1. One: While I Was Sleeping How the World Became Flat
The World is Flat
One: While I Was Sleeping
How the World Became Flat
Prepared by F. Sibel Salman
Indr 481 Information Systems course, Koc University

2. The Beginning Thomas Friedman traveled to Bangalore in February 2004
to understand why India had become such an important pool for the outsourcing of service and information technology work from U.S. and other industrialized countries
He returned back with the conclusion that “The World is Flat”
How did he come to this conclusion?
What does he actually mean?

3. Bangalore - Bengaluru
Bangalore lies in the southeast of the South Indian state of Karnataka
Bangalore is called the "Silicon Valley of India" because of the large number of Information Technology (IT) companies located in the city which contribute 38% of India's US$ 22 billion IT and software export market

4. Bangalore - Bengaluru
Bangalore's IT industry is divided into three main "clusters“
Software Technology Parks of India, Bangalore (STPI)
International Technology Park Bangalore (ITPB),
Electronics City
Infosys and Wipro, India's second and third largest software companies, have their largest campus in Electronics City.
As headquarters to many of the global SEI- CMM Level 5 Companies, Bangalore's place in the global IT map is prominent. (SEI-Software Engineering Institute, CMM-Capability Maturity Model)

5. CMM-Capability Maturity Model
A maturity model can be viewed as a set of structured levels that describe how well the behaviors, practices and processes of an organization can reliably and sustainably produce required outcomes.
A maturity model can be used as a benchmark for comparison and as an aid to understanding - for example, for comparative assessment of different organizations where there is something in common that can be used as a basis for comparison.
In the case of the CMM, for example, the basis for comparison would be the organizations' software development processes

6. CMM-Levels (cont.’d)
There are five levels defined along the continuum of the model and, according to the SEI: "Predictability, effectiveness, and control of an organization's software processes are believed to improve as the organization moves up these five levels.
Initial (chaotic, ad hoc, individual heroics) - the starting point for use of a new or undocumented repeat process.
Repeatable - the process is at least documented sufficiently such that repeating the same steps may be attempted.
Defined - the process is defined/confirmed as a standard business process, and decomposed to levels 0, 1 and 2 (the last being Work Instructions).
Managed - the process is quantitatively managed in accordance with agreed-upon metrics.
Optimizing - process management includes deliberate process optimization/improvement.

7. Development of Software Industry in India
In the 1990s, an increasing number of traditional Fortune 500 companies as well as newer multi-national technology corporations turned to India for software programming and development, call centers and back office operations. 
India’s revenue from exports of these industries is expected to grow by 25% a year to $60 billion 
by 2010 (Nasscom-McKinsey Report 2005).

8. Development of Software Industry in India
Industry giants like General Electric, Microsoft Corp. 
and Dell Inc. rapidly increased their workforce in India; many multi-ational corporations like Motorola, Larsen 
and Toubro and Siemens actively recruited Non-Resident Indians (NRIs) to work in their India-based operations.
Simultaneously, Indian IT leaders like Infosys Technologies, Wipro and Tata Consultancy Services increased recruitment and extended their domain to other parts of the world, setting up offices in the United States and Canada, Europe, East Asia, Australia, and the Middle East. 
Infosys Technologies recruited 25 Asian Indian graduates 
from premier American universities for its competitive 100-seat summer internship. 

9. Infosys
Chairman of the Board and Chief Mentor: Narayana N.R. Murthy
Co-Chairman of the Board of Directors:Nandan M. Nilekani
Chief Executive Officer and Managing Director : S. Gopalakrishnan
Infosys Technologies Ltd. provides consulting and IT services to clients globally
Application development and maintenance
Systems integration
concept-to-market R&D and engineering services
over 130,000 employees worldwide
one of the pioneers in strategic offshore outsourcing of software services
In the 1990s, an increasing number of traditional Fortune 500 companies as well as newer multi-national technology corporations turned to India for software programming and development, call centers and back-office operations. India’s revenue from exports of these industries is expected to grow by 25% a year to $60 billion by 2010 (Nasscom-McKinsey Report 2005). Industry giants like General Electric, Microsoft Corp. and Dell Inc. rapidly increased their workforce in India; many multi-national corporations like Motorola, Larsen and Toubro and Siemens actively recruited Non-Resident Indians (NRIs) to work in their India-based operations.
Simultaneously, Indian IT leaders like Infosys Technologies, Wipro and Tata Consultancy Services increased recruitment and extended their domain to other parts of the world, setting up offices in the United States and Canada, Europe, East Asia, Australia, and the Middle East. Infosys Technologies recruited 25 Asian Indian graduates from premier American universities for its competitive 100-seat summer internship. 

10. Infosys Key milestones Year of Incorporation : 1981
Became a public limited company in India : 1992
ISO 9001/TickIT Certification : 1993
Attained SEI-CMM Level 4 : 1997
Listed on NASDAQ : 1999
Crossed $100 million in annual revenues : 1999
Attained SEI-CMM Level 5 : 1999
Crossed $ half a billion in revenues : 2002
Crossed $ billion in revenues : 2004
Crossed $ 2 billion in revenues :2006
Added to the NASDAQ-100 Index : 2006
Crossed $ 3 billion in revenues : 2007

11. Leveling of the business world
Nandan Nilekani of Infosys explains
Massive investment in technology, broadband connectivity around the world
Cheaper computing power
Explosion of software: , search engines, proprietary software that can distribute work
Platform where intellectual work could be delivered from anywhere
Disaggregate, deliver, distribute, produce and put back together again
The playing field is being leveled

12. Flat World
It is now possible for more people than ever to collaborate and compete in real time
in different corners of the world
in different kinds of work
on a more equal basis
using computers, , workforce software, teleconferencing, fiber-optic networks
Connects all the knowledge centers in the world into a single global network

13. Three Eras of Globalization
Globalization 1.0: 1492 (Columbus) – 1800
Trade between the Old World and the New World started
Countries and muscles
Dynamic force is powerful countries
Countries drove global integration
Global competition among countries
It shrank the world from large size to medium size

14. Three Eras of Globalization
(interrupted by the Great Depression, World Wars I & II)
Started with industrial revolution
Dynamic force driving global integration was multinational companies and breakthroughs in hardware
In the first half powered by
falling transportation costs due to steam engine, railroads
In the second half powered by
falling telecommunication costs due to telegraph, telephones, the PC, satellites, fiber-optic cable, early version of the www

15. Three Eras of Globalization
Movement of goods and information among continents
Global competition among companies
It shrank the world from medium size to small size

16. Three Eras of Globalization
Dynamic force driving global integration is individuals
Powered by the flat-world platform
PC+ telecomm+ work flow software
Global collaboration and competition among individuals
It shrank the world from small size to tiny size

17. Facilitators of Outsourcing
Investment in broadband connectivity
Cheaper PC and IT hardware
Availability of search engines and software
Altogether these created a platform where intellectual work, intellectual capital, could be delivered from anywhere leading to easier remote development, i.e.,
It could be disaggregated, delivered, distributed,produced, and put back together again

18. Outsourcing Examples
Accounting work – US tax returns prepared in India
In 2003: 25,000; 2004: 100,000; 2005: 400,000
Software product called VTR, Virtual Tax Room
Medium size firms get a chance to outsource
Data protection and security is high

19. Outsourcing Examples
Medical – Radiologists outsourcing reading of CAT scans to doctors in India and Australia
Teleradiology – ship images to radiologists abroad
CAT and MRI images are already in digital format and available on a network with a standardized protocol
After-hours readings by “Nighthawks”

20. Outsourcing Examples
Journalism – News about company earnings and related business news
Reuters – 2300 journalists worldwide in 197 bureaus serving investment bankers, derivatives traders, stockbrokers, newspapers, radio, TV, Internet outlets
Create the news flashes
Then, value added work: analysis
Cost and speed efficiency
Analysts are paid $15,000 in Bangalore, as opposed to $80,000 in New York or London
Financially literate and highly motivated employees in India

21. Outsourcing Examples Call Centers
24/7 operations, inbound and outbound calls
As of 2005, 245,000 Indian operators answering calls from all over the world
Low-wage, low-prestige jobs in the US, but high-wage, high-prestige in India
You can work at night and go to school during part of the day, cost of an operator is $500/month
Japan outsourcing to China, Dalian
In the 1990s, an increasing number of traditionalFortune 500 companies as well as newer multi-national technology corporations turned to India forsoftware programming and development, call centersand back-office operations. India’s revenue fromexports of these industries is expected to grow by25% a year to $60 billion by 2010 (Nasscom-McKinsey Report2005). Industry giants like GeneralElectric, Microsoft Corp. and Dell Inc. rapidly

22. Outsourcing Examples Globalization of innovation
Research and development tasks outsourced to India, Russia and China
Indian offices of Cisco, Intel, IBM, Texas Instruments, GE filing patents in U.S. Patent Office
GE transferred Indian engineers who worked in US back to India
By 1990, persons who were born in Indiaand living in the United States numbered over450,000
Entire grad-uating classes of the prestigious Indian Institutes of Technology (IIT) left for graduate studies in univer-sities in the United States in the 1970s and 1980s,many staying on to work after obtaining their advanced degrees 
The liberalization of theeconomy in the 1990s encouraged foreign directinvestment and the establishment of more offices bymultinational firms in India. 

23. Outsourcing Examples Personal remote executive assistant
$ /month
JetBlue Airways homesourcing, reservation agents working from home
McDonald’s drive-through ordering
E-tutoring

24. Flat world The flattening of the world means is that
we are now connecting all the knowledge centers on the planet together into a single global network.
Pro: can usher in an amazing era of prosperity and innovation
Con: Higher competition
Risks: Politics, terrorism,...