Idle ramblings of a wandering mind...

H-1B Visas: Problems All Around
Its old news that this year the annual quota for H-1B visas filled twice over in just two days (Link to CNN story). This has given rise to all kinds of discussion on whether H-1B cap should be raised; whether H-1B should even exist and what effect does H-1B has on wage levels in US. There is a bipartisan bill on table in congress that is expected to make matters worse.

Among all the noise, there is one group of people who are finding themselves in the middle of the crossfire - International students in US Universities. The H-1B visas are no longer available for students who will graduate at the end of the current academic year. Most of them have job offers with US companies, provided that they are get their H-1B visa. This really is a double whammy for them - first of all - employment opportunities for international students are severely limited in US. Here in Ross School of Business, University of Michigan, during the past internship season for the MBA class of 2008, only 255 of the total 490 job listings accepted applications from international students. On top of that, even these jobs are in jeopardy because of visa restrictions. Just to be sure - these are students from one of the top MBA programs in the world and any country/company should welcome them with open arms as they will script the future of the business world tomorrow - and here they are rebuffed and rejected.

Increasingly US universities are looking abroad to get qualified students. In most top MBA programs, international students make up more than one third of the student body. These students pay higher out of state tuition and take huge loans (more than $120K) and are willing to legally pay taxes and contribute to the US society and economy - there is no reason to not allow them to work and prosper in US.

Update: International PhD students that take up a job with a US University are not counted as part of the usual H-1B limit. This is good news for all aspiring faculty members like me! (More information available at Carnegie Mellon's excellent page on the subject.)

US Competitiveness: Auto Industry

Already many people including Bill Gates and Harvard Crimson have raised their voices. Bloggers have even suggested that restricting companies from hiring foreign workers will actually lead them to go to the source of talent and outsource more work. In the middle of these, New York Times has written an excellent piece on increasing skill levels of outsourcing firms in India. Combine this with excellent engineering innovation like the sub-$2,500 car I mentioned in my last post - and the indicators are not good for long term competitiveness of the US economy.

If someone really needs some hard data after all this, here are the latest automobile sales figures for US market for March 2007 (market share means share among the producers mentions, not total market share, sales mean unit sales not dollar sales). Look at how the Detroit Three are doing against the Asian Three:

Since I live in Michigan, the auto industry is always top of the mind - and the figures above are so disappointing for any true fan of Detroit's auto history. Not only are GM, Ford and Chrysler losing market share, they are doing worse even in their supposedly strong area - trucks and SUVs. In cars its not even a competition anymore - its a rout! Toyota is already the largest car maker in US and is third if we include both cars and trucks. With gas prices and emission requirements pushing the market towards smaller and more efficient Toyotas and Hondas, its only a matter of time before Toyota and Honda take the leadership position in US auto market from GM and Ford.

Toyota and Honda are both excellent value with forward PE in 13.50 range. I own Honda as I am slightly concerned with Toyota's ability to sustain growth with the large base that it has. Plus I expect Honda to take back the green leadership that it seems to have lost to Toyota Prius.

Labels: Auto, Immigration, India, US

   

I had written before about the growing wind energy capacity in India (Link: Wind Energy Powering India). Wind energy has continued to expand at a phenomenal pace in India. In year 2006, wind energy capacity in India increased by 41.5% amounting to 1,840 MW of new capacity. India was third in the world in new capacity additions (after US and China) and fourth in the world in total installed capacity (after Germany, Spain and US). The table below shows the distribution of installed wind power capacity in the leading countries:



Fast growth in US was expected because of recent tax concessions and the large suitable area and energy demand. China's emergence as the second largest capacity addition in 2006 is more of a surprise. Till few years back China did not really cared about alternative energy. China's ability to quickly ramp up is admirable though.

Things are moving in the right direction. Wind energy is the cleanest renewable energy source available and even though it had problems of high capital cost and non-optimal load distribution, its good to see rapid growth in wind energy capacity. This is one positive impact of the rise in oil prices - the renewable energy sources are now looking more and more attracting in comparison. I will continue to follow growth in wind and other renewable energy resources.

Labels: Alternative Energy, China, India, US, Wind Power

   

Cricket World Cup 2007

The cricket world cup is going on in West Indies. Till now it has been a disaster - India and Pakistan, with a combined population of 1.2 billion and a cricket media market worth many billions went out of the contention in the first round itself. Billions of dollars were lost, billions of people were utterly devastated (for those who know the influence of cricket on lives of ordinary Indians and Pakistanis - they know how deep the hurt it) and the Pakistan team coach was even murdered.

Within all this turmoil, the Sri Lankan team has emerged as a bright silver lining. The small island country of 20 million or so with a deeply unstable political and social environment has produced a team that is holding the Asian flag high. The team itself is so unorthodox and quaint - it even has three players that won the world cup 11 years ago!! In the age of world's fascination with youth and everything skin deep, they bring a depth of skill that gives you reason to continue believing. Mukul Kesavan has captured the essence of Sri Lankan team in his blog on CricInfo. The blog post and the ensuing discussion is highly recommended for all with any interest in cricket.

Labels: Cricket, India, Sri Lanka

   

Business Process Outsourcing (BPO) has been on a center of a lot of debate and controversy. However, the fact remains that it is here to stay, it will continue to grow and it benefits both sides. Important thing to note through is that the nature of BPO and hence the potential benefits of BPO as well as the capabilities needed to successfully compete in the BPO marketplace have evolved significantly in past few years. This evolving nature of BPO and associated issues have been part of my recent research focus. Here is one picture that explains my view of the evolution of BPO:



The figure above says many things - so needs a little explanation. The left axis represents the main driver of BPO in a particular BPO evolution stage. The right axis represents the ideal role that a vendor should play (or a client should establish) for a BPO evolution stage. The x axis represents the three stages of evolution of BPO. The main body of the graph depicts the core activity or work that is outsourced for a BPO evolution stage. This framework was presented by Prof M S Krishnan (my doctoral advisor and dissertation chair) at the Global BPO Forum organized by the CGRL:India in New York. Prof Krishnan and I both attended the forum.

This framework is helpful in understanding the future direction of BPO. We will increasingly be moving towards the third generation BPO - BPO 3.0 - high value added, knowledge intensive BPO work. This will require vendors to change their focus from cost (predominant focus right now) and quality (emerging focus among top players) to innovation. Clients, on their side, would need to make sure that they do not use the old and outdated mechanisms (efficiency oriented SLAs, restricted collaboration...) to engage with their vendors. They will have to enter into strategic partnership with their BPO vendors to co-create value for both sides of the transaction. This is of course easier said than done - but there are many leading indicators to suggest that this is happening and growing. We (as in researchers at Ross, Michigan) have documented instances of BPO 3.0 in our case studies, analyzed them in our ongoing research and I plan to investigate this phenomenon further in my dissertation.

From a research point of view, the most interesting question to be asked is: on a broad level, what are the antecedents of a successful BPO 3.0 engagement? What kind of contracting, engagement structuring, engagement monitoring, HR policies, process selection etc needs to be done to leverage the "innovation" aspect of BPO 3.0. BPO vendors and clients have more of less perfected the art of an "efficient" BPO engagement with main focus on cost reduction. Many have acquired sufficient mastery over running an "effective" BPO operation with main focus on quality improvement. However, based on my interactions, most companies are still looking for directions on how to successfully leverage an "innovation" oriented BPO engagement where an efficiency or effective oriented policies might not only be ineffective, they may even be critically detrimental to the success of the engagement. I hope to throw more light on the subject through my ongoing dissertation research.

To end, an image I have found quite effective in breaking the ice when teaching any BPO related topic:

Labels: BPO, CGRL:India, India, Research, Teaching

   

I have written before about growing wind power capacity in India and also leadership roles of Indian wind power companies like Suzlon. Since that post in April 2006, the growth has only accelerated. Here are the numbers updated up to June 2006 (source).


Growth of wind power in India is quite remarkable. In fact, preliminary sources indicates that wind power capacity has reached 6018 MW in India as of Sept 2006. The wind power story is now getting attention of popular press as well. Following is an excerpt from the article in New York Times:

Suzlon has expanded rapidly as global demand for wind energy has taken off. Its sales and earnings tripled in the quarter ended June 30, as the company earned the equivalent of $41.6 million on sales of $202.4 million.

The demand for wind turbines has particularly accelerated in India, where installations rose nearly 48 percent last year, and in China, where they rose 65 percent, although from a lower base. Wind farms are starting to dot the coastline of east-central China and the southern tip of India, as well as scattered mesas and hills across central India and even Inner Mongolia.

As oil prices stay high, renewable energy sources are becoming more competitive. For this reason, I am not too concerned about oil reaches $100 or beyond - that will only be helpful in the long run as it will focus our attention on developing renewable energy sources like Wind.

Labels: Alternative Energy, India, Wind Power

   

I am a teaching assistant for BIT 582 - Enterprise Systems Strategy course at Ross. During last class the class discussion went towards a remarkable analysis - which countries has more people looking for information about cutting edge technology . After all, tomorrow's technology leadership will be decided by how many people in which country are knowledgeable about advanced technologies. So here are some startling information from Google Trends, which tracks origins of search requests for popular search terms.

So, to start, lets pick a popular and generic advanced technology: Nanotechnology. There is no doubt that Nanotechnology will be exceedingly important in future. So - which cities have most people looking for information in Nanotechnology? Google trends provides the answer:



Whoa! Look there - of the top ten cities, none are in developed countries, six are in India and all ten are in Asia! May be top cities is not capturing the full information - lets look at the same data by Countries, rather than Cities.


This is definitive now - Developing countries are the one most important in finding out more about cutting edge technologies. US comes 8th in the list - quite troublesome, considering that its current "adversary" Iran is at the 2nd spot. BTW - this is not happening just because developing countries have more people than the developed world. While overall population is surely bigger, the number of people with Internet access is developing world is smaller than that in developed world.

Just for fun, lets take something from manufacturing, say "Lean Manufacturing" - very effective and well known concept. Which countries are looking for information on Lean Manufacturing? Lets also look at something more specific, say "Service Oriented Architecture". Google Trends provides the the following information:



Chart 4: Searching for Service Oriented Architecture: Top Countries (from Google Trends)

The trend is consistent - Developing countries are more inquisitive about technology then developed countries. India seems to be right on top on every technology search. Is this a cause of concern for developed countries? I think so. These kind of things are the leading indicators, the weak signals that portends a structural shift in balance of technology leadership. A few more years of this and we will have a developing world well versed in technology and a developed world ignorant of the same. What makes it even more striking is the fact that *all* advanced education and technology facilities are in developed countries and even then we have this disparity. As developing world improves their education systems and builds technology facilities, this gap will only increase and the trend will get even more momentum.

Some caveats are in order too: Google is mostly used by the English speaking world - that's why China is conspicuously absent from all the charts above. I am quite sure it will be neck-to-neck with India (or even above) if all search engines are taken together.

My take on this: the four billion poor people of the world have finally information at their disposal (Thank You Internet!) and they are voraciously consuming all this information. The knowledge barrier that kept them down has vanished - and they will be down no longer. We are looking at the emergence of a global knowledge base - that will further feed globalization, and the developed countries are looking at strong (and knowledgeable) competition for tomorrow's technology leadership.

Labels: Development, India, Technology, US

   

All these while that I have been rather dormant on this blog, my research has moved into top gear. With my co-authors, I submitted two papers to top journals and had three papers accepted at various research conferences in past three months or so. Here are the details:

The Alignment Between Software Structure and Collaboration Network Structure In Open Source Projects
Submitted to Information Systems Research
Ning Nan, Sanjeev Kumar and Li Wang

Abstract

In this study, we view open source software (OSS) as digital networks of processing elements (e.g., function and classes) and open source development teams as social collaboration networks of developers. By integrating theories and methods from social network, software engineering and organizational behavior studies, we examined the information processing need implied by structure of the digital networks, the information processing capability defined by structure of collaboration networks and the alignment effect between the two on developer productivity. With development data from SourceForge.net, we found that the alignment between the digital and the social networks is not always proper. Particularly, in projects with high software structural interdependency, the current collaboration network structure (larger and less centralized) is associated with lower productivity. Our findings indicate that OSS practitioners still need to deliberately manage collaboration structure of the development teams to enhance productivity. Furthermore, we found that the negative effect of collaboration network size on productivity was diminished in projects with high software structural interdependency but low requirement ambiguity. Therefore, eliciting clear and complete project specifications is a potential remedy to the difficulty of aligning software structure and development team size.

Antecedents and Performance Outcomes of Onshore and Offshore Business Process Outsourcing
Submitted to MIS Quarterly
Jonathan Whitaker, Sunil Mithas, Sanjeev Kumar and M.S. Krishnan

Abstract

Firms are increasingly utilizing onshore and offshore business process outsourcing (BPO) to manage their operations and achieve their strategic objectives. However, there is a lack of understanding of when firms are likely to use BPO, and when firms are likely to see business value from BPO. Building on previous research in transaction cost economics, business process management, strategy and international business, this paper proposes a theoretical framework for adoption and benefits of onshore and offshore BPO, and tests the framework using data on U.S. firms. Our analysis indicates that firms with broader IT application deployment and stronger business process codification are more likely to engage in onshore and offshore BPO. We also find that firms with broader IT application deployment are more likely to experience both cost and quality benefits from BPO.
This study makes two primary contributions to the emerging literature on BPO. First, we draw on previous research in transaction cost economics, business process management, strategy and international business to develop and validate a theoretical model for both the antecedents and performance outcomes of BPO. We extend previous research to understand the relationship between organization characteristics and adoption and benefits of the emerging practice of onshore and offshore BPO. Second, we establish a link between IT application deployment and BPO adoption and performance outcomes. This research highlights and validates the role that IT plays in enabling firms to locate their business processes across vendor and geographic platforms, and in facilitating cost and quality benefits from BPO.


Empirical Analysis of Determinants of Perceived Customer Satisfaction with Open Source Software
Accepted for presentation at the OASIS 2006 Workshop of IFIP Working Group 8.2
Sanjeev Kumar and M.S. Krishnan

Abstract

Open Source Software (“OSS”) has attracted significant research interest but research has focused on the development process (“supply side”) of OSS leaving the “demand-side” of OSS relatively unexplored. Further, extant OSS research is lacking in empirical studies. In this study we fill the gap with an empirical analysis of drivers of perceived customer satisfaction with Linux, the most popular OSS product. We used Ordered Logit technique to analyze a dataset collected through a survey of business-technology professionals. Our results suggest that perceived customer satisfaction with Linux is positively influenced by duration of use and the quality of third party support. We also found a strong relationship between perceived satisfaction with Linux and prevalence of other OSS products in the organization. Further, we found that perceived customer satisfaction with Linux is lower for large firms and higher when the largest distribution of Linux is used. Interestingly, internal IT support capability was found to have no significant effect on perceived customer satisfaction with Linux. Our results contribute to research by verifying traditional customer satisfaction models in an OSS context and also by extending these models to include unique aspects of OSS. On practice side, this research provides directions to the OSS community for achieving higher customer satisfaction.


Do CEO Characteristics Influence the Technology Strategy of a Firm?
Presented at INFORMS Conference on Information Systems and Technology (CIST) 2006

Srinivas Kudaravalli, Sunil Mithas and Sanjeev Kumar

Abstract

This study provides evidence for the link between CEO characteristics and technology strategy. We use IT and R&D spending in firms as evidence of strategic orientation to establish this link. The results of this study show that CEO characteristics account for a significant amount of variation in technology spending even after controlling for other firm level variables. In particular, the CEO’s career experiences in marketing and technical (R&D, Engineering or IT) functions and CEO’s stock holding in the firm have a significant impact on technology spending. We use these results as well as the comparison between IT and R&D spending in our sample of firms to illuminate the effect of top management on technology strategy.

Performance Outcomes of Onshore and Offshore Business Process Outsourcing
Presented at INFORMS Conference on Information Systems and Technology (CIST) 2006
Jonathan Whitaker, Sanjeev Kumar and M.S. Krishnan

Abstract

Firms are increasingly utilizing business process outsourcing (BPO) to manage their operations and achieve their strategic objectives. While researchers have noted the increase in BPO since the 2000 timeframe, there is limited work on the implications of BPO for firms. To study the performance outcomes of BPO, we first develop a theoretical model based on literature from operations management, performance measurement, and vendor management. We then validate our theoretical model by performing an empirical study of data from 49 publicly traded firms in the U.S.
Consistent with previous research in operations management and software development, we find that a firm’s performance measurement focus and strategy dictates whether the firm achieves quality, cost and/or time benefits, and that quality benefits from BPO lead to cost and time benefits. These results suggest that firms should place a strong focus on quality when evaluating processes and vendors for BPO, and that firms should incorporate a robust performance measurement system to ensure that their strategic objectives are achieved.
This study makes two primary contributions. First, we integrate literature from operations management, performance measurement and vendor management to develop a theoretical model for quality, cost and time benefits from BPO. Second, this paper extends the emerging literature on BPO. While recent research has investigated BPO benefits from the analytical and case-based perspectives, our empirical research investigates actual performance across a broader range of firms.

Labels: Conference Presentations, Economics, FLOSS, India, Journal Submissions, Research