Multinationals will move services to the location where they can extract the most value, but salary levels are just one element of the cost equation, a senior Nortel executive has said. John Collinsreports.

Steve Bandrowczak, Nortel's chief information officer, was speaking on a visit to the Canadian networking company's Irish operations in Galway which employ almost 300 staff. He said factors such as infrastructure, the tax regime, a business-friendly environment and good-quality universities were just as important as the "cost per hour of particular skills".

Appointed last July, Mr Bandrowczak made his first visit to Galway last week as a Nortel executive, although he visited Ireland in previous senior roles with Lenovo and DHL.

Mr Bandrowczak is firmly of the new school of chief information officer that has emerged in recent years. He's less concerned about which servers and software Nortel uses to run its business and instead talks about "adding value to the business and meeting customer needs".

One of the first major projects he is undertaking is cutting the number of applications that Nortel runs on its network from its current level of 1,100. "There are very common problems and challenges, no matter what company you are CIO for - how do I get more out of my existing infrastructure and how can I make the business more efficient," he says.

Although the internal challenges may be the same, as part of his role in Nortel he also has to advise the company on its own technology strategy vis-a-vis customers.

He has also taken on responsibility for its shared services function. With Galway carrying out finance, IT and other functions for overseas subsidiaries, potentially this means he could have to make hard decisions about em- ployment levels there. Last year, Nortel announced the establishment of a R&D facility in Galway, which will create 60 jobs.