So the IBM share price peaked to an all time high this week. On Friday, International Business Machines Corp (IBM:NYQ) closed at $190.53. This reflects an increase of 32% in the last 12 months.
IBM is a sales organisation and Global Services is responsible for over 50 percent of IBM’s total revenue. So it would appear that IBM is doing the right things for all key stakeholders. Global Business Services (AM etc.) and Global Technology Services (infrastructure on demand etc.) are their two market facing divisions.
Thomas Watson implemented “generous sales incentives, a focus on customer service and an insistence on well-groomed, dark-suited salesmen”.
The Client Solutions (Sales) Executive is typically a trusted advisor who understands client needs and shapes the solution to meet these perceived needs. The CSE is allocated a % of the Total Contract Value as a bonus. The CSE also dictates the amount of bonus paid to each of the defined names in their team. As you can imagine by taking this approach the team is highly motivated to win. However, it is important to note that if the deal goes bad within 2 years the CSE must repay their bonus amount.
In contrast, the IBM Delivery Executive and Service Delivery Manager manage to the letter of the contract and typically act in a transactional manner. There is little partnering with the retained client organisation or desire to work collaboratively with other service providers. In my experience IBM refuse to take ownership for incidents, fail to investigate or resolve problems and are not pro-active. It is a well known fact that IBM hide behind the Statement of Work which is used as a delaying tactic for the smallest enhancement request.
Moreover, I understand that Global Technology Services has been put on “Notice to Cure” in some cases in the US, or has failed to live up to promises made during the solution sales process. There is a serious expectation gap between clients and their IBM [Technology Services] delivery teams. So what is really going on out there? This state of affairs is not a sustainable position for Global Services now or in the future.
If you Google IBM Service Management you will be directed to IT Solutions – Operations and Service Management where the focus is on Tooling (Netcool, Tivoli etc.)
Whilst Technology plays an important part in delivering predictable services it is much more about People and the Processes that they perform.
IBM allegedly claim to have shaped ITIL 1.0. If this is indeed the case I would like to know why they have not maintained their thought leadership in all things related to excellence in Service Management practices.
Listed below are IBM entities which are certified to the International Standard for demonstrating excellence in Service Management
- ISO/IEC 20000 Certification – IBM China / Hong Kong Limited
- ISO/IEC 20000 Certification – IBM Global IT Delivery
- ISO/IEC 20000 Certification – IBM Global Services (China) Company Limited
- ISO/IEC 20000 Certification – IBM Korea, Inc.
- ISO/IEC 20000 Certification – IBM Ltd France
- ISO/IEC 20000 Certification – IBM Solution & Services (Shenzhen) Co Ltd
- ISO/IEC 20000 Certification – IBM Solutions Delivery Company Limited
- ISO/IEC 20000 Certification – IBM Taiwan Corporation
- ISO/IEC 20000 Certification – IBM UK Ltd – MOD LITS Service Delivery
- ISO/IEC 20000 Certification – PT. IBM Indonesia
Furthermore, it is not clear to me how IBM Technology Services Delivery Executives are incentivised to succeed. Some clients definitely will not renew their infrastructure outsourcing contracts given the lack of response from IBM to their changing business needs. As a minimum IBM should shift their service strategy from just doing the basics to creating demonstrable value through providing world class information services.
It would be very helpful if IBM ate its own dog food and created a “Smarter” Service Management capability that is not totally dependent on tools.
Ivor MacFarlane was recruited by IBM, following the ITILv3 update, to help build a “Smarter” Service Management capability. Ivor knows what good looks like.
Here is Ivor running an IBM Service Management Simulator session
Good luck Ivor in getting the IBM “Integrated” Service Management mantra [around tools] shifted to different messaging around the principles of Service Management excellence.
I have direct experience of two IBM AAA Business Partners in the UK who know what good “Service Management Practices” look like, namely PIREAN [Tivoli Enterprise IT Service Management] and Simon and Jason at ORB DATA. To be clear these two partners sometimes confuse Tivoli Enterprise Systems Management with Service Management Practices.
“doing the right things is more important than doing things right.”
To recap “Smart” Service Management is all about embedding the right service focus into an established technology platform / skill based organisation. “Service Matters” around here was a slogan that was used to good effect in order to get this message across. At another client the top down message was that we have a”Zero Tolerance of Failure” not in a blame culture sort of way but in a collaborative let’s prevent this from happening again on our watch.
So in conclusion my exam questions is the following: To what extent can your Service Provider predict the warranty and utility of their service: measured by the number of consecutive “Green Days” for service KPIs?
Service Providers who are able to deliver predictable Business outcomes sound much more “Smart” to me.