Wrapping up China and on to India – The Kirkpatrick Report
Thursday, August 11, 2011
Wrapping up China
New country, new time zone, my body clock is now thoroughly confused, but other than that all continues to go well.
Clearly, my first introduction to mainland China was a very positive experience from a business and personal perspective. The urban infrastructure is excellent, the people are great to work with, although English language is much more of a challenge there than in India where the country has a hundred-year head start.
When China’s next generation hits the work force, because English is now a core subject at all levels of education, it will be a business outsourcing force to be reckoned with. Unlike India, where the population often views the government as more of an obstacle than a resource, in China the government clearly gets things done. The mixture of central government and the new capitalism certainly has some questionable traits, but from my perspective it also has many benefits and the Chinese people seem to appreciate this.
One aspect of China, however, remains troubling; clearly, the central government has a choke-hold on ALL electronic communications.
As a matter of course, I have assumed that every message coming and going to my computer and phones has been monitored at some level (my buddy, Jim Satterfield, repeatedly threatened to send me an email while in China with the subject “How’s your CIA work going?”.
I’m assuming it blocks other sites as well, but I did not research. China had previously blocked Google, but is now back in a China version.
So, clearly, the Chinese central government is keeping tight reins on what comes and goes within the electronic ether.
So, goodbye for now to China and on to India.
Bengaluru (Bangalore), India
What we have traditionally known as Bangalore is now officially Bengaluru (the Indians are recovering traditional city names, post-English occupation).
Bengaluru is widely known as the epicenter of the offshore business processing explosion. With a rapidly growing population of about 10 million, and like other growing Indian cities, it is struggling to keep pace with explosive growth from an infrastructure perspective.
Insane Traffic? True
Heard the rumors about insane traffic in India? Well, let me tell you that they are absolutely true. If any of you have ever been to Disney World and ridden “Toad’s Wild Ride,” that’s a mild introduction to traffic in India and Bengaluru.
I am in a car right now (forget about driving yourself here) on the way to a vendor assessment. The distance is probably less than five miles but I have been in the car for over an hour, and it’s not during the morning commute.
Indians drive on the left – except when they decide to drive on the right or maybe just down the median or sidewalk if that has some spare room. Horns are constant, but not expressing frustration, but rather letting the masses know where you are in the mess.
The first trips to India are terrifying while in the car, but after many trips I now hardly blink when I see a large bus headed, head-on, for my Toyota – somehow it usually just works out.
One of my business contacts said yesterday that India is great proof that there is a God as evidenced when somehow he gets safely home every day! By the way, I just passed a motorcycle (but not a large one by U.S. standards) with a family of five on it. My all time record is a family of six.
Okay, so you probably get the point about traffic. New roads are being constructed and even a metro elevated/subway system. But by the time these projects are finished, they are already outdated due to the rapid growth in people and traffic. Tata automobile now sells a very inexpensive family auto that has opened up car ownership to millions of Indians who could only afford motorbikes and scooters previously. Great…
Electricity is a growing issue with regular outages. Most businesses here rely on backup generators to ensure continuity. Purified water is still an issue and most of the middle-class and above locals only drink from personally filtered sources or bottles.
My first vendor assessment here yesterday went very well, and their security and business continuity plans equaled or even exceeded some of the best I have seen in the U.S. They clearly understand the U.S. concern regarding information security, and in an increasingly competitive market are making sure that security does not trip them up.
Cost of Living
Cost of living in Bengaluru is rapidly rising, and thus the influx of business process workers is apparently stalling out somewhat. Thus, the companies are finding themselves in position to compete for labor.
Also, they are looking at “tier two and three” cities to keep costs down and provide fresh labor pools. This may be challenging for westerners who need to regularly visit their providers here as the lower-tier cities will most certainly not provide the comfort levels found in the larger cities.
Competition for Talent
Whereas Indian companies had been used to applicants flooding to them, now they are faced with the problem of employee turnover as companies vie for a limited workforce population. Thus, they are spending significantly more time and resources in courting applicants AND current employees to make them feel wanted, important, with growth opportunities, etc.
The BPO center that I visited yesterday actually had workspaces equivalent to those in the U.S. (based on size, comfort, etc.). Most companies provide a cafeteria where employees can eat breakfast, lunch and dinner for free (servicing the normal 7×24 operations). This same company recently relocated within Bangalore and now provides paid vans for its employees to commute. So, it’s no big surprise that costs are trending upwards in the big cities.
Indian workers are generally loyal and “heads-down” workers. They are very, very good at well documented, repetitive tasks and will do the same thing a million times with excellent quality. Challenges arise, however, when Indian workers are asked to perform tasks requiring more intuitive decisions. They are willing, but their intuition foundation is light years different from ours. I see many outsourcing projects fail when the U.S. companies fail to understand this and are disappointed when they expect their Indian providers to “figure out” what they really wanted.
More from India in a day or so.