Archive for May, 2008

How to Manage Projects to Reduce Travel Costs

USA Today has an article about how rising airline ticket costs — attributed to soaring fuel costs — is leading businesses to try and find ways to cut their travel expenditures.

The article, http://www.usatoday.com/travel/flights/2008-04-30-jet-fuel-high-fares_N.htm, says thanks to fuel costs, which are 44 percent higher than last year, fares have risen at least 18 percent. More and more airlines are forced to introduce fuel surcharges to their increasing list of airfare costs. That means businesses — large and small — are finding other solutions to increase sales while at the same time mitigating travel expenses.

One powerful solution is teleconferencing and online presentations. Companies such as WebEx (now owned by Cisco) and ACT Conferencing have proven technologies that are now widely used to "meet over the web". And Nortel has a product called "Telepresence" that brings businesspeople together with a life-size, full-motion cinematic view and stereo sound. It’s like IMAX and Dolby Digital for business meetings.

Here are some of the changes we made at Tenrox to try and reduce travel costs:

1. Onsite versus online services

Just two years ago, I would say more than 75 percent of our implementation work was done on site and face-to-face, whether they were done in New Tork, Sydney or London. Today, our on-site activity is down to 30 percent — at most.  So what changed?

We started to communicate with our customers about the benefits of online instead of on site services. Today we go onsite to meet our customers, the project teams, to get to know one another, to understand their needs and their business. After the initial one or two face to face meetings we have established the trust and the relationship to do much of the remaining work online. Customers love it. More work gets done faster with remote online delivery; and we are able to handle a larger number of implementations with less staff since less time is wasted on travel. Our customers win by saving on travel costs and faster service delivery, and we win by having lower turnover rates on highly specialized consultants since less travel creates a more stable and a happier career life for our service teams.

2. Project meetings

Disconnected systems and management spreadsheets lead to oganizations that often require more face to face meetings to get things done. At Tenrox, we have agreed on and implemented role-based dashboards and key metrics per department. When I come to work, I log into my portal and I can see how every team is doing. The information I look at is not coming from the team leaders or their assistants. The reports I look at are derived from data entered directly from the project contributors; managers simply have to approve/reject the data entries. Therefore the business unit performance, project costs, revenue, issues, and change requests I look at are based on actual data reported by our staff.

These reports and dashboards have virtually eliminated status report meetings. We meet to discuss strategy, to celebrate wins/review losses, and yes to review project progress; but at least in any such meetings people are not showing up with manipulated spreadsheets or to verbatim repeat what I could get from the dashboards/reports I already have access to.

Dashboards, project management reports based on live data, online approval workflows, and online collaboration technologies have reduced our G&A travel costs by at least 50% over the last two to three years. Not to mention the reduction of time and energy we wasted going over "design your own" spreadsheets in management and review meetings.

3. Combine events

Like many other companies today, we have a highly dispersed workforce. Our employees and outsourced teams work from various offices and from home throughout three continents. To make sure all of our teams are aware of the company’s mission and business plan we try and bring everyone together once or twice a year in Montreal, where the company was founded and where most of our R&D staff is located. In the last few years, we have combined such all hands meetings with performance evaluations, training, company parties and picnics to try and make the trips as fun, worthwhile and productive as we can make them to be; and to avoid additional travel costs we would incur if we did some of these events separately.

These are some of the travel cost savings we have come up with. Do you have any insights to share? What are you doing in your company to try and reduce travel costs?

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H-1B Visas: Look to Small Town America Before Bangalore

Responding to record demand for foreign workers and the beating of the “I can’t find enough American talent” drum by Bill Gates and other prominent business leaders, Republicans in the U.S. House of Representatives are urging Congress to raise the H-1B visa cap.

H-1B visas allow foreigners to work in the United States for up to six years to fulfill specialty positions – usually tech-related – that require at least a bachelor’s degree. To keep the loss of American jobs to a minimum, the government imposes a yearly limit of 65,000 visas with an additional 20,000 allocated to foreigners with advanced degrees from U.S. universities.

Earlier in April, the government received 163,000 requests. That means filers have a 50 percent chance of getting an H-1B worker for next year, especially since the system is designed to be random. Literally, American companies have to win the lottery to get foreign talent.

With so much demand, America must really have a critical technology talent crunch, right? My answer is “No.”

Yes, India and other developing countries are outpacing us in the engineering department. And yes, some skill sets are hard to find here. But I believe there is far more talent in the United States than advertised. One needs only to look at the dot-com crash of the early 2000s. As American high-tech workers lost their jobs in droves, H-1B applications still poured in.

And this continues as the country is facing a weakening economy.

Proponents, however, say a weakening economy is when you need more – not fewer – foreign workers because American companies need to be extra competitive to survive. Large tech firms and groups such as the American Electronics Association are pushing for increased caps and new rules, saying American competitiveness is hurt because the country does not have enough high-tech workers. Said Gates to a recent House panel: “The current base cap of 65,000 H-1B visas is arbitrarily set and bears no relation to the U.S. economy’s demand for skilled professionals.”

As a result of the growing support, this could be the year when more liberalized H-1B laws are passed. There currently are several bills floating around, including the “SKIL Act,” which would raise the number of visas to 115,000 and increase the cap by 20 percent each year afterward.

That would be a mistake. Yes, we are living in a flat world and many companies have to bring in foreign talent. But another big reason why these companies want more H-1Bs is simply to import cheap labor. Rules on H-1B wages are hardly ever enforced. And employees from India and China are happy to work for wages below American standards.

In my recent travels across small-town America, I have seen first hand the high number of skilled workers – American workers – who want to be employed in technology fields. I see many of them who want to be designers, programmers and developers. There are states such as the hard-hit Michigan and Wisconsin that have plenty of young college graduates who would be great candidates for Microsoft, Google and other high-tech firms such as Tenrox.

Why do we want more workers from Bangalore? We should be looking to Detroit, Madison and Milwaukee first.

You want more students to take high-tech courses in school? How about offering fewer jobs to foreigners? Let’s send a message to young Americans that high-tech careers are safe – as safe as any job can be in a flat world – as long as they train to compete in that flat world.

What Microsoft and others should be doing is setting up more development centers in hard-hit markets – whether they’re hit by lost manufacturing jobs or the real estate crisis. Not only would those companies get a workforce willing to work, but they’d get employees cheaper than in places such as Redmond or Mountain View. Government can help by providing research and development tax incentives for companies that invest in small town America; just look at Canada’s successful R&D tax credit program as an example of a model that can be adopted for America’s hard hit states.

Global IT giant Wipro is taking a page of that strategy. The company – one of the world’s largest offshorers – is currently building software development facilities throughout the United States that will employ hundreds of recent college graduates. Wipro CEO Azim Premji, realizing that it’s good business to be developing in the places one is selling, trains the employees in intensive programs and puts them right to work. We’re not talking six-figure salaries here. But these are 20-somethings who are getting valuable educations.

So, what’s the best part of these two strategies? Premji would not be reversing a 20-year offshoring model if he didn’t believe it wasn’t good for shareholders. Ultimately, though, more American IT workers will be entering the market. That means companies can rely less on going through government bureaucracy to find the world’s top talent and rely more on fostering technology talent right here in the United States.

I’d like to hear your thoughts. Do you think the United States really does have a critically-short amount of high-tech workers? Or do you think the claim is overblown? What do you think should happen with the current H-1B system in today’s flat world?

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