IBM Seeks Patent On 'Outsourcing Machine'

Big Blue has invented a computerized system that automates the process of sending jobs overseas.

Paul McDougall

March 31, 2009

2 Min Read
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On the same day that IBM gave layoff off notices to thousands of American workers with an eye to shifting more work abroad, the U.S. Patent and Trademark Office published Big Blue's application to patent a computerized system for offshoring IT jobs.

The patent, "Method And System For Strategic Global Resource Sourcing," outlines plans for technology that would automate many of the steps involved in outsourcing or offshoring work.

"An important challenge in shifting to globally integrated enterprises is planning the location and capacity of the global workforce," notes the application. "There is a need to provide a robust and reusable sourcing template to identify new/expand existing global resource pools, analyze trade-off qualitative and quantitative aspects across multiple global locations, and model the global nature of resource sourcing."

The U.S. Patent and Trademark Office published the application on March 26, a date that some IBM workers have called "Black Thursday" because it's the day Big Blue handed out pink slips to about 5,000 U.S. workers, according to internal company documents and labor sources.

Some IBM employees claim the jobs are destined for low-cost countries such as India, where IBM has hired tens of thousands of workers in the past several years while trimming its ranks in the United States.

The patent application describes a system that would remove much of the hassle involved with shunting jobs around the world.

"It is desirable to have method and system for determining an effective sourcing strategy to support a global portfolio of resources, over time, which concurrently incorporates qualitative and quantitative factors, some of which may be non-linear in nature," the application reads.

IBM's offshoring plans have drawn protests from labor groups and on-air pundits like CNN's Lou Dobbs. Critics note that the company is laying off American workers while at the same time aggressively bidding for work funded by President Obama's multibillion-dollar stimulus package, which aims to create jobs.

In its defense, IBM has argued that it needs to have a global workforce to operate as efficiently as possible and to capitalize on sales opportunities in high-growth emerging markets such as India, China, and Eastern Europe. More than half of IBM's revenue now originates from outside the United States.

On Tuesday, the Times Herald-Record of Middletown, N.Y., quoted an IBM spokesman as saying the application was filed in error and would be withdrawn.

If that's the case, it won't be IBM's first about-face on an offshoring patent. The company in 2007 withdrew an application for "Outsourcing Of Services," after critics slammed IBM for violating its policy against filing patents on business methods that lack substantial technical merit.

An increasing number of U.S. companies are turning to Indian outsourcers, but their level of dissatisfaction has increased as well. Download the report here (registration required).

About the Author(s)

Paul McDougall

Editor At Large, InformationWeek

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