62716275 Rebirth of IBM

8/2/2019 62716275 Rebirth of IBM

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INTERNATIONAL BUSINESS MACHINE

8/2/2019 62716275 Rebirth of IBM


8/2/2019 62716275 Rebirth of IBM


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Selling oost t e short r n t loss of speci l rel tionship ith clients Sale of net ork computers ere rocked ut mainframes plunged thinking of switching cost.

8/2/2019 62716275 Rebirth of IBM


Louis Gerstner to take over as CEO"In order to serve markets, we have to understand them, reflect their diversit and build a workplace in which ever individual knows their opportunit to contribute is gated onl by the quality of their ideas and job performance, and the integrity of their work."

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Gerstner performed a study on different divisions to implement the steps. New independent managers for each division of business. Attractive incentives to the managers to perform well. eplaced senior executives with managers in low down ranks. Changed the decision making process and way of meetings. Centralized hierarchical structure to quick decision making

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I to remain as a single unit Complete and comprehensive collection of hardware,

software and services To provide computer packages suited to new computer environment and to survive the competition Speeding innovations and decision making

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Provide a complete state-of-art computing solutions Take advantage of Internet f

or marketing. To make I as customer-driven company Low profit margins & to provide unique so that customers pay on premium price Challenge ±How to customize the products according to the needs of the customer?

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To design the hardware to meet the satisfaction of clients To customize the mainframe computers to suits to all business units small or big Smaller mainframes ³enterprise servers´ to meet the clients of growing companies Problem solving ³ThinkPaddevices´ Development of new advanced microprocessor chips Cost advantage over ainframe Computer. Customize the chip to suit to all computers needs for OE s.

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Rapid change in software proved to challenge to I istake is that allowing icrosoft to provide SDOS operating system to I pc¶s & mainframes Then they tied up withERP to increase the value by mainframe to server, server to PCs. Started to acquire the software companies like lotus ±Lotus notes for corporate Intranet. Developed iddleware software

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Gerstner move is to satisfy all the clients and their needs. Computer services contributed to 2 % of the revenues. U.S govt to employ the I to run the major computing systems. Establishment of Integrated Systems Solution Corporation (ISSC)to develop the services. Electronic Data System and Accenture Followed Jack Welshof GE. Renamed as Global Services Consultant -Design, Plan, Implement, aintain

and Upgrade to reduce client cost structure. -It increase client loyal on long term

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Investing large amount to services To compete Accenture and EDS to provide consulting and services Expertise in middleware Client to Client assessing. All abovewill give Clear idea on customer needs.....

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Growth of internet and e-commerce would major force in the direction of computing future Established e-business is to serve internet related value chain transaction before its competitors Acquisition of lotus enabled competitive advantage Lotus collaborative software provided a model for making middleware software internet compatible I I initiative its e business in 6

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Competitive advantage over competitors growing no of clients

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I showed importance on SMB¶s and growing industries to their needs To manage theirdatabases & functional value chain 1999 two million SMB clients by 2 1

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Advantage is early move to internet which helped in cost cutting efforts Saved billion of dollars by selling their products directly to clients

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By 2 IBM replaced EDS as global leader in computer services Gerstner continued t

o work to strengthen his new services driven model across all IBM New pay-for-performance at the all levels of employees Change of IBM structure to became entrepreneurial, collaborative and customer oriented Gerstner¶s successor Sam Palmisanotook charge of global services, he was known as ³street fighter´ in college Changein the operating structure as to new service driven organisation.

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Sam palmisano

corporate headquarter

Global services

hardware

software

Global marketing

R&D

Global sales & distribution

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Global services Hardware Software Global financing R&D Global sales and distribution

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LYNCHPIN most powerful group of operating group

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Services surpass hardware revenues Work to deliver software and hardware to clie

nts They have two superior software such as PeopleSoft's HRM , SAP¶s ERP $ billiondollar to develop Linux based OS which works on all platform Major clients in Asia such as India and China which results in lower cost OS

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STRATEGIC OUTSOURCING SERVICES provide customer with cost advantage INTEGRATED TECHNOLOGY SERVICES designs, implementation and maintenance BUSINESS CONSULTING SERVICES Business process innovation, application enabled

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Acquisition of PriceWaterhouseCoopers for $2. billion Increase in consultants inservices To serve the needs of different industry clients To offer the same complete IBM solution all over the globe 40% revenues from global services Improvement in online collaboration and global teleconferencing to promote collaboration

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In 2003, IBM reorganized the hardware group - system & technology group - personal system group

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IBM microelectronics division:Offered:x Leading semiconductor technology. x Customized solution x Sold Engineering technology Services to Original Equipment manufacturers(OEM) x And offered serviceto other computer companies.

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Offered 3 services:Manufactured & tested Semi-conductor products for customers. IBM provides integrated supply chain services to deliver the product to Customer and clients.x Eg: Sony P3 and Home media centre

In addition, Technology group launched its new Engineering and Technology services division that provides system and component design service.

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Include the companies lines of PCs, printers and Point of Sale terminals used inretail stores and fast food restaurants. And include IBM Thinkpad devices Intense price Competitionx Dell, Hitachi and Samsung

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Could not match efficient Competitor.x So in 2000, sold hardware to Hitachi x And in 2002, 3 years Outsourcing to SCI

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Despite outsourcing they plunged in profit (2005). Sold Computing business to LENOVO.LENOVO can sell under the brand name of IBM.

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Analysed the Core competencies and gained through the leadership of new CEOx x x x Hardware Software and services Servers Storage Devices

Leads to more profit and Operating margins are high.

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Failed in commodity product because of DELL competition Gerstner insight was tooffer complete range of computer products and solutions.

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Offered:Open Source middle ware solutions

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IBM once again to strengthen its competencies in application software went for stratergic acquisition.Lotus Tivoli System Rational System

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To provide its clients with the financing to facilitate them to purchase their computer products and services. This decision is the major source of profitability. IBM is the largest IT financier in the world.

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IBM has an operating division devoted to advanced research Focused on emerging technologies like nanotechnology and autonomic computing.

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Palmisano introduced the ³e-business on demand initiative´ He searched for new IT business Solution His teams objectivesx To further innovation x To significantly reduce cost x To integrate activitiesIt has developed 17 expert system

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By 2005, increased IT budgets IBM was working hard to promotes itsx Customized on demand hardware x Software offerings.

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HP- Compaq merger. Microsoft-SAP merger. IBM eyes on lucrative SMB segments

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8/2/2019 62716275 Rebirth of IBM


62716275 Rebirth of IBM

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