Future of IT consulting

This article from HBS on "Future of IT Consulting" was something worth going through:
http://hbswk.hbs.edu/item/3402.html

On a side note, I am trying to catch up with my reading, as I get settled with my new job and the new place where I've relocated myself.

One of the interesting notes which I already experience in the market-place is:

Many CIOs say they will do less outsourcing in the future. This is driven by several factors, including a decrease in the number of new, "gorilla" ERP and CRM initiatives and the increasing need for rapid and flexible modifications to existing systems. What they do outsource will be the "body shop" activity when they need more capacity, but they plan to keep the deeper expertise in their companies.

The companies having intensive IT functions want to keep outsourcing to
Where will the IT consulting arms of the Big Four in audit go from here?

a. The headcount-increment predictions are flattening out, as seen from their projections for the next year.

b. Most of the functions performed by the consulting arms of the Big Four are geared towards the above mentioned "body-shop" activities. For instance, if you look at the IT consulting arm of a leading Big Four firm, it has huge chunk of ppl (more than 50%) devoted in their Systems Dev arm and barely, a few in their IT Strategic Management arm.


What do I suggest for my regular readers?

One must work towards developing one's own skill-sets. Do not go behind the names of the companies. Within those companies as well, you are evaluated based on the work you've done in the past and the work you are doing now. Thus, one must remain highly selective in the work one does. You will automatically be picked up by one of these firms, if you are working in a niche area as an expert. I say this because they want ppl as they are operating (20%) far above their healthy attrition levels (which are 12-13%).

Also, it makes logical sense to load up one's skills at one's own consent than what the firm's want. Most of the body-shops want only one skill - working hard on whatever you are put onto. Thus, specialization is only a matter of chance and not a pre-meditated, strategic play. As Ayn Rand puts it: "Wealth is the product of man's capacity to think."

globalization forces

Headlines today in WSJ: Some in Silicon ValleyBegin to Sour on India

Labor wage-arbitrage is about to vanish for Indian firms in high-end skilled work. Companies such as Infy, WIT, SAY are facing a double whammy due to this:
a. On one hand, they have the rising labor rates
b. On the other hand, they have strong INR eating up their bottomline.

What's next?
Companies look to other offshore locations: Phillipines, Vietnam, Czech (I bet my money on it), Brazil, etc. Globalization forces are getting work from one low cost nation to another one.

Virtual work is also carried out and pretty well - check out this list/ranking of the coding market here.

What must one do?
Figure out what skills are sold at a higher rate and are untradeable. Create revenue streams in the same at places of the highest offered rates.
Along with this, always be in a nation of predictable (and preferably low) inflation.

Google's 411

Google has decided to crush 411 (in a way).
Check out this new *free* service from Google named "Google voice local search".

Dial 1800-Goog-411 from any phone.
Differentiator in this service is: it's free !

Lat/long tracking and monetization of the same is on its way now :) This was a hot topic in last year's convention of "Future of technology" where Eric Schmidt alluded to a possibility of this happening.

Long-live the Google trio !

whats next?

Anxious readers of the blog ask me: "What will happen to this blog?"

I am in a dilemma.

On one hand I propose the following: This will become my technology blog - as in, random thoughts on technology would be put here by me. CMU inspired me to remain in an inter-disciplinary zone and relevant inputs will be posted here.

On second thoughts, I feel that I should start another one in order to acquire a focus to my discussions. This is also because the current blog is to log experience of a CMU student.

Well, I will make a quick decision on this front. Until then, this will remain my dump for many other things.

SaaS implementation

A new genre of service providers is emerging - SaaS service providers.

Here's a link about the same - Bluewolf, with experience in SaaS implementation have taken over as the pioneers. Salesforce.com has a consulting team - however, Bluewolf does implementations in many places as their services are cheaper. They can execute it and stay competitive due to economies of scale and scope. Now, joining Google for Google Enterprise Apps will help them quite a bit. Definitely, Bluewolf is at quite a bit of risk if they dont broker the contracts correctly with the end client or the service providers.

Will eSCM apply here? - both in case of CL and SP? Should it apply here?
As per me, the answer is yes - if you have a different point of you then you and I must talk ! :)

Pgh - the most livable city

To my own personal experience and absolute delight - Pittsburgh is rated as "the most livable city".

The nine subcategories mentioned are all that matters for me:

1. housing affordability (cost of living);
2. transportation;
3. jobs;
4. education;
5. climate;
6. crime;
7. health care;
8. recreation;
9. ambience (museums, performing arts, restaurants

Housing was very very cheap and hence, at times, I regret on my decision to move to NYC for work (my current employer offers the same pay in pgh and nyc). Crime rate is low in Pgh and hence, the insurance rates are low. UPMC provides healthcare right then and there.

Transportation is convenient if you have a car.
Jobs are good for those who have it. For those who are looking, it may not be the best market !

Well, as I've mentioned in an earlier post of mine, if I get tired of the city, I will move back to Pgh :)

value added by ivys!

Donald Asher has come out with yet another interesting writeup for schooling !
Check this out: http://teacherweb.com/CA/PacificaHighSchoolOxnard/MrsGillett/Is-the-Ivy-League-Worth-It_.pdf

Does Ivy League matter (beyond finance)?

Also, another advice of having least debt when one gets out is very important. Developing social skills and technically skills is an equally important advice. Thus, getting into an environment where there is a good balance between to the two makes more sense.

This is what I was thinking when I used to see the undergrad students at CMU. CMU is too expensive when it comes to learning undergrad education. Then, why invest so much when a person from some other school is also going to join the same job? Also, these days recruiters and companies have smartened up. With good training programs, they would hire folks from lesser known univs and then train them in order to drive down the prices of the labor from these highly known univs.

So, candidates who are applying need to think if they are getting a good value-added when they join CMU or are similar returns possible elsewhere (say Kelly, or the likes). Returns will vary from person to person based on which skill is valued how much by the individual who is evaluating it! For instance, developing social skills may be valued highly by someone lacking it but may be valued less by someone already possessing it.

Infosys BPO and eSCM

Infy BPO gets distinction:
http://itsqc.cs.cmu.edu/Default.aspx?EntryUID=e9d290e7-e800-42c3-8700-49d5baddf279

Check out this article. First assessment led to Level 4. This has happened for the first time. Infy has yet another feather in its cap !! This is an outstanding achievement for Infy and shows how all its arms are well-enabled.

Graduate !

The last week at CMU was fairly eventful. Here's the account for pre-graduation, graduation, and post-graduation.

Pre-graduation:
The semester got over and I was partying non-stop ! Two parties in one evening on Thursday - first, at Prof Steve Roehrig's place and then later at Firehouse with Turkish Students Association (TASA-Pgh). The initial one was sober and a good opportunity to meet the faculty members in a social setting. TASA party was fairly nice as I met a new dance partner Ashley ! Next Friday, we went to Matrix for another night out with her friends.

Graduation: This was a memorable event for me - not because I was graduate but for reasons as follows:

First, the graduation dinner was a cool plan by Val - this one was at Le Mont ! As CMU represents, it was a fairly international dinner - ppl from origins of US, Iran, China, Bosnia, and India !

After the dinner, myself and Gorana went to Firehouse as she wanted to check out the place.

Second, Val's mom was present for cheering me up at the diploma handing over ceremony for MISMs. My parents didn't make it to the US but I had someone from my American family to cheer me up !

Third, Bal & Val gave me the exact gift that I wanted :) Val's mom gave me a graduation gift too. Her actual gift was being there for cheering me!

Graduation day was a day to cheer an effort and the sacrifices that went into getting the degree. Clearly, I was not ready to leave school once I was there until April. In April, something happened and I was so ready to graduate - I feel the emptiness without the school even now !

When I came to CMU, I had a situation similar to the one Odysseus had in Homer's Odyssey. On one hand, he had the beautiful Calypso and on the other, he had his kingdom Ithaca. Odysseus went for Ithaca and I went for Carnegie Mellon U. I wish that alike him, I will be able to get what I want.

Post graduation:

After graduation, I left my townhouse in Sq. Hill. Believe me, I was happy to leave it - lol !

I went to meet Bal and Val for this one last dinner at IL Pizzaiolo (Bal said that I must have Pizza out there before I leave Pgh). They used wood heated ovens to churn out some delicious and sizzling pizzas. The cheese was unmatchable. They beat the Giordano's (Chicago fame) hands down. However, I got some information due to which my stay in Pgh got extended. In a way, it was a fortunate accident as I got to have some family time. :)

Next day, Val bhabhi made some tasty Chinese dinner and we watched another movie. Yea, she fed me just like my Bhabhi would ! Later that evening, we watched Da Vinci Code (yea, this was a movie on my pending-list). Finally, on Saturday evening ,we went to horse racing at Meadow Lands. That was a fun evening and then we watched Notes on a Scandal.

Last day in Pgh morning, I checked out Pandolfo's with Bal and Val. It was a sumptuous meal. While leaving, I was sobby and almost cried while I sat in the car. I have decided that if I am unable to settle down in NYC, I shall go back to Pgh !

MSFT's India research

MSFT has taken the research in India further ahead. This is one of the ways by which knowledge-oriented firms are tightly integrating their supply chains. They are having partnerships with IISc and IITs.

Check this link regarding the work they are doing. I feel that optimization of water usage in agriculture is an essential resaerch for India. Why is discussed in later parts. However, I end this segment with the conclusion that either MSFT is being a really good partner and enhancing their image in India OR MSFT seems to have struck a deal with GoI about helping India in whichever way they can for getting the GoI contracts :) In either case, it works for benefit of India. I hope the researchers/students pick up these projects and get them to the levels where by they become practical and freely available. For instance, Virtual India - a la Google Maps for India by MSFT !


About agri development in India.

As India becomes wealthier, the price of non-tradeable services and wages will increase as the general price level goes up (Balassa Samuelson effect). However, revenues from agriculture will not go up as much (they will go up a bit on count of better practices). Therefore, agriculture as an occupation will become less viable. Therefore, on cost-side, economies of scope and scale will happen ==> we will see consolidation due to smaller farmers finding it infeasible to compete. Mechanized farming will come into the picture as this consolidation happens and the fixed costs requried for mechanized farming start getting justified for the larger farmers.

Now, what must the Govt of India (GoI) do?
One of my mentors suggested that GoI must use agricultural subsidy to redeploy agri labor force to some other work.

I feel that this is an extreme step. I think that the education budget can be increased to create vocational institutes which will help ppl choose re-training themselves. If GoI does not have a budget for making the vocational institutes then they must
give monetary incentives (say, tax incentives) to private sector companies who can make provide it for profits equal to the tax incentives. If none of this happens then a social entrepreneur can take this up as a non-profit business concept.

what area of strategy to specialize in ?

Another common question by prospective management students:
What area of strategy to specialize in?

Answer:
What area depends on what you want to do and your skillsets.

Option 1:
If you have good project management skills then you might want to do implementation of strategy. This is important because it is often found that the implementation of a strategy fails to match with the original vision and goal of the project (I consider an entire business as one large project here)

Option 2:
If you do not have good project management skills but have good analytical skills w.r.t. market research, economics (both macro and micro), design skills, etc then you might consider designing the strategy as your option.

For best results, a firm is well-off giving the design work to someone who has these skills as well as possesses the experience mentioned in the earlier option. Experience is important in order to make the design "pragmatic". Often, the companies cannot procure such folks and do a trade-off on either experience or design skills due to shortage of time.

Bottomline: Get a better grip of fundamental concepts for the field before thinking of strategy area. It is a buffet dinner out there - you yourself need to figure out what suits your palate, appetite, and digestive system.

graduation

This is a follow-up post to an earlier post here. Comtemplating on my journey of MISM - naaaah, there's plenty of time for that later.

Graduation's in the air and there are celebrations all around. One full week of parties and catching up with friends, et al.

Last Sat night, we went clubbing to Firehouse to celebrate this one last party with colleagues before everyone disperses for their internships and full time positions.

Yday evening, there was a welcome event at Six Penn Kitchen for the newcomers (the event became slightly unpleasant because there was barely any food after 5.30pm and party was scheduled from 5pm to 7pm- I must say that the organizers did a dismal show in the party estimation! The choice of place was good though.

Tonight, some of the existing students have a dinner at Anisha's place - her parents have come down to visit her and her brother for 3 weeks. She's invited everyone for a dinner made by her mom :)

Tomorrow night, there's another party at Prof Steve Roehrig's house !

Friday night, I plan to go clubbing - but Pgh night life is not as active on Fri nights - unless there are $1 drinks - lol ! Letsee - I missed Diesel lounge last Friday night when Anisha visited it - I might go there this Fri night.

Thereafter, on Saturday evening, a graduation dinner with my Indo-American family (Bal, Val, Val's mom and some other guests) at LeMont ! This is right after MISM/MSIT ceremonies in the evening.

Catching up with friends over coffee, lunches, dinners is the routine for this week prior to the graduation. I have to make a list of who all are left to be met.

I've to get my gown and cap in the meanwhile. Also, packing for the move from Pgh to NYC is going on. That's the only painful part these days.

customer service

Yesterday, I interacted with a Geico agent for getting my plan changed and having a new quote. This official was amazing. I was trying to put a finger on what was making this consumer facing employee better than the other call center agents. Some of the points were:

1. Emotional Quotient (EQ):

The person seemed to be emotionally intelligent. High EQ helps the consumers as it becomes more of a social interaction rather than a routine call-center call.

On this front, I had a terrible experience with the IBM Thinkpad call center. With terrible, I dont mean that the SLA was violated or the person was nasty. The agent was simply too thrifty in the interactions and appeared socially inept, if you can say that.

McKinsey backs my empirical evidence with a more detailed study here.

This reminds me one of my Infy bosses (he was way up in the food chain but somehow I was reporting to him). This individual had good customer interaction due to higher EQ. What mattered was not only the action but also the reaction to certain events. His reactions were well-thought.

I think in sourcing management, companies must ensure this part in the vendor selection process - the EQ of the client-facing personnel.


2. Good knowledge of their domain:

The responses made by the agent while I was thinking out loud were critical to my decision making. Those inputs were well explained w.r.t. pros and cons.

3. Ethics:

"Only do things which if posted on front page of The Times will not make you feel ashamed." says Warren Buffett. There's so much truth in this.

One has to be consistently ethical in order to gain respect and save face. As the Oracle of Omaha says further "It takes 20 years to build the reputation and just 5 mins to ruin it" This is so true. It is reflected in Geico, which is his holding company. The frontline will be capable of selling more and more services with this attitude.

I conclude this post with the following:
Firms training customer facing employees must impart a foundation of base-values in EQ to all their customer facing employees. This is a knowledge-based era and the tacit interactions have outgrown the implicit ones and thus, the need of having a higher EQ.

where do MISMs go?

Prospectives frequently ask this question to me in order to judge RoI of MISM program: "Where do MISMs go (after they graduate)?"

I decided to blog on this as it is really easy for them to check.

Professional social networking group such as linkedin are open and can be easily checked out by searching on keyword "MISM". They are everywhere - consulting firms such as Deloitte, McKinsey, Booz Allen Hamilton, etc....product firms such as Google, Microsoft, Oracle, etc financial services firms such as Goldman Sachs, Barclays, UBS,etc , and on linked in there are atleast 156 users (while I am posting this ..) who are returned as a search result to MISM.

After knowing this and the avg base from career services page on MISM website, they can judge alum's sals from salary.com or something. Stop harassing existing students or alums about what salaries folks in their batches got - it is not only impolite (politically) but also indicates immaturity of the candidate to discuss salaries with an alum. Salaries vary widely. As a thumb rule, ppl with experience tend to get higher salaries than those without. However, along with experience, relevance is often important. If your earlier experience is not relevant to the job offer you are getting there is a high probability of having lesser salary. Besides, the progressions will be smoother.

I like to give an analogy of a buffet dinner to those who ask me such questions. It's a dinner table out there - you must pick or get prepared to pick what suits you. For instance, some ppl may not like consulting and hence, there's no point for them to go towards that. Some other set may like coding and they should go for that. Its a soul-searching process which one must undergo and not just get a job for a "paycheck".

There are ppl in the current and previous batches who have turned down higher paying offers (and I am talking large differences - to the order of US$35k) in order to choose the work which they want to do. This is a sign of maturity!

I often say that you dont have to be a MISM to get a huge sal - that you can get by doing coding on Wall St (lol !) . The reasons for joining the program must be right or else at the end you will be left unsatisfied.

Define what you want to do and search in that direction. The result may even indicate that MISM is not what you want. In that case, do not invest in it just for the sake of doing a Masters.

Frankly speaking, CMU's inter-disciplinary approach is awesome and based on one's readiness to slog, one can achieve their objectives if worked well. Of course, CMU is Computer U. and hence, one has to keep in mind that one should not crib about not making it for some trading position after MISM (though there are ppl in the past who have made it). For achieving that, there are different programs (may be different schools) which one must consider.

Bottomline: Do your research well, before asking questions to an alum or an existing student. Then, ask crisp, concise, and precise questions while presenting context as well.

MRO boom in India

In the current mini semester, I took a course called Marketing Applications of Data Mining (SAS was used as the mining tool) by Prof Alan Montgomery. The objective to take this course was learn analytical Marketing concepts and techniques (from an entrepreneurial and consulting perspective). That was achieved !

The course was fairly intense and demanding (with me having to provide atleast 10 hours a week). We had a presentation in which we had to present our marketing plan to the Sr. Management for a fictitious firm named Cell2Cell.

Recently, I read this article on India's possibility to become the market research hub of the world. Market Research Outsourcing or MRO is picking up pretty fast and one of the firms that's making headway is Markelytics.

I am unsure if this company wants to get bought by some other firm. However, I think, one of the Indian service providers must buy it before one of the MNCs or Google Analytics buys it. The reason to buy is that it can become one of the offerings for the consulting arms of these service provider firms and help them climb up the value-chain faster.

Besides, it can serve as an internal shared-services unit for other arms of the consulting firms. Consulting involves rigorous analytical research with hardcore data. Most of the consulting companies fail to do it and the consulting presentations are based on superficial research than an in-depth data-driven one (no matter how much they claim they dig, it ain't enough). As Dr. Montgomery says, "Data mining leads to amazing results and sometimes inexplicable ones !". However, data is data and hence, must be respected.

eSCM-SP best practices must be laid out by service providers such as Markelytics at an earlier stage to ensure that they can differentiate themselves and provide greater satisfaction than the regular vendors to the client. Clients will have to get ready with eSCM-CL as well.

eSCM-SP done !

...finally, my first step in this direction is done. eSCM-SP is done !

Dr. Hefley introduced me to the current provision that CMU students can attend eSCM certification courses for no charge at the ITSqc's Execution Education Center and I hopped on to grab the opportunity.

The Service Provider model was authored by Mark Paulk, Elaine Hyder, and Keith Heston. I had the opportunity to go for a dinner with Dr. Paulk, and Dr. Siegel on the first evening. It was a delightful event at the Monterey Bay with a great view of Pittsburgh during sunset.

Executives from a leading global service provider and a leading financial services firm had come down for the SP executive education.

On the concluding day, I rushed through my test to the speaker talk on Services Research by Robert Morris, VP of Services Research. I introduced to the concept of industry-academia collaboration between IBM and CMU via CMUSMO and he was amenable for such an arrangement. CMU already has an arrangement with IBM as is indicated on this page.

Thus, I had a heavy dose of Services arena in this week !
The whole schedule made me highly efficient as I had high productivity....yea, they say, adversity is the mother of all inventions....lol !

social solutions to poverty

Dr. Scott Myers Lipton conducted a session on social solutions to poverty. He presented some interesting facts. He flew down from San Jose on invitation.

Apparently, he is a clearcut democrat as he didn't support policies by Bush administration regarding acting as per the Church to reduce poverty. Besides, he also appreciated the Clinton era for the reduction of poverty. One of the significant potshots at the Bush adminisitration included removal of the word poverty by Mr. Bush as it is too abstract. I didn't know that trivia - lol !

According to him, the top ten effective and interesting ways to eliminate poverty were:
10. Provide assets to young women and men, as suggested by Thomas Paine (1796) and recently by Michael Sherraden (2000)
9. Living wages, as indicated in Robert Pollin (1998) and Matthew Carrey (1830)
8. 40 Acre and a mule, as suggested by The Freedman's Bureau w.e.p. Du Bois (1901) and Randall Robinson (2000)
7. Worker owned cooperatives, as suggested by Huey Newton
6. Public works, as being worked upon in the Gulf coast Civic work project
5. Centers of civic engagement, as suggested by Huey Long (1935)
4. Re-distribute wealth - of course in a sensible way - basically a capped taxation
3. End hunger, as suggested by EPIC by Upton Sinclair in 1934
2. Strengthen unions (by far this was one of the stupidest one I must have heard from him)
1. Economic bill of Human rights, as suggested by Martin and Franklin.

What I didn't like about the presentation was that in order to be sensational he was taking some of the assumptions to the extreme. He was making one feel bad about the DJIA reaching about 13k. Some of the facts were not being presented in the correct light.

Also, I didn't like his emphasis on the US focus. I rarely agree with Mr. Bush. But, on this one, I definitely do agree - the removal of the word Hunger because it is truly abstract (especially in the US context). If we look at the Gates' efforts and Buffet's help and their interview on Charlie Rose show, we will realise that they focussed their efforts to help across races, across geographies, across gender, and across world in absolute terms. That sounds more intelligent than a mere US focus. Also, I wonder why Mr. Lipton did this today - was it for sensation?...was it for attraction from the crowd? ... cos he mentioned that he did some work in Africa, etc. however, he repeatedly emphasized on America....which was something that bothered me. Social solutions must be across the board and not just restricted to the US. I am not against the US but just vouching for a universal solution. Huge imbalances lead to issues such as the World Wars and hence, the concern.

I feel that as long as the society is material-minded, it will be difficult to reduce this gap and it might keep on increasing. Of course, Clinton administration did some good things to reduce poverty proportions and create new jobs and the Raegan and Bush administrations did some stupid things to increase poverty proportions. However, some of the above remediations are not good enough - for instance the strengthening of the unions.

This reminds me of his presentation of fact that form 1947 to 1979, the poor got richer faster than the rich got richer. This is an ideal climate which we wish to attain. However, after 1979, the rich got richer and the poor got poorer. Thus, there are few historical incidents that lead to this. The housing market was about to collapse in this time frame when the administration came up with some measures to forgive mistakes by the bankers and bail them out. There was an adverse supply shock in form of oil problem. After that, there started forming a lobby of pre-boomers who started asking each other for favors. Also, the boomers were more and more material minded (This was the culture that cherished Madonna et al. ) Thus, the poor got poorer and rich got richer in this second era.

The whole presentation also took me back to the discussion of Nickel and Dimed book by Barbara Ehrenreich.

concept of retention team at the work-place

In hot job markets similar to that of the current job market, some employers definitely need to have this concept of retention team at their workplace. This is similar to the US telecom service providers and/or financial service providers providing incentives for customers to stick out with them.

From my limited exposure, I can say - some of the Indian software service providers, some of the US consulting firms, etc need to have this concept.

Recently, an acquaintance of mine, who has abt 2 yrs SAP experience with Accenture, decided to look out. To his delight, Deloitte offered him a grand package. Also, Deloitte sponsors MBA if you were with them for 2 yrs and promise to stay for 2 yrs after MBA. Thus, it was a no-brainer for him.

He was called by HR from Accenture telling him that he is getting an out-of-turn bonus and other incentives. However, the total package that they planned to offer him was lower than what Deloitte could offer him - so, it was a no-brainer for him. Besides, MBA education funding is another lucrative attraction for him.

Jack and Suzanne Welch expressed concern in their podcast and article on Brain Drain. Private Equity firms or PE are poaching away the talent from the regular companies either directly or by competing on campuses with extremely high pay packages. They suggest a retention approach of having a separate track (or as they call it promotion slope) for such achievers who can be identified earlier in their careers. For this reason, middle to senior managers must know their teams well. This forces them to be detail-oriented as they will have to sit with their HR managers to see what William F. Pounds, CMU alumnus and current Dean @ MIT, says "Net Flow of Talent". This will require use of sophisticated skills such as data-mining in order to have a slight edge over others who run the show on an ad-hoc basis.

I feel that this has to be done by the executive team and not by the middle managers. Middle managers who had to climb the ladder rung-by-rung may have counter-productive emotions involved in the process of giving some other newcomer a faster track than what they had.

I hope the concept of retention team evolves further.

bomb scare at hamburg hall, CMU

Here's the article from Post Gazette. Hamburg Hall, a historic landmark (1900), is the place where my program(MISM) has its lounge.

I will not comment anything as this was a routine alarm for a suspicious liquid and cannot be correlated to heightened security post VTech's unfortunate incident - CMU security was always fairly vigil.

mba in itsm

I could hardly believe till I saw this - there is an MBA program with ITSM concentration - at Dallas School of Management.

Long live ITSM !

My blog for exploreitsm is here.