Executive Briefings

IBM Discovers It Can Outsource to East Lansing and Dubuque

India has become synonymous with tech outsourcing. More than 90 percent of tech services that are performed in low-cost countries happen there. But when IBM announced its two newest global service delivery centers this week, they weren't in Bangalore, Delhi or Mumbai. Instead, Big Blue picked East Lansing, Mich., and Dubuque, Iowa.
In what may blossom into a countertrend, the company is hiring close to home. The moves come at a drama-fraught time, since the U.S. economic downturn has already claimed more than 60,000 tech jobs in the past three months alone. In East Lansing, IBM expects to create up to 1,500 direct and indirect jobs in five years, and it should employ 1,300 people in Dubuque within two years.
With 200,000 service employees worldwide and nearly 80,000 in India, IBM has over the past six years created a vast global network of service delivery centers. Michael Daniels, senior vice president of IBM Global Technology Services, says that while the cost-competitiveness of East Lansing and Dubuque were factors in the company's decisions to locate there, salaries and other costs weren't the biggest factors. "Low cost is a factor in any decision, but the critical thing for us was the access to skills and the willingness of the local universities to cooperate with us and add to their curricula," he says.
Source: Business Week

India has become synonymous with tech outsourcing. More than 90 percent of tech services that are performed in low-cost countries happen there. But when IBM announced its two newest global service delivery centers this week, they weren't in Bangalore, Delhi or Mumbai. Instead, Big Blue picked East Lansing, Mich., and Dubuque, Iowa.
In what may blossom into a countertrend, the company is hiring close to home. The moves come at a drama-fraught time, since the U.S. economic downturn has already claimed more than 60,000 tech jobs in the past three months alone. In East Lansing, IBM expects to create up to 1,500 direct and indirect jobs in five years, and it should employ 1,300 people in Dubuque within two years.
With 200,000 service employees worldwide and nearly 80,000 in India, IBM has over the past six years created a vast global network of service delivery centers. Michael Daniels, senior vice president of IBM Global Technology Services, says that while the cost-competitiveness of East Lansing and Dubuque were factors in the company's decisions to locate there, salaries and other costs weren't the biggest factors. "Low cost is a factor in any decision, but the critical thing for us was the access to skills and the willingness of the local universities to cooperate with us and add to their curricula," he says.
Source: Business Week