Indian Outsourcers Jittery After Obama Win
Senator Barack Obama’s victory in the U.S. presidential election has left India’s
outsourcing industry feeling a little nervous. But there is the expectation in industry
circles that, in the end, economic pragmatism will prevail.
In his speech accepting the Democratic Party’s presidential nomination, Obama said that as
president he would stop giving tax breaks to companies that ship jobs overseas and start
giving them to companies that create U.S. jobs. That could spell trouble for India’s
outsourcers, which get most of their revenue from the U.S.
There are fears that in the current protectionist mood, companies in the U.S. that are
already battling an economic crisis will cut costs by reducing discretionary work sent
offshore to countries such as India, according to an analyst who declined to be quoted.
In congratulating Obama on his victory, India’s National Association of Software and Service
Companies (Nasscom) said it supports expanding the H-1B visa program to allow more skilled
workers from abroad. As it helps to meet skills shortages in the U.S., the H-1B visa program
can help U.S. companies lead the way on innovation and contribute additional jobs and
economic growth in the country, a Nasscom spokeswoman says.
The H-1B visa program has previously come under criticism from some U.S. senators who say it
was being used to displace qualified American workers with foreign employees. But many U.S.
technology companies say the program provides skilled workers that they can’t find easily
The uncertainty in India about the impact of Obama’s presidency on Indian outsourcing was
also reflected by the country’s Finance Minister P. Chidambaram, referring to Obama’s
comments on outsourcing.
“A comment here or a comment there should not bother us,” Chidambaram told reporters. “Once
Obama is in office, he will realize that it is an interconnected world, and countries have
to work together.”
Some analysts hold that the fears may be exaggerated as a U.S. economic recovery will depend
largely on cutting costs, which offshore outsourcing offers.
Obama’s comments about bringing jobs to the U.S. were primarily in the context of
manufacturing jobs, according to Gartner.
“In a specialized field like IT, it is not just a matter of ‘choosing’ to outsource overseas
or not, but the issue of skills availability locally,” says Partha Iyengar, a vice president
There is usually a lot of rhetoric in the run-up to an election, says Siddharth Pai, a
partner at sourcing consultancy firm Technology Partners International. Before pushing
through any protectionist legislation, any president will have to seriously consider that
outsourcing and offshoring offer direct cost-benefits to U.S. companies, and will keep the
country competitive, he adds.
Other Nations Moving Up on U.S. IT Industry
The U.S. has the world’s best environment for a competitive IT industry but other countries
are catching up, according to a study sponsored by the Business Software Alliance (BSA).
The U.S. retains its number-one ranking from a year ago, and it ranks in the top five in all
six categories that the Economist Intelligence Unit used to evaluate countries’ IT
environments. But U.S. broadband infrastructure, including broadband penetration, ranks
behind many countries in Western Europe and East Asia, and the U.S. is facing a shortage of
skilled tech workers, the study said.
U.S. lawmakers must focus on the nation’s IT needs for it to remain the IT innovation
leader, says Robert Holleyman, the BSA’s president and CEO. The U.S. score, based on a
100-point scale, fell between 2007 and 2008, from 77.4 to 74.6.
“A deterioration in U.S. performance is possible should tougher immigration controls have a
negative impact on the pool of IT talent and the skills base,” the study said. “And as the
U.S. and Western European economies endure a downturn, the impacts of a heavier regulatory
touch and slower growth of technology spending cannot be discounted.”
Taiwan, the U.K., Sweden, Denmark and Canada all moved up in the rankings from 2007, with
Taiwan jumping from number six to number two. Japan, ranked second last year, fell to number
12; South Korea fell from third to eighth. The study ranks overall business environment, IT
infrastructure, human capital, legal environment, research and development environment, and
support for IT industry development.
How Snoops Can Snag Your Keystrokes
Computer keystrokes can be snooped from afar by detecting the slight electromagnetic
radiation emitted when a key is pressed, according to new research.
Other security experts have theorized that keyboards were vulnerable to such detection,
wrote Sylvain Pasini and Martin Vuagnoux, both doctorate students with the Security and
Cryptography Laboratory at the Ecole Polytechnique Fédérale de Lausanne in
But Vuagnoux and Pasini believe that theirs is the first set of experiments showing such
spying is feasible. They faulted cost pressures on keyboard manufacturers for not making
keyboards more snoop proof. Keyboards “are not safe to transmit sensitive information,” they
wrote in an entry on the school’s website. “No doubt that our attacks can be significantly
improved since we used relatively inexpensive equipment.”
They tested 11 different wired keyboard models produced between 2001 and 2008, including
some with USB connectors and keyboards embedded in laptops. All were vulnerable to one of
four surveillance methods.
Videos posted show two different experiments, both of which accurately picked up the typed
text. The first shows a white Logitech keyboard with a PS/2 connector that was attached to a
laptop for power. It was monitored with a simple one-meter wire cable about a meter away.
After typing “trust no one” on the keyboard, the same phrase is returned on the researchers’
monitoring equipment. In a second video, a larger antenna picked up keystrokes through an
office wall. Various experiments showed they could monitor keystrokes from as far away as 20
Vuagnoux and Pasini have a paper in peer review detailing the technique. It will be released
soon at an upcoming conference.
GM Bets on Visual Modeling Tech
General Motors (GM), facing possible bankruptcy, has been pursuing efficiencies on the
desktop with visual modeling technology that simulates an IT user’s experience of a software
application before it is deployed. The technology will speed new tool development, cut
project costs and increase adoption of IT applications by allowing internal users to weigh
in during development, according to GM’s Chief Systems and Technology Officer Fred Killeen.
“It’s a great way to avoid errors, figure out costs and behaviors,” says Gartner analyst Jim
Sinur. In the current economic environment, IT is under cost pressures like everyone else.
And GM itself is fighting for its life after losing billions of dollars in 2008. At press
time, the automaker was seeking federal help to stay afloat.Sinur says that new process
technologies allow for the simulation of a process to detect issues early on. Older process
technologies required a complete development cycle before finding the issues. “You also had
to spend a lot more time modeling before you had a chance to try it out,” he says. Visual
models also foster collaboration by expediting the ability for far-flung groups to work
together, says Marc Halpern, research director in manufacturing advisory services for
GM is using visualization software from iRise and a rapid prototyping process developed by
Capgemini. The automaker has already implemented a number of business applications built
from this modeling process for its manufacturing, human resources and dealer-facing systems.
Visual modeling reduced project duration, on average, by 10 percent, according to GM. “We
use it early on in any project where we are doing sessions with business customers about how
they want the applications to behave and look,” says Killeen.
Killeen plans to incorporate IT visual modeling into all of GM’s customer-facing
applications. “The sooner you deploy, the sooner you get business benefits,” he says. “It’s
less about the development costs and more about the speed to completion.”
GM has used visual models before to simulate vehicle design and crash testing. It developed
the Production Operations Execution Test Simulator, a tool that simulates the manufacturing
plant floor operations and vehicle production, which won a 2008 CIO 100 Award.
With Economy in the Red, Green IT Suffers
CIOs have significantly reduced or cut their budgets for green IT initiatives since May,
according to a recent survey of 3,500 CIOs and corporate executives by the Brown-Wilson
Group, a market research company.
In May, 18 percent of respondents reported that they were designating funds to implement
green IT initiatives. As of last month, that number dropped to just seven percent, due in
part to the economic crash.
“What we’re seeing is that tangible funds that were budgeted for green projects in May have
now been reallocated” to other projects, says Doug Brown, managing partner of Brown-Wilson
Group and coauthor of The Black Book of Outsourcing: How to Manage the Changes,
Challenges and Opportunities. “It’s indicative of the economy right now.”
However, the survey found that more than 97 percent of CIOs consider green computing an
important part of their overall IT strategy. And finding green outsourcing partners was
considered a key priority by 26 percent of those surveyed. However, dealing with budget cuts
was the top priority (61 percent).
The report also found that the majority of U.S. IT executives (61 percent) and their U.K.
counterparts (85 percent) believe that outsourcing vendors should be innovating and leading
sustainability efforts on the client’s behalf as a value-add.
Vendors disagree: 95 percent of outsourcing vendors in India believe that sustainability
demands should be at the expense of the customer, as do 23 percent of U.S. vendors and 16
percent of U.K. vendors.
Brown-Wilson also compiled a list of the top green outsourcers. Hewlett-Packard/EDS leads
the list, followed by IBM Global, CSC, Oracle and Atos Origin.
IT Strategy, the Internet and Leadership
Travel today—especially around the holidays—often means cooling your heels in
some airport lounge waiting for a flight. Put that time to good use with one of these recent
books by CIO’s contributors.
Creating the Ultimate Corporate Strategy for Information Technology
By Chris Potts
Technics Publications, 2008, $18.95
The business novel is a popular format for probing the intricacies of leadership and
decision making. Chris Potts, a consultant with Dominic Barrow (who writes occasionally for
CIO), uses it to explore the process through which a CIO learns to create a business
strategy that “exploits IT” to its competitive advantage.
Potts’s hero, 44-year-old Ian Taylor, has a CEO who thinks his IT strategy is
incomprehensible techno-speak. She challenges him to replace it with a single page
describing how the company will use IT to achieve its business goals—or look for work
elsewhere. It’s not easy: Ian’s IT portfolio doesn’t account for investments that others in
the company must make to get the full value from new systems; nor has he mapped IT projects
to high-level business objectives.
Sound familiar? Few CIOs today are wholly business strategists, but the role is changing.
Potts’s narrative spells out how you might change with the times.
The Future of the Internet
And How to Stop It
By Jonathan Zittrain
Yale University Press, 2008, $30
Will cloud computing kill the Internet? That depends, says Jonathan Zittrain, a professor at
Harvard Law School and Oxford University. Zittrain observes that we’re ceding control of our
devices (think iPhone) and software (anything Web 2.0) to vendors. The impulse to do so
stems from the headaches consumers encounter with technology.But locking down devices and
software inhibits innovative tinkering. Vendors can control, for example, whether you may
modify their code or use someone else’s—and change their minds anytime. Plus, they
know everything you do and can pass that information to law enforcement on demand.
Zittrain (a moderator at CIO events), says solutions include ensuring data portability,
privacy protections and new legal frameworks to protect third-party developers. But will we
insist on them? That’s an open question.
Lead By Example
50 Ways Great Leaders Inspire Results
By John Baldoni
Amacom, 2008, $21.95
Whether great leaders are born or made, author and leadership consultant John Baldoni, (a
frequent CIO contributor) outlines how they can inspire results. Packaged as quick
management lessons, this is less a textbook on leadership skills than a source of
inspiration that could offer you a tip about relating to staff or suggest ways you might
At its core, the book focuses on the importance of building up individuals, improving
communication skills, standing up to adversity and putting others before yourself. It
suggests that the better you become at “acting the part,” the more it becomes part of you.