IBM trying to promote internal cycle of growth

IBM is working to promote a "virtuous cycle of growth" within its operations, according to a senior Big Blue executive. The hope is that increased employee productivity results in collaboration which in turn stimulates innovation which then drives productivity and so on.

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"We're trying to strike a balance at IBM," Linda Sanford, senior vice president for IBM's On Demand transformation and information technology, said during a speech at analyst AMR Research's Executive Leadership Conference in Boston this week. "We're automating and simplifying [business] processes to give employees back time to collaborate and create breakthrough innovation."

In her role at IBM, Sanford is responsible for continuing Big Blue's move to become an on-demand business, initiated by IBM Chairman and Chief Executive Officer Sam Palmisano in 2002, she said. Her work includes creating both the necessary IT infrastructure and the culture to support her on-demand transformation mission.

Instituting cultural changes is one of the hardest parts of her job, according to Sanford, particularly in the area of increasing collaboration.

IBM has nearly 330,000 employees, 42 percent of whom are mobile workers. Close to 55 percent of Big Blue's work force have been with the company for less than five years with many joining the organization through acquisitions.

To help encourage staff to work with each other across business units and geographic boundaries, IBM has put in place its enterprise portal On Demand Workplace, a central repository of information that is receiving one million hits per day on its home page, Sanford said. The portal contains what IBM calls Blue Pages Online a directory of all of the company's staff, not only listing their contact details, but their background, their experience, which IBM customers they've worked with and which Big Blue competitors they're familiar with, she added. "The basic idea is to make IBM seem like a small company," Sanford said.

Also within the portal is ThinkPlace, a place for staff to submit innovative ideas. IBM already has plans to implement more than 300 ideas it has received from ThinkPlace including creating Green Pages, a directory of IBM customers listing their needs and requirements, according to Sanford. "Our intention is to open up On Demand to our suppliers, partners, and customers," she said, adding the portal was designed with that goal in mind. Sanford didn't provide details on when this might occur.

"We’re redefining what it means to be a 21st century business," Sanford said. "We're evolving from a multinational to a globally integrated company." IBM is undoing the work it embarked on post-World War II to establish "self-contained IBMs" around the world, she added, a model that has served the company well for decades, but is now obsolete and too expensive.

"We no longer need to replicate IBM from floor to ceiling," Sanford said, pointing to the centralized structure the company is putting in place, for example, by cutting the number of purchase order processing centers from several hundred to three, one in Shanghai, one in Bangalore and one in Budapest. The factors that are now making global integration possible include employees' high level of skills around the globe, the strong growth in developing markets, world trade agreements and a global networked infrastructure, she said.

IBM is working to continue changing the mix of its IT spend, according to Sanford. Previously, the company spent about 90 percent of its internal IT budget on maintaining its traditional IT infrastructure and 10 percent on IT innovation. That mix is more like 70/30 now, she said. "We're not done yet," Sanford added.