Aparita

Toronto Star, [02/24/2003]

It began as a way to harness cheap overseas labour And it’s evolved — can an out-sourced CEO be far off?

Special to the Star

NEW DELHI-Night has coated New Delhi in its pitch black blanket, but the day has just begun for Subir Arora. Dressed casually in jeans and a shirt, Arora drives about an hour from his house in Kalkaji to his office in Noida. He works as a sales manager at FCS Solutions Ltd, the Indian arm of an American recruitment agency, managing a team of employees who call up American firms to fulfill their staffing needs for IT consultants.

“I work according to EST (Eastern Standard Time) because most of our clients are located in the east coast,” says the 26-year-old Arora, stifling a yawn as he whizzes down the wide bridge across the river Yamuna that separates New Delhi from the satellite town Noida, a growing hub for offshore development work. “Here, in Delhi, my hours are from 7:30 p.m. to 4:30 a.m and 6:30 p.m. to 3:30 a.m. during the summers.”

The hours are the only downside for Arora since it means most of his social activities have to be accommodated during Saturday. His position and salary more than make up for that small inconvenience. While his salary of 300,000 rupees ($10,000 Canadian) may seem peanuts compared to North American salaries, it affords Arora a decent lifestyle in India besides all the perks of the jobs.

“This is the biggest thing happening right now,” he says enthusiastically. “And it can only grow from here. I joined this work because of the future prospects of India for becoming a hub for business process outsourcing and IT enabled services.”

Business Process Outsourcing, or BPO. IT Enabled Services, or IT-eS.

These are magic phrases that provide people such as Arora the opportunity to join multitudes of upwardly mobile young Indians who do back-end work for North American companies. Similar set ups can be seen in China, Philippines, Costa Rica or Hungary.

In simpler terms BPO and IT-eS could be explained as long-term contracting out of non-core and core business processes to an outside provider.

So, a company somewhere in Manila might do the accounting of a firm in New York. Engineers sitting in Bangalore are doing research and development for international tech giants such as Texas Instruments, Intel and Hewlett Packard. And an architect in Budapest might draw inspiration from his European environs to design a house for you in Toronto.

Welcome to the latest development in globalization.

And forget about the cheap shoes made in India, cheap electronics made in China or even software coding and credit card processing done in Asia. Now, thanks to the Internet and the bridging of the digital divide, all kinds of knowledge based work can be done anywhere in the world.

Supporters of this phenomenon call it the next step towards building a global economy. In fact, Mohanbir Sawhney predicts that it won’t be too long before global corporations as we know them today will change the way they function.

“The notion of a parent company with subsidiaries around the globe that are replicas of the parent company has started to become an antiquated notion,” says Sawhney in a telephone interview from Illinois, home to Kellogg School of Management where Sawhney is the McCormick Tribune professor of e-commerce and technology.

“What you’ll probably see in the near future is the rise of what I call a differentiated network company. That is, global companies organized in terms of capability clusters distributed around the world. So a company may have its R&D headquarters in Israel, call centres and customer support centers and accounting done in India, and human resources done somewhere else. The Australian subsidiary could do e-governance, because Australia has done a lot in terms of automating governance. And, of course, marketing and sales around the world.”

It’s a subject Sawhney elaborated upon at an event held by TiE, www.tie.org, at the Royal Bank Conference Centre in Toronto last week.

Sawhney was the keynote speaker of the three-member panel. The other two speakers were Richard Garnick, chief executive of Americas for Wipro Technologies and Rakesh Puri, vice president client management of EXL Service, one of the largest BPO providers in India.

TiE is a not-for-profit organization created in 1992 in the Silicon Valley for the advancement of entrepreneurship. Currently TiE has 22 chapters across the globe and about 5,000 members.
Citing the example of GE Capital International Services (GECIS), Sawhney posits the future dynamics of the outlocation of BPOs.

“The GECIS Indian operation is today providing 450 processes to 15 of the top 20 GE operating companies worldwide,” says Sawhney. “And recently, GECIS India hired Japanese people in northern China to serve Japanese markets. So now the subsidiaries are trading among each other. India can provide customer service to Japan, in turn buying R&D from them.”

Outsourcing of work by companies is already happening, he adds. Handspring, for example, a company that makes PDAs (personal digital assistant), doesn’t manufacture, design, ship or support their products. It’s all done through a network of partner companies and Handspring manages the network.

“It’s like a business web. The metaphor I like to use (for outsourcing) is that of a symphony orchestra,” says Sawhney. “The conductor doesn’t sing or play an instrument, he just waves a wand. But he takes the applause at the end.”

In fact, the prospects are so lucrative that talking to Business Week magazine on the `new global job shift,’ Forrester Research Inc., analyst John McCarthy predicts at least 3.3 million white-collar jobs and $136 billion in wages will shift from the U.S. to low-cost countries by 2015.

Europe is joining the trend, too. British banks like HSBC Securities Inc. have huge back offices in China and India; French companies are using call centres in Mauritius; and German multinationals from Siemens to roller-bearings maker INA-Schaeffler are hiring in Russia, the Baltics, and Eastern Europe.

Therein, lies the rub.

Critics of this latest wave of globalization say outlocation and outsourcing leads to corporate downsizing. Already, New Jersey legislators are pushing a bill that would block the state from outsourcing public jobs overseas. At Boeing Co., an anxious union is trying to ward off more job shifts to the aircraft maker’s new 350-person R&D center in Moscow, according to Business Week.

Paying a highly-skilled software developer in a developing country substantially less than what a North American developer might earn might suggest exploitation. And creating markets in the developing world smells like neo-imperialism.

There will be a painful transition period, Sawhney agrees. But companies don’t really have a choice in face of a competitive imperative to cut costs, he adds.

“I’ve been talking to Boeing,” says Sawhney. “They are thinking about outsourcing manufacturing to other parts of the world and getting cheap aerospace engineers from Russia but the union is up in arms about it. But, even if Boeing doesn’t do it, you think Airbus won’t?”

Instead of raising such alarmist notions of disappearing jobs, American politicians and industry experts should be devoting their time, energy and money into the American education system, says Sawhney.

“Outsourcing and outlocation is going to happen, like it or not,” he says. “But you still have time. (Policy makers) in the States should be thinking ahead, building up a quality human capital. They should be figuring out ways to re-skill people.”

The notion of exploitation of skilled labour in developing countries doesn’t arise when you compare costs of living.

“The engineer is India, who might be earning $20 an hour in India compared to $100 in the States, is saying thank you very much,” says Sawhney. “He earns a decent salary at a lower cost of living and is enjoying a better lifestyle with his family and community over there.”

Currently, only a small percentage of work from the West is being outsourced to developing countries. Outsourcing experts say it will take about another decade until there is a significant change in that equation.

The real issue, then, appears will globalization make the world a better place? Whether the standards of living between the developed and developing countries will eventually balance out?

That, in turn, depends on whether the shift works to ameliorate the conditions of those who live below the poverty line in countries such as India, Philippines or Costa Rica - the common man who doesn’t have access to knowledge based jobs.

For the moment, however, recent university graduates such as Arora are happy to be the beneficiaries of this latest trend of globalization.

“A few years ago, there were limited job opportunities even if you were highly qualified,” he says. “Now, at least you have a future to look forward to.”

Toronto Star

…and you begin to get an idea of the growing status of Indian Institute of Technology. Its graduates are building companies and shaping technology everywhere.

Special to the Star

Call them a new wave of Indian gurus. Nope, not the spiritual kinds who propose to tell you how to attain nirvana in 10 easy steps.

They are the IIT-ians, tech gurus whose mantras involve complex algorithms, computer networking and bridging the digital divide.

Graduates from the Indian Institute of Technology (IIT), one of India’s most prestigious, male-dominated academic institutes, IIT-ians have also been called India’s hottest export item.

These IIT alumni are some of the most successful and influential immigrants in North America, who have either made their way to top management positions in various corporations, started up multi-million dollar companies or joined senior faculty positions in prestigious North American schools.

Some of the more famous IIT alumni in the United States include tech guru Vinod Khosla, co-founder of Sun Microsystems (nasdaq SUNW) and partner with heavyweight venture capital firm Kleiner Perkins Caufield & Byers, Victor Menezes, a senior vice-chairman at Citigroup, Rajat Gupta, managing director of global consultancy firm McKinsey and Co. and Desh Deshpande, founder of Sycamore Networks.

In Canada, heavyweights in the academia and industry with IIT background include Mohan Mathur, vice-president, training support and services division at Ontario Power Generation and former dean, faculty of engineering science at the University of Western Ontario, and the media shy Prem Watsa, chairman and CEO of Fairfax Financial Holdings Limited.

Earlier this year, when the 50th anniversary of the institute gave occasion for a large celebration in Silicon Valley, which included Microsoft chairman Bill Gates as keynote speaker amongst other dignitaries, 60 Minutes ran a segment on IIT.

The program called the institute, currently comprised of seven universities all over India, the “most important university you have never heard of … Put Harvard, MIT and Princeton together, and you begin to get an idea of the status of this school in India.”

IIT graduates have had a large impact on the American technology revolution and Fortune 500 headhunters and American companies love kids from IIT, reported 60 Minutes.

The achievements of the IIT aren’t far from the vision that laid the foundation of the institution.

After winning freedom from colonial rule in 1947, the first prime minister of India, Pandit Jawaharlal Nehru, envisioned a modern India which included technocrats who could build state-sponsored power plants, dams, bridges and other such infrastructure for the newly independent country.

Following Nehru’s vision, the 22-member Sarkar committee, headed by N. R. Sarkar, recommended the establishment of four higher technical institutions in the four corners of India, along the lines of the Massachusetts Institute of Technology in the States, with several secondary institutions affiliated to it. Such institutes would not only produce graduates at par with top institutions abroad, but would also be engaged in research, and produce research workers and technical teachers.

With funds from UNESCO and international aid in terms of academics and exchange programs from the former Soviet Union, the U.K., the U.S. and Germany, the first IIT university was built in 1950 in a former detention camp in Hijli, Kharagpur. The first session started in August 1951 with 224 students and 42 teachers and 10 departments. In 1952, Nehru laid the foundation stone of the new building. In 1956, the Indian parliament passed the Indian Institute of Technology (Kharagpur) Act declaring the institute as one of national importance, also giving it the status of an autonomous university.

Since then, six other universities have been added in the cities New Delhi, Chennai (Madras), Kanpur, Mumbai (Bombay), Guwahati and most recently Roorkee.

Today, IIT offers undergraduate and postgraduate degrees in over 25 different engineering, technology and business/management disciplines. In IIT Kharagpur alone currently there are 450 faculty members, 2,200 employees, 2,700 students and 18 departments. The annual tuition fees for India’s most technologically advanced and state-of-the art institute is approximately Rs. 40,000 (a little above $1,200 CAD) a year.

Joseph Kurian, who started the now multi-million dollar Don Mills-based Alpha Laboratories Inc. with $8,000 in 1971, joined the IIT Kharagpur in 1954 for a doctorate in applied chemistry.

“At that time that was the only IIT,” recalls 69-year-old Kurian. “I had applied to two universities, but IIT offered fellowships for PhD students. Financial incentives were fairly new at the time. Also IIT was more pro-active in recruiting me. Now I understand it’s much more difficult (to get in).”

Besides the national prestige associated with it, the global success of its alumni has made IIT one of the most sought after universities in India. According to 60 Minutes, last year 178,000 high school seniors took the IIT entrance examination called the JEE (Joint Entrance Examination). Just over 3,500 students were accepted. That’s less than 2 per cent. (Harvard accepts about 10 per cent of its applicants.)

Some students who don’t merit in the top 200 or so often get admission in Ivy League schools in the States.

On a particular date, IIT aspirants, who are just a number until the results are declared, write the JEE exam. The exams are centrally marked. The students are ranked by their performance and it’s expected that the higher the rank, the better the scope for tougher programs such as electrical or computer engineering.

“JEE is the fairest exam in India,” says Mitali De, associate dean in the business department at the University of Waterloo and current president of IIT alumni association of Canada. “It truly weeds out the cream of the crop. In India, kids learn by rote in high school. But this examination tests whether you have your fundamentals straight and whether you can apply them to a complex problem.”

Some students begin preparing for the JEE exam years before they become eligible to sit for the test. It isn’t rare to see grade nine students attending coaching classes held at IIT-specific tuition centres that have mushroomed in the cities, or subscribing to a postal coaching course to pass the rigorous JEE exam.

But De, who graduated from IIT Madras in 1973, clarifies that IIT graduates aren’t just geeks who can calculate complex problems in seconds.

“Nehru wanted a wholesome education for the IIT students,” she says. “That’s why even as early as 1951, engineers were given a humanities course. And there was always a link to sports and culture and arts. Then IIT-ians had to live on campus, even if your family was in the same city, which helped foster a bond between them.”

This “all-round” education that emphasizes on analytical thinking is what makes IIT-ians successful, adds De.

“These days you will see IIT graduates pursuing higher studies in management,” she says. “I can say with certainty that a B Tech from any IIT in India will get admission in Canadian universities into a masters or PhD (program) because of the mastery of his subject. That’s not true for other Indian universities.”

Canadian industry is another story.

“Well, maybe bigger companies such as Nortel might hire an IIT grad, because they now know the name,” says De. “But other medium, even smaller sized companies aren’t aware of the institute. By comparison, the U.S., especially the IT industry, recognizes IIT grads.”

Yet, that doesn’t deter young IIT-ians like Tauhid Khan from testing the job market waters in Canada. Khan, who graduated from IIT Kharagpur in May 2002, recently immigrated to Toronto.

Currently looking for a job, Khan hopes to pursue a Master’s at U of T but eventually wants to do an MBA.
“You need that Canadian experience, right?” says Khan. “So I think an MBA will be helpful.”

Born and brought up in Dubai, in the United Arab Emirates, Khan wanted to study at IIT because he’d been hearing about the institute from his father ever since he was in grade 5. So he gave the IIT international exam and got accepted as an international student.

“IIT is the best of the best of the best,” grins Khan. “It was tough initially, getting used to new a system, living away from home. They make you work very hard but they really treat you like family. They have a saying in IIT. If you can live four years at IIT, you can live anywhere in the world.”

The Toronto Star

Kalpana Chawla

Special to the Star

To the press in the land of her birth, Kalpana Chawla was “India’s worthy daughter.” With the death of the 41-yearold flight engineer, she has become a martyr for space exploration.

Although a naturalized American citizen, she was celebrated for being the second Indian in space after Rakesh Sharma, who flew with the Russian program.

As a youngster in her native Karnal, India, Chawla would join her brother for long bicycle rides that often took them close to a local flying club. She recalled a fascination with the light planes as they took off and landed and credited the experience with eventually leading her into the field of aerospace engineering, her stepping stone to the astronaut corps. Chawla, who earned a master’s degree in aerospace engineering from University of Texas, was making her second space trip.

“I’m looking forward to the flight, of course. After you go to space once, you sort of get addicted, you want to have the same experience,” she explained to reporters at a Jan. 3 pre-flight news conference. “That’s precisely what I feel, especially the part about looking at the Earth, looking at the stars. Doing it again is like having a good dream once again.”

Those bicycle rides with her brother eventually convinced Chawla’s father to secure a ride in a plane and glider for his daughter.

She combined the experience with an interest in a pioneering Indian aviator.

By the time she was in high school, Chawla was determined to become an aerospace engineer.
After earning a bachelor’s degree in the field at the Punjab Engineering College, Chawla pursued graduate work in aerospace first at the University of Texas then at the University of Colorado, where she earned a doctorate in 1988.

Chawla began her professional career at NASA’s Ames Research Center at Moffit Field, Calif., where she characterized the air flows around high performance aircraft.

Trained as an aerobatic pilot, Chawla was selected by NASA for astronaut training in 1994.
Three years later Chawla participated in her first space flight.

“She had the passion for space exploration,” said Laura Woodmansee, a Canadian writer who interviewed Chawla in May, 2002, for a book on women astronauts.

“She was very excited and youthful, like a kid in a candy shop. She just loved her job and when she talked about the (Columbia) mission she just lit up inside.”

Chawla, who was married to Jean Pierre Harrison, a flight instructor who lives in Texas, had cut her waist-length hair to her shoulders before the flight to prevent it from floating in front of her face while in orbit.

“She was really into the future,” Woodmansee said. “She talked about wanting to put a scientific base on the moon. She was your true space geek.”