Paved Paradise: Faces of the IT Recession

[Guest.Visitor]

I thought this article from CIO was interesting... "U.S. CIOs want to do business with offshore companies with high CMM ratings. But some outsourcers exaggerate and even lie about their Capability Maturity Model scores." http://www.cio.com/archive/030104/cmm.html

[MCWebsite.Staff]

Paved Paradise: Faces of the IT Recession

** This thread discusses the article: Paved Paradise: Faces of the IT Recession **
** This thread discusses the Content article: Paved Paradise: Faces of the IT Recession **
0

[Guest.Visitor]

Paved Paradise: Faces of the IT Recession

** This thread discusses the article: Paved Paradise: Faces of the IT Recession **
Americans want the right to sell Coca-Cola, Kentucky Fried Chicken, McDonald's hamburgers and Dominoes Pizza in every country in the world but don't want certifiably better software from dedicated professionals from other countries to come into the US. Why? Didn't we see the same complaints in the 1970s when Japan swamped the US auto industry with better quality automobiles? How many of these whiners drive a Japanese car even today? Just check the California freeways. How many of these people buy products made in China and Korea? Look at the check-out lines at the local Wal-Mart. By the way, what is so difficult about taking people's money for 20-30 years? The process is called insurance and right now under "globalization", we have Met Life and Prudential selling insurance in India which they couldn't do 5 years ago. The least Prudential could do is to spend a little of the money it takes in in India on software services procured in India. By the way, why can't the software companies in the US try and obtain CMM Level 5 certification like Indian companies do? Are they afraid they would flunk the test? Why is it that Oracle has to open shop in India? All those hot-shot programmers in Bay Area we hear about, why can't they get CMM certification for Oracle in Redwood Shores?

[David Abramowitz]

Paved Paradise: Faces of the IT Recession

** This thread discusses the article: Paved Paradise: Faces of the IT Recession **
As long as you're asking all of theses questions: Why don't you sign your name? Dave

[Guest.Visitor]

Paved Paradise: Faces of the IT Recession

** This thread discusses the article: Paved Paradise: Faces of the IT Recession **
Thank you, Dave. I was going to ask that very question. Paula

[Guest.Visitor]

Paved Paradise: Faces of the IT Recession

** This thread discusses the article: Paved Paradise: Faces of the IT Recession **
Thank you, Tom, for another great piece. I too am troubled by such stories. In fact, the fellow that talked me into getting into the "data processing" career and got me my first job recently emailed me to say: "It's been a great run but I think it's time to find another profession." And now he's openning a canoe and cayak rental in Maine. I feel we have to study what's happened to IT in the last few years. Probably the biggest problem we have is that CEOs have lost confidence in IT. Regardless of whether or not off-shore is the IT solution or if off-shore should be legal, we have to restore our CEO's confidence in IT. We have to change the fact that, historically, a large percentage of IT projects go way over budget and then many of them fail. I was at a company last week bidding on a project. The project was to migrate a Sun server running Oracle to iSeries-based Java. The CEO was afraid of doing the project because another migration, several years earlier (a SAP migration) caused their company to go from a 300 million dollar company to a 75 million dollar a year company (because shipping was down for a month.) My task is to restore that CEO's confidence in IT. Might I also say that our task is to restore CEO confidence nationwide in IT. Tom, I'd like to read your suggestions as to how we need to restore IT confidence. One of my "silver bullets" is Extreme Programming, but that's only one weapon in our arsenal.

[David Abramowitz]

Paved Paradise: Faces of the IT Recession

** This thread discusses the article: Paved Paradise: Faces of the IT Recession **
Don Denoncourt wrote: Probably the biggest problem we have is that CEOs have lost confidence in IT. This may not be the case. It should be kept in mind that CEOs tend to look at their firms in terms of a balance sheet. On that balance sheet IT will be in a cost center. IT is almost always in a cost center because unless you are producing marketable software or services, there is no income generated by the IT process. Consequently a CEO will look at any method of reducing the cost regardless of confidence or comfort level that the CEO has with the people involved. This is another reason why it's so easy for an outsourcer to sell the outsourcing concept to the CEO. The bottom line is the bottom line, and in this case the bottom line has sorely little to do with the level of service. This is also why most outsourcing efforts do not work. That is the bottom line is not enhanced. If the overall cost includes level of service, and timeliness then that is a detriment, but since accounting is performed for a set period of time the loss may not become apparant. It's a complicated topic indeed, but if a comprehensive survey were to be conducted I think you will find that just as many "successful" IT departments have been victimized as others. Dave

[Guest.Visitor]

Paved Paradise: Faces of the IT Recession

** This thread discusses the article: Paved Paradise: Faces of the IT Recession **
Her story is an example of how the outsourcing and offshoring push is resulting in what I would call a kind of "buffalo syndrome". The "trade press" hype is such that it's become a twist on an old cliche: "No exec ever got fired for offshoring". This was probably the point of the article. I was a missionary for some years in Latin America before coming back to IT, my wife is from Honduras, so I have a multi-faceted perspective on this issue, and have other reasons for also considering overseas work. And am not against it per se. But there are patterns at work, and it is no accident that there was enough economy in the U.S. to support IT in saving the rest of them from Y2K, which would have been a real problem. Nor the plummeting afterward. But the real issues are the tremendous burden that are laid upon entrepeneurs in the U.S., startups and upstarts that in a "fair environment" would upset everything. If the education system hadn't been sabotaged, at least. (1) Tremendous burden of taxes. Every employee in most Euro countries cost a fortune to hire, here too, compared to some new offshorers. (2) Tremendous burden of over-regulation. Dept. of Labor agents requiring loud back-up beeps of x decibels on forklifts/trucks, then requiring earplugs for the workers to muffle the decibels. (True case) (3) Tremendous burden of over-hyped and over-done environmental regulations. (4) Assault on honesty. (5) Competition against state industries. (Almost all Chinese corporations disguised as capitalists ventures are owned by some state government agency, including an international trade corp and the ones listed on Wall Street). (NOT an endorsement of industry subsidies in the U.S.). "He that stoppeth his ears at the cry of the poor, he himself shall also cry, and shall not be heard".

[Guest.Visitor]

Paved Paradise: Faces of the IT Recession

** This thread discusses the article: Paved Paradise: Faces of the IT Recession **
"...the right to sell Coca-Cola, KFC, ..."???? These poor people in other country’s are clamoring to purchase the products that AMERICAN entrepreneurs provide. Yeah, it helps the bottom line, but we also employ the natives when we open a franchise in that country....we don’t "outsource" those jobs to Americans. The economy (such that it is) in those countries benefit from the hard work and ingenuity of the AMERICAN entrepreneurs. Heck, if the only diversion I had was to study for the "CMM Level 5", maybe it would interest me to be certified. But I have color TV, air conditioning, an automobile, movie theaters, vacations to take, places to go and things to see. I guess there is a benefit to living in a God forsaken corner of the world...you have the time to be "CMM Level 5" certified.

[Guest.Visitor]

Paved Paradise: Faces of the IT Recession

** This thread discusses the article: Paved Paradise: Faces of the IT Recession **
> Americans want the right to sell Coca-Cola, Kentucky Fried Chicken, > McDonald's hamburgers and Dominoes Pizza in every country in the > world but don't want certifiably better software from dedicated > professionals from other countries to come into the US. Why? And what is the difference betweeen these 2 examples? The Americans are selling a product in these other countries and are employing citizens in those countries. India is not selling a software product, they are selling a service which is performed outside the US - a distinction which I'm sure is not lost on you. Introduce a competitor to Windows and if Americans complain then, you'll have a point to make. And as to your ascertion that the software is certifiably better is plain wishful thinking. > Didn't we see the same complaints in the 1970s when Japan swamped the > US auto industry with better quality automobiles? Again, product versus service. > By the way, why can't the software companies in the US try and obtain > CMM Level 5 certification like Indian companies do? Are they afraid > they would flunk the test? Why is it that Oracle has to open shop in > India? All those hot-shot programmers in Bay Area we hear about, why > can't they get CMM certification for Oracle in Redwood Shores? If Indian programmers are so "hot-shot" why are numerous computer boards experiencing member revolt due to the clueless newbies joining and asking questions that reveal the newbies total lack of knowledge about the subject? My favorite example was in a BPCS discussion board where someone came in and asked for detailed breakdown of what an MRP system provided as a user experience so he could fulfill a programming request. Bill

[A.Garrison]

Paved Paradise: Faces of the IT Recession

** This thread discusses the article: Paved Paradise: Faces of the IT Recession **
While I recognize many companies do have the attitude mentioned by Dave, I just dont see it as often as I used to. There was a time when most companies I knew treated IT as just an expense, like electricty. Dont pay the bills, and you have no light -- it was just something you had to have. I dont see that attitude much anymore. The companies that are thriving (or surviving) are treating IT as an active contributor to the bottom line. Maybe not as a direct revenue source by writing software for sale, but a contributor nonetheless. My current company, for example, is an entertainment company. The CEO on down knows our IT solutions create a customer experience that keeps customers coming back. We are viewed as a strategic asset, not an expense. It just hasnt been hard proving the ROI. If I was working for someone who thought IT was an expense, I would be looking to move asap. Such a company just wont survive. It pains me to read about a successful IT dept that got torpedoed by an aquisition. Sometimes companies make decisions that just arent rational. I do, however, see the impact of outsourcing every day. My employer constantly lets big contracts to software firms in India and the US instead of making modest expansions in our own staff. That is a real problem for us in many ways. The knowledge the contractors gain just walks out the door (and believe me, every new contractor here gets an education, esp in our tools and practices). The amounts we pay these firms are sky high. A three month stint as a contractor here would pay the annual salary of a full time developer. We arent saving money by outsourcing, the numbers dont add up. It is a myth. So why do we do it? I have asked lots of people without getting any satisfactory answer. Don: I do see some companies out there as you describe. I run into some that have spent big $$ on projects that didnt deliver on the hype. Now those same companies are gun shy about anything that doesnt have a 13mth ROI. (Try to sell management on a new enterprise infrastructure that will take 36 mths to deploy and still must have a 13mth ROI. We managed to do it here but it was a hard sell.) These kinds of articles really bring it home for me. I dont get much from the stories of vague warnings and generalizations, however, specific cases like these show you what is really at stake. You know, for me, the puzzle has always been how to reconcile the massive amount of experience and education it takes to be really good in our industry with the perception of some management suits that we are a commodity; that is, replaceable on a moments notice. The system knowledge, experience, and proven delivery record goes out the window with the promise of cheap labor out of sight somewhere. Why is that? Sure they will figure it out somewhere down the road when they try to find out what happened to their competitive edge, but thats a bit late for the casualities. Years ago I knew I had all the answers. Now I know better.

[J.Pluta]

Paved Paradise: Faces of the IT Recession

** This thread discusses the article: Paved Paradise: Faces of the IT Recession **
Tom, I'd like to read your suggestions as to how we need to restore IT confidence. Actually, it's pretty simple. Get back to providing value. In the 70's and 80's we provided real value for our customers. Service bureaus provided collation and reporting of data for companies that didn't have the manpower to do it themselves. Online data entry systems and inquiry provided the ability to enter that data without paying for data entry and printing. These costs were pretty easy to justify. The other area was application programming. A good example was inventory control, MRP and finally ERP. Those applications provided real savings in reduced inventory costs. Once again, pretty easy to justify. For the last 15 years, though, we've been selling crap. We've been telling our clients "move to Unix", "don't move to Unix", "move to Linux", "SQL is king", "Java rules all", "EJB is the next coming". Moving to Unix doesn't save any money (except maybe a few bucks in hardware which is offset by extra costs in labor). EJB is dead, long live whatever the next fad is. We've stopped providing value add, and instead have focused on providing technology. Technology for technology's sake sucks. A decent analyst who takes the time to understand his client's business needs can do wonders with VB; he doesn't need Java or HTML. The tools we use are secondary to the work we do. The IT industry is basically "blinded by science" right now. The machinery is driven by the latest technologies, and the problem is that nobody knows how to use these technologies. In effect we're selling beta code to the CEOs. No wonder they've lost faith. Joe

[Harimau]

Paved Paradise: Faces of the IT Recession

** This thread discusses the article: Paved Paradise: Faces of the IT Recession **
Actually, I was not TRYING to post anonymously. I just hit the button saying "Discuss" and it took me there. Anyway, I am a naturalized US citizen from India. I have spent about 30 years in the US. I now split my time between the US and India. I like to practice what I preach and can truthfully say that I never owned any car other than an American-made one, even when I was in Singapore for 18 months. If I own a Japanese TV that is because by that time there were no US-made electronic equipment. As to Coca-Cola being a product and off-shore programming a service, all you are saying is that a one-off product is NOT a product. After all, the off-shore programmers do write programs, something that can be considered a product. By the way, several credit-card companies and banks are using off-shore services to track non-payment of bills as low as $10, something that would be written off if the follow-up has to be done by US staff sitting in Omaha, NE. As to that stupid comment about there being no entertainment and so people in India have the time for getting quality certifications, that merely exposes your ignorance. India produces over 1000 movies a year. I flip thru TV in India and can watch 60+ channels including BBC, CNN, Deutsche Welle (Germany), Channel News Asia (Singapore), etc. The vast majority of the channels are locally produced. The other nice thing about Americans is how they cut off discussions by pointing out national origin, accent, religion, etc., as if that explains everything. Remember how some law student at Georgetown University leaked out the fact that minorities with lower LSAT scores were admitted to Georgetown Law School while some whites were denied admission because of that? (He found that information from his work in the Admissions Office). While he was being interviewed on Larry King Live, I decided to call in. My own experience ar Georgetown was that when I called to inquire about admission to law school there, the receptionist simply said that they don't admit foreigners and hung up on me. At that time I was a green-card holder and had every right of studying in any university I qualified for but that was not Georgetown's view. Guess what? I didn't get past Larry King's receptionist either!

[Harimau]

Paved Paradise: Faces of the IT Recession

** This thread discusses the article: Paved Paradise: Faces of the IT Recession **
There was a time in the US when the internal IT departments wrote the systems that they needed. But then we got into the situation where everybody decided to chase after the "latest and greatest", meaning Oracle and SAP ERP systems. If you ran an honest IT department that was successful but if you didn't have one of those ERP packages, you had the Big Five consultants come in and tell the management that they needed to replace the systems -- using of course themselves as consultants. Enough of you guys went along and we saw SAP, Oracle, PeopleSoft and Baan take over the software business. The IT department started the resume enhancement process by implementing these packages and then going after the "flavor of the day" such as J2EE, ASP, VB, EJB and any other combination of letters one could think of. On top of this, you guys went hyping the complexity of your work. Pray tell me, exactly what is the "business logic" in an Accounts Receivable system? In the integrated package we had, shipping against a sales order automatically created the invoice. All that we did in AR was to apply the checks to accounts, send out dunning letters, make collection calls. So, how many lines of code does that take? When your consultants showed up and asked you to move from CICS systems to client-server, you happily went along. When the same consultants came in 5 years later and told you that you need to move to Java, you did that too... forgetting the fact that the browser model on the front-end is not significantly different from the CICS model. Did you ever question the consultant's previous advice -- or your lame acceptance -- of the client-server model? No. Instead, you now go to management and tell them the browser will enable you to replace programs without having to visit every desktop; that same situation obtained in the CICS model or with just plain RPG. If you don't want to think, don't blame others for your problems. By the way, I ran the reference site for IBM AS/400 in Silicon Valley for 7 years. Those wonderful consultants from Price Waterhouse told us in 1993 that we needed to go to SAP.... minor problem that they knew nothing about: at that time, Unix was limited to 256 users and we were already in excess of that. (So don't tell me about Indian programmers with limited knowledge). After I left, the company chose to go with SAP. Two years later, they wrote off $40 million in unusable manufacturing software. You might want to take a guess at what that is. All implemented by wonderful on-site consultants, a few of whom happened to be H1-B programmers from India but quite a bit from various US consulting companies! I am willing to grant you that incompetence is spread equally across the globe. Unfortunately for you guys, quality certification seems to be unequally spread with the main concentration in India followed by Japan. Harimau

[Harimau]

Paved Paradise: Faces of the IT Recession

** This thread discusses the article: Paved Paradise: Faces of the IT Recession **
These are companies that have opened shop in India. They charge HIGHER rates than Indian companies like Infosys or Wipro because they are American companies and then outsource their work to their captive programming shops in India. They maximize their profits at your expense. And you complain that Indian companies are making you jobless!