Managing Automation - September 2007 - (Page 37)

chain — the first functional area to adopt the new business model — process optimization began to take center stage. Carroll says the priority became identifying gaps in a given business process, adjusting accordingly, and only then layering IT on top of the process to make it more efficient. Using its own WebSphere ser vice-oriented architecture (SOA) technology, IBM melded applications and their associated data to create a reliable information source. With WebSphere, says Chris Sciacca, manager of strategic communications for IBM Integrated Operations, “now you’ve got one baseline that, behind the scenes, is one standard way of pulling the data together and looking at the data.” WebSphere, Sciacca says, “acts as the glue” that brings together information from related applications, such as i2 and SAP, and produces real-time inventory information, for instance. Asked who the project leader was for the business model transition, Carroll acknowledges the leadership of Palmisano, but points to the employees as the true drivers of the effort. They, after all, represent a significant part of the strategy shift. In raising the control of some functions to a global level, Palmisano also “lowered the center of gravity” in the workforce, dispersing decision-making power to more rank-and-file staffers. “Now the power is not in the hierarchy; the power is in the matrix,” Carroll says. “I think that’s the biggest challenge, switching ourselves over from the strength of a hierarchy to the strength of a matrix.” Big Blue’s 2006 financial results indicate that the initiative may be gaining traction. In a year when revenue inched up just 0.3%, IBM still scored a strong boost in the bottom line, growing net income by almost 20%. More recently, second-quarter 2007 results showed improvements in all the metrics IBM is using to gauge the effectiveness of the effort. “Based on what you just saw with IBM’s financial results, it’s quite obvious that this strategy is starting to hit its stride and show up in terms of value,” Carroll says. But the road will be a long one, noted CFO Mark Loughridge in announcing the quarterly results. “Our business model success will be measured over the long term, not at any individual quarter or year,” he told financial analysts. “The strategies we put in place, the investments we make, and the actions we take are all with an objective of optimizing our longterm performance.” “I think this was a bold move on IBM’s part because it was a foreign concept to us,” Carroll says. “I think we had a difficult time up front really understanding the difference between what international meant and running a global business.” But now that the new thinking has taken hold, he says, “everything says that we’re on the right track, and that we’re just at the beginning of the momentum with this.” ■ “I think that’s the biggest challenge, switching ourselves over from the strength of a hierarchy to the strength of a matrix,” says Tim Carroll, vice president of IBM’s supply chain operations. maonline managingautomation.com RELATED ARTICLES: Conquering Space in the Integrated Enterprise www.managingautomation.com/integration23 Creating the One Enterprise www.managingautomation.com/integrate A Roadmap to Lean Success www.managingautomation.com/lean6 Photo courtesy: IBM September 2007 37 http://managingautomation.com http://www.managingautomation.com/integration23 http://www.managingautomation.com/integrate http://www.managingautomation.com/lean6

Table of Contents Feed for the Digital Edition of Managing Automation - September 2007

Contents Take 1 Europe’s Automation Chiefs Upbeat on ’08 Business Prospects Vendor Coalition Pushes Human Element of SOA Wireless: Users Still Approaching with Caution One Year Later, IBM Shows Plan for MRO’s Maximo Study: More Work Needed to Lure Next-Gen Talent Executive Q&A Notes Cover Story: 2008 Companies to Watch Special Report: The 2007 Progressive Manufacturing High Achievers Progressive Manufacturer of the Year Business Model Mastery Innovation Mastery Customer Mastery Supply Network Mastery Data & Integration Mastery Education & Training Mastery Operational Excellence Mastery Leadership Mastery Transformation: Orchestrating the Multi-Tier Supply Network Integration: The Timeless Quest for Accurate Data Industries: Maintenance No Longer on Schedule Product Scan Advertiser Index Next

Managing Automation - September 2007

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