mind × the + gap

KENNETH M. HARVEY AT HSBC HAS HAD A LASTING impression of an IT leader for me. And I believe in the capacity of a corporate executive, ‘richness’ (see: Money) has more to do with quality of role, thought leadership and budget at disposal. In all of these terms, one might wager, Ken Harvey indeed must be a very rich man, for him being the group CIO of the world’s largest organisation, and then having a whopping USD 5bn in terms of his annual spending budget.

It always felt great to conclude my induction sessions for the newly joined Business Analysts in my team by saying, “While certain organizations (vendors) aspire to make millions every year, Ken plans to spend in billions…” It rather gave everyone, me included, a sense if you like, of having a bundle or two of “cash” from Ken’s kitty into our pockets.

Especially and rather fondly I recall Mr. Harvey’s discussion with the Gartner members where one of the panellists posed him with the question of the challenge of keeping motivated the global workforce of nearly 125000 IT professionals. What Mr. Harvey replied is pretty interesting. Mr. Harvey suggested that the workforce worldwide is like a huge diversified but united team where:

“The out-of-box ideas come from my California office, for planning I give it to my London office, and for execution, it is my Asia (HK/India) office…”

While the lion’s share of the budget goes towards the 2 tbps dedicated worldwide network that the bank privately maintains under “run-the-bank”, the “change-the-bank” quadrant still attains a hugely sizeable amount for the change-agents (like myself!). And then, spare a thought for the contribution this 5 bn makes annually towards the IT economy worldwide, and also to the net-worth of individuals… For the record, I am quoting Mr. Harvey here that he would want to maintain a list of no more than a dozen suppliers and vendors… Statistically, the sum of 5bn in itself is more than the annual GDP of many countries worldwide (and could perhaps make for an outright buyout of a few islands in the Pacific). On the other hand, we are talking about only a handful of IT service providers splitting the billions among themselves. And this spending is sustained whilst the market is feeling the sub-prime heat.

But then, Mr. Harvey never said it would be easy: the bank commands some of the lowest billing rates from IT providers in the industry, the roles are stretched to the limit of imaginations, and requirements happen and change as dramatically as the Hang Seng index of Hong Kong stock exchange which practically runs on Mr. Harvey’s servers.

[Right: HSBC corporate HQ building at Canary Wharf, London when viewed from Narrow Street besides Limehouse Basin. Source: self]

Here is some indication as to how Mr. Harvey planned about spending USD 5bn. And here is a Reuters report suggesting how it finally paid off.

AT TIMES IT SEEMS impossible to not to include statistics in my analysis while making a proposal for a client or to the higher management. This is also at the cost of pure brilliance of a point that need to statistical support but is rather a marvel of common sense.

Statistics and sensibility are supposed to be the right mix. Statistics are to be handed to the right personal, at the proper time and format, to be utilised in the appropriate manner in aid of the point rather than being the point themselves. This seldom becomes the case nowadays. I couldn’t help but mutter to myself at such times the following:

“Statistics are like a lamp-post to a drunken man – more for leaning onto than for illumination.”

HAVING BEEN TRAINED FOR CULTIVATING ‘GROWTH’ AND evaluated for a few appraisal cycles by now for tasks that were marked under a title called ‘Business Development’ (or something that either sounds or seems similar), the debate on the subject by a certain groups of ‘experienced’ personnel almost immediately drew my attention.

And it becomes interesting when, with all due respect, the so-called experts, having built their careers in the relevant fields, seemed rather confused between the functioning and mandate of ‘Business Development’ and ‘Sales’ functions. Before taking a dig on that, respectfully, here is my version of the ‘classical’ definition (or differentiation) of the two:

“Business Development is a bunch of activities of today, based on your strategic vision of your product/service framework, that the Sales people would be selling tomorrow.”

Well, this definition might neither be universal nor be entirely technically accurate. However, it does give a certain level of clarity (when some of the rather experienced folks are contributing to the confusion). To me, these two functions are neither the ‘same’ nor ‘interchangeable’, but are distinct. And by the virtue of that clarity one can perhaps define both the functions more accurately and also appreciate their imperatives.

So, what we are saying here is – today’s Business Development initiatives could (should) potentially translate into sales targets of tomorrow – in other words: Sales follows Business Development. And thus, what we call pre-sales will have to fit between the two where it would have a sort of a ‘vetting’ role for the tasks trickling down from BD for the Sales to be made. It perhaps is a different matter that all of these three functions may not exist independently for a given organization, but could be merged among each others (pre-sales may be merged with BD, or BD may be made to co-exists in the same basket as of Sales. And that perhaps is the very reason where the confusion about the distinction is arising from).

[Above: The ‘Arrow-head’ components: a) the Sales function as the cutting-edge, b) the Business Development (BD) function, the main-body, that gives the aerodynamic shape and (thus) ‘direction’ to the arrow, and c) the Pre-sales function that embeds the Arrow-head to the stem (delivery streams).]

My personal exposure to these “cutting-edge” functions has been in terms of IT systems services, products, and delivery (where I have had the opportunity to performed all the roles except for direct-sales). In terms of the required skill-sets and experience for each of these functions: a BD professional might have to have a more strategic (and, if I may add, visionary) inclination on top of pure selling skills. A pre-sales professional, at the same time, may have to have a more Risk-oriented outlook (the correct Risk-appetite measure, as well as Risk-averse functioning) and the mandate to have Risk-mitigation embedded within the Sale that is going to be made. This is also the position where the ‘Analysis‘ bit could play its role. And connect the “arrow-head” to the structural strength of the stem (delivery streams) which provides for the momentum for the ‘travel’ (i.e. growth).

Further, this also helps give the logical alignment of each of these functions vis-a-vis the leadership roles in a typical organization. The BD function should ideally be with the top executive leadership (CEO/COO); the Sales function should report into BD; and the pre-sales should be closely knit with delivery/operations and having a dotted-line reporting to the executive leadership.

Go here for the interesting ‘confusion’ that I referred to at the beginning (you may would want to skip the vanity of the thread at the start and move over to the answers).

WOULD YOU LIKE TO BE AMONG MILLIONAIRES? If you are in IT in India, perhaps you already are!

First, some bullet-points about the global and Indian IT industry that got me thinking:

• Indian Software Industry is approx 66% of Worldwide Software Services
• Top 6 Indian IT Companies makes of approx. 50% of total Indian IT Industry
• In terms of sales among these top six (in descending order of reported figures for 2007 – TCS, Wipro, Infosys, Cognizant, Satyam, and HCL), the first three clocks almost 60%

Now, a Forrester Research forecast reports says that the total Global IT spend (IT industry potential) is projected to be at USD 1.55 trillion in 2007-08.

Wow! A quick back of an envelop analysis reveals some pretty interesting monetarily figures. (above: rather front of the envelop; the back was already taken by the groceries’ list…) Enjoy:

* To account for the disparity of “value-add” across various levels and roles in a given organization and in the industry at large, let me introduce a ‘premium’ factor p, which takes into account factors such as experience, longevity and loyalty, value-add-over-tradition, client-relationship-quotient, niche skills/domain knowledge, roles/management abilities, innovations/leadership demonstrations, reputation/recommendations/published papers/blogs etc., I-am-the-best-attitude, and alike.

As the base, a ‘pure’ and productive software engineer in Infosys would have her contributions to the industry measured at p = 1.

For my p factor, I have considered value 1 for 10 years of industry experience, 1 for effectively delivering in client-relationship and value creation (business development) roles, added 1 to it for venturing into and bringing back ‘goodies’ from unchartered territories (business development, and successful greenfield projects), and 0.5 for doing more than 3 years at Infosys (longevity and loyalty), which makes my p = 3.5.

And, in terms of the Global IT industry, that brings my current ‘Professional’ net-worth at USD 5.5 million!

Now, that ‘Feels’ good!

How much is your worth? Aren’t you a millionaire yet!

For relevant Forrester Research forecast for 2007-08, go here.
For the corresponding NASCOMM story of 2007, go here.
For Forbes.com report on Ambani’s ‘costliest home in the world’, go here.