Infosys, the wall street darling of outsourcing is expanding services (or has been) to compete directly with IBM and Accenture for consulting contracts. This excerpt from the interview with Nandan M. Nilekani is worth noting:
Q. Do you think you will be able to accelerate your consulting services as fast as companies like I.B.M. ramp up their operations in places like India to lower their costs?
A. I think the challenge is fundamentally different. For us it’s about hiring and growth and building a brand; for them it’s about restructuring the work force and I think, frankly, I wouldn’t want to do that job because it’s very painful, whereas this is exciting.
This is part of the great economic circle of cities, global cities in this case, and Nandan is correct that it can’t be stopped. And that it shouldn’t be stopped from a capitalist perspective. And that it IS all about the BRAND.
If a brand like Infosys can deliver the same service, or a better service, at a lower cost it will get back to the consumer in the form of savings that can be spent on other things. Which is all good as long as the consumer who lost their job at IBM or wherever can innovate and create or find a new job. I am in favor of this even knowing how hard it is to create a culture of innovation. Having read Jane Jacobs book The Economy of Cities followed by The World is Flat, it all makes megatrend-economic-sense.
In fact it makes so much sense that an outsourced provider of tasks would expand to include total consulting offerings that it makes we wonder what the heck the folks at IBM and Accenture were thinking as they built up a future competitor like Infosys? First you import, then you start exporting the chairs you used to import because you figure out how to make them and it is cheaper to make them locally in a flat world.