Archive for August, 2007

The Right Way to Use Web 2.0

August 28, 2007

Entrepreneurs are eager to use the rapidly emerging social networks and blogging tools to get closer to their customers, but first they need to develop a business strategy, according to members of a high-profile panel in a recent discussion at the MIT Enterprise Forum of the Northwest. Panelists included representatives of Technorati, Facebook, and Wetpaint, who offered the following suggestions for best using Web 2.0 techniques:

• Define the business goals your business can achieve by creating a community. One panelist described how Victoria’s Secret created a Facebook community around “Pink,” a line of sweat suits, before the line was even launched. The company successfully used “a two-way dialogue” to build up advance sales for the new product.

• Don’t automatically give up on old marketing techniques in favor of Web 2.0. One panelist asked the audience how many have bought products based on TV advertising vs. Web advertising, and the TV side won out by a large margin. “People are sometimes too willing to abandon” tried-and-true marketing tools, noted a panelist.

• Go beyond starting a conversation with customers. While getting people talking is a good start, “You have to listen to people when they come” to a blog, noted a panelist. Because people tend to trust their own personal social networks more than any particular company, entrepreneurs must demonstrate their organizations are worthy of trust by applying feedback to their offerings.

Opinions Divided on Linkedin for Entreprenuers

The networking site gets mixed reviews in a discussion on the Harvard Startups listserv.
One entrepreneur reports he is down on LinkedIn because “it depends on all its members responding to messages when one member wants to contact another beyond their immediate network.… In every case where I tried to contact someone two networks away, I found the gatekeepers asleep, so my messages were never passed along.”

Another says he finds it “to be very static. The network’s in place, but I’m not doing anything with it, partly because I’m not sure how to use it well.… I like having other people I respect in mine in the hopes that they will ‘meet’ each other, but that doesn’t seem to be happening either.”

Others say they’ve had the opposite experience. “As your network grows, the number of gatekeepers available to a given contact grows as well. Perhaps I have just been lucky, but the ones I asked to pass on a referral have been prompt and helpful.” The head of a startup says he uses LinkedIn “almost daily. Anything from finding valuable information about a prospect…to finding the next employee, finding contacts in a particular industry, geography, and much more.”

Must Social-Entrepreneurship Ventures Be Nonprofit?

Not necessarily, argue two Spanish researchers in a paper published in the Journal of World Business. Analysis of three success stories—a bank in Bangladesh, a hospital in India, and an educational organization in Egypt—”reveals a common feature: All three creatively combine resources…to address a social problem and thereby alter existing social structures,” write Johanna Mair and Ignasi Marti of IESE Business School at the University of Navarra. The Bangladesh and Egyptian organizations “fit perfectly with a for-profit scheme,” they maintain. “In sum, whether social entrepreneurs choose a nonprofit or a for-profit vehicle often depends on the particular business model and the specific social needs addressed.”

More Early-Stage Businesses Leverage Emerging Economies

Consulting firm saw the percentage of inquiries for global businesses increase to 22% of the total, from 5% in the year-earlier period, according to the firm’s chief executive officer, Bryan Howe. Examples include not just outsourcing computer programming to India and targeting suppliers in Mexico, but developing condominiums in Montenegro for wealthy Russians and selling agricultural technology to Tanzania.

Waqas Ahmed


Outsourcing With Confidence

August 28, 2007

Call it the low-cost labor chase. Fed up with Bangalore’s swiftly rising costs, high turnover, and overstretched infrastructure, companies are looking to send IT operations to other cities. Need some inexpensive tech support? Check out Ho Chi Minh City. Want to develop a security system? Take a look at Bucharest.

But be warned. The labor may be cheap, but the risks can be high. Companies that shift work to developing countries have to be prepared to deal with language and cultural differences, potential political instability, and possibly even the theft of valuable intellectual property. Here’s a guide for going global.


Take a trip Before you sign a contract, spend some time at the offshore outsourcing center, even if it’s on the other side of the world. Many companies send business to centers overseas without ever visiting them.Consider culture Offshore workers may speak your language, but they may not fit the company culture. Want programmers to challenge ideas and propose alternate courses of action at times? You may be better off in Moscow than Bangalore.

Look beyond the bottom line Many outsourcing deals are focused solely on cost but break down in the third year after every last penny has been squeezed out. Instead, consider what you’ll need over a three- to five-year period and choose a vendor capable of innovating or making enhancements when the time comes.

Seek maturity The Software Engineering Institute rates the maturity of business processes of some offshore IT providers. Look for providers with CMMI (capability maturity model integration) Level 5, the highest possible rating.


Forget about time If your employees will need to collaborate with workers in other countries, pick an offshore destination in a time zone that will allow some overlap of the workday.

Give it all away Not all work is appropriate to send offshore. For instance, some organizations that outsource entire help desks are starting to take back pieces that are especially complex.

Expect instant results There’s an illusion that sending IT work offshore will immediately yield high productivity. Success takes time.

Pick the wrong partner Offshore providers often cater to specific countries. In China, for example, some providers have experience serving domestic clients, while others work primarily with U.S. and European companies.

Jump the gun If you’re just beginning to send work offshore, consider a locale where providers have years of experience. Emerging destinations such as China or Vietnam offer lower costs but present bigger challenges.

Waqas Ahmed

Artificial Intelligence Surpassing Human IQ

August 20, 2007

Many specialists in the field of Artificial Intelligence argue when is AI going to surpass human intelligence. Indeed, there is now an AI Checker Playing system that can play a perfect game of checkers, we know that IBM built a Chess playing machine that beat a top human chess player, thus some say that AI has already surpassed human intelligence.

Of course those are just games and a human mind is capable of multiple intelligences, so when will an AI machine be as smart as the World’s Smartest human? Well, this question has been posed and most AI scientists believe it will come around 2020 or 2030. I completely disagree, why you ask?

Well, you know there sure seem to countless pessimists in the ranks of AI niche scientists, in fact it seems that many humans do not achieve what they seek due to this negative feedback. So we really need Artificial Intelligence to design an artificial intelligent system that can surpass all the humans, who are stuck in linear thought convincing themselves that it cannot be done until a prescribed date.

Who can tell us why everyone is convincing everyone else it cannot be done for 2 decades, why? Just because someone says it cannot be done does not mean it is so. When they say such things it only means that they believe they cannot do it in less time and if they believe that, then they are right, but for others to adopt such a line of reasoning simply does not follow any sort of real logic.

Therefore those who cannot think logically, well why are they in the field of AI which combines various human thought processes with machines of logic? Let’s say the upper end human IQ is no more than 210, which really is not that high when you think about it, why couldn’t we develop a system that mimics human thought processes using many combinations of strategies, why is everyone so adamant about their specific methods, which often can only attain a certain level presently.

Having had many original thoughts on the subject that I have not seen in any research papers, it appears to me that we are about a “half a break thru” from cracking the whole thing right now, not in 20 years. It could come at any time, the sooner the better.

The entire subject is interesting really. Those who predict such a long-term point of singularity almost seem to be promoting job security. Twenty years is not good enough, that is unacceptable. We should not promote weakness, laziness, defeatism or attempt to convince ourselves we cannot do something until some far off date when half these niche scientists maybe dead by then? It is time to bring Artificial Intelligent to the forefront now, not in 2-decades. Think on it.

Waqas Ahmed

IP and its value for Pakistan

August 17, 2007

IP? What is IP supposed to be? Is this the IP address we use to access our Internet Service Provider’s FTP servers? Does it mean Inspector Police?!

These are some of the obvious questions the educated lot from almost every industry and business community would ask when requested to describe IP. The dearth of knowledge surrounding this essential economic growth component contributes to its violation and a whole lot of other evils that:

1) Eliminate chances and opportunities for creative entrepreneurship.
2) Eliminate the already diminishing notion of research and development.
3) Keep investors at bay from potential long term investment.
4) Give the world the wrong signals about Pakistani business practice

Our government claims that the growth of the IT and Telecom sector in Pakistan has been due to consistent “economic” reforms. It looks more so to be due to the efforts of the entrepreneurs who have played catch up with other economies of the world, and managed somehow to carve a niche place for themselves in the market, battling every possible business scenario.

The reality is that the “real” efforts have done little to warrant any macro economic stability in a sector that is ripe with potential, but still falls behind in its efforts to attract local as well as foreign investment. The main reason for this is cited to be the absence of any IP rights enforcement, protection, and policing.

Contributing to this is also the national phenomenon of endorsing the “copycat” regime of the Rainbow Centers in Karachi, to the Bara in Peshawar. Consumer attitudes towards these rampant forms of copyrights and IPR infringement and blatant forms of piracy are so friendly to this culture, that it would need major awareness campaigns as well as active involvement of key players in the global market to bring about a change.

What is IP? IP is an acronym for Intellectual Property, which can be anything from a particular manufacturing process to a design for a product launch, a chemical formula or any other intangible proprietary information relating to countries in which it is registered and protected.

The formal definition, according to the World Intellectual Property Organization is creations of the mind – inventions, literary and artistic works, symbols, names, images, and designs used in commerce. IP encompasses but is not limited to proprietary formulas and ideas, inventions (products and processes), industrial designs, and geographic indications of source, as well as literary and artistic works such as novels, films, music, architectural designs and web pages.

Waqas Ahmed

WiMax launching : Pakistan ahead of USA and Europe!

August 17, 2007

It’s not every day or even every month that you can get a news item that a South Asian country is ahead of USA and Europe in something. If it is related to the field of technology then surely you would relish it more. So, naturally, the news that Pakistan is ahead of USA and UK in launching WiMax. WiMax is a super-fast wireless technology related to mobile phone and WiFi users. Motorola is providing Wateen Telecom 802.16e WiMAX solution for nationwide network deployment in Pakistan. This will ensure better service for mobile phone users as well broadband internet users.

Pakistan government and private companies are very aggressively pushing for development in the technology sector and that is why Pakistan is going to launch WiMax technology. Well, Motorola bosses have realized the potential market opportunities for WiMax in South Asia and that is why Motorola is joining hands with the Indian government for the setting up of a WiMax development center in Chennai in which Motorola will invest $100 million. I do not know why international tech companies are yet to realize the opportunity of Bangladesh in wireless network. Bangladesh is one of the most densely populated countries in the world and WiMax will surely help a lot of people here.

Waqas Ahmed

Outsourcing: Beyond Bangalore

August 17, 2007

After 10 months of working with software developers in Bangalore, India, Bill Wood was ready to call it quits. The local engineers would start a project, get a few months’ experience, and then bolt for greener pastures, says the U.S.-based executive. Attrition rose to such a high level that year that Wood’s company had to replace its entire staff, some positions more than once. “It did not work well at all,” recalls Wood, vice-president of engineering at Ping Identity, a maker of Internet security software for corporations. Frustrated, Wood began searching for a partner outside India. He scoured 15 companies in 8 different countries, including Russia, Mexico, Argentina, and Vietnam.

That path is being trod by a lot of executives, eager for new sources of low-cost, high-tech talent outside India. Many are fed up with the outsourcing hub of Bangalore, where salaries for info tech staff are growing at 12% to 14% a year, turnover is increasing, and an influx of workers is straining city resources. Even Indian outsourcing pioneers Tata Consultancy Services, Wipro Technologies, and Infosys Technologies, which have helped foreign companies shift software development and other IT operations to Bangalore, are starting to expand into smaller Indian cities, as well as China. “Overall, in terms of productivity and quality of life, beyond Bangalore is better,” says Wipro Chief Information Officer Laxman Badiga. “Bangalore is getting more crowded, and the real infrastructure is getting stretched.”

So companies are setting their sights on a slew of emerging hot spots for IT outsourcing. Need a multilingual workforce adept at developing security systems and testing software? Buna ziua, Bucharest. Want low-cost Linux developers? Bienvenidos a Buenos Aires, where many companies adopted open-source software after the devaluation of the peso in 2002 made licenses from abroad prohibitively expensive. Other cities on the list include Moscow and St. Petersburg in Russia and Prague in the Czech Republic, according to consulting firm neoIT. Other hot spots include Mexico City, São Paulo, and Santiago in Latin America; and within Asia, Dalian, China, and Ho Chi Minh City, Vietnam.

The Search for Lower Costs

Make no mistake: India remains an IT outsourcing powerhouse, with $17.7 billion in software and IT services exports in 2005, compared with $3.6 billion for China and $1 billion for Russia, according to trade organizations in each country. And India’s outsourcing industry is still growing at a faster pace than that of Russia and other wannabe Bangalores.

Yet many companies can’t resist the lure of cheaper labor. “Ninety percent of all outsourcing deals in the market today have been structured around cost improvement only,” says Linda Cohen, vice-president of sourcing research at consulting firm Gartner (IT). By the third year of an outsourcing deal, after all the costs have been squeezed out, companies get antsy to find a new locale with an even lower overhead.

But moving IT operations into developing countries like Vietnam or China can also pose big risks, such as insurmountable language and cultural differences, geopolitical instability, and the risk of stolen intellectual property. “You keep following the money, but how often are you going to move people around?” asks Cohen. Even the routine day-to-day management of an offshore team can require significant project management expertise. “If you don’t have experience and don’t do it well, it can negate savings,” says Barry Rubenstein, program manager of application outsourcing and offshore services at IDC.

Mix of Outsourcing Locations

Plenty of providers are ready to help clients overcome those obstacles. Companies including Accenture, EDS, IBM Global Services , and Genpact are building global networks, comprised of operations in a variety of cities, aimed at giving customers a mix of worker skills and labor costs. “We tailor where you want your people, based on the premium you want to pay,” says Charlie Feld, executive vice-president of portfolio development at EDS.

Continental Airlines, for instance, uses an EDS center in India for development of some software that runs on mainframes, but the airline handles some finance work through an EDS office in Brazil. Accenture uses its global network of facilities in a similar fashion. “Today we are about 35% in high-cost locations, such as the U.S. and Britain; 20% in medium-cost locations like Spain, Ireland, and Canada; and about 45% in low-cost locations like the Philippines, India, China, and Eastern Europe,” says Jimmy Harris, global managing director of infrastructure outsourcing at Accenture.

When Bob Gett, CEO of Boston systems integration firm Optaros, decided to hire an overseas outfit to handle development of some applications or programs designed to perform specific tasks, he scouted out six or seven countries in Eastern Europe. He finally settled on Akela, an outsourcing company in Bucharest, Romania. Gett found Romania attractive because of its good education system, multilingual population, and abundance of technical talent.

Benefiting from Geography

The move reduces costs by 60% to 75%, Gett figures, letting Optaros offer competitive pricing to customers. “We’re going to where the most cost-effective talent is in the world, but it has to be feasible,” he says. “It can’t be where there are economic, time zone, or language barriers.” In fact, Gett needs his application developers to interact directly with customers in the U.S. and Western Europe, so he appreciates that Akela workers speak English and French and are closer to the Optaros Geneva office than workers in India would be.

Companies such as Genpact, Accenture, Wipro, and Infosys are hoping Romania’s expected admission to the European Union will make it even more appealing for companies from Western Europe to do business there.
Dalian, a seaport in northeast China, is also turning out to be an ideal center for outsourcing, in large part because of its geography and history. Located in the northeast corner of China, Dalian is close to both Korea and Japan and was, in the first half of the 20th century, occupied by Japan. So there’s still a labor pool of Japanese speakers.

Intellectual Property Issues

Dalian’s labor costs are lower than in Japan, so it’s become a center for application development for Japanese companies. U.S. firms outsource some technology work there as well. General Electric and Nissan outsource work to Genpact’s operations in Dalian. Genpact was the first outsourcing firm to locate in the city in June, 2000. Accenture and IBM Global Services have since moved in.

There are certainly challenges for companies that wish to outsource to China, including the potential theft of intellectual property. To combat this, Infosys Technologies has disabled USB drives on PCs to limit the ability of workers to take data out of the office. “We’ve taken extraordinary efforts to protect the intellectual property of our clients,” says Stephen Pratt, CEO Infosys Consulting, a subsidiary of Infosys Technologies, which has operations in Shanghai.

For U.S. companies that need to collaborate closely with offshore workers, South America is an attractive option because the time zones are similar and the infrastructure is strong.

Infrastructure Counts

Brazil boasts a mature software and IT industry, and the nation’s providers such as Politec, Stefanini IT, and ActMinds are keen to do more offshore business. Stefanini, which has served clients such as Whirlpool and Johnson & Johnson, derives about 20% of its revenue from international operations, but the company would like to expand that to 50% by 2008.

Total Brazilian software and IT services revenue is $17.16 billion, while revenue from offshore software development is a much smaller $205.3 million, according to Brazil IT, an association of Brazilian IT services providers. “If we can get a client interested enough that they will go to Brazil, they will do business with us,” says Eric Olsson, principal consultant with Politec, which has done work for clients such as insurer MetLife, software colossus Microsoft, and SAIC, a provider of a host of scientific and engineering services. Companies are drawn to Brazil’s modern infrastructure, with airports and highways that are first world, says Olsson, whose company is the largest IT services provider in Brazil.

Good roads and the developers who drive on them don’t come cheap, though. A software engineer in Brazil costs $20 to $35 per hour. That’s lower than in the U.S. but pricier than in India.

Threat to U.S. Workers

And while a technically skilled global labor force is a boon to companies, the picture isn’t so rosy for U.S. workers. Instead of competing with just India, now U.S. IT workers will need to go up against workers all over the world. In 2005, about 24% of North American companies used offshore providers to meet some of their software needs, according to Forrester Research. Over the next five years, spending on offshore IT services is set to increase at a compound annual growth rate of 18%, according to IDC.

The effect in the U.S. is that starting salaries in the engineering field—when adjusted for inflation—have stayed constant or decreased in the past five years or so, says Vivek Wadhwa, executive in residence at Duke University. “It doesn’t make much sense to get into programming anymore,” says Wadhwa, who worries that a lack of talent in certain industries, such as telecom, along with the outsourcing of research and development will erode U.S. competitiveness. But U.S. companies say that hiring programmers in India, who might make a fifth of what programmers do in the U.S., allows the companies to survive in a globally competitive economy.

After traveling the world, Ping Identity’s Wood finally settled on Luxoft, an outsourcing provider based in Moscow that has served high-profile clients such as Boeing, Citigroup’s Citibank, and Dell. While programmers are typically 20% more expensive in Moscow than in Bangalore, Wood found that there wasn’t much difference in the hourly rate for the kind of work that he needed. “Indian companies are cheap until you ask for people with experience, and we wanted workers with eight years or more of experience,” he says.

Russia’s high-end software developers are drawing plenty of offshore business to Moscow and St. Petersburg, which together account for about 60% of the country’s software development exports. Those exports have grown from $352 million in 2002 to nearly $1 billion in 2005, according to RUSSOFT, an association of software development firms from Russia, Belarus, and Ukraine. Providers EPAM and Luxoft are starting to gain some international recognition as well, both making Brown & Wilson’s Top 50 Best Managed Global Outsourcing Vendors for the first time in 2006.

For Wood, the biggest benefit of working with Luxoft is a cultural one. “One of the reasons we’re in Russia is that we found a common value set. Their work ethic is strong, and these people are very outspoken,” says Wood. He says engineers in Moscow have no trouble proposing a different course of action when necessary. He says he found workers in Bangalore to be reticent. And since Russian developers stick around longer—turnover is now in the low teens—Wood has plenty of time to take those opinions to heart.

by Rachael King of
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Waqas Ahmed