Is India (Outsourcing) Winning?
Getting to the gut-check level of hard truth of whether all our TechComm lives will be forever changed - Is India (Outsourcing) Winning?
Recently I’ve been examining the outsourcing market in India. Part of this came out of my extremely detailed analysis of Adobe, however I also investigated innovation in India. One further study I recently did was analyzing the STC India earnings comparison between US / North American technical communicators and India-based technical communicators.
J Schwan, Managing Partner of Solstice Consulting just returned from a meet and greet trip overseas to India.
I visited four different potential partners yesterday. One was a smaller startup of really smart software engineers, one was essentially a sweat shop (20 programmers packed in a 12×12 room, a very hot room) and the other two were large publicly traded companies.
I’m really glad I came because on paper, the first two firms looked the same and visiting their development center proved they were very, very different.
Here’s a sketchy SWOT analysis based on my research:
How I Analyzed
My working theses so far are based on the experiences I’ve had with outsourcing along with these analyses. I’ve also considered the first person points of view from rational professionals such as J Schwan who blog about their India business development.
And last, I’ve examined the focus of India-based Technical Communicators who have posted their thoughts about how their country should improve.
I grade the information from my sources the same way that I would any source of human intelligence as per my Naval Intelligence training background: they all get a score based on external source corroboration and other factors.
Strengths - India
Costs for skill development are much lower therefore costs for skilled knowledge workers are much lower.
Skill development will remain low cost.
Distance Learning and eLearning efforts provided by US / EU based top tier schools such as MIT’s OpenCourseWare initiative (as reported earlier by Articulate QA lead Dave Mozealous’ blog) are providing higher level education globally - for free. India benefits by accessing those knowledge resources through their existing and expanding Information Communication Technology (ICT).
From FoxNews’ Internet Opens Elite Colleges to All
The world’s top universities have come late to the world of online education, but they’re arriving at last, creating an all-you-can eat online buffet of information.
And mostly, they are giving it away.
MIT’s initiative is the largest, but the trend is spreading. More than 100 universities worldwide, including Johns Hopkins, Tufts and Notre Dame, have joined MIT in a consortium of schools promoting their own open courseware. You no longer need a Princeton ID to hear the prominent guests who speak regularly on campus, just an Internet connection. This month, Yale announced it would make material from seven popular courses available online, with 30 more to follow.
The India-based corporate social network will grow more influential and stronger.
As more F500 companies like Adobe (NASD: ADBE) base their operations out of India the social network which provides a cradle for business development will grow. Social networking is crucial for startups, and crucial for nontraditional business development.
Cost saving efforts are a core competency leading India innovation. Online collaboration and QA will assist maintaining the value of India-based operations while forward-deployed US and EU marketing teams interact with their customer base.
Here’s a new analysis from an outsourcing entrepreneur who also touches onto the other main focus of research I’ve had for 2007: Online Collaboration and Workflow Collaboration.
From The Technology Edge: India is winning…
After visiting these firms there are three major things I’ve determined.
1) All application development will eventually be over here. They’re not ready for it all yet, but they are coming up the learning curve fast and eventually will surpass the purely domestic US firms. In some ways, they already have as some of their CMM processes force them to focus on continuous improvement.
As collaboration software continues to improve and software development tools continue to mature, this will become more and more of a reality.
See the full article.
One of my key competitive analyses is the ability of a group to perform the OODA Loop. While collaboration tools will help assist the growth, it is fair to note that the internal pressures of the entire team translate into a weakness: Failure to get past the Observe - Orient step.
Weaknesses - India
From what I’ve directly observed and from what others have reported, the OODA Loop for business strategy within India-based business is easily broken.
This translates into a loss of maneuverability which in a competitive market, can easily be exploited. In Web 2.0 Tech Support: Part 4 I speak about the opportunity that MadCap software capitalized on after Adobe laid off its Tech Support team. MadCap has capitalized on the OO-OO-OO sound.
During my brief time working inside a user focus group for a major software company I observed the inability of the team to really listen to the problems I presented. This was contrary with the goals of the development of the software they presented, and it was my impression that nobody wanted to tell the boss any different than what they had already established.
I can’t tell whether this is cultural or based in the dysfunctional corporate cultures I’ve witnessed. I’m leaning towards a mix due to the caste system issues India still suffers from.
Innovation is not yet a competitive strength. You’re not going to see a new technology such as Google, but you would see an Indian Google that’s cheaper to operate.
J Schwan sees it this way:
Offshore firms are going to have to either partner or inorganically acquire this talent, but those roles will remain in the US (or wherever the business is).
Just like the clothing industry, the clothes may be made in China, but they’re still designed in New York.
Quality is questionable, however that is rapidly changing as more collaborative tools are developed. Tighter collaboration means that corporations who regularly outsource can be more involved at every level.
Risk in investment and venture capital is not as readily available to the entrepreneur as it is in the US or EU.
There has been a stigma against entrepreneurship within the Indian culture.
Where are the interesting product startups in India? |Technology and Business Startups in India
Honestly, except for a few startups, most of them don’t even seem to be a serious effort at all. Infact, it won’t be wrong to say that most of the startups (or lets call then dotcoms) are like “Look momma! Even-I-can-code” sites and lack the basic thought process that should go inside building a great product.
Opportunity
Infrastructure improvements can be and already are subsidized by EU / US based corporations. These improvements raise the bar for education while keeping costs low as additional entry level knowledge workers are trained. This in turn creates a flow of skilled labor with career progression - all at five to seven times less cost than the traditional EU / US worker.
Cost savings like that can not be ignored.
Collaborative tool development is of great interest to companies who focus on core competency in outsourcing. Part of their trade secrets / intellectual property will be the workflow they manage to provide solutions to their clients.
Bernard Lunn’s article I quoted in my analyses states the opportunities best:
Today’s successful (meaning currently lucrative) innovation in India tends to be at the process and business level. These companies use technology extensively, they are technology driven and enabled, but the technology innovation is more incremental than disruptive and still uses lower cost labor as a core advantage.
As J Schwan mentions, mid-range hotels are nonexistant. One of my Indian friends told me about her surname, Patels run hotels. Well, Patels - get busy there and make it happen.
Threats to India
The threats to India-based development are fuzzier and come from several arcs. One glaring issue is the matter of social infrastructure. Some of the threats to business with India are internal - infrastructure is no small issue. Education, poverty, population, and unemployment are all major issues.
Eventually the societal pressures between the classes will have to be addressed. The infrastructure is truly third world, and there is very little middle class. You either have or you don’t. If you are one of the don’t-haves, your children stand very little chance to get out of that category. Unfortunately appears to result in a 21st century continuation of the caste system.
The originator of my New Black Gold of India article, Rahul Prabhakar stated quite a bit about this in his contributions to the white paper. He caught my attention with his article What Ails India.Rahul has been published in many periodicals.
…Home to the second largest population in the world today, only next to China; India leads the pack if density of population is to be considered. The country’s total land area is half to that of China.
Consequently, its per capita income is recorded at a low of $3400 when measured by the purchasing power parity and $820 at nominal rate; thus attributing towards a low-income economy.
…It is essential to empower people via education. Provisions should be made for making higher education compulsory and free of charge in rural and backward areas. Similar measures can be taken for promoting adult education, whilst providing land, electricity, and other necessities at subsidised rates for setting up schools in these areas.
…Consider this: The Economist reports that, (‘India on fire’) in Bangalore, water is now available for less than three hours a day, compared with 20 hours in the early 1980’s. As has been buttressed by T.K. Arun, columnist with The Economic Times, India cannot thrive with the size of the urban population restricted to 28% figure as at present.
Additionally a new post on his site quotes a member of their guild:
To put the work culture differences into perspective, Samartha Vashishtha, Senior Technical Writer at HCL Technologies, offers some useful insights,
“Yes, layoffs are a part of the U.S. work culture, but there are several things one can find solace in. Social security and unemployment benefits come to my mind immediately. Compare that to India, where unemployment benefits exist only in name.
Even if you are able to bypass the government machinery to collect the pittance, that would not pay for anything! In a country of a billion people, where a sizeable number spend their lives working for their next meal, the danger of being reduced to nothing is real.
There is no subsidized healthcare for the elderly; the cost of living is mounting by the day. Just some of the reasons why people feel about their jobs here the way they do.
I am not saying that the clash of the working cultures does not exist; I only want to emphasize that the problems of these two democracies are fundamentally different.”
Blame it on the culture, but many companies in India still cannot differentiate between a person who was “laid off” and a person who was “fired.”
The largest threat to India winning the outsourcing battle is internal - realizing that they cannot expand the cities past their current figure means that the societal pressures must be addressed in order for India’s growth to be scalable.
Additionally, nobody is going to risk their necks in a job and ‘champion’ any positions that might get them fired - if unemployment is as described.
Therefore it might be safe to assume that the innovation will be limited for quite some time, however process development will be refined to a pure state of collaboration.
Thoughts?
Posted by Charles in Online Collaboration, Technical Communication, Web 2.0, Workflow Collaboration |
April 29th, 2008 at 9:29 pm
“Therefore it might be safe to assume that the innovation will be limited for quite some time, however process development will be refined to a pure state of collaboration.”
I think that given the large number of attempts being made, chances are that someone will have great success somewhere or other, and soon if they haven’t already.
I also think that India will never become the Eutopia where a general refined pure state of collaboration will work. Apart from the points already mentiones, here are some things that come to mind.
India is so complex that it is going to be terribly difficult to subject it to any kind of analysis. You will need 25 different firms, not four, to even begin to predict anything.
I have worked as a Technical Communicator in four firms, taught Technical Communication in two institutes, and met several other kinds of firms during my stint as a contractor. But the dynamics of every new environment was always so very different from the ones before.
The extent to which things like caste mattered differed greatly from firm to firm,and from city to city. So did the values of people.
In a sense, differences of dynamics is true of any firm anywhere. But we are talking about collaboration, where we need two groups of people to understand each other and work with a seamlessness that can be documented and replicated.
My kids study in Auckland, and I now understand how different our Indian way of learning is. Thus the availability of e-learning opportunities of a global standard will not necessarily benefit the Indian user in the same way as it would a Western user. This is not to say that the Indian learner is in anyway inferior. Just different. Ah, and not just different from the western user, but different from other Indian learners.
Indians can and do produce quality work, but one must not take for granted that the behaviour of a group in India would be the same as their western counterparts. It is as easy to err on the the side of an excess of rules as it is on the side of inadequate guidance. However, one must not expect the balance that works well for one firm to work for the next one.
Any working paradigm caters to some differences that get factored in. However, as far as outsourcing in India is concerned the model needs to include substantial processes for finding out differences and making the necessary adjustments for them.
Nahomi Dhinakar’s latest musing..How does one get into a relationship with Jesus?
April 30th, 2008 at 12:16 am
Great post, Nahomi, and thanks for the detailed analysis. Just the type of discussion I was hoping to begin.
Would you attribute the different learning styles to anything particularly Indian in nature, or is this just an offshoot of traditional learning styles that people have globally (visual, auditory, written, etc.)?
Another question - where would you place the usage of Web 2.0 elements such as a wiki within collaboration refinement in an Indian corporation?
May 1st, 2008 at 8:00 pm
As for your question about learning:
I do not know for sure that the way we (Indians) benefit from an online course would be different from our western counterparts. I just suspect that to be the case.
That there is a difference in the way we learn was brought home to me by my youngest daughter in intermediate school, who could convert decimeters into meters, kilometers into decameters, and ares to hectares as all kids do in India in their math classes. When we came to Auckland, she found the math to be several levels lower. But there was one crucial difference–she did not really know what a meter was, whereas her classmates had been practically using the measuring tape for many years.
Indians have perfected the art of memorising and even understanding, to a certain level, large quantities of material. We have done it year after year. To keep our sanity, thankfully, we also learned how to forget almost everything just as soon we handed in the last exam paper for the year.
Although we have seen that generalisations do not work in anythign Indian, It is possible that many of us can go through all the motions of having completed a course and yet not have the information penetrate deep enough to be able to apply it. It may be that this is something that my family and I suffer from, or it may be something that everyone, not just Indians, face.
Another thought that comes to mind that is not related to learning. Many of the technical writers you might meet in an online forum or an STC conference in India belong to an elite group. Although it sounds silly, and no one may have even noticed it before, I suspect that you will find that most of them have had their schooling in good schools. But at the grassroots level, things can be very different. When I taught Technical writing, I came across many kinds of students. So also, when we were trying to fill a position for technical communicator in a documentation team, which was incidently doing work for a well-known software company in the US, I interviewed a large number of candidates. Cruel as it may sound, you have the ‘Can speak correct English’ type and the ‘Cannot speak correct English’ type. The success of a person in a field such as technical communication is related to one’s familiarity with the English language.
A sufficient grasp of English of the kind that IELTS tests for is not sufficient for our purposes. With a person who says, “ABC is a company that develops software and export to International markets,” and you ensure that it is not a typo, you have a long and tedious struggle ahead before you correct this and all the other mistakes that this mistake is indicative of. (Such a person may sail through the IELTS testing system.) Thus a carefully designed English test is essential to eliminate those whose grammar is not easily correctible.
Your second question about Web 2.0:
If you can convince management of the need for a wiki, you have won half the battle.
You would have to also ensure that the users understand the purpose of the wiki enough for creativity to kick in. Four or five years ago, I worked in a smaller firm (of the ’smaller startup of really smart software engineers’ kind) and was introduced to wikis. At the time, I did not understand what it was about and resented having to trade my comfort with Frame with troublesome tags and a sandbox. Unfortunately where I work now, the first half of the battle with management hasn’t been won as yet.
Nahomi Dhinakar’s latest musing..How does one get into a relationship with Jesus?
May 2nd, 2008 at 8:03 am
Thanks again Nahomi,
Those are compelling points. One of the issues that I thought so easy to fix was in the level of schooling. I appreciate your candor with the “Speak and write correct English” or not crowd.
Your comments are a tremendously great “eyes on the ground” level of information for my analysis. What you’re saying is that, even if the students pass the English testing, they may not retain the proper skills.
My mom, a California lifetime certified English teacher has told me similar things as well. Her concerns are always about the skills developed through our schooling, and whether or not certain curriculums “Leave Children Behind“.
If I’m reading you correctly, it seems that the majority of India’s children are in fact, left behind. Additionally, the minority of children are well educated, and the very elite obtaining the global educational skills required to compete in the technical writing field.
I speculated recently about whether India’s technical writing resources could be enhanced by targeted and specific career based schooling. I posted my comments on Sarah’s Palimpsest blog, however her blog’s archives aren’t allowing me to find the article.
Let me be the first to say, I based that assessment on a limited view that the base level of education provided a similar launch platform for post-secondary education. Based on what you’re relating, there is an even smaller portion of India which receives this education than what we realize.
For my India research I’ve used the World Factbook and other resources. I bet that test you told me about has some sort of research statistic attached to it - number of people or such. However, if even graduates of that course of study are not able to speak English, where could I look to find stats on how many may be able to compete in Technical Communication?
May 6th, 2008 at 7:11 pm
You mentioned the idea of ‘competing in the technical writing field’ twice in your comment.
I am sure that with the growing disdain for prescriptivism in technical writing, most Indians who train to be technical writers will find technical writing jobs. Hope for such people also comes from the fact that the audience is becoming more global and less insistent on grammatically correct English.
Happy as it is for those concerned, the more one knows of correct English, the more uncomfortable one is with this trend. As the lyric goes: “I’d rather hear a choir singing flat.”
I once, this was back in 1996, sat through the lecture of a man who had his prepositions, conjunctions, and even some verbs confused. Every sentence he uttered was ambiguous and confusing. But what was really interesting was that the rest of the class had no problem understanding him. This was because their English was at the same level as his. Instead of saying, “The way the compiler handles this is that it allocates a block of memory to hold the value of the variable,” he might say something like “The way the compiler handles this is because it allocates a block of memory to hold the value of the variable.” For the others the wrong word ‘because’ did not pose a problem, but it threw me off course.
So too we have a growing audience of people who cannot discern between correct and incorrect English as long as the material is intelligently arranged and easily navigable.
Because of India’s large population, one would also be able to find many who write correctly or are in the correctable stage. The problem is not the unavailability of the good, but in the need for weeding out the others. Of course, as pointed out, the others will also probably find their corner in the field.
As for children left behind by the Indian educational system, it depends on what your vantage point is. For poor children in a village or a slum, the corporation schools provide their only hope for a better life. Many children from these schools do much better than their parents. But if we compare their education to ours, they are left behind. But these children will not even hear about technical writing.
For our purposes we must focus on those who come out of English schools in the big cities. An average student from any of the many good English schools in places like Bangalore, Chennai, New Delhi, Calcutta, Bombay, Poone, and so on, is a potential candidate for technical communication. I am not sure of what you have in mind when you say post-secondary, but it will have to be after the tenth standard or high school. Another point to note is that unless the qualification is a degree offered by a university, it is not likely to interest Indians. we have an obsession for university degrees.
May 7th, 2008 at 8:37 am
Right - secondary school meaning up to tenth or twelth grade (stateside).
Thank you again for your detailed post!
What an amazing dilemma you bring up - that the corruption of the English language is not discernable even in lectures.
Languages are like that - if you don’t use them you lose them. As we used to say in the military, it’s a ‘perishable’ skill set.
August 19th, 2008 at 2:46 am
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