SumTotal savings
Here's an answer for the critics who questioned how the Click2Learn/Docent combo was going to cut costs while moving forward.
SumTotal to invest $8 mn over 2 yrs
The company expects to move customer and technical support and engineering work fully to India.
SumTotal plans to increase headcount
HYDERABAD: SumTotal Systems Inc., the new entity created by the merger of Docent and Click2learn, plans to increase headcount in Hyderabad centre from 90 to 160, though at the global level it will go down from 470 to 400 (excluding Hyderabad additions) by the time restructuring is complete. Investment in Indian operations is also likely to be about $3 million in the next 12 months, according to Sudheer Koneru, Senior Vice-President, International Operations.
SumTotal Sets $3 M Aside For Hyderabad Development Centre
OUR EFE BUREAU
HYDERABAD: SumTotal Systems Inc, the newly-formed merged entity of Docent Inc and Click2learn, is planning to make its Indian development centre as the hub for products, services and research and development for its global operations. With a combined cash reserve of over $40 million in hand due to the merger, SumTotal has proposed an investment of $3 million in the Indian development centre over a period of 12 months, said Sudheer Koneru, senior vice-president, international operations of SumTotal Systems Inc.
Announcing the completion of merger of both the companies here, Mr Koneru said following the merger, SumTotal will end up saving $15 million annually, with a combined turnover of $60 million. The company, which has its largest manpower at the Hyderabad development centre, will add another 30 professionals basically for research and development and product engineering work, Mr Koneru said. He added, “We see the development centre emerging as a hub for our research and development, products engineering and solutions.”
Following this development, the R&D centre of Click2Learn, will now broaden its work and include the Docent product line. This will also increase the number of techies based in the Hyderabad centre from the current 130 to about 160 and expand the maintenance work for the two companies.
The investment of about $ 8 million would cover both the working expenses and capex in the company centre based in Hyderabad.
Uncomfortable? Get used to it. Business is global. This is good business practice.
Update
From ZDNet
Tech Update Software Infrastructure
Gartner CEO to CIOs: Embrace offshoring or else
By David Berlind
March 29, 2004
That advice was delivered by Gartner Group CEO Michael Fleisher to a roomful of IT executives here at Gartner Symposium/ITxpo 2004.
Fleisher admonished IT executives who have been resisting the "unquestionable" benefits of outsourcing. Fleisher's warning was subtle but unmistakable: Not only IT's rank-and-file jobs are at risk; even IT leaders could be out of their jobs if they aren't looked upon within their organizations as the go-to people on outsourcing.
Fleisher acknowledged that outsourcing, and particularly offshoring, would be a very painful experience for those IT professionals whose jobs face elimination, but he offered little if any practical wisdom on how to deal with the trend. "I don't for a minute want to minimize the pain involved to individuals in this transition," Fleisher said. "The government has an important role in helping our citizens make this transition as quickly and painlessly as possible through education and retraining."
It's an open secret that Gartner reads Internet Time Blog, but this time they beat me to the punch by twelve hours.
Many of the IT jobs being outsourced today are destined to be wiped out by the efficiencies of Service Oriented Architecture in the next few years anyway. Gartner's Fleisher warns CIOs to take control of outsourcing rather than fight a losing battle against it. Otherwise they'll have to deal with the unruly consequences, much as they did when the obvious benefits of unauthrorized PCs forced centralized IT departments to adopt client/server architecture.
Fleisher identified four major factors that are going to reorganize the world of work:
- secure broadband wireless
- always-on/always-connected devices
- easy access to vast amounts of very reliable and very cheap computing power
- service-oriented architectures that make application development cheaper and faster.
The Workflow Institute was delighted to note that Fleisher did not mention worker empowerment, learning, culture, job enrichment, community, teamwork, or any other human factors, assuring us that we'll have plenty to do amid the evolution to the new way of doing business.
Posted by Jay Cross at March 29, 2004 11:46 PM | TrackBack
Now I get it ;-)
Posted by: Harold Jarche at March 30, 2004 02:52 AM
