Companies adjust to new global realities

Global markets briefs

Globalization poses major risks to enterprises.

Globalization is posing major risks that enterprises simply aren’t prepared to handle. More than 60 per cent of enterprises with at least US$5 billion in revenue suffered from a major risk event in the past three years, and a large number were not prepared to deal with the consequences, according to a recent IBM study. “A surprising number of enterprises are not well prepared to handle the impact of a major risk event to their organization,” IBM stated, after completing the study with help from the Wharton School of the University of Pennsylvania. “Globalization opens up significant opportunities for companies but exposes more risks for the enterprise.”

Global computer usage, cell phone ownership jump.

Increased computer usage and better e-mail and Web access may narrow the digital divide, although globalization critics may perceive such changes as a threat to local cultures and economies, a new Pew Research Center study suggests. The survey said that while technology inequality between countries has lessened, an ongoing backlash threatens globalization. People believe free trade and free markets are good for their countries, the survey said, but it also noted that globalization has its economic, environmental and cultural downsides. For example, people in the U.S. and Western Europe are growing less supportive of global trade, while those in China and India approved it more as their economies grew, the survey said.

Cisco to have a fifth of its top executives in India.

Cisco Systems plans to have one fifth of its top executives in India by 2012, in line with its plan to make India the hub for the development of technologies and new business models for emerging markets. The company expects 60 per cent to 70 per cent of its growth to come from emerging markets, John Chambers, the company’s chairman and CEO, said in Bangalore at the inauguration of the company’s Globalization Centre East campus. The new centre will work with partners in the Middle East, Africa, China, Asia and Latin America on developing technologies for these markets. While emerging markets are growing at between five per cent and 10 per cent, markets in developed countries are growing at just one per cent to four per cent, according to various estimates, Chambers said.

Cost of BPO operations in Philippines rising.

The global outsourcing market for IT, BPO and call centre services will finish the year 2007 at US$297 billion with an estimated growth rate of 19.31 per cent, according to the latest independent forecast study conducted by ICT research and advisory firm, XMG. The projected revenue estimate is up from its 2006 figure of $249 billion. The report also revealed that analysts expect the total outsourcing market to hit $450 billion by 2010. The study centered on the performance of the four top Asian offshore countries, namely India, China, Malaysia and the Philippines. India is estimated to corner $34.1 billion in total revenue by end of year 2007 at 29.5 per cent compound annual growth rate (CAGR) and settling with 11.5 per cent share of the global market. XMG estimates India will continue to lead the offshore segment through 2010.

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Jim Love, Chief Content Officer, IT World Canada

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