From the outset, we recognize the need – nay the obligation – for publicly traded operations to maximize shareholder returns and to take all necessary steps to ensure fiscal health. And, as a business, we recognize that tough choices need to be made along the way.
That said, the purpose of this missive is to explore the folly of Harley Davidson’s recent decision to off-shore their Interactive Development and Marketing needs. We intend to explore the struggles large companies have with IT in general and the Interactive disciplines in particular, the trends that have come and gone in their attempts to grapple with these struggles, and finally the underlying reasons we feel are at the core of executive initiatives that seek to remedy these struggles.
This rant is not intended to have political overtones, as the partners here are all across the board in that respect: right, center, and left. We have no particular axe to grind with web professionals in other parts of the world, nor with any culture in particular that is distinct from our own. What we do have a problem with is short-sightedness and mismanagement as we see it, have witnessed it and have lived with it throughout our careers time and again.
Our industry has endured all of the following trends. Any of you who have been in the space for a substantial amount of time are familiar with the various contortions American firms have employed to deal with “the problem” presented by technology and the advent of a web-driven world.
Back in the Hey Day – the advent of the commercialized web – those who embraced it (whether aggressively or reluctantly) were confronted with a choice: either seek hosting and web services from newly-founded and expensive firms or bring the necessary IT and web know-how in-house (also very expensive at the time).
As the web extended its tendrils throughout the globe, the entrance of non-American IT and web geeks into the marketplace occurred. This relatively cheap source of know-how coincided with a proliferation of off-site web hosts and hardware vendors. All of this pushed the cost of maintaining a web presence dramatically downward. Then came the bust… the Internet Bubble burst and the marketplace was flooded with now-unemployed domestic talent, hardware from now defunct web and web-related concerns, and extremely cheap (commoditized) hosting providers.
The secret was out: the web was not a Field of Dreams proposition. Long gone were the “if you build it they will come” fantasies. Reality had set in. The web was not some serum that could revive a poorly-run concern with a great product or service or, for that matter, a well-run concern with a poor product or service.
Companies rightly saw the opportunity to ditch their internal web servers and the strange professionals needed to maintain the same. But, in most cases, there was some need to retain the geeks – there were computers to maintain, networks to troubleshoot, intranets, and emails. Nevertheless, in the main, many an IT pro found himself unemployed.
But what to do about those pesky web developers? Those off Mountain Dew drinking, Cheetos-eating, largely socially inept geeks? Well, it appeared they’d have to be tolerated. At least in the short-term.
But as market forces dictated, and as Human creativity is given to respond to, there was a movement afoot. And that movement was the advent of Ukrainian, Indian, and Russian web developers willing and ready and seemingly capable of fulfilling all of a given corporation’s web dev needs at a fraction of the price. Even if the quality was not quite up to snuff. Even if the cultural issues presented manifold managerial issues. Even if there was a sudden need for web project managers, quasi technical account managers, and eventually interactive operations managers to manage the off-shore fulfillment. None of that was generally considered. Instead, executives did what spreadsheet executives cannot help themselves from doing: they compared hourlies and crunched ratios. It was, in the end, the lure of “reduced costs” and “greener pastures” which overwhelmed sound business logic. Off-shoring became vogue.
But it didn’t happen without some unintended consequences. As mentioned above, there was a sudden need for web project managers, quasi technical account managers, and other intermediaries who were tasked with traffic and ushering foreign-produced products through the pipe. Easier said than done. Even if quality and know-how were equivalent (which they were not and still are not), the necessity of this new class of web professionals meant the savings envisioned in the cost accounting ratios vanished in the real world. And then some. The reasons for this are varied, but rework, re-scoping, and continual babysitting of the production teams, coupled with Cross-Cultural communications and business environments meant more headaches than anyone was willing to see. Atlantis was sinking – and sinking rapidly.
The Ukrainians, Russians, and Indians were not slow to respond to the complaints they were hearing from their American clients (all of the above). In a bid to rectify this and that, they began to introduce their own Project Managers, Account Managers, and Operations Managers. Pricing considered of course.
Yet even this failed to quell the complaints. How does an Indian manager explain power outages in Bangalor? And how does an American Account Manager explain that to their bosses or the end client? It doesn’t translate well. Ditto for the 84 National Holidays in India (perhaps an exaggeration), or the propensity of people to say “yes, we will hit that deadline,” even when it has been repeated like a bad chorus so many times as to be laughable to the American ear?
So now it appears at least one group of foreign competition has figured a way around it. We are talking about well-funded Indians hitting our shores, setting up shop, bringing over entire management teams from India, and managing the client relationship directly on American turf. It is shrewd and smart, in fact. Our hats go off to them as entrepreneurs and problem solvers. And we wish them success on the battlefield.
But know this: these very same companies only hire American Professionals when absolutely necessary. We do know several of these firms and how they operate. Look at their executives. 95% ex-pats from India is the standard. With a token American, if any at all, among them.
So, this rant is apropos. You may accuse us, if you want, of being xenophobic, insensitive, perhaps bigoted. But show us a culture outside of perhaps North Korea more exclusionary and we will buy you a pizza.
It is, alas, a Cultural thing. Your friends and children will not be marrying any of these executives. And if they are employed by these companies, they will find that they are the Other, despite the fact that these sales and management operations are geographically located in Milwaukee, New York City, or Atlanta. It is not in their cultural DNA to be inclusive as it relates to high-paying managerial jobs. Even those they have displaced by their very presence.
On to Harley-Davidson Inc. and the announcement that it “is outsourcing some of its information technology work to Infosys” – an Indian-owned company:
The move means 125 Harley IT workers, including 83 in Milwaukee, will lose their jobs. Harley said they are eligible to apply for new jobs being created at both Infosys and Harley.
Beyond the pure hypocrisy of this move, from a marketing standpoint, the move is incredibly cynical. And in the worst way. Especially in times like these.
What are the motives in play? We can guess. Someone, somewhere has a spreadsheet.
Don’t fret: for the time being Americans can continue to buy and even service their bikes (as mechanics). There’s that. But don’t pretend some allegiance to Milwaukee. And please remove the American Flag. At this rate – and with your continued support – no one will be able to afford your luxury… at least not in the States.
Note for readers: we do not have a horse in this race other than we work in the industry. we are way too small to service a client the size of Harley-Davidson and so we never had a bid or any prospect of work from them. This rant is for posterity-sake and to make known to conscientious Americans of all political persuasions that Harleys may have been born in America, may be assembled in America, even fabricated in America (?), but their web marketing and development is now Indian-built. So, the next time you hear a Harley owner gripe about illegal immigrants picking beans and displacing low-wage American jobs, ask them to calculate how many Middle Class American jobs are going to ex pats living in the States, sending their US Dollars home to be converted into Rupees. And then look to your left and to your right, across the street. See those for sale signs? Dissipating Middle Class? Yeah. Harley-Davidson had a hand in that.
JSONLINE ORIGINAL STORY UPDATED: JSOnline has modified their original story with additional information – making math fuzzier and expectations wonkier. They don’t note the article as being updated, but the new version includes additional reasoning from Harley-Davidson PR. With journalism like that, we are waiting for JS Editorial to embrace all manner of out-sourcing – and opportunities for displaced US Workers – across all of its articles. We hold our breath.
V2.0 Additions are as follow:
In addition, Harley says it is creating 68 information technology management positions and says the employees affected by the change can apply for those positions or other jobs within the company. [so kind -ed]
Only a portion of Harley’s IT department, which has 360 employees, is being outsourced [for now, until we can “demonstrate the veracity of the model – ed], according to the company.
First office in state
Infosys has 16 other locations in the United States, where it hired 1,200 people in 2011. This will be the company’s first Wisconsin location. [why, finally Wisconsin is on the map! -ed]
Harley said it insisted that Infosys open an office in Milwaukee if it wanted the company’s business. [now that is rough and tumble. Always looking out for Milwaukee. How nice. -ed]
Harley decided to outsource some of its IT work because “there certainly are suppliers [none of which are native to Milwaukee -ed] who can do this type of work much better than we can. That’s the reason for it,” spokeswoman Maripat Blankenheim said.
Jobs ending this year
Employees affected by the outsourcing will have their jobs end Oct. 31 or Dec. 31, according to the company. They have been kept informed of the changes for many months, Blankenheim said. [how very reassuring -ed]
Some could be hired in management positions. [real… life… management positions? No way! -ed]
“We told people that everyone’s job would change in some way, shape or form,” Blankenheim said. [well, then. no harm, no foul. -ed]
The Good News is HD probably won’t be outsourcing any of its crack PR staff any time soon. Yes, yes… no one in Milwaukee, the Midwest, or the US for that matter could have fulfilled such complicated and demanding needs. And… bonus! The Indian firm was willing to open a headquarters right here in sleepy ol’ Milwaukee. HD, to their credit, really put them over a barrel with that demand! Added benefit for Infosys is the infomercial insinuated into this story. What benevolent foreign occupiers they must be. And how nice of HD to make room for them in our own quaint back yard.