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Tech Creates New Standard: Companies That Don't Sleep
Date: 7/15/98
Author: Matt Krantz
Robert Ferkenhoff flicks off the lights around 6 p.m. every night - yet there are 25 programmers under his wing who are about to begin their day.
Ferkenhoff, technology chief for Sears, Roebuck & Co.'s payment systems unit, is responsible for processing and analyzing corporate credit card data out of offices in suburban Chicago.
But the 25 programmers work halfway around the world, in remote Bangalore, India. They're employees of Information Management Resources Inc. of Clearwater, Fla., a computer consultancy that works closely with Sears to develop custom database programs for large corporate clients.
''By using offshore programmers, we're able to take advantage of the full clock,'' Ferkenhoff said.
Ferkenhoff is one of a growing number of systems executives taking advantage of a new phenomenon called the 24-hour workday. The idea is simple: Work never stops because it is handed off via the Internet between programmers in cities around the world.
Consulting firms such as IMR now offer this option to customers looking to get computer systems installed fast. Also, labor is cheaper overseas, and U.S. technology workers are in short supply. There's plenty of tech help overseas, but workers are unavailable to U.S. firms because of limits on worker visas.
The 24-hour workday also cuts in half the time needed for Sears to get back to customers with special programming requests, Ferkenhoff says.
It often took two days or more for Sears programmers to put together custom reports for such clients as Tandy Corp.'s Radio Shack and Goodyear Tire & Rubber Co. These companies have Sears process billing for their own branded credit cards. Sometimes, these firms want unique reports on such data as buying patterns.
Now customers can have custom reports the next morning. All the heavy coding work is done in Bangalore while Sears customers - and Ferkenhoff - slumber.
Dealing with offshore programming seemed scary to Ferkenhoff at first, he admits. But he changed his mind about a year into the project with IMR.
It's just like building a car, says Satish Sanan, IMR's president and CEO. Design can be done in one country, manufacturing in another and marketing near the customers, he explains.
''Only about 25% of a ystems) project needs to be done near the customer,'' said Sanan, whose IMR has development centers in the U.S., India, Ireland, England and France. Three more sites are being built in Australia, Eastern Europe and the Philippines.
Offshore work also lets pieces of a project be done at the same time, Sanan says. Part of a program can be written in India, then tested in IMR's office in Ireland and OK'd by customers in the U.S. Development time can be cut by 40% or more, Sanan says.
Cambridge Technology Partners, a systems consulting firm based in Cambridge, Mass., also is offering offshore development from its software factories in Ireland and India.
''We've found that this works best for (computer) projects that are clearly defined and don't require much user involvement,'' said Gordon Brooks, Cambridge Technology's vice president of sales and marketing.
But even with all the perks, there are caveats.
Keeping morale up in India is the top chore, Ferkenhoff says. He doesn't want programmers there to feel isolated. Ferkenhoff sends ''office gossip'' e-mails that don't have any assignments in them to let programmers in India feel more in the loop.
Ferkenhoff also travels to India a few times a year to visit with the programmers and explain what the customers do with their work. And the project manager in India is flown to Illinois during the year.
Some consultants, like David Reingold, vice president of Computer Horizons Corp., say there's no need to risk having a far-flung factory. Reingold's firm, based in Mountain Lakes, N.J., recently ended a joint venture with a software factory in India.
''If you need to make changes to a system, do you want programmers halfway around the world?'' Reingold asked.
He prefers ''near shore'' sites, such as Canada. Labor costs are two-thirds those in the U.S., he says. Computer Horizons' Canadian programmers also put in 1,980 hours of work a year, compared with less than 1,600 put in by most U.S. programmers, Reingold says.
And just because a company has offices around the world doesn't mean it can pull off a 24-hour workday, warns Tom Rodenhauser, analyst with Consulting Information Services in Keene, N.H. Computer consulting arms of the Big Five accounting firms are the worst offenders of saying they can do this, he adds.
In order to expand more quickly around the world, these firms' offshore offices needed to be granted a little more autonomy. As a result, they compete more than cooperate with each other, Rodenhauser says.
Before committing to a 24-hour workday, managers should make sure consultants have at least three successful references, says Warren Gallant, chief operating officer of Technology Partners Inc., which helps companies pick consultants.
''A firm with no references would scare me,'' Gallant said. ''There's just too much room for miscommunication.'' |
