One integrator balances objectivity
If Hewlett-Packard co. acquires Pricewaterhouse Coopers, it may want to look at one of its rivals for advice on how to integrate an independent consulting business into a product-focused company.
IBM Global Services, the consulting and systems integration division of IBM, has been under scrutiny since its inception in 1991. When Global Services' predecessor, Integrated Systems Solutions, was being formed, IBM still faced the antitrust watch of the federal government and was careful to keep services independent of IBM's hardware and software business. To this day, the consulting group's mission is to be objectiveâ€"not a sales arm for IBM, said Mike Albrecht, global public sector executive at Global Services, in Chicago.
According to analysts, customers and even competing consulting companies, IBM Global Services has largely met its aim of acting independently of IBM's hardware and software divisions. How has it done this? For one thing, the incentive system for consultants is set up so that their bonuses are not based on selling IBM products but on meeting goals specific to the services business, Albrecht said.
"We focus on customers and knew that would come at the expense of IBM hardware and products in some cases," said Albrecht.
IBM Global Services has been successful in creating a perception of impartiality toward its parent's products, said Tom Rodenhauser, founder and president of Consulting Information Services LLC, in Keene, N.H. In recent years, Rodenhauser said he believes Global Services has focused more on IBM products, but, he added, that may simply reflect the breadth of IBM's product line.
"IBM has done a masterful job of doing that, creating the perception of objectivity, when, in fact, it's structured around the notion of an IBM solution," Rodenhauser said.
Gary Sutula has been impressed with Global Services' independence from IBM hardware and software. At times, in fact, the division has seemed too cautious about suggesting IBM products, said Sutula, CIO at commercial printer R.R. Donnelley & Sons Co., in Chicago.
"I've had a lot of experience with IBM Global Services, and there was a lot of concern when IBM started growing its consultancy side of the business that it would be an in-house and captive consultancy," he said. "What I found is that that is not the case. Those consultants have to maintain their objectivity."
Objectivity seems to be paying off for IBM Global Services. The unit's revenue has increased by 27.5 percent over the last two years. It now accounts for 36.7 percent of IBM's revenues.
Besides reassuring IT managers, Global Services' reputation for objectivity helps it do deals with other vendors such as Microsoft Corp. as well as other consulting companies.
Creating a similar atmosphere would be the challenge for a combined HP and PricewaterhouseCoopers, said Chell Smith, a senior vice president at Cap Gemini Ernst & Young, in Chicago.
"IBM has done a really good job of maintaining that wall," Smith said.
