Friday, June 10, 2011

Random Analogy

DB comes up with some really quotable stuff now and again. An observation thrown in the middle of an unrelated conversation will give me pause of thought. Recently one evening while cleaning out his French Press that always has it's plastic base falling off, DB said "India is to the IT services industry what China is to the manufacturing in this country. They both produce stuff that is attractive because it is so cheap and really bad for you in the long term" Obviously the Made in China label at the base of the Press triggered this. 
At his workplace, a cheap and relatively unknown Indian managed services provider is trying incredibly hard to win their business. There is no harm done in that except that they are flagrantly misrepresenting their capabilities in every aspect of the proposed engagement. He is yet to see one original idea or any indication that they understand what they are looking to undertake. Every presentation they have made to the management team is generic and culled from material "googled" on "the internets". None of it translates to or address the problem at hand. However, the price point is simply too compelling to not consider. The powers that be figure even if they get it wrong 70% of the time, the numbers will still favor them over running a similar operation locally. 
To DB's point this is no different from him picking up that French Press at Wal-Mart because it was "value" for money. This was to replace an expensive one he had before that dropped on a hard surface and broke. Instead of staffing local at ten times the cost of the outsourced operation, DB's company will decide to take the Wal-Mart route with managed services. This shop in India will deliver the software services equivalent of this fragile French Press that smells of plastic, has an unstable base and generally exudes cheapness. Like DB, they may in a few years be back in the market for a superior product.

1 comment:

Anonymous said...

You are assuming that in few years, this organization would not be able to develop capabilities do deliver superior product. Look at Hyundai and Samsung, they were known for cheap and imitated products 10 years ago, they are now innovators and have a great product out there. Similar has been the case of Huawei from China in Telecommunication market.

Only reason organizations in India and China do not deliver quality products in some areas is that they have seen so much growth and not enough people with right kind of experience. Once the growth slows down, processes would mature and people would have right kind of experience, they would be able to deliver quality products.

Also, your husband needs to learn a lot about Chinese manufacturing capabilities. All apple products are manufactured in China and have best quality that can be manufactured anywhere in the world. So do not assume that Chinese do not have the capability to manufacture great products. But as any business person will tell you that there is a market for cheap products with poor quality too. And with cheap Chinese manufacturing, that market has been expanded in US and worldwide. Quality does not comes cheap and it comes in many forms, including Chinese!!!