Go East, Big Blue

Earlier today, IBM formally announced that it would be moving its global procurement headquarters to Shenzhen, China. According to Reuters, "The move comes after IBM's Asia-Pacific office completed its move to Shanghai from Tokyo this year, and the company made India a global delivery hub for software needs and client services." Spend Matters readers were alerted to the move of IBM's CPO to the region months before the actual office relocation was actually announced. You can read my earlier post in on it here where I opined: "Another angle to this announcement is how this will impact IBM's procurement outsourcing offering, which shares resources with the global procurement organization. IBM is already marketing its capabilities to outsource direct materials procurement for companies (unlike other BPO providers who tend to focus on indirect). Might IBM scale up this offering in China?"

Earlier today, Pierre Mitchell took a break from cramming forty eight ideas onto a single PPT slide -- I'm not sure if he is more famous for his knowledge of this sector or the complexity of his decks -- to send me the actual press release with the news. Here are some other facts from it, courtesy of AMR's former road warrior (in the driving, not the travel sense). Today, IBM spends "30% of its $40 billion procurement budget in the Asian-Pacific region, of which about half is spent in China." They employee one fourth of their 7,500 worldwide procurement staff in Asia. 700 team members are in China specifically. And according to John Patterson IBM will not "lay off procurement workers in the U.S., who account for one-third of the division's staff world-wide."

Jason Busch

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