If you're new here, you may want to subscribe to my RSS feed. Thanks for visiting!

In mid-May of 2008, just a few weeks back, HP’s CEO Mark Hurd announced an agreement to buy EDS for $13,9 billion and stated that it fulfills their strategic objective of expanding in the services area.

This is major news because this agreement means that HP’s and EDS’ combined revenues reaches a whopping $38 billion a year, a bit behind IBM at $54 billion but clearly ahead of Accenture at $21 billion.

According to the merger plan that’s been released, EDS CEO Ron Rittenmeyer will lead a new organization called “EDS — an HP company” and report directly to HP’s Mark Hurd. EDS will still employ 210,000 people but Wall Street is abuzz with rumors of downsizing.

While HP’s IT services unit was already managing P&G’s global consumer products’ tech operations (a 10 year, $3 billion contract, started in 2003), EDS brings blue-chip customers to the table, such as American Airlines, Bank of America and Royal Dutch Shell.

So EDS’ vast vertical and operational expertise which is especially strong in the financial services, health care and government sectors could finally help HP break into the IT services major leagues. The biggest threat to the success of this deal might come from HP’s somewhat “computer and printer” culture that’s still (proverbially speaking) lightyears away from SaaS, cloud computing and other new-wave IT trends for which EDS has proved to be more comfortable with.

HP hopes that with EDS now on its team, big multinationals will look to outsourcers more often to collect, secure, integrate and deliver software and other IT resources over the web.

Of course, the future will tell if giant system integrators, like HP’s newly acquired EDS, will still be required at a time when the SaaS and cloud computing super-efficient duo are removing complexity from many IT activities, across the board.

Tags: hp, eds, operations, merger plan, it, it services, saas, cloud computing, outsourcing, it resources

Possibly Related Posts:

• SaaS ranking high on IT strategists’ agenda
• Bracing for data breaches
• SaaS checklist
• Microsoft’s take on openness
• Enterprise 2.0 Conference 2008

While it’s still a common belief, among the general public, that IT companies in India are nothing more than sweatshops, the savvy Canadian business people know the reality is closer to the other end of the rainbow — the technology powerhouse side.

India is already offering IT services that compete with the world’s best and brightest. The information technology outsourcing revolution is well underway, with India being the clear winner. As if this wasn’t enough of a blow to the “local” IT job market, more outsourcing “ideas” might become viable alternatives, for all sorts of companies.

For instance, what if a company’s CEO was fired to be replaced by a tactical team of 10 Indian PhDs with complementary knowledge? Would that be a good thing, for some companies? It seems a growing number of decision makers “in the West” are considering these kinds of alternatives.

Predictably, it doesn’t stop with the CEO but it goes down to command chain as well. When the workforce pool is suddenly upped by tens of millions of university graduates, Western workers risk being evaluated to see if their job couldn’t be done “on the cheap side”. Since the outsourcing trend towards India isn’t limited to IT anymore, expansive cities like Bangalore stand to gain the most.

In today’s Indian employment marketplace, a 15,000$CA IT worker is considered the professional equivalent of a 90,000$CA worker, in Canada. Mathematically speaking, it’s easy to understand why the outsourcing for computer-related tasks has gained such momentum, over the past few years.

So here’s the big question: how can Canada stay competitive in the face of such a qualified, yet affordable, workforce?

More education and ongoing training are two smart ways to keep our workers “attractive” for the most lucrative employers. Furthermore, government policies protecting the “domestic innovators” from global threats, including the outright theft of their hard work, is another pillar we need to build up in order to survive the massive influx of talent being brought, by India, to the worldwide pool of qualified labor.

In the real world, the Canadian government is currently doing very little (if anything at all) to protect its domestic innovators from India’s clear and present “outsourcing dangers”. Some people from Canada, who are familiar with this matter, consider this to be a treason to our workforce.

Getting educated about how India is reshaping the IT industry, all over the world, should help understand what’s in store for many other lines of work, in Canada and everywhere else.

Tags: india, outsourcing, information technology, it, jobs

Possibly Related Posts:

• XBRL gaining significant momentum
• Short-term thinking can be risky business
• America’s most admired companies
• Is your company at risk?

Many of the risks today’s companies face are subtle or indirect. It’s not just about competitors or computer hackers anymore. The risks have gone as global as your company’s efforts to serve new, ever expanding, markets.

Let’s take a look at few risk factors you should be on the lookout for:

• Globalization - As you know, supply chains and markets have gone global which means there’s a new set of potential crises, anything from natural disasters, political unrest or even cultural clashes for which you need to worry about… and plan for.
• Outsourcing - While outsourcing may, in fact, reduce the monetary burdens, this “à la mode” management approach also dramatically reduces your control. For instance, from the instant your outsourcing partner suffers a fire or a labor strike, it’s your problem too.
• Single Sourcing - Getting all your manufactured goods from a single source may buy you a better price, it also means there’s no easy alternative in the event this supplier suddenly shuts down.
• Crises - Being located in mainland America means you have little chances of being hit by a deadly tsunami or a terrorist attack but over time, the odds add up so instead of foolishly downplaying those crises your think won’t happen, reflect on the damage caused if any one of them does… and prepare for that.
• Employees Leaving - When employees leave, especially the seniors, their knowledge usually walks out the door with them. Even though their smarts may not end up in your competitors’ hands, these infinitely useful tidbits of information may be lost. Make sure to have a system in place which can capture and share this tactic know-how or risk sweating over the same problems, all over again.

The goal here isn’t to become paranoid about risk management but since so many companies don’t set time and money aside for these matters, now is probably a good time to assess your company’s risk awareness… and preparedness.

Tags: risk, corporate risk, risk management, risk awareness, preparedness, damages, employees, outsourcing, globalization, competitors, computer hackers

Possibly Related Posts:

• XBRL gaining significant momentum
• Short-term thinking can be risky business
• Signs of a business revolution from India
• America’s most admired companies