IBM Presentation


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IBM Presentation

  1. 1. Presented by <br />Ryan Olsen ~ Ali Aldossary ~ Adair Gregory ~ Ahmad Alrashidi<br />Management 3800 – Business Policy & Strategy<br />
  2. 2. The Roots<br />1911 ~ Computer Tabulating Recording Co. (C-T-R)<br /><ul><li>International Time Recording Company
  3. 3. Computing Scale Company of America
  4. 4. Produced meat/cheese slicers, commercial scales, industrial time recorders, tabulators & punch cards
  5. 5. 1,300 employees. 6 Plants. </li></ul>1914 ~ Thomas J. Watson Sr. becomes General Manager<br />
  6. 6. Thomas J. Watson Sr.<br />Became President within 11 months of joining C-T-R<br />Corporate Culture<br />“THINK” mantra<br />Dark suits, ties, clean cut <br />Company sports teams, family outings, and band (company songs)<br />3 Principles<br />Respect for the individual<br />Service to the customer<br />Excellence must be a way of life<br />Focus on large scale tabulating solutions for customers<br />Revenues doubled to over $9 million in first four years<br />Expanded operations to Europe, South America, Asia, & Australia<br />CTR becomes IBM in 1924<br />♪ Our voices swell in admiration, ♪<br />Of T. J. Watson proudly sing,<br />He&apos;ll ever be our inspiration,<br />To him our voices loudly ring,<br />The I B M will sing the praises,<br />Of him who brought us world acclaim,<br />As the volume of our chorus raises,<br />♪ Hail to his honored name. ♪<br />
  7. 7. Early Years at IBM<br />Grew business through acquisitions and investments in R&D<br />Grew during the Great Depression as a result of government contracts<br /><ul><li>1930s ~ One of the first companies to offer its employees group life insurance, survivor benefits, paid vacations </li></ul>The New Deal ~ Social Security Act of 1935<br /><ul><li>IBM maintains employment records for 26 million people</li></ul> “…the biggest accounting operation of all time”<br />WWII ~ IBM facilities used at governments disposal <br /><ul><li>Produced bombsights, rifles, and engine parts
  8. 8. Only took 1% profit from government and established a fund for widows and orphans of IBM war casualties</li></li></ul><li>Leading the Way in Business Computing<br /><ul><li>1944 ~ The Mark I
  9. 9. First machine that could execute long computations automatically
  10. 10. Took less than a second for an addition problem, 6 for a multiplication problem, and 12 for a division problem
  11. 11. $141 million revenue
  12. 12. 21,126 employees
  13. 13. 1981 ~ IBM Mainframe/5150
  14. 14. 70% market share
  15. 15. $26.2 billion in revenue
  16. 16. 341, 279 employees</li></li></ul><li>A History of Progress<br />
  17. 17. Key Issues @ IBM<br /><ul><li>IBM hires 1st outside CEO, Lou Gerstner, on April 1, 1993
  18. 18. IBM’s strategic vision focuses on infrastructure and integration
  19. 19. IBM’s focus on open technologies and high value-added solutions
  20. 20. Sold off commodity low-value elements of portfolio and used the capital to purchase high-value extensions to software and services business
  21. 21. IBM’s done over 40 acquisitions of software companies under software group since 2000
  22. 22. Acquisition of PricewaterhouseCoopers
  23. 23. Become the premier globally integrated enterprise
  24. 24. Contemporary challenge for IBM is to help build a smarter planet
  25. 25. IBM in Middle East</li></li></ul><li>Help From an Outsider~ Louis V. Gerstner ~<br /><ul><li>1991-1993 ~ $16 billion loss (100 days until bankruptcy)
  26. 26. Disassociated divisions ~ Software, Hardware, Services
  27. 27. Very decentralized and independent culture
  28. 28. Proprietary technology
  29. 29. Appointed in April, 93’
  30. 30. 1st outside higher level executive hire
  31. 31. Brought customers perspective ~
  32. 32. CEO of American Express & RJR Nabisco
  33. 33. New Strategy ~
  34. 34. Integration & Infrastructure
  35. 35. By 1999 ~
  36. 36. Stock at all-time high
  37. 37. $169 billion market capitalization</li></li></ul><li>A New Strategic Vision~ Louis V. Gerstner ~<br />Decision to INTEGRATE divisions<br /><ul><li>11 Globally Integrated Support Functions
  38. 38. Breaks “no layoff” policy</li></ul>85,000 employees laid off by 1996<br /><ul><li>Cut $7 billion in costs
  39. 39. Integrate internally to provide a top-to-bottom solution for customers</li></ul>INFRASTRUCTURE<br /><ul><li>End-to-End business solutions</li></ul>One 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 net<br />IBM’s Role: To facilitate the workflow <br />Big servers, mainframes that could handle the mass amount of eBiz<br />
  40. 40. A New Strategic Vision~ Louis V. Gerstner ~<br />“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.”<br />INFRASTRUCTURE cont. <br /><ul><li>Proprietary technologies to open standards
  41. 41. Invests $1 billion in Linux
  42. 42. Invests $100 million in computer that is 100 times more powerful than any other computer</li></li></ul><li>
  43. 43.
  44. 44. New Leader, New Strategy<br />Samuel J. Palmisano becomes CEO in October, 2002<br />Strategy focuses on Integration & Innovation<br />Sold off low-value commodities and invested in high-value added solutions<br />Hitachi buys hard-drive division in 2002 for $2.05 billion<br />Lenovo buys PC division in 2005 for $1.25 billion<br />JV gives IBM Chinese market access<br />Ricoh buys Printer division for $725 million<br />
  45. 45. Expanding Software & Services<br />Purchased 40 software firms since 2000<br />Investment in Service Oriented Architecture to better manage business processes<br />Streamline BPM through SmartSOA<br />2nd Largest Software firm (Microsoft)<br />Acquired PricewaterhouseCoopers Consulting in October, 2002 for $3.5 billion<br />Access to C-Level executives at Fortune 500 companies<br />
  46. 46. Service Oriented Architecture<br />
  47. 47.
  48. 48. IBM: Let’s Build a Smarter Planet<br />
  49. 49. IBM: Let’s Build a Smarter Planet<br />Areas of Attention<br /><ul><li>Energy
  50. 50. Traffic
  51. 51. Food
  52. 52. Infrastructure
  53. 53. Retail
  54. 54. Intelligence
  55. 55. Government
  56. 56. Banking
  57. 57. Telecom
  58. 58. Oil
  59. 59. Healthcare
  60. 60. Cities
  61. 61. Water
  62. 62. Public Safety
  63. 63. Buildings
  64. 64. Work
  65. 65. Rail (Trains/Subways)
  66. 66. Products
  67. 67. By the year 2010 there will be over 1 Trillion devices connected to the Internet.
  68. 68. Each person will carry over one billion transistors
  69. 69. Shows we have become globally integrated
  70. 70. IBM can leverage existing technology to make the world better </li></li></ul><li>IBM in the Middle East<br />In Middle-East since 1947<br />Originally went to service oil companies <br /><ul><li>Trust IBM to save their information</li></ul>Outsourcing work<br />People are becoming familiar with growing technology<br />Business shifting from regular commerce to E-commerce<br />Governments trying to minimize paper usage<br /><ul><li>IBM offers electronic solution
  71. 71. Headquartered in Dubai
  72. 72. 1,500 local employees</li></li></ul><li>Evaluate the Role and Effectiveness of Corporate Executives in the Development and Implementation of the Organizational Strategic Plan <br />Lou Gerstner<br />Integrate & Infrastructure<br />Shift from Hardware to Services based business<br />Rightsized company, laid off 85,000<br />Near bankruptcy to record earnings in 6 years<br />Sam Palmisano<br />Integrate & Innovate<br />Global Supply Chain Integration<br />Software & Services Acquisitions<br />Smarter Planet<br />
  73. 73. SWOT Analysis<br />Strengths ~<br /><ul><li>IBM has the technology and expertise to make every business more efficient
  74. 74. IBM has a singly supply chain used worldwide, which helps in their being the premier globally integrated enterprise
  75. 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. 76. Most patents held by any company (R&D)
  77. 77. IBM’s “smarter planet” initiative
  78. 78. Smart Service-Oriented Architecture approach to managing business processes at all levels makes companies much more efficient
  79. 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.)</li></li></ul><li>SWOT Analysis<br />Weaknesses ~<br />High operating expenses <br />Spends nearly $5 billion per year on R&D, depending on the amount of success the department has, this could be spending “money for nothing<br />Opportunities ~<br />High price products that competitors produce <br />Continue global expansion. Become more globally integrated.<br />Amount spent on research and development should give them an advantage over their rivals.<br />Use PricewaterhouseCoopers to continue expanding the consulting services aspect of the business. <br />Continue making acquisitions of software firms that can innovate new solutions <br />Continue to help “make the world a smarter planet”<br />Threats ~<br />Liability associated with spending $5 billion annually on R&D<br />Changing marketplace<br />Shift to a globally integrated enterprise, more decentralized organizational structure, which did not serve them well prior to Lou Gerstner<br />Sam 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.<br />
  80. 80. Porter’s Five-Forces Model<br />
  81. 81. Key Success Factors<br />Distribution-related Key Success Factors<br />Marketing-related Key Success Factors<br /><ul><li>Strong direct sales (internet)
  82. 82. Most sales are large contracts
  83. 83. Able to secure image to consumers, used in banks, libraries, ect.
  84. 84. Well-known brand name
  85. 85. Respected brand name
  86. 86. Good, large customer service</li></ul>Other Types of Key Success Factors<br />Skills & Capability-Related Key Success Factors<br /><ul><li>Talented workforce
  87. 87. Global distribution capabilities
  88. 88. Strong e-commerce capabilities, user friendly website
  89. 89. Overall low costs
  90. 90. Ability to provide fast, convenient after sale repairs and service</li></li></ul><li>Key Success Factors<br />Technology Related Key Success Factor<br />Manufacturing Related Key Success Factor<br /><ul><li>IBM has thousands of IT employees and leads the industry with e-networks.
  91. 91. Proven ability to change organization when technology changes.
  92. 92. Has the capital and man power to survive the bad economy
  93. 93. IBM’s product is needed within organizations regardless of the economy
  94. 94. Low cost of production design</li></li></ul><li>Chairman, President & Chief Executive Officer<br />S. J. (Sam) Palmisano<br />GlobalBusiness Services <br />Software Group<br />Sales& Distribution <br />Enterprise On Demand Transformation<br />Systems & Technology Group<br />Global Technology Services <br />Research<br />& Intellectual Property<br />Senior Vice President<br />R. F. (Frank) Kern III<br />Senior Vice President<br />M. E. (Mike) Daniels<br />Senior Vice President<br />V. M. (Ginni) Rometty<br />Senior Vice PresidentJ. E. (John) Kelly III<br />Senior Vice PresidentL. S. (Linda) Sanford<br /> Senior Vice President<br />R. W. (Bob) Moffat<br /> Senior Vice PresidentS. A. (Steve) Mills<br /><ul><li>Consulting and Systems Integration
  95. 95. Application Management Services
  96. 96. Global Markets
  97. 97. System z
  98. 98. Power Systems
  99. 99. System x
  100. 100. Storage
  101. 101. Retail Store Solutions
  102. 102. Global Business Partners
  103. 103. Integrated Supply Chain
  104. 104. Application & Integration </li></ul> Middleware<br /><ul><li>Information Management
  105. 105. Tivoli Systems
  106. 106. Workplace Portal & Collaboration Software
  107. 107. Rational
  108. 108. Enterprise On Demand Transformation
  109. 109. CIO
  110. 110. Quality & Process Transformation
  111. 111. Technology Development Programs
  112. 112. Strategic Outsourcing
  113. 113. Integrated Technology Services
  114. 114. e-Business Hosting
  115. 115. Small & Medium Business Services
  116. 116. IBM Global Financing
  117. 117. Managed Business Process Services
  118. 118. Research
  119. 119. IP & Standards
  120. 120. IP Business Development
  121. 121. University Relations &</li></ul> IBM Academy<br />Development <br /> & Manufacturing<br />Senior Vice President<br />R. (Rod) Adkins<br />Services Delivery<br />Senior Vice PresidentT. (Tim) Shaughnessy<br /> Finance<br /> Human Resources<br /> Legal<br />Marketing and Communications<br />Strategy and<br />Enterprise Initiatives<br />Senior Vice President Legal & Regulatory Affairs & General Counsel R.C. (Bob) Weber<br />Senior Vice President J.R.(Randy) MacDonald<br />Senior Vice President & Chief Financial Officer M. (Mark) Loughridge<br />Vice President and General Manager<br />E. (Erich) Clementi<br />Senior Vice President J.C. (Jon) Iwata<br />
  122. 122. Global Technology Services<br />
  123. 123. What’s IBM Doing Right Now?<br />
  124. 124. Current Figures<br />386,000 Employees worldwide<br />Suspected to lay off 16,000 in 2009<br />Fiscal Year 2008<br />IBM posted record revenues of $103.6 billion and profits of $16.7 billion<br />Despite 4th quarter revenues dropping 6%<br />
  125. 125. Recommendations<br />General<br />Hire Sam Palmisano’s successor from outside the company to ensure a similar culture doesn’t arise to the one Gerstner found himself in<br />Pay close attention to the level of decentralization allowed in the pursuit of becoming the premier Globally Integrated Enterprise<br />Use former CEO’s as consultants <br />Continue investing in R&D so the company can continue to lead the way in introducing innovative IT solutions to the global business world <br />Strategic<br />Continue to expand operations into other countries<br />Continue purchasing/acquiring software firms that will help integrate global businesses through innovative products<br />Pursue initiative to make the world a “smarter planet”, this could be a major source for future revenues<br />