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 Intel
chief Andy Grove has been actively speaking on the competitive crisis
being faced by the US. MOHAN BABU writes that when global
leaders like Grove voice their opinions on trends, other business
leaders, lobbyists and policy makers are bound to take notice
When Andy Grove, the revered chairman of Intel,
speaks the business world sits up and listens. He is the same leader
and technocrat who brought Intel from the brink after the company
faced a severe crisis during the downturn in the transistor business
and helped steer it towards microprocessors, in the process coining
the term “strategic inflexion point” in his famous book,
Only the Paranoid Survive. The author and master strategist is now
scared of the competitive crisis in the US, the world’s most
innovative technology provider. “I’m here to be the skunk
at your garden party,” Grove reportedly told a group of about
150 executives and leaders at the Global Tech Forum, hosted by the
American lobbying group Business Software Alliance. In the meeting,
Andy Grove indicated that the US was facing a competitive crisis
due to a number of reasons, including offshore outsourcing, lack
of federal support of sciences education and a “ho-hum”
telecommunications infrastructure.
The irony here is that an American immigrant
is trying to warn Americans about the looming competitive threat
from foreigners. Actually the real irony here is that Intel itself
has been outsourcing work to its research and development centres
around the globe to capitalise on the markets and to get access
to local talents. Make no mistake, Andy Grove, a brilliant technocrat
and business leader, would have thrived wherever in the globe he
was. The fact that he decided to make the US his home and take Intel
to commanding heights is a well documented story of American ingenuity.
Grove emigrated from Hungary in 1957 and co-founded Intel in the
late 1960s.
To readers of this column, the current trends
are not something new; in the over two-and-half years that I have
been writing this column, I have attempted to look at different
aspects of work-life of technologists, more specifically global
techies who want to follow opportunities and trends. Week after
week I try to interact with my peers, read technical journals and
articles to gather a pulse on the current happenings. To me, paranoia
over outsourcing is like crying over spilt milk. The trends in outsourcing
are nothing new: Even a decade ago, companies like GE (then under
Jack Welch) weaved offshore outsourcing into their IT strategies
and the benefits to organisations are too well documented. If we
were to look at outsourcing (not just global outsourcing), the history
will take us back to the core competencies of companies like EDS,
Accenture, CG-E&Y, et al, who have refined outsourcing of entire
datacentres of Fortune 500 companies into an art.
Every few weeks or months we see the announcement
of yet another “multi billion dollar, multi-year” sourcing
contract signed by companies and governments with one or the other
large IT vendors. How the IT vendors execute the projects is not
a mystery: they consolidate data centres, optimise on resources
(aka downsize redundant IT workers) and ensure that they skim a
slice of profit out of the entire deal. In the process if some work
gets sourced to a lower cost location like India, Ireland, Phillipines
or China, so much the better for them. The debate on outsourcing
being played out in individual western countries has more to do
with lobbying rather than just the trends in globalisation of outsourcing,
which as a matter have been ongoing for a while.
The Indian IT industry, which depends on a large
part on exports is naturally watching the trends very closely. Executives
of Indian companies are also attempting to make their employees
aware of the competition in store in the global marketplace. For
instance, the CEO of Infosys, in a recent address to employees reportedly
tried to make them aware of the competitive threats not just from
those opposing outsourcing but also from competitors like Accenture
and IBM who are playing the “local” card in markets like
the US and Australia.
How the game of lobbying actually plays out is
anybody’s guess. What is clear that as more global leaders
like Andy Grove throw their hat in the ring by voicing their opinions
on the trends, other business leaders, lobbyists and policy makers
are only bound to take notice. And rest assured, this is not the
last word on this topic from my end.
Mohan Babu is a US based software consultant
trying to find the ‘sweet spot’ where IT meets business.
E-mail: mohan@garamchai.com
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