{"id":4265,"date":"2021-10-18T00:07:00","date_gmt":"2021-10-18T00:07:00","guid":{"rendered":"http:\/\/localhost\/projects\/horsesforsources\/ibm-consulting_101821\/"},"modified":"2022-04-26T17:16:35","modified_gmt":"2022-04-26T17:16:35","slug":"ibm-consulting_101821","status":"publish","type":"post","link":"https:\/\/www.horsesforsources.com\/ibm-consulting_101821\/","title":{"rendered":"IBM rebrands its GBS division to emphasize what it actually does: Consulting"},"content":{"rendered":"

<\/p>\n

Almost two decades after its landmark acquisition of PwC Consulting<\/a>, IBM Global Business Services (GBS) is now IBM Consulting. Just another industry rebrand, you say? Botox for GBS? Not so fast. .<\/p>\n

Here are five reasons why this rebrand\u00a0matters…<\/strong><\/span><\/p>\n

1) Clarity is king and consulting dominates what IBM\u2019s services organization does.<\/strong> There have been a lot of misconceptions around IBM\u2019s GBS (Global Business Services) and what the organization does, so part of the positioning with IBM Consulting is to clarify this across the board while pitting itself more aggressively against competitors with deep consulting chops like Accenture, EY, PwC, and Deloitte. With roughly 70% of its $16 billion revenues in the group coming from technology and business transformation projects, this rebranding is aligning the identity of IBM services with the lion\u2019s share of its business activity. Moreover, the term \u201cGBS\u201d is most often associated with centralized internal shared services governance organizations, which is vastly different from the IT and business services where IBM specializes.<\/p>\n

2) Simplified organization structure.<\/strong> Behind the rebranding, IBM Consulting also restructured its organization structure to shift from an input\/capability-led structure to a more client-centric model. There are now four transformation services blocks that IBM consulting is organized around \u2013 customer transformation, employee transformation, finance & supply chain transformation, and industry transformation with cross-cutting cloud services and emerging technology capabilities. All the emerging technology capabilities (automation, AI, analytics, blockchain) are now housed under the same group to try and maximize the value creation opportunity for clients. One of the biggest gripes of IBM clients has been painful navigation across capabilities. This simplification should help.<\/p>\n

3) Talent acquisition.<\/strong> There are two roads to travel here for the talent discussion: organic and inorganic talent growth.<\/p>\n

a) Organic acquisition.<\/strong> \u201cIBM Consulting\u201d certainly brings more cache than a consulting title within GBS when compared to Accenture and the Big 4. This is an opportunity to strengthen the employer brand at all levels so long as IBM supports it internally with clear consulting career pathways and progression towards a master class of client-facing managing client partner roles. The shift from GBS to IBM Consulting and the strength of its growth should be a boon for IBMs ability to pull talent from top firms during the Great Resignation and straight out of the university gates.<\/p>\n

b) Substantive skills and talent growth through M&A.<\/strong> IBM acquired eight firms in since 2019: 7Summits, Expertus, Instana, NordCloud, TruQua, WDG Automation, Accanto #, and Red Hat. Consider this a catalyst for skills-building that accompanies world-class training and assets. IBM ranked #4 in the HFS Employee Experience Services Top 10 report<\/a>, with notable takeaways on their skills ecosystem. IBM places skills at the center of its people strategy and has a fully scaled internal experience to back it up: half of the revenue IBM earned from 2015 \u2013 2020 is from new areas of the business (e.g., cloud computing, AI, data science, cybersecurity).<\/p>\n

4) IBM Consulting leadership has a consulting pedigree and a leader who pioneered the modern-day Accenture consulting model. <\/strong>So many of the leaders within the group came across as part of the 2002 PwC acquisition and have long-since built consulting and managed services practices under the IBM banner.\u00a0 In recent years, the revenue model has shifted more and more towards consulting and away from commodity managed services offerings where it is increasingly challenging to compete on cost-driven engagements against the likes of the heritage Indian providers and Accenture (with 250,000 of its staff based in India).\u00a0 Moreover, Mark Foster, the SVP leading the IBM Consulting division, is widely credited as the leader behind the significant growth of Accenture consulting until he left the firm in 2011. He was the pioneer behind the Accenture \u201cdiamond client\u201d model, where a laser focus on 150-200 major enterprises has formed the bedrock behind the force that is Accenture today.<\/p>\n

5) Divorced from Hardware, finally<\/strong>. With the spinoff of Kyndryl days away, IBM Consulting has clear mandate to focus on business and technology process re-engineering. The Consulting group is free to partner more broadly with hyperscalers, accelerate innovation labs with its Garage services, and be more software first around AI, automation, and emerging technologies like blockchain, IoT, and 5G.\u00a0\u00a0Garage services will become innovation labs for industry-centric consulting services to align technology consulting and software platforms (Cloud Pacs) with industry-centric business transformation for large enterprise customers. Expect a big consulting push around \u201cthe cognitive enterprise powered by IBM Consulting\u201d as they meld together Watson, multi-vendor hybrid cloud, Red Hat OpenShift and Enterprise Linux, and Cloud Paks to modernize technology and push with industry-specific software and services offerings.<\/p>\n

The Bottom Line: \u00a0IBM Consulting now has the structure to take on Accenture and Deloitte, but optics have to be complemented by real talent investment, C-level commitment, technology agnosticism, and client results. <\/strong><\/span><\/p>\n

IBM\u2019s shift to emphasizing consulting couldn\u2019t be better timed with a huge talent dearth for outsourcing delivery talent, especially in India.\u00a0 Our research shows that 54% of the FORTUNE 1000 are racing to stay relevant in the virtual economy, and they need immediate transformational and IT support to make fast decisions.\u00a0 This lends much more to partnerships with providers with deep onshore talent and a deep consulting pedigree.\u00a0 If IBM can continue to beef up its consulting presence with organic talent \u2013 and perhaps an acquisition or two \u2013 there is no reason why IBM Consulting cannot challenge Accenture and Deloitte at the help of the IT transformation market.<\/p>\n

IBM consulting should also make it very clear to its existing and prospective clients that it is not getting out of the \u201coutsourcing\u201d market with this rebranding to \u201cconsulting.\u201d The Kyndryl divestiture earlier this year and the contact center divestiture to Concentrix in 2014 provides ample ammunition to its competitors to raise concerns about IBM\u2019s commitment to the BPO and ITO markets which it needs to proactively address,<\/p>\n

Another area where we \u2013 at HFS \u2013 believe IBM Consulting needs to clarify its position, is with regards to its technology partnerships.\u00a0 While the firm has been successfully teaming with software firms such as Celonis, Blue Prism and UiPath, it has also had to work with IBM Software which has acquired produces such as myInvenio and WDG, which compete in the market with these firms.\u00a0 If IBM Consulting can clarify its technology agnosticism in a similar way to the ethos Foster applied at Accenture, there is every chance of success as we venture into unchartered waters.<\/p>\n","protected":false},"excerpt":{"rendered":"

Almost two decades after its landmark acquisition of PwC Consulting, IBM Global Business Services (GBS) is now IBM Consulting. 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