I worked for a company that "went Indian". True, they work for less. We did a productivity study, and found out that 1 American engineer produced the work of 20 of our Indian staff, but since the Indians were paid 1/20 of the American worker, it was a wash. But factoring in the re-work the Americans had to do for the shoddy Indian work, we found it was cheaper to have "spoiled Americans" doing the work. Unfortunately, our new Indian VP saw it otherwise.
IBM sees India as its global hub by 2010
Monday, December 10, 2007 at 0000 hrs
NEW YORK:: Betting big on the ‘India advantage’, IBM, one of the world’s biggest information technology (IT) companies, eyes India as its hub for global delivery, providing research software, besides contributing significantly to the company’s revenue. Talking about its road map for 2010, IBM vice- president (financial management) Jesse Green said, “We think of India as a support to IBM. The country will be a hub of global delivery which will help us improve margin components and growth initiatives.”
The IT giant, which is already working with local telecom major Bharti Enterprises and has entered into pacts with some other Indian corporates, expects its revenue from the country to touch the $1 billion-mark by the end of the year. “We expect our revenues to reach $1 billion by the end of this calendar year, up from $700 million in 2006, driven by strong factors. In the first three quarters of the current financial year, our revenue has grown by over 39 per cent,” Green said. The recent deals with some of India’s big corporates are likely to contribute a good chunk to IBM’s revenues. Besides Bharti Enterprises, the IT behemoth has also entered into agreements with BSNL and Idea. Other big names to have inked pacts with IBM include realty major DLF, Central Board of Direct Taxes, Delhi International Airport, Financial Information Network and Operations and Apollo.
The $1 billion would include revenues from services and solutions provided by IBM to local clients and other global corporates operating in India, along with total revenues of IBM Daksh — its business process outsourcing unit. Green said factors such as competitive offerings, effective sales force, strong brand name, and technology base along with the ability to offer hardware and software combination would contribute to the expected figure.
Last year the company’s India revenue grew by 37 per cent against the same in 2005, while the compound annual growth rate from 2002 to 2006 is over 49 per cent. “The company experienced broad-base growth during 2002-2006 in telecom, financial services and small and medium businesses, growing at 58 per cent, 34 per cent and 35 per cent respectively,” Green said.
IBM brings world’s fastest chip to India
BANGALORE: IBM has launched the world’s fastest computer processor chip, called the dual-core POWER6, in India. With this launch, the company’s System p570 — which the company says is the world’s most powerful midrange consolidation machine — and bladeCenter JS22 servers, both powered by the new chip, would be available in the country, said IBM India and South Asia director (systems and technology group) Shashi B Mal. The POWER6 features virtualisation capabilities — a means of server consolidation — and is also the latest addition to IBM’s Project Big Green initiative. It allows “unparalleled power savings on mid-range servers,” Mal said.
You are correct about that. A lot of outsourced work is coming back to the U.S. for those and other reasons.
Unfortunately, executive idiocy is rampant everywhere.
But factoring in the re-work the Americans had to do for the shoddy Indian work, we found it was cheaper to have "spoiled Americans" doing the work.
Doesn't sound like the Americans at your place were spoiled Americans, if they were able to compete--you see, that's exactly my point. It sounds like management goofed there....just like those employers who think they are saving so much by using slow computers or offshored tech support but don't consider the lost time for their highly paid professionals.
One of my clients had a reverse problem, though. They have fought to keep operations American, despite a long downward slide as German and other companies have taken away their dominance. At one point, they had to send some production over to China because American plants couldn't keep up with demand or something (sorry, don't recall details). They found that their return rate on products plummeted, as there were fewer defects from the Chinese-made products than there were from their American plants.
Now, what should the company do? Pay more for shoddy manufacturing, or go overseas?
All that adamantly staying onshore does is put US companies out of business when they can’t compete with those who do go to the best value in labor.
I worked for a company that “went Indian”. True, they work for less. We did a productivity study, and found out that 1 American engineer produced the work of 20 of our Indian staff, but since the Indians were paid 1/20 of the American worker, it was a wash. But factoring in the re-work the Americans had to do for the shoddy Indian work, we found it was cheaper to have “spoiled Americans” doing the work. Unfortunately, our new Indian VP saw it otherwise.
You have explained the problem and results in a nutshell.
Congratulations.....
My neighbor needed a replacement window for his semi truck cab. The truck warehouse and the glass warehouse are both employing (illegal) Mexicans because they are cheap.
It took 3 attempts to get the correct window. That meant that the American desk help was on the phone for a number of calls with the warehouses, shipments were made 3 times with the wrong glass inside the boxes, and the final one was checked by 3 different people who could read and write English before it finally was sent the 3rd time by OVERNIGHT FED EX, which cost more than the original window. Someone explain to me how this is efficient and makes the truck company any money.
(BTW) He had to replace the window because 3 thugs tried to get into his truck when he was sleeping at Stockton Calif truck stop. They were armed. He had only a length of pipe. Want to guess if he is NOW aremed when in the truck??????
My company has an entire team of Amercian programmers who do nothing but clean up the foreign code. Now, they could just dump the Bangalore staff and get it done right the first time, but some little pissant manager built his paper empire on outsourcing, so he can’t admit he’s actually costing the company money.