American Decline- Why outsourcing doesnt make sense

Bureau of Labor Statistics logo RGB colors.
Image via Wikipedia

Here is a celebrated graphic from an American journalist using U.S. Department of Labor’s Bureau of Labor Statistics. It is a good example of using time as a dimension for animation- and heat maps for geography enabled visualizations.

————————–According to the U.S. Department of Labor’s Bureau of Labor Statistics, there are nearly 31 million people currently unemployed — that’s including those involuntarily working part time and those who want a job, but have given up on trying to find one. In the face of the worst economic upheaval since the Great Depression, millions of Americans are hurting. “The Decline: The Geography of a Recession,” as created by labor writer LaToya Egwuekwe, serves as a vivid representation of just how much. Watch the deteriorating transformation of the U.S. economy from January 2007 — approximately one year before the start of the recession — to the most recent unemployment data available today. Original link: http://www.latoyaegwuekwe.com/geographyofarecession.html. For more information, email latoya.egwuekwe@yahoo.com

————————————————————————————-

 

31 million unemployed- Does a US corporation seriously think that it can build everything OUTSIDE America and SELL INSIDE America. or who think it is okay intellectual property continues to be stolen as long as labor is cheap.

Shame on you if you outsourced your neighbour’s jobs- or would rather hire in a geography where they steal your intellectual property.

 

This Christmastime – May the Ghost of  the Unemployed Family Christmases visit you in your sleep instead.

Quantifying Analytics ROI

Japanese House Crest “Go-Shichi no Kiri”
Image via Wikipedia

I had a brief twitter exchange with Jim Davis, Chief Marketing Officer, SAS Institute on Return of Investment on Business Analytics Projects for customers. I have interviewed Jim Davis before last year https://decisionstats.com/2009/06/05/interview-jim-davis-sas-institute/

Now Jim Davis is a big guy, and he is rushing from the launch of SAS Institute’s Social Media Analytics in Japan- to some arguably difficult flying conditions in time to be home in America for Thanksgiving. That and and I have not been much of a good Blog Boy recently, more swayed by love of open source, than love of software per se. I love equally, given I am bad at both equally.

Anyways, Jim’s contention  ( http://twitter.com/Davis_Jim ) was customers should go in business analytics only if there is Positive Return on Investment.  I am quoting him here-

What is important is that there be a positive ROI on each and every BA project. Otherwise don’t do it.

That’s not the marketing I was taught in my business school- basically it was sell, sell, sell.

However I see most BI sales vendors also go through -let me meet my sales quota for this quarter- and quantifying customer ROI is simple maths than predictive analytics but there seems to be some information assymetry in it.

Here is a paper from North Western University on ROI in IT projects-.

but overall it would be in the interest of customers and Business Analytics Vendors to publish aggregated ROI.

The opponents to this transparency in ROI would be market leaders in market share, who have trapped their customers by high migration costs (due to complexity) or contractually.

A recent study listed Oracle having a large percentage of unhappy customers who would still renew!, SAP had problems when it raised prices for licensing arbitrarily (that CEO is now CEO of HP and dodging legal notices from Oracle).

Indeed Jim Davis’s famous unsettling call for focusing on Business Analytics,as Business Intelligence is dead- that call has been implemented more aggressively by IBM in analytical acquisitions than even SAS itself which has been conservative about inorganic growth. Quantifying ROI, should theoretically aid open source software the most (since they are cheapest in up front licensing) or newer technologies like MapReduce /Hadoop (since they are quite so fast)- but I think that market has a way of factoring in these things- and customers are not as foolish neither as unaware of costs versus benefits of migration.

The contrary to this is Business Analytics and Business Intelligence are imperfect markets with duo-poly  or big players thriving in absence of customer regulation.

You get more protection as a customer of $20 bag of potato chips, than as a customer of a $200,000 software. Regulators are wary to step in to ensure ROI fairness (since most bright techies are qither working for private sector, have their own startup or invested in startups)- who in Govt understands Analytics and Intelligence strong enough to ensure vendor lock-ins are not done, and market flexibility is done. It is also a lower choice for embattled regulators to ensure ROI on enterprise software unlike the aggressiveness they have showed in retail or online software.

Who will Analyze the Analysts and who can quantify the value of quants (or penalize them for shoddy quantitative analytics)- is an interesting phenomenon we expect to see more of.

 

 

China biggest threat to Indian Software in 5 years: Indian Tech CEO

The Hall of Prayer for Good Harvest, Temple of...
Image via Wikipedia

An interview with a noted Indian Software CEO, mentions China the possible biggest threat in next 5 years at  http://www.thehindubusinessline.com/2010/10/13/stories/2010101353180700.htm

 

China could be the biggest threat to India in next five years, positioning itself as the lowest-cost manpower supplier in the IT sector by 2015, according to Mr Vineet Nayar, CEO, HCL Technologies.

“I believe it (China) is the biggest threat in the next five years that we are going to face…So India will have to up its game,” he told reporters on sidelines of ‘Directions’, the company’s annual town hall.

Terming China, as both “threat and opportunity”, Mr Nayar said that India will have to find alternate “differentiators” than the ones it currently has. Despite issues of language and the purported inability to scale-up, China has sharpened its technological and innovation edge, he added.

“Look at the technology companies from China…how does that fit in with the assumption that they (China) do not understand English or technology. They are producing cutting edge technology at a price which is lower than everyone else,” he said.

Manpower

By 2015, Mr Nayar said, China will be the lowest cost manpower supplier in IT sector to the world

——————————————————————————————–

I wonder how he did his forecast. Did he do a time series analysis using a software, did he peer into his crystal ball, or did he spend a lot of time brainstorming with his strategic macro economic team on Chinese threat.

China has various advantages over India (and in fact the US)-

1) Big pool of reliable scientific manpower

2) State funded education in higher studies and STEM

3) Increasing exposure with the West-English speaking is no longer an issue. Almost 50 % of Grad Students in the US in STEM and certain sectors are Chinese and they not only retain fraternal ties with the motherland- they often remain un-assimilated with American Culture mainstream. or they have a separate interaction with fellow American Chinese and seperate with American Americans.

Chinese suffer from some disadvantages in software-

1) Communism Perception- Just because the Govt is communist and likes to confront US once a year (and India twice a month)- is no excuse for the hapless Chinese startup guy to lose out on software outsourcing contracts. unfortunately there have been reported cases where sneak codes have been inserted in code deliverables for American partners, just like American companies are forced to work with DoD (especially in software, embedded chips and telecom)

If you have 10000 lines of code delivered by your Chinese partner, how sure are you of going through each line of code for each sub routine or call procedure.

2) English- Chinese accent is like Chinese cooking. Unique- many Chinese are unable to master the different style of English even after years (derived from Latin and Indo European class of languages)

Sales jobs tend to go to American trained Chinese or to Westerners.

In Indian software companies, accent is a lesser problem.

———————————————————————————-

The biggest threat to Indian software in 5 years is actually Indian software itself- Can it evolve and mature to a product based model from a service only model.

Can Indian software partner with Chinese companies and maybe teach the Indian government why friendship is more profitable than envy and suspicion. If the US and China can trade enormously despite annual tensions, why cant Indian services do the same- if they lose this opportunity, US companies will likely bypass them and create the same GE/McKinsey style backoffices that started the Indian offshoring phenomenon.

3) Lastly- what did the poor American grad student do to deserve that even if devotes years to study STEM (and being called a Geek and Nerd) his job will get outsourced to India or China (if not now- in his 30s or worse in his 40s). Talk to any middle aged IT chap in the US who is middle class- and India and China would figure in why he still worries about his overpriced mortgage.

Unless the US wants only Twitter and Facebook as dominant technologies in the 21 st century.

Amen.

 

 

 

Fighting Back -The Net, Social Media, Spam, Identity Theft, Terrorism

Recently some influential bloggers got nailed by TSA for leaking security directives of Airlines that were issued post the failed Christmas Day attack. While the first Amendment is a much admired piece of legislation, a blogger’s right to blog cannot be greater than his desire to see his fellow citizens safe.

[tweetmeme=”Decisionstats”]

As someone who is brown , male, single ( and thus automatically a TSA curiousity) I travel to places like New York, San Fransisco, Austin, Atlanta, Ohio, Las Vegas for both personal and professional work- some of the following may be purely personal experiences.

1) Some of the biggest drawbacks that Airlines have had in the past were- Airport checks Susceptibility to social engineering. – They would rarely glance at a photo id if it is an American driver license but would do a proper job if it is a external passport. Unfortunately the second generation of Arab/ Asian exiles that are prone to internet based clerics have American issued passports as well as licenses. In addition they go to colleges and play soccer with actual citizens of foreign countries who can motivate or guide them. A look at the number of Arabic- Asian students in the University system who are not vetted by the TSA would reveal the magnitude of the problem.

I flew from Knoxville Tennessee to Las Vegas some months back on college I card, en route on my way back, I went through Washington, and was also hospitalized. Thus using a Vol Card, an Indian driving license and an American social security card – I managed to travel almost all the landscape. In addition I passed through enough transit airports to switch my destination. Sometimes I am so good I scare myself..

In order to catch a thief, the TSA needs to think like a thief rather than waste time and precious agents on just another liberal blogger. Have a contest open to all members of the public, and especially hackers, social media spammers, identity thieves- most of whom are starving people who need money AND respect. Say here is our system- and our processes. Break it to win a million dollars but share the solution with us in private.

2) Some elements of social media should be reviewed for a secure online identity. Twitter has a system for authenticating prominent people, that should be rolled out for all users of Facebook, Twitter, Linkedin. The costs should be subsidized by the airlines given the bail outs they received in 2004. or the Airlines should simply give an equity stake as the banks and the car companies did- to ensure  there is no cutting of corners to make profits

3) Analyzing chatter While the NSA and the TSA and CIA and the AAA etc monitor the internet for data and specifically terror linked chatter- these cases point to the fact that they need to adopt faster ways of crunching data ( MapReduce for fighting Terror- maybe is not a bad idea after all). Companies like SAS, SPSS, Revolution Computing can then collaborate with the data gathering companies by embedded analytical solutions.

What is more important? Catching people who are defaulting on their mortgages ( that can wait for a quarter and you can still catch them with more penal interest)

or Catching people who are defaulting on their conscience ( within 2 days of writing that email, tweet, facebook). Think of it as creating a big new system of online parking tickets, you can even create a lucrative online health insurance market by asking people to seek compulsory identity theft protection and insurance.

4) Spam and Identity Theft go hand in hand and so far as now have been dismissed by financial authorities as just another operating loss that shaves a few basis points. But when terrorists who are trained to blow up people get a sweet fake identity they can use to cause catastrophic losses in terms of market capitalization. If all onus on fraudulent transactions is placed firmly on the financial organizations including hefty fines they will be move much faster at eliminating these thefts.

5) Modifying customer facing interfaces- All American financial institutions have to abide by Fair Credit Lending Act and the USury act and the PAtriot Act ( ?). Since what they report is more or less the same- the interfaces of forms can be re designed or guideliness issued so that they are easy to read. A lot of fraud is caused because of the fine print phenomenon. Fine print can be fine in quality not just the font size. Design on the web needs to be monitored so that operations and risks forms have the same importance as marketing brochures. ( A sarcastic example below on Image Credits using just color and font size)

6) Kill all the terrorists.

That;s how they did in my native state of Punjab in India.

7) Point 6 may be an analytical over reaction. With social media tools that the new Govt is rolling out- citizens can play more prominent roles in suspicious activities tracking. Use your Android or I Phone to tweet to a secure govt website on anything suspicious. The techies there would have installed Map Reduce and a Data Miner solution to cut the signal and noise chatter and get to the point of impact faster. Rather than wait for Daddy to call.

Disclaimer- The author knows no government sources and no terrorists. Some of his insights are personal given his father helped fight terrorists trained in Pakistan for 2 decades while in India. These are purely personal views only and all trademarks are acknowledged etc etc.

( and yes United Airlines kept me for 4 hours on an airport, that has no co relation to this story)

Image credit ( or how credit card companies charge fees)-