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Software Economics

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“What I don’t understand is”, Steve asked me, “How do you guys leave (jobs) like that”.

We were at the waterfront on the Jersey shore. What started as a warm summer morning hid in itself an unplanned visit to the beach and an unexpected meeting with Steve. I worked with Steve when I joined the company I work for now, back in 2007. We were in two different parts of the world. Steve was (and still is) the Primary contact for a group of applications that I was too a part of. Being constantly at the helm of managing these applications and not a big fan of the job he was handling made Steve lose his temper very often, over the phone, with the team in India. I had worked closely with Steve for more than a year before I changed my project. At times, I had cursed him silently and was astonished at his insensitivity and insanity that I thought he possessed.

And I had never met him.

Then at the waterfront the other day, in a company get-together, out of nowhere, I thought I saw him, eating a hamburger and corn, alone. The self-made name tag on his shirt confirmed my finding and I was stuck somewhat in disbelief.

“How do you guys leave like that? The same year, I think it was 2007, three guys came to US and we trained them for 3 months. They went back to India and they quit! We had two guys replacing them and we had to train those two guys again — this time from India of course!”, Steve complained, getting down to business as if we were never out of it.

Oh, I know what it is. I did not know who those three guys were but I know why they left. And why the management let them leave.

Those three guys left because they came back from US and they knew they won’t get to go to US anymore. They left because most likely another company offered them a good pay package and they needed the money. Why did the management let them leave? Because theoretically, you can’t ask them to stay if the responsibilities they carry could be transferred to another bunch of people. But could those job roles be transferred just like that? Again, theoretically yes. Knowledge Transfer (KT) allows you to do that. Just like they were KT’ed by their American counterparts, these fellows KT’ed to the new guys. Maybe they spent 3 days imparting education that originally came to them in 3 months, but they did it anyway.

Practically, is it possible that one is even eligible to give a KT session on some enterprise application that he has hardly even worked upon? No. Would the management understand this concept? Absolutely not. So they left.

So, in the end, we have:

1. Those three guys, who came back happy and dandy after a trip to America and left happier and dandier to another job, grabbing their fatter pay packages.

2. The two guys who must have recently joined the organization and would be flourishing under the relatively fatter paychecks, KT’ed apps notwithstanding.

3. The management who would be patting its own back for a job well done (organizing KT and all).

4. Steve, in front of the Atlantic shore, whining about it all, 3 years after it happened.

The sad part is that within all this, the management does not question itself. That it is believed that jobs and responsibilities can be transferred like that. In the long run, those two guys would have struggled getting hold of that application and after being subjected to late night calls and Steve’s wrath, would have looked for new jobs. In between all this, there would have been a phase when the production issues of that application would have hit sky high and these guys would not have delivered, so Steve’s anger is justified. The Software Managers do not understand that part. They are unable to map this problem to the anomaly occurred during the 3 day KT. Good programmers develop a need for clarity as they grow in their profession and they are expected to carry that trait while they manage teams later in their career. But what percentage of today’s managers would have been good programmers? Forget that — what percentage of today’s managers would have even had careers as programmers?

As Brooks’s law goes, “Nine women can’t deliver a baby in a month”. You see, code delivery is something similar. But they still expect that. And they continue to think that a KT Session is a magic wand that can work wonders even in the hands of the most mediocre software guys. Management in Software can never be thought as a offshoot branch of traditional shop-floor management. And exactly the opposite is happening – even with software companies in the west. But its a different topic altogether.

Going back, it begs us the question — why this run for the fat paycheck? For that, I had to dwell in some basic economics to Steve. The answer would be in two parts.

When I buy an iPod nano in India, I end up spending 1/3rd of my monthly salary. When I buy that here in USA, I end up spending 1/20th of my monthly paycheck. You could do that calculations for a pair of Reebok shoes, a bottle of Head and Shoulders shampoo or a McDonald’s burger and find the same disparity. Believe me, I have done the math. That is the first part.

If the Indian economy had an inflation rate that most economists would term as ideal, it would be around 2-3%. Sadly, that is not the case. As of June 2010, Indian economy was inflating at 13%. It gets worse – Since 2008, the cooking gas price has increased by 20% in India. A rise in the price of cooking gas shows a similar upward trend for Petroleum. So, While the Americans have experienced a 2-3% inflation for the most part of the last two decades, their Indian counterparts have seen (and continue to experience) much worse. The Americans should not find much to complain about when their employer gives a 5% annual raise but the Indians choose to look away and search for higher paying jobs. And why shouldn’t they? That is the second part.

And somewhere there, with Steve looking convinced and mumbling, “makes sense, makes sense”, ended my lecture on Software Economics.

Written by aditya kumar

August 19th, 2010 at 9:57 am

7 Responses to 'Software Economics'

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  1. Great post, Aditya.

    As someone working in the software industry, I must agree with you. KT is not the solution for everything. That said, I have been fortunate enough to meet people who are really passionate about their work. In such cases, KT is often an incredible voyage with as much depth and twists as this blog entry.


    19 Aug 10 at 1:53 pm

  2. Nice. very good :D

    Gaurav Kadyan

    20 Aug 10 at 12:30 pm

  3. Well, the two parts are on the spot, I’d add another part here.

    No matter what the entire world says, the work that comes to India (in almost 90% of the companies) is of the standard that even a 12th grader — with decent logical abilities and self-study of programming languages — can do it; you do not need that fancy degree from premier schools or sound knowledge of the bigger picture always (I’m talking about programming jobs here.) Rest of them have this illusion of doing something special as long as they do not find the ‘real'(?) thing. That should explain the management’s over reliance and dependence on KT per se.

    One of my friends who worked here for the biggest software company in the world, got recently transferred to their US office. While on a weekend phone chat he was of the opinion that he’d anyday take a pay-cut (if that was an option to remain in the job in case of calamity) for the kind of work he gets to do there, he’s now going to file for three patents for which he didn’t need to burn mid-night oil, rather, they were just the off-shoots of his daily job. For the first 7 years in his job in India, he couldn’t do this, barely 1 year there and he’s already fishing deep, can’t just be a miracle.

    So, most of the times the dilemma here is between “Poor job – poor pay, or por job – slightly better pay” and not about economy or passion alone.



    20 Aug 10 at 1:10 pm

  4. Good one AD.
    This line made me think a lot…
    ” what percentage of today’s managers would have even had careers as programmers? ”

    To add more…
    what percentage of today’s managers would have even the knowledge about management?

    Haa Haa Haa..

    – Aravind


    20 Aug 10 at 2:07 pm

  5. Well phrased by keeping it simple & brief. gr8. keep it up


    21 Aug 10 at 10:22 pm

  6. A well-written and insightful post, Aditya, especially for someone like me who is not in the software profession. It’s complicated equation, to say the least.

    There’s always this comparison between value of work and value of money. It’s not always possible to balance that: if at all one manages to balance that, it’s in the mind!


    15 Sep 10 at 11:16 pm

  7. If what you tell me about them working you to death is anything to go by, I’d be quitting too.


    9 Oct 10 at 8:20 am

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