IBM's Future Is In Business-Performance TransformationIBM's Future Is In Business-Performance Transformation

information: What specific areas within business-performance-transformation services is IBM pursuing?

Rometty: We've assessed the top opportunities. Among them are logistics and supply-chain management, procurement, engineering services, CRM, finance and administration, and HR. If you look at those areas, there could be a very good growth rate based on the need for clients to change what they do there.

information: Will this initiative bring IBM into competition with vendors outside the IT space?

Rometty: Definitely. Hewitt (Associates) is an example of new competitors we'll face--it's not going to be just HP and Dell anymore.

information: So why should a customer choose IBM for HR services over a specialist like Hewitt?

Rometty: There are linkages from HR to finance and accounting, another one of our practice areas, so we offer breadth as well as scale. One of the other things clients do in business-process-outsourcing is move to self-service, and that's very technology-laden. Your ability to provide that service wrapped with knowledge management, software that does intelligent searching, and call-center technologies--all these are a huge part of being great at HR. That plays to our strengths.

information: Some of these business-process-outsourcing vendors also are IBM users; are you worried about competing with customers?

Rometty: The competition changes any time you enter a new market. But in a market that is $500 billion, there's plenty of room to succeed. We're unlocking it. The people we will compete with are different than the ones we compete with today. But it will only be those that have amassed the right capabilities for the long run that will last.

information: How will IBM's software capabilities contribute to the BPTS push?

Rometty: To play in this new market, you need the capability to understand triggers in the business environment so that you can have a dashboard and analytics. It's a perfect example of why the software group has launched its business-performance-management software initiative. Think of it as putting sensors in a company's business processes. So you can tell when volumes are up or down, when there are errors, when service calls are lasting too long. So we are building and amassing that kind of software.

information: Do business-performance-transformation services require an outsourcing component?

Rometty: Not necessarily. In some cases a customer hands over operations. In others the client will say they're willing to try something internally that they couldn't have done before. The latter is an example of what we are doing with Mayo Clinic. We're not actually running anything for them, but putting together a set of capabilities they couldn't have before. We're helping them create a way of doing predictive medicine that is new. It takes a high-powered grid infrastructure, and software to do the analysis, and consultative skills are required.

information: Hardware, software, and consulting--it sounds like BPTS encompasses all of IBM's main operating units?

Rometty: It does indeed.

Photo by James Leynse

Continue to the sidebar:
Acquisitions With Business Transformation In Mind

Return to the story: The Transformer