Services Safari

Powerful Analogy

                  The Dead Sea Effect - IT and IT Services

I saw a great analogy used to describe the effect of continued outsourcing, offshoring and staff reductions on IT organizations. It's call the Dead Sea Effect.

This phenomena occurs when all of the best and brightest evaporate (along with a lot of others who are forcibly displaced/jettisoned) and all that remains is a residue that is unable to support life. In the Dead Sea, so much water has evaporated over the millenia that the brackish water that remains is too salty to support hardly any sort of aquatic life.

This metaphor is a powerful descriptor and one that management teams need to consider whenever they are planning significant offshoring or outsourcing initiatives or forced layoffs. 

EDS - Overtime Dispute

                                Money Will Settle This

Last month, six former/current EDS employees filed a class-action lawsuit seeking overtime pay (see: http://www.examiner.com/a-1224633~EDS_technical_service_workers_sue_for_overtime_pay.html ). This type of suit occurs frequently and hinges on whether or not specific workers were correctly or incorrectly identified as 'exempt' under Fair Labor Standards Act (FSLA) regulations.

Not surprisingly, specialized websites have sprung up to identify other potential claimants/plaintiffs (see: http://www.edsovertime.com/ ). CRN, Computer Reseller News, has also covered this story.

FSLA suits are usually solved with money. Some goes to the litigants and some goes to lawyers. If found in violation of FSLA regulations, the offending employer makes adjustments to their payroll system going forward, recalculates owed back pay and makes restitution.

Is this a BIG story? Probably not. It's interesting and very solvable. It's only scandalous if long-term patterns of deceit/fraud are uncovered. If it's a legitimate difference of opinion in interpreting regulations, fraud is much harder to prove. Without fraud, the fines will likely be scant. 

Name Your H-1B Legislation

       When Congress Gets Creative - The Selling of H-1B Legislation

Two new bills are being introduced in Congress to raise the cap on the number of H-1B visas. One would double the number initially and eventually triple the number of visas granted annually. The other takes the limit up to 195,000 in 2009.

Take the H-1B Legislation Naming Game!!!

Can you guess which legislation names are legit and which aren't?

1. The Innovation Employment Act
2. SUSTAIN - Strengthening U.S. Technology and Innovation Now
3. Replacement Work Force
4. Full Employment Act for Outsourcing and Global Competitiveness
5. The North American Job Security and Economic Stimulus Act
6. American Workers are Lazy, Uneducated and Ignorant of Technical Disciplines

The correct answers are the first two although numbers 4 & 5 could also work. The congress persons leading these efforts should be applauded for the creative names they've chosen. You'll notice that the bills are named around innovation as any name that would imply loss of jobs to offshore workers would be death to their political careers.

If you'd like to learn more about these bills (e.g., exactly who is sponsoring them and where they are from), please read: http://www.eweek.com/c/a/Careers/Bills-Would-Double-and-Triple-H1B-Cap/ .

   

Let The Fighting Begin - H1B Issue Goes to Washington

                The Best Reading on H-1B: Issues, Testimony, Fraud....

                        Can't We Make a Hit TV Show From This?

Ever get the feeling that someone's making money on those H-1B visas you read about? Check out U.S. Senator Chuck Grassley's letter to the Bush administration re: H-1B visa abuses: http://grassley.senate.gov/public/index.cfm?FuseAction=PressReleases.Detail&PressRelease_id=9af53fa4-b99b-5638-8db2-5021e681c258&Month=3&Year=2008 There's some really juicy stuff in this. It discusses the blatantly illegal job advertisements here in the U.S. where advertisers are only looking for holders of H-1B visas. It details how visa factories are being established to create false employer fronts within the U.S. There's the story of an Iowa businessman getting harangued by an offshore firm with all of these potential visa holders on the bench. The fact that Homeland Security is being alerted to these abuses suggests something is really rotten here. Great reading - really.

Computerworld expands on the Senator's letter in this story: http://www.computerworld.com/action/article.do?command=viewArticleBasic&articleId=9067738&intsrc=hm_list . Like the above, it's a great read, too.

We also have Network World chiming in with their piece: http://www.networkworld.com/news/2008/031208-h1b.html.

Bill Gates, of Microsoft fame, testified before Congress and a synopsis of his remarks can be found here: http://www.networkworld.com/news/2008/031208-gates-immigration-reform.html

All this comes at a time when the U.S. government is being asked to raise the limits on H-1B visas from 65,000 to 110,000/year.

Here are the questions U.S. policy makers must address pronto:

• Does bringing in more non-US workers actually motivate US students to pursue technical degrees or does it achieve the opposite effect?
• The H-1B program was intended to bring in people with unique skills and talent. How do green, low-level tech coders meet that standard? What aren't more PhDs being granted this visa?
• Why are large tech outsourcers allowed to hog the number of available visas? Should U.S. based tech companies get an equal or better opportunity to import scarce, unique talent?
• Why are students at U.S. colleges electing not to pursue careers in technical areas? Is it because of bad employer behavior? Is it because these positions are vulnerable to outsourcing? Is it because potential employers send mixed signals to colleges, employees and job seekers? Or, is it that U.S. college students can't be bothered with these degrees? What is the real root cause?
• Is the L-1 visa program as messed up as the H-1B? Should both be addressed?

Approving or disallowing the increase in visa permits is not the issue. Congress must address bigger concerns (e.g., national security) and discover the answers (and appropriate remedies) to the matters above and more.

Get Over It Already

                         You're Not Consultants Anymore

Today I listened in on an analyst firm webinar concerning their predictions for the IT services industry. In the Q&A that followed, a caller wanted to know why systems integrators still have not productized their offerings as we move well into 2008.

While one of the analysts offered a capable answer, the reality of it is a little more insidious.

Yes, consultants like to believe in the unique problem sets that their clients possess and that only a consultant can craft an equally unique solution for them.  The concept of commoditizing (or productizing) one's solution is repugnant to a consultant because once commoditized, the unique value of a consultant is lost.  In fact, the consultant is replaced with an installer.

People love to call themselves consultants even when all they do is show up at the same outsourcing data center and do the same task every single day.  Likewise, you are not a consultant if you routinely install the same software package using the same methodology that is sold through a menu of pricing options from which a customer selects.  No, you're not a consultant. You are an order fulfillment specialist.

The Economist produced a book titled Business Consulting recently.  One major theme that this book explored was that management and strategy consulting is no longer what most major service firms sell today.  No, they sell preconfigured solutions.

Any systems integrator that balks at productizing its offerings is doing so because it is hanging on to the romantic notion that it still is a highly malleable and adaptable consultancy when it is not. Anyone who works in a delivery center, center of excellence, or other industrialized factory of preconfigured thinking is not, I repeat not, a consultant.

For those firms with deep roots in the old consulting world, it's time to drop the name consulting from your corporate banner.  You do not provide independent advice and counsel to clients anymore.  You do not put your client's interest first as you put your economic interests ahead of their's.  You have chosen to provide services around commodity technologies and not provide unique solutions in their place.  You have chosen to grow your company and revenues at the expense of maintaining the intimacy and professionalism of consulting.  You no longer deserve nor warrant the use of the name consulting or consultant and you should refrain from it going forward.

The market, workforce and many firms have evolved in recent years. It's time to to rename companies, professions and job titles and get clear about what it is that integrators and consultants deliver.

Unnecessary People Departures

Where is Everyone Going? 

 

(This blog will be cross-posted on www.softwareSafari.typepad.com ) 

 

Wachovia Capital does a great job of capturing attrition data on publicly traded service firms.  Their analysts are especially interested in the turnover rates experienced by Indian outsourcers.  I, too, track this information as attrition rates of 20 - 40% annually cannot be good for the clients who use these outsourcers’ services. 

 

In the November 2007 issue of Global Services magazine (www.globalservicesmedia.com ), there is an interesting article (“Early Warning on Attrition”) that describes the efforts of several outsourcing firms to stem further attrition. Highlighted firms include Convergys and Genpact.   

 

Several weeks prior to this story being published, I discussed predictive analytics around attrition with numerous HR software executives at the HR Technology conference in Chicago. In particular, I questioned the limited thought that is going into many talent management and performance management solutions regarding attrition.  In essence, most of these systems rely on compensation and prior evaluation data to determine someone's flight-risk potential.  Unfortunately, those data attributes, while present in most HR or talent management solutions, represent a limited view into the causes of attrition.

Stanley Bing, of Fortune magazine fame, recently published a book on crazy bosses.  He identified six common pathologies that these mixed up individuals possess.  Bad bosses, as it turns out, are either the first or second reason behind many employee departures depending on whose survey you read.  It would stand to reason that any early warning system around attrition should be significantly focused on the dysfunctional characteristics present in far too many managers, supervisors or bosses. 

 

The bulk of the Global Services article discussed those red, yellow and green dashboards that managers can use to identify potential attrition candidates.  To their credit, the companies utilizing the systems are evaluating more than performance data.  The article indicated that issues such as hygiene, rejections for internal job postings, work quality and other factors also are evaluated. 

 

Convergys stood out in the article by addressing issues related to management that contribute to attrition.  The article states:

“At Convergys, we have introduced a "Team Leader Transformation" program with an emphasis on training the team leaders to improve their people management skills.  Agents with more effective managers have higher job satisfaction, and are thus likely to leave," says (Sharad) Talwar of Convergys.”

 

Right on, Convergys. More human resource software firms should follow the lead of Convergys in this regard.  Bad bosses are more than just harmful to their employer and to themselves. They drive away significant numbers of great people.  Once attrition detection systems understand, track and trap these bad behaviors, corrective actions can be taken. 

 

Going forward, more work must be completed regarding flight-risk.  Systems should be monitoring whether employees are cashing in their stock options, have been bypassed for promotions, have received new supervisors, and other factors beyond compensation and performance evaluation scores. 

 

Talent management and HR vendors should also look at ways of evaluating the attrition impact of ineffective managers and not just bad bosses.  The latter has a toxicity about them that drives all workers away quickly while the former takes more time to run great people away.  When dealing with ineffective managers, companies may devise a number stratagems to either bolster the manager’s skill set, change their team composition to offset managerial weaknesses or other measures.  But, until HR and talent management vendors invest in understanding the root causes of attrition (instead of building new platforms for their technology infrastructure), we will continue to see uninspired, ineffective attrition management solutions.

CEO Interview - Beth Carvin

                Interview with Beth Carvin of Nobscot Corporation 

 

At last week's HR Technology conference in Chicago, I had a chance to sit down with Beth Carvin, CEO and President of Nobscot Corporation. (We also discussed the recognition software marketplace. Please see the prior post for more on this.) 

 

Her firm has software that allows workers to request and find potential mentors and mentees within their own firm.  The software allows mentees to choose from three types mentor in pools: General, special or affinity.  Affinity groups would include subsets of workers such as women or African American employees. Mentors from affinity groups should have a special understanding of unique issues and challenges that other members of that population face. Special mentor groups could include those individuals identified as either a high potential or high performance employees.  This would be helpful for those seeking guidance from others of similar classification or aspirational role. 

 

Large retail firms are they key buyers of this software.  Customers include Best Buy Home Depot and General Mills. 

 

Nobscot also offers a talent networking edition for their software.  This technology adds a social network solution and is issue, not mentor, focused in its scope.  As such, users can pose questions to the general population of workers or to specific groups to get help with their business related problems.

Social networking sites are also attempting to add mentoring capabilities to their products. These tools are most successful with identifying/facilitating mentoring relationships with persons outside of one's employer. Standalone mentoring systems or social networking solutions will likely continue to enhance and expand their respective mentoring capabilities. All of this action should make for a fun space to watch. 

Recognition Systems - A Good Fit for Service Firms?

        Observations From the HR Technology Show - Chicago Oct. 10-12

                                  A Technology That Could Get Misused

 

I got a chance to discuss the praise and recognition needs of younger workers in the North American workforce with Beth Carvin of Nobscot Corporation. Beth was a presenter at the HR Technology Show and is CEO of Nobscot.  (More on Beth in the next post)

 

We discussed how in today's talent pool, newer generation employees have gone through public education systems and other youth related groups (i.e., baseball leagues) where they are accustomed to receiving praise and accolades just for attending these events.  With the generation of workers who are used to receiving ribbons, medals and trophies for even the most basic completion of an activity, workers today expect to receive greater levels of recognition even for doing just the bare basics of their job. 

 

At the HR Technology show, vendors were on-hand selling these new recognition systems for this latest generation of workers.  These on-line “attaboy” systems even provide tabs for one to enter kudos for a coworker.  One conference attendee, a senior health care executive, told me that his firm now employs a recognition specialist.  This individual is responsible for providing this type of pastoral care to their workforce.  Their recognition specialist is even certified to provide this capability. 

 

Given how heavily the ranks of middle management have been decimated over the last few decades, it is not surprising that large numbers of workers are not getting the recognition they deserve.  When this recognition-lite environment is now houses so many newer workers that crave and need recognition on a constant basis, the need for recognition tools is actually increasing.  While an entire generation of workers has grown up without the need for such praise, especially when one was simply doing the job one was hired to do, newer employees are undoubtedly going to require greater care and feeding lest they leave their employer. 

 

It will be interesting to see how these new recognition systems play with certain kinds of organizations.  For example, businesses with an up-or-out philosophy have never been short on providing positive and negative feedback to individuals based on their performance.  Some of these firms, in fact, consciously seek out individuals who crave attention, validation and praise.  In some of the largest management consulting firms, the ideal candidate is a Type-A personality with a little bit of a self-esteem issue.  These people can be expected to work unbelievable hours, do a great job and come back hungry looking for more.  Furthermore, these individuals want to be told what they've done well and what they haven't done well. 

 

Sadly, too many firms offer too little feedback to their workforce. A common lament I heard at this show was that many firms are still struggling to give workers an annual evaluation. Worse, managers are still chafing as to the time and difficulty required of them to provide this essential feedback. Maybe these firms need some sort of recognition system as their managers lack the time or willingness to provide such to their workforce.   

 

Slackers, no matter what generation of the workforce they come from, are just that slackers.  No amount of recognition or rewards will turn some of these individuals into superstars.  In fact, many employers would be hard-pressed to get a decent days work effort out of these individuals even with a lot of positive feedback.  Several years ago, I witnessed one such individual on my son's Little League baseball team.  This less than stellar player was assigned center field.  When a ground ball got past him and went to the warning track, this player turned round pointed to the ball and announced for everyone in the stands to hear “Someone ought to go get that ball".  Rather than being embarrassed at his lack of baseball playing expertise, this player chose to stand immobile and deflect his failure to others on his team.  Sure enough, another outfielder came to pick up the ball that was only 15 feet behind the centerfielder.  At the end of the game, the centerfielder was treated to the same drinks and desserts that the other players on his team received. Did he learn a lesson? No. Did he become a better player? No. Did he miss an important learning and growth opportunity? Yes. 

 

When rewards and recognition are doled out to everyone they demean the efforts of the very best players or workers.  Why should the best and brightest work so hard to receive only the same recognition, rewards and compensation of the mediocre?  Rewarding incompetence or marginal behavior does nothing to improve the productivity of a U.S. worker or this country's competitive position in the global economy.  If rewards are to be meaningful, and helpful to everyone involved, they must be tied to performance.  Anything less is a joke. 

 

The bottom line: recognition systems may actually become HR technology components for some companies.  As such, enough of a marketplace may emerge to provide some modicum of success to those technology providers catering to it.  However, in and of itself, this niche may not ever get widespread acceptance.  We should expect to see though some ERP and other HR suite providers offer some of this functionality in their offerings over time. 

Who's Your Most Valuable Service Employee?

The Next Frontier for Human Capital Solutions in Service Enterprises

Say your firm has two employees of like grade, seniority, etc. However, one person is the go-to subject matter expert that dozens of clients and fellow employees reach out to constantly for answers to their questions. Who is the employee you really need to retain the most?

Suppose you have another pair of employees with similar credentials except one of these is constantly connecting with clients, prospects, alliance partners, etc. Who is more critical to your firm's success? Does your answer change if you learn that the latter's chargeability is lower because of all of this connectivity?

Valuing people is still subjective and it remains unclear as to whether companies are looking at consistent measures or even the right measures. A great service employee must always expand his/her professional balance sheet. They must:

• constantly be in-touch with the people, media, tools, etc. needed to remain relevant and valuable with clients (People that prospects seek out, sell more work. Their value (i.e., Total Assets) increases as result.)
• creating a distinct set of differentiating skills for him/herself (This increases one's Net Assets)
• prevent their skill set, contacts, etc. from ossifying (This is the depreciation that affects all assets)
• build their personal brand. A person everyone knows and values never has career or employment problems. A nobody is someone who could be really talented but few people know this. Unknown skills are not worth much.

This subject is important as it reminds us how little Human Resource or Human Capital systems really know about a service firm's workforce. Imagine what would happen if a service firm kept track of workers':  cell phone calls, desk calls, emails, etc.? What if you also could 'see' who they chat with informally every day as they walk around your office or a client's office? What if you could use all of this personal network data to assess the value of employees to your firm? Would you make different decisions as to someone's contribution to the company?

I remember some fine folks I've worked with over the years and I really wonder if the company truly appreciated what they could deliver. For example, I worked with one lady who really burned up a telephone. She always had the best intelligence, knew the inside track on anything going on inside or outside the company. I had another colleague who was one of the firm's most sought after subject matter experts. Hundreds of partners and numerous software vendors constantly sought out her opinions and counsel. One individual was a great closer of work because he could really understand and speak to CXOs.

In the current issue of Strategy + Business (a Booz Allen Hamilton quarterly publication), there's an article titled "The Science of Subtle Signs". This piece looks at groundbreaking research being done in using sensors (on people) to reinvent organizational research. Just check out these sound bites:

"... these devices would uncover patterns of activity that usually go unobserved in organizations like the dynamics of person-to-person relationships and the ways they affect managerial decisions and organizational practices.  Imagine, for example, an automatic system that could detect a breakdown in the trust on which a creative team depends and flag specific steps that could fix it, or one that could map out the complete flow of information and knowledge within an organization...

Beneath the formal organizational chart of any company line hidden webs of social interactions that we can rarely talk about, winds whose existence we may not even acknowledge.  The health or dysfunction of these social networks can determine the effectiveness of a team, a large group, or an entire firm.

In collaboration with Thomas Malone of the MIT Center for collective intelligence, and his research team has begun to use sensors to observe creative group behavior at a major German bank.  (One deliver a finding: people who maintain lots of e-mail and face to face contact report high job satisfaction and personal productivity; those who socialize less, even with the intention of getting more work done, expressed overall less satisfaction.)"

The sensors could be used in other applications as well.  For example, many studies have shown that workplace burnout is a serious issue that cost companies billions each year.  But because people tend to high stress, it can be very difficult, if not impossible, to detect."

Human Resource and Human Capital systems have been and mostly remain focused on transaction systems processing.  The inability or unwillingness of human resource management systems vendors to get into the softer sides of worker attitudes, personal networks and other behavioral aspects is disappointing.  We need technologies that help improve business productivity.  We also need systems that protect employees rights to privacy and individuality.  I believe we can deal effectively and professionally with ethical issues; however, we need vendors in the human capital and human resources space who will energize our thinking and open our minds to new possibilities in the way we value and measure workers.

I've spoken with several human resource and human capital vendors the last two years about moving away from transaction-based solutions; however, I believe the time is right to really advance the thinking and innovation these firms could possibly deliver.

(This post will be cross-posted on www.softwaresafari.typepad.com). 

New HR Frontiers

            The Softer Side of IT, Outsourcing, Services and HR

Let's take a look at the people side of IT, services and consulting. Here's a quick recap of articles I spotted recently:

First, eWeek examined where IT shops are recruiting new talent for their firms. A big part of their story included observations by Forrester. IT shops need to quit over-fishing the usual sources of talent and look to new sources like college students, academics, superusers, and more. (see www.eweek.com, "Competing for IT Talent" 7/23/2007)

Second, Computerworld identified the hottest IT careers one can get (see www.computerworld.com 8/06/07, "Irresistible IT Skills"). These skills included: Machine Learning, Embedded Security, Human-Computer Interface and more.

Third, Business 2.0 (see Jan/Feb 2007 -"Taking on the the Recruiting Monster") highlighted a changing way that candidates can be sourced: Referrals. This articles focused on Jobster although I think the power behind social networking sites like LinkedIn and Spoke may prove even more powerful.

Fourth, Global Services did a piece called "HR: No Longer a Career Graveyard" (see: www.globalservicesmedia.com August 2007). They showed a chart (see below) that really defines HR's impact on the executive suite.

Fifth, Human Resource Executive has a related piece called "The Talent Drought" (see 6/16/2007 issue). It describes how a talent shortage is possibly affecting the HR Outsourcing industry. This is an interesting issue as really talented HR professionals are scarce to begin with and fewer still exist in the HR outsourcing space. This issue is delicious as the people responsible for managing other firm's employees are having trouble managing their own.

Sixth, stories are emanating from India that outsourcers there are leaning more and more on software instead of employees to deliver value. Software, it appears, doesn't leave the company or request ever higher pay raises. (see www.informationweek.com "Indian Firms Turn to Software As Talent Crunch Takes Toll" 6/4/2007)

Seventh, look at the Baseline piece "Efficiently Managing A Human Supply Chain" (www.baselinemag.com, April 2007). It tells the story of how CUNA Mutual Group got a better handle on using and sourcing in contingent workforce.

Lastly, look at Global Service's piece "Offshore HR, What Can Customers Do?" (www.globalservicesmedia.com May 2007). This piece has a couple of good case studies involving Wachovia and a Fortune 100 firm and how they get better long-term results from their offshore partners.