is not as easy to do it as a service provider, and also how more can be got from an outsourcing relationship.

My thought:

Very interesting! We are a service provider – and we work with ISVs – the software vendors – whose entire existence is dependent on their innovation.

At one point in time, we even considered if we can christen our tag-line as “Outnovate” meaning Outsourcing Innovation.

Not because we could innovate completely for our customers. But because creating success through innovation does not stop with idea – but success comes because of execution of an innovative idea. Since we help “execute” innovative ideas – which is all we do due to our work with innovative software firms – we thought we can call ourselves as a company that you can outsource innovation with!

But, at a very fundamental level – outsourcing is about handing over non-core activities to experts in those non-core activities. How can “innovation” be outsourced? Is that a non-core activity of yours?

Can the outsourcing company be made to go beyond what the customers are specifying? Yes. Only by involving the people in your decision process, and by setting the expectation and reiterating the expectation.

As service providers – do we want to promise that to our customers. We sure do. Do we have people who can contribute improvements beyond what is being specified? We sure do! But, does that happen automatically? No. Like in any people process, stakeholder commitment and follow-through is needed for harnessing the potential of any initiatives beyond the call of duty.

So, my 2 cents to CIOs and CTOs:

– Ask questions triggering innovative answers / solutions. Keep asking with all people involved including your internal people and outsourcer’s people.

– Show that you are willing to listen to the comments / suggestions and if you do not, take the pain of explaining why you do not want to take it. Nobody wants to advise / recommend to deaf ears.

– Make sure that you respect the people involved as people with ideas that can improve your business.

Silicon Valley Start-Ups Awash in Dollars, Again!

Nytimes article said it!

The easy assumption here is that the learning stays, and there will be cautious optimism  – as the disaster that was dotcom bust – is hardly 7 years back – and we can expect that there will be reasonable caution.  But world has proven time and again that history repeats itself and some lessons are never learnt.  In some senses, some lessons should not be learnt!

Entrepreneurship is about taking risks.  As much as we want to take a “right-brain” or objective, cautiously optimistic approach – where the learning of the past matters – entrepreneurial spirit prevails.  Not just with the promoters but also with the VCs and the other stakeholders.  Hence a lot of activities happen with just a whiff of optimism, sometimes bordering on sheer “hope”. 

I still see a lot of hockey stick projections of revenue growth – including in case of my own company Aspire Systems. 

But, I belong to the “believer’s club”.   Optimism prevails all the naysayers and the pessimists – not just in the IT industry – but in the economy as a whole and how the world will be a better place with all this innovation and entrepreneurship.

 There is a lot of activity in the internet-based entrepreneurship now.  Almost as much of a frenzy as it was in the last golden rush – and the subsequent crash.  Is there so much mad-rush with people jumping up and writing millions of dollars worth of checks? – I do think there is a certain amount of caution.

A larger percentage of VC activity in what I see in the market is with tough questions asked more than what was asked earlier.  Revenue models, proof of concept, existing customer base – the right fundamentals are being looked at.

So, do I believe that there will be an impending crash?  As much cold I feel in my spine – of pessimistic risk – I believe that no crash will happen this time.

All the very best for all the risk-takers – the entrepreneurs who make this world a better place every day!

What is cooking at OPD?

Excellent reality check by Pratima Harigunani in CIOL on the status of Outsourced Product Development.  It also offered some amount of reality check and what the OPD companies need to be doing.

http://www.ciol.com/content/2880799376.aspx#comment

As I mentioned to her – the secret for the OPD firms is for the software engineers to become product engineers or producteers.  In other words – from cooks, we need to become chefs!

To that end, we have created the term “Producteer”, which is Aspire’s trademark now!  Here is the run up to our concept of Producteer:

India Vs China: The eternal debate!

So, this has surfaced again – here, here and here and many other places! 

Let’s not talk about India Vs China. Let’s talk about the overall need / demand for IT in the world.

The overall need for IT in the world – including the need for integrating diverse systems in the developed world and the need for getting new computerized systems in the developing world – the need for IT talent is ENORMOUS. I really believe that this need is not going to deplete in the next 20 years.

So, there is going to be opportunity for trained IT engineers – irrespective of where they are. I do not for a moment believe that the “real” IT engineers in the USA or Europe could have lost jobs because of outsourcing. Because, the actual demand for IT work, I believe, far exceeds the supply of all the countries put together – given the enormous task in front of us – of pulling all our systems into computerized systems and get them integrated enough.

This is a way forward for every country, and I sincerely believe that – any loss of job in any country is incidental – and not a trend!

What is happening, if anything, is this: Today – when a student in India is trying to choose a graduate studies – let’s say Mathematics or Logical thinking is not his or her strength – and arts or history is his or her passion and interest – Due to sheer parental and peer pressure, such young people are choosing to study IT. They do not suddenly become better in logical skills and mathematical skills, and bright people among them end up getting decent jobs irrespective of the apparent lack of this inner strength. And, IT companies are surface-training these people to make them just to “acceptable” levels.

These are not “real” IT engineers! These are people who are just making use of the current opportunities! In the long run, this course will correct itself, and some of these “unreal” engineers are likely to lose their jobs.

Not because there is less demand, but because they are not as suitable for the demand.

I do not think “real” qualified IT engineers – be it in China or India or the USA will lose their jobs in the next 20 years!

So, it does not matter where such talent is physically located.

OFFSHORING: IMPROVED PROCESSES NOW MORE OF A DRAW THAN COST SAVINGS

Nice article by Shamus in SearchCIO.

Talking as an outsourcing provider – I feel happy that offshoring is being seen as providing value other than pure cost arbitrage.I believe that the demand for IT engineers in the world is greater than the combined IT developer forces of all countries put together.  And, I do believe that better processes are needed – irrespective of offshore or any-shore, for software development.So, this article – confirming the improvement – is an excellent one and a timely one.

Outsourcing trends to watch out for: Specialization!

Nice, pressworthy title and a good mention of important trends in Natasha Lomas’s article in Silicon.com.  Saw it here.

Any mature industry – gets commoditized, and hence consolidation is inevitable. 

There is also a parallel trend to watch out for – Specialization – some special niche segments will become so special – that specialists will emerge just to service the niche segment.

No consolidation can even happen without this emergence of “specialists” who question the mammoth “consolidated” companies.

As an example, we at Aspire Systems feel “Outsourced Product Development” to be such a “specialization” niche.  We feel that no amount of consolidation can stop from a few OPD firms emerging to become large IT outsourcing players in the next few years!

Cheeni Kum!

Another enjoyable movie!

I cannot even believe that Amitabh is almost the top-most hero in Bollywood.  At his age – he is acting as hero, and not as a college-student that Rajini and others are trying to enact – but – a person of his age, but still the hero of a movie.  So many recent movies – Nishabd, Eklavya, so many others.  He continues to reign Hindi movies.  What a personality!  I am amazed!

This movie – is so light hearted, so much fun – the director had to succumb to create emotional weight by adding what seems to be an unnecessary child-dying sequence.  In another note – it is so much clean fun, I think the crew had to compulsorily add a couple of dialogs to make it adult-like.  In my mind, these 2 were unnecessary – why not make a light-hearted movie with only clean humor?

The trio – the main characters in the film – act so well in this movie that it is impossible to even think of anyone else in those roles.

A very similar subject as that of Nishabd – but, so much difference between the two movies!

It is a very interesting movie!

Metrics driven Parenting!

I have this reputation – most of it self-proclaimed – but much of it very true – that I am not very organized.

Building Aspire – I have a lot to learn in terms of having metrics and driving the entire operations number-driven.  We have done ISO-9000, but are we truly metrics driven in its truest sense – I would say “no”.  Are we trying to change that?  Yes.

But, years of learning and working with Gowri and many others, has gotten me personally to a point where I have become a metric driven – parent!  Yes, it is true.

I do not know if “metrics” is the word or “a simple incentive system” is the word.   (I saw a movie by name “Employee of the Month” where I found that some corporates use this “star” system to rate employees, but believe me, I came up with this all by myself!)

Here is what happens:

§         We have a calendar stuck on the wall, that has a rectangle for each date – of 2 inches by 3 inches size.  It is a regular monthly calendar like the ones people use to write “milk accounts” in India – it is the desk calendar that I picked up from FedexKinkos..

§         We have bought 2 sticker books – one with small star and small smiley stickers and one with large “encouraging” stickers – that has wordings like fantastic, awesome, etc.

§         Every time my son does something good – like he behaves very well in a restaurant, he has a “zero-tear” day, or he brushes his teeth well, or whatever, we give him a small star or a smiley sticker.  He gets to paste that in the calendar for that date.

§         Every small star has double-rewards for him. 

1.       Chocolate award:  He can convert each small sticker into a small chocolate (like a Gems (M&M), or a peanut dots, etc.)  Or, he can accumulate 5 and convert into a mid-sized chocolate or a bowl ice-cream.

2.       In addition, each 5 small stickers earns him a large motivational sticker.  He sticks those motivational stickers on the gifts that he plans to earn.

§         Every time we buy a gift for him – we mark price for the gift in terms of number of large stickers.  For example, we bought a large Easel for him.  It is a large gift.  He worked hard through 2-3 weeks, earning stickers after stickers, and stuck large stickers one after the other and “earned” this gift – with 5 large motivational stickers – 25 small stars.  You should have seen the pleasure on his face when he actually won this.  He was so happy – he played with this new toy for hours.

§          We used to struggle with ideas for punishment (or stick against carrot) when he misbehaves.  Nowadays, a great, a non-violent and a very effective punishment is “removing the stars”.  If we warn him that we will remove stars, he immediately listens and stops mis-behaving. 

§         This has worked so wonderful.  He seems to understand the basics of this complex reward system, and understands the fundamentals – that he does not get gifts free – he needs to earn them.  He earns them by doing good.  Crowded star days or weeks are good weeks for him.  If he does not have stars in a day, that means, it is a normal day or a negative day.

§        We keep the gifts roster busy and attractive.  Right now, he has a lot more gifts to earn, including a trip to Bronx Zoo (6 large stars), a book, a few DVDs, etc. 

§         He seems to enjoy the process as well, and feels proud to see the calendar full of stars.  He values the stars, and the gifts a lot.

Immigration debate!

Saw this article on immigration debate.  

 Couple of disclaimers before I make my comment: a) I do not understand the full impact of this – particularly in view of the “labor pool” and illegal immigrants from the neighboring countries.  b) In one sense, I am happy that countries like the USA are preventing people from migrating!  If I take India as an example – it will make more and more bright people to stay back in India – and that is good for a country like India!

If the USA allows immigration and competition that results out of it, it will be a true and a remarkable testimony to the United States. That’s if the real underlying belief is in “free markets creating wealth for everyone,” which is the fundamental principle of capitalism. I admire the country to have been built purely by getting the best people from around the world. Why is there an effort to stop that? Why is there a step backward on something that has worked so well, and that still holds the promise of working very well for this country?