How the Big Blue was forced to evolve into a globally integrated enterprise as the communication evolution sparked a major and rapid shift in global economy.
Engineers in Bangalore were doing the same work as their counterparts in Silicon Valley, but at about 20% of the cost. The same was true for other office work, including accounting, customer service and even scientific research. This revolution gave rise to a new force in the world of business.
Aggressive Indian companies, including Infosys, TCS, and Wipro offered high quality outsourcing services at lower prices than those offered by IBM and other Western tech companies. Once again, IBM faced serious threat.
IBM rapidly began hiring people in low cost countries and now employs more than 100000 people in emerging markets.
The initial impulse was to respond to the challenge of the Indian tech services upstarts. "if we didn't shift work to lowercost countries, we wouldn't have been able to compete," said IBM chief financial officer Mark Loughridge. But there was an added bonus: IBM found that by locating its offices in important population centers around the world, it could engage tens of thousands of the best and brightest young minds on the planet.
What got the company's attention, specifically, was a brash prediction by Nandan Nikekani, an executive at Infosys, that the Indian tech service companies would have the same crippling effect on the American tech services giants that Japan's auto companies had on Detroit's Big Three automakers. Nilekani's prediction was further impetus for IBM to evolve into a globally integrated enterprise.
Source: www.economictimes.com
Ravi Jhawar
Summer Intern-Technical Analyst
DENIP Consultants Pvt. Ltd.
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