IBM Presentation
- 1. Presented by Ryan Olsen ~ Ali Aldossary ~ Adair Gregory ~ Ahmad AlrashidiManagement 3800 – Business Policy & Strategy
- 2. The Roots1911 ~ Computer Tabulating Recording Co. (C-T-R)International Time Recording Company
- 3. Computing Scale Company of America
- 4. Produced meat/cheese slicers, commercial scales, industrial time recorders, tabulators & punch cards
- 5. 1,300 employees. 6 Plants. 1914 ~ Thomas J. Watson Sr. becomes General Manager
- 6. Thomas J. Watson Sr.Became President within 11 months of joining C-T-RCorporate Culture“THINK” mantraDark suits, ties, clean cut Company sports teams, family outings, and band (company songs)3 PrinciplesRespect for the individualService to the customerExcellence must be a way of lifeFocus on large scale tabulating solutions for customersRevenues doubled to over $9 million in first four yearsExpanded operations to Europe, South America, Asia, & AustraliaCTR becomes IBM in 1924♪ Our voices swell in admiration, ♪Of T. J. Watson proudly sing,He'll ever be our inspiration,To him our voices loudly ring,The I B M will sing the praises,Of him who brought us world acclaim,As the volume of our chorus raises,♪ Hail to his honored name. ♪
- 7. Early Years at IBMGrew business through acquisitions and investments in R&DGrew during the Great Depression as a result of government contracts1930s ~ One of the first companies to offer its employees group life insurance, survivor benefits, paid vacations The New Deal ~ Social Security Act of 1935IBM maintains employment records for 26 million people “…the biggest accounting operation of all time”WWII ~ IBM facilities used at governments disposal Produced bombsights, rifles, and engine parts
- 8. Only took 1% profit from government and established a fund for widows and orphans of IBM war casualtiesLeading the Way in Business Computing1944 ~ The Mark I
- 9. First machine that could execute long computations automatically
- 10. Took less than a second for an addition problem, 6 for a multiplication problem, and 12 for a division problem
- 12. 21,126 employees
- 13. 1981 ~ IBM Mainframe/5150
- 14. 70% market share
- 15. $26.2 billion in revenue
- 16. 341, 279 employeesA History of Progress
- 17. Key Issues @ IBMIBM hires 1st outside CEO, Lou Gerstner, on April 1, 1993
- 18. IBM’s strategic vision focuses on infrastructure and integration
- 19. IBM’s focus on open technologies and high value-added solutions
- 20. Sold off commodity low-value elements of portfolio and used the capital to purchase high-value extensions to software and services business
- 21. IBM’s done over 40 acquisitions of software companies under software group since 2000
- 23. Become the premier globally integrated enterprise
- 24. Contemporary challenge for IBM is to help build a smarter planet
- 25. IBM in Middle EastHelp From an Outsider~ Louis V. Gerstner ~1991-1993 ~ $16 billion loss (100 days until bankruptcy)
- 26. Disassociated divisions ~ Software, Hardware, Services
- 27. Very decentralized and independent culture
- 29. Appointed in April, 93’
- 30. 1st outside higher level executive hire
- 32. CEO of American Express & RJR Nabisco
- 33. New Strategy ~
- 35. By 1999 ~
- 36. Stock at all-time high
- 37. $169 billion market capitalizationA New Strategic Vision~ Louis V. Gerstner ~Decision to INTEGRATE divisions11 Globally Integrated Support Functions
- 38. Breaks “no layoff” policy85,000 employees laid off by 1996Cut $7 billion in costs
- 39. Integrate internally to provide a top-to-bottom solution for customersINFRASTRUCTUREEnd-to-End business solutionsOne end all suppliers, distributors, tax authorities, regulatory agencies and anyone else outside a company’s firewalls; on the other end: the “explosion of devices” connected to the netIBM’s Role: To facilitate the workflow Big servers, mainframes that could handle the mass amount of eBiz
- 40. A New Strategic Vision~ Louis V. Gerstner ~“Inside IBM, we talk about 10 times more connected people, 100 times more networked speed, 1,000 times more devices and a million times more data. Whatever it is, very soon this networked world is going to be several of orders of magnitude bigger and more complicated than anything we know today.”INFRASTRUCTURE cont. Proprietary technologies to open standards
- 41. Invests $1 billion in Linux
- 42. Invests $100 million in computer that is 100 times more powerful than any other computer
- 44. New Leader, New StrategySamuel J. Palmisano becomes CEO in October, 2002Strategy focuses on Integration & InnovationSold off low-value commodities and invested in high-value added solutionsHitachi buys hard-drive division in 2002 for $2.05 billionLenovo buys PC division in 2005 for $1.25 billionJV gives IBM Chinese market accessRicoh buys Printer division for $725 million
- 45. Expanding Software & ServicesPurchased 40 software firms since 2000Investment in Service Oriented Architecture to better manage business processesStreamline BPM through SmartSOA2nd Largest Software firm (Microsoft)Acquired PricewaterhouseCoopers Consulting in October, 2002 for $3.5 billionAccess to C-Level executives at Fortune 500 companies
- 48. IBM: Let’s Build a Smarter Planet
- 49. IBM: Let’s Build a Smarter PlanetAreas of AttentionEnergy
- 50. Traffic
- 51. Food
- 52. Infrastructure
- 53. Retail
- 54. Intelligence
- 55. Government
- 56. Banking
- 57. Telecom
- 58. Oil
- 59. Healthcare
- 60. Cities
- 61. Water
- 62. Public Safety
- 63. Buildings
- 64. Work
- 66. Products
- 67. By the year 2010 there will be over 1 Trillion devices connected to the Internet.
- 68. Each person will carry over one billion transistors
- 69. Shows we have become globally integrated
- 70. IBM can leverage existing technology to make the world better IBM in the Middle EastIn Middle-East since 1947Originally went to service oil companies Trust IBM to save their informationOutsourcing workPeople are becoming familiar with growing technologyBusiness shifting from regular commerce to E-commerceGovernments trying to minimize paper usageIBM offers electronic solution
- 72. 1,500 local employeesEvaluate the Role and Effectiveness of Corporate Executives in the Development and Implementation of the Organizational Strategic Plan Lou GerstnerIntegrate & InfrastructureShift from Hardware to Services based businessRightsized company, laid off 85,000Near bankruptcy to record earnings in 6 yearsSam PalmisanoIntegrate & InnovateGlobal Supply Chain IntegrationSoftware & Services AcquisitionsSmarter Planet
- 73. SWOT AnalysisStrengths ~IBM has the technology and expertise to make every business more efficient
- 74. IBM has a singly supply chain used worldwide, which helps in their being the premier globally integrated enterprise
- 75. IBM has an employee base of well over 350,000 employees operating in over 170 countries, this gives IBM the expertise and talent base to find solutions and grow as a globally integrated enterprise.
- 76. Most patents held by any company (R&D)
- 77. IBM’s “smarter planet” initiative
- 78. Smart Service-Oriented Architecture approach to managing business processes at all levels makes companies much more efficient
- 79. Have significant amount of market share in each of the industry’s they compete in: (Global) Services, Software (2nd behind Microsoft), and Hardware (large mainframe computers, servers, etc.)SWOT AnalysisWeaknesses ~High operating expenses Spends nearly $5 billion per year on R&D, depending on the amount of success the department has, this could be spending “money for nothingOpportunities ~High price products that competitors produce Continue global expansion. Become more globally integrated.Amount spent on research and development should give them an advantage over their rivals.Use PricewaterhouseCoopers to continue expanding the consulting services aspect of the business. Continue making acquisitions of software firms that can innovate new solutions Continue to help “make the world a smarter planet”Threats ~Liability associated with spending $5 billion annually on R&DChanging marketplaceShift to a globally integrated enterprise, more decentralized organizational structure, which did not serve them well prior to Lou GerstnerSam Palmisano will most likely retire in two years at age 60, as most IBM CEO’s are encouraged to do. This shift of power will likely cause turbulence at IBM.
- 81. Key Success FactorsDistribution-related Key Success FactorsMarketing-related Key Success FactorsStrong direct sales (internet)
- 82. Most sales are large contracts
- 83. Able to secure image to consumers, used in banks, libraries, ect.
- 86. Good, large customer serviceOther Types of Key Success FactorsSkills & Capability-Related Key Success FactorsTalented workforce
- 88. Strong e-commerce capabilities, user friendly website
- 90. Ability to provide fast, convenient after sale repairs and serviceKey Success FactorsTechnology Related Key Success FactorManufacturing Related Key Success FactorIBM has thousands of IT employees and leads the industry with e-networks.
- 91. Proven ability to change organization when technology changes.
- 92. Has the capital and man power to survive the bad economy
- 93. IBM’s product is needed within organizations regardless of the economy
- 94. Low cost of production designChairman, President & Chief Executive OfficerS. J. (Sam) PalmisanoGlobalBusiness Services Software GroupSales& Distribution Enterprise On Demand TransformationSystems & Technology GroupGlobal Technology Services Research& Intellectual PropertySenior Vice PresidentR. F. (Frank) Kern IIISenior Vice PresidentM. E. (Mike) DanielsSenior Vice PresidentV. M. (Ginni) RomettySenior Vice PresidentJ. E. (John) Kelly IIISenior Vice PresidentL. S. (Linda) Sanford Senior Vice PresidentR. W. (Bob) Moffat Senior Vice PresidentS. A. (Steve) MillsConsulting and Systems Integration
- 96. Global Markets
- 97. System z
- 98. Power Systems
- 99. System x
- 100. Storage
- 104. Application & Integration MiddlewareInformation Management
- 105. Tivoli Systems
- 106. Workplace Portal & Collaboration Software
- 107. Rational
- 108. Enterprise On Demand Transformation
- 109. CIO
- 110. Quality & Process Transformation
- 114. e-Business Hosting
- 115. Small & Medium Business Services
- 116. IBM Global Financing
- 117. Managed Business Process Services
- 118. Research
- 119. IP & Standards
- 121. University Relations & IBM AcademyDevelopment & ManufacturingSenior Vice PresidentR. (Rod) AdkinsServices DeliverySenior Vice PresidentT. (Tim) Shaughnessy Finance Human Resources LegalMarketing and CommunicationsStrategy andEnterprise InitiativesSenior Vice President Legal & Regulatory Affairs & General Counsel R.C. (Bob) WeberSenior Vice President J.R.(Randy) MacDonaldSenior Vice President & Chief Financial Officer M. (Mark) LoughridgeVice President and General ManagerE. (Erich) ClementiSenior Vice President J.C. (Jon) Iwata
- 123. What’s IBM Doing Right Now?
- 124. Current Figures386,000 Employees worldwideSuspected to lay off 16,000 in 2009Fiscal Year 2008IBM posted record revenues of $103.6 billion and profits of $16.7 billionDespite 4th quarter revenues dropping 6%
- 125. RecommendationsGeneralHire Sam Palmisano’s successor from outside the company to ensure a similar culture doesn’t arise to the one Gerstner found himself inPay close attention to the level of decentralization allowed in the pursuit of becoming the premier Globally Integrated EnterpriseUse former CEO’s as consultants Continue investing in R&D so the company can continue to lead the way in introducing innovative IT solutions to the global business world StrategicContinue to expand operations into other countriesContinue purchasing/acquiring software firms that will help integrate global businesses through innovative productsPursue initiative to make the world a “smarter planet”, this could be a major source for future revenues