Inside HP's new $1 billion outsourcing plan

By Stephanie Overby, CIO |  Business, Hewlett-Packard, HP

HP today revealed further details of its previously announced $1 billion investment in offshore outsourcing, selecting six countries-Bulgaria, China, Costa Rica, India, Malaysia and the Philippines-as its global delivery hubs. Those six spots are "best for our clients and best for where our markets are headed," says Robb Rasmussen, VP and general manager, Best Shore, HP Enterprise Services. (Best Shore is what HP calls its global services delivery strategy within HP Enterprise Services.)

The company, which acquired IT service provide EDS two years ago, maintains that the restructuring will involved a total of 9,000 layoffs over the next two years as well as 6,000 new hires.

CIO.com spoke to Rasmussen and Jeff Womack, VP, Best Shore enablement, about HP's increased focus on cost cutting and offshore delivery, its pursuit of domestic business in emerging markets, and the criticism that HP doesn't adequately value the IT services business.

CIO.com Although these six hubs are not all new to HP, you will be staffing up in these locations. How many and what types of professionals are you hiring in each country?

Rasmussen: We did have a presence in these hubs already, but not at the scale we currently have or with the government approvals and tax benefits. We are aggressively hiring and building them out today. We don't disclose [employment] numbers at the location level or the "best shore" level.

These six hubs are all large campus-like facilities, housing IT outsourcing, business process outsourcing and applications capabilities. From an enterprise services perspective. HP also has other needs for work done offshore. Take the case of our Cyberjaya, Malaysia location where we have opened a state-of-the art global delivery hub with thousands of employees that do global delivery work on behalf of our clients. Our CIO Randy Mott will also have cadre (in Malaysia) that will maintain applications for HP. Our CFO will build out financial functions there as well.

Womack: We've been doing business out of Kuala Lumpur [Malaysia] since 1986. It's one of our longest running global delivery centers. Of course in India, we have our most mature center, anything from apps to IT to BPO. In China, we have been operating out of six different cities. In the last three weeks, we've opened up a center in Suzhou, China, which has the full-blown application suite-from application development and management to testing and SAP implementation. From an ITO standpoint, the primary focus is service desk. If you need level one or two support, we might do that in China. They'll also provide BPO processingBPO without voice.


Originally published on CIO |  Click here to read the original story.
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