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IBM tries to come up with creative ways to help companies jump on the outsourcing train.

IBM has a new idea for business software, which it feels is unique enough that it deserves a patent.  The computer industry giant has filed application for a patent, which the U.S. Patent and Trademark Office is currently mulling over.  IBM seeks to patent "Outsourcing of Services", which is briefly defined as a "method for identifying human-resource work content to outsource offshore of an organization". 

The patent application, which can be found here, is an attempt to patent the use of computer software to algorithmically analyze a workforce and the various workloads on a company and determine which parts should be cut and outsourced.

The patent application was filed July 12, 2007.

IBM is also seeking to patent a software system for "matching a knowledge worker" with a corporate entity via means including "experience levels, salary, geographic location, job starting date and duration, and industry sector".  The patent application can be viewed here.  The patent has a figure attached which demonstrates its software, which looks like a small calculator.  The figure shows an example of the device displaying the lower costs of dealing with IGSI (Indian) professionals.  IGSI stands for IBM Global Services, India.  The device also seems to be closely connected to outsourcing jobs, as its main purpose appears to be demonstrating to employers that labor can be found far cheaper in non-U.S. locations.

Finally, IBM has at least one more patent in the works.  They currently have an application for a patent for a "System and method of using speech recognition at call centers to improve their efficiency and customer satisfaction".  This application attempts to patent a system for accent reduction in international workers.  The patent's language clearly indicates that it is targeted for situations such as call centers, where a large number of non-native English speakers will be answering calls. 

The patent first propose to electronically transcribe and then provide a digital voice for the caller.  In order to do this IBM proposes using its text transcription system, IBM ViaScribe, developed for hearing-impaired individuals.  Finally, the patent also suggests the speaker take accent reduction classes, such as the programs which IBM offers.

Some may be troubled by the developments that IBM's patents are contributing to the trend of outsourcing technology jobs outside the U.S.  They should not be surprised, however, with the overly broad scope of the applications or of the fact that the applications appear to be for existing or common sense practices. 

There is a long history of tech patents with overly broad language.  There have also been many patents which attempted to patent a well-defined existing technology that already had become common-place in an industry, which the applier was not necessarily the first to develop.  A famous example is Microsoft's 2004 successful attempt to patent the "double-click" (note--their patent only applied to PowerPCs).



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All IBM has to do ....
By TheGreek on 10/1/2007 2:37:05 PM , Rating: 5
is reprogram all the Diebold voting machines to vote for H1-Billary.

Then we'll all be outsourced to death.




RE: All IBM has to do ....
By porkpie on 10/1/2007 3:01:22 PM , Rating: 2
You might be in danger. But people in the US who work hard and aren't vastly overpaid generally don't have to worry about their jobs.


RE: All IBM has to do ....
By zombiexl on 10/1/2007 4:14:20 PM , Rating: 2
How do *you* determine whos vastly overpaid?
Many would say its sports stars.. pretty hard to outsource a *ball or hockey team. Althoguh they have gotten great at insourcing.


RE: All IBM has to do ....
By TheGreek on 10/1/2007 5:00:28 PM , Rating: 2
quote:
How do *you* determine whos vastly overpaid?


He stabs in the dark all the time. Pork reduces blood circulation, saturated fats and all.


RE: All IBM has to do ....
By Ringold on 10/1/2007 8:05:54 PM , Rating: 1
Further explination:

The free market makes the decision. If low skilled labor internationally can do similar work at lower cost despite high transport costs, then jobs will move overseas.

The labor here, now defined as structurally unemployed, has three options. (a) Remain unemployed (b)Accept underemployment in low-skill jobs (c) A combination of a & b while receiving education/skill training such that one acquires an in-demand skill.

Some sectors of the economy even qualify for some sort of trade-adjustment job training benefit, though that's much more common in Europe.

We get lower inflation, and since ultimately we improve our productivity in response to the competition in the aggregate, our income rises. Wealth creation. Malthus fans need not apply.

Of course, some overpaid individuals, namely union workers, will be protected. They're merely holding back the rest of us, though, and if they're not taking their wages and improving themselves and sending their kids to college, they're fools.


RE: All IBM has to do ....
By sinful on 10/1/2007 11:01:29 PM , Rating: 3
So what happens when one day, goods can be loaded onto huge shipping vessels and shipped overseas cheaply -- negating the "high transport costs" portion of the equation?

And I think it's a little dubious to use terms like "low skill".

If tomorrow the legal system employs video conferencing with lawyers in India, is the legal profession now considered low skill?


RE: All IBM has to do ....
By Ringold on 10/1/2007 11:53:49 PM , Rating: 2
Okay, low skill doesn't seem to apply to lawyers, but it's not that simple. There's reasons why doctors still bother to go to their offices and people to offices; there are tactile skills and.. I don't bloody know, not my field, there would seem to be clear benefits to "live action" but I won't BS a response on that count.

But I would say, no, if an American lawyer can't perform a duty competitively with an Indian counterpart, and the Indian is willing to accept lower pay, then I for one will not shed a tear. On the other hand, you have to keep in mind that wage inflation in India is currently astounding -- which flows beautifully from the idea that as their economy grows and skills shortages develop that wage differences will in the long run equalize, given a certain level of productivity. A similar story is developing in China which is about to, for the first time probably since Mao, feel what it's like to have a massive skills shortage. Not that either nation can produce lawyers of the caliber of a home-grown American with an instrinsic understanding of our society.

Of course, the next frontier is Africa. History moves forward, and trade protectionism has never been anything but a failure. Do you think it could be otherwise now?


RE: All IBM has to do ....
By sinful on 10/3/2007 12:00:43 AM , Rating: 2
Well, right NOW there are reasons for doctors to see patients, but there really isn't any compelling reason it will stay that way.

Let's put it this way: how often do you actually need real, physical contact with a doctor? Would a nurse suffice, with a Doctor video-conferenced in India for a lot of things? Just because it isn't happening now does not mean it won't eventually. I would propose that skyrocketing healthcare costs is going to push this industry out too. Just give it time.

And logically, aren't the high paying jobs going to be the ones that are most prone to outsourcing? Sure, an Indian can go to school for 6 years and become a programmer. But if he can go to school for 6 years and become a lawyer, and the potential pay is 2x as much as a programmer, don't you think that's a huge incentive? I think you seem to be under the illusion that only mindless, tedious jobs are prone to outsourcing. That's not the case. In fact, it's the lucrative, high paying jobs that are going that are the end target.

I do agree that globalization will eventually lead to equalization; The question is, when does that happen, and how long will it take to get there, and is that something we REALLY want?

You seem to be of the view that protectionism is bad. Which is somewhat interesting, when you really think about it.

"Equalization" is more or less just another way of saying "Averaging", is it not?
Doesn't that somewhat imply that the top-end will go down, as the bottom end goes up? In other words, first world countries will (eventually) see a decrease in the quality of life, while the 3rd world countries will see an improvement?

To put it this way: right now, the US (with something like 4% of the world's population) consumes something like 25% of the world's resources. Do you see a potential problem here?
What happens when other countries start demanding the same quality of life / needing the same amount of resources?

Either we're going to have to find vast, vast amounts of new resources, or we cannot possibly consume the same amount we are now.
Put another way: you thought $4/gallon for gasoline is bad, what happens when 2 Billion more people start using gasoline to power their cars as well? Either we're going to have to find massive amounts of oil to keep them satiated, or we're going to have to drastically cut our consumption. (or, perhaps more accurately, watch prices of gasoline skyrocket to $20/gallon).

Explain to me again why protectionism is bad?


RE: All IBM has to do ....
By Hexxx on 10/2/2007 9:21:05 AM , Rating: 2
As a South African embedded software engineer working on firmware for devices with applications as varied as mixing ANFO (mining explosive) and infant life support for our various partners in the US and Australia, I can assure you that not all work that is outsourced is "low skill" as you put it.


RE: All IBM has to do ....
By Ringold on 10/2/2007 1:08:52 PM , Rating: 2
Nor would I describe South Africa in the same terms as, ah, whats the politically correct term these days? A 'transitional economy', such as your northern neighbors. South Africa's GDP is, what, more than all the rest of Sub-Saharan Africa combined? You having that job isn't any more controversial than an American job going to Europe on occasion; not a big deal. Software engineers also aren't unionized; low skill jobs tend to be unionized, and thus the ones making a fuss.

Speaking of those northern neighbors, ya'll really should try to do something about Zimbabwe. It's gone from bad to worse and could go from worse to humanitarian disaster any day now.


RE: All IBM has to do ....
By Hexxx on 10/3/2007 5:19:41 AM , Rating: 2
It's still an example of outsourcing to get the job done for cheaper. The man hours would be less expensive seeing as the cost of living here is cheaper than Europe and the states and our salaries, as a consequence, aren't as high. Making us a prime candidate for outsourced skilled labour. The table at the bottom gives a comparison of the average IT salaries relative to the US and Aus (divide by 7 to get USD):

http://mybroadband.co.za/news/General/1452.html

I can' comment on the figures for the other countries, but for SA those salaries look about right.

With regards to Zimbabwe, unless someone removes Mugabe from power there will be a humanitarian disaster. Unfortunately, I don't see him being removed. Even if he is removed, the situation may have already reached critical mass.

The problem is also cultural, among some of my countrymen (I can't speak for Zim residents), he is seen as a leader. Their reasoning is that leaders are not meant to be questioned. That is why they are leaders. If he says the Western powers are sabotaging the economy, it must be true. He is doing what's best for the people.

It's a sad truth, and a view that I found is shared, to my absolute astonishment, by a few of my relatively well educated colleagues. I don't hold much hope, they may have to hit rock bottom before they can come right again.


RE: All IBM has to do ....
By Kuroyama on 10/1/2007 5:31:15 PM , Rating: 2
So IBM will make it possible to outsource CEO jobs? Sounds good to me. But I suspect those who are vastly overpaid probably are the ones least likely to be fired, because they probably wield control over decision making such as whether to outsource their own jobs.


RE: All IBM has to do ....
By Ringold on 10/1/2007 8:12:21 PM , Rating: 3
You mean, the CEO's that shareholders bid on to attract top talent in full knowledge of the price tag?

If you want to see how to quickly destroy a well-oiled corporate machine, go ahead, hire a run of the mill Chinese and pay him 100k. He might be well intentioned, but there's a reason firms are willing to pay someone like Jack Welch stupendous amounts of money. They create value. Cherry picking the 1% who end up as bad apples isn't fair; why pay McDonalds employees as much as we do when (really more than) 1% still screw up my burger? Oh, that's somehow different? Can't treat two groups of humans equal?

Nevermind the moral issue that what owners decide to do with pay is none of our business -- unless we, too, are part owners.


RE: All IBM has to do ....
By sinful on 10/1/2007 10:47:14 PM , Rating: 2
If you want to see how to quickly destroy a well oiled corporate machine, go ahead, hire a run of the mill Chinese [INSERT JOB NAME HERE] and pay him 10% of the normal salary.

So basically you believe that there won't be a problem if said underpaid person is merely building an airplane, designing your computer, or doing something like that... but somehow a CEO is off limits?

When you break it down, employees are just mini versions of CEO's - unless the job is so menial that no intelligent thought is required -- at some point the underlings are making decisions.

CEO's have the most noticable effects, but are they doing the R&D? Nope. The development? Nope. Selling the product? Nope. CEO's choose the overall direction of the company, but it's everyone else that keeps the machine running. "Let's build a hydrogen powered car" might be the direction the CEO wants, but it's the employees that implement, excute, and sell said direction.

In other words, employees create value.

In that regard, CEO's are just like everybody else -- Like you said: "Can't treat two groups of humans equal?"


RE: All IBM has to do ....
By Ringold on 10/2/2007 12:03:11 AM , Rating: 2
You're driving the argument in to whole other realms. I was defending a private group of owners ability to hire or fire who they please.

The can of worms you open is comparative and absolute advantages of Chinese, Indian and American workers. American's above all others have an uncanny knack (do college keggers somehow contribute to this?) for management and human resources. We understand capitalism and how to deal with people in a free and open way from a young age. We're culturally uninhibited -- compared to Asian cultures. It's a cultural advantage, I suppose; it also helps our universities are the best in the world.

So yes, swapping CEO's could be a disaster, but no, moving engineering jobs may not necessarily be.

You're also giving a CEO way too little credit for a job that often requires more dedication and time than I would dare say 99% of the population would tolerate, all willingly. They absolutely are responsible for creating value. How big of a company or team do you work in? Hopefully you've seen and understand that while yes, pawns do the heavy lifting, different management can take similar resources and produce astoundingly different results.

Again, HR's not my thing, I prefer macroecon, but some of this is simple. You sound like a UAW rep :P You're also not qouting a single bit of economic principle to back any of it up.


RE: All IBM has to do ....
By sinful on 10/3/2007 2:02:42 AM , Rating: 2
quote:
American's above all others have an uncanny knack (do college keggers somehow contribute to this?) for management and human resources........So yes, swapping CEO's could be a disaster, but no, moving engineering jobs may not necessarily be.


First of all, I'm not saying "swapping engineers will result in failure 100% of the time".
What I'm saying is that while CEO's are important, a lot of jobs are under-rated in value in comparison to the CEO.

Second, do you honestly believe that Americans comparative advantage ONLY applies to management & HR, and not other fields??
I think that's a pretty silly statement.

quote:
You're also giving a CEO way too little credit...

No, I'm giving proper credit, you're just giving too much.

Let's put it this way: If we win/lose the war in Iraq, is it President Bush's credit/fault? He's essentially the "CEO" of the army. Or are you going to go "Ok, well he controls the overall direction, but for a lot of things he relies on his subordinates, and thus success/failure cannot be solely pinned to him?

Like I said, I recognize the importance of the CEO, but I'm also not such a fool that I believe a CEO of a company full of dull-wits is the same as a company with a company full of sharp witted people.

quote:
You're also not qouting a single bit of economic principle to back any of it up.

Have you ever heard the saying:
"For want of a nail the shoe was lost..."?

Sometimes, it's the small details that make the difference.
If your theories do not incorporate common sense, maybe you'll discover why they're still theories.
;)

quote:

Hopefully you've seen and understand that while yes, pawns do the heavy lifting, different management can take similar resources and produce astoundingly different results.

Yes, and I've also seen where pawns doing the heavy lifting have made a big difference, and success cascaded from there.

For instance, I know of someone that made slightly more than minimum wage. They saw a problem in their company, devised a solution, and sent it along to management. Managment liked the idea, and implemented it. In the end, it saved the company $50,000-$100,000/year.

Ok, small potatoes for a major company; but then, the story goes on. In some part because of this (not the sole factor, but a contributing one), the company's costs to its clients were less than their competitors -- which weren't implementing this solution.
When the company landed a multi-million dollar contract, it turns out that one of the big factors in landing that contract was that the company's costs were lower than its competitors.

Now, you can say that it's not a direct cause-effect relationship; you can say that it might have only been a contributing factor; but it's hard to deny that one minimum wage employee made a major difference, and (may) have ultimately generated millions of dollars worth of business.

To put it bluntly: Yes, employees might only make a 10% difference in a company, but then again in a cut-throat industry, an advantage of 10% can mean the difference between success and failure.

Second, imagine what would happen if this one company had 10 employees like this. You're talking about millions of dollars/year.

quote:
You sound like a UAW rep :P

And you sound like a self-absorbed manager that can't get over the idea that managers aren't the center of the universe.
:P


RE: All IBM has to do ....
By Kenenniah on 10/2/2007 10:55:54 AM , Rating: 2
If an engineer makes a big mistake, it will hopefully get caught by quality control or testing before a product is released. If not, a faulty product might get released, causing a recall, warranty repair work, or some loss of consumer confidence. Costly? Very possibly. Cause severe damage to the company as a whole? Possible but not likely. Completely destroy the company? Extremely unlikely.

A CEO makes a big mistake. Leading the company completely in the wrong direction, making horrible investments, or a long list of many type of big mistakes. Costly? Always. Cause severe damage to the company as a whole? Pretty damn likely. Completely destroy the company? Entirely plausible.

The difference in resonsibility is huge. Most outsourced employees total possible effect on the company is pretty limited, so while there may be a risk it's more calculated. A CEO on the other hand? It's far far more likely for a CEO's bad decision to cause a company to go under, and to cause possibly thousands of people to lose their jobs, than a bad decision made by the underpaid person "designing my computer".


RE: All IBM has to do ....
By sinful on 10/3/2007 12:25:55 AM , Rating: 2
You're exactly right; but my point (perhaps not fully expressed as such) is that the employees are just MINI -versions of the CEO.

If a company consistently puts out bad prodcuts, recalled products, loses consumer confidence year after year, etc, yes, it's not going to implode overnight, like if the CEO made a giagantic blunder... but eventually, the company is going to fall apart.

To make a bad analogy: a death by 1000 cuts, instead of a death by 1 deep cut, is still a death.


RE: All IBM has to do ....
By TheGreek on 10/3/2007 9:49:56 AM , Rating: 2
quote:
A CEO makes a big mistake. Leading the company completely in the wrong direction, making horrible investments, or a long list of many type of big mistakes. Costly? Always. Cause severe damage to the company as a whole? Pretty damn likely. Completely destroy the company? Entirely plausible.

The difference in resonsibility is huge.

Sure is, he gets a nice golden parachute, makes out like a bandit no matter how bad he screws up. It's like top level boxing. Ever notice how much the loser gets? There are no losers in that match.


RE: All IBM has to do ....
By rdeegvainl on 10/2/2007 8:44:59 AM , Rating: 2
actually is is completely our business, since the money they get is money from the consumers,as potential consumers, we do have a right to know how the company is run, and make decisions based on that. not arguing either side of the issue but that is the way i see it.


RE: All IBM has to do ....
By Ringold on 10/2/2007 1:14:15 PM , Rating: 2
So if a girl sells you a cup of lemonade on the street corner, you suddenly have a right to know her personal financial situation, possibly that of the "parent company" (parents) as well, along with the manner in which she operates her life?

Absolutely not, not unless you're a business partner (which is what a shareholder is). The logic is identical; just applied in a way you may not like, but identical none the less. Gravity applies in situations we dont find convenient; so do economic principles. Where do people get the idea that buying something from somebody by an act of free will suddenly gives them ownership of something other than the product?


RE: All IBM has to do ....
By Kuroyama on 10/2/2007 1:20:17 PM , Rating: 2
I hate to agree with Ringold, but only the shareholders have a right to decide management and CEO pay. Unfortunately, the Board of Directors is largely self-appointed and shareholders have little real influence in corporate decision making processes.


RE: All IBM has to do ....
By Kuroyama on 10/2/2007 1:16:24 PM , Rating: 2
CEO pay structure and hiring issues are often quite opaque. Moreover, in most companies there is no real means to vote against a candidate for Board of Directors, as generally a single share voting in favor of the candidate is sufficient to give them the job. US corporate structure is far from being in the best interests of the owners (read stockholders) of the companies.

The CEO as overpaid employee part was meant to be serious, but obviously the outsourcing bit was in jest, as no one would seriously propose outsourcing the CEO's job to China.


RE: All IBM has to do ....
By Kougar on 10/2/2007 2:34:09 AM , Rating: 3
Tell that to the last several rounds of layoffs at Circuit City, they fired all of their most senior level staff just because they made $3 or less more per hour than an arbitrarily set pay cap of $15. Most of those employees had been there for years. They are one of many examples out there: http://www.dailytech.com/Circuit+City+Fires+3400+O...

The hard worker is only taken advantage of in the typical blue collar or service job. Work long and hard enough, and you will be fired and replaced with a new employee they only have to pay a fraction of your paycheck to.


RE: All IBM has to do ....
By elpresidente2075 on 10/2/2007 10:37:18 AM , Rating: 2
I work as an outside rep at a local Circuit City. The problem with that company is that it's trying to go bankrupt so that some CEO or something can run away with a TON of money and leave the company in shambles. Word on the street is that the store I work in will be going completely out of business within 24 months.

An interesting thing about Circuit City I've noticed: Everyone who works there is either 2-3 weeks from quitting or has just been hired. Since there's been a hiring freeze at that store, there's a lot less of the latter and many more of the former. That is on top of the constant firings for not meeting arbitrarily high numbers, despite being the best salespeople in whoever's respective department.

This is a perfect example of my new slogan after being in the game for several years: Retail Sucks.


RE: All IBM has to do ....
By TheGreek on 10/3/2007 9:43:33 AM , Rating: 2
quote:
But people in the US who work hard and aren't vastly overpaid generally don't have to worry about their jobs.


Pffft. Anyone that can be outsourced for 1/10th his current cost here will be, its only a matter of time.

Those that expect to compete with global workers should prepare themselves to also accept their standard of living, or lack thereof.

Even the techs in India are concerned about this as China gears and prepares to undercut their prices.

There are a lot of people in the US that have worked hard and got screwed in the end.

But yeah, one has to note that the people making these decisions are never on the outsource list. Like the leaders in the current war, the rules of engagement and sacrifice only apply to the proletariats.

Hillary could save money by setting up her office in Bangalore.


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