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   Kaytek IT Consulting Perspectives |
Consulting
Technology
Offshoring
Four Fuels Further Fine Tuned
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Kaytek IT Consulting Perspectives |
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Read This First - Four Fundamental Fuels of The Flight Offshore. Some additional information and clarification on the Four Technology Laws that drive Offshore Outsourcing. The first Moore's law facilitates increased automation and PC Penetration levels (with more and more powerful PC's at constant prices). It drives labor (both white collar and blue collar) productivity upwards around the globe. Indian rural farmers have been known to enter PC showrooms with wads of cash asking for the latest computer only. In the old debate of Power PC's versus No Frills PC's, Bill Gates was right. Nobody wants stale stuff ! All around the globe. The second Gilder's law drives the death of distance due to (almost) zero long-distance telecom costs. The third Metcalfe's law signifies the power of networks. |
Also, if the intelligence / IT knowledge of the people using the networks is some indication of perhaps the power of the network, then the additional fact that the number of IT Professionals in Bangalore is more than the corresponding figure in Silicon Valley, adds credence to the geographical distribution and global spread of the network. The fourth Roase's law dictates the creation of new forms of work and organizations. Unbound by geography, dictated by mutually compatible mindsets and perhaps, shared destinies. Hence, Cheap Powerful PC's, powerful global networks (both of PC's and people) enable new types of work arrangements across countries. Boundaries have got blurred, Borders banished between Nations. The four laws have caused global benchmarking of Manpower Talent and Labour Productivity. The Labour Arbitrage caused by Currency Exchange Rates between different countries with different costs of living play a very significant role in the offshoring phenomena. The other issue is of course Quality. India today has the largest number of CMM Level 5 Certified companies. CMM stands for Capability Maturity Model. It is Carnegie Melon University's framework which measures Software Quality. Level 5 is the highest level that a software organization can reach. The number of software companies in India which are CMM Level 5 Certified is growing steadily. Hence, the Low Cost High Quality combination is perhaps a Mind-Blower. However, going forward; as the Indian Rupee becomes stronger and appreciates in value against the US $ (as it has been doing), the Offshoring attractiveness may perhaps become less. Who knows ? Some people perceive that only low end no value add routine work gets offshored. Sorry ! Those days are gone. I remember meeting an Indian IT company CEO many years back who remarked that they were doing compiler level stuff work for Microsoft from India. Microsoft worked with them because of this company's technical competence, not because of a few dollars less ! |
So any work element that probably does not need live human interaction can potentially get offshored. We all have to accept and live with this reality. Finally the bottom line (and all Top and Middle lines) is Money. Money talks (perhaps, it sings). Coins jingle in our pockets. Thoughts in our head (however noisy) remain silent. Somebody mentioned that only 5 % of our daily work involves actual decision making. The rest 95% involves use of information (either creating or consuming information with others). In today's tough economic scenario, anything which helps us save money on the 95 % is a No Brainer. It makes us heroes (or heroines !) So we could shout "Honey, I got the Money ! .... Reals, Roubles, Rupees and Renminbi .... "
Email Us : Can we help in your Offshore Outsourcing Strategies ? |
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