I commented on the "IBM bets on India" story the other day in the context of Apple's pullout - it occurred to me that I should look at it on its own. The gist of the story: IBM is on a hiring spree in India:
IBM said Tuesday that it will triple its current level of investment in India over the next three years, bringing its total spending in the country during the period to $6 billion. The plan aims to vastly increase the range of IBM's offshore computer services offerings. Those services are designed to help businesses cut costs, but critics say they also threaten U.S. tech jobs.
IBM currently employs 43,000 workers in India, up from 23,000 just one year ago. At the same time, the Armonk, N.Y.-based company has been quietly trimming payrolls in the U.S., where its staff complement is now less than 150,000. IBM officials were not immediately available to comment on how plans for India would impact the U.S. operations. On a Web site operated by current and former IBM staffers, www.allianceIBM.org, posters routinely share news about layoffs at IBM sites around the country.
They hired an eye popping 20,000 employees in India last year, which tells me something that the business analysts are missing: they are growing staff way, way too fast. I don't care whether you are hiring in your own backyard or on another continent - there's simply no way to manage that hiring pace effectively. Palmisano can boast all he wants:
"If you are not here in India, making the right investments and finding and developing the best employees and business partners, then you won't be able to combine the skills and expertise here with skills and expertise from around the world, in ways that can help our clients be successful," said Palmisano. "I'm here today to say that IBM is not going to miss this opportunity."
But he's making a huge error - and I don't mean in terms of where he's hiring (although, readers of this blog will recall that I don't have confidence in that, either). He's simply hiring too many people too fast, and he's going to end up with the same kind of hangover that the dot-bomb firms experienced in 2001. I wonder how quotable he'll be then.
The other question I'd have is on how they are planning on managing development. Here's their stated goal:
The announcement comes on the heels of a plan IBM unveiled in March, under which the company is moving all development of business solutions based on service-oriented architectures to Bangalore.
That may or may not work well. The big question I'd ask is this: Where is project and product management located? If the answer for either one is "in the US", then I'd guess that the problems are coming down the pike. It's a 9 hour gap between the US east coast and India, and 12 hours from the US west coast. That make communication very hard, because someone has to be willing to work during non-business hours - on an ongoing basis. That's not a scalable solution. If you want offshoring to work, you have to be willing to place the management right there with the developers, in my opinion.
I have some experience in this area - we have a geographically spread team. Most of it is in North America, but we have some support staff in India, and a few developers and partners in Germany. The 9 hour time gap between the west coast and Germany makes it hard to manage communication - there are short windows in which it can occur. We only have a few people that far off - if the entire staff were 9 or 12 hours away from me, my life would be hell. Bottom line, if IBM hasn't accounted for that, then they have some rough sailing ahead.