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The Role of Value-Added Services in Building Cisco’s Collaboration Market Presence

Monday, May 31st, 2010

Cisco is on a self-described mission to transform itself from a box pusher, into a solutions vendor and trusted architectural adviser. Although its goal is certainly ambitious, such a transformation requires a big dose of high-value services—including many of the type of services that Cisco repeatedly emphasizes are the domains of its partners, rather than of Cisco.

Just how far will Cisco go in creating such high-value services and what role will they play in the company’s value propositions? Just as importantly, how will the company reconcile its rapidly growing value-added consulting line-up with its long-term commitments to delivering the vast majority of its services through partners?

The rapid growth the company’s Collaboration Services portfolio provides a valuable window into Cisco’s entire value-added services strategy. This article briefly profiles the role of services in Cisco’s collaboration value proposition and the range of collaboration consulting and hosting services it currently offers. Two additional articles will follow:

  • One that examines the composition, growth and unique roles of Cisco’s two consulting organizations in bringing new services to market.
  • A third that examines the role of these consulting groups in rolling new solutions out through and in driving success of Cisco’s channel partners.

The Critical Need for Collaboration Services

Collaboration is one of the largest, most strategic and fastest growing of Cisco’s 40 “market adjacency” opportunities, with its collaboration product line, consisting of products ranging from instant messaging and mail though Web conferences and Telepresence-based video, growing at about 25% per year. While Cisco’s enterprise customers are rushing to embrace collaboration solutions as a means of better engaging with customers and improving their own organizational effectiveness and agility, few of these customers are currently prepared to design or manage their own implementations. Fewer still are able to transform their processes and organizational cultures in ways that will allow them to derive optimal value from these solutions. A recent Cisco-commissioned study by the IESE Business School, for example, found that:

  • Only one in seven companies has a formal process for managing deployment of social networking tools;
  • One in five have policies in place for managing social networking; and that
  • IT organizations are directly involved in only about one in ten implementations.

Business value assessments of collaboration implementations are often cursory, organizational ownership responsibilities are vague and integration with established enterprise tools and processes are limited And this does not even begin to get into the corporate culture and organizational model changes that are required to transform traditional command-and-control companies into agile, collaborative organizations.

Effective assessment, preparation, implementation and management, not to speak of effective use of these new tools, requires a broad range of expert services. However, as with most new IT and communications technologies, such skills are in short supply. Vendors who want to create a market for such tools must often develop and initially deliver such services themselves. Cisco is no exception.

Cisco’s Collaboration Services Portfolio

Cisco recognizes that customers need help through the entire collaboration planning and implementation process; from justifying business value and ROI, to understanding what tools are necessary and how they integrate with each other and into legacy environments, to planning organizational adoption and support and often, to managing the entire process.

The company has, therefore, introduced a services-led process to help customers plan for and address the business, as well as architectural and technical issues entailed in an enterprise-wide collaboration implementation. This five-step service-based process entails:

  1. Discovery Sessions and Collaboration Index, a Telepresence-delivered session designed to help stakeholders envision and prioritize the business benefits of different forms of collaboration within their specific organization and industry;
  2. Readiness Assessment, an online self-assessment tool that evaluates the organization’s current collaboration capabilities, assesses and suggests remediation measures for its network infrastructure, suggests program management and governance models and evaluates customer readiness;
  3. Collaboration Solution Design, which designs Cisco/Microsoft –based collaboration solutions that can be integrated with the organization’s current collaboration tools;
  4. Collaboration Infrastructure Deployment, which includes architecting and implementing an in-house solution or designing and planning a SaaS implementation; and
  5. Collaboration Strategy and Architecture, which develops detailed business and use cases, identifies the highest-value applications and users, outlines business process and cultural changes that will be required and defines a deployment program.

Cisco’s Services Collaboration Methodology, meanwhile, helps customer’s identify implementation and adoption challenges, suggests and helps them set up governance and incentive structures and define and implement required business process changes.

Cisco will then use its 800 Advanced Services collaboration specialists to design and implement the customer’s solution, train its staff to manage the system and support the ongoing operation with its 1,000 collaboration technical services specialists. (My June 6 blog will have more information.)

New Delivery, Payment and Optimization Models

Although the majority of Cisco collaboration solutions are implemented at the customer’s site, few IT organizations, as mentioned above, have the time, the people or the experience required to manage today’s sophisticated, mission-critical unified communications environments. Nor, in the current era of tight corporate budgets, can all corporations afford or justify paying for all of this out of increasingly tight capital budgets. Cisco, therefore, now offers a broad range of deployment and payment options. It can, for example, Build, Operate and Transfer (BOT) the system to the customer or deliver its collaboration software either as a managed service, or as software-as-a-service. It also now offers a broad range of payment options, including utility-based pricing.

Since Cisco initially expected these alternate delivery models to be attractive primarily to mid-sized companies, it designed them to be offered through third-party partners (see my upcoming June 13 blog). Much to its surprise, however, a rapidly growing percentage of large enterprise customers are also looking for these delivery options and some are insisting that Cisco deliver such services itself.

Cisco’s large, enterprise collaboration customers are also demanding that Cisco provide more than a new level of solutions and architectural consulting services and new, more flexible delivery and pricing options. They also increasingly require that Cisco tailor these solutions to the needs of their specific industry.

The company has been developing industry-specific sales skills over the last several years and has been rapidly expanding its industry-based services capabilities. It, for example, now has collaboration service specialists with deep focuses in industries including healthcare, financial services and education and now counts on highly specialized implementations in industries including pharmaceuticals, airlines, education and state governments for some of its highest-profile reference accounts. And, with Cisco services receiving customer satisfaction ratings of 4.6 out of 5.0, it appears that most are appreciative of the company’s increasingly sophisticated and specialized value-added services capabilities.

Posted in 21st Century Careers, Cisco, IT Company Strategies, IT Industry and Companies, IT Industry Trends, IT/Business Consulting/Outsourcing, Skills Requirements, Workforce Trends | No Responses »
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Addressing HP’s Industry Solutions Talent Gap

Sunday, May 23rd, 2010

This blog is an overview of the findings of my new report (hot link to offering page) in which I examine the talent requirements and recruitment and development efforts that will underlie HP’s effort to develop the type of more industry-focused value propositions and service-led go-to-market approaches discussed in my previous blog and report, both titled “HP Goes Vertical”.

My “HP Goes Vertical” blog, describes how Hewlett-Packard is likely to use EDS as a vehicle for gradually transforming the company’s entire enterprise IT operations:

  • From a horizontally-focused, engineering-centric IT products and solutions company;
  • To a consultative, industry-focused solutions company that helps customers envision and apply IT as a solution to pressing business needs.

This transformation will entail an equally momentous change in the company’s need for talent. It will have to retain tens of thousands of current employees, hire thousands of new people and radically change how it trains, goals and compensates these people. These changes are likely to forever alter a corporate culture that has been 44 years in the making.

Transformation to a Services-led Workforce

Selling horizontally-focused IT product and solutions requires a deep knowledge of product capabilities and competitive differentiators as well as how modernized, efficient IT infrastructures can improve performance and reduce costs. Designing, implementing and managing these solutions require not only deep technical skills and experience, but also change management and some level of cultural skills.

Although the sale, design, implementation and management of industry-specific business solutions certainly require similar capabilities, they require much more. While technical skills remain at the center of an IT solutions engagement, these skills tend to take a back seat to deep industry and business process skills in a business solutions engagement.

Rather than leading with product capabilities and TCO, business solutions account executives typically enter accounts with well-defined points-of-view as to how the customer’s specific industry is changing and the requirements for success relative to new market, competitive and extrinsic conditions. Just as importantly, they must be able to engage in these conversations not just with the types of IT executives with whom most IT companies are used to working, but also with senior business executives.

These industry-specific solutions perspectives, however, cannot stop at the sales level. They must be infused throughout the organizations, through people that architect, build and support industry-specific solutions, and through those who define and prioritize target markets and identify and communicate compelling value propositions.

A small percentage of HP’s senior sales people and consultants (especially in CME and financial services) had such capabilities. They are, however, in a small minority. EDS had more—although not to the level of competitors like IBM or Accenture.

Enterprise Services as HP’s Business Solutions Incubator

The combined HP/EDS company has already begun to marshal its best business solutions-based talent across all groups, identify those industry segments in which it has the strongest capabilities and most compelling value propositions, and identify and assign the best qualified salespeople to the most promising accounts in each of these segments.

Although HP has some such talent in all parts of its Enterprise Business Group (not to speak of in its Imaging and Printing and Personal Systems Groups), the vast majority of such capabilities reside in the company’s Enterprise Services team, which houses most of the EDS business and people.

Given this, I believe HP will use this organization—particularly its sales and service delivery arms—as the company’s Business Solutions Incubator. This incubator would:

  • Create, market, sell and support the company’s initial service-led industry solutions;
  • Identify and disseminate consistent, repeatable best practices that could be applied across all industry groups; and most importantly
  • Develop the people most capable of architecting, building, selling and supporting them and then, disseminate best practices and people out through other parts of the organization.

Among this group’s primary talent development responsibilities would be to:

  • Define the type of talent it will need—especially across its service sales and service delivery teams;
  • Identify current employees that are most capable of filling key roles and create accelerated development and mentorship programs to help develop their skills;
  • Determine the talent—both new graduates and people with experience in other companies—that it must recruit from the outside; and
  • Restructure sales and service delivery career paths, metrics, incentives and compensation structures to create a large supply of such people.

Once it begins to “incubate” a critical mass of such professionals within the company’s services sales and service delivery arms, it must rapidly disseminate this talent out through all parts of the HP Enterprise Business organization—initially Software and Technology Services and ultimately Hardware. Once the group is on track to accomplish all this for the company’s initially targeted industries, it would probably lead the process of identifying and prioritizing HP’s move into additional verticals and sub-verticals.

Posted in 21st Century Careers, Creating the 21st Century Workforce, Globalization, Immigration and Offshoring, Hewlett-Packard, IT Company Strategies, IT Industry and Companies, IT Industry Trends, IT/Business Consulting/Outsourcing, Job and Career Opportunities, Skills Requirements, STEM Careers, Technology's Impact on Job Skills, Vertical Strategies, Workforce Trends | No Responses »
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IBM’s Plan to Transform University IT Education And Spur Student Enthusiasm in the Process—Summary

Sunday, May 2nd, 2010

This week’s blog is an overview of the findings of my new report, “IBM’s Plan to Transform University IT Education: And Spur Student Enthusiasm in the Process” in which I examine how IBM’s university alliances have evolved to emphasize education in areas that transcend IT skills, and the long-term benefits that IBM is likely to derive from this approach.

IBM started its Academic Initiative in the 1950s when it helped universities create Information Science programs. It extended this program around specific IT and engineering skills and then, in 2003 added a Service Science, Management and Engineering (SSME) initiative.

This SSME initiative went way beyond the university efforts of IBM—as well as most other vendors—that traditionally focused on “hard” science and technology skills, such as around programming, database design, electrical engineering and physics. SSME, in contrast, emphasizes the needs for universities to encourage multi-disciplinary education and the need to develop T-shaped skills, which combine deep skills in one or more fields, plus a high-level understanding across many others. IBM worked with universities to help professors expand the focus of their own courses and departmental curricula and, most importantly, to coordinate curricula across multiple schools within a university.

It, for example, encouraged and helped schools refocus engineering education around real-world problems and train engineers to work in multi-disciplinary teams. It also challenged business schools to evolve their traditional focus on management of manufacturing companies (which now accounts for less than 20% of developed-country economies) to developing a similarly rigorous management science around services (which already account for about 60%). Some 40 universities have are going further, creating truly integrated curricula that cross traditionally sacrosanct boundaries—integrating courses across schools including management, information science, engineering and social science. A few have even begun offering new cross-school degree programs around SSME-related themes.

Smarter Planet—Using SSME to Change the World

IBM’s huge, corporate-wide Smarter Planet initiative is, in many ways, the application of SSME to critical, real-world problems. SSME, after all, is an effort to create a science around decomposing and recomposing service-based processes, optimizing service supply chains and value chains and creating interdisciplinary research centers to design and optimize complex “service systems”—combinations of people, organizational networks and technologies that are aligned around a specific objective, such as designing and managing more livable cities, more effective healthcare systems and more efficient energy networks.

This effectively transforms SSME from an academic discipline into an instrument for addressing societal needs. It provides universities with the tools required to create education tracks and, eventually, degree programs around social goals—thereby attracting and making it easier for students who want to “change the world”. Moreover, IBM’s efforts to help shape educational curricula across Smarter Planet initiatives now transcends traditional information science, engineering and business schools to reach into areas including mathematics, architecture, healthcare management, public service, urban studies, and others.

Although such programs may not attract those students who are driven to become hedge fund managers or musicians, they do have the potential of attracting and providing “employment-ready” educations for millions of other students with similarly strong drives in other fields.

Engineering a Path to an IBM Job

Virtually all corporate university education programs share a common goal—to facilitate the education of students with the skills and perspective required to address the talent needs of the sponsor corporation, its customers and its partners. It’s easy to see the direct benefit that IBM can gain from programs that teach System z mainframe skills, that Intel can gain from multi-core architecture design programs or that Wal-Mart can derive from the University of Arkansas’ supply-chain optimization program.

But what benefits will IBM gain from encouraging universities to launch broad, non-vendor specific programs like SSME, healthcare management and transportation system design? The company’s logo isn’t on or necessarily associated with these programs, nor is IBM the first place most newly-minted graduates would look for a job to solve world hunger—unless, perhaps, you know about IBM’s Smarter Food program and its projects to increase agricultural yields, improve sustainability, reduce waste through the optimization of supply chains and improve food inspection processes.

That’s where some of IBM’s multiple university outreach programs fit in. The company has 4,000 University Ambassadors, typically IBM domain experts, who volunteer to work with universities to engage with faculty members, develop classes around real-world problems, deliver guest lectures, participate in seminars and otherwise engage with professors and students. The company also provides education tools, such as its INNOV8 Business Process Modeling (BPM) simulation game and is adapting many of its other courses to new learning methods, as through support of community portals and wikis, discussion forums, blogs, and Facebook and Twitter communities.

It also has an active university research program through which it funds professors and graduate students to conduct specialized research and all types of fellowship and internship programs in which it works with professors to identify high-potential students. It also partners with universities on IBM’s annual Battle of the Brains competition, the most recent of which attracted more than 28,000 students from 2,000 universities worldwide. These competitions engage interdisciplinary teams to tackle real world problems. The theme of these competitions? Would you guess they are typically aligned around one of IBM’s 21 (and growing) Smarter Planet themes?

IBM will certainly not attract or hire all of the graduates from SSME and Smarter Planet-theme programs. Nor does it want to. Although it hopes, and is positioning itself to identify and recruit some of the most talented graduates, its ultimate objective is to seed the world—its businesses, governments, NGOs and universities—with people who think about the world’s needs (and solutions) in much the same way that IBM does, who have been touched by IBM Ambassadors and programs, who understand IBM products, and who recognize that IBM is dedicated to addressing the same types of needs as are they.

This all leaves me with two questions. When will other corporations recognize the long-term payoffs of this broader approach to partnering with universities? And, how will they reach professors and students in the myriad fields that will be increasingly reshaped and redefined by IT?

Posted in 21st Century Careers, Business Trends, Corporate Social Responsibility, Creating the 21st Century Workforce, Education System and Institutions, Globalization, Immigration and Offshoring, IBM, IT Company Strategies, IT Industry and Companies, IT Industry Role in Education, Job and Career Opportunities, Skills Requirements, STEM Careers, Technology's Impact on Job Skills, Universities and Grad Schools, Workforce Trends | No Responses »
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The Great U.S. Tech Education Debate

Sunday, March 21st, 2010

On March 15, TechCrunch produced a very informative debate between Craig Barrett, former CEO of Intel and huge proponent of technology education, and Vivek Wadhwa, a Duke/UC-Berkeley professor who writes extensively on innovation, entrepreneurship and cross-border movement of technology talent. 

The debate was spawned by a Wadhwa comments in a Scientific American article that claimed there is no shortage of tech talent in the U.S. To summarize a debate, which must be read in its entirety to be fully understood, Wadhwa claims there is plenty of talent in the form of STEM (science, technology, engineering and mathematics) talent in this country. The problem is that much of this talent is in the form of postdocs (post-doctoral fellows) that are bottled up in a broken university technology education system, and in foreign-born PhDs who, once they receive degrees from U.S. universities, find it increasingly difficult or unattractive to remain in the U.S. If the artificial economic and political restraints were removed, and STEM PhDs were actually paid what they were worth, this talent would be unleashed and produce the type of innovation and jobs that the U.S. so desperately needs.

Barrett views things differently. Although he acknowledges that some postdoc PhD’s do not achieve their commercial market potential, he claims that this is due to their decisions to dedicate their efforts to the long, uncertain process of becoming tenured professors at research universities, rather than working at corporations. In his view, the real problem lies in our K-12 education system, which, due largely to the lack of qualified science and mathematics teachers, fails to ignite children’s’ imaginations around the opportunities in these disciplines and fails to provide a foundational knowledge for university study.

Wadhwa certainly acknowledges the limitations in the U.S. K-12 education system and the need to create “excitement about science and engineering at the national level and motivate our best and brightest to become engineers and scientists.” He, however, clams that the biggest problem is pay. The scientific community in general and the educational system in particular, simply do not pay enough to retain the best talent. These people are lured by the huge the huge rewards promised by the financial industry (such as becoming venture capitalists or investment bank “quants “), rather than become research scientists who drive U.S. innovation.

My Interpretation

While the debate is fascinating, it appears to me that Wadhwa over-generalizes the admittedly disturbing dilemma of postdocs. Just because some STEM PhDs remain in poorly paid fellowships (with hopes of earning valued professorships) rather than going to industry, it does not necessarily mean either that:

  • There are not enough jobs for STEM graduates; or that
  • STEM professions do not pay competitively.

True, not all STEM PhDs can become professors at prestigious research universities. On other hand, not all law school graduates can win U.S. Supreme Court clerkships or highly paid posts at premier white shoe law firms. That, however, does not stop students from overwhelming law school admissions offices. Nor do the short odds of becoming professional athletes, actors or musicians prevent millions of young adults from aspiring to these careers.

Even if there are not enough tenured professorships, PhDs who do need jobs can always “stoop” to work in the private sector. Nor should we confine the analysis of STEM jobs to PhDs. There are, after all, far more Bachelor and Master-level STEM graduates than there are PhDs. Most statistics show that newly minted STEM graduates have higher employment rates than other job categories (even during the recession) and that by far, the largest percentage of unfilled jobs utilize STEM-related skills. Moreover, starting salaries for these graduates remain among the highest of those for all degrees. As shown in a March 2010 Association of Colleges and Employers study, for example, engineering and IT jobs account for all ten of the top ten earning degrees. 

Although some segments of the financial services industry certainly pay more for a handful of the best graduates from the best schools, this cannot be viewed as the standard for all STEM jobs—just as Wall Street law firm salaries cannot be viewed as the standards for all JDs from all law schools. These numbers are too small, and their selection criteria too limited to apply to all graduates.

In sum, I generally agree with Craig Barrett that most people—especially young people—are driven as much by their passions as by the immediate opportunities for monetary rewards. There are, however, limits to this idealism. Pay must yield reasonably comfortable lifestyles and must at least be in the same ballpark as reasonably competitive fields. Although most STEM careers probably meet these criteria (except when compared with financial services, professional sports or entertainment), the big exception is in K-12 STEM education.

Unfortunately, it will take much more than competitive salaries to fix this country’s K-12 education system. Its problems are far too complex and ingrained to be solved by the education community alone. As I have discussed in many of my articles, solving these problems will require a huge amount of assistance from the private sector.

A number of private sector companies—especially IT companies, like Intel, Microsoft and IBM—are already doing great work in helping to improve education at all levels, from K through graduate schools. They are giving schools some of the tools and the training required to improve teaching and learning and helping them improve STEM curricula.

Some are even attempting to address the intense social and peer pressures against becoming “geeks” and “nerds” by demonstrating that STEM skills can be instrumental in achieving the goals of many young adults—to make a real difference in the world. As discussed in my report on IBM’s Academic Initiative, IBM is doing particularly interesting work in engaging student’s desire to make a difference in the world by showing how STEM skills are so critical to addressing some of society’s most pressing problems, as around smarter healthcare, energy and food supplies.

With all due respect to Intel’s wonderful commercials, it may be too much to hope to persuade kids to view scientists, engineers and mathematicians with the same admiration and awe as rock stars or professional athletes. It may, however, be possible to engage at least some part of their minds, psyches and self esteem around the idea of helping the world solve real problems. Perhaps someday, children focused on such missions may even earn the respect, if not necessarily the admiration, of their peers.

Posted in 21st Century Careers, Business Trends, Creating the 21st Century Workforce, Economic and Political Forces, Education System and Institutions, Global Forces-General, Globalization, Immigration and Offshoring, IT Industry Role in Education, IT Industry Trends, IT Industry's Role, Job and Career Opportunities, K-12, Political Forces, Skills Requirements, Societal Forces, STEM Careers, Technology's Impact on Job Skills, Universities and Grad Schools, Workforce Trends | No Responses »
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Understanding Evalueserve’s KPO Business

Sunday, March 7th, 2010

My last two blogs defined and explained the nature and dynamics of the KPO industry and provided a relatively representative overview of range of services provided by profiling the offerings of the industry leader Evalueserve. But understanding the breadth of KPO offerings is one thing. Understanding the business models by which firms operate, the value they provide to clients and the implications for U.S. knowledge workers is something totally different.

Service and Employee Management

Evalueserve was founded in 2000 and now offers eight different KPO offerings (in addition to its Circle of Experts program. Although this type of growth is rapid and challenging, the company times its new offerings carefully (as by not launching a new offering until each current offering has a minimum staff of 100 analysts) to ensure that it maintains critical mass and quality of service in each of these offerings.

This growth has resulted in an employee base of 2,100 people, 1,750 of whom are billable to clients. These billable employees were initially based in India, where the vast majority of continue reside. However, the company has opened three additional delivery centers. Its Chinese and Chilean centers (established in 2005 and 2006) employ about 175 people each and its Romanian center (opened in 2008), an additional 40. Although many of these people have decent levels of domain knowledge and provide some substantive services (such as reviewing and analyzing financial reports), their primary role is to provide local language support and real-time communications with regional clients:

  • China supports clients in Japan, Korea, China and other East-Asian countries;
  • Chile supports Spanish-speaking clients worldwide, although primarily in the Americas; and
  • Romania supports those in Germany, Russia and Eastern Europe.

Who are these billable people? Most are research associates, analysts and managers/team leaders. They average 27 to 28 years old and have 3-to-5 years of post-high school education (at least a bachelors, and usually a masters degree). Although most are fresh out of school, Evalueserve does hire some people with 5 or more years experience as senior analysts or managers. Even though the company assigns each employee a “Career Manager”, many employees leave within 3 years. These employees tend to view Evalueserve not as a permanent home, but as a valuable stepping stone where they can develop the skills and experience that will be required for a career in a large global corporation. Many such employees leave the company to pursue higher education. On the other hand, those who remain after 3 years consider the KPO industry to be their “home” and tend to work in it for a much longer period of time.

Evalueserve has close to 60 professional employees in the U.S. and Western Europe, although they are primarily sales and client relationship managers. Most have consultative sales backgrounds in market research, IT consulting and related services. The company plans to open delivery centers in North America and Europe (see below).

Addressing Client Needs

Evalueserve’s 1,000+ clients range from the largest corporations to modest-size professional service firms and span virtually all industries, from consumer goods to life sciences and manufacturing to media. The vast majority of these clients are from Western Europe (40% of the company’s revenues) and North America (40%), with the remaining 20% spread across Asia and Latin America. While the breadth of its client base is large, 80% of its revenues come from only the top 50 clients and two-thirds is derived from only three industries—banking/financial services, technology and telecom, and healthcare. The vast majority of these clients originally came to Evalueserve for the expected reason—to reduce costs through labor arbitrage—and many of these companies subscribe to only a single service offering and view Evalueserve as a “mere vendor”.

This, however, is beginning to change. A few companies are leveraging existing relationships, such as for market research, into additional services (e.g., business research or marketing support). Meanwhile, some clients are beginning to view the provider as a true business partner, rather than as a vendor. Interestingly, this later trend appears to be determined primarily along departmental lines, rather than by industry or company size. Strategy and intellectual property departments and consulting firms are increasingly viewing Evalueserve as more of a partner whereas financial departments, banks and market research departments still tend to view it primarily as a vendor.

Most clients, however, are beginning to look to KPO for more than labor arbitrage. Some look to it as a vehicle for revenue enhancement, such as by using sales management services to improve sales productivity or by leveraging investment and legal research capabilities to enable banks to cover more companies and law firms to gradually expand into new specializations.

A growing number of U.S. and European clients are also leveraging Evalueserve’s global presence to facilitate expansion into higher growth emerging country markets in Asia, Latin America and Eastern Europe—using its services to research and evaluate new market opportunities, gain a better understanding of local customers, partners and legal/regulatory requirements and to insure protection of intellectual property. In fact, approximately 15% of Evalueserve’s revenue now comes from researching emerging countries (particularly China and India).

Evalueserve recruits the vast majority of its personnel with skills in providing broad, horizontal, cross-industry services—skills for which the vast majority of its clients retain the company. Having said this, analysts develop industry-specific knowledge through ongoing work with clients and the company now claims that a growing number of its people are developing demonstrable skills in its three core verticals: banking/financial services, technology and telecom, and healthcare. If a client requires particularly deep industry skills, the firm can tap its rapidly expanding Circle of Experts. Furthermore, using these three verticals as the springboard, it is now developing expertise in other verticals such as energy (oil, gas and, increasingly, renewables) and consumer packaged goods.

The recession took its toll on KPO, along with all other offshore and outsourcing services. The bad news is that after years of 70% annual growth, KPO revenue growth effectively ground to a halt from September 2008 to August 2009. The good news is that industry revenue did not actually fall. In fact, it still grew by 3%-5%! Even financial services revenues held steady for the entire industry.

Evalueserve even sees something of a silver lining in this no-growth year, both for itself and for the KPO industry at large. After years of growing at an unsustainable rate, the company finally had a chance to cut some fat from the organization and to shed the bottom 5% of its workforce. This thinning, combined with the growing availability (not to speak of slightly lower cost) of more senior people, also allowed the firm to hire more experienced talent.

In some ways, the recession has also improved Evalueserve’s competitive position. Its size and diverse line of services gave it an advantage over its legion of smaller, more specialized rivals. More importantly, the recession has slowed the KPO progress of the leading Indian IT service providers and prompted them to dedicate their efforts to retaining their core businesses rather than investing in the very different research and especially sales skills required for KPO.

Although Evaluserve, like many other firms, is seeing encouraging signs of growth, especially from companies looking to expand capabilities without taking on the commitment of hiring full-time employees. This being said, it does have one important concern—a growth in protectionism that is likely to grow as long as unemployment remains high. Although it will be tough to avoid this highly emotional issue, Evalueserve does at least have one other advantage over its larger offshore service rivals—its U.S. business is not dependent on H1B visas,  and when it does open its U.S. delivery center, it will staff it with Americans.

Opportunities for U.S. Knowledge Workers

Evalueserve, like many of the big Indian IT services companies before it, is now looking to complement its offshore and nearshore delivery facilities with onshore centers located near its largest clients. These centers, which are currently planned for the U.S. and Western Europe, will house more senior people than the company’s offshore and nearshore centers.

While offshore analysts typically have 3-5 years experience, onshore Research Architects and Solution Architects will be seasoned professionals. They will often have graduate degrees (MBAs, MS in engineering and even PhDs) and 10 or more years experience in their disciplines. They will also play very different roles. Rather than performing analysis, they will evaluate client needs, design research requirements, manage projects, present findings to clients and deliver additional levels of value, such as by interpreting research results within the context of market and industry realities and engaging in strategic dialogs with clients. They will also play demand creation roles, as by working with Account Executives to evaluate and promote additional opportunities within existing accounts.

The company plans to begin hiring these new onshore professionals (initially in financial services and heath care, with other disciplines following), when it becomes confident that the North American and Western European economies are truly on the mend.

What does all this mean for U.S. and European knowledge workers? At a very high level, offshore KPO services will pull growing numbers of service jobs—especially lower-skilled, more standardized and non-customer-facing jobs—out of the U.S. and other developed countries. It will, however, create smaller numbers of higher-skilled, more customer facing, and higher-paying jobs in these countries. This, however, is only the tip of a very large, very deep iceberg. I will examine the broader implications of the globalization of knowledge services in my March 14 blog, tentatively titled, “The Economic, Competitive, Social and Political Implications of KPO”.

Posted in 21st Century Careers, Business Trends, Creating the 21st Century Workforce, Economic and Political Forces, Economic Forces, Global Forces-General, Globalization, Immigration and Offshoring, IT Industry and Companies, IT Industry Trends, IT/Business Consulting/Outsourcing, IT/Software-as-a-Service, Job and Career Opportunities, STEM Careers, Workforce Trends | No Responses »
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Evalueserve’s KPO Service Offerings

Sunday, February 28th, 2010

My last blog discussed the outsourcing of knowledge-based services and the growth and breadth of the Knowledge Process Outsourcing (KPO) industry. This blogs drills into some of the most general of these offerings by focusing on the evolution and growth of a single provider, Evalueserve. I focus on this company not because its services are unique (many KPO providers have similar offerings), but because it is representative of the broad range of horizontal knowledge-based business services that are now available from India.

Evalueserve Offerings

Evaluserve, which was founded in December 2000, now consists of more than 2,100 employees in Delhi-Gurgaon, India; Shanghai, China; Valparaiso-Santiago, Chile; and Cluj, Romania. Since it is a private company, its precise annual revenues are not known, but they are believed to be around $100 million. Its first offerings, launched in 2001, included intellectual property and business research services, targeted at lawyers, consulting companies, and investment banks. It added roughly one additional service per year, consisting of market research services, other banking-related research services, risk and data analytics services, and, in 2007, a range of legal process offerings.

It currently offers eight types of services, which are combined in distinct ways to provide customized solutions for its customers:

  • Market Research – qualitative and quantitative surveys and focus groups to address issues including employee satisfaction, brand perception, customer loyalty, event effectiveness, and new concept testing.
  • Business Research – market sizing, market assessment and segmentation studies, value chain analyses, competitive research and analyses, innovation searches, company profiling, and the identification of new business opportunities and business partners.
  • Investment Research – independent and support services to all types of financial services companies across four primary areas: equity, fixed income, corporate finance, and buy-side. It provides a full range of research services plus a broad range of analytical services, such as to model portfolios and risk, allocate resources, and simulate returns. It also provides reports and develops pitch books and marketing packs.
  • Intellectual Property Research – patentability and invalidation searches, patent landscape and portfolio analyses, patent drafting and filing services, and patent litigation support services.
  • Legal Support Services – a broad range of legal research and litigation, electronic document discovery, immigration support services, ongoing contract management, with the ability to bring engineers, scientists and business analysts, as well as lawyers and paralegals onto teams.
  • Marketing and Sales Support – services covering the sales spectrum, including lead generation, proposal and collateral production; sales analytics; client satisfaction studies; sales process benchmarking and public relations support.
  • Knowledge Technology Development – developing knowledge management tools including portals, taxonomies, business intelligence and data warehouses, and content management and elearning solutions.
  • Data Analytics – data acquisition and modeling as well as the use of analytics techniques including simulations and econometric modeling plus more specialized credit risk, consumer risk and market risk analytics services to banks and insurance companies. In addition, it builds dashboards and offers specialized services atop packaged data analysis software, such as Cognos.

Although the vast majority of Evalueserve analysts are recent graduates with only a few years of experience (see my next blog), the company also recognizes and accommodates client requirements for assistance from much more seasoned industry experts. The company’s Circle of Experts program is a network of more than 20,000 senior independent consultants or retired executives from across the globe, each with deep domain and industry expertise in their specific fields. These experts, who are billed at anywhere from $150 (for an Indian expert) to $900 (for a U.S. one) per hour, can address specific client questions, provide days of consulting, or provide an extra level of analysis to work provided by more junior Evalueserve analysts.

But while this provides an overview of the breadth of current KPO offerings, it is more important to understand the business models by which KPO providers operate, the value they provide to clients and the implications for U.S. knowledge workers is something totally different. This is the focus of my next blog.

Posted in 21st Century Careers, Business Trends, Creating the 21st Century Workforce, Economic and Political Forces, Economic Forces, Global Forces-General, Globalization, Immigration and Offshoring, IT Industry and Companies, IT Industry Trends, IT/Business Consulting/Outsourcing, IT/Software-as-a-Service, Job and Career Opportunities, Technology's Impact on Job Skills, Workforce Trends | No Responses »
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The Growth of Knowledge Process Outsourcing

Monday, February 22nd, 2010

Over the last decade in my quarter-century career as an IT Industry analyst, I focused extensively on the outsourcing of increasingly high-level IT functions to offshore employees. I examined, for example, how offshore tasks have evolved from basic maintenance of old, centralized, Cobol-based applications to the architecting of new-generation, distributed Java and .Net-based apps and a broad range of other high-level IT functions. I examined how application outsourcing evolved into business process outsourcing, in which offshore providers not only managed increasingly sophisticated processes (as from basic call centers though comprehensive financial and supply chain processes), but also developed deep expertise in architecting and transforming entire processes to make them more secure, accurate and efficient.

Although Application Outsourcing (AO) and Business Process Outsourcing (BPO) growth has (along with everything else in the business world) stalled over the last couple years, they promise to resume rapid growth as the recession ends and companies strive to institutionalize the efficiency gains achieved during the recession.

Emergence of KPO

However, the greater growth, and even greater workforce implications will come from a new generation of outsourcing—the outsourcing of a broad range of sophisticated knowledge-based processes in fields ranging from financial analysis and marketing management to legal research and the research and development of the newest generation of sophisticated IT, communication and pharmaceutical products. Even hip replacement and open heart surgery is now being outsourced!

This growth of Knowledge Process Outsourcing (KPO), which was originally launched on the promise of cost cutting, or “labor arbitrage”, is now being driven by something else—the rapid growth in education in emerging countries and the rapid decline in availability of developed country students majoring in STEM (science, technology, engineering and mathematics) disciplines. It is simply becoming easier (not to speak of less expensive) to find, grow and mange such skills in emerging countries. (Note, that while the U.S. continues to lead the world in STEM PhDs, foreign-born students now account for more than half of all graduates. And since the U.S., through a combination of government policies and societal pressures, is making it increasingly difficult for foreign graduates to work in the U.S., more and more of these graduates are returning to their home countries—especially India and China—rather than contributing to the U.S. economy.

We have all seen, or at least heard of the rapid growth in offshore knowledge work:

  • Virtually all of the major financial service companies have opened offshore financial analysis centers;
  • All leading electronics and pharmaceutical companies have build large offshore research and development teams;
  • Offshore hospitals, which perform increasingly sophisticated surgeries for 15-20% of the price of domestic hospitals—with free foreign vacations thrown in—are proliferating and U.S. insurance companies are increasingly referring patients to them.

These, however, are just the most visible tip of a revolution that has begun to touch virtually every aspect of knowledge work. And while the fruits of these offshore knowledge sources were traditionally available only to those very large corporations that had the resources, skills and patience to build and manage their own offshore centers, the emergence of third-party KPO providers is rapidly democratizing the offshore knowledge processing industry, making such services available to mid-size, as well as large firms.

The Emergence of KPO Service Providers

All of the leading Indian IT providers now offer some knowledge processing services. (Tata Consulting Services, for example, offers business intelligence and performance management services, Infosys provides legal research and litigation support services and Wipro is a leader in product engineering services). A growing number of Western outsourcing providers also provide KPO services. IBM BPO/KPO offerings include a broad range of horizontal (including supply chain management) and vertical (as for banking, insurance and healthcare) offerings. So too does Accenture, with cross-industry services including financial and human resource management and industry-specific, such as Clinical Trial Management and Pharmacovigilance.

But while most of the leading outsourcers have begun to enter this field, their progress and active marketing of these offerings has—not surprisingly—slowed during the recession. As of now, the industry remains dominated by business KPO specialists. Although there are a few multi-line KPO providers, such as Outsource2India, KPO Experts and Evalueserve, the vast majority are specialists. More than 300 Indian firms already provide horizontal or industry-specific vertical services in fields including legal research and litigation support (Lexadigm), market research (Progonsys), business analytics (C-BIA) to architectural and drafting (Indovance) services.

Although the vast majority of the larger providers focus on providing business services to large or mid-sized companies, the Internet, combined with the emergence of third-party offshore service intermediaries, are now making KPO services available to very small businesses (as for Web design and accounting) and even individuals (such as for English and math tutors to personal assistants).

But, when you talk about business KPO providers, the discussion should begin with Evalueserve, one the first and largest of India’s multi-line KPO providers. My next blog (February 28 blog) will look specifically into the growth of Evalueserve and the range of services it provides. My March 7 blog will examine the implications for U.S. corporations and knowledge workers and what students and employees can do to “outsource-proof” their careers.

Posted in 21st Century Careers, Business Trends, Creating the 21st Century Workforce, Globalization, Immigration and Offshoring, IT Industry and Companies, IT Industry Trends, IT/Business Consulting/Outsourcing, IT/Software-as-a-Service, Job and Career Opportunities, Technology's Impact on Job Skills, Workforce Trends | 3 Responses »
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The Jobs of Today—and Tomorrow

Sunday, February 14th, 2010

I have written extensively about the jobs of tomorrow and the critical role of STEM (science, technology, engineering and math) skills in preparing applicants for these jobs. (See, for example, my recently completed free report, “IT Companies as Catalysts in Creating the 21st Century Workforce.“) As explained in a new CareerCast study, these skills also critical in preparing applicants for the jobs of today—or at least many of the “best jobs”.

“Best Jobs”

What are these “best jobs” and what makes them “the best”? The study, which compiles U.S. Bureau of Labor Statistics and Census Bureau data, evaluates jobs in terms of five criteria:

  1. Stress;
  2. Working environment;
  3. Physical demands;
  4. Income and growth potential; and
  5. Hiring outlook.

While not necessarily the highest skilled (neurosurgeon, corporate M&A lawyer), highest paying (bond trader, hedge fund manager) or most glamorous (movie star, professional athlete), these jobs are available in reasonably high numbers and are available to people with relatively moderate (typically a four-year degree) degree of education.

Just what are these jobs? The top ten are, in descending order: actuary, software engineer, computer systems analyst, biologist, historian, mathematician, paralegal assistant, statistician, accountant and dental hygienist. All but two (historian and paralegal) require some form of specialized STEM education.

Perhaps none of these jobs are quite your cup of tea. Or, perhaps unlike CareerCast, you do not weigh each of the five criteria equally. You may, for example, be motivated primarily by income and advancement potential, or you may actually prefer a physically demanding job.

No worries. There are dozens of other jobs. But be forewarned: 37 of the CareerCast’s 50 “best jobs” (out of a total 200 ranked jobs) require some form of explicit math, science or technology background. Moreover, as I have discussed in previous blogs, a number of the 13 additional jobs (such as historian, sociologist, anthropologist and archeologist) increasingly require specialized IT and math skills, such as in compiling and analyzing huge quantities of information and data.  

Of course, this doesn’t suggest that ALL jobs that are intellectually, emotionally and financially rewarding require STEM educations. You can, for example, become a philosopher (11), attorney (80), author (74), clergyman (96) or artist (104), although most such professions require extensive training or specialized skills. There are also somewhat lower skill jobs. You can be a damn good paralegal (7), medical records technician (20), purchasing agent (40), jeweler (61) or actor (163) with little or no math or science training and few, if any, computer skills. But if you want to find jobs with no specialized training requirements or long apprentices, you generally have to move much further down the CareerCast list into lower-skill, more physical and/or more repetitive jobs such as waitperson (125), bus driver (137), retail salesperson (142) or mail carrier (191). And if you really want to live on the edge (literally and figuratively), you can always become a lumberjack (199) or roustabout (200).

Skills Requirements

But regardless of which type of career you choose, the work environment of the 21st century will not be like that of the 20th century. Jobs will remain scarce for at least the next five years, more positions will become temporary or freelance, and a growing number of jobs will be devalued or disappear as a result of increasingly pervasive globalization of knowledge work and the automation of functions that used to require human discretion and labor.

Success in this new environment will require much more than strong, specialized domain skills (whether STEM-based or not). Traditional left-brain analytical skills will, in fact, become the ante required for success in tomorrow’s jobs. Knowledge workers who hope to capture and retain the best, highest-value and most secure jobs must also complement these capabilities with increasingly large doses of left-brained conceptual and empathic skills. And, with all due respect to technophobes, virtually all high-value knowledge jobs will also require at least basic quantitative, statistical and IT skills. IT, in fact, will increasingly have to become the second language for almost all 21st century knowledge workers.

Posted in 21st Century Careers, Business Trends, Creating the 21st Century Workforce, Economic and Political Forces, Economic Forces, Job and Career Opportunities, Skills Requirements, STEM Careers, Technology's Impact on Job Skills, Workforce Trends | No Responses »
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The Government’s Efforts to Bridge Schools’ STEM Gap

Sunday, February 7th, 2010

I have written extensively about the U.S.’s urgent need to retool its workforce to compete in the Global Knowledge Economy of the 21st century, and of the particularly critical need for a whole new level of STEM (Science, Technology, Engineering and Mathematics) literacy. Although this need must be addressed at all education levels, from primary school through universities and continually through one’s career, the biggest and most pressing gap lies in the formative years, from elementary school through high school.

Just how big is this gap? U.S. 15-year olds now rank a dismal 21st in the world in science and 25th in math. It is similarly drawing up the bottom in high school completion, where the 2006 PISA study ranks it 21st out of 27 OECD countries. Meanwhile, at a time when virtually every knowledge-based career requires strong IT skills, most U.S. middle and high school computer classes focus on teaching rudimentary Windows, word processing and spreadsheet usage, rather than the value of IT in all disciplines and occupations. But our educational prowess relative to OECD countries is one thing. We are now even getting our STEM educational clocks cleaned by China, where:

  • Math, science (not to speak of foreign language) skills are the primary focus of the educational system, from elementary school, all the way through universities;
  • IT is integrated into math and other high school curricula, rather than taught as a standalone set of skills;
  • College STEM graduation rates far exceed those in the U.S.; and even where
  • Adult literacy rates (over 90%) are higher than in the U.S. (86%).

In reality, how could we hope for much more when most teachers graduate in the bottom quartile of their college classes, only 39% of 8th grade math teachers and 7% of science teachers even majored in the subjects they are teaching and children devote so little time to homework. Compare this again with China, where, all math and science teachers must have degrees in these subjects, school years are longer and students devote twice as many hours to homework as their U.S. counterparts.

Government Progress

Although this is all pretty grim, we are seeing progress. And it is coming from the most unlikely of places—the U.S. government. While every U.S. president since Dwight Eisenhower has tried to create a national education program, virtually every effort has failed in Congress. Sure, George W. Bush managed to get No Child Left Behind through Congress, the law allows every state to set their own standards. And, 15 states that fell short of the law’s performance requirements found a creative way of staying in compliance—they simply lowered the scores required to demonstrate proficiency.

Although a couple of multistate organizations, the National Governors Association and the Council of Chief State School Officials, are making some progress in creating a voluntary set of common standards for Math and English education, Barack Obama shares his predecessor’s view of the need for national action. However, he understands (all too well) the perils of relying on Congress. He, therefore, gave Arne Duncan, his Education Secretary, unprecedented power and an unprecedented pool of money ($4.35 billion) to incent states to pursue innovative strategies for recruiting, credentialing, rewarding, and retaining teachers. Although this Race to the Top initiative will cover all subjects, it is particularly skewed to STEM education.

Obama would like to do much more to address many of the fundamental deficiencies of the current educational system. Yet he recognizes the formidable political, fiscal and practical constraints to enacting true educational reform. Therefore, he is attempting to enlist the private sector to fund and drive additional programs.

Enlisting Private Sector Help

In November, OBama announced a new campaign to encourage businesses and not-for-profit organizations to help enhance science, technology, engineering and math education in middle and high schools. This Educate to Innovate program is focused on encouraging companies and non-profits to contribute $250 million worth of time, money and volunteers to create extracurricular education programs to expand children’s interest in and knowledge of STEM. As reported in the New York Times, some of the first of what are expected to grow into a larger number of commitments include:

  • Discovery Communications is sponsoring two hours of commercial-free, after-school Science Channel programming to be targeted at middle school students;
  • Science and engineering societies’ commitments to provide volunteers to work with children;
  • PBS will incorporate a science focus into two years of Sesame Street programming;
  • Time Warner Cable, which has committed to devoting 80% of all its philanthropic efforts to science and math education, will also create and promote a web site that will provide a searchable directory of local science activities;
  • Sony will donate 1,000 PlayStation 3 game consoles and LittleBigPlanet educational games to libraries and community organizations and fund a $300,000 contest to incent game designers to develop science- and math-based games that Sony will distribute free; and
  • The Jack D. Hidary and MacArthur Foundations are working with the National Science Teachers Association and American Chemical Society to launch a website (http://www.nationallabday.org/) to create a Web site that will match volunteer scientists with teachers looking for assistance in teaching specific areas.

Intel, which already has one of the largest and most active STEM education initiatives in the world (which I’ll discuss in some future blogs), is playing a particularly central role in this imitative. It is launching a ten-year, $200 million cash and in-kind campaign to help train more than 100,000 U.S. math and science teachers and is committing its own employees to volunteer 100,000 hours to improving STEM education. Its former chairman, Craig Barrett, will also work with prominent technology CEOs and former astronaut Sally Ride, to encourage other corporations and foundations to fund and participate in efforts to improve STEM education.

Promising First Steps

The bad news is that U.S. educational system (especially elementary, middle and high school) has dug itself into a huge hole. It is not vaguely prepared to teach the types of skills that tomorrow’s workers will need to compete in an increasingly global economy that is being redefined by information and communications technology.

The good news is that virtually everybody—private sector and public sector and Democrat and Republican—recognizes these deficiencies and the urgency of addressing them. George W. Bush—with solid bipartisan support—took an important first step (No Child Left Behind) in addressing these needs. Barack Obama, without waiting for Congress, has taken two more. Race to the Top provides schools with compelling incentives to reinvent policies and processes. Educate to Innovate enlists the private sector to help identify, enable and fund some of these changes. Both focus on those areas that are in greatest need of change—how middle and high school students are exposed to and taught math and science.

Ideally, politicians of both parties will again come together to acknowledge this critical need and address it in a comprehensive and enlightened manner. But even if not, Educate to Innovate, in particular, sets an important precedent as:

  • An effort to encourage and focus the efforts of the private sector (especially information companies and foundations) around a common goal.

This will hopefully be the first of many initiatives in which government attempts to mobilize the private sector to address critical societal issues.

Posted in 21st Century Careers, Business Trends, Corporate Social Responsibility, Creating the 21st Century Workforce, Economic and Political Forces, Education System and Institutions, Job and Career Opportunities, K-12, Political Forces, Skills Requirements, Societal Forces, STEM Careers, Technology's Impact on Job Skills, Workforce Trends | No Responses »
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The Payoffs of Cisco’s Globalization Odyssey

Sunday, January 31st, 2010

In my last blog, I outlined Cisco’s ambitious globalization plans, its plans for establishing Cisco Globalization Center East in Bangalore as a corporate co-headquarters and its longer-term plans for building a network of globalization centers that will not only globally distribute the company’s workforce, but also its management team. This blog looks at some of the challenges Cisco faces in its globalization efforts and how it is addressing them, the opportunities its expanded global presences is creating and some of the lessons that its experiences may provide to other companies.

Challenges and Solutions

Cisco certainly faced many of the same challenges that all companies face when building a major presence in India. It had to navigate the government‘s infamous bureaucracy, compensate for and adjust to the country’s deficient infrastructure and inconsistent education system, and find a way of managing the 12½ hour time zone difference between India and the company’s California headquarters. It also had to adapt to cultural differences between Indian and Western employees. These include the difficulties that many Indian workers have delivering disappointing news and providing candid feedback, their deference to corporate executives and the disappointment and even shame they experience in adapting to the Cisco tradition of lateral organizational moves (versus promotions to higher level jobs and titles).

Cisco, like many other companies establishing an Indian presence, has addressed these traditional challenges. It faced greater challenges, however, from the tricky governance challenges that arose from the combination of two Cisco-specific issues:

  • Its highly matrixed organizational structure and its extensive use of councils and boards (see, for example, the July 2009 McKinsey & Co interview with John Chambers) which is highly dependent on frequent, often spontaneous communication and collaboration among managers and executives from all across the organization; and
  • Its decision to globally distribute its executive and management team, as well as specific functions to India and other countries.

Its first governance challenge was to ensure that all of its employees would accept and adapt to the increasingly central role that the Indian center would play in the organization. This required an immediate, high-profile validation of the role of the Indian organization and the need to incorporating it and its managers and executives into all appropriate decision processes. Cisco built the credibility of the Indian organization in three steps:

  1. Its high-profile promotion and launch of the facility as the greenest and most technologically advanced of all Cisco sites, its role as one of the company’s most important customer/partner demonstration and education centers and its being the home of what will soon be the company’s second largest R&D facility and by the actions of two particularly critical executive sponsors;
  2. The move of EVP Wim Elfrink and 20 other senior executives to Bangalore; and
  3. John Chambers’ ongoing elaboration of the importance of Globalization Center East and his hosting of Cisco’s 2008 company meeting in the complex.

The next challenge was to identify how to maintain, or adapt, the company’s traditional freewheeling, real-time communication and collaboration process when critical members of each team are located halfway around the world, with no shared work hours. Would communications patterns change or would more and more meetings be conducted (and decisions reached) without participation by remote group members?

Cisco’s own technologies, including its Unified Communications solutions, WebEx conferencing and TelePresence videoconferencing systems, certainly helped. But technologies alone are not sufficient to change established processes or corporate cultures.

Cicso began its global communications began in the normal way, trying to schedule meetings at times that were only minimally inconvenient for each party, such as 6:00, 7:00 or 8:00 AM/PM. There were, however, far too many conference calls for far too few time slots. And since there were typically far more participants in the U.S. and Europe than in India and China, calls were increasingly scheduled throughout the night (Indian time) and early Saturday mornings (Friday afternoon in California). India-based executives were getting worn out and were losing sleep and family time. Although Wim Elfrink had a Telepresence system installed in his home, this only moderately reduced the burden. Nor was Cisco prepared to provide this same, very expensive luxury/incursion for all its India-based managers and execs.

The solution? John Chambers ordered that no calls would be held after 11:00 PM in any time zone and that the burden of calls outside of work hours must be spread across geographies, so that everybody would end up making similar compromises.

The Opportunities of Globalization

While the launch of the Bangalore center presented some obstacles that had to be overcome, it also provided Cisco with some important new opportunities. As I discussed in my last blog, the first and the single most important reason for Cisco’s dramatically expanded Indian presence was to accelerate the company’s growth in Asian and other emerging markets. Cisco claims that this investment is already paying off, such as by providing a presence and allowing it to incubate Asian ecosystems that were instrumental in capturing big, strategic accounts. These include Smart Building wins in China, Smart City wins in Saudi Arabia and Smart Education wins in Qatar. (I’ll cover such projects in more depth in a future blog). It is also working on a number of other projects, such as Korea’s Songdo Smart City and Malasian WiMax (with YTL) implementations, that have the potential of creating other huge new global growth opportunities.

Cisco’s commitment to Asia has also allowed the company to extend relationships with current Indian SI partners and to create new joint market initiatives, as with Tata around security and Wipro in addressing Middle Eastern markets.

Establishing the Indian co-headquarters also gave Cisco a powerful new tool in developing a new generation of globally-aware managers and executives. The initial expansion has already contributed to globalizing the traditionally Western-centric corporate culture. Meanwhile, moving Wim Elfrink and other executives to India helped increase Cisco’s visibility into other countries and emphasize the importance the company places on doing business in emerging countries. Of course, it also provided a new high-profile opportunity to gain experience in other geographies. And, as a somewhat unexpected bonus, Cisco is already finding that many employees who transfer to India are more willing to remain in India or transfer to another Cisco emerging country site, than they are to return to San Jose.

The growing role of expats is also a critical tool in spreading the company’s culture to new offices and employees. This was initially done by sending U.S.-based employees to India. India, however, is now emerging as a training ground for Cisco employees in—and the transfer of new technologies and solutions to—other emerging countries, such as the transfer of Smart Grid and Smart Community experts and concepts from India to South Korea.

Leveraging Its Learnings

As I mentioned in my last blog, this is only the first step in Cisco’s plan to transform the company into a fully geographically distributed, global enterprise. Although it entered this expansion without a big, formal central design, Cisco has learned many lessons that will be increasingly institutionalized in future globalization efforts. It is also studying experiences of other global companies, such as Coca-Cola and, especially GE, to help facilitate its learning process.

This will not only help Cisco help itself, it will also help it to help its customers—companies that, like Cisco, recognize the need to decentralize their management structure and globalize their operations. Most companies, however, don’t have the technology, the architectural capabilities or the experience to engineer these transformations themselves. Cisco, in the spirit of its self-defined transformation from “Internet plumber” into “trusted business advisor”, is preparing to help these other companies as well as itself.

Posted in 21st Century Careers, Business Trends, Cisco, Creating the 21st Century Workforce, Globalization, Immigration and Offshoring, IT Company Strategies, IT Industry and Companies, IT Industry Trends, STEM Careers, Technology's Impact on Job Skills, Workforce Trends | No Responses »
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