Niyamath Parveez

IBM are one of those companies where their name precedes them and this has seen them develop a huge awareness around the world. Read the rest of this entry »

When it comes to firms that are big in size and stature, IBM and BP are amongst the biggest. The fact that they are known by these initials as opposed to a whole word being spelled out would indicate the fact that they are so well known. It may seem strange to think that two companies of this size and stature are going to be working together on an outsourcing project but when you consider it, it’s a fantastic move. Working alongside a firm of a similar size or stature should offer the type of confidence that a big firm really needs and this should make it a simpler and easier affair to organize. There are obviously going to be some difficulties with two major firms working together, ego and power may come into play but at least there will be a belief and acceptance that both have the expertise to work together on such a major project.

The main factor behind BP’s remit for work from firms is to simplify their business processes and of course, lower their cost of labor. Even major firms need to re-evaluate their wage levels and number of employed staff at the moment and outsourcing is a fantastic way of doing so. As IBM has a great level of experience in this area, they should be able to offer many benefits of progressing these areas which should see BP becoming even stronger. Even the firms who are experiencing success at the moment should not rest on their laurels and the current economic slowdown is the perfect opportunity for all firms to re-examine their business areas.

It may be a bit unfortunate for the employees who lose their jobs but with the current climate, every firm appears to be cutting back or laying people off. Therefore, it would be the perfect opportunity for any firm to do the same without drawing particular attention to themselves. This may sound rather callous but in the business world, this is the sort of hard edge that firms need to succeed and BP and IBM know what it takes to stay at the forefront of hard industries.

Another important element of the BP and IBM tie-up will come in the fact that IBM will be responsible for many of the SAP applications and services at BP customer and client sites. The fact that IBM will be required to work closely with the end user places a greater deal of importance on the partnership and again maybe explains why a major firm has been employed to get involved in this project. Whilst there is no reason to believe that a smaller firm would be unable to work successfully in this type of field, it is easy to see why the confidence level of BP would be much higher working with a reputable firm like IBM. This may be concerning for small firms because how can they possibly become a major sized firm if they do not get the opportunities but again, no one said the business world was fair.

There is not a week going by without news of some company reshuffle or collapse or takeover and the names of the firms involved are getting bigger and bigger. The size and scope of some of the firms who are massively struggling in the current financial crisis is possibly the scariest aspect of all and this week saw Sun Microsystems make a disappointing announcement to members of their UK based workforce. The long-term future of the company is always the most important issue in any management decision but the news that 150 jobs in their field service engineering area will be transferred to a third party company before June is a massive blow to staff. News of this move comes as speculation starts to build about the firm drastically lowering costs and attempting to make their books more attractive to a potential buy-out. It is said that firms along the lines of IBM, Apple and Fujitsu are closely monitoring the situation and may be ready to move in.

Industry insiders believe that Sun Microsystems have been in discussions with a number of European based outsourcing specialists in an attempt to outsource their entire field-service operations. An attempt to outsource such a large amount of jobs is a clear indication that the company are experiencing difficulties but the solution offered by this outsourcing may help prolong or resuscitate the business in an extremely difficult time.

Therefore, this outsourcing manoeuvre may buy Sun Microsystems enough time and short-term cash to balance the books in a better style which could guarantee the long-term future of the company. With so many firms going to the wall, anything which can give a firm a better chance of survival and save the vast majority of jobs within an organization is a route worth taking although the job losses are unfortunate. This means that outsourcing can act as a solution to some of the problems which are affecting more and more firms in the modern era.

Whilst this outsourcing is great for Sun Microsystems on the whole, many of the company’s customers will be looking at this decision and wondering what impact it will have on them. It is inevitable that with agents like banks, building societies and agencies working for the government involved on the Sun Microsystems customer base, concerns over data protection and safety of information will be a factor. Although the quality and service offered by the vast majority of outsourcing firms are of the highest standard, it is inevitable there will be concerns about the implications of this decision.

With rumours that the previously considered acquisition of Sun Microsystems by IBM is being considered again, there is more hope for Sun Microsystems executive and employees and this outsourcing decision may be another shot in the arm for the ailing company. With the market in the current state it is, do not be surprised to see a number of other firms looking to follow Sun Microsystems and undertake outsourcing of their own if it can bring them a better chance of survival.