IBM and globalisation | Hungry tiger, dancing elephant

via Economist.com: "The third model, argues Mr Palmisano, the IBM he is now building, is the “globally integrated enterprise”. Rather than have a parent with lots of Mini-Mes around the world, such a firm shapes its strategy, management and operations as a single global entity. It puts people and jobs anywhere in the world “based on the right cost, the right skills and the right business environment. And it integrates those operations horizontally and globally.” In this approach, “work flows to the places where it will be done best”, that is, most efficiently and to the highest quality. The forces behind this “are irresistible”, he says. “The genie's out of the bottle and there's no stopping it.”"

IBM is doing cutting-edge research and development in India and writing valuable software, as well as running low-cost call centres.

As the Indian tigers improve, the pressure on IBM to innovate is bound to grow. That may get harder, which is why there is speculation that it will buy one of those Indian tigers. So far, adding jobs in India has not meant shedding many jobs in costlier places, such as America. And innovating may be harder when the corporate headquarters is in cosy New York rather than in the heat of the action in India.

India outsourcing moves to front office

via International Herald Tribune:

While call centers and software houses closed in the West, often leaving their workers scrounging for employment, professionals in fields like aeronautical engineering, investment banking and drug research likely believed they had nothing to worry about.

Quietly, but steadily, that is changing. High-skilled jobs in those very fields, which once epitomized the competitiveness of Western economies, are flowing to India. The pool of jobs once thought to be impossible to outsource is gradually evaporating.

And with multinationals employing tens of thousands of Indians, some are beginning to treat the country like a second headquarters, sending senior executives with global responsibilities to work from India.

Cisco Systems, a maker of communications equipment, has mandated that 20 percent of its top talent be in India within five years.

N. R. Narayana Murthy, chairman of Infosys, an Indian outsourcing company, said Western multinationals were entering a world in which they would conceptualize, develop, manufacture and sell products and services, from start to finish, outside their countries of origin.

A few years ago, the work sent to India consisted mostly of $100,000-a-year-or-less jobs in software maintenance or $50,000-a-year-or-less jobs in customer service, said Atul Vashistha, who runs neoIT, a consulting firm in California that advises U.S. companies on outsourcing. Now, outsourced jobs include elite positions that pay $200,000 a year or more in the West, he said.

"The definition of what is core is shrinking and may not even be relevant," said Dennis McGuire, the chairman of TPI, a consultancy in Texas that advises multinational companies like Pfizer and Motorola on outsourcing.

'Frugal engineering is India's strength'-India Business-NEWS-The Times of India

via The Times of India: "And the no-nonsense, tough speaking Carlos Ghosn who has worked in the world's three largest car markets__US, Europe and Japan was clearly in awe of Indian engineering. Why? Because they managed to shave 15% off the Logan's production costs.

This is the kind of number that has Ghosn drooling. When the car was first thought up at Renault's headquarters, it was meant to be a no-frills car that had to be built with as little resources as possible. Ghosn thought his company had done a pretty good job with it.

'But there is a thirst for learning here and that makes the Indian engineer innovate and create a product frugally. Engineers in other parts of the world always need more resources to do the same thing,' he said.

So is there a lesson in what he has seen for global automobile companies? 'Yes,' says Ghosn. 'They will have to show the humility to come into this country and learn. It isn't possible to demonstrate such innovation when you work out of markets where resources are not at a premium,' he adds."