Musings on body shopping, IT Service Firms, visas and the 7 Year itch

Technology sourcing companies have long struggled with the "7 year itch" but now with a few forces coming together, the problem seems to be getting magnified: Sluggish global economy coupled with continued demand for offshoring, protectionist visa policies, and IT service companies continuing to go after a slice of the same big pie. The unsung beneficiaries of this: small, mid-size body-shops (And no, in this blog, I am not adding to the debate on Whether Infosys Is a 'Body Shop')

Firstly, defining the 7 Year Itch. Many IT professionals who have grown in a service firm, especially those with an extended experience working on hot technologies in more than a few projects feel the need to explore the grass-on-the-other side. These Tech-lead/Junior-Architect level folks are also backbones of successful IT sourcing projects, and are much in demand.

Case in point. Here is a practical problem that managers of sourcing firms face. My client just awarded a million-dollar six-month contract for the next phase of eCommerce program to my firm. Most of the existing technical folks in my project are already locked into working on the previous phases. I don't have a pool of experienced IBM Websphere, IBM Portal and IBM Commerce programmers currently available in my organizational bench pool to join the team at a short notice. Flying in folks from out of US is not a practical option for two reasons: we don't have a pool of "visa ready" folks waiting on bench, and getting visas for other folks at short notice would be impossible.

What do I do? I turn to sub-contractors in the local market. The sub-con has a database of Websphere professionals working for other tier-1outsourcing and offshoring firms - possibly my competetors. These also happen to be folks either going through a 7-Year-Itch at their firm, are looking for a subcon to sponsor their immigrant visa or simply an opportunity to make a few dollars more as an IT contractor.

There are a few interesting market forces coming together here, something that the body-shops are looking to capitalize on.

• Sluggish global economy with continued outsourcing. Sluggish global economy means most companies either have a hiring freeze or a slowdown in hiring. The slowdown in hiring does not always mean a corresponding freeze in the technology initiatives, which translates to an opportunity for sourcing vendors.
• Let the big dogs fight over the slice of the same pie. A client may decide to award an eCommerce project to a Vendor A and a SAP upgrade program to Vendor B. Vendor A scrambles to put together a team of Managers, Architects, Tech Leads and Developers proficient in eCommerce technologies. Vendor B likewise does it for the SAP program. Just like organizations realize they can easily interchange and deploy resources across client programs, the ‘resources’ realize they can switch employers and continue to work on same technologies.
• Fewer Work Visas: Not wishing to go against political headwinds, service companies are applying for fewer work visas. Even the few applications are going through additional scrutiny by immigration officials, which means one thing: fewer experienced IT professionals available in any geography.

Opportunity: Body Shops promise mobility while carving out a niche. Technologists with the 7-Year-Itch are motivated and unencumbered by a baggage of loyalty and need to work for a single employer. However, their mobility is restricted by their immigrant/visa status and sluggish hiring by end-clients. Also, most large sourcing firms are reluctant to hire candidates in the US if they also have to sponsor visas for them. The body shops are stepping in to provide a bridge: hiring talented individuals who can be sub-contracted to larger sourcing firms with the only overhead of having to sponsor their paperwork.

ps: As with any opportunity, there are risks, especially for those being "body shopped." Risks include being out of visa status if the body-shopper is unable to get the right paperwork to sponsor visa extension …. but that is another topic in itself.

Congrats : 2011 Enterprise Architecture Awards Winners

Enterprise Architecture as a practice continues to evolve. While consultants and experts in the industry debate over the role of EA in technology and business, Architects in successful organizations continue to guide, mentor and steer their business and technology teams to leverage industry best practices.

Coagulations to Enterprise Architects for making it to the top of the 2011 list:

• American Express
• Bayer Healthcare
• First Data
• Singapore Ministry of Education
• Proctor and Gamble
• USAA 

Ref: The 2011 Enterprise Architecture Awards from InfoWorld and Forrester Research

 

Successful EAs seem to be doing the right things:

• Help define the right roadmaps and guide teams to work towards them
• Enabling "knowledge bridge" between business operations and IT
• Create a framework for strategic technology programs to coordinate technology adoption and development in a manner that maximizes value
• Moving away from being hostage to a legacy of dysfunctional IT, help the organization transform into an agile organization that embraces change
• Digitize and simplify its end-to-end processes
• Experimenting with different approaches to presenting data and collecting and maintaining architectural elements

As a consulting Enterprise Architect, I have had the pleasure of working with EA’s from organizations that continually move towards top of these lists. However, the challenge I continually see is that not all Enterprise Architecture organizations do all the right things all the time. 

RIP Steve Jobs , but Innovation lives on with the world's cheapest tablet?!

With an uncanny timing, Indians have launched the "world's cheapest" tablet on the day when the genius behind personal computing passed away. [RIP #SteveJobs]

Students display Aakash, which means sky, dubbed the world's cheapest tablet computer, after its launching ceremony in New Delhi October 5, 2011. Aakash will be sold to students at the subsidised price of $35 to expand digital access in the Asian giant that lags peers such as China and Brazil in connectivity. Reuters/Parivartan Sharma

For a generation of technology professionals who caught on to the offshoring wave, prompting the (re) definition of Flattening World [apologies Friedman], it is heartening to see the next wave of kids in the East with a device that can further flatten the world.

It is almost prophetic to see tablet computer, that caught the fancy of western world also moving to the bottom of the pyramid.

While the brouhaha over the cheapest tablet dies down, Indians must continue to ponder if they want to continue to be after the “Worlds Cheapest” lable? Remember a similar hype over "The World's Cheapest Car" when Tata launched Nano?

Blogs on the cheapest tablet

•  India Announces World’s Cheapest Tablet - WSJ Blog
• India's new $35 Aakash tablet computer designed in Canada‎ - Yahoo! News
• A tablet computer for the price of an iPad case‎ - FT.com
• Is The $35 "Indian" Tablet Actually Chinese? onlygizmos.com
• A $35 Android tablet becomes reality - ZDNet
• Aiming for the Other One Billion - NYT 

Code: MFUQ2EKZ8WUJ

Jobs in America: Offshoring Angle

As the global economy flounders, the debate over job creation rages. In America the debate is getting an additional political overture due to the heating debate over 2012 Presidential elections. Given the focus on economy and job creation, immigration and globalization is a hot-button topic a few policy makers want to entertain. While politicians and policy makers take a macro view of jobs in America, business leaders are factoring job creation into their social-outreach program. This is an angle offshoring firms also seem to be pursuing.

According to a recent Knowledge Wharton/ Network article, the big-three of Indian Offshoring are already taking focused steps towards global hiring:

Infosys: At its recent analyst meeting, Infosys revealed that by next year, it plans to increase the number of local employees at onsite client locations to 50%. Infosys, which has a total employee base of over 130,000, currently has around 27,000 employees at client locations. Of these, around one-third are local hires. With the U.S. accounting for the biggest chunk of Infosys’s revenues, the maximum local hiring will happen there.

TCS: In its annual report for 2010-2011, Tata Consultancy Services, the leading Indian IT firm, notes that protectionism in major markets is one of the key risks that the company faces. “Restrictive legislations that impede the free flow of talent in key markets could disrupt operations and hamper growth in those markets,” the report says. One of the solutions to mitigate this risk: “more local recruitment.”

Wipro: At Wipro Technologies, plans are also in the works to increase local hires at onsite locations — from around 35% currently to more than 50% over the next couple of years.

There is a steady economic activity around corporations that have been sourcing work. In anytown USA, one can still encounter IT development centers that continue to staff high-paying jobs. In addition to people working for end-client organizations, local economies are spurred by transient workers from sourcing/vendor firms. Such activities include apartment and extended-stay hotel, motel rentals, local grocery chains, supermarkets, malls and restaurants. Those on short-term visas and contracts also pay taxes that includes federal, state and local income taxes.

ps: One can als make an argument that if it were not for offshoring, similar – if not more – economic activities would continue around IT development centers and hubs; with a difference, the economic transplants would have been from out-of-state and not out-of-nation… but that is not the point here.

A few interesting articles:

• ET: Infosys targets 50% local staff overseas in onsite locations


• Knowledge@Wharton - Indian IT Firms Are Looking to Create Jobs Overseas


• WSJ Blog: HCL Looks to Boost US Workforce


• My earlier viewpoint on onsite hiring