Monday, January 28, 2013

World Economic Forum and a view of globalization from the trenches

For the rich, powerful and global elite, it is time to get together in snowy Swiss alps of Davos and schmooze, network and muse about the state of global economy and the world’s pressing problems. The 2013 meeting of the World Economic Forum was held from 23 January to 26 January, with the theme of "Resilient Dynamism," following founder Klaus Schwab's declaration that "the need for global cooperation has never been greater".

Where the elite go, the global media spotlight is certain to follow and this year is no different. The benefit of this media spotlight is obvious: The not-so-elite armchair global news buffs, self-included, who neither have an invite to Davos or the means and inclination to pony up for a trip to Swiss Alps can get their globalization-fix by watching news feeds, blogs and podcasts.

WEF and forums like these potentially lead to some “top down” thinking. However, an equally potent catalyst to change is the bottom-up view of the world and globalization. For instance, by getting visas stamped on their passport and traveling to far-flung client locations, Indian technologists who come from the trenches of offshoring gain an empirical appreciation of globalization. Likewise, there are also a few western youngsters who swim against the tide, travel east to observe and learn from globalization first hand. Case in point is Tobias Kuttler.

A German colleague, Franz Kuttler forwarded a link to the interesting profile of Tobias who had an opportunity to spend six months with an Indo-German project called ‘Sustainable Hyderabad’ It is fascinating to see western youth trying to analyze life and trade in anytown India, Begum Bazar, Hyderabad.

As a part of the Indo-German project called ‘Sustainable Hyderabad’ Tobias Kuttler spent six month talking to people in Begum Bazar. Understanding the problems and looking at a solution from within. As a part of the project, people’s views, experiences with traffic and issues related to their everyday life and work were discussed.
Years ago, while researching for my book - Offshoring IT Services – I was reflecting on observations of the management guru, late CK Prahlad who observed how globalization was being reshaped by young technologists from India packing suitcases and traveling and working in western economies with just their chutzpah, and very little formal support.

The media spotlight has already been shifting past Davos and WEF 2013, but the "Resilient Dynamism" that was discussed by global thought leaders is really being practiced and experienced by those who can look beyond grandiose strategies: Western youth like Tobias taking the leap and spending time in India, and scores of eager techies in offshoring industry eager to migrate west. Botom-up globalization if you will!

Friday, January 11, 2013

What reverse outsourcing? Offshoring is alive and well

During the past couple of weeks, there were a number of reports in the media on reverse-offshoring. Many of them took off from Reuters’ writeup “GM to open third U.S. tech center, hire 1,000 people”  The article described General Motors' plans to  open a third U.S. information technology center as "part of its plan to bring that work in-house and improve the automaker's efficiency and productivity."

A few writers took the story further. For example
Most of us who have been in the industry long enough, and have been a part of the growth engine in the past decade know intuitively that these are fascinating headlines but not an indicator of a “trend” by any means. To put it in context, the offshoring industry in India alone employs about 2.8 million techies. Add sourcing to other countries and near-shore and the scale is mind boggling.

GM reverse-sourcing a thousand jobs to centers in the US is certainly significant for the company and will provide much needed boost to communities and local economies where the jobs are coming to. The news is also significant since offshoring firms wrote their playbook based on learnings from early contracts at sourcing pioneers like GM and GE. Interestingly, In 1984, General Motors agreed to buy EDS for $2.5 billion. In 1996, GM spun off EDS again as an independent company, and then became one of its largest clients. (Wiki)
Just as industry watchers try to analyze the context of these media reports, comes earnings report by industry bell weather and my former employer, Infosys. As Forbes headline chimes “Infosys FY Q3 Top Estimates; Outsourcing Not Dead

Bottomline: Just as one swallow does not a summer make, General Motor’s decision on sourcing, while making an interesting headline is perhaps a drop in the backdrop of global offshoring ocean.