Grove speaks...and the American media listens
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.