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Friday, July 14, 2017

Romania: Between HR technology and childhood memories

BUCHAREST
The blogger at age 8
wearing a traditional
Romanian costume
Two historic events are taking place in Romania this month. First, King Michael will celebrate the 90th anniversary of his accession to the throne, a record for any monarch in history*. Sure, he lost it 70 years ago, but post-Communist Romania returned, if not his crown, at least his palaces (I am staying just a few blocks from his Bucharest home, Elisabeta Palace), castles (you should visit lovely Peleș Castle) along with full honors and titles (move over, Elizabeth II, your 60 years on the throne are kid's stuff.) The second memorable event is that yours truly is launching from here the first of a worldwide series of HR localization workshops for one of the largest cloud HRIS projects in the world.

Romania has always been close to my heart. That's where my mother's family hails from, and where my Paris-born mother grew up, separated by the Iron Curtain from her Paris-residing mother for 20 years. Amazing at it may sound, between the ages of 2 and 21, my mother never saw her own mother, growing up in the most beautiful region of Romania: Transylvania (known as Ardeal in Romanian.) Dracula's region is indeed not only the most beautiful from a landscape perspective, it is also among the most ethnically diverse areas in Europe: Romanians (the majority) live next to Hungarians and Germans, and almost every town in Transylvania has a Romanian, Hungaria and German name (In another record, Romania recently elected as president a member of the German minority, thus becoming the only country in Europe whose leader comes from a minority group!) Many cities are medieval jewels, in particular what is known as the "Saxon towns."

I spent many a lovely summer in Transylvania in my teen years, enjoying the food (see below), fishing in the Mureș river, trekking through the Carpathian mountains, bonding with the extended Romanian family: cousins galore from Geoagiu de Sus to Teiuș and Alba Iulia, the old capital where 99 years ago the country was reunited, as well as Cluj-Napoca where my mother started university and Bucharest where cousin Felicia lived and where my mother and I  had to hide from the building's Securitate man since we were "foreigners."

Sun of IT rises in the East...and women too!
It is therefore with great pleasure that I always come back to Romania, although now it is more likely to be to Bucharest on business than Transylvania, although the latter's capital, Cluj-Napoca has become a major IT hub, rivaling Bucharest. Many large multinationals are taking advantage of the good infrastructure and education, competitive salaries and tax structure and Romanians' linguistic abilities, to set up engineering and shared service centers. Many of my international clients have consolidated shared HR operations from either Cluj or Bucharest. As an employee, if you have a question about your vacation balance, send an email or pick up the phone and your request is likely to be handled by a Romanian.

An even more remarkable development is that an increasing number of women developers are to be found in Romanian-based IT centers: latest figures show that almost 30% of the tech force in Romania is female. Much higher than in Western Europe or the United States. Communism doesn't have much to recommend it for (my family lost land acquired through hard work when the monarchy was overthrown) but at least it pushed women into science and engineering jobs, resulting  in the amazing stats I just mentioned.

HR in Romania
Although Romanian companies can elicit their share of complex rules (especially when allowances are dependent on absence/time data or extraneous factors such as outside temperature several days in a  row), in comparison with other countries I know well such as France, Italy or Brazil, Romania is a model of simplicity.  For instance, whereas France has a good 20 different types of labor contracts, Romania has, for all intents and purposes, only two: fixed term or unlimited term (permanent.) Temporary employees are not common either, reminiscent of Italy who banned it for so long. But post-Communist Romanian governments have clearly embraced pro-business labor laws, simplifying the tax code (both individual and corporate income tax is a flat 16% rate), getting rid of the quaint labor booklet or cărtea de muncă (similar to Brazil's carteira de trabalho) and overall making life much easier for employers and (some) employees. Although the dreadful and dreaded bureaucracy of old hasn't entirely disappeared, the current situation clearly has nothing to do with the olden days of the command economy.

HRIS vendor market
The Romanian HRIS market can be divided into two groups. Tier-1 vendors cater to the local subsidiaries of multinational groups and large Romanian companies (including utilities such as Romgaz and state agencies such as the Romanian Central Bank). Amazing how history tends to repeat itself, although with a twist: A decade ago I worked on the Oracle localization effort for Romania, leading a workshop in Bucharest; and now here I am running another localization workshop in Bucharest, but this time on the customer side. Tier-1 vendors include the usual suspects we know, with SAP on top (the only one with full localization including payroll) and Workday the #1 cloud HR vendor with limited localization (and the need to improve its Romanian translation).

...and their lei

Tier-2 vendors cater to the other Romanian companies: smaller in size but more numerous. Charisma and Wizrom are top of the pack, with Charisma the payroll vendor used by many multinational subsidiaries.

Culture and the rest
View of Bucharest's Royal Palace from the blogger's
room in the landmark Plaza Athénée hotel
 
My favorite hotel in Bucharest is the Plaza Athénée (now part of the Hilton hotel chain): in Communist times my mother would book a room there when we visited Bucharest since as a "foreigner" she was not allowed to stay with her cousin (the local authorities in her hometown, though, turned a blind eye - after all, they all went to school with her!) I continue the family tradition in this grand hotel, whose heyday was in the 1930s where glitterati, royalty, diplomats, and spies made of the Paris of the Balkans (as Bucharest was known) their HQ. It faces both Revolution Square (where hated dictator Ceaușescu's fall started) and the Royal Palace. The Old Town and most sights are within walking distance.

Romanian cinema has rapidly become one of the most dynamic in the world winning prizes in major festivals. I strongly recommend   Cristi Puiu's The Death of Mr. Lăzărescu, Cristian Mungiu's at times disturbing Behind the Hills and 4 Months, 3 Weeks and 2 Days. Many of Communist-era movies are forgettable, but I would single out the exceptional World War I drama Forest of the Hanged.

Romanians have produced great writers: Eugen Ionescu wrote Englezește fără profesor ("English Without a Teacher") in Romanian before he moved to Paris, Frenchified his name and wrote a French-language version which became La cantatrice chauve, a masterpiece of absurdist theater and the longest running play in French history (it just celebrated its 60th anniversary, playing every single day in the same tiny theater in the Latin Quarter in Paris). During the 30s, like all Romanian aristocrats, Princess Bibesco had a preference for the French language and wrote what is still amazing prose. Although many other good Romanian writers are only available in Romanian, Mihai Cărtărescu's amazing Nostalgia is available in English and I strongly recommend it. Transylvania-born Herta Müller writes in her native German (although she is fully bilingual), mainly about life in Communist-era Romania: for her efforts, she won the Nobel Prize for Literature.
The blogger, at age 10, with his mother in a
photographer's studio in Aiud, Transylvania

Speaking of languages, Romanian is a linguistic oddity: the only Latin-based language that maintains noun cases lost since Roman times, and with a strong Slavic influence. In other words, if you speak Russian and Italian, Romanian will be easy to learn. My favorite Romanian word? The joyful "lalelele" which means "the tulips."

Last but not least, Romanian food has to be sampled: often hearty, it relies on local produce, has some similarities to dishes found elsewhere in the Balkans. Many meats are served with mămăligă, similar to the Italian polenta, a type of mashed corn. I cannot eat eggplant purée, sarmale (meat in vine leaves)  and ardei copți (roast red peppers) without thinking fondly of my childhood summers where we grew those vegetables in the garden (water came from...a well! it was cold, clean  and delicious). Sweet cozonac and ișler (the latter, a Transylvanian specialty that reminds me of the Latin American alfajor)),especially when served with a shot of vişinată should round off your evening brilliantly. 

*King Michael holds another record: He is one of the  few monarchs in history to have both preceded and succeeded his father on the throne.

Next destination after Bucharest: Casablanca, Morocco. 

(This is the latest in a series of wide-ranging articles focusing on a single country. Previous posts:

July 2016: Middle Kingdom: Musings on Chinese HR, technology and the country
Nov. 2014: Of Switzerland, the country, its HR practice and technology landscape
June 2013: Thoughts on India, its HR/technology space 
Dec. 2012: My 20-Year Affair with Spain  - with more than 10,000 views it is one of my most popular articles
Aug. 2011: Brazil Rising: Thoughts on HR, technology and an emerging giant )


NOTE: All pictures are by/from the blogger and therefore copyrighted.

Thursday, May 4, 2017

The French presidential election: Going blank

PARIS
Facing off for the top prize
So, here we are, just a few days' away from the runoff election that will decide who will be the most powerful man in the Western world. Yes, I mean it: the French president has more powers than his American counterpart who has to deal with Congress, a more often-than-not independent judiciary and a highly decentralized country where most decisions affecting people's lives are made by mayors or governors rather than by the Federal government. And other European leaders tend to be heads of government, sharing power with a head of state (elected or hereditary, depending on the case). As one of the major candidates reminded the nation in his campaign (see below), we live under a presidential monarchic who, apart from being elected, maintains most of the power and trappings of the "kings who built France," as the phrase goes (Les rois qui ont fait la France).

And, for once, the finalists are as different as can be, with two radically different views of what ails France and how the country should be run. After many decades of pretending otherwise, voters have finally realized that there is no difference between the mainstream parties and gave the Socialists and their partner-in-crime the Gaullists what Churchill called "the order of the boot". Something I have been calling for in as far back as 2011, when I wrote in a post subtitled "Democracy 2.0" that throughout the Western world whether you pick Party A or Party B makes no difference. They are just the two faces of the same coin, the establishment party. Or, to quote my beloved Gore Vidal, they are just the two wings of the single party.

Let me give you my two cents on the four candidates who made this campaign by being within a whisker of each other in both polls and actual election results, before I share with you my vote - and why.

François Fillon, a.k.a The Crook, had what was  undoubtedly the best program, and it certainly wasn't the most popular one as it offered the French some belt-tightening ahead. The only issue with it, were actually two, both related to how credible its plan is: First, when Fillon was in charge for five years, why didn't he implement  it? What guarantees do we have that once in charge he will deliver on his promises? Remember that when a private business makes false claims on its products, it can be penalized and fined; not so with politicians, who can promise you the moon and the stars and, once elected, do the opposite and still keep their seat. Second, the little credibility Fillon had disappeared with the financial scandal he got engulfed in. French voters can tell a liar and crook when they see one, and rewarded his campaign with the dubious distinction of  being the one which, in a 60-year period of time, managed to get a Conservative candidate disqualified for the runoff. If there is a dustbin of history for politicians, Fillon is heading straight for it.

The Gang of Four that made history


Marine Le Pen, a.k.a. The Loony or The Fruitcake (have your pick), has the silliest of all manifestos, basically based on hatred: of Arabs, Muslims, immigrants, Europe, the euro. Anything that can be offered to the people's anger as the source of their miseries, you'll find it in Ms Le Pen's bag. French politicians have been doing this for centuries: It used to be the Jews (in the Middle Ages) and Huguenots (in the 16th and 17th centuries). Nihil novi sub sole, as ancient Romans used to say (in their times, Christians were the scapegoats - food for thought.) Her success resides only on two facts: Her denunciation of the elite's abject failure in running the country (which hardly anybody can dispute) and that, having never been elected to office, she can claim the benefit of the doubt. Apart from that, her program of Fortress France does not make any sense at all.

Jean-Luc Mélenchon, a.k.a. The Commie (or Bolshie.) His sharp tongue, quick wit, consistent philosophy, grasp of details, brilliant, inventive campaign (those videos, holograms and the cruise on the Ile-de-France canals!) made him my favorite. He is the only one of all candidates, who realized that the corrupt leaders we got and their ineffective policies couldn't be separated from the sick political system we have. I fully agree with his calls for revamped political institutions, which he calls the 6th Republic, and many of its tenets such as the ability to recall all politicians. Is it normal that we  have to put up with a deeply unpopular and incompetent president as Hollande for so long? Is it normal that neither you and  I can decide on our compensation or rules governing most of our career, but politicians can? Is it normal that when we commit a felony or crime we go to court (and jail if found guilty) like everybody else, but not politicians who have their own court (Cour de justice de la  République) who rarely finds politicians guilty: and small wonder - its membership is largely made up of...fellow politicians! And even when they do find them guilty, they make the bizarre ruling that no punishment should be meted as we saw with the recent Christine Lagarde trial. Mélenchon is right to say that the system is rotten at the core and propose to do something about it, beyond the mere superficial slaps on the wrist for wayward politicians. I also fully support his call to move to real environmentally friendly policies, not the vague lip service most other politicians adopt.

However, on the economic front, I deeply disagree with Mélenchon. We already have the highest tax burden of the developed group of nations. If that could have translated in higher growth and more employment, we would have seen it. And I feel very uncomfortable with his anti-"rich" rhetoric. What is wrong with being rich, if you've earned it through your hard work - or inherited it? Unless the rich have gotten there through fraud and murder, confiscating their wealth strikes me as deeply unfair and demotivating for society at large.

Emmanuel Macron, a.k.a The Dapper (or the Charmer). Let's give credit where credit is due: His is the most amazing political career France has ever seen, and few countries can boast a novice with no experience of running a campaign, no party, no funds, coming from nowhere and about to win the ultimate prize. For sheer audacity, vision, and management skill, one has to acknowledge his amazing talents and wonder what he could do for the country if he continued to evince the same skills once in office. For a while, he was my favorite. Even when I couldn't completely shake off a feeling that he may just be a manipulator, who saw an opportunity and seized it. (Even then, still a brilliant one.) However, as  I shared several times with my old friend, C.T.H., a member of his campaign team, as soon as Macron put meat on the bone of his program, that's when he lost me. Freeing 80% of French households of the Taxe d'habitation (a kind of property tax) is typical of the worst of the French political-administrative establishment. First of all, that's a local tax, so what is he doing, apart from being generous with other people's money? And then, the lucky ones aren't exactly exempt from this tax, it's the central government that pays it to cities and towns on  their behalf, but should the rate go up, then you will still be liable for it. Again, what's the point  of putting in place such a complicated scheme when the objective, increasing people's purchasing power, could be done via levers the central government controls such as VAT, income rebates or credits. A bad idea, to be jettisoned immediately, as the idea to increase the CSG-based social security taxes, another tax created in the 1990s: then with a 1.1% rate, it currently stands at 15;5% and he wants to increase it? Wasn't he supposed to be a liberal (in the European sense?) As for his non-reform of the net-worth tax (ISF), it is absurd to remove most assets from it, except the one that affects most people who don't make money out of it: homeowners.

Worse, unlike Mélenchon, he seems to be very happy to keep the political system as it  is. Maybe just tinker a little bit here and there ("moralisation de la vie publique"), but over all, let's not rock the boat. Which rekindles my suspicion that Macron may just be all PR and marketing, all fluff, with some Conservative economic policies, some left-wing social policies,  all repackaged by a nice smile and endearing family life. But still a politician bent on grabbing power. And his will to rule by decree is alarming - this is the "presidential monarch" Mélenchon is right to denounce.

Le protest vote
Based on this, I just can't bring myself to vote for Macron. And I won't cast a negative vote: voting for him, to block the Loony. Since neither of the two has managed to convince me, then I'm voting blank. I do hope that Macron will prove my concerns wrong, and manage to fix some of the country's most serious issues. If  he does, then in five years' time, I will be more than glad to vote for him. As for Blondie, I do hope that they commit her either to an institution or behind bars: either way we'll be free of that nightmare. Until 2022 when, should Macron fail, then the National Front could finally grab the elusive prize it has been after for several decades. After all, that's a French political tradition: Fight long enough, and you end up in the Elysée Palace.





Tuesday, February 21, 2017

Cooking the books: How Oracle inflates cloud revenue figures and what it means for you

PARIS  
The truth will always out
Technology firms have never been stranger to hyperbole, whether discussing the alleged value their products bring, customer numbers or the size of their business. As I described in my book, High-Tech Planet: Secrets of an IT Road Warrior, being creative with facts is par for the course for most of them. However,  those vendors scrambling frantically to move from a legacy on-premise business to the brave new world of cloud-based systems, find themselves so desperate that creativity with reality takes on new forms.

Oracle, though by no stretch of the imagination the only offender, is doubtlessly the worst one. This is compounded by the fact that it came late and reluctantly to the cloud (watch this video of Oracle's boss Larry Ellison pooh-poohing the cloud). After its on-premise succession product Fusion failed to gain much traction and its Sun hardware acquisition turned out to be in the words of former Oracle Über -VP of Sales, Keith Block, " a dud", Oracle and Larry Ellison (the two are interchangeable) had no other choice but to go down the cloud route.

Unfortunately the software industry, among others, is known for its first-mover advantage meaning that by the time Oracle decided to do something about (in) the cloud, many of its customers had already defected to Salesforce (for CRM) and Workday (for HR.) Resorting to its good old ways, Ellison didn't hesitate to predict quite outlandishly that his company would bury Workday. Post-truth statements and alternative facts didn't premiere with the Trump administration; Oracle had started the ball rolling earlier. However, since "facts are stubborn" as Lenin said, Oracle felt it had to go one step further: falsify its cloud revenue figures.

Last June, a courageous Oracle employee, Svetlana Blackburn, a finance manager, came forward denouncing Oracle for pressuring her to inflate cloud sales figures (here's another report by Reuters). The various tricks used by a vendor trying to inflate its cloud figures include, but are not limited to, the following :

  • Lump on-premise and cloud figures together and then pretend it's all cloud
  • Give huge credit to customers moving their on-premise license value to the cloud and consider it as booked cloud sales
  • Give a cloud product for free and then extrapolate its sales value to other modules
  • Sell a cloud subscription for a pilot population but book it as if it were for the whole company headcount.
Of course, Oracle immediately fired the whistleblower claiming she was being terminated for low performance. Yeah, right! Ms. Blackburn went to court, Oracle stood its ground saying it had done nothing wrong until last week it capitulated by offering an out-of court settlement. As we all know, nobody offers a settlement unless they have done something wrong. Oracle hoped to put behind it the embarrassing scandal and avoid more damaging revelations to come forward.

What does this mean for you?

As a customer, you need to get a sense of how serious an offering is, what its long-term prospects are and how likely that a sizable customer base will ensure that continuing investment in the platform is assured. Most of the clients I work with and who include Oracle Fusion in the evaluation, end up not shortlisting it for various reasons including fuzzy economics and product strategy. 

As an employee/candidate, especially from the sales function, you need guarantees that your employer will not fiddle sales figures with the aim to shortchange you. Interestingly, the same week that it was confirmed that Oracle indeed forges its cloud sales figures (last week), the company was on the receiving end of a $150 million class-action lawsuit by sales employees complaining about the company's efforts to avoid paying them their commissions.

Finally, as an investor you want to ensure that your investment dollars are well used and that you are not throwing good money after bad*.  Interestingly, too, when the whistleblower revealed Oracle's accounting shenanigans last June, a group of investors launched another lawsuit against Oracle. And for the past (rolling) year, as the below graph shows, Oracle's stock has been languishing whereas its pure, native cloud competitors' has shot up by 40 to 50%. 


A tale of two vendor types: native and adopted cloud


In summary, we  can see that Oracle's desperate behavior, far from helping it, is making matters worse: customers are not joining in droves, cloud sales remain stubbornly a tiny fraction of its overall revenue, in spite of all the figure massaging, and the stock price evolution reflects that situation. Until and  unless Oracle makes some serious changes to its product strategy/sales approach, and culture, it is no rocket science to see what the end game is likely to be: increasing irrelevance. 

Losing steam


*The blogger's clients include not only end-user organizations evaluating/selecting/ implementing/expanding new HRIS systems, but also investors requesting analysis as to HR system vendors' market potential.