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Thursday, November 10, 2005

IBM : The Remaking

The remaking IBM theme is attracting a lot more coverage & analysis, perhaps rightly deserved. Tom highlights that IBM is gearing towards becoming a vendor of highly automated business processes. Companies that need to add a business process within their industry will one day be able to buy one off the shelf, so to speak. IBM is collecting best practices within each industry, within each business process, and using applications, middleware, and its integration skills, to create ready-to-go business process modules that can be rapidly slotted into a company's operations. As covered eearlier, in Sam’s new vision for IBM - Instead of merely selling and servicing technology, IBM is putting to use the immense resources it has in-house, from its software programmers to its 3,300 research scientists, to help companies like P&G rethink, remake, and even run their businesses - everything from accounting and customer service to human resources and procurement. "We're giving our clients a transformational lift," says Palmisano. He is out to transform the very nature and image of IBM with vision to carry IBM beyond that 20th century legacy, beyond computing while making IBM as indispensable to clients today as it was during the heyday of mainframes.

Tom quotes Irving Wladawsky-Berger as saying that IBM does not need to be in the apps business because it can get the apps from others.The approach would be to pull together the right apps, and the other software and hardware components to create automated, highly optimized business process modules.To become a business process vendor requires the adoption of many industry standards within many different industries-a long, slow process. "Once we have the standards in place, such as agreement on document formats and many other categories, we will then have the building blocks that we can use to build the business process modules. The Internet was based on common standards, it was more of a standards revolution rather than a technology revolution."
I agree with Tom that to remake IBM into a business process vendor will require huge amounts of R&D to figure out how things are done today, how business processes can be best optimized, develop the tools to design and implement automated business processes, and many other related issues. IBM rightly thinks that the intersection of technology and business process services holds great promise. As it sees the giant is trying to come out with a new set of services that includes technical assistance but adds strategic advice about business methods. Palmisano dubs the concept "business process transformational services," and claims it represents a massive market nearly a third as large as the $1.2 trillion spent annually on IT. An interesting company and exciting approach to watch - no doubt.

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