One of the main problems which pop up when Westerners think about outsourcing services to India is the overestimation of costcutting through decreasing the salary costs.
Because of the high level of labour cost in the West-European countries, most Western businessmen almost only take into account the salarycosts when making an offer.
Suppose one has to make an offer for doing an IT-job which will take an estimated 60 hours of labour.
In West-Europe, salary cost will be let's say around 25 euro per hour and typically one will add to that cost some euro's for investments and other costs. Total would come to around 30 euro. So 20% of the salarycost is added, and even for important new projects or tests, this investment/fixed costs are overlooked then.
Now, in low-labourcost countries, the situation is very different and the spontaneous calculation a Western businessman does, is not applicable here.
Let's say that the salarycost for a good employee is here 600 euro cost-to-company. This results in 3.5 euro an hour.
All the other costs however, fixed -, running - and investmentcosts, are at least the same and often a lot more in these countries. Among the reasons for this are: bad or at least unreliable power supply, lower quality in education, complexity of administration, traffic problems ... Often this results in a typical overhead cost of 4-7 euro an hour, depending on the size of the company.
So for overhead costs one must add 200% to the salarycost in case of a small company.
The total cost for an hour approaches as a result 10 euro an hour, which is a multiple of the salary cost.
This is the reason why so many outsourcing trials fail. At one side you have the overestimated costcutting at the Western side. At the other side often you find the underestimation of extra costs by the supplier in terms of reliability, quality, knowledge and overheadcosts in general ...
The same fact is also thriving f.i. Indian companies to grow as quickly as possible, because only companies with a big-enough number of employees can be profitable in India. In prepress this has f.i. led to companies having several thousands of employees.
The only way for a company in India to survive is to grow so that overhead costs decrease ...
Let's hope that the Indian government will work hard to meet companies in reducing all these overhead costs. Providing a reliable infrastructure in terms of energy and transport for employees, and the simplification of all administration, are the topmost requirements.
Monday, June 8, 2009
Monday, May 11, 2009
Through Indian eyes ...
At times one can become really lyrical in India ...
I could shoot these photographs in Periyar, Kerala.
For me it symbolized the main strengths of India on the personal level: strong familyties, not-discussed religious tradition and rituals, pride. All combined with a wonderful optimism and curiosity towards the future.
These strong pillars, in combination with the very lively democracy on the society level, which I witnessed during the last election fever, will make India one of the great nations in the globalised world.
In the everlasting competition with the other tiger in this area - China - some values (like democracy and openess of society) which may have not lead to the same massive and immediate success however will become crucial factors on medium long term.
Read U.S. Media See a Path to India in China's Snub.
India doesn't need to be looked at with foreign eyes.
It's rather the rest of the world that needs to be judged ...
with Indian eyes !
Thursday, April 9, 2009
The War between Religions ...
or ... Why Hinduism is a superior religion.
I am complaining already long time about the number of free days my directors installed in our company.
India is a Hindu-country, so of course the big Hindu-festivals are free days. No problem with that.
But essential to Hinduism is the great openess to other religions. One can find strange mixtures of Hinduism and Christianity or other religions. Hinduism is like a spunge, sucking all religious symbols and "gurus" from other religions.
Apart from Eid, the Muslim festival (= free day) and even God doesn't know what other divine reasons there are for having free days if you are a Hindu, I was very surprised to be informed that even tomorrow, 10th April, is a free day.
I asked: "Why ?"
The obvious answer was: "But Sir, it's Good Friday". Now, being a non-believing-Christian (whatever that may mean), I had forgotten myself about it. And because at the moment we suffer from heavy workload, I was not very amused with the free day that apparently goes with it.
So when we were making a planning for a specific job which we had to send to Belgium, I told an employee that Tuesday morning would be OK, because on Monday there would be a free day in Catholic Belgium.
The Hindu-guy enthusiastly asked ... "Why ?".
I did not even think about giving him a reason !!!!!
I am complaining already long time about the number of free days my directors installed in our company.
India is a Hindu-country, so of course the big Hindu-festivals are free days. No problem with that.
But essential to Hinduism is the great openess to other religions. One can find strange mixtures of Hinduism and Christianity or other religions. Hinduism is like a spunge, sucking all religious symbols and "gurus" from other religions.
Apart from Eid, the Muslim festival (= free day) and even God doesn't know what other divine reasons there are for having free days if you are a Hindu, I was very surprised to be informed that even tomorrow, 10th April, is a free day.
I asked: "Why ?"
The obvious answer was: "But Sir, it's Good Friday". Now, being a non-believing-Christian (whatever that may mean), I had forgotten myself about it. And because at the moment we suffer from heavy workload, I was not very amused with the free day that apparently goes with it.
So when we were making a planning for a specific job which we had to send to Belgium, I told an employee that Tuesday morning would be OK, because on Monday there would be a free day in Catholic Belgium.
The Hindu-guy enthusiastly asked ... "Why ?".
I did not even think about giving him a reason !!!!!
Friday, April 3, 2009
The Ivory Tower
The following can be observed very often when one resides in India and talks with employees here:
- Indian employees having to take care of their family members;
- Indian employees having to move 2000km to get a job which is payed 200$;
- Indian employees having a family back home and only be able to visit them every 3 months;
- Indian employees being pressurized by all means and from all sides;
- Indian employees lacking all support from their State;
- Indian employees having fear: of loosing their jobs, of not fullfilling their many duties, of being impolite, of causing problems, of doing something wrong towards their bosses;
...
The psychology of enormous stress this results in is impossible to understand by Westerners. It's easy talking when you are sitting on your Ivory Tower and only have to judge ... because you know that you are safe up there.
The only thing you have to do is to work your 8 hours while knowing that Law supports your situation, income, illness, family ...
Easy to become a "professional" then ...
We really are arrogant bastards at times!
From my experiences here in India I can notice the enormous motivation of Indian employees and I really belief that India will work his way out of its situation. I see a very dynamic country with a great culture. I also observe Indians struggling to combine new influences with tradition. And they are doing it in their own way ... as it should be.
Have confidence in your work. The progress being made in your society is as quick and professional as can be at this moment.
Cheers to India !
- Indian employees having to take care of their family members;
- Indian employees having to move 2000km to get a job which is payed 200$;
- Indian employees having a family back home and only be able to visit them every 3 months;
- Indian employees being pressurized by all means and from all sides;
- Indian employees lacking all support from their State;
- Indian employees having fear: of loosing their jobs, of not fullfilling their many duties, of being impolite, of causing problems, of doing something wrong towards their bosses;
...
The psychology of enormous stress this results in is impossible to understand by Westerners. It's easy talking when you are sitting on your Ivory Tower and only have to judge ... because you know that you are safe up there.
The only thing you have to do is to work your 8 hours while knowing that Law supports your situation, income, illness, family ...
Easy to become a "professional" then ...
We really are arrogant bastards at times!
From my experiences here in India I can notice the enormous motivation of Indian employees and I really belief that India will work his way out of its situation. I see a very dynamic country with a great culture. I also observe Indians struggling to combine new influences with tradition. And they are doing it in their own way ... as it should be.
Have confidence in your work. The progress being made in your society is as quick and professional as can be at this moment.
Cheers to India !
Wednesday, April 1, 2009
Relationship paradigms ...
Indian salesmen keep surprising me.
Apart from the (unnecessary and annoying) phones I receive every day, some typical phonecalls are always coming after a first contact by mail has been made with Indian companies with whom there never was any other contact before.
Mainly the prompt and immediate expression of their desire to build "a long-term relationship" is felt as hilarious.
I think Indians don't understand really that Europeans are not going into a long-term relationship without having satisfying sex first!
Without having sufficient and satisfying small job results, there will be no co-operation on long term.
Such a phonecall could sound like this:
Ring Ring
KLICK.
With Tony.
— Hi Sir, how are you?
Fine.
— Hi Sir, I’m XXXX from YYYY. We have send you an offer two days back and we did not hear from you yet. And I phone to hear when the project will be assigned to us.
Assigned to you? Well, we don’t even know if that job will be assigned to us. So how can you ask me to tell you when it will be assigned to you?
— OK Sir, but we need to plan our projects in. Could you please tell me when you plan to send that job to us?
My friend, I really cannot say anything about it, but if you really insist I propose second half of 2014. Is that OK with you?
— Yes Sir. But … can’t this be scheduled for 2012? This would definitely work better for the both of us!
I can even give you a good discount by then …
That’s OK for me, you can plan it in.
— Thanks Sir. May I ask you when we can have our meeting then?
What meeting?
— Well Sir, I would like to meet you and discuss a longterm relationship with you.
Oh, euh … but … you know … I’m already married for 30 years.
— Oh really Sir? That is so nice. Do you have kids?
Yes … even 4 of them …
— Very nice Sir. Then when could we see eachother? To start our longterm relationship, Sir.
Why do you think I would be interested in a longterm relationship with your company?
— Oh, but Sir, for the mutual benefits and the embetterment of our companies.
KLICK
Apart from the (unnecessary and annoying) phones I receive every day, some typical phonecalls are always coming after a first contact by mail has been made with Indian companies with whom there never was any other contact before.
Mainly the prompt and immediate expression of their desire to build "a long-term relationship" is felt as hilarious.
I think Indians don't understand really that Europeans are not going into a long-term relationship without having satisfying sex first!
Without having sufficient and satisfying small job results, there will be no co-operation on long term.
Such a phonecall could sound like this:
Ring Ring
KLICK.
With Tony.
— Hi Sir, how are you?
Fine.
— Hi Sir, I’m XXXX from YYYY. We have send you an offer two days back and we did not hear from you yet. And I phone to hear when the project will be assigned to us.
Assigned to you? Well, we don’t even know if that job will be assigned to us. So how can you ask me to tell you when it will be assigned to you?
— OK Sir, but we need to plan our projects in. Could you please tell me when you plan to send that job to us?
My friend, I really cannot say anything about it, but if you really insist I propose second half of 2014. Is that OK with you?
— Yes Sir. But … can’t this be scheduled for 2012? This would definitely work better for the both of us!
I can even give you a good discount by then …
That’s OK for me, you can plan it in.
— Thanks Sir. May I ask you when we can have our meeting then?
What meeting?
— Well Sir, I would like to meet you and discuss a longterm relationship with you.
Oh, euh … but … you know … I’m already married for 30 years.
— Oh really Sir? That is so nice. Do you have kids?
Yes … even 4 of them …
— Very nice Sir. Then when could we see eachother? To start our longterm relationship, Sir.
Why do you think I would be interested in a longterm relationship with your company?
— Oh, but Sir, for the mutual benefits and the embetterment of our companies.
KLICK
Monday, March 30, 2009
No Man's Land
I've seen those big machines come rolling through the quiet pines
Blue suits and bankers with their Volvos and their valentines
Give us this day our daily discount outlet merchandise
Raise up a multiplex and we will make a sacrifice
Now we're gonna get the big business
Now we're gonna get the real thing
Everybody's all excited about it
Who remembers when it all began
Out here in no man's land
Before they passed the master plan
Out here in no man's land
Low supply and high demand
Here in no man's land
There ain't much work out here in our consumer power base
No major industry, just miles and miles of parking space
This morning's paper says our neighbor's in a cocaine bust
Lots more to read about Lolita and suburban lust
Now we're gonna get the whole story
Now we're gonna be in prime time
Everybody's all excited about it
Who remembers when it all began
Out here in no man's land
We've just begun to understand
Out here in no man's land
Low supply and high demand
Here in no man's land
I see these children with their boredom and their vacant stares
God help us all if we're to blame for their unanswered prayers
They roll the sidewalks up at night, this place goes underground
Thanks to the condo kings there's cable now in Zombietown
Now we're gonna get the closed circuit
Now we're gonna get the Top 40
Now we're gonna get the sports franchise
Now we're gonna get the major attractions
Who remembers when it all began
Out here in no man's land
Before the whole world was in our hands
Out here in no man's land
Before the banners and the marching bands
Out here in no man's land
Low supply and high demand
Here in no man's land
http://www.youtube.com/watch?v=up3lfI3wA58
Lyrics and music of a song "No Man's Land" by Billy Joel
on his album "River of Dreams".
Blue suits and bankers with their Volvos and their valentines
Give us this day our daily discount outlet merchandise
Raise up a multiplex and we will make a sacrifice
Now we're gonna get the big business
Now we're gonna get the real thing
Everybody's all excited about it
Who remembers when it all began
Out here in no man's land
Before they passed the master plan
Out here in no man's land
Low supply and high demand
Here in no man's land
There ain't much work out here in our consumer power base
No major industry, just miles and miles of parking space
This morning's paper says our neighbor's in a cocaine bust
Lots more to read about Lolita and suburban lust
Now we're gonna get the whole story
Now we're gonna be in prime time
Everybody's all excited about it
Who remembers when it all began
Out here in no man's land
We've just begun to understand
Out here in no man's land
Low supply and high demand
Here in no man's land
I see these children with their boredom and their vacant stares
God help us all if we're to blame for their unanswered prayers
They roll the sidewalks up at night, this place goes underground
Thanks to the condo kings there's cable now in Zombietown
Now we're gonna get the closed circuit
Now we're gonna get the Top 40
Now we're gonna get the sports franchise
Now we're gonna get the major attractions
Who remembers when it all began
Out here in no man's land
Before the whole world was in our hands
Out here in no man's land
Before the banners and the marching bands
Out here in no man's land
Low supply and high demand
Here in no man's land
http://www.youtube.com/watch?v=up3lfI3wA58
Lyrics and music of a song "No Man's Land" by Billy Joel
on his album "River of Dreams".
Saturday, March 28, 2009
What's happening to India ?
I observe many Indians becoming slaves (again) !
After you threw out the British in 47, in a way so unique that the whole world admires you for it, you let your minds become enslaved by a criticless admiration of your non-real fantasies about Western society, culture and economy.
You threw the British out through your backdoor.
THESE DAYS HOWEVER, YOU ARE EVEN INVITING THEM IN AGAIN THROUGH THE FRONT DOOR: YOUR MIND!
You become so blinded by success, money, material status, power ... and forget completely about the basic teachings of your own culture and religion.
I have many problems convincing employees that:
- the Western societies are not only the big corporates. It is like many Indians even refuse to see reality ... chasing dreams about a reality that does not exist except in their own mind;
- professionality is not so much linked to the height of your paycheck, but more to the incremental development of your own personality and in-depth understanding and know-how about the services/product you are selling;
- the best way to achieve enduring success in your life is to constantly focus on the product/services itself, instead of be blinded by power and status. The reason is that all know-how you build up over the years, is connected to yourself and it will not leave you ever again. However, elbowing yourself a way through everchanging social or commercial structures will only last till the next crisis;
- every personal development takes time. Every "learning how to" is a lifetime challenge. I would expect that especially Indians would subscribe to this thought. However ... I find many Indians nowadays to be so blinded that they completely lost the time-aspect in their lifes. Sometimes I feel that people get confused because they earn already at 28 twice or trice as much as their father at 55;
- the promotions in the so-admired big corporates are reducing you to the status of a donkey chasing the carrot it runs after from year to year.
Ambitious is the young guy or girl focusing on the increase of his paycheck next year or on status-driven signs.
Stupid is the ambitious young guy/girl ONLY focusing on that. Crises come and go every 5-10 years. The lifespan of such stupid ambition is 10 years only !
Only fools are looking at short-term and take their wildest fantasies for reality.
Wise are those developing their own personalities and knowledge in a quiet and focused way, without paying too much attention to the everchanging external conditions.
What is happening to these Indian cultural and religious teachings:
- the importance of time and patience;
- the prevalence of truth above anything else;
- the importance of self-development over time;
- minimizing the importance of your ego.
I hardly find it here !
More and more India is evoluating into some sort of a Disneyland-for-the-few and a No-Mansland-for-the most.
More and more this fantasy is promoted to the younger generations.
However, 99% of a normal population will never reach Disneyland but has to reside in No-Mansland!
Parents should be careful promoting this. I read daily in the newspapers about suicides of young boys and girls (even 12 year old kids !) because of fear that their marks in school are not high enough! Believe me ... I know what I'm talking about ... I have four kids myself. And you can bet I've failed in making the right judgments and choices myself!
This is good for the British perhaps, because they can sell !
I doubt it is good for India !
After you threw out the British in 47, in a way so unique that the whole world admires you for it, you let your minds become enslaved by a criticless admiration of your non-real fantasies about Western society, culture and economy.
You threw the British out through your backdoor.
THESE DAYS HOWEVER, YOU ARE EVEN INVITING THEM IN AGAIN THROUGH THE FRONT DOOR: YOUR MIND!
You become so blinded by success, money, material status, power ... and forget completely about the basic teachings of your own culture and religion.
I have many problems convincing employees that:
- the Western societies are not only the big corporates. It is like many Indians even refuse to see reality ... chasing dreams about a reality that does not exist except in their own mind;
- professionality is not so much linked to the height of your paycheck, but more to the incremental development of your own personality and in-depth understanding and know-how about the services/product you are selling;
- the best way to achieve enduring success in your life is to constantly focus on the product/services itself, instead of be blinded by power and status. The reason is that all know-how you build up over the years, is connected to yourself and it will not leave you ever again. However, elbowing yourself a way through everchanging social or commercial structures will only last till the next crisis;
- every personal development takes time. Every "learning how to" is a lifetime challenge. I would expect that especially Indians would subscribe to this thought. However ... I find many Indians nowadays to be so blinded that they completely lost the time-aspect in their lifes. Sometimes I feel that people get confused because they earn already at 28 twice or trice as much as their father at 55;
- the promotions in the so-admired big corporates are reducing you to the status of a donkey chasing the carrot it runs after from year to year.
Ambitious is the young guy or girl focusing on the increase of his paycheck next year or on status-driven signs.
Stupid is the ambitious young guy/girl ONLY focusing on that. Crises come and go every 5-10 years. The lifespan of such stupid ambition is 10 years only !
Only fools are looking at short-term and take their wildest fantasies for reality.
Wise are those developing their own personalities and knowledge in a quiet and focused way, without paying too much attention to the everchanging external conditions.
What is happening to these Indian cultural and religious teachings:
- the importance of time and patience;
- the prevalence of truth above anything else;
- the importance of self-development over time;
- minimizing the importance of your ego.
I hardly find it here !
More and more India is evoluating into some sort of a Disneyland-for-the-few and a No-Mansland-for-the most.
More and more this fantasy is promoted to the younger generations.
However, 99% of a normal population will never reach Disneyland but has to reside in No-Mansland!
Parents should be careful promoting this. I read daily in the newspapers about suicides of young boys and girls (even 12 year old kids !) because of fear that their marks in school are not high enough! Believe me ... I know what I'm talking about ... I have four kids myself. And you can bet I've failed in making the right judgments and choices myself!
This is good for the British perhaps, because they can sell !
I doubt it is good for India !
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