1

UNIVERSITY OF CENTRAL PUNJAB

UCP Business School

PROJECT on: INTERNATIONAL BUSINESS MACHINES

(IBM)

Submitted To
SIR NAVEED ANWAR

By

Team Members:

Ahsan Saleem

L1S15MBAM0029

Umair Rasheed

L1S15MBAM0030

Faisal Raza

L1S15MBAM0111

Program:

MBA (2-Years)

Semester:

1st Semester

Subject:

Operations & Supply Chain Management

CONTENTS

Page #

Introduction to IBM

Supply Chain Management

Technology Development

Procurement

Inbound & Out bound Logistics and Operations

Merger with Lenovo

Global Alliances

How They Saved Money

Circumstances after Downsizing

Competition

IBM still an I.T Service Giant

10

IBM being the Best

10

Product Service Bundling

11

Generic Product Development Process

11

Services

12

Products, Software and Systems

13

Introduction

The International Business Machines Corporation (commonly referred to as IBM) is

an American multinational technology and consulting corporation.
The

company

Company (CTR)

originated
through

in

1911

merger

as
of

the Computing-Tabulating-Recording
the Tabulating

Machine

Company,

the International Time Recording Company, and the Computing Scale Company. CTR
was changed to "International Business Machines" in 1924.
Vision
At IBM, we strive to lead in the invention, development and manufacture of the
industry's most advanced information technologies, including computer systems,
software, storage systems and microelectronics. We translate these advanced
technologies into value for our customers through our professional solutions, services
and consulting businesses worldwide.
Mission
IBM main activity is to find solutions to its wide range of clients using advanced
information technology. Its clients are individual users, specialized businesses, and
institutions such as government, science and defense, spatial and educational
organizations. To meet and respond to its customers needs, IBM creates, develops and
manufactures many of the world's most advanced technologies, ranging from
computer systems and software to networking systems, storage devices and
microelectronics.
Strengths
- Advanced business performance management.
- Good organization culture.
- Strategic outsourcing, mergers and acquisitions.
- High efficient fulfillment centre.

- Flexible marketing management.

- Creative services.
IBM one of the leader brand of I.T industry which is basically related to computing,
having its arm spreads to almost all dimension of technology weather it is about
gadget or the software. IBM is the world's largest information technology company
with 2005 revenues of $91 billion. IBM is the biggest provider of IT services ($47B),
hardware ($24B) and rental and financing ($2B). The company has approximately
431,212 employees (after downsizing in India) and conducts business in 170 countries.
IBM is an I.T giant now days, stretching it hands. The IBM provides wide range of Data
storage devices as well as servers with enormous storage and secure database. IBM
has constantly evolved since its inception. Over the past decade, it has steadily
shifted its business mix by exiting commoditizing markets such as PCs, hard disk
drives and DRAMs and focusing on higher-value, more profitable markets such
as business

intelligence, data

analytics, business

continuity,

security, cloud

computing, virtualization and green solutions. IBM is now aiming for animation,
consolidation which saves wide range physical assets.
As company handling all most 95% of business task of top 1000 companies of wall
street, the company have some of the world fastest main frame and many
revolutionary technologies like: speech recognition; a software with which you can
work just with your voice, blue gene; a supercomputer which is 500 times fastest than
world fastest computer and capable of more than one quadrillion operation per
second. Through such outperforming technologies IBM is able to provide some of the
best back hand facilities.

Supply-Chain Management:
In IBM, supply chains of IBM are becoming more complex, harder to manage and more
costly to run. In fact, nearly $3.4 trillion was spent on supply chains in 2005. To
address this, IBM is creating a supply-chain management business transformation
outsourcing practice. The Supply chain management (SCM) solutions can help IBM to
improve costs and customer service, while decreasing overall supply chain inventory.
IBMs (2006) Business Performance Management enables companies to visualize endto-end processes across business and IT systems, analyze execution in real time
against goals, and make adjustments as needed. For instance, IBM offers consulting,
services and middleware to simulate and monitor business processes, and provides
clients with real-time analysis of the underlying IT systems carrying out those
processes.
Technology development:
IBM's research and development, operations differentiate IBM from its competitors.
IBM annually spends approximately $5$6 billion for research and development,
including capitalized software costs, focusing its investments in high-growth
opportunities. IBM has 12 research laboratories worldwide, bundled into IBM Research.
As of 2013 the company held the record for most patents generated by a business for
22 consecutive years. IBM has some of the best technology registered in its account
that made revolutionary changes through-out the many of business operation through
huge amount of business data transferring around the world.
Procurement:
IBM has developed Business Partner relationships with establishment, best-of-breed
Supply Chain Management solution providers. Their solutions, coupled with IBM
products

and

services,

deliver

the

cost-competitive,

scalable

and

secure

infrastructure the customers need. Acquisitions and mergers in order to improve their
businesses on the high value products and services, IBM acquired service-related
companies into the global services segment, (e.g. Network Solutions, data storage and

transferring, mainframes etc) and the software-related companies that were

integrated into the software segment.
Inbound & Out bound Logistics and Operations:
IBM's supply, manufacturing and logistics and customer fulfillment operations are
integrated in one operating unit that has reduced inventories, improved response to
marketplace opportunities and external risks and converted fixed to variable costs.
This feasibility IBM has acquired after facing a huge flexible competition by Compaq
in 1982. Through this flexible and enormous services exchange system IBM now a
days possessing almost top position at market in its segment.
Merger with Lenovo:
In the merger of IBM with the Lenovo in which Lenovo is providing the outer hardware
technology and IBM providing all of its latest chip technology. IBM has been entered
the wide range of fields i.e. Business continuity and resiliency services, End user
services, Integrated communications services, IT strategy and architecture services,
Maintenance and technical support services, Middleware services, Outsourcing
services, Security and privacy services, Server services and Site and facilities services,
mainframes, communications, mainframe storage, minicomputers, and personal
computers. Now IBM came in market with its revolutionary Green technology through
which they can save 40% of energy cost through animation, consolidation and
consultancy.
Global alliances:
IBM and Cisco
IBM and Dassault Systems
IBM and Infor
IBM and Oracle

IBM and SAP

IBM To Save Money

To reduce I.T services cost, IBM reduced its India-based workforce by 52,000 over the
past three years, with more to come, is a reflection of the diminishing importance of
low-cost operatives.
The reported reduction in staff in India, although unconfirmed, is in line with
changing IT-outsourcing demand and delivery models. One source claimed India's Tata
Consultancy Services (TCS) is now IBM Global Service's biggest competition.
According to a report from India, the IT giant has reduced its India-based workforce
from about 165,000 in 2011 to 113,000 in 2014. The report quoted sources close to
IBMs plans who said this number will be down to 100,000 in 2015. The firms global
workforce is made up of 431,212 employees.
In IBM Global Services, the company boasts the worlds biggest IT services firm. It is
often referred to as an IT bellwether and its every move is scrutinized by IT
executives at enterprise users and at its competitors. When the offshore-IT services
delivery model was at its peak, the firm was the biggest IT employer in India.
But new technologies, such as automation software including IBMs very own Watson
and cloud computing, are reducing the need for high numbers of offshore staff to
carry out business processes and software development.
Telecommunications firm O2, for example, uses automation software from Blue Prism
to cut its reliance on offshore recruitment to cope with spikes in workload.
IT services firms traditionally grew in a linear way typically, they win more business,
then add more staff to support it. In many cases this has involved building large
offshore workforces. But service providers are now trying to reach the holy grail of
non-linear growth. This means adding business without needing to add to the

workforce to support it reducing the proportional increase in the cost of providing

an additional service.
At the same time, increased use of cloud-based IT is forcing IT services firms to add
more higher-level support services, while the move to platform-based services in the
cloud means there is less need for businesses to develop their own software.

After Downsizing
In its recent results for the third quarter of 2014, IBM said Global Services sales
decreased by 3% to $13.7bn, compared with the same period of 2013. Pretax profits
from Global Technology Services reduced by 11%.
IBM CEO Ginni Rometty said in areas of focus which did not include IT services the
company did well.
In parts of IBMs portfolio that aren't as well differentiated, they are continuing to see
price and profit pressure. These are the areas where they will be more aggressive on
the use of global delivery centers and applying intellectual property for faster time to
value for their clients and improved business results for IBM.
While they did not produce the results they expected to achieve, they again
performed well in their strategic growth areas including cloud, data and analytics,
security, social and mobile where they continue to shift their business. They will
accelerate this transformation.
Reflecting its shift in focus, IBM has reportedly reached an agreement with Global
foundries to

take

over

its

semiconductor

operations.

manufacturer $1.5bn to take the chip operations off its hands.

IBM

will

pay

the

Competition from Tata Consultancy Services

Outsourcing lawyer Mark Lewis said it is not yet clear what IBMs strategy is, and
compared the company with India's biggest IT services firm Tata Consultancy Services
(TCS).
TCS has 276,195 global staff, with 92.3% being Indian. Just over 21,000 of the
company's staff are not Indian, while it has an increasing UK workforce, with more
than 10,000 UK-based staff.
In Europe TCS added almost $1bn in new business in 2014, which underlines the
enormous market momentum and customer confidence they now enjoying.
TCS is achieving both linear and non-linear growth. It is still recruiting heavily in India
and is building its global workforce at the same time. While IBM is the biggest IT
Company in the world is unsure if it is leading the way in terms of strategy in IT
services.
The stronger presence of the offshore-based firms has given clients enormous
bargaining power over IBM, and they are using this to extract pricing concessions and
renegotiate contracts. TCS is the main challenger to IBM in Global Services too.

10

IBM still an IT services Giant

IBM is always in the mix when it comes to global outsourcing deals, according to KPMG
management consulting partner IBM has not taken its eye off the ball in services it
quietly gets on with its work.
IBM could still be considered a bellwether for global IT services. In four recent large
global IT-outsourcing deals, IBM has been in the running.
The reduction of staff at IBM in India could be linked to the companies scaling back on
business process outsourcing (BPO) services, with more focus on IT services.

IBM Being the Best

Without being particularly specific, IBM does business with the American government
(on very large scale), the Chinese government (extremely large), Walmart (largest
revenue company in the world), Exxon Mobile (2nd largest revenue in the world) and
the rest of the biggest companies in the world. In fact, IBM does business with the
entire Fortune 2000 in one way shape or form between Services, Software and
Hardware lines of business.

11

Product Service Bundling

Product-Service bundling refers to a company building its service activities into its
products offering for its customers. Such service include maintenance, spare part
provisioning, training and in some cases total system design and R&D. IBM is pioneer
in this area, which treats its business as a service business and views physical goods as
small part of the business solutions.

Generic Product Development Process

Platform products: IBM is providing platform products as its products are built around
a preexisting technological subsystem (a technology platform) because IBM has
previously invested huge money in developing these platforms.
Quick-build products: Software provided by IBM is made following Quick Build
product development process type. For the development of the software, building and
testing prototype model has become such a rapid process that design-build-test cycle
can be repeated many times which helps IBM to modify the software as a result of
each cycle of design. IBM involves its customers in the testing process.

12

Services
Business services

Application innovation

Business analytics & strategy

IBM Interactive Experience

Application management

All business services

Global process services

IT infrastructure services

IT outsourcing

Global Technology Services

Cloud Services

Mobility Services

Networking Services

Outsourcing

and

Outsourcing services

Training

Managed

Services

Resiliency Services

Security Services

Site and Data Center Services

Systems Services

Technical Support Services

Offerings

Certification

Conferences & events

Additional services

Systems lab services

Consulting alliances

IT services financing

Mobile enterprise services

13

Project financing

Working capital

14

Products

Industries & solutions

Enterprise modernization

Analytics

Enterprise resource planning

Asset management

Expert integrated systems

Application infrastructure

Marketing

Big data

Mobile enterprise

Business process management

Procurement

Cloud computing

IBM Security

Commerce

Service

Connectivity and integration

Continuous engineering

Data management

Data warehousing

DevOps

Digital experience

Energy and environment

Unified communications

Enterprise content management

Virtualization

oriented

architecture

(SOA)

Smarter computing

Social collaboration

Systems

and

software

engineering

Talent

and

workforce

management

15

Software

Systems

Product finder

Pure Systems

Business analytics

Power Systems (AIX, IBM, Linux)

Cloud & Smarter Infrastructure

z Systems mainframe

Enterprise content management

System x (x-Series)

IBM Platform Computing

IBM

Information management

IBM Security

Flex

System

and

Blade

Center

UNIX servers

Systems software

System networking

Storage

Additional products

Disk systems

Flash systems

Tape systems

Storage software

Semiconductors

Storage area networks

Upgrades, accessories and parts

Network attached storage

Hardware financing

Software financing

Financing for medium business

Certified

used

servers

and

storage

Certified used PCs for businesses

/schools

*REFERENCES: Website of IBM, Wikipedia