HfS Network

Monthly Archives: Jul 2007

Somethings you may not know about me...

July 24, 2007 | Phil Fersht

Dscf0018 1) I am a sports-junkie (passions include Tottenham Hotspur Football Club and the Boston Red Sox);

2) I grew up in London and Cambridge (UK).  My hometown friends are all lunatics who refuse to act their age;

3) I have lived and worked in the UK, France, US, Singapore and Australia;

4) My wife, Pooneh, is Canadian (pictured) and I am a Brit living in Boston, MA;

5) My favorite things to do (apart from watching sport) involve skiing and drinking exorbitant red wine;

6) I would like to retire as soon as I can swing it;

7) I had this very embarrassing piece written about me by "FAOToday" last year...but it's worth a giggle:    Download Fersht_FAOCover_Story.pdf

Posted in: Absolutely Meaningless Comedy

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Being middle-seated in the back row

July 18, 2007 | Phil Fersht

Today, for the first time, I got middle-seated - in the back row - courtesy of Delta Airlines.  Not only that, we sat on the tarmac in Atlanta for 2 hours waiting for the "traffic" to clear (heh?).  So I got thinking about some of the things in life that irritate me.....

Being middle-seated - in the back row
LinkedIn invitations from people I don't know, or will ever have the need to know
Being middle-seated - in the back row
Bacardi (ugh)
Victoria Beckham
Basketball...the first 59 minutes
Bowflex infomercials
Being middle-seated - in the back row
People who talk incessantly about themselves
Stale coffee in airports
Hotel room service charges
Bluetooth headsets
Just being middle-seated
Taxis with no A/C
Taxis that smell
Being middle-seated
The term 'RPO'
Pay-for-play conferences
American airlines coffee
Trying to get anything with Best Buy rewards points
Disney
British tourists at Disney
Americanized Chinese food (you know the place)
People who stick on 16 when the dealer's packing a high number
Macdonald's salads (why?)
Boring blogs
That guy on Fox News (work it out...)
Cheap wine
American commentary on world cup football (soccer) matches
That arrogant Brit on American idol
James Patterson novels
Donald Trump's sweep-over
Johnny Damon
Bad sales reps

People who pretend to be my friend when they want something
Using snail-mail

Subway
Doing expenses
Steely Dan 'best of' albums
Being middle-seated - ESPECIALLY in the back row

Vb

The UK's most Irritating export?

Posted in: Absolutely Meaningless Comedy

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H1Bing for outsourcing workers... where do you stand?

July 15, 2007 | Phil Fersht

Unclesam The last post on Horses for Sources - "Has the Lou Dobbs factor faded?" - certainly got several people voicing their opinions on the outsourcing of jobs to India (and please feel free to air your views publicly on this site rather than email them directly to me!).  Personally, I think the whole argument about the pros and cons of offshoring services has been done-to-death, but one issue that has been raised, concerns the allocation of H1B Visas to offshore outsourcing suppliers looking to bolster their onshore workforces to improve their service delivery:  Should offshore firms have the right to "import" their labor into the US in addition to "exporting" US jobs oversees? 

I'm probably not the best person to provide an balanced argument here, being an H1B Visa-holder myself (but I don't work for an outsourcing provider), so I am inviting you to cast your vote to the left of this post. Personally, I have thoroughly enjoyed my experience working in the USA and helping some US firms develop their services - and hope I am adding some value along the way - and I strongly encourage skilled US workers to apply for temporary work visas to experience working in the UK (my country), Europe or Asia, if they have the opportunity.  Working in dynamic business environments across the globe is such a great developmental experience for people in today's economy. However, the key issue now is whether the offshore outsourcing providers should be entitled to create onshore jobs for foreign workers to help run and develop outsourcing services. So have your say!

I did want to relay some key facts regarding temporary work visas that outsourcing providers typically use for skilled immigrant workers.  There are two types of Visas outsourcing suppliers use to bring skilled immigrant workers over to the US:

1) The L1 Visa:  This applies to an employee working within a foreign subsidiary of a global firm, has over a year of service with that company already completed, and wants to be transferred to a US office of that organization.  The requirement is simply that the firm was unable to find a local US worker who could do that exact job, and that job required a specific qualifying expertise, or was a unique management position that fulfilled certain (strict) qualifying criteria.  The sponsoring firm will have to prove they advertised the job first in the US and was unable to find a suitable candidate.  There is no cap on L1s, and 7 of the top 10 L1 users in 2006, according to the US Senate - were Outsourcing providers that were either headquartered, or had their largest employment base, located in India. 

TOP TEN COMPANIES RECEIVING L1 VISAS (2006)

Rank Company Headquarters Primary Employment Base L-1 Visa Received
1 Tata Mumbai, India India 4887
2 Cognizant Technology Solutions New Jersey India 3520
3 IBM Armonk, New York USA 1237
4 Satyam Hyderabad, India India 950
5 Wipro Bangalore, India India 839
6 Hindustan Computers Ltd. (HCL) Noida, India India 511
7 Deloitte & Touche LLP New York, New York USA 512
8 Patni Computer Systems Mumbai, India India 440
9 Intel Corporation Santa Clara, California USA 394
10 Kanbay Chicago, Pune, Hyderabad, and Chennai India 329

Source: US Senate, 2007

2) The H1-B Visa:  H1B visas apply to skilled individuals applying for jobs with US companies.  As long as the US company is a registered corporation or LLC, the visa is dependent on the university qualifications of the individual to fulfill a specialist role within that US company.  Unlike L1s, H1Bs are subject to a cap for commercial workers, and this allocation of H1B Visas has been dramatically reduced from 195,000 in 2003 to only 65,000 in 2008, with an additional 20,000 made available for worked with US Masters degrees.  This is an exceedingly minute percentage of the US working population (of the fractions of a single percentile).  Like L1s, 7 of the top 10 H1B users in 2006, according to the United States Citizenship and Immigration Service - were Outsourcing providers that were either headquartered, or had their largest employment base, located in India. 

TOP TEN COMPANIES RECEIVING H1-B VISAS (2006)

Rank Company Headquarters Primary Employment Base H-1Bs received 2006
1 Infosys Bangalore, India India 4,908
2 Wipro Bangalore, India India 4,002
3 Microsoft Redmond, Washington USA 3,117
4 Tata Mumbai, India India 3,046
5 Satyam Hyderabad, India India 2,880
6 Cognizant Technology Solutions Teaneck, New Jersey India 2,226
7 Patni Computer Systems Mumbai, India India 1,391
8 IBM Armonk, New York USA 1,130
9 Oracle Corporation Redwood Shores, California USA 1,022
10 Larsen & Toubro Infotech Mumbai, India India 947

Source:  United States Citizenship and Immigration Service, 2007

B/w - thanks to Steve Dunkerley from The Finance Director magazine for contributing these data points,

PF.

Posted in: Business Process Outsourcing (BPO)

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Has the Lou Dobbs factor faded?

July 10, 2007 | Phil Fersht

It was only three years' ago that I recall speaking at an Outsourcing conference in New York...there were a couple of hundred vociferous protesters outside the hotel, journalists armed with stories of woe about impending doom for the US economy...and that Lou Dobbs guy stirring it all up on the TV at dinner time with his "Exporting America" feature.  How times have changed...

In the last few days, we've seen both the New York Times and the BBC produce reports on outsourcing that compliment each other to drive a compelling argument:  Western firms can embrace the global labor pool to focus on delivering higher-value services - which is not having a significant impact on domestic job losses.  The New York times discusses the IBM business model:

“We couldn’t keep building out labor,” Samuel J. Palmisano, the chief executive, said. “The long-term strategic answer was not to have a half a million people working for I.B.M.”

Today, the company’s global work force is organized in clusters of business expertise and connected by high-speed communications links. Project managers can search worldwide for the right people with the right skills for a job. One tool is Professional Marketplace, a Web-based database of people and expertise.

The idea is to build networks for producing and delivering technology services much like the global manufacturing networks that have evolved over the last couple of decades. Look inside a computer or automobile and the parts come from all over the world. High-end technology services projects increasingly will follow that formula, combining skills from across the globe and delivered on-site or remotely over the Internet.

The Times also picks up on one very crucial point:

Jobs in technology services may be particularly vulnerable because computer programming can be described in math-based rules that are then sent over the Internet to anywhere there are skilled workers. Already, a significant amount of basic computer programming work has gone offshore to fast-growing Indian outsourcing companies like Infosys, Wipro and Tata Consultancy Services.

As they increasingly compete for higher-end work, the Indian companies are hiring thousands of workers this year in the United States, adding an odd twist to the offshoring trend. Tata alone plans to recruit 1,000 workers in America, said Surya Kant, president of the company’s American unit, for “the near-shore work that requires regular contact with clients in person.”

The Times makes a compelling argument that only certain IT jobs can be moved offshore and the offshore providers are having to bolster their onshore workforces to compete effectively for the high-end work, otherwise will be left competing for lower-value work on a price competitive basis.  So while offshoring in IT created a wide pool of labor talent, it has only fueled the demand for the high-touch labor needed to work close to the customer.  Creating these types of jobs onshore only serves to keep IT professionals on their toes to focus their skillsets on more client-centric work, while a lot of the programming work is done offshore.

Meanwhile, the BBC reports on a study by the Work Foundation, a not-for-profit body that aims to promote best working practice, which claims that job losses across Europe due to outsourcing to India are exaggerated: 

"Concern over off-shoring has become a surrogate for wider issues about economic insecurity," said Work Foundation chief economist Ian Brinkley. "There is something about exporting jobs to foreigners that does press all the wrong buttons. Fears have been stoked by claims that the Chinese and Indians are coming to get your lunch, but the reality is that it is not happening." He said that figures showed that just 5.5% of all jobs lost across Europe in the first quarter of 2007 were due to work being sent abroad. "Self-serving claims from consultancies and aggressive PR from outsourcing companies themselves has tended to drown out the careful analysis of data regarding off-shoring," added Mr Brinkley.

Lou Dobbs is a first-class political commentator and personality, and there is no doubt he has the US's best interests at heart.  The early phase of outsourcing was clearly focused on body-shopping, with companies eager to slash costs looking to find providers to do the same work at a fraction of the cost through cheaper labor.  Lou has every right to stand up to protect US interests in these circumstances.  However, times have changed and businesses and governments are changing with these times.  You can't fight innovation, and the outsourcing model has evolved to the provision of business services, not products.  Offshoring provides a cost-lever to enable providers to be more innovative and client centric, and while it does impact some onshore jobs in some cases, the wider picture is a developing global IT industry.  Moreover, is the job market swamped with unemployed IT professionals?  I don't think so....The next big questions will be how outsourcing to China will impact the global engineering industry, and India the accounting profession.  If these follow suit the way the IT outsourcing industry has developed, then it's not  going to be all doom and gloom for the future.

Posted in: Uncategorized

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Who is the greatest of all time?

July 08, 2007 | Phil Fersht

Wimbledonfinalgallaryrogerfederer4_ Having spent the first half of my life living in Wimbledon, I have been privileged to follow some historic matches - especially the Borg/McEnroe/Connors golden age.  I never thought we'd see anyone emulate Borg's 5 consecutive Wimbledon titles, but today we saw the "Fed Express" dig deep to achieve the unachievable.  Does this make him the greatest player of all time - to win 5 Wimbledon titles on the bounce in this era of physical and technical perfection? 

My vote goes to Bjorn Borg - for two reasons:

1) Borg also won the French open 6 times (and 3 times concurrently with Wimbledon).  To dominate clay court and grass for such a long period is the true test of class and having the complete game.  Federer hasn't won in France.  Neither did Sampras, McEnroe or Connors.

2) Borg had to contend against other great players....McEnroe, Connors, Vilas, Nastase to name a few.  Federer's only real competitor is Nadal.

Feel free to cast your vote (see the sidebar to the left)....

Posted in: Uncategorized

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Somethings are better kept onshore...

July 06, 2007 | Phil Fersht

Posted in: Absolutely Meaningless Comedy

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My name is Phil and I am a recovering Crackberry addict

July 04, 2007 | Phil Fersht

CrackberryIt’s official, I have come out of the closet and am confronting my addiction.  I will be available for group therapy and counseling sessions to all you fellow recovering addicts.  (In fact, I actually dropped mine into a bathtub a few weeks’ ago which finally got me on the wagon, but that’s another story…..).  Here are some telltale symptoms:

   

1)      Onboarding a new job.  Your chief concern is your new firm’s PDA policy.  Will they support Blackberry?  Will they buy you that latest model that has you salivating, or will they force you to use some bug-ridden Microsoft pocket PC thing?  You really don’t want to look at the new Health plan, that 401K, or expense policy until that all-important PDA issue has been resolved.  You proceed to spend your first afternoon selecting your preferred PDA, and the majority of your fourth day (when it arrives) talking to tech support getting the thing working.  Then you worry profusely that you didn’t select the right model (that suretype method sure is tricky) and that leather pouch just don’t look quite as sexy clipped to your belt as you had envisioned…

2)      ADD.  You knew you had a latent case, but now it’s fully rampant.  Conversations can barely last 2 minutes before you have to have a sneak.  You start to hang out with other addicts at work to avoid feeling awkward…

3)      Driving.  You have mastered the art of one-handed emailing on the dreaded device while changing lanes on the tollway at 75 mph.  Oh – and the quick “two hands off the wheel routine” to switch between applications is a little risky, but you have already resigned yourself to the fact that crackberrying comes with death-defying risks.

4)      Flying.  A) You have already been busted on several occasions by flight attendants for taking a sneak-peak after the “turn off all your electrical devices” warning.  I mean - are you really going to derail your plane just ‘cause your pilot's got some annoying feedback going off in his headphones?  and B) Upon your plane hitting the tarmac you are primed and ready with your finger at the “on” switch for the very moment the pilot pads his breaks.  You thank the Lord for the invaluable extra 120 seconds of Crackberry time you created for yourself as a result of your precision timing, before staring intently at the little screen to watch those new memos pop into view….

5)      Social occasions.   Your spouse has specifically warned you about Crackberrying in front of the guests.  The conversation is caught in a vociferous debate between the merits of the ’86 Margaux and that great run of ’99 Cabs…. You can’t take it anymore… you sneak to the washroom…just one reception bar, but that’s enough to get those little memos popping in….phew.

6)      The Bedroom.  Your spouse has banned it…you have resorted to hiding it in the bedside table drawer….you wake up at 4.00am in a cold sweat….”just a quick hit” you think, sneaking it out of the drawer….you feel a slap…you turn around and there she is – a look of ferocious hatred on her face….oh no, this isn’t good….

7)      Brickbreaker.  You have a colossal problem here – you have spent more time on this mind-numbing game that you did with the ‘Cube in the ‘80s…you start having conversations about the infernal game with complete strangers also playing it on planes…”I just can’t get past that level with all the bricks blah blah”.

8)      Power-precautions.  You have a spare battery (always fully charged) and a spare charger.  Now that is serious….even I wasn’t that bad J

Parishilton35

A Crackberry addict spotted earler.  This one clearly has issues....

Posted in: Absolutely Meaningless Comedy

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Consolidation in outsourcing...some thoughts

July 02, 2007 | Phil Fersht

Am sure you heard the whispers regarding an Infosys / Cap Gemini merger last week - and I don't see this happening.  While I agree that the bold Indian-centric offshore suppliers will - and should - make moves to acquire Western suppliers (and vice versa), I don't buy this one. Infosys wants to develop a strong presence in North America to cement further its ITO and BPO businesses and Cap Gemini's one challenge is to strengthen its US business - which it is addressing, but will take time (the firm is already very strong in Europe and Asia). Having said that, CG is an excellent ITO/BPO firm with some innovative solutions that would add considerable strength to Infosys's global presence (outside of the US).   Infosys has so far proven to be a "build", as opposed to "buy" focused firm, and there doesn't appear to be a compelling reason why it would derail its so-far-successful growth strategy.  Surely the firm would prefer to invest in taking on global clients' shared services and captive operations, as a means to expanding its footprint?

At a future point, consolidation between BPO and ITO firms is inevitable as suppliers vie for high-end outsourcing deals of increasing complexity, scale and scope.  We are increasingly seeing more intricate and unique requirements that span IT and process requirements across finance, HR, procurement - and other process areas.  And while it may make sense for some companies to work with a multitude of suppliers, the increasing capability of global outsourcing firms to broaden their delivery scale and capabilities across multiple processes, languages and technologies is simplifying the equation for companies looking for longer - and more strategic - outsourcing relationships.

My personal view is we'll see some alliances between some of the middle-tier ITO and BPO vendors - be them partnerships or mergers, as these firms seek to bid on more complex deals.  Moreover, there is no reason why outsourcing vendors can't be successful with strategic partnerships, as opposed to outright acquisitions.  We will likely also see one or two major takeovers over the next year involving the leading Indian and Western outsourcing providers, but the aggressive evaluations of offshore firms at presence is holding back a lot of the acquisitive strategies - which are only likely to happen when we have a valuation correction in the Indian market. 

Predicting the future in a global market as truly unique as outsourcing is a science unto itself - as companies today have unique options and challenges to strip out costs and focus on their core businesses.  One thing is certain - Rome wasn't built in a day, and neither were outsourcing suppliers' global delivery capabilities...

Bush_india    

Discussing the merits of offshore captives versus outsourcing last week

Posted in: Business Process Outsourcing (BPO)

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