»Some firms replace offshoring with onshoring.
»SB 929 - A Big Win for the California I.T. Community.
»Are you practicing productivity?
»Decision-Making: Hard-Wired to Err.
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By Peter Pae, Los Angeles Times Staff Writer
October 21, 2007
CORSICANA, TEXAS -- Gary Richardson left this boomtown-gone-bust in 1996 for a computer job in Dallas, the big city 60 miles north.
"I didn't think I would ever come back," Richardson recalled recently, "because there were no jobs like mine here."
Not until this year, when Northrop Grumman Corp. opened an information technology center in town and began recruiting IT specialists and software engineers.
In a twist on offshoring that Northrop has dubbed onshoring, the global defense and technology corporation has been shipping computer work to small-town America, shunning India's Bangalore and Mumbai.
Century City-based Northrop picked Corsicana and six other small cities, including Lebanon, Va., and Helena, Mont., as locations for employees who develop software and troubleshoot technical problems for clients hundreds or thousands of miles away.
It costs Northrop about 40% less to have the work done in Corsicana than in Los Angeles -- savings similar to what would be achieved by sending jobs overseas.
"We're getting very high quality and a dedicated workforce," said Thomas Shelman, president of Northrop's Information Technology Defense Group and creator of the company's onshoring program.
Onshoring, in fact, is becoming trendy.
Some U.S. companies have recently pulled back from India to set up shop in rural areas where access to high-speed broadband connections isn't the problem it was just a few years ago, and where lower real-estate prices and wages are attractive.
Xpanxion, an Atlanta-based software developer, relocated its test operations to Kearney, Neb., from Pune, India, because the time difference was hampering communications.
Computer maker Dell Inc., once at the forefront of outsourcing to foreign countries, opened a technical support center in Twin Falls, Idaho, after customers complained about overseas workers' English-language skills.
Accenture, the world's largest consulting firm, is building a document-processing center on an Umatilla Indian reservation in Oregon.
"We're responding to the tremendous demand among Accenture clients for outsourcing services performed by professionals within the U.S.," Randy Willis, a senior Accenture executive, said when the project was announced last fall.
A few companies based in India are turning outsourcing on its head too. Wipro Technologies, a software maker based in Bangalore, is establishing a design center in Atlanta that could employ about 500 computer programmers.
"The work we're doing requires more and more knowledge of the customers' businesses -- and you want local people to do that," Wipro President P.R. Chandrasekar said in a recent statement.
It's not that offshoring isn't popular in corporate America anymore.
A survey of more than 500 large U.S. companies last year by consulting firm Booz Allen Hamilton found that 60% had shipped some work to other countries. Another firm, Forrester Research, predicted that about 3 million high-tech jobs would head overseas by 2015.
But Dan Sernett, a partner in Los Angeles with Ernst & Young, a professional advisory firm, said many companies were reassessing offshoring. "It's not a slam dunk as it was several years ago," he said. "They're looking for alternatives closer to home."
Northrop would rather stay home, in part because so many of its government contracts are for national security projects. The company hires 5,000 software engineers every year, and putting some of them in its new small-town centers could save at least $15 million annually in payroll costs. The plan is to have 50 such centers around the country.
The starting salary for a software engineer with one year's experience is about $42,000 a year in Corsicana and $56,000 in Los Angeles or McLean, Va., the Washington suburb where Northrop's IT operations are based.
One reason: A three-bedroom home in Corsicana sells for about $125,000, compared with about $700,000 for a similar place in L.A.
For communities such as Corsicana, white-collar jobs are seen as a way to elevate and diversify a local economy that has long been dominated by low-wage, blue-collar work.
"It's not something people are used to seeing around here," said Kevin Culpepper, a systems engineer and native of nearby Ennis, Texas, who returned to the area to manage the new center after having worked in Dallas.
Corsicana's heyday came in 1894 when drillers digging for water accidentally hit black gold and transformed the once-sleepy trading post into the first oil boomtown in Texas, with more millionaires than anywhere else in the state.
Most of the wells have dried up, fast-food restaurants have replaced oil derricks, and the city has struggled to survive with a quarter of its population living in poverty. Its claim to fame these days is fruitcake maker Collin Street Bakery and the Pearce Civil War Museum, which has one of the largest collections of letters written during the conflict.
"We've basically been stagnant," said Lee McCleary, the town's economic development director.
In recent months, locals have begun talking about the possibility of another boom bubbling to the surface -- this time from the nearly empty shopping mall where Northrop has set up its work site.
Enticed by the potential for a new pool of middle-class buyers, developers are talking about building 200 homes -- the kind of large-scale construction that hasn't happened in Corsicana since the oil boom.
"That's significant for us," McCleary said, noting that the presence of Northrop has prompted other high-tech companies to consider opening offices in town. "It's taken us to another level in types of industry we can recruit."
Richardson, who left Corsicana for a job in Dallas, returned in March when he was hired at the center as a software developer.
"I jumped at the chance to come back," he said. In Dallas, his workday commute was 90 minutes each way. In Corsicana, his drive takes about 10 minutes -- through two traffic lights and two stop signs.
Nancy Boone, 58, a homemaker who has raised four children and wants to get back into the workforce, has been taking computer courses online in a special program at a local community college.
The 10-month crash course was created to retrain local residents to work at the Northrop center.
"It's ideal for my situation," Boone said as she logged off her computer on a makeshift desk in her kitchen. "It's what I've always dreamed of."
Copyright 2007, Los Angeles times. Reprinted with permission.
Our very special thank you to Senator Dave Codgill (14th Senate District which includes the areas of Mariposa, Madera, San Joaquin, Fresno, Tuolumne and Stanislaus Counties) who was the sponsor of SB 929.
This is a very important piece of legislation for the I. T. industry in California. With the threshold rate now set at $36.00 for 2008, many more “computer professionals” will be able to work beyond an eight hour day or a forty hour week without their employers being liable for the payment of premium overtime and double-time rates. This is of benefit to both employers who do not want to incur this premium rate liability and I.T. employees who want the freedom to make their own schedules and to work beyond “overtime cut-offs” when needed.
We are particularly pleased by the role SMCI's President, Spencer L. Karpf, played in gaining passage of this important legislation. Mr. Karpf has for many years been active in the Southern California Chapter of the NACCB as the Chair of its Legislative Committee. (The NACCB is a national trade association that serves the I.T. services industry.) In this role as Legislative Chair, Mr. Karpf has worked with his counterpart in the Northern California NACCB Chapter and with Advocation, Inc., the chapters' lobbyist, for the past three years to find a solution to the “computer professional” overtime issue in California.
This year's passage of SB 929 provides a welcome partial solution to the issue of overtime for computer professionals. As such it should help to keep highly compensated, high-tech, I.T. professional jobs in California by making it less expensive for employers to hire those professionals who would otherwise be entitled to premium overtime and double-time pay.
We present the following for those of you who are interested in a more comprehensive understanding of this issue and its history.
In 2000 the California Legislature passed AB 60, which recast wage and hour law in California. One of the major intended results of AB 60 was to change the basis for premium overtime pay from a forty-hour (40) work week to an eight (8) hour workday. An unintended result of AB 60 (so say an intended but hidden result) was that with the passage of AB 60 all employees in California who were paid by the hour became non-exempt and entitled to overtime premium pay.
This had tremendous impact on organizations that compensated professionals (e.g. I.T. professionals, nurses, doctors, etc.) on an hourly basis. Responding to the impact of this legislation on the I.T. consulting industry, Mr. Karpf and the two California Chapters of the NACCB, again working with their lobbyist, Chuck Cole of Advocation, Inc. were able to achieve passage of SB 88 in 2001.
SB 88 carved out an exemption from AB 60 for “computer professionals”. Both this exemption and the definition of “computer professionals” are codified in California Labor Code section 515.5(a). In creating this exemption the California Legislature set an hourly rate of $41.00 as the threshold for determining whether someone defined as a “computer professional” would be entitled to premium overtime pay or would be “exempt” from this entitlement (i.e. compensation below $41.00 / hour creates the entitlement. (Subsequent legislation amended 515.5(a) to create the exemption for certain I.T. “computer professionals” who were compensated on a salaried basis as well.)
This was a pretty good solution at the time and the industry heaved a cumulative sigh of relief when SB 88 went into effect. Unfortunately, a provision of the law tied this $41.00 threshold to the CPI and the threshold rate has steadily climbed until it hit $49.77 effective January 1, 2007 (with the possibility of topping $52.00 in 2008.) Having such a high threshold meant that many developers, analysts and project leads – I.T. professionals traditionally treated as “exempt” employees – became entitled to premium overtime compensation when working over an eight-hour day or a forty-hour week.
It is the problem created by this high threshold rate that was corrected by SB 929.
Important Caveat: The above article is intended to provide the reader with information concerning recent legislation that affects the compensation of I.T. “Computer Professionals” in California. It is not intended to be - nor should it be - construed to be legal advice. Please consult appropriate legal counsel to determine the impact of SB 929 on, as well as the application of Section 515.5(a) to, your organization.
How helpful is your to-do list?
You probably feel pretty organized with that list of your projects and tasks. If your list has grown to multiple pages, however, or you have recopied that list a half-dozen times carrying forward items that have not yet been accomplished, your list has lost usefulness - other than to let you know you aren't getting things done, of course. If a project has been on your list for that long, you need to figure out why you aren't getting it done.
All hail paperless?
Does a paperless office equal an effienct office? It depends. The file free office is a laudable goal but if you still can't find the file you need in your online library, you haven't improved anything. The filing system is the process to examine, not the material used!
I multitask, therefore I am efficient.
Some people do seem to be able to juggle a dozen issues at once with ease, but the ability to multi-task is not a must for efficiency. Others deal capably with one issue at a time and get through projects just as quickly. Working outside your comfort zone only ensures you won't get anything done, which isn't going to make anyone happy. Getting the job done is the bottom line; how you get there is less of an issue.
Delegate for more productivity.
Delegation only works if you are directing jobs to the right person. That person must have the time and tools to do the job….making sure the hand off is complete goes a long way, too. Remember, if your delegate doesn't do the job either, it's likely to end up back in YOUR lap and make YOU look bad. If you find yourself looking for someone to offload a task to, you might want to find out why that item ended up on your list in the first place.
And on a similar note…
You probably feel that if your manager gives you a task, you have to accept it. It takes some guts to believe it, but that's not true. Don't be a yes-man; sometimes the most productive thing to do is say NO. Remember that your manager is there to prioritize and allocate. The fact that they ask you to do a job doesn't necessarily mean you should, and if you take on something you can't complete, everyone will pay the price.
We documented this process to reduce the time and effort spent on it.
Documentation is a super step towards the efficient office. But ask some questions about your documentation before you assume it is going to help. Is it well written and easy to understand? Do people know where to find it? Is it up to date? If your document requires hours of explaining and footnoting to clear up outdated information, the purpose has been soundly defeated.
I spent hours answering my email, so I must have gotten something done!
Email can be a deadly time sink in the office. You can spend all day, feel like your fingers have typed War and Peace, and still not have finished anything. How many emails are left in your inbox? How many problems did you actually solve? The trick to replying to an email is to write it carefully and with this number one goal in mind: I don't want this email back.
How good are you at making decisions? Specifically, how good are you at assessing risk and probability of a particular consequence following a given action? In two thought provoking books, Fooled by Randomness: The Hidden Role of Chance in Life and the Markets and The Black Swan: The Impact of the Highly Improbable, professor, author and Wall Street Trader, Nassim Nicholas Taleb, argues that we (human beings) are wired in such a way that prevents us from accurately assessing risk and predicting outcomes. His compelling arguments have immense implications for decision-making in business (or for that matter, all parts of our lives).Here are a few of the key concepts discussed in his books:
Hindsight Bias: Events Are Less Predictable Than We Think
We innately believe that past events were more predictable than they really were at the time. Applying this concept to historical events, looking back now, we believe that it should have been obvious to individuals living through the Great Depression, the outbreak of WWII, the stock market crash of 1987, the bursting of the tech bubble, that these watershed historical events were going to occur. These historical events appear obvious now because we know the event and its aftermath happened; the near infinite possibilities of associated with the future are not options. Why does this matter? According to Taleb and others, because we believe we are very good at predicting the past, we feel confident we can accurately predict the future. We cannot. Future events are less predictable than we think.
We Don't Know How Much We Don't Know
We believe we know more than we do. It is not that we don't know the answers to key questions. We often don't even know the questions.
We are not Good at Assessing Cause and Effect and We Discount the Potential of the Randomness of Outcomes
If you implement Plan A and something good occurs, did Plan A cause the good outcome? While there may be a cause and effect relationship, it is also possible that the outcome was a random occurrence (i.e. there is no casual connection). Nevertheless, we are wired to draw the casual link. Was your success (or failure) caused by the new compensation plan you put in place or were the action and outcome unrelated? The answer has immense management implications as you evaluate past decisions and reflect on potential future actions.
Confirmation Bias: We Often Draw Conclusions Based on Too Little Information.
We are wired to draw quick conclusions based on insufficient information.
We are Often Concerned about the Wrong Things
Because we don't accurately assess risk, we are often concerned about the wrong things. Researchers have shown that we will elect to insure against the occurrence of a vivid, but less likely peril, than a peril that is abstract, but more likely to occur.
Given How We Are Wired, Now What?
If we are poor at predicting outcomes and assessing risk in an uncertain world, how should we respond? We should embrace the reality of uncertainty and maximize our exposure to new ideas and opportunities. Events such as the NACCB Annual Confer - ence and educational and networking activities in general maximize our exposure to favorable outcomes. Don't merely rely on your “gut” to assess your risks—it is often unreliable. Evaluate your exposure to risks of all kinds based on the facts. In many cases, that requires an outside evaluation from a trusted source. In the case of insurable risks, the NACCB sponsored TechServe insurance has a program to provide a comprehensive evaluation of your property and casualty risks performed by an expert at no cost (see the article by Ed Armstrong, CPCU, ARM on page 14). While we can’t completely overcome how we are “hard wired”, our appreciation of our own limitations is an important first step. Through recognition of our innate biases, we can improve (though not perfect) our decision-making abilities in both our business and personal lives.