IBM trying to promote internal cycle of growth

One area IBM is focusing its attention on is operational innovation, according to Sanford. "We need to reinvent what we do and how we do it," she said. Business processes are one of the biggest areas of frustration for IBM employees. Big Blue is addressing the issue by eliminating, simplifying, automating or sourcing out to partners some of the business processes its staff are dealing with, Sanford added.

Free IT resource TechNet: More ways to know it, share it, and keep it running. Sponsored by Microsoft Free IT resource Attend the SOA Executive Forum: Breaking SOA Bottlenecks SOAExecForum.com/may2007 Sponsored by InfoWorld

For instance, she cited the work some of her team had done to assist IBM's software sales force. "The deal size was getting smaller, so they needed more smaller transactions," Sanford said. "They were used to go hunting bear, now they have to hunt rabbits." Trying to find new smaller size customers was equivalent to the sales people trawling through phone directories or trying to sell door to door, she added.

Sanford's team, the sales people and IBM's research and business intelligence software units all got together to develop a tool, On Target, to aggregate customer data and create algorithms to suggest how best to locate sales prospects and which IBM software to sell them. "It's improved our salespeople’s efficiency," she said. So far, sales staff have reported an 80 percent reduction in time spent on locating prospects as well as a 50 percent increase in those prospects yielding sales opportunities, according to Stanford. "It's a reusable asset for other groups," she added. IBM started On Target with 60 sales people in Canada and has since rolled it out across the U.S. The plan is to have the tool in 10 European countries by the end of this year and also to take it to Asia, she said.

Tony Friscia, president and CEO of AMR Research, agreed that reinventing business processes was a smart move. "It's less about product innovation and more about process innovation," he told conference attendees.

Friscia gave the example of the chemical industry when companies had to react to regulations requiring them to track waste management. While some firms simply complied by putting in tracking systems, the more innovative companies set about trying to come up with ways to eliminate waste altogether. The same approach can be applied to U.S. public companies working on complying with the Sarbanes-Oxley (SOX) rules, according to Friscia. "Most companies are spending money and getting nothing back," he said. "It's like Y2K. But the smart companies are looking to innovate" by overhauling their business processes as they move to SOX compliance, Friscia added.