SemiPundit
Tuesday, September 30, 2003
Outsourcing has become the love object of American business, an affair that has been going on for quite a few years now. And why not? Why should we do it ourselves if we can get somebody else to do it cheaper?
Fair enough, but there are tradeoffs, the greatest being a loss of control, which can be strategically risky. It is one thing to contract out the office janitorial services to a deserving local business, but yet another to send the entire financial services (or engineering, or whatever) to a foreign country.
The decision to farm out work can be a good one when it is based on a sound understanding of the relative strengths and weaknesses of the business. But when it is done mainly to maximize profits, it can be detrimental to all of the stakeholders involved.
Not too many years ago, I returned to the University of Tennessee to update my management skills (at the time I worked for a Fortune 100 government contractor in the area). I recall a couple of courses in Global Management and in Strategy and Policy in which the subject of foreign (as well as domestic) outsourcing was extensively discussed. While many of the students were very enthusiastic about this practice, there were many of us who felt that it was overused and not necessarily strategically safe.
At that time, the current business fad was the “new economy” exemplified by the “dotcom revolution” (we know how that turned out). So-called “brick and mortar” enterprises were downplayed and marginalized, while the wonders of the Information Age were promoted. We had already lost a great deal of manufacturing capability to foreign suppliers, mainly because profits had been steadily extracted instead of being reinvested in infrastructure improvements (but that’s another story). Now, the emphasis was on cost-cutting to improve profits. The search was on for cheaper places to operate.
Even though a good deal of our heavy industry was given up in favor of overseas production, we still retained a lot of infrastructure. You can’t just jack up a steel mill or automobile plant and haul it off to Asia. However, an entire information operation can be moved with the flip of a few switches. In fact, I have noticed even in our community, a lot of call center and telemarketing operations don't even bother to put up a durable sign-- it's usually a large banner that is tied to the building or taped to the window.
A couple of the old professors tended to agree with us that outsourcing could pose long-term hazards for a company that fails to use it carefully (yes, Virginia, there are some old business professors who have lived in the real world).
They cautioned that we could literally have the plug pulled on us because of geopolitical events, military actions, infrastructure failures, and others. We could also, conversely, find ourselves much too dependent on the foreign operations after having abandoned, alienated, and disinvested in the training and development of many of our current and potential domestic employees.
There is another word of caution as well. A common justification for outsourcing work, either foreign or domestic, is that the project only requires a certain number of workers for a limited period of time. They are let go at the end of the project with minimal impact on regular employees. However, it should be kept in mind that your contract employee today will be your competitor’s contract employee tomorrow-- after having learned a great deal about the inner workings of your business.
Use this tool wisely.
For an interesting article on the subject, CLICK HERE.
The article is a bit lengthy, but informative—especially the part that says: “Indeed, even the Republican Party has turned to outsourcing recently. The Indian magazine Business Standard recently reported that the GOP has hired HCL eServe to set up call centers in two Indian cities to make fundraising calls into the United States.”
Don't be surprised if the Democrats aren't doing the same. I won't.
Monday, September 29, 2003
Senator Charles Schumer (D-NY) appeared briefly on CNN today to discuss the idea of anti-missle defense technology for commercial airliners. He stated that there have been at least 35 known attempts by terrorists to shoot them down since 1978, and that there are an estimated 500,000 of the shoulder-fired rockets dispersed througout the world right now.
According to him, the cost per plane would amount to about one million dollars and, in his opinion, should provide a justifiable margin of safety. He said that the Israelis routinely equip their airliners with such devices. His view is naïve at best.
Fitting the planes with the anti-missile systems would certainly be a boost to companies who manufacture and install them, and the airlines would, of course, pass the cost along to their customers. The problem is that their effectiveness could only be marginal.
Many of the shoulder-fired missles in existence rely on heat-seeking infrared guidance systems that home in on the heat of the jet engines. They do not emit a signal that can be detected to give a warning of an imminent strike. Generally, metallic chaff or some other false target is released so that the missile's sensors will be confused and send it chasing after the new target and away from the plane.
In addition, the altitude of the plane at the time the missile is fired is critical. The greater the distance to the target, the more time there is available for the system to react, if it can detect an incoming missile. An automated system would, of course, be preferable and much faster to respond than would a system that warns the crew to take action against the threat. Clearly, planes that are taking off and landing are at highest risk, since the distance is short and the transit time for a missile is mere seconds. The mall parking lot at the end of the runway could be a killing ground.
Airline travelers must understand that the risk of flying have been compounded many times over. The last thing we need now is a false sense of security.
Oh, for the good old days when we only worried about the engine running out of gas.
Sunday, September 28, 2003
It's a beautiful fall afternoon here in east Tennessee. Right now, at this time and place, it is hard to think anything but good and pleasant thoughts. I, along with, I'm sure, many others feel bittersweet about it.
Sometime this week, perhaps even today, somewhere in America, an unfamiliar car will pull up into the driveway of a home where a real-life American family lives. A pair of soldiers will get out and make their way up the walkway toward the front porch. They've made this walk before, and it never gets any easier.
Inside, a mother, a wife, a daughter, will draw back the curtain and, in the space of a heartbeat, will see and know that someone so special in their lives has made "the ultimate sacrifice" for our country and for freedom in our world. Subsequently, the acknowledgement will be made on the evening news, almost as a footnote by now, before moving on to the sports and weather.
Only time and recorded history will say whether their losses have been for a good cause, and if our leaders have served their honor well.
For today, however, step outside, take in a deep breath of the cool, clean air, look at the natural beauty around you, and know that they will never see a day like this again.
If we support what is truly right, and correct what is morally wrong, then perhaps their children will enjoy many such days.
Saturday, September 27, 2003
One of this morning’s guests on CSPAN’s Washington Journal was Casey Lartigue of the Cato Institute; the subject under discussion was school vouchers.
If the concept is so good, then why isn’t the case to support it more solid and logical? It should make sense to all of us. Instead, Mr. Lartigue, as do many other supporters, offered the same scripted package of lame arguments. Further, he transparently avoided every substantive question posed to him by the call-in audience.
The questions asked of him are also, by now, almost as scripted: What if parents can’t afford the difference between the voucher amount and the tuition at the desired private school? Would the private schools have to accept special-needs students, or those with discipline problems? Will new private schools open up to accommodate the influx of students? Will the students, as with the systems in Cleveland and Minneapolis be chosen by lottery, requiring that a student be both needy and lucky? Would the same support be given to home-schooled children?
I was surprised to learn that the tests used to evaluate the problematic public schools are not required of the private schools. Without such comparison, how can it be known if improvement has occurred?
If a particular public school is determined to be a failed school, it must be a failed school for every student who attends it. How, then, could it be a failure only for those students whose parents can’t afford to, or choose not to send them elsewhere? Therefore, it is fair to ask what would happen to those who are left behind. Is there a plan to come back for them later, and rescue them from a school that is by then in even deeper trouble because financial support has been taken out for vouchers—in essence, getting the last one out moments before the walls cave in?
Imagine, if you will, a school that has been academically condemned. The parents all stream in, gather up their children, get together, and build a new private school across the street. They set up a governing board and hire highly qualified administrators and teachers (non-union, of course), and pay them attractive salaries, since they are competing with other similar new schools for the best teachers. Then they begin educating the children.
It would be extremely important to assume that this new school has wide diversity of culture, religion, affluence, and social and political values. After all, we wouldn’t want it any other way, would we? It should reflect American life.
To me, that seems to be a long and tortuous way around the problem. How could that be easier and more effective than working to improve the system at hand?
In the end, the lack of clear argument on the subject raises concerns that there may be other, less open agendas, such as ridding the schools of the poor and minorities, subsidizing private education for the rich, ultimately abandoning nonsectarian teaching for religiously themed study (in its extreme, think about the Taliban and the Madrassa schools in Afghanistan and Pakistan), as well as an assault on teacher unions.
As for the teacher unions, they shouldn’t get off lightly. They, more than anyone are to blame for keeping teachers in the classrooms who don’t belong there. They need to do their part and enforce the highest standards, therefore justifying their demands for good salaries and working conditions.
Friday, September 26, 2003
Oops! Here's an update on the national do-not-call list ball game.
Another federal judge, this one in Denver, has now set Congress back. Presumably it’s all about the free speech rights of the telemarketers. There seems to be a problem in that charitable organizations would be able to continue calling while those promoting goods and services would not.
For me, the charitables get off on the wrong foot when they interrupt my dinner, or when I switch over in the middle of an important call and find them there.
I might be more convinced by the free speech angle if they would consider letting us call the telemarketers at their homes, as Jerry Seinfeld once suggested.
So far, it’s Judges 2, Congress 1—and the game has hardly gotten under way.
Congress took a decisive step yesterday to get the national do-not-call list back on track. Its implementation on October 1 would have been delayed by a judge’s ruling that the Federal Trade Commission did not have the legal authority to establish the list. One could only guess who the plaintiffs were in this court action. Besides, did it actually take this long for the parties involved to conclude that the FTC was out of bounds? It sure looks like an eleventh-hour effort to me.
The telemarketing industry has fought this every step of the way, claiming that it denies them free speech and will put thousands of their employees out of work. Its spokesmen have delivered a consistent message that the 50 million people (say it slowly: fif-ty mill-ion) who opted for the list just don’t understand the benefits that telemarketing has to offer. Some of them have been unbelievably arrogant, insisting that they have a right to commit what amounts to electronic trespassing. Have you ever known anyone who wanted to get on their lists, and anxiously awaited their calls at dinnertime?
Their employees who do the grunt work deserve plenty of sympathy. After all, they work at jobs that are probably at or near the top of the list of those to get away from as soon as possible. Turnover is extremely high. I’m guessing that the majority of people who take these jobs are out of options, but not out of hope that something better will turn up
In this comic opera, Congress gets to play the good guy, but don’t start applauding yet—the fat lady hasn’t sung.
Thursday, September 25, 2003
Bring back the regular conservatives-- please. I miss the old crowd that advocated the tried and true ways of running the country, even though I often thought they were behind the times.
I miss the conservatives who insisted on restraint in spending and the expansion of government, although I believe there are a lot of things that only government can and should do for its citizens. Without their counterbalance, who knows what the overly generous liberals might have done.
I miss those who cautioned against unnecessary involvement abroad, but were always ready to protect American interests.
The new crowd has a serious problem with credibility; and many of them are unaware of it. They are running on empty when it comes to public trust, but they’ll tell you with a straight face that things are going great. Less is more, bad is good, and black is white. For them, fighting for freedom around the world means giving up much of it at home, and exercising our first amendment right does not include dissent. A large chunk of our population is confused about what patriotism is.
On the spending issue, Republicans are as gifted as Democrats— they differ only in the things they buy. Right now, they have a particular taste for money pits in the Middle East.
At home, the emphasis is on dismantling much of our social and political structure. The long-term goal is the financial starvation of programs that provide safety nets for many of our citizens in need of help. Recently, columnist William Raspberry, among others has suggested that the run-up of huge deficits is purposeful— intended to ultimately force hard choices about which services to cut, since more taxes would be out of the question (and unpopular as well). It is fair to ask, then, will programs on both sides of the aisle be sacrificed equally?
Currently, the new conservatives are focusing attention on the war in Iraq and the very real threat of terrorism. They have called this war the greatest military victory of all time. It takes nothing away from our dedicated military men and women to ask if that is a fair comparison to the great campaigns of World Wars I & II, the Korean War, the horrible tragedy of Vietnam, and most of all our own sustained and brutal Civil War.
For now, we should not decieve ourselves that we are safer from attack by terrorists. They may simply not be inclined to attack, since we and the administration seem to be doing a good enough job on ourselves.
While plunging headlong toward their objectives, Republicans may be in denial about where things are going. They often pride themselves on “not governing by polls”. They should keep in mind, however, that the big poll is coming in November of 2004.
Monday, September 22, 2003
Hopefully George Bush will get a good night’s sleep tonight. He’ll need to be well rested when he addresses, once again, the United Nations tomorrow morning.
It is foolish to expect that he will go contritely to plead for their help in controlling the situation in Iraq—nor should he. However, a little humility might be in order. As surely as he realizes that the outside world will be acutely attentive to his remarks, he must be well aware that his most ardent supporters at home will be paying close attention, too. His administration has promoted, or at least allowed, a groundswell of blind support to develop since well before the decision to go to war. It has its foundation in the idea of patriotism as a loud, raucous, and brash assault on any perceived external threat to our way of life.
If he makes nice with the French, will it be OK to ditch the freedom fries and freedom toast, and stop flushing the toilet with french wine and champagne? How about patching things up with the Germans and the rest of “old Europe”? There are a lot of political checks out there that have to be cashed sooner or later.
He has cultivated a popular image through his words and actions of a frontier marshall who has come into town to get rid of the bad guys and restore order and security to the grateful citizens. Obvious problem, obvious solution. He now has the challenge of making the hard swallow of such compromise go down a little easier for his loyal followers without appearing to backpedal them. These are the people who said that the U.N. was useless and that we should pull out of the organization.
For my money, I believe that he will deliver yet another lecture-- a well-crafted speech on the moral duty of the United Nations to carry out its traditional role of service to help rebuild Iraq. The rhetoric may be toned down, but the message will likely be the same as before—we lead, you follow.
His administration’s greatest failing in this adventure is that of having tunnel vision. For them, the conclusion came first with the argument coming later. The pros were emphasized and the cons all but ignored. Much helpful advice from seasoned political and military leaders was cast aside in favor of what has essentially been a business model for conduct of the war, and a clearly flawed one at that. Burger King was in Baghdad before the bombs had stopped falling.
Now we are at a point where “the situation is in charge”, to paraphrase what was said once of an out-of-control crowd at a Grateful Dead concert. Our technology is of little help now, since we can’t use night vision scopes to see weapons concealed beneath clothing. Smart bombs are useless. The stealth planes have gone home. Almost every defensive move we make now has the potential of alienating more of the Iraqi citizens. In fact, we will never find the elusive “weapons of mass destruction” without searching every home and place of business in the country. Try that for a public relations nightmare in a place where pre-war life was tough, but bearable for most Iraquis. The decision to eventually impose martial law is a real possibility.
If he fails tomorrow, it’s back to the drawing board, as they say. The five-dollar word, quagmire, may be too strong. Perhaps it is only a morass.
Sunday, September 21, 2003
Here’s something I’ll admit that I hadn’t thought about before—computer viruses as analogous to the public health problem of infectious disease.
Recently I was having lunch with a co-worker, a lowly 17 year-old high-school kid. In the course of our conversation the subject of computer viruses came up. He knows a lot more about this stuff than I do, so he caught my attention when he said that people shouldn’t have to pay for and maintain anti-virus software. I asked him to explain why, since I bought it for my computer and keep it as up-to-date as I can.
He explained it like this: Shouldn’t the safeguards all be in place at the point where virus-infected messages enter the internet, as well as at all the points along the way as they travel to their destination? This is a problem that should be approached in the same way as we would for outbreaks of infectious disease, as opposed to the idea of treating individual cases as they occur.
No doubt it would still be appropriate to protect individual computers against infection, but what about all of those out there that are not protected—all of those Typhoid Marys, as it were? They continue to spread viruses all around the internet until they play themselves out, causing immense grief along the way.
I know this may be simplistic, unsophisticated thinking on the issue, but is enough really being done to confine these things as quickly as possible after they occur? After all, when there is an outbreak of disease that threatens the public at large, do health officials provide immunization only to those who can afford it?
Saturday, September 20, 2003
The conflict surrounding federal judiciary appointments is, of course, not new. The White House and Congress have always engaged in debate that reflects the political interests of each of the stakeholders, and that is the way it will be from now on.
The scenario is always the same: The administration contends that the nominee is highly qualified and deserving of the opportunity to serve, demonstrated by an impeccable record of training, experience, and innate wisdom. Opponents in Congress counter with grave concerns that the prospective apointee is either too liberal or too conservative, depending on which way the distinguished legislative body itself is leaning at the time. Many do not survive the running of the gauntlet.
One of the best examples yet was the attempted appointment of Miguel Estrada, which failed through successful maneuvering by the Democratic opposition. He did little to help himself by remaining consistently elusive and uncooperative througout the proceedings. He incredibly denied ever having discussed certain key issues, such as the constitutionality of Roe v. Wade. He was not forthcoming on requests for information about internal communications in his work at the Department of Justice, which could have dispelled concerns about bias. He repeatedly stated that he would “follow the law”. Now, imagine how you would conduct yourself in an interview for your dream job.
The confirmation proceedings are never really balanced. In this case, the administration and Mr. Estrada had the answers to all the questions that were asked. They and Estrada held out and lost. In particular, how could the information on memoranda be considered privileged and essentially private when it bears on his decision processes as an arbiter on matters that affect the public.
Has a judge then failed in a material way if he or she is labeled liberal or conservative? Judges find themselves in a position similar to religious leaders in that they compromise their standing as advocates for the common good when they deviate too far from the neutral. Often it is their own fault if things don’t work out for them.
It is our loss as well.
Friday, September 19, 2003
Dick Grasso has, at last, been forced to step down as head of the New York Stock Exchange. I feel sympathy for him in his plight, but hopefully the $140 million he earned for his unique and gifted leadership should help tide him over until he finds another job. I’m sure that his cohorts on the board will be good for a meal now and then, or an overnight sleepover on the couch until he gets back on his feet financially.
Hang in there, Dick, and keep your chin up. Remember, it’s always darkest before the dawn.
Well, I have to get going now. If I'm late getting to work and don't clock in on time I'll get docked, which could affect my portfolio. See ya!
Friday, September 12, 2003
I recently received a summons for jury duty here in Knox County, Tennessee. This will be the first time for me, and it will be my pleasure to serve (although I may have a change of heart by the time I'm done). Being a citizen of this country is a unique privilege, and such service is one of the ways we pay for the ride. Participation in our civic responsibilities gives us standing when we counsel our children.
During the past few days, I have mentioned my good fortune to acquaintances and co-workers. Surprisingly, I have yet to come across a single person who regards jury service as anything other than inconvenient and disruptive to daily life. I have been offered plenty of advice on how to get out of it. One piece of wisdom in particular is that I should avoid being a registered voter, since that is where they get the names.
But here's what caught my attention: Some of the guys, not long ago, affirmed to me that, if they were younger, they would gladly sign up and go to Iraq or Afghanistan to help defend democracy-- even at risk of their lives. Talk about dichotomy.
I have not challenged any of them on this inconsistency, since they are all really good people who I like very much, and it would serve no good purpose to cause a stir. Sometimes it is better to hold back and give things a chance to work themselves out, although that is often difficult for me to do.
It does, however, remind me of a story someone told me once: The boyfriend, talking on the phone to his girlfriend, said, "I love you more than anything--more than life itself. In fact, I would swim the widest river for you! I would crawl over broken glass for you! I would give my life for you!"
She responded, "That is a such a wonderful thing for you to say! Will you be coming over tonight?"
He replied, "Sure will-- er, that is, if it doesn't rain."
Unfortunately, many issues in our lives can be affected by such a distortion of perspective. We can be drawn to the high profile and glamour of big events and causes, yet be unwilling to invest time and effort when we might do good in more accessable and humble ways.
Get out and vote, serve willingly on a jury when called, and be a good example to our next generation—we owe it to them.
Wednesday, September 03, 2003
When will the Democrats in Congress admit that their voting to let President Bush proceed with the war on Iraq was actually an effort to keep their jobs? If it weren’t such serious business, I’d be amused. Whenever they are backed into a corner by critics who note that they originally supported the war, but are now opposed, they always say that they were misled by the administration.
Perhaps somewhere along the way one of them who has had enough of politics will confess that the real reason many of them voted to go along was the fear of losing the upcoming election. Bush (translated: Rove, et al) had them in a vulnerable position at a time when most Americans (translated: voters) were whipped into a frenzy over what was believed to be an imminent (translated: possible) threat from Iraq. For those Democrats, opposing the war could have radically changed the makeup of Congress, and could have had effects well beyond the war issue.
It shows that Machiavelli’s advice can be appreciated by Democrats as well as by Republicans. To wit: In order to exercise power, one must first acquire power.
Come on, folks, the podium is waiting. Who wants to go first?
