Should Playboy have Offshored?

By sourcingon, November 25, 2009 3:46 AM

Playboy Enterprises announced on Tuesday that it’s going to outsource all business functions except editorial to American Media Inc. It primarily meant that American Media will ‘handle’ production, circulation, advertising sales, marketing and other services of Playboy magazine and other publications. Playboy CEO Scott Flanders believes that outsourcing operations will significantly cut costs and lead to profitability at its magazines business in 2011.

The first question that comes to my mind (somthing that I havn’t been able to get answers to, as well) is; what do they mean by ‘handle’? Outsourcing is famous for saving costs but is that the real motive behind this association? Undoubtedly, I see this relationship reducing the cost of production of their magazines but i wonder if enough offshoring options considered. Playboy’s partner in Singapore is doing a fantastic job at publishing and even creating content for VIP Magazine. They should have been the ideal choice for a vendor to manage operations for Playboy, in addition to a number of other service providers who have a wide network in the U.S. to manage production and other operations. Wouldn’t this have led to more significant savings?

Executive at Playboy further added that it’s expected to lose about $8 million this year and the deal with American Media should reduce the loss to $5 million in 2010 before turning a profit a year later. Playboy said it expects to record a fourth-quarter restructuring charge of $2 million to cut 25 positions, some of which will be transferred to American Media. Playboy has set March 2010 as the latest date for moving business functions over to American Media. In my opinion, this isn’t the beginning of an outsourcing relationship but an initiation of a bid that American Media could make to buy all brands and assets of Playboy Enterprises in years to come. I may be playing the devil’s advocate here, but believe Playboy is either acting naive, or laying base for creating an environment for lay-off’s (for their stocks to be least effected in the financial markets) and then finally being acquired by another company.

As for now, all we can do is, wait and watch. What do you think?

The Americans are loosing it! Fast & Unknowingly.

By sourcingon, November 16, 2009 11:37 PM

I recently came across a post by Bruce Nussbaum (http://www.businessweek.com/innovate/NussbaumOnDesign/archives/2009/11/american_is_los.html) which makes me believe that the debate about Americans loosing jobs because of outsourcing is a far less alarming than, them loosing the sense of innovation, creativity and conceptulization.

“….Now Fareed is saying what we conceed to be increasingly true—the US is losing its edge in innovation. And with that loss, comes the loss of geopolitical clout. President Obama’s trip to China is about soothing our banker, not pressuring for civil rights. Americans are finding it hard to accept their decline in the world. They can’t admit that smart Asians and Europeans and others are not coming to the US nearly as much as they used to for study. Or that there are increasingly more innovative startups outside the US than inside the country. They don’t see all the people who got advanced degrees at US universities going home to greater opportunities….”

For long Americans have been known to be great at formulating ideas and revolutionizing the industrial space by out-of-the-box ideas and solutions. Has there been a decline in such ideologies? I may not have substantial facts to support it and many may believe that many US born online properties (including social networking sites) are examples of innovation. But I beg to differ. I would like to evaluate this based on the achievements in conceptulizing and evolving processes and implementing cost-effective solutions.

Over the last ten years, the business of outsourcing has grown from simply outsourcing/ offshoring low-end process-driven jobs to high-end creative jobs. The vendors across the world are now boasting about their capability to work from concept-to-implementation. Have the American taken a back-seat and prefer to only use and manage services?

In my opinion, its time the Americans stopped banking on their second best skill of packaging and marketing themselves well, and take up hands-on work that involves greater innovation. The same will have to inculcated amongst the youth in America. Only then will we see the revival supremacy the U.S holds in the field on innovation and technology.

Cheers America!

Is it time for the publishers to consider outsourcing? No! Not just yet.


Growing number of media companies are currently considering outsourcing the design and development of their publications. Many service vendors have already set up strength and are targeting this upcoming segment of outsourcing. But the question really is; Should publishers really outsource?

While many publishers are still comtemplating, believing that executive miles away from home will never be able to relate to the local happenings; the vendors are also finding it extremely difficult to relate to the design culture of the customers location. Very few are not considering it and are beginning to adopt innovative means to increase their circulation; which now includes the online circulation as well.

According to MediaFinder.com─an online database of U.S. and Canadian magazines- 383 magazines folded through the third quarter of 2009, which may be significantly less when compared to the same time period in 2008 and 2007, but is still alarming. Does this again justify outsourcing, to reduce costs and making their product sustainable?

A recent whitepaper featured at MPA (http://www.magazine.org/ASSETS/ACC5AFCF184843B9B8A4CE13080DB232/misperceptions-about-magazine-closings-082009.pdf ) suggests that Advertising is the biggest single factor in magazine closings and circulation plays a far less important role. Further emphasizing their point, the recent research report, The Twenty Tweetable Truths About Magazines (http://www.magazine.org/research/twenty-tweetable-truths.aspx), discusses 20 facts that showcase magazine vitality. These include;

-Magazine readership remains steady in an increasingly crowded and noisy media landscape.

Source: MRI Fall Study 2008, Page 7 of MPA 2009 Magazine Handbook

-92% of U.S. adults read magazines.

Source: Experian Simmons, 2009

-New magazines continue to be launched. The latest figures show that magazine launches surged 10% in the first part of 2009 from the prior year.

Source: Professor Samir Husni, author of The Guide to New Magazines; MrMagazine.com

-Magazines appeal to younger adults. Adults 34 and younger read more magazines than adults +34.

Source: MRI Fall 2008, Page 77 of MPA 2009 Magazine Handbook

-Magazines love the Internet. Almost a quarter of all new subscriptions come from the Internet.

Source: MPA Internet Subscription Surveys 2009 edition  

-The top 25 magazines reach more adults and teens than the top 25 prime-time TV programs.

Source: Carat Insight, Nielsen September 2007-May 2008 (Primetime Schedule) MRI Fall 2008; MRI Twelveplus 2008, Page 75 of MPA 2009 Magazine Handbook

-The number of consumer magazine websites grew 78% between 2005 and 2009.

Source: Mediafinder.com, 2009, Page 9 of MPA 2009 Magazine Handbook

The year 2009 seems to have been amongst the best the magazine industry has seen in any recession so far and yet, most publishers are finding it hard to sustain in the economy. With an increase in the popularity of online social networks there has been a change in the way that media is comsumed but undoubtedly Print remains an intergral part of it.

It’s time publishers re-access their business models and allign themselves to compete in the digital age. Instead of thinking about outsourcing their production, its time they start taking online seriously and digitize their publication. Think about the following;

  • Digitize your archives and have a FLASH-based version of your magazine. I am sure you know that both ABC and BPA recognize these.

  • Sell MULTI-MEDIA ad space on these FLASH versions.

  • Get social about it. Make the best use of social media to promote your magazine.

  • Charge for premium content. This implies; focus on extremely niche content. Content, that users will treasure and archive.

  • Do not think of breaking news or forming a comunity using your publications. Twitter, Facebook and others are already doing it. In case that is what your audience want; turn a part of your website into a content aggregator that automatically retrieves news from various sources and publishes on your website.

  • If possible, have a print-on-demand facility. For those readers who love to sit-back and read a print version, can always pay and have a hard-copy delivered to their mailing address.

Its not the time for Print media to shut down, neither is it time for them to outsource. Its time to revolutionize their business model, think online, adopt innovative ways to monetize the digital world and portray legendary value for hard-copies. Doing so, the publication will automatically begin creating niche communities and have loyal customers and in days to come, I look forward to witnessing a growth in the subscription of print magazines.

The GS100 Survey: Where Do We Go From Here?

By Ed Nair, October 26, 2009 9:24 PM

This is the time of the year that we usually call for participation in the GS100 survey. I have been getting mails from many service providers inquiring about the survey and its timeline.

 Here’s the news: Global Services has decided to push the survey out by one quarter. Hence, the survey would open in January 2010 and the results would be announced sometime in May 2010.

 One good reason for doing this is that the survey requires information about financial performance for the calendar year. And with an October survey, we end up with either estimates or no information at all.

 But that’s not the only reason. We are looking at revamping the survey, expanding the scope, tweaking the methodology, and advancing its relevance to the marketplace. We cannot do this without feedback from the service provider as well as services buyer community.

 A few other surveys rank and list global IT services and BPO providers. Unless these surveys are based only on quantitative measures, which usually means using a variety of financial parameters, like the Fortune500 listing, there is  no way  to ensure that they are strictly objective. However, for a specialized industry like ours, basing the survey purely on financial metrics would inhibit the scope and may even render the survey  irrelevant.

 We also know that asking for too much quantitative information may not be the answer. Already, for our previous GS100 surveys, we have been using over 200 data points per service provider in the survey, which gives us the reason to believe that our survey is one of the more objective surveys in the market. But more data does not necessarily mean better results.

 We do have several alternative models in mind, but some feedback and debate is honestly appreciated. It will only help improve our efforts. The broad goal for this survey is to recognize the leaders who power the growth of the industry and at the same time recognize pockets of excellence that strengthens its impact.

 Do write in here with your thoughts and ideas or email me at <ed@cybermedia.co.in>

The GS100 Survey : Where Do We Go From Here?

By Ed Nair, October 22, 2009 12:29 AM

This is the time of the year that we usually call for participation in the GS100 survey. I have been getting mails from many service providers inquiring about the survey and its timeline.

 Here’s the news: Global Services has decided to push the survey out by one quarter. Hence, the survey would open in January 2010 and the results would be announced sometime in May 2010.

 One good reason for doing this is that the survey requires information about financial performance for the calendar year. And with an October survey, we end up with either estimates or no information at all.

 But that’s not the only reason. We are looking at revamping the survey, expanding the scope, tweaking the methodology, and advancing its relevance to the marketplace. We cannot do this without feedback from the service provider as well as services buyer community.

 A few other surveys rank and list global IT services and BPO providers. Unless these surveys are based only on quantitative measures, which usually means using a variety of financial parameters, like the Fortune500 listing, there is  no way  to ensure that they are strictly objective. However, for a specialized industry like ours, basing the survey purely on financial metrics would inhibit the scope and may even render the survey  irrelevant.

 We also know that asking for too much quantitative information may not be the answer. Already, for our previous GS100 surveys, we have been using over 200 data points per service provider in the survey, which gives us the reason to believe that our survey is one of the more objective surveys in the market. But more data does not necessarily mean better results.

 We do have several alternative models in mind, but some feedback and debate is honestly appreciated. It will only help improve our efforts. The broad goal for this survey is to recognize the leaders who power the growth of the industry and at the same time recognize pockets of excellence that strengthens its impact.

 Do write in here with your thoughts and ideas or email me at <ed@cybermedia.co.in>

The Case of Thwarted Expectations

By Ed Nair, July 15, 2009 5:01 PM

The 2010 budget announced by the Indian finance minister received muted response, especially from those who expected an ‘India-as-the-emerging-economic-power’ story. Include foreign investors, global trade associations, and rating agencies in this category. The Indian stock markets plunged even as the budget announcements were being made.

Clearly, this was a case of thwarted expectations. Expectations were high from a government that won an unfettered victory in the recent elections. Even before that, India had fared many shades better in managing the economic crisis. The world expected the Indian finance minister to announce the next phase of reforms that would catapult the country into the next orbit of economic power.

Instead, the budget presented was purely inward looking and was marked with an accent on domestic growth with emphasis on rural development. The budget fell short on lack of major structural reforms, lack of a clear roadmap to contain the fiscal deficit, lack of clarity on the plans for divestment of state-owned enterprises, and no word on policies to attract FDI. The Wall Street Journal called it ‘a budget for a second tier developing economy’.

I recently chaired a panel discussion on the budget and its implications on global trade, organized by the NY-based India America Chamber of Commerce. The sense of disillusionment amongst the NRI investors was palpable because the budget failed to present a cogent picture of opportunity for cross-border investments.

My fellow panelists were: Dr. Ajay Gondane, Dy. Consul General; Dr. Rajeev Kohli, Professor, Columbia Business School; and Rajiv Khanna, Chairman, India America Chamber of Commerce and Partner, Greenberg Traurig LLC. The discussion centered on what the budget meant for the NRI investor community in terms of new business investment opportunities.

Defending the government’s viewpoint was Dr. Ajay Gondane, who was very articulate in driving home the national priorities as the government saw it. He said that none of the existing policies that attracted foreign direct investment have changed; they continue to be as inviting as ever. India already has a healthy reserve of dollars and dollar inflows have seen healthy growth despite the downturn. He patiently explained that flooding the country with foreign investments could be detrimental because the country does not have the capacity to absorb foreign investment beyond a point. The absorptive capacity of the country depends on the kind of projects that are being pursued, the industry sectors that get opened up for foreign investment, and robust domestic demand. On divestment of public sector enterprises, Gondane said that the government was very much on track and would want to wait for valuations to get better.

Dr. Kohli cautioned against subsidies getting out of hand. While appreciating the intent of many of the rural development programs, he also cautioned against India’s poor track record in the implementation of such programs. Dr. Kohli was specifically concerned about the budget’s lack of focus on primary education, though the budget announced major outlays in creating new universities across the country. In Dr. Kohli’s opinion, there are many foreign universities that could do this whereas primary education is what is going to determine the complexion of India’s workforce in 2020.

Rajiv Khanna clearly spelt out the disenchantment with and expectations of the global community of Indians from the budget. He was hopeful that the government would announce many more reforms during the rest of the year which would help bilateral trade and investment. The group, however, largely agreed that the budget had some fine points that increase domestic demand in the short run and agreed to the need for equitable development of the rural and urban sectors of the country.

In my opinion, the problem with the budget was about messaging, especially to the global community. The finance minister, who was once voted as the ‘best finance minister in the world’ in 1982 and who belonged to the party that ushered in liberalization in India, seems to have chosen to ignore the external world. In the current globalized world, one cannot do that. Between a stealthy and confusing Russia and an iron-willed and protectionist China, only India and possibly Brazil can offer some hope. In the end, it’s all about ‘telling your story’ the best way.

Who Should Manage Your Green IT Projects?

By Imrana Khan, June 23, 2009 9:15 PM

Recent findings of a research conducted to find out the green IT-spending trend in Australia reveal that many companies felt that the CIO is responsible for green IT projects whether in-house or outsourced. Others opined that someone else–typically either CEOs or CFOs—should handle the green IT initiatives.

The research surely gives an interesting and useful input for other companies across the globe when they try to kick-off green IT projects.

Green Outsourcing Careers

Source: Connection Research 2009

Ukrainian company NET Technology Center WEB100 has become a Sponsor of the “Central and Eastern Europe IT Outsourcing Review 2008”

By irad, June 5, 2009 5:18 AM

5 June, 2009 – KIEV – Ukrainian company NET Technology Center WEB100 has become a Sponsor of the “Central and Eastern Europe IT Outsourcing Review 2008”

“Central and Eastern Europe IT Outsourcing Review” is the project of the Central and Eastern European Outsourcing Association (CEEOA). The main goal of the research is to provide the whole overview of the IT outsourcing market in the Central and Eastern European countries, and to promote the CEE region as a cluster of provision of nearshore IT outsourcing services for the EU countries and offshore outsourcing services for the USA. The lack of the information that is also scattered among different sources does not allow the CEE region to demonstrate its potential. “CEE IT Outsourcing Review” provides the holistic view on the whole region and is a good information source for those who are willing to find IT outsourcing services providers in the CEE region.

NET Technology Center WEB100 – the Ukrainian IT outsourcing company that deals with the development of IT solutions for B2B communications and business solutions based on Social Media technologies. WEB100 is the member of Ukrainian Hi-Tech Initiative and takes and active part in the association’s projects. The company efficiently works on the market of the CIS countries, EU countries, and the USA, and during 8 years of its work has executed more than 60 international projects.

Gennady Serdyuk, CTO at NET Technology Center WEB100 noted: “As IT outsourcing company, we are interested in the development of the Eastern European market of outsourcing services providers. We have become a sponsor of the research to support the development of the European Outsourcing Association CEEOA and the CEE region as well. Earlier we sponsored the “Ukrainian Outsourcing Forum 2007” and “IT Job Fair” which were aimed at the development of the Ukrainian local market of IT outsourcing services providers. I believe that the research is very useful now when many companies are searching for the ways to reduce the costs on IT infrastructure support and IT development. Offshore and nearshore outsourcing is a good way to reduce such expenses. I would like to admit that Ukrainian outsourcing companies are now the competitive and qualified IT outsourcing providers, and Ukraine is one of the best countries for outsourcing.”

The research is undertaken by Ukrainian HI-TECH Initiative with the support of Baltic Outsourcing Association, Hungarian Service and Outsourcing Association, Employers’ Association of the Software and Services Industry – ANIS (Romania), Bulgarian Web Association, and Association of IT & Business Process Services Companies – ASPIRE (Poland), and is based on the interviewing of national IT associations, as well as the largest IT companies and experts from 16 countries of the region.

The Central and Eastern Europe IT Outsourcing Review is free-distribution research with the public access. The official version of the research will be published on the information portal of the CEEOA – ITONews.eu (http://www.itonews.eu)

CEEOA

Central and Eastern European Outsourcing Association (CEEOA) (http://ceeoa.org) was founded in 2008. The members of the association are the leading national IT and Outsourcing associations, among them Baltic Outsourcing Association (BOA), Ukrainian HI-TECH Initiative, Hungarian Service and Outsourcing Association (HOA), Employers’ Association of the Software and Services Industry (ANIS) from Romania, Bulgarian Web Association (BWA) and Association of IT & Business Process Services Companies in Poland (ASPIRE). One of the main objectives of CEEOA is to promote the Central and Eastern European Region as competitive alternative to other Global offshoring destinations, and to increase services delivery quality and volume to the recognized standards.

NET Technology Center WEB100

NET Technology Center WEB100 – (http://www.web100.com.ua) the Ukrainian software development company that provides offshore outsourcing services and deals with the development of IT solutions for B2B communications and business solutions based on Social Media technologies. The company efficiently works on the market of the CIS countries, EU countries, and the USA, and during 8 years of its work has realized more than 60 international projects. The company WEB100 has developed its own product WEB100.platform – the platform for the development of web-oriented systems aimed at B2B and B2C collaboration.
NET Technology Center WEB100 is an active member of Ukrainian HI-TECH Initiative, the association of software development companies and outsourcing services providers in Ukraine.

Are You Ready for Transformational Outsourcing?


Extracting better value from an outsourcing relationship also means transforming the organization, not just keeping headcounts.

Outsourcing is not new anymore. In fact, it has become necessary to outsource either part or most of many organizations’ operations, especially in the current business climate. As ExecutiveBrief had predicted at the start of the year, the decision is not about whether to outsource or not; it is about outsourcing as a critical aspect to the survival of an organization.

However, signing up the help of third parties to cut costs and keep head counts is not the best way to approach outsourcing, no matter the economic climate. Instead of cutting costs, extract better business value from consulting engagements in terms of improving internal processes, learning from the experiences that consultants have earned from their exposures to past projects and clients, and optimizing productivity. Suffice to say that the most mature organizations and the ones that have a better chance to succeed when things turn around (yes, because things will eventually turn around) are those that adopt outsourcing to transform their processes and strategies.

“Plenty of organizations outsource, but they typically do so for marginal or nonstrategic processes that don’t matter to their business success. And many organizations need radical change, but they rarely think of entrusting that objective to a third party,” said Jane C. Linder in her book Outsourcing for Radical Change: A Bold Approach to Enterprise Transformation.

Creating long-term value from an outsourcing relationship means changing the organization, and we are not talking of adding or scrapping headcounts alone, but of improving the entire organization and shaping business strategies because of the following strengths that only third-party involvements could provide:

  • Access to additional skill sets and business experience. The right outsourcing partners bring talent and skills to the table, but the best ones add industry expertise and improve processes, so make it a point to tap the wisdom that outsourced workers have gained from their extensive experiences in past projects. It could mean an overhaul of internal processes, management of metrics, or improvement of quality. The insights and experiences that they bring just might be the wakeup call that you need to shake your organization out of lethargy.
  • Better resource management. Because cost-reduction is a huge part of such initiatives, outsourcing allows organizations to free up resources to continuously support critical business operations, acquire new assets, or seek new growth opportunities. Cost management is important to your strategy, whether it involves streamlining resource requirements or focusing business processes, so take such opportunities to reallocate resources on core strengths and build new skill sets and processes to support the initiative.
  • Creation of new revenue streams because of available cost-effective expertise. This is particularly true for independent business units and small- and medium-scale enterprises. Outsourced talents bring more than the core skill sets required by projects, but also side expertise that could be tapped to create additional service offerings.  Enabling consultants to be more than hired workers that fill up gaps in the workforce could result in new opportunities for business growth.

By ExecutiveBrief
Technology Management Resource for Business Leaders

Observations of the Impact of Culture on Communications in Outsourcing

By gnair, June 4, 2009 10:42 AM

 

Prologue 

            Over a period of 30 years I’ve worked for a wide range of companies in the Information Technology ecosystem. The work almost always dealt with sales and client relationship management. I started my career selling fabric for suits and shirts in Southern India and then moved to computer hardware. Deliberately, over time, I covered software, professional services, management consulting, outsourcing and more.  

           

            I’ve lived in New York for 26 years and have worked for Unisys, DEC, HP, KPMG/BearingPoint, MphasiS, Sapient and now DataArt. Over the course of this time I’ve been fortunate to observe and engage with varied cultures, their approach to client relationships through their sales and delivery organizations and management styles.  There is enough material for a book, one that would appeal to a fairly limited audience so I’d like to focus on a broader subject,  the impact of culture on communications in these organizations.

Perhaps a little back ground would help.

History 

            I was born in Bombay, and so stubbornly, I choose to keep calling it that despite the newer and more politically correct “Mumbai”. My family moved to London when I was four  years old and I grew up in a tough neighborhood called Tottenham till the age of 16 when my father retired from the Indian High Commission.  We returned to India and I went to college in Trivandrum and then Nagercoil (relatively small towns at the southern tip of India).

            My first technology job was selling computer systems, data loggers and closed loop controllers to anyone who would buy them in Pune, a fast growing city just outside Bombay.   I sold for an Indian conglomerate called DCM (they also manufactured textiles, edible oils, and engineering goods) and competed with equally young firms like Wipro and Hindustan Computers Limited (HCL). I moved to
New York City in 1984 and have never left nor really wanted to. 

            I genuinely enjoy meeting people and am very outgoing, all of which helped in developing perspectives on communications.  My observations are about what seem to be differences in communication style and behavior when working with a predominantly Eastern European (EE) operation Vs an Indian one.   I’m guilty of sweeping generalizations drawn from inadequate data and limited samples but they are merely my observations from the trenches.

Observations of Cultural Influence in Communications between Clients and their Software Development Outsourcing Partners 

            The main players in these observations are the client, the front office and the delivery organizations. Obviously, in every firm, the degree to which these entities have impact on each other will be different based on leadership culture, geography, competitive environment, and countless other factors.  In some firms, the front office is well integrated with the delivery arm and in some cases not.  Regardless, certain process dynamics exist between these entities from a functional perspective, and if these are managed well, will promote greater efficiency for everyone, especially the client. There are as many observations as there are people involved that can be made here, but to list them all without a focus would be dilutive.  I believe communications to be of paramount importance and so focus on the influence of culture on communications.

            Clients want to get work done with a reliable partner who will do everything possible to achieve client success.  Some clients have deep experience, earned through painful lessons about how to manage an outsourced service and the providers of that service.  Clients perceive value from partners who align with their goals and evaluate in terms of competence, commitment and efficiency metrics. They want to see openness and transparency in the work on their projects and abhor surprises.

            Most provider companies get the right “client focus” words into the mission and vision statements. No one wants to do a bad job for clients. What is interesting is how organizations behave when it becomes difficult /expensive to do the right thing.  This is not an attribute of solely of either the EE or Indian firms but it is where the rubber meets the road and says a lot about how you look at your business relationships. All I can say is that there is a willingness to take a longer term view of business relationships by firms who are not driven by quarterly metrics. Small or privately help firms seem to be able to do the right thing more easily and without a lot of hand wringing.

            Anyone who has spent time in this business knows there is always some level of dynamic tension between sales and delivery organizations.  This tension serves to keep everyone honest about what is promised and what can be delivered and if communicated correctly will set appropriate expectations for everyone.  The front office sales organization is typically an onsite US based operation and also an important, if not primary, interface for the client.  They are usually responsible for being first contact and introducing new clients to the rest of the firm.  The majority of the firm is the more remote delivery organization and its operations teams. They can be anywhere, Bangalore, Delhi, Bombay, Chennai, Moscow,
St. Petersburg or a host of other centers.  If communication is not in synch between these two groups bad things happen.  My experience in turning around distressed projects taught me many things about what can go wrong.  They are almost always because of bad communications between the client and delivery organization or between onsite and offshore delivery teams or all three entities.

Communication Traits in Indian Firms 

            Based on an amalgamation of experiences with firms that used software development centers in India, a majority seemed to exhibit communication challenges based on rigid hierarchies, not wanting to lose face and an aversion to saying “no” or delivering bad news.  I see the advantage of hierarchy in large development organizations but if the environment restricts the flow of information in either direction between the top and bottom there is a real problem.  If people do not feel empowered to speak out, ideas are stifled, delays and quality problems can be invisible till too late.  Secondly, how organizations deal with bad news is important.  Inherently, I think rank and file people in Indian firms are less likely to speak up because of their adherence to hierarchy. 

            Many are not comfortable in saying “no” or delivering bad news. In fact Malayalam, the language of Kerala and my mother tongue, does not have a single word for “no”.  You can communicate “no” but it takes at least a couple of words.  I have witnessed unnecessary delays in flagging issues because people did not speak up, in part because they were either not listened to or did not think it was their job.  When teams are open to admitting problems and actively communicate to stakeholders, there are fewer surprises and often solutions emerge from the “included” extended team which can lead  to better outcomes. 

            A vivid example of how things can go horribly wrong involved badly sold expectations, an aggressive project timeline to accommodate a client budget limit, and a fixed time deal.  The firm’s development center was is in Mumbai. Compounding this perfect storm, the firm assigned an inexperienced onsite PM to be the point person. The offshore development team was very unhappy that they were immediately under the gun from day one through no fault of their own.  The sales team disappeared to chase the next deal.

            Instead of throwing down a big flag when he saw delays, the PM felt that they would somehow be handled by the offshore team leads.  He continued to accept changes to scope from the client well into the project and instead of speaking up or even communicating them to the delivery team, he kept these changes to himself in a drawer, perhaps to shield the development team from more anxiety and stress. Seven months later, at the User Acceptance Testing milestone, he delivered code to the end user business client that would not run at all , not even past the login. and could not have passed any standard of QA that we as professionals, would not laugh at.

            During the course of the project some people on his team spoke up but no one in the management team was listening.  The relationship managers were not engaged nor watching for opportunities to support the success of the engagement. Morale had gone through the shredder as people felt powerless as they watched the train wreck unfold. I worked on two other projects that had suffered similar fates. The root cause and patterns were the same – huge gaps in communications and perspectives based on cultural blind spots.  So I decided to teach a course in improving transparency, speaking up, how to say “no” directly and politely, and delivering bad news in a timely manner.  It was designed for anyone who was dealing with the client or even communicating internally amongst different functional units.  I used role play as a vehicle to give everyone a chance to examine and pick apart what works and doesn’t work when it comes to communicating intra group and with the client.  It was based on the simple premise that transparency and focus are good and keep everyone honest while promoting competence.      Clients want to know when things are not going to happen as planned because they have often made promises to their stakeholders too.  When the vendor delays communicating a delay, no one is able to reset expectations and there is disappointment throughout the stakeholder community and consequently everyone is unhappy. 

            In the instance of the project manager who delivered bad code to testing, he knew it was all going bad but deferred the pain of telling the client till the bitter end.  Perhaps he was waiting for a miracle right at the end but they are so very rare. Or that the client would push back delivery for some reason of their own.  Whatever the case, the course was very successful and mighty entertaining.

Communication in Vendors-SMEs (
Eastern Europe)
 

On the other hand, my experience with Eastern European IT firms so far, suggest that  employees are more than willing to tell the client when they think the client is mistaken or pursues a bad course of action. As a consequence, EE firms can be seen as more resistant to client direction until they have fully bought into the logic or rationale of a decision.

            I haven’t seen hesitation with anyone in my current organization (DataArt) when making their views and opinions known, regardless of their position.  The people I work with seem to be able to defend their respective positions using logic, facts and a dry humor.  Discussions can get colorful and many perspectives are aired. Some clients can find this disconcerting if they are accustomed to development partners who like to huddle and form consensus opinions before engaging the client.  Perceptions of abruptness during discussions are not uncommon but are really based on a culture that does not take offense to directness and places tremendous value on intellectual rigor. 

            I hear clients say all the time that they want partners to be much more than obedient and efficient builders – though efficient would be very good thing. They see real value when partners are more than sounding boards, when they validate ideas and approaches and bring their own unique ideas to the table. I see the team I work with do this all the time and when I hear a client comment “that’s a good idea, I hadn’t thought of that” or “I want your opinion on this” – it’s music to my ears.  A clear example of directness and insight was when a senior architect responded succinctly to a proposed client technology framework that “this won’t work as designed”. Of course, he went on to explain why, which resulted in a dialog that lead to a better design. Or when working with a travel services client, the client architect says I am happy that you “get it” after evaluating several approaches to building a booking engine that were validated against our experience.

            I enjoy being the only non-EE person in my office and understand the warm dynamic of the firm and its lack of overt hierarchy.  You can rely on everyone to have an opinion and ideas are talked through without rancor.  There is a healthy air of openness and people seem to thrive in it.  One hears nay’s and yay’s in seemingly reasonable balance during the work day.

            Clients who understand the cultural basis of communications can manage either the directness of the EE firms or the subtleties of the Indian style to their benefit.  With the Indian firms it is important to ask the right questions that allow for them to communicate bad news when it happens, gracefully.  For EE firms the client should choose an alternative to the Borg Collective’s “resistance is futile” approach and understand that they can get real insight and buy-in from taking an extra step of vetting the logic and rationale of key decisions with questioning minds.

Girish Nair is a Senior Vice President of Business Development at DataArtGirish.Nair@dataart.com

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