HP troubles show dangers of demotivated staff to business

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Is the ability for IT services firms to provide the high levels of service their clients demand being undermined by a lack of motivation amongst mistreated staff.

I wrote last week about how HP could shut down under-performing units. I suggested the services unit, which has been devalued by $8bn since it was acquired from EDS, could be an under-performer.

I got an interesting comment from a source that knows a thing or two about HP/EDS. The source talked about the importance of having motivated staff if you are going to provide good service levels.

He described how moral amongst staff at HP is low. The point is the customer has no control over the moral of workers at their service provider. Yet they are doing jobs that are business critical.

And HP is not alone, with IBM and CSC others mentioned. Indeed I doubt IBM staff were particularly motivated when a senior HR executive made the ill-advised claim that that it could reduce its workforce from 399,000 today to 100,000 in 2017. Turns out IBM had not said this but no smoke without fire as they say.

Anyway this is what the source said: "I T service companies need to be based on providing excellent levels of service to clients, firm financial footings and a well lead (inspired) and well-motivated workforce. Any one of these missing and it will not work. All I read these days of these service companies is staff cutting, freezing salaries and bonuses, disposing of unprofitable units, playing musical chairs with overpaid and incompetent CEOs.

"HP EDS is one of these companies. IBM, CSC, CGI etc. all seem similar. The accountants have taken control and displaced excellent service with financial juggling. Morale at HP EDS is low as the staff are busy working on CVs looking for other work, doing the minimum necessary to keep their jobs, but certainly not providing innovative and inspirational solutions to business problems."

He also added that he does not believe outsourcing to India, for example, is a solution. "We need to get back to rewarding properly and delivering quality solutions."

General Motors, which previously outsourced almost all IT to HP/EDS is bringing everything in-house. It has already recruited 3000 HP workers who worked on its account.
I bet it can get more out of these same workers.

This is in stark contrast to the views of HCL Technologies CEO Vineet Nayar, who has a corporate strategy known as Employees first Customers Second.  The idea is that by empowering staff customers benefit from higher service levels. By that rationale demotivated staff will means lesser services.

Tell me what do you think about the importance of IT service provider staff motivation.

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There is a growing trend for IT infrastructure providers to become visa suppliers to third world I T engineers(amazing how programmers are now engineers). In return for work visas, Indians are prepared to flock to the UK, Canada, Australia and the USA (number one choice) for low wages, long hours and personal non quit contracts. However, all have the intention of remaining long after the work dries up. Of course Indian outsourcers and the likes of IBM, Apple, HP will never admit to this. But this is how they get cheap labour. The I T industry is in disrepute because of the way it treats its employees, rarely delivers either quality or on time, as for budget, well forget it, that is why the need for such stringent change control. Change control is where the big bucks are. In a battle between government purchasing agents and these companies, the government has no chance. Focusing as they do on saving 10 per cent of price which is already built in as a contingency. The margins are around 35 percent plus additional contingencies (say 10 to 20 percent) then the skimming on training, documentation, testing and quality. Makes for a pretty good profit, especially using very cheap labour from India.

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This page contains a single entry by Karl Flinders published on January 14, 2013 11:25 AM.

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