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IBM moves solutions development unit to India

Posted: 13 Mar 2006 ?? ?Print Version ?Bookmark and Share

Keywords:Paul McDougall? IBM? solutions development?

In a stunning example of how India has progressed from a country to which businesses farmed out routine programming and back-office work into a center for leading-edge innovation, IBM disclosed that it is moving all of the design and development of its vaunted business consulting offerings to this fast-growing country.

"Until this, we depended on any number of solution development centers across the globe. We're moving all of that development to India," said Jeby Cherian, head of IBM's new global solutions delivery center in Bangalore. IBM disclosed that it will spend $200 million this year to launch the center. The center will handle the bulk of solutions development work for IBM worldwide, with two existing development centers in India playing a supporting role.

Staffers at the center will look for ways in which IBM's vast array of hardware, software and services products can be combined into prepackaged offerings that consultants can sell to specific industries. Teams are designing a system that uses telemetry devices, embedded processors and mathematical algorithms to help automakers better predict and manage costs from warranty claims. To the extent possible, the teams will create systems that can work in so-called service-oriented architectures. SOAs feature reusable software components and applications that can be combined and recombined in numerous ways.

The company currently employs about 39,000 workers in the country, up from 23,000 a year ago. The rate of growth is expected to continue for quite some time according to Amitabh Ray, who runs IBM's global delivery operations in India. If it does, IBM would have more than 60,000 workers, or about 20 percent of its worldwide workforce, in India by next year.

Ray said IBM will realize a number of advantages from the movement of its business solutions development to India. Costs will be lower, and greater centralization will speed design and innovation. "In the previous model these solutions were splintered across a number of development centers," he said. "We can get cross-visibility; something that's applicable in retail might be applicable in automotive."

IBM says existing delivery centers outside India would not be closed. Instead, they will be "remapped" into demo centers. Still, IBM's decision to offshore virtually all of the design and development of its consulting offerings is sure to draw heat from critics who say American corporations should keep jobs in America.

- Paul McDougall
EE Times




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