Archive for June, 2006

Indian IT industry can use a lot more selling skills!

Tuesday, June 27th, 2006

Indian IT industry has underestimated the role of good sales people. No wonder, we always seem to have the ability to deliver almost anything but perpetually have our Achilles heel in selling and marketing.

Is it that, with offshore rates being typically one-third of onsite rates, Indian IT companies enjoy a great price advantage and really don’t need good sales people?

As the market gets crowded, as offshore becomes mainstream in the Western world, offshore vendors will realize that their primary competition is going to come not from onsite vendors but from their own offshore brethren. When this happens, everyone will be offering more-or-less the same prices. The 1:3 price advantage will go away, and companies will need to employ much better sales people, who can sell on value and not on cost and who can negotiate with customers for better terms and conditions.

In the current scenario, many IT sales people simply note down what their customers demand, come back to their offices and start doing internal selling to get these demands accepted by their company’s management – regardless of how unreasonable the demands are. Worse, some of them start putting tremendous pressure on their delivery teams to start the delivery process even before getting any form of order confirmation from the customer.

Being in the service business, it is important to meet customer requirements. However, there has to be a limit. Senior management has to take a serious look at whether the contractual commitments make business sense. I am not saying that each deal, or the very first deal, should make business sense. It is fine even if the deal makes business sense only in view of future business potential. Those are calls that senior management can very well take.  

There are many non-IT companies who have solid processes to scrutinize a customer order, make sure it makes business sense and only then begin execution of the order. Even within the IT industry, there are a few examples of companies who follow such processes. But, many IT vendors begin delivery of projects – including sending their staff overseas – even before a firm purchase order is received, let alone waiting for completion of their internal order acceptance process or signing of the contract. The customer concludes that the vendor is very desperate for business and also figures that the vendor has invested too much time, money and effort to withdraw from the deal, however one-sided the terms and conditions. This naturally diminishes the vendor’s ability to negotiate favorable terms and conditions with the customer whenever such negotations do take place.

Many customers in the Western world, especially those companies that are new to offshoring, are not really aware of the significance of their demands. They ask what they are used to asking, without realizing the impact in the offshore context. Many outlandish demands stem from a basic ignorance of how the onsite-offshore model works. For example, I know of one customer that expected its Indian offshore vendor to work during the regular US business hours, which translated to night shift in India. This was not for some BPO or product support activities but for a straight-forward development project with a 18 month delivery period! They were used to working with their existing software vendors (all located inside the US) in this manner, so they really hadn’t thought too much before making their demand. Luckily, the vendor’s sales person was sensible and could quickly make the customer understand that their demand was neither necessary nor practical, at least not at regular offshore rates. The customer agreed for a two hour overlap between the US and Indian working hours to facilitate reviews. This was fine for the vendor, and a win-win situation overall.

Another significant area of improvement is in getting an undertanding of contract terms and conditions. Most IT companies tend to think that negotiating a contract is purely a legal function. This is only partially true. Every contract has business and legal clauses. Business clauses (such as working hours, response times for support calls, etc.) cannot be negotiated by legal people. Sales and delivery people need to resolve these before the contract even goes to the legal department for scrutiny.

I have come across salespersons from some IT companies who have prior working experience in non-IT industries. Being mature and not operating with a one-third price advantage, many of these industries need excellent selling skills and tend to have far more mature selling and contract negotiation processes. Their salespersons can often better position their company, products and services, and negotiate superior terms and conditions. Once they are trained on IT, they can make good sales people in the IT industry.

Going forward, I think Indian IT companies is going to need many more sales persons of that type!

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Selecting the Right Web Hosting Package is Tough!

Tuesday, June 27th, 2006

I had read on the web that selecting the right web hosting package is tough. I agree.

I had already registered a domain with a leading Indian Internet Broadband provider (email me on info@sketharaman.com and I’ll tell you the name of this provider). I had also bought a web hosting package from this provider since I had a prepaid broadband account with this provider and there was money lying in my credit which I wanted to exhaust before it expired at the end of the one month period. My troubles started there!

Despite showing the web hosting charge on my usage statement, I never could get a control panel to manage my website. I didn’t even get the IP address and the ftp username / password details. Telephone calls to their call center resulted in standard “we have informed the concerned department, they will call you back”, which they never did. Nor did I get any replies to my emails.

After 10 days or so, I decided to write-off my investment with this provider and start afresh, but do some thorough research this time.

There is wealth of information at the websites of the various (US-based) web hosting providers. Some of them even offer live chat, not only for their customers but even if you are only a prospective customer … that is, “just lookin’ around”. I could get a lot of clarifications from the live chat, which I couldn’t get from replies to email-tickets.

I strongly recommend that you should select a provider who provides live chat e.g. HostGator (www.hostgator.com). Telephone support is very costly (calling a US number from India can be very expensive), and email support takes time.

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Indian Education System is the Best … for India!

Tuesday, June 27th, 2006

One keeps hearing that the Indian education system is lousy, how good the European system is, blah blah blah.

Actually, the Indian education system is the best there is … for India.

This becomes very clear when one examines a few key parameters from some other education systems.

Let’s take the age of graduation.

In Germany, for example, a person completes university education at an average age of 28 years. Yes, that’s right. While a few people come out at 26, there are several who take till 32 also. Contrast this with the average age of around 20 for a university graduate in India. Even granting that the average university graduate in Germany comes out with a post-graduate degree — their university system does not have the concept of bachelor’s degree, it’s all master’s degree only — and is perhaps more worldly-wise compared to the average Indian university graduate, the fact is, in India, we cannot afford for a person to wait till the age of 26 or 28 to start earning their own income. Neither does the Indian government provide for free university education, whereas university education is free in most European countries including Germany.  

Another parameter is the “standard” of education.

When I started off at IIT Bombay in 1980, there was a spate of so-called “capitation fee” engineering colleges opening up in Bangalore, Mangalore, Manipal, and elsewhere in Karnataka. When they started, it was rumored that many of them had very few faculty members, some of them had absolutely no lab facilitities, and so on. Many people used to wonder what kind of output is going to be produced from such colleges.

But, today, we can be sure that it is such colleges who have contributed largely to the creation of the huge pool of engineering resources that has made Bangalore an IT superpower in the world.

Therefore, in my opinion, there is no need to be overly-critical or defensive about the Indian education system. I think, given the needs of India, our education system is the best there is.

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Welcome to “Talk of Many Things”

Tuesday, June 27th, 2006

“Talk of Many Things” is my personal blog and views expressed are my own.

In “Talk of Many Things”, I shall be writing about some of my favorite topics like sales and marketing, technology, globalization amidst cultural differences, gadgets and gizmos, the English language, music, books, consumer rights, and so on — a very broad spectrum, as the title suggests.

I’ve borrowed the expression “Talk of Many Things” from a favorite poem by Lewis Carroll called “The Walrus and the Carpenter” …

“The time has come,” the Walrus said,
To talk of many things:
Of shoes–and ships–and sealing-wax–
Of cabbages–and kings–
And why the sea is boiling hot–
And whether pigs have wings.”

I hope you enjoy reading Talk of Many Things as much as I enjoy writing it.

Ketharaman Swaminathan