Becoming a different kind of traditional enterprise
By Staff -- Manufacturing Business Technology, 7/1/2006 12:00:00 AM
Employees used to joke that the letters "IBM" stood for "I've Been Moved." That was back in the days when battalions of executives were dispatched from IBM's Armonk, N.Y.-based headquarters to manage its far-flung operations around the world.
These days, says Tim Carroll, IBM's VP of supply chain operations, "IBM doesn't regard itself as having subsidiaries around the world, but sees itself as a truly globally integrated enterprise."
And according to another IBM staffer, Chairman Sam Palmisano doesn't just say IBM is a global business—he holds key meetings in Rome and other global capitals to prove it.
The old IBM was what Carroll characterizes as a "traditional enterprise"—i.e., silo-ridden, with proprietary infrastructure and national hierarchies. And look where that got it, he points out: Bookstore shelves still groan under the weight of publications detailing Big Blue's spectacular missteps in the 1990s.
Remodeled as a globally integrated enterprise, IBM these days is open, flexible, collaborative, horizontally integrated—and delivering results.
Take the divestiture of IBM's personal computer business, says Carroll. It took just 143 days to transfer a business with 11,500 employees in 66 countries over to Lenovo—half the time required by Hitachi in 2002, when it undertook a similar but smaller divestiture with half the number of affected employees, half the number of countries, and half the revenue.
And IBM's newfound agility is showing up in the bottom line, too, Carroll adds. The company has achieved more than $25 billion in cost savings over the last three years, is delivering orders 32 percent faster, and has generated $1 billion in free cash flow.
But the real change is a shift in perceptions: Today IBM is the world's largest provider of IT solutions—with 329,000 employees moving in agile lockstep.
