February 11, 2008

1. QuadraMed Curries Little Employee Favor by Offshoring

Facts and Background

QuadraMed announced Tuesday that it will outsource its quality assurance, technical publications, and software programming functions to India-based offshoring firm Tata Consultancy Services, eliminating 68 US-based positions.

Opinion

Offshored labor usually provides only one benefit: lower cost. Whether a moronic giveaway of hard-won intellectual capital or a wise way to cut costs and increase leverage won't be known for 2-3 years. Historically, it could go either way.

Musings

• The hyper-informative and annoyingly upbeat press release doesn't mention until the fifth paragraph that the company got rid of several dozen employees, burying that fact among product and company marketing pitches.
• Investors may not have been impressed. The stock dropped slightly in the days following the announcement.
• The overall development headcount will increase by 11%, according to the press release. Given cheap Indian wages, that most likely means that QuadraMed is cutting its development budget.
• If competitors can do OK with cheap, inexperienced new grad labor, then why not use even cheaper offshore labor with at least technical experience if nothing else?
• The company now has to develop a new core competency: design, project management, oversight of distant and task-driven workers, and coordination. Offshoring isn't just hiring cheaper workers on a longer wire - it's changing a company's values, belief, and identity.
• This is a daring, visionary, ingenious move -- if it works.

2. Revolution Health Brags That It Has More Freeloader Readers Than WebMD

Facts and Background

Revolution Health issued a press release Friday claiming that the company's Web sites passed WebMD's in page views in January.

Opinion

Page views are a good start toward making money, but they aren't the same thing. If it wasn't Steve Case's money behind it, would anyone care? In fact, do they anyway?

Musings

• Revolution Health is actually totalling traffic across its five sites in claiming it is #1 in "consumer engagement." Page views don't exactly measure consumer engagement since it just means someone is surfing on the site.
• Everybody wants to look at free Internet health information, but few are willing to pay for it. See: porn.
• Now that Revolution Health is bragging on traffic, it now has to show it can make money from it, at least when Steve Case gets tired of providing it with a weekly allowance from his AOL fortune.
• If you have a me-too healthcare social networking or so-called Health 2.0 site, Revolution Health is still your best hope of pocketing cash since selling out to them is more of a sure thing than actually making a profit yourself with fickle consumers and advertisers.
• Steve Case said he started the company to change the world. If providing online side effect lookups and running articles on dry skin counts, then they've done it.

3. McKesson Workers of the (Colorado) World Unite!

Facts and Background

A Colorado newspaper reported Saturday that McKesson will consolidate three area offices into a new location in Westminster, CO, moving 500 employees from Louisville and Broomfield.

Opinion

It's only an extra handful of minutes of commute time, so this is hardly news. The only people who would possibly care are those who are affected, most of whom are probably happy about it. If the whole industry wasn't taking a pre-HIMSS siesta, we wouldn't be talking about this at all.

Musings

• Maybe they should have moved them to Atlanta. They would have no reason to be in Colorado in the first place if McKesson hadn't bought companies already working from there, especially since their counterparts working on allegedly integrated applications are thousands of miles away.
• Other than still having far-flung developers who don't know each other or other McKesson systems, the move makes sense.

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