Today in Tech: Jagdish Bhagwati on Obama; Robotic automation - threat ...

Jagdish Bhagwati on ObamaThe traditional view on the anti-outsourcing rhetoric in US is that it usually dies down once the election season is over, and the business logic takes on. That's pretty much what Som Mittal said, “Our business depends on our customers. This time, the focus of the Obama administration would be more on economic growth. The priority would be on creating jobs. To achieve that, they need to support business.” And that's the most likely scenario.However, there could be other far reaching consequences. In an interview to NDTV Profit, Columbia University professor Jagdish Bhagwati made a strong statement about the pernicious effects of anti-outsourcing stance that Barrack Obama and his fellow democrats have taken. Here's a condensed, rough transcript of what he said in the last ten minutes of the interview. You can watch the full interview here:

President Obama, from the beginning, from the time he came in, has been talking about outsourcing. What does outsourcing mean? It's a code word for India, really. And he keeps doing that. He has been doing that from the time he first came in, the entire four years. And he did that also during the elections I think the time has come now to tell him, it's a wrong thing to do, it really spoils the ethos, it creates anti-Indian sentiment..... They think outsourcing means Indians are taking jobs away from them, and then they see Indians coming in to United States and they think 'they are taking our jobs away right here'. That creates a sense of agitation, the dot busters and all sorts of things. He is feeding it all the time... We have got to say, this is bad, and if you continue do it, we will retaliate in our own way.

Robotic automation: threat or opportunity?Mint and CIO have stories on robotic automation in IT. A robotic threat to outsourcing (Mint).  IT Robots May Mean the End of Offshore Outsourcing (CIO) The term refers to a set of tools that 'enables non-engineers to automate certain business processes quickly and cheaply'. The two big names in the business are Blue Prism and IPSoft. Mint quotes a CEO of a top 5 software exporter: "We have never invested in services R&D (research and development)—all these 10 years. Now, these companies could do to us what Amazon is doing to old-world retailers." The nature of free market is that this can happen to any business, and in technology sector, it can happen fast. However, for IT Services companies, right now, robotic automation is as much an opportunity as it's a threat, for two reaons.One, robotic automation has limited applications. A report by HfS Research, Robotic Automation Emerges as a Threat to Traditional Low-Cost Outsourcing that both Mint and CIO refer to gives a sense of what it's good at and what it's not.

• Highly rules-driven – Typically a rote, repetitive back-office process that does not require human judgment or sophisticated exception handling.
• Important and urgent for the business unit to address, but not an IT development priority – IT’s traditional software development process is better suited to strategic process improvements, while robotic automation is well suited to processes that are too tactical or short-lived to suit IT’s primary mission.
• Problematic to send offshore – As robots can run in pretty much any location the organization desires, they can also be helpful in scenarios where regulatory restrictions make moving work offshore problematic for security and compliance reasons.

 Two, it's not as if the underlying idea came as a bolt out of blue for IT Services companies. They have been mulling over it for sometime now, and have made some progress in the form of solution accelerators, reusable components and so on. Here's a story from 2008 on that theme.Even so, Mint and CIO have a point. The traditional companies, after all, didn't make the leap. Blue Prism and IPSoft did. Being big, and sitting on the top of a highly successful business model makes it difficult to change track. The real threat, then, is not robotic automation, but the culture traditional companies get used to. Symantec on not tracking employee timeSymantec, a security software company, is making a transition to a virtual workplace. Here's Rebecca Ranninger, its chief human-resources officer, on what it means to tell the employees: "Take your time off when you can—we’re not going to record it but you need to get the job done"

I think it causes most people to look at time in the same way they did when they were students. Nobody cared if you studied five minutes or ten hours for the quiz. All they cared about was that you did well on it. The new policy has been a challenge for some employees, and we obviously have to beware of the extremes—say, people watching soap operas all afternoon, at one end, and completely burning themselves out with overwork, at the other. But it’s been very successful overall, and I think our people appreciate the move.More in McKinsey Quarterly