Random Walk – Page 4 – Stephen Shu, PhD

July 21, 2005

New Person Comes Knocking At My Door On Offshoring 2.0

In my professional career in and about software companies, I’ve primarily run into offshoring of things like call center & customer care, documentation, quality assurance and testing, and R&D. In software, such stuff may be so commonplace that it can be considered Offshoring 1.0 and behind us – a done deal. And from a macroeconomic perspective the US may even be all fine after Offshoring 1.0. Dr. Daniel Drezner blogs that the World Trade Organization’s recent annual trade report release indicates:

The
strength in the rebound in [IT] employment in 2004, and the resilience
of wages of computer occupations, do not support the view that
offshoring services of high-skilled IT specialists had a marked impact
on overall US employment in these occupations up to the end of 2004 …

So what’s in Offshoring 2.0?

If InformationWeek’s July 18th issue and article, "Behind The Numbers: Customer Satisfaction Not A BPO Priority" is a hint of what is to come next on the offshoring front (note that in BPO the "O" stands for outsourcing, which should be differentiated from offshoring), more than 30% of respondents in a June 2005 study said that they outsource sales & marketing to some extent. This is the second item in a list behind call center or customer care (which is close to 45%). Note: my intent by pointing out this article is simply to cites the stats, not reflect my personal opinion on either customer satisfaction or outsourcing in business.

Well just last week (and for the first time), I was approached by an MBA friend involved with business development for an offshoring company in India that provides services related to product lifecycle management, customer lifecycle management, and strategic brand management. This is my first, personal introduction to Offshoring 2.0.

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Update (7/21/05): Uptick in IT wages in tight labor market …

July 19, 2005

The Death of Organizational Structures In Three Internet Stops

As a U of Chicago business guy, I have a tendency to lean toward things that breathe free market theory. Markets are (mostly) efficient. Market are (mostly) right. Stems from Chicago’s strong grounding in economics.

So it’s interesting to think about why organizations of today just aren’t freely forming efforts. Why isn’t there a free market in organizational structures? Why can’t organizations just freely form and dissolve? I haven’t really analyzed this ~~very closely~~ at all, but here’s three interesting Internet stops for you that could spell the death of business organizations as we know them:

Internet Stop 1 (BusinessPundit) – Outsource the CEO
Internet Stop 2 (Business Plan Archive) – Comb the business plan document archive of failed dot coms (compliments of the Library of Congress et. al.) and learn what not to do in business
Internet Stop 3 (The Business Experiment) – Participate in an actual experiment on an open source business model (where the business model and governance structure is all open source) … "The goal is to have the registered
users of this site collectively start and run a real business."

Update (7/20/05): As for Internet Stop 2, I should probably not characterize the business plan document archive as "things not to do in business". These are mostly the planning documents of businesses that are no longer around or in a reduced state of operations (e.g., Blue Meteor, marchFirst). The companies may have very well taken the correct steps in points in time or done the best thy could given the circumstances. That’s one issue with analyzing cases. It is frequently not possible to see from static documents how management teams reasoned, whether they used consistent reasoning, if it was inconsistent with a best practice, etc.

July 18, 2005

When Rules Of Thumb And Keeping It Simple Stupid (KISS) Make Me Nervous

As a general rule, I favor the Keep It Simple Stupid (KISS) principle. In some cases, I also like to follow rules of thumb when working on a day-to-day basis. That said, in business I always believe that one should try to ground KISS and rules of thumb within the context of core business theories. If one is going to diverge from theory, then be cognizant of where those boundaries are and what the risks are.

Some example KISS and rules of thumb that I try to use on a day-to-day basis within business operations:

Talking to the press (PR) – While educating press contacts may be great, KISS and speaking quotably are musts.
Storyboarding out the ideal sales pitch and process (Sales) – Push potential objections and roadblocks as far back into a presentation as possible. The objective is not to hide things by any means, but the average person is looking for a reason to say "no" before they will even try to understand the merits of what you have to offer.
Keeping the marketing message simple (Marketing) – People can’t spread your ideas for you if they can’t remember what your ideas are. Although there is a constant struggle with doing disservice to a product by simplifying the marketing message, it takes experimentation to get the balance right.
Minimizing accounting and finance perfection except for specified periods or for external customers (Accounting and Finance) – Administration costs and internal communications costs go up dramatically if one tries to implement GAAP accounting at all times other than agreed upon intervals and fixed times (e.g., beyond end of month, end of quarter, end of year).

In light of probably a long list of rules of thumb for me, a conversation my daughter and I had this past week gave me extra pause about how I apply the KISS principle and rules of thumb. When driving through a somewhat "seedy" area of town, my daughter asked me if we could go eat at one of the restaurants there. I told her "no" that I didn’t think the area was safe and that it might have "bad people" around.

Then she asked me a seemingly simple question, "how do you know if someone is bad?"

Methinks the KISS principle doesn’t work too well in cases like this.

I started off by talking about the bars on the windows of some of the houses and the fire-gutted properties all-around. I stated that there is a tendency for bad people to be around. My daughter then countered me by saying that these properties weren’t that close to the proposed eating place.

I then tried to point to some of the people begging for money, but then this degenerated into a poor people are bad type conversation that wasn’t right either.

We had a whole bunch of mini-conversations, and I couldn’t find very good footing for quite awhile. I finally tried to reason that bad is what bad does. When you see bad things, e.g., illegal graffiti on the walls of building, this is the wake of what bad people have done. In my mind flashed the wake of Worldcom and Bernie Ebbers. I was getting more satisfied with how my answer was playing out as it made intuitive sense and was snappy.

Then I got the question, "but what if the bad person doesn’t do anything bad?" … oh well. It’s back to the drawing board …

To bring things back, where I end up getting nervous about the face value of KISS and rules of thumb are scenarios where I’m in some sense taking custody for someone’s well being. The circumstances might be as I’m getting closer to closing a sales prospect – I want to make certain that the person understands everything presented, that we are making an informed choice together, and that we have addressed the business needs of the prospect. If I’m talking about career advice for someone, let’s be clear whether I’m providing some quick advice or deeply thought out counsel. If we’re talking about me helping an entrepreneur to decide which direction to take his/her business, I know there may only be one shot and that the endeavor is a treasure.

So treat rules of thumb and KISS with care.

July 6, 2005

Leadership According To A Leading Investment Bank

Hat tip: Ken Thompson. The managing directors and senior leaders at prominent investment bank Goldman Sachs have published the firm’s nine leadership principles. Although I can’t say that I follow the i-banking closely, this list is not the sort of thing I’ve ever seen before out of the i-banking sector. Anyway, my favorite one in the list is "Debate Freely, Decide Quickly, and Commit". I chose this one because it is something pretty critical in entrepreneurial endeavors. No time to have a weak stomach when being a maverick or pioneer (or supporting the mavericks – which is really my focus).

As an aside, a thought of my own that came to mind, but I wasn’t sure where it mapped in the list, is that I have a personal taste for leading by doing. For example, if one wants to show how money can be made in a venture, then go close a deal and sell the product, make key introductions, or structure the deal where things are falling apart and the negotiation settlement zone is narrow. If one wants to show how money is being left on the table, then prove it in the field. If one thinks that product development is less than optimal, then line up both the confirming and disconfirming evidence with customer prospects, customers, and competitive information. If you need people to work overtime and make a contribution beyond the normal call of duty then you have to put in the time too. If the team is under financial pressure and cutbacks are in order, make sure that you are in the front of the line to be cut.

June 27, 2005

More On Product Management and Product Marketing (and Requirements Design Skills)

Will Hsu (no relation to Steve Shu methinks … although the story is that customs reversed the "H" and "S" in my family’s last name) has a good post and emerging blog on product management and product marketing musings. Will is part of the product marketing department at eBay. I’m all for those that blog about product management and marketing disciplines.

Will’s post has some interesting perspectives on using more formalisms as part of requirements definition within the product management discipline. Having spent a good portion of my career in the telcom and software space (and writing requirements using all sorts of formal and informal methods), I think that it’s great when formalisms can be used (where the mix of technology, culture, and customer permit).

In the tech sector, good requirements skills also carry over to management consulting and sales discipline. Consider the following cartoon (source: unknown, click to enlarge):

June 23, 2005

On Small Companies And Solo Practioners Collaborating Cross-Borders

Carlos Valez poses some interesting questions about doing business cross-borders as a small company or solo practitioner. Most people only hear about the mega-offshoring deals. When I step back to think about the companies I have worked for and consulted to, it seems like I have worked with a more diverse set of people overseas when with a smaller company as compared to when with a larger company. Whereas I primarily did international business in Canada and Indonesia while working for larger companies, I have worked with folks from the UK, Germany, France, India, Australia, Japan, and Latin America when working with smaller companies or as a freelance consultant. Although there are likely several factors in play, I suspect a lot of the explanatory power has to do with the increase in virtual collaboration and networking technologies.

June 22, 2005

Retraction – Vonage Service Stinks (Double Retraction: Got Better)

I hate to retract my prior glowing review of turning on Vonage service, but the service stinks from a quality of service perspective. I hinted at QoS issues from other perspectives in another post.

A few key notes (perhaps I didn’t make before):

My primary reason for selecting Vonage was to provide me with telcom flexibility (so that I could add 2 to 3 more lines, e.g., for contractors). Bandwidth tests using the Vonage do-hicky indicate there is sufficient bandwidth (I now speculate that it is calculated using average bandwidth during Internet idle). My upload speed is 250kbps and Vonage recommends 90kbps or greater. My download speed is 598kbps. (Thus, my expectations have not been managed here properly).
I have DSL (many others are using cable).

Some problems I’ve run into:

The ringing one hears in the earpiece when dialing a call – well the Linksys box doesn’t reliably create this tone for me. Sometimes calls go through without me knowing ’cause there’s total silence. Not sure if this a Linksys box problem or an interworking issue with the Vonage service.
Outgoing calls don’t dial reliably (perhaps 1 in 8 calls successfully dial out).
People report not being able to ring me (inbound call problem).
If I try to use the Internet while also being on the Vonage call, I’ve had calls dropped mid-call (e.g., using web conference software like GoToMeeting, sales CRM software, financial software, or web mail). Alternatively, sometimes access to web services gets blocked when I’m on the phone.
Hang-up time is slow. Bad if trying to make quick phone calls.

I’m very sorry if I led people to select this service, but one’s mileage will vary with Vonage (and likely other VoIP players).

Update (8/5/05): Service is just getting worse as I find more bugs. I find that (frequently) when I ring people, sometimes they answer and hear silence, but I still hear ringing, and the call is never answered. Yet, I never go to voice mail. Somehow the Vonage system isn’t detecting the called party picking up the phone.

Update (11/9/05): My Vonage service improved quite a bit after having some SBC folks come out to check out my DSL connection. While the average data rate for my line seemed to be OK according to the Vonage software checker, the peak capacity for my DSL was suboptimal due to the way SBC installed things. SBC personnel forgot to take off some do-hicky adapter outside by the wire box. The adapter was an old adapter that was used to facilitate plug in of diagnostic gear for pre-DSL lines. The net effect of the adapter was to create an additional filter on the DSL line, thus slowing down the peak rates. So the essence of the problem seems to be two-fold: SBC needs to work on its outside of the plant operating procedure (whether that is a quality control issue), and Vonage probably needs to modify its capacity-checking software or provide caveats to customers.

June 16, 2005

College Student Near Southern Methodist University (SMU) Needed For Part-Time Marketing and Sales Work

I am going to need some contract telemarketing, marketing list generation, and related support for maybe 1-2 days per week for a person near Southern Methodist University in Dallas, Texas. I’ll have more details later, but here are some thoughts off-the-cuff on skills needed:

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