SGTP eNews 04/03/06
“You Are Going Global”
(The Theme Of SGTP’s AnCon’06, Last Month!!)
1. Going Global? Pitfalls To Avoid
2. Global Gotchas: Avoiding Legal Traps
3. Bird Flu: Planning For The Worst
4. Global Sourcing: Cultural Perspectives
5. How To Clean Up Costs In Europe
6. State Hits The Road With E-Passports
7. E-Passports Await Real-World Tests
8. L-1 Visa Abuses
9. Outsourced Call Centers: Mixed Results
10. Help Wanted = Immigration Reform
SGTP’s EdCon’06, September 6-8
Hilton Alexandria Mark Center
Conference At A Glance & Registration
1. Thinking Of Going Global? Six Pitfalls To Avoid
uschamber.com
March 2006
By Laurel Delaney
Going global takes guts. You have to confront the unknown, do what it takes to land the deal, and make your customers happy. Learning what mistakes not to make—are even more important in foreign trade.
(1) Overseas buyers are already interested, so we don’t have to do any more research.
Not true. Doing market research can help you explore and identify the fastest-growing, most penetrable, and profitable market for your product.
(2) It’s OK to have only certain employees dedicated to the company’s global business.
To ensure coherence, every employee should be a critical member of your international team—from the executive to customer service.
(3) My product is really low in price---so it’s guaranteed to do well in an international market.
Customers typically pay attention to packaging first, quality next, and price last. It’s very difficult for small business to compete on price alone, but quality leaves no room for negotiation.
(4) My product sells well here, so I’m not going to make any changes to it for exporting.
To be successful in export markets, you must tailor your product to meet the needs and expectations of the local customer.
(5) Let’s be all things to all people and do business with the world.
The truth is, you can’t be all things to all people or you’ll disappoint everyone. Instead, pick a product or service to take overseas. Then stick with it. Ease your way into the market.
(6) I know that my product sells well in the United States, so I’m certain that it will sell overseas.
Just because your product is in demand on the home front doesn’t mean that it will be well received in a foreign country. You may need to consider modifying your strategy.
2. Global Gotchas: How To Avoid Hidden Traps In International Laws
COMPUTERWORLD
February 20, 2006
By Mary K. Pratt
Seasoned managers are well aware that laws and regulations vary from country to country, yet lawyers and executives acknowledge that there are some areas that can trip up even experienced pros. They range from navigating the nuances of labor laws to negotiating procurement deals. Experts say many companies discover legal traps only after they fall into them.
That’s all the more reason to get a handle on potential pitfalls in advance, experts agree. “When you have a team around the world, you have to know exactly what laws you’re dealing with,”
says Stephen Pickett, a CIO and president of the Society for Information Management.
Here are seven key areas to watch out for.
1. Labor Relations
Lawyers point to labor as one of the thorniest issues facing American executives working in Europe. And if you think only HR execs need to worry, you’re wrong.
A U.S.-based company bought a European counterpart, with plans to replace the European workers with its own. But the workers at the European firm quickly pointed to their legal rights, and in the end, the U.S. company had to hire some and pay off others.
Employee councils, which enjoy particularly strong legislative support in France, Germany and the Netherlands, can come back with support for a plan or questions about it. They can even delay action.
2. Privacy
European laws require much higher levels of data security and privacy, even as they apply to accessing employees’ information.
For example, European privacy laws could prevent an HR official in France from e-mailing salary information to the CEO in London, even though such data-sharing is perfectly acceptable in the U.S.
3. Procurement
Some clauses that are standard in U.S. contracts aren’t much good elsewhere. So the protections built into legal lingo such as “liabilities,” “trade secrets” and “confidential information” don’t necessarily hold up in other countries, even if the words themselves are written into contracts.
4. Documentation
Linguistics is hardly the only thing that can trip up leaders buying globally. Different standards in documenting deals can also be problematic.
Foreign managers weren’t documenting software purchases, which is necessary information for audits and minimize the chances of buying pirated products.
Without that paper trail, you’re lost.
5. Taxes
CIOs can minimize taxes, though, by knowing when purchases can be charged to U.S. headquarters. Consulting services and software used companywide could be bought by the U.S. headquarters even if they are being used at European sites.
6. Legal Systems
Experts say that as outsourcing work to India and developing countries has gained ground in recent years, CIOs have begun to learn a valuable lesson about worldwide legal systems: They aren’t equal.
Many executives aren’t focused on the issue of what legal remedies are available to them.
7. Fractured Worldview
Leaders need to keep in mind that laws and regulations vary from country to country—even in unified areas such as the European Union.
There’s a tendency to think that Europe is a region and it only has one law. But it isn’t. It’s much more a series of individual country laws with some codification. That really surprised even lawyers in the States.
This has led to fractured approaches that continually need adjusting from country to country.
It would be better for organizations to do these things on a global basis versus a regional basis.
3. Bird flu: planning for worst
NetworkWorld
March 13, 2006
By Denise Dubie & Tim Greene
Inoculate your business
The threat of an avian flu epidemic preventing large numbers of employees from coming to work means corporate IT departments need to figure out now how they will keep workers connected. Some tips:
Screen employees who travel to known outbreak areas before they return to the workplace to avoid spreading infection.
Beef up audio and video conferencing to avoid sending workers to regions where outbreaks have occurred.
Identify workers who may be added to the remote access rolls in the event of an outbreak and make sure they have the gear and authorization they need to work from home.
Estimate the increased load on remote access gear and upgrade accordingly.
Tune help desks so they can deal efficiently with a likely increased workload.
Stage dry runs of procedures that would kick in when there is an outbreak
4. Global Sourcing
Contract Management
March 2006
Cultural Perspectives
Japan Canada
High Brazil Singapore
Mexico
Focus on Personal
Relationships
Germany
Low 0 United Kingdom
United States
Low High
Focus on Problems
5. How To Clean Up Costs In Europe
meetingsnet.com
February 2006
By Carolyn Zusi
Nine Ways To Cut Costs When Meeting Overseas, especially In Europe.
1. Use global/international sales offices (GSO/ISO).
Your GSO is a wealth of knowledge because GSOs have an overview and know where value will be found. For example: Say you need a city that has direct flights from the United States and that also offers a four-star hotel at the budgeted room rate of $175. Seems impossible? There are many destinations that would work.
By using these offices you can save yourself and your team time when it comes to contract and addendum negotiations. Time is money!
2. Be clear about what you need.
Make certain you share your budget and guidelines. This will help you screen out the properties that are not a match..
3. Be Flexible.
If you have the luxury of having flexible dates, ask for pricing on each set of dates. The property may have a soft period and you will see price discounts accordingly. Just like domestic hotels, pricing internationally is seasonal.
4. Avoid 24-hour hold.
One question you should always ask yourself is whether you really need 24-hour hold. In most destinations, there is an additional fee applied for 24-hour meeting room rental. There’s a 50/50 chance you will get it anyway, without expense.
5. Ask for the Daily Delegate Package
In Europe, a Daily Delegate Package (day meeting package) is the way to go. Not only are they easier to book than individual meal functions and meeting space, there are definite cost savings when priced out. Keep in mind that 90 percent of the time a full breakfast is included with the room rate. Also, make certain you look at the delegate package in detail to see what is included. And be aware that most countries do not include unlimited beverages and that you most likely won’t find Coke or Diet Coke at a morning break.
6. Negotiate the deposit schedule.
Because there is no way to know what the U.S. dollar exchange rate will do from day to day or month to month, you can always try to negotiate a payment schedule in hopes that the exchange rate will improve. And here’s another option: If your group has an office in the country where you’re planning a meeting, use that office for deposits or to establish billing privileges.
7. Be upfront about commissions.
It’s very important to ask about commissions on food and beverage and on meeting room rental.
8. Ask about the comp policy—most international hotels have one.
9. Ask for VAT (value-added tax) to be included in pricing when requesting for quotes.
Most hotels will provide you with a breakdown. For a fee, several companies will help get part of the VAT back.
6. State Hits The Road With e-Passports
GOVERNMENT COMPUTER NEWS
March 6, 2006
By Wilson P. Dizard III
GCN STAFF
Diplomats travel with RFID technology, despite doubts and a dearth of products.
Amid continued doubts from experts, and with only one approved technology vendor, the State Department is pressing forward with its electronic passport program.
It started issuing e-passports to its diplomatic corps on January 1 and by last week had distributed 299 of them. The department plans to roll out the contactless chip technology for the general public this summer, officials said.
The e-passport rollout represents the culmination of a program that has spawned ongoing disputes over security technology [GCN, May 2, 2005, Page 1] and litigation over procurement of contactfless chips. And disputes about the safety of e-passport technology haven’t dropped off, even with State’s decision to start issuing the new documents.
State’s security measures include a metal shield in the passport cover to help protect against interception of data. In addition, State has adopted Basic Access Control, a means of securing the data transmission between the passport and reader, and “random uniqueness,” a more secure encryption key than the Dutch passport’s.
An ICAO technical committee recently met to consider strengthening the security of the encryption key used to secure data flowing from the passport to the reading device. The committee is considering lengthening the key by including alphanumeric data from the second line of the machine-readable zone of each passport as well as the data from the first line, which is already included.
7. E-Passports Await Real-World Tests
Card Technology
March 2006
By Kevin Woodward
With deadlines looming, governments and vendors around the globe are accelerating their development of electronic passports. A handful of nations are already issuing the new travel documents and a number of others are preparing to do so.
Will passports and readers work together as expected? Will they be secure?
Vendors have had to contend with a new passport specification from the International Civil Aviation Organization, writing operating system software for chips and making chipsets and booklets durable enough to last up to 10 years. Driving some 40 nations forward are two deadlines this year. By October 26, the 27 countries whose citizens now don’t need a visa to enter the United States must begin issuing e-passports.
Before that, the European Union will require its 25 member states to begin issuing e-passports. Many of these EU countries are also in the U.S. Visa Waiver program.
U.S. Delayed?
Ironically, while the United States was the force behind the move to e-passports, it may lag behind other countries in its rollout.
A legal challenge to the U.S. government’s procurement practices has held up the rollout, some say.
Also, a 28% increase in forecasted demand for U.S. passports this year contributed to delays. The State Department issued just over 10 million passports in 2005, but expects to distribute about 13 million this year. Factors contributing to growing demand for passports include a 2007 deadline for U.S. citizens to present passports when traveling to and from Canada, Mexico and the Caribbean.
8. L-1 Visa Abuses
INFOWORLD.COM
March 27, 2006
By Ephraim Schwartz
The DHS Office of the Inspector General finds significant flaws in the overseas hiring program.
First, some background on what the L-1 visa program is. The program allows a foreign worker employed by a company overseas for at least one year to enter the United States temporarily, “in order to continue to render his services to the same employer or a subsidiary or affiliate… in a capacity that is managerial, executive, or involves specialized knowledge.”
Insurance companies are bringing in foreign workers under L-1, providing food and lodging, but are paying the guest workers at the salary they were getting back home. If a typical programmer in the United States makes $60,000 to $80,000 per year, these workers are being paid as little as one-quarter of that. And they can stay as long as five to seven years.
These workers may be employees of the insurance company; or worse, they could be employees of IT services companies, known as “body shops,” who hire them out for a fee.
Finally, that DHS report I mentioned calls L-1 “The Computer Visa,” saying nine out of ten companies that use the L-1 are “computer-and IT-related,” The report says that it is “difficult to be confident that a firm truly intends using an imported worker” as a manager or executive. It suggests that the term “specialized knowledge” is so broad that “adjudicators believe they have little choice but to approve almost all petitions.” And while L-1 workers must be employed by the importing company abroad for at least a year, the report finds that the United States has “little ability to evaluate the substantiality of the foreign operation” and even allows “ petitioners to transfer themselves into the United States.
9. Mixed Results With Outsourced Call Centers
TRAVELWEEKLY.COM
March 20, 2006
By Andrew Compart and Dennis Schaal
Expedia Corporate Travel recently revealed plans to bring some of its call center functions back to the U.S. from Manila, Philippines, where they had been handled by PeopleSoft. That decision closely followed a move by US Airways Group to hire about 400 reservations agents for positions in North Carolina, Arizona and Nevada to perform work that had been outsourced to call centers in Mexico, Central America and the Philippines.
To deal with service concerns, some companies have outsourced to locations where they believe the centers will be staffed with multilingual, educated and travel-savvy workers who can relate to customers.
U.S. airlines are demonstrating an ambivalent attitude toward off-shore outsourcing.
United, for example, outsourced some of its call center work to India early last year, after already having funneled a small amount to Nova Scotia in March 2004. The outsourced call centers handled general reservations calls and some customer-service inquiries.
But there are some signs, even at United, that airlines are discovering limits to the usefulness of outsourcing.
Though United has closed five U.S. call centers with 800 employees since 2003, it still uses about 2,500 of its own employees at call centers in five U.S. cities for general sales, high-level frequent flyers and other specialty calls.
US Airways is bringing many of its calls back in–house because it found that the outsourced centers often couldn’t handle calls that didn’t follow a script, said Scott Kirby, the airline’s executive vice president for sales and marketing. A customer, for example, might ask for alternative destinations if fares for the one they first asked about are too high. Or they might ask about nuances in airline policy.
“The airline industry,” Kirby said, “tends to go off script.”
That is why, contrary to Ryan’s view of outsourcing across all industries, the US Airways shift may reflect a growing reassessment of the outsourcing trend in the travel sector.