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IBM Corporation: Competing Globally by
Offshoring IT Workers and Giving Away Technology
Group 5Macky Villagarcia
Martin ReyesMichelle ZhouSteven SuikiWinnie Ren
Sanaz Sadeghi
14 Feb 2011
Topic Outline: Case Background
Case Study Questions
Real World Activities
Case Background IBM’s gamble – giving away crown jewels (intellectual
property in the form of software, patents, and ideas) “Openness” - Collaborating w/ customers and rivals to
invent new technology Gives away a technology but w/ intellectual property &
enterprise that will enable it to make money if the tech is widely adopted
April 2005 – eliminated 14,500 jobs mostly in India IBM’s move to “strategic low-cost geographies” July 2005 – Bob Moffat (SVP) was assigned to handle
“global delivery model” To cut cost of delivering services, even high-value ones, by
tightening the “services supply chain”
Case Study Questions
1. Do you agree with IBM’s employment response to competition from software development contractors in India, like Wipro, that are expanding into IT consulting services? Why or why not?
Yes Necessity More economical and efficient Done within the law – proper
separation pay were given
2. Will IBM’s plan to give away some of its IT assets and intellectual property, as well as increase its support of open-source software products like Linux, be a successful growth strategy in the “brutally competitive marketplace” in which it operates? Why or why not?
Yes More people having access =
bigger market Awareness of other IBM products Provides competitive advantage Limited assets only – VP
Intellectual Property filters
3. Do you agree with IBM researchers’ assumption that IT will remain “hard to use, expensive, and labor-intensive, w/ customers continuing to need help solving business problems” for a long time to come? Should IBM bet its business on that assumption? Defend your answers to both questions.
hard to use, expensive, and labor-intensive – NO Advancement in technology – more user friendly Cloud computing and the likes
w/ customers continuing to need help solving business problems – YES IT would always need experts to plan, develop,
design, program, maintain, and support it Practicality – Business’ core competency
Yes. Services is now IBM’s core competency and has the resources and capabilities to sustain this
Real World Activities
IBM Wipro
INR 38,999,000 = USD 842,200,00
Accenture
http://www-935.ibm.com/services/us/gbs/applicationmanagement/pdf/forrestser_wave_north_american_applications_outsourcing_2010_final.pdf
http://www.iaop.org/Firmbuilder/Articles/19/205/2047/Default.aspx
Discuss the implications of offshoring for your current or future career choices & the kinds of companies or organizations you would want to work for.
As of the moment, we are benefiting from offshoring as business continues to flock in our country.
However, this would always keep us on our toes as we would need to sustain our marketability and competitive advantages.
IBM Corporation: Competing Globally by
Offshoring IT Workers and Giving Away Technology
Group 5Macky Villagarcia
Martin ReyesMichelle ZhouSteven SuikiWinnie Ren
Sanaz Sadeghi
14 Feb 2011