IBM is now operating in more than 189 countries, has concentrated about 70% of its research and development activities in the US, with all its research and development headquarters - except
two small subdivisions (Display Systems Division and Embedded Systems Business Unit) which are based in Japan. With the attrition in the US, reaching top levels - like in Austin TX, a major development hub with 30% and more per year - and similar attrition figures in the San Jose / Silicon Valley arena, it is
becoming very hard to have a sustainable quality level in the further development of high-class server systems or middle ware software - both activities that need huge quantities of developers and a core research staff, highly educated and also highly flexible in adopting towards future customer requirements.
Though, there is a need to get development sites in areas with stable employment possibilities for the corporation, and - whilst doing so - also guaranteeing a sustainable level of new hires year over year to support both growth and minor attrition effects.
This research investigates how and where to set up new development labs outside of the United States.
Table of Contents
1. Executive Summary
2. Screening for a suitable place
2.1 General assumtions
2.2 Exclusion of unappropriapte regions
2.3 Five countries in overview
2.4 Relevant screening factors
2.5 Leading Countries
2.6 Key success factors
2.7 Recommended area.
2.8 Strategic limitations of IBM
2.9 The next step
3. Plan for implementation
3.1 Entry mode: learning by doing
3.2 Make or Buy? - Make!
3.3 Extending organizational relationships
3.4 Expanding external structures
3.5 Aligning functions strategically
3.6 Human resources strategy
3.7 Hiring workforce
3.8 Retaining workforce
3.9 Training and development
3.10 Career Management
3.11 Managing a diverse workforce
3.12 Human resource Marketing
3.13 Knowledge and Information management
4. Conclusion
Research Objectives and Key Themes
This report evaluates the strategic feasibility of expanding IBM's software and product development activities outside of the United States and Europe to address critical labor shortages and high attrition rates in established hubs. The research aims to identify a sustainable location for a new development site, focusing on talent availability, economic growth potential, and the cultural alignment required for global team integration.
- Strategic assessment of international locations based on STEEP and OUBS screening factors.
- Implementation strategy for building a wholly-owned development subsidiary in India.
- Human resource management frameworks for recruiting, training, and retaining global IT talent.
- Overcoming organizational limitations of US-centric corporate structures to foster innovation.
Excerpt from the Book
Recommended area.
As a consequence of the analysis above, India seems to be one of the most suitable countries for pursuing further product and software development activity: there is a good extent of available IT skill, the education system provides a certain degree of growth potential, local competition and competition from foreign countries towards workforce does exist but still the wages are five to eight times below United States rates and at least a third or comparable European rates. The climate towards foreign investment has changed from once negative about 15 years ago towards positive and still, despite the “brain drain” of Indian highly skilled workforce towards Silicon Valley (AKA West Bombay), surveys (Die Zeit et al) indicate that even very high skilled workers prefer working in India if comparable personal growth opportunities allow that.
Summary of Chapters
Executive Summary: Provides an overview of IBM's operational context, highlighting the challenges of high attrition in the US and the strategic necessity of establishing new, sustainable development sites.
Screening for a suitable place: Details the criteria and analytical framework used to exclude inappropriate regions and compare potential host countries for new IBM development facilities.
Plan for implementation: Outlines the strategic operational steps, from entry mode and subsidiary establishment to human resource strategies and knowledge management, required to integrate a new site into the global IBM network.
Conclusion: Synthesizes the findings, confirming India as the optimal choice and reiterating the need for tight integration into global teams to ensure long-term sustainability and innovation.
Keywords
IBM, international enterprise, software development, site selection, India, human resource management, STEEP analysis, Porter's Diamond, IT skills, global strategy, expatriate management, innovation, knowledge management, workforce retention, offshoring.
Frequently Asked Questions
What is the core focus of this research?
The report focuses on the strategic expansion of IBM's development operations to non-US and non-European countries to maintain sustainable quality and staffing levels.
Which countries were considered for the development site?
The report compared India, China, Brazil, Japan, and Saudi Arabia based on various socioeconomic and political factors.
What is the primary objective of the study?
The main goal is to recommend a suitable location for a new development lab and provide an implementation roadmap for a 1000-developer facility.
What methodology is used to evaluate the locations?
The author employs the STEEP analysis (Social, Technological, Economic, Environmental, Political) and the OUBS screening tool to rank potential countries.
What does the implementation plan cover?
It addresses entry modes, HR strategies for hiring and retention, career management, knowledge sharing, and aligning the subsidiary with global IBM standards.
Which criteria are identified as the most crucial for success?
Availability, quality, and reliability of staff are highlighted as the most critical factors, alongside favorable attitudes toward foreign investment and intellectual property protection.
Why is India recommended over other countries?
India is favored due to its abundant IT talent pool, competitive labor costs, improved investment climate, and the potential for long-term growth and innovation.
How does the author propose managing the US-centric nature of IBM?
The author suggests using matrix management systems and ensuring that the work content in India is challenging and self-fulfilling to attract top-tier local talent.
- Citation du texte
- Dipl.-Ing. Christoph Frhr. von Gamm (Auteur), 2000, IBM - deploying development activity in non-US-countries?, Munich, GRIN Verlag, https://www.grin.com/document/144860
