back to article Eight in ten IBM Global Tech Services roles will be offshore by 2017

Just 20 per cent of IBM’s Global Technology Services workforce in mature economies could remain under offshoring and near-shoring plans set out by the company’s top brass, The Register can exclusively reveal. Big Blue last month embarked on a cost-cutting exercise in the UK, putting 1,352 staff on a 45-day notice period to “ …

  1. disgruntled yank Silver badge

    hmm.

    No doubt this has to do with a laser focus on Client Excellence.

    1. allthecoolshortnamesweretaken Silver badge

      Re: hmm.

      Laser focus? When you see a red dot on you, take cover.

      1. GitMeMyShootinIrons

        Re: hmm.

        "Laser focus? When you see a red dot on you, take cover."

        It's IBM - shouldn't that be a blue dot?

      2. Tom 13

        Re: hmm.

        If you see the red/blue dot, it's already too late to take cover.

  2. Pascal Monett Silver badge
    Thumb Up

    "it is hard to be agile when most of the coders are based in another time zone"

    I vote that for the Best Statement of the Week Award !

    1. Sooty

      Re: "it is hard to be agile when most of the coders are based in another time zone"

      yes, I used to have to contend with this, ask an email question of the devs, get a crappy half answer the next day. You follow it up with clarifications and extra questions, get an answer the day after that may, if you're lucky, have what you need in it.

      And so on, it can take up to a week, with much prompting, to get an answer to a question that should take 5 minutes.

    2. Lysenko

      Re: "it is hard to be agile when most of the coders are based in another time zone"

      Silly Cone Valley : GMT -8

      New Yawk : GMT -5

      New Dehli : GMT +5:30

      Shenzhen : GMT +8

      ... basically it is a wash in TZ terms if you're used to dealing with the wrong side of the pond anyway. Personally I prefer skyping Shenzhen at 6am rather than CA at 10pm.

      1. Nifty

        Re: "it is hard to be agile when most of the coders are based in another time zone"

        The UK is still a prime location for central IT and financial services due to the ability to deal with most places in the globe during our waking hours - even if slow overnight reactions mean mediocre productivity. Think I'll be finding work somewhere in the UK for a while yet.

        (I was reading that the UK's low productivity might not be a bad thing if it means high employment levels. So we are an ideal low productivity hub sitting amid all those time zones.)

  3. Where not exists

    IBM

    IBM means It's Bad Management.

    1. Snowy

      Re: IBM

      Or IT's broken man :D

      1. Marketing Hack Silver badge

        Re: IBM

        I said, and it fit's in the context of this article, Indian Business Machines

    2. Anonymous Coward
      Anonymous Coward

      Re: IBM

      or... I've Been Mislead, Inferior But Marketable

      1. jdoe.700101

        Re: IBM

        It's Better Manually

  4. Snowy

    El Reg wonders the wider tech services space will come full circle. ®

    Maybe when the cost of the downtime is greater than the cost of Onshoring it?

    1. Tom 13
      Unhappy

      Re: El Reg wonders the wider tech services space will come full circle. ®

      Nice thought, but odds are they'll be bankrupt before they see those numbers.

  5. Lusty Silver badge

    Offshore?

    "Global Services". Technically "offshore" would be the moon, surely? In a globally delivered service, someone will end up having service delivered from over a border and generally that someone will live in a wealthy country. If you want guaranteed work, cost less or have a skill that can't be outsourced elsewhere. Sadly most of this stuff can appear to be satisfactory when sent elsewhere. We can argue about whether the service is as good all we like, but it's management who decide and they probably have no idea what you do anyway or what the output needs to look like.

    1. Anonymous Coward
      Anonymous Coward

      Re: Offshore?

      The problem with this is that management rarely sees the link between offshoring and losing business. When the primary key performance indicator is customer satisfaction, management gets the impression that a boorish support guy that fixes your problem in 15 minutes is worse than a polite guy that goes out of his way and spends a week to tell you that he can't fix your problem or only half-fixes it.

      Sadly, the latter is hardly ever captured and likely never captured when field support is involved because the latter will frequently fix a problem just by being there despite being asked to do something that breaks the hardware.

      1. Anonymous Coward
        Anonymous Coward

        Re: Offshore?

        The problem with this is that management rarely sees the link between offshoring and losing business

        So long as the other outsourcers and offshorers are equally crap, the clients have nowhere to go. Insourcing something like IT is hugely complex (and shameful) job when five years previously you transferred all your in-house IT bods to IBM Global Buggerups, who promptly fired them.

        The whole outsourcing industry is a scam, in which the buyers don't understand the business model of the sellers, but then find out too late that it is a scam, and there's no easy way back. But if IBM lose a client for their shit service, it doesn't matter because their snake oils salesmen can lure in a disaffected HP or TCS customer. The majority of contract wins amongst the outsourcers are simply industry churn, and most of the ITO and BPO vendors can live with that.

        The one thing the vendors can't live with is the idea of a client bringing back almost all of their IT in house, but because that's hard it is rarely seen. Meanwhile directors keep falling for the "too good to be true" promises of the vendors, despite the obvious conclusion that it it looks too good to be true, its because it is indeed too good to be true.

        1. Preston Munchensonton
          Mushroom

          Re: Offshore?

          I hear a lot of complaints about management when it comes to offshoring, but I don't hear one of you complaining about the bean counters that really drive this decision. If you honestly believe that managers can make these kinds of calls in a vacuum, then I give you too much credit.

          The reality is that it's the accountants driving the "let's keep the assets off our books" that's been the main driving force behind outsourcing in general. That certainly doesn't prevent any blame from flowing over to incompetant management, overzealous sales teams, and all the other bloodsuckers in the mix. But it's unthinkable to ignore the central influence of the accountants/CFOs.

          1. Tom 13

            Re: reality is that it's the accountants driving the

            No, the reality is that those accountants are reflecting the workings of the tax codes enacted by the politicians we put in office. Fix that and the rest will follow.

      2. Anonymous Coward
        Anonymous Coward

        Re: Offshore?

        Of course they do. They just don't care a bit.

    2. TheOtherHobbes

      Re: Offshore?

      >Technically "offshore" would be the moon, surely?

      No - that's where management lives.

  6. Alistair Silver badge
    Windows

    "management rarely sees the link between offshoring and losing business."

    "The stock market never sees the link between throwing out experience and the stock value crashing"

    1. Millsey

      IBM share price has been rising steadily throughout the last couple of weeks, ever since this news about culls and layoffs started. The greedy people love to see costs being cut even if in the long-term that leads to a weakening of the company.

  7. Anonymous Coward
    Anonymous Coward

    Eight of ten IBM outsourcing contracts

    won't exist in a few years.

  8. Ilsa Loving

    So what does IBM DO then?

    They sold off a bunch of their hardware divisions, and now they're outsourcing their staff. Does IBM even do anything anymore, or is basically just a shell company now run by a single person in Ireland (for the tax breaks)?

    1. Snowy

      Re: So what does IBM DO then?

      Well there is a large stack of patents...

    2. BennyJ

      Re: So what does IBM DO then?

      They aren't outsourcing their staff, it's offshoring. They employ people in India etc to do the work rather than paying three times the price for people in mature markets. That way "in theory" companies can outsource their IT to IBM for cheaper than doing it themselves. I wouldn't call a company with hundreds of thousands of employees a shell company. They also sell software.

      BTW I'm not saying it's a good/fair business model but just letting you know the facts. IBM has plenty of problems but being a shell company is not one of them

  9. Anonymous Coward
    Anonymous Coward

    Real talk

    This is just the nature of outsourcing.... I don't think IBM is any worse than the outsourcing provider of your choice in this respect. It is really the companies buying these services fault. They bring in outsourcing because they believe IT is a commodity, so give me your lowest price. It is rare that service quality trumps price for the people buying outsourcing. IBM is losing in the outsourcing market because the Indian providers are undercutting them on price... and people buying the contracts assume that TCS can hire Indian techs about as well as IBM can hire Indian techs and their models are more or less the same. This issue isn't really on IBM or HP or Accenture. It is a government labor and trade issue. If IBM decides they are only going to staff UK accounts with UK staff, they just get slaughtered on price by other outsourcing providers and it doesn't really solve anyone's problem. Not a pleasant business.

    1. Aitor 1 Silver badge

      Re: Real talk

      Not only that, but they saw the very real risk of losing relevance.

      If the market is tech driven, the beancounters provide no value. So, declare that the tech has no value, therefore an external company has to deal with it. They simply won.

      1. ecofeco Silver badge

        Re: Real talk

        The bean counters are fighting a losing battle. Computers were tailor made to put them out of business forever. I'm surprised they've lasted this long.

      2. Anonymous Coward
        Anonymous Coward

        Re: Real talk

        More real talk... All of this infrastructure outsourcing is going cloud in a few years anyway. Compute power on tap is a commodity and the giant cluster players, Azure and AWS, are good at it and getting better. It is a volume and scale business. IT is largely about standardizing and automating manual processes. IT itself is in its own cross hairs.

    2. Anonymous Coward
      Anonymous Coward

      If IBM decides they are only going to staff UK accounts with UK staff...

      Once upon a time it was policy for some government contracts (I'm not mentioning the Department) to source from the median three bids unless there were overriding technical reasons to choose something more expensive. Being the lowest (or highest) bid generally doomed your proposal. I only remember one low ball getting through, and that was only after the Department imposed a 20% increase in costs (and staff).

      Strangely, I don't remember any of the notorious public sector IT disasters being procured that way.

    3. chris 17 Bronze badge

      Re: Real talk

      maybe if they give their customers the choice, X for offshore or Y for onshore techs on the account?

  10. azaks

    you need the Donald...

    ... to come over and "make the UK great again".

    He'd force those companies to rethink their off-shoring strategies, while simultaneously filming a rivoting reality TV series covering the transformation.

    And in the final episode, he would unveil plans for a big, fuck-off wall around the English coast to stop those pesky jobs leaking out. Marvellous!

  11. a_yank_lurker Silver badge

    Its a Brainless Moron

    My employers try to have all the core IT functionality in house with IT types scattered throughout the world in the various offices.

  12. Howard Hanek Bronze badge
    IT Angle

    A New Perspective

    If you rotate the IBM logo 90 degrees left or right it's just a vertical line unrecognizable as anything, let alone a global IT behemoth. Most companies don't want to have there logos displayed that way but IBM seems intent on IT.

  13. gnufrontier

    When it comes to transnational corporations there is no such thing as offshore. All shores are their shores.

  14. Death_Ninja

    Globalisation

    No customer of an IT service provider cares about a high quality service. They are all trying to drive their own internal costs down just the same as everybody else.

    They want to define the absolute bare minimum service level for their business to function and then pay absolutely the least possible price for it.

    If any of you think we can ever put that genie back in the bottle, then you are sadly mistaken.

    The technology no longer is a nice pet thing that people play around with because the MD "likes computers", its just another piece of business tooling that needs to be as cheap as possible.

  15. Anonymous Coward
    Anonymous Coward

    Globalsim is no substitute for Product

    No wonder Ibm is going down in flames. Instead of innovation and bold products, they give the world globalist finance games while screwing their own workers.

    Those who survive the ax will not trust, and never trust, the so called leaders again. They will simply lay down and hope they miss the next swing.

    Ibm is toast....that shoulda' been the headline.

  16. Anonymous Coward
    Anonymous Coward

    So glad I am no longer with little Big Blue. The constant salami slicing every six months and the regular threats of redundancy are no longer with me. My thoughts remain with all those who stick it out.

  17. ibm_escapee

    Get your CV together and start applying for jobs now. You might be pleasantly surprised at the response, I was.

    I'm much happier for having left, although I miss my colleagues. That's where Facebook comes in.

    There are good options, but you need to reach out for them. Take control - good luck.

  18. harry1867

    IBM

    In 30 years IBM has gone from 80% of global IT market share to a fifth rate Indian Consultancy. Hiring bods off the street of Delhi with credentials from degree mills in India. After 5 years dealing with offshore I have yet to meet one with any grasp of database systems.

  19. MrBongoHerman

    Trainwreck

    I've worked in GTS for a few years. I've worked with countless offshore DBAs and techies from other areas. There are a few good ones offshore but a bit like good project managers, good ones are bloody hard to find.

    Especially if IBM were to honour my redundancy package I would be pleased to go. IBM has always been a tough place to work. But IBM has lost its integrity with respect to staff and customers. You see this on a daily basis in management comms with customers when you know the truth and what is really happening. You see it again with they way they managed pensions and in general how they treat the staff. The "Business Conduct Guidlines" only apply to those at the bottom. Management can do as they please. And they do.

    They're always looking achieving the Q's targets. "I don't care about the implications for the next year or next Q. I know that if I don't hit this Qs targets I won't be around to worry about the next Q or next year". Hence everything is short sighted.

    It can't continue, it won't continue. The funny thing is, the concept of out sourcing and the profits coming from automation, economies of scale etc is a wonderful idea. But you've got to wonder why none of it is implemented... ah ... yes ... because its too expensive!

    Of course at the top of the costs is staff. All they see is the cost. So we're the first to go. And those that stay have to cope with what the aftermath. It will be interesting this time as staff who are go are going with statutory minimum payments, and are expected to work the notice period. The internal security of systems is generally poor. So we have motive, opportunity and method. Sounds like a disaster waiting to happen.

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