IBM Business Innovation ServicesBy Matthew Rothenberg Print
This 50,000 person outfit offers clients everything from systems integration to supply chain management. Most clients agree that their decision to use BIS was shaped in large part by their IBM infrastructure.
Power of a Pedigree
Nobody ever got fired for buying IBM, and Big Blue's Teflon coating extends to IBM Global Services' consulting wing when it goes up against more specialized consulting outfits such as PricewaterhouseCoopers or Accenture.
The management of IBM's $10.2 billion Business Innovations Services, a 50,000-person operation that spans management, consulting and business integration, makes no bones about the power of its pedigree. Although it prides itself in being platform agnostic, the group admits that most of its clients have investments in IBM hardware. Furthermore, most clients agree that their decision to sign up with IBM's consulting was shaped in large part by their IBM infrastructure.
That's a formidable roster of companies; Joe Gagnon, vice president of e-business strategy and change for Global Services, wagers that BIS has plied its consulting prowess at 498 of the Fortune 500.
Nevertheless, BIS' clients also give it credit for familiarity with specific markets ranging from health care to the airline industry. "We considered Accenture" to help create an e-commerce strategy, says Bill Homa, chief information officer of Scarborough, Maine-based grocery chain Hannaford Bros., "but we thought their approach was pretty generic. It would have been very difficult to wade through what was boilerplate and what was aimed at our market, our technology and what we were trying to accomplish.
"We took a look at all the big [consulting firms]," Homa said, "and IBM was a lot cheaper than the others, who didn't understand our underlying architecture or underlying business. I didn't want to pay for that."
The reach of IBM's consulting arm isn't unlimited. While IBM uses it as a prop to work its installed base, old-school consultants such as Accenture or PricewaterhouseCoopers still have the edge when it comes to management consulting and strategy work.
Like most of its smaller competitors, IBM says that instead of mining new contracts, it's focusing on maintaining long-term relationships. While it is higher margin than the outsourcing that pays most of IBM Global's bills, consulting is a fickle business tied to the ups and downs of clients.
Right now, BIS is trying to steer a tricky middle course that keeps those margins comfortable and the work steady.
IBM Somers Complex, Route 100, Somers, NY, 10589
IBM Business Innovation Services Employees: 50,000
IBM, as a Whole: 316,300 employees
Frank J. Roney
General manager, Business Innovation Services
Roney was appointed to lead the new Business Innovation Services division in January 2000. Previously, he was the former general manager of global operations for IBM Global Services. A former Price Waterhouse consultant, Roney joined IBM in 1993. He was named one of the most influential consultants in 2001 by Consulting Magazine.
General manager, Business Innovation Services, Americas
General manager, Business Innovation Services Europe Middle East Africa
General manager, Business Innovation Services, Asia Pacific
Top Outsourcing Deals:
Fiat, Italy, $7B in 2001
NTL, U.K., $2B in 2001
Cable & Wireless Communications, U.K., $3B in 1998
Westpac Banking, Australia, $2.3B in 2000
Blue Cross and Blue Shield Kansas
Enterprise technology architecture planner
Project: Four-month engagement to overhaul internal architecture and infrastructure.
Goodyear Tire & Rubber
Manager of extranet systems
Project: Worked with IBM on several engagements, including creating the company's call center.
Port of Seattle
Project: Initial $2 million stage of business transformation project due for completion Dec. 31.
SVP of new business development
Project: E-business transformation for Delaware-based manufacturer of shipping containers.
CIO and VP
Project: Three-month engagement to revamp Net strategy for regional grocery chain.
VP, electronic services and product support
Project: Develop-ment of an e-commerce strategy for provider of student loans. Kroehler found IBM had specialists to deal with a variety of challenges.
Business intelligence, customer systems integration, customer relationship management, digital branding and marketing, e-business strategy and design consulting, e-commerce services, enterprise resource planning, knowledge and content management, merger and acquisition services, procurement, security and privacy, skills development for e-business, supply chain management, Web application development.
Accenture, Cap Gemini Ernst & Young, Deloitte & Touche, EDS, KPMG, PricewaterhouseCoopers
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