IT workforce immigration & knowledge-worker visas

Watching the nasty debates between two well-meaning colleagues highlights the difficulty of finding a policy solution. Check out this vicious exchange between Vivek Wadhwa of Duke University and Ron Hira of the Rochester Institute of Technology on CNBC on this subject (BofA Shunning Foreign MBAs?)

I never watch Vivek and Ron spar without the irony that both gentlemen are patriotic Americans and both are of Indian descent -- where INDIA is always the subtext in the contours of debate. Vivek is an immigrant and Ron is a first-generation American. I've come to know both and contend that both care deeply for America and take their strong positions from that core value.

Vivek believes that importing smart people will make America more successful. Ron believes that importing cheap people distorts the economy (and only helps the corporate elites) by displacing American-born workers.

Liaison – A job title for globally dispersed tech teams

Like the old cliché ... Eskimo have many for words for snow, in the IT business, we have many names for the person who is a liaison in globally distributed IT work. In these types of work structures, it is critical to have a person who bridges time zones and culture. In fact, these global teams would not able to function without the liaison.

The liaison is typically a mid-level manager, such as a project manager. He/she is the one who stays up late at night to make their critical telephone calls. He/she is the one who is able to speak across cultures and across languages.

All the successful technology companies that I've encountered over many years have liaisons -- either formally or informally. I encountered them in Indian companies, and American companies, and Chinese companies, and in Israeli companies, and many more.

So, here I document some of the many names that we give to this important person.

· Liaison -- in the book Global Software Teams (Carmel, 1999).

· Window men – from China (submitted by Yu, Yanjun).

· Point person (Lee et al 2006).

· OC - On-site Coordinator -- in the Indian IT company Infosys (Carmel, 2006).

· Bridge

· Go-between

· Boundary spanner. This is more of an academic term that comes out of the technology management literatures. It describes a person who straddles inter- and intra-organizational lines. This isn’t strictly a liaison, but close.

· Linking pins (Harvey, et al 1992) refers to inpatriation in global corporations from the host-country. Again, close, but not exactly the same.

Please send me additional names and full citations where possible.

References:

· Carmel, E. Global Software Teams: collaborating across borders and time zones, 1999. Published by Prentice Hall-PTR.

· Carmel, E. Building your Information Systems From the Other Side of the World: How Infosys manages time differences. MIS Quarterly Executive, 5(1), 2006.

· Harvey; M Cheri Speier; Milorad M. Novicevic, The role of inpatriation in global staffing The International Journal of Human Resource Management, Volume 10, Issue 3 June 1999 , pages 459 - 476

· Lee, G. W DeLone, JA Espinosa Ambidextrous coping strategies in globally distributed software development projects - Communications of the ACM, 2006

What is the Caribbean model for competition in IT offshoring?

I was invited to speak this month in Barbados about the place of the Caribbean in IT offshoring. It was the first time I had reason to examine this region carefully. This comes in context of the competitive landscape: there has been remarkably rapid maturation of offshoring nations in just a few years -- from India, cascading to Brazil, Philippines, and on to smaller players like Egypt and Costa Rica.

How will the Caribbean nations compete in IT? Whether separately -- or as some collective under CARICOM? First, let’s be clear that we’re setting aside Cuba and Haiti in the rest of this analysis. Then, note that one must really distinguish between the larger nations, Jamaica (3 million) and DR (9.5 million) versus the smaller ones, like Barbados – with a population of 250,000.

If you use any framework to get some indicators on the situation (such as my “Oval model”), the Caribbean nations have few factors that could enable them to surge forward in IT. Yes, they have good "Quality of Life," they are stable locations, and they are business-friendly. But, what the region lacks is human capital in size and high quality that can be the foundation for an IT exporting industry.

A bold move could address this. What the region needs is an aggressive labor importation model. Without it, the region cannot be competitive in high-value IT/software work. After all, Americans, Canadians, Australians, Singaporeans, and Irish have aggressively imported talented tech labor that has made a difference to their technological success. If these economic leaders have done so, why can’t the Caribbean nations?

Interestingly, a Barbados-based firm, PRT, was a pioneer of this idea. At its peak around 1998, PRT imported 400 programmers into Barbados, mostly Indians, to work on nearshore jobs for American corporations (including blue chip Wall Street firms).

But PRT was not sustainable and it fizzled soon after the downturn of 2001.

[the photo on the right shows the building in which PRT was once housed, in the business section near the port entrance. The PRT building now has many satellite dishes on its rooftop.]

I talked to two former PRT employees, Pamela Abbott, now a British assistant professor, and Stephen Broome, who later co-founded and now runs one of the island’s largest IT firms, SCL. Both did not warm to the idea. “We tried it at PRT and it failed” was the refrain. Partially this was for cultural reasons—managing so many new migrant workers was just too hard.

Meanwhile, Barbados Minister Boyce, who opened our ministerial conference, had come in from awarding diplomas to 100 graduates of a certificate in medical transcription. Young Barbados workers will be listening to American doctors’ notes and carefully transcribe them to text. This is an example of the growth in IT enabled Services (ITES) in Barbados and elsewhere in the Caribbean. There will soon be 100,000 call center workers in the region according to Zagada.

However, such jobs are often fleeting and may be made obsolete in the coming years from better voice recognition technologies. The rise of Caribbean ITES may also be diverting limited energy that may have been better funneled at software and IT. What is a sustainable model for small island nations?

My talk was the 6th Caribbean Ministerial Strategic Seminar on ICT organized by the Caribbean Telecommunications Union (CTU).

Micro-sourcing

Is this the eventual global sourcing landscape?

Definition: sourcing knowledge work from an ecosystem of very small providers, most of which are contracted with over the net. Micro-sourcing is the opposite of mega-sourcing, which is the classic outsourcing approach in Fortune 500 firms where billion-dollar multi-year contracts for IT services are signed.

I coined this term to encompass an emerging smorgasbord of sourcing trends that I've observed: person-to-person, online programming marketplaces (e.g., Rent A Coder, Top Coder, eLance), globalization of consumer services, crowd-sourcing, multi-sourcing, commoditization of process, and open source.

Micro-sourcing is allowing clients to choose from a supermarket of providers for increasingly small, granular tasks and processes.

In the area of IT, Rent A Coder is a very successful case. I’ve followed this firm since 2003 and enjoy the thrill my students get when they’ve purchased something from this e-marketplace. I’ve also used Rent A Coder in a number of my studies.

I thank my colleagues at the NYU conference on “Global Delivery of Professional Services” May 2008, for helping me select this term.

On Israeli high-tech

In March 2008 I chaired the Technology, Innovation, and Start-Ups panel in the "Israel Biz at 60: Lessons and Directions in Israel's Business and Economy” that was held at American University. http://american.edu/israelstudies/businessconf/index.cfm

Here is a condensed version of my opening talk.

How many of you are old enough to remember that the industry that Israel was once known for was citrus products – Jaffa oranges? Today it’s high-tech.

Israel became the darling of the high-tech boom – that is -- in the last high-tech boom -- in the 1990s. The new darling is India.

I study global technology… I’ve been studying this area for many years. I’ve seen it become quite democratic. Whereas once a tiny cabal of elite nations did high-tech, now there are more than 100 countries exporting software products services / high tech services. I stopped counting when my Dutch co-author came back from a tour of North Korea’s software export firms.

With so many countries entering high tech, Israeli high-tech is no longer in the spotlight. It’s been somewhat forgotten. Yes, every once in a while Businessweek or The Economist run one of those articles, about how Israel has been successful in high-tech, but…

As a kick-off to this panel, let me take you on a quick tour of Israeli high-tech, noting Israel’s key success indicators along the way.

1. Israel high-tech has been very inventive. Important artifacts came from Israel in the last decade; some examples: the software firewall, the ingestible camera (for medical diagnostics); design of many Intel semiconductor chips that we use in laptops and other devices -- come in whole, or part, from Israel; Instant messenger (IM).

2. The US NASDAQ stock exchange. About 100 firms are Israeli, mostly tech startups; in numbers this is the second largest of foreign nations after Canada.

3. Israeli tech startups make up more than 2% of Israeli GDP; which is larger than the percent in the USA.

4. Venture capital investment in Israel in 2007 was a respectable $1.2- 1.8 billion, (depending on source). Most of the money is going to networks/communications, semiconductors, software, internet including web 2.0, and some to life science,

5. What do the giant foreign companies think? Major tech MNCs came into Israel decades ago -- and have bought-- not 1 Israeli firm -- but rather, they are serial investors, buying more and more Israeli tech firms. These global foreign tech companies have huge investments in Israel.

o IBM kicked-off 2008 with a $300m acquisition of the Israeli storage firm XIV.

o HP is a big eater of Israeli firms: Indigo (2001 for $800m); Scitex (2005 for $230m), Mercury (2006 for $4.5b).

o Intel has 7000 employees in Israel and made several acquisitions.

o Cisco, Applied Materials each has made several acquisitions. And the list goes on.

6. The biggest Israeli firms – the Top 5 – the 5 biggest Israeli firms in sales. All are tech-oriented and heavy exporters. First is Teva – $8b Pharma firm, leader in generics; Second is Amdocs -- 16000 employees, $4b in sales, the largest Israeli IT firm. Third and fourth are Machteshim and Israel Chemicals – both in chemicals and agri-tech. Fifth is IAI - Israel Aircraft Industries.

Having briefly reviewed what’s working well in the Israeli technology sector, then besides Israeli tech being slightly forgotten, is there anything wrong? -- worrisome trends?

The turning point was the year 2000. In and since the year 2000, a trifecta of blows hit the Israeli tech sector: the NASDAQ dot.com bust (there was no foreign country as closely linked the tech bubble as Israel); the Palestinian Intifada that began in late 2000; and since 2000 many American firms began shifting attention in offshoring/ sourcing to India and China.

There are other problems and issues to watch.

The 1^st -- and probably most threatening problem -- was summed up in 2005 by Hemi Peres, head of Pitango, largest Israeli venture capital firm, and son of Israeli President Peres, He said that R&D will move offshore-- if Israel doesn’t invest in Education and R&D. Indeed, in late 2007 we saw two low points in Israeli education. A 3- month teachers strike in secondary schools and a 3-month strike of professors at major universities.

The second issue is wages. While Israeli tech has not competed on low wages (Israel, as a middle-income nation, always had higher wages than developing nations like India). But, Israeli wage costs have risen: in 2007, for the first time since the era of the biblical King David, the shekel has gone up 20% against the US dollar.

The third issue is that Israeli tech is offshoring its own work. Since 2000 Israelis themselves began sending work offshore to cheap countries. Israelis source to India, Eastern Europe, now China. By 2005, 4 of Israel’s BIG5 IT firms were offshoring to India: Amdocs, Comverse, Mercury, Ness.

Back to Israel vs India. Recall that I had said that Israel lost its global prominence to India in high-tech.

Let’s do some rough comparisons. The middle class in India is 50 times larger; employment in high-tech plus ITES in India is 40 times greater than Israel (roughly 1.6 million v 60,000). Yet, annual exports of high-tech are very roughly in the same range $30b-50b (depending on assumptions).

Whereas India continues to have advantages due to its size and low wages. Israel’s high-tech advantages remain its creative, innovative, entrepreneur tech culture – a culture of startups for high end innovation.

In fact, many Israelis are more worried about competition with China than India.

And rather than India or China, Israel needs to be compared globally to other small successful island economies: Singapore, Ireland, and Taiwan.

Let me conclude by making an observation about the trajectory of Israel’s tech sector.

First the good news: large amounts of VC in 2007 continue to flow into the same super-successful sectors that were big in the 1990s. Most funds are targeted, as I’ve noted already, to networks/comm, semiconductor, software, internet including web 2.0. This is an indicator of Israel’s profound strengths in these areas.

Now the bad news: This blessing is also cause for some worry-- because it means that in the next IT downturn, which may have just begun, Israel again will not be diversified and will be hit hard.

FOLLOW-THE-SUN: A call for more research and experimentation.

In late August 2007 I was the opening keynote speaker at ICGSE - International Conference on Global Software Engineering, in Munich, Germany.

The core of my talk examined the goal of FOLLOW-THE-SUN, also called: 24-hour development and Round-the-clock development. The idea is simple: Hand-off work from one site to the next as the world spins (USA to India, for example). This way you reduce the total time of development by 50% if you have two sites, and by 67% if you have three sites. Follow-the-sun is about speed!- Cycle-time reduction, Time-to-market reduction, Duration reduction.

This is where the community of specialists on global software engineering can make an impact – in using the special advantage of time zones to increase speed. After all, we’ve already achieved cost reduction and other goals, as a result of global software development.

Because of the hype, exaggeration, and myths of Follow-the-Sun, I offer Carmel’s rigorous definition: Follow-the-Sun must satisfy all 5 conditions.

1. At least 2 sites substantially separated by time zones.
2. High dependency between sites
3. Project is set up with the objective of reducing duration
4. Successfully achieving duration reduction.
5. Successfully achieving duration reduction using objective measures.

More on this topic in future.

Coordinating Knowledge Work Across Time Zones

They’re Sleeping While We’re Working

By Erran Carmel & Alberto Espinosa

Alberto and I wrote this short piece in March 2007. A condensed version appeared in Intercultural Management Quarterly, 2007

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Sitting here in Washington, India is 9.5 hours away. I am stuck on the task, so I write an email. Then the delay begins. She, in India, asks for clarification the next day. Then she has to wait. I clarify the following day. Then I wait. 3 days have gone by and then, another delay, it’s October 2^nd, Mahatma Gandhi's Birthday, a holiday in India. I didn’t know about this holiday, so I got angry at her lack of response.

The unfortunate problem of time zones is that it is inherently not solvable. We human beings work during the daylight hours due to hard-wired biological reasons. So, once the number of time zones between global collaborators is larger than about 8 hours, the time zone gap is not solvable! Fancy video-conferencing doesn’t help -- no matter how high the pixel density or how small the image transmission latency. The time zone problem can be mitigated somewhat, but it cannot be eradicated.

Today, precisely because of speed expectations, time differences have become the principal obstacle to efficient coordination across distances. In fact, in recent decades, coordination across time zones has become a greater problem, not a diminishing one.

Since 2003 we have been researching global collaboration across time differences. We uncovered time difference best practices. Our studies have found that experienced global workers have a bag of time zone tactics.

Synchronous tactics

It is clear that distributed global teams do not treat time differences as static, but rather adjust and adapt to them. The synchronous window can be adjusted with changes in work schedules. The 10.5-hour difference between New York and Chennai (India) is not “fixed” in that sense. This is called time shifting.

For example, European staff may start late and work late, in order to create overlap with their American counterparts. Conversely, the Americans may start early, either everyday, or at least on some weekdays, in order to expand the overlap time with Europe. In Asia, many of the new tech companies are staffed with young, ambitious software engineers that work long hours, often late into the night, creating overlap windows with Europe and America.

Regular time shifting is practiced by only some of the distributed teams we have studied—particularly the managers, team leaders, and liaisons. Liaisons are the glue that keeps global teams working across time zones. The liaisons work all kinds of odd hours. They are always on call. And of course, they complain about the impact on their personal lives.

In one case we studied a large software team with engineers in Britain, Germany and India trained Indian software engineers in Europe for several months to serve as liaison engineers. These liaison engineers returned to India and then permanently time shifted to be on European time.

Time shifting solves some of the problems associated with temporal differences, but it can also create others. For example, one multi-site team we studied spanned 7 time zones. The team members organized their work so well that they had what they called a “circular” meeting schedule that went around the clock, depending on who had to meet with whom. This required so much time shifting that the co-located teammates in the home project location never saw each other. In other words, the team had created artificial co-located time zones because some team members started very early and others stayed very late.

Asynchronous tactics

Work involves disruptions. Research has shown that same-time communication-- particularly in meetings-- has substantial “production losses.” This is because only one person is talking during any time slot while everyone else is listening. Hallway spontaneous encounters are very effective for coordination, but they also cause a lot of disruptive interruptions and distractions.

A silver lining of time differences is that you have “quiet time.” There are less telephone calls, meetings, and instant message requests. People can concentrate on “getting their work done.” Effective global workers maximize this time without interruptions and this seems to work well with simple tasks with fairly routine activities that can be programmed mechanistically (e.g., work plans, project schedules, division of labor).

We found that because of lack of overlap talk time, the work global workers perform needs to be formalized. They try to send messages so that the text conveys information in a more effective manner, so that there will not be a need for clarification which is very costly in delays. The global workers become formalized in other ways: they carefully define the collaboration workflow, tasks, owners, and deliverables in order to reduce the need to coordinate via real-time interaction. Finally, we found that global teams that do not formalize are by and large going to fail: they will be late, or quality will suffer.

Awareness tactics

Many young workers are not attuned to working across time zones and require mentoring. They are not used to computing the direction of the time difference (“Is it +7 hours or -7 hours?”). They do not know to recall when their counterparts shift to daylight savings time (it is different in every country). Small reminders and coaching help address this problem. A simple tactic is to post hours and time differences on the common team web site. Also, tell everybody about timeanddate.com.

Other tactics

An important trick is knowing to “break the e-mail chain.” The e-mail chain begins as we described in the opening paragraph: one worker initiates a message; the receiver, on the other side of the globe, does not understand it fully and asks for clarification; the original sender attempts to clarify; the receiver then interprets it incorrectly and responds accordingly; the receiver then sends another clarification. Meanwhile, an entire week has gone by. Experienced globalists stop this chain early “by picking up the phone” to clarify the message. However, this gets into the cultural problems because many cultures are reluctant to break with protocol or hierarchy.

Other popular practices are very effective but often involve “heroics” that can cause team burnout. These include: being available around the clock; carrying mobile communication devices at all time; frequent travel to other sites to develop team knowledge and bonding and resolving critical issues; more rigorous, structured and disciplined project processes; and over documentation to minimize the need to clarify issues.