IBM is shifting its global procurement headquarters to Shenzhen in a bid to create a new new globally integrated enterprise.
The decision to move the global procurement office from New York to China marks the first time the headquarters of an IBM corporate-wide organisation has been located outside the US.
The company has 3,000 suppliers in Asia and the region accounts for about a third of the firm's total purchasing.
IBM has been sourcing in Asia for more than 50 years, but most of it has been in support of its hardware businesses. Now that IBM is focussed more on software and services, its procurement function is being reshaped to allow Big Blue to tap into new sources of software and services in the Asia region.
The company has already made India a global delivery hub for software.
In another highly symbolic move, IBM has also moved its Asia-Pacific office to Shanghai from Tokyo.
Many multinationals are beefing up their presence in China by giving their China-based executives responsibilities that cover the entire Asian region. For example, treasury management functions for the Asia region are these days more likely to be located in China rather than, as was the case before, in Singapore, because of the huge cash flows now generated on the mainland.
Similarly, as China increasingly becomes the hub around which Asian trade revolves, more multinationals are follow IBM's example and relocating their Asia-Pacific regional headquarters to the PRC from Australia, Japan or HK.
IBM's move to relocated its global procurement function to China goes a step further than most, however. What is interesting is how IBM no longer sees China as simply a source of hardware. Instead, it sees the PRC as a key point to access the emerging software and services industries that are developing in Asia.
