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News & Press Releases -September 16, 2003
 Managing Overseas Employees Can Pose a Control Challenge
By PAULETTE THOMAS
Special to THE WALL STREET JOURNAL
THE PROBLEM: How to manage overseas employees.
In the early 1990s, Steven Palm helped his father, an electrical contractor, customize some accounting software. The billing system evolved into a full-feature, double-entry accounting system, based on a Microsoft product, and they began selling the product to others as Comtech Solutions. Mr. Palm's sister, Rebecca Palm, a marketer in several high-tech start-ups, came aboard too. Wary of debt, they grew slowly, just four people in a Houston office.
One of their early hires was a man whose wife happened to be Filipino. The couple persuaded the Palms to consider expanding Comtech by hiring programmers in the Philippines at less than half the U.S. wages. In early 2002, they opened an office in Makati City, part of the Manila metro area. The skills of the Filipino programmers exceeded their expectations, and they were willing to work the crazy hours required for a global operation.
"Once we saw the wealth of talent," says Ms. Palm, "our plans exploded." They added more programmers, developed new products. They decided to put their customer support staff in the Makati City office as well, rather than Houston, and hired employees to work throughout the night to serve their American customers. Before long, they were Comtech Solutions Worldwide Inc. with 50 employees.
As they grew, it seemed logical for the colleague with the Filipino wife and connections to manage the entire Makati City operation. But that included areas beyond programming, such as customer support, and he was spread too thin. Routine matters fell through the cracks between the two hubs.
THE SOLUTION: They scrapped their geographic management structure, and reorganized around function. Programmers in Makati City, for instance, now answer to the head of product development in Houston. Customer support is still handled in Makati City by a newly hired manager. The former manager moved on.
Managing across the globe required a technological upgrade, as well. They bought special online meeting software. Instant messaging is constant. They leased an Internet-based phone system that seamlessly routes customers calls from the U.S. to Makati City offices.
So far, it's working. August revenue was 70% higher than a year earlier. Ms. Palm describes plans for new products, and a new office, three times as big in Makati City. They are adding graphic-arts designers, new programmers for outsourced jobs, and a new sales team -- each with their own line boss, who might be in the U.S. or the Philippines.
THE LESSON: Companies can manage distant tasks, with technology helping to bridge the gap. |
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