IBM's Success Factors - Coursework Example

Introduction World’s future is dependent on the growth of the services sector which is estimated to increase by 19% by 2010 within a span of 10 years in comparison to the manufacturing sector which may experience a decline from 13% to 11% within the same 10 years. Service means a product offered in return for a consideration which is basically intangible in nature and which does not attribute any ownership to the consumer. Services may be dependent on equipment or people which may be subdivided into skilled, unskilled or professional workers. In the professional people based services slot, comes one of the most successful companies of the world – IBM. An $81 billion company positioned itself in the computer software and hardware has been customer oriented right from its inception and also its strategic tie ups with low cost suppliers, innovated new dimensions in customer satisfaction expertise. (Kotler. P. & Keller. K, 2006). The nature of services offered by IBM can be broadly defined according to the services they offer namely: types of services, the needs of the customer’s business, Industry specification, Solutions for asset recovery/engineering, services for software related consultation and services for businesses of any size etc. As the size of the organization is very vast, obtaining a blueprint of it as a whole would be purposeless. Instead, analyzing blueprint of a particular functionality like engineering solutions which are flexible and leveraged to the customer’s needs would be more meaningful. The blue print of the attributes in this range is depicted in table – 1. Table – 1. Engineering Solutions Semi conductor solutions Design Enablement Extended Eco System ASIC Centers Technology at IBM Foundry Methodology Organization of power Architecture for Intellectual Property & Platform for Power Libraries Common Technology Packaging Services Road map for technology (Anonymous, 2009). The various semi conductor solutions and their value propositions are as follows: ASIC solutions: to help in the success of designing of the customer’s projects including their intellectual properties in consonance to the eco system. Foundry solutions: providing solutions end-to-end for a diversified range of customers comprising of extensive vendor network, standard industry libraries, flows of reference in addition to the ASIC solutions. Architecture for power: technology to both super computers and ordinary electronics which is scalable, configurable and core connectible by Xilinx and synopsis. Similarly, design enablement deals with: Centers for design: Positioning and future prospects of such centers which are established all over the world enabling the customer to access the organization from anywhere. Methodology: Planning of customized designs according to the customer’s requirements and the processes involved in it like maintaining the quality of the suppliers and tying up with low cost suppliers like amkor. Intellectual Properties and Libraries: Developing IP and spreading the knowledge all over the organization through libraries to provide engineering services worldwide. Packaging: The Intellectual properties are paired with the customer’s capabilities to deliver customized solutions for component and manufacturing designs and consultancy. Services: These include integrating architecture leveraging on a global basis through partnerships and networks, data analysis through simulations and servers, technical implementation visualizations which are computable for complex data understandability, platform integrations which are efficient in energy utilization and promise high-performance, packaging and logistics operational carbon analysis. Road map for Technology: This is developed to help the customer understand the technology according to his requirements. Value in the above services is delivered by this service where the employees help the customer to arrive at the required viewpoint. The extended ecosystem refers to the CMOS technology which targets the mobile devices and their value propositions can be expressed as follows: Technology at IBM: While mobile devices are fast capturing the specialties of the computers, the IT companies are finding it extremely difficult to deal with inaccuracy of device inventory, its configuration and the security of the information stored in those devices. IBM strives to achieve maximum excellence in these areas. Organization of Power: For this purpose, it standardizes the devices to the maximum possible extent so that chances of dissatisfaction from the consumer point can be avoided. It also tries to reduce the registration and waiting for repairs time. Platform for common technology: Wherever possible, it ties up with other suppliers of common technology thereby providing an extensive platform for the users. In short, the organization is developing compatibility with a variety of business partners to provide customized solutions in various categories thus positioning itself as the leader in the hardware/software management services and in management of business processes to its clients. Measurement of services provided by the IT giant can be diagrammatically presented as follows: Measurement of services Hardware/software management Businesses Processes Management. Uptime of Servers, computers, Sales and Distribution Management. Network applications etc. Mailing systems, ERP applications etc. Connectivity of P.C., leased lines, Server, ERP, Module etc. In the above illustration, services measurement is done mainly on two fronts – the hardware/software management and businesses processes management which are further measured on the lines of uptime of the applications meaning the function ability of servers, computers, network etc. in consonance to each other in terms of percentage like 95%, 97%, 99% etc. which provide a base for the effectiveness of all the platforms like mailing systems, ERP etc. and sales and distribution management and connectivity of P.C., leased lines, server, ERP, Module etc. respectively. It is to be observed that depending on the nature of business, the customer would go in for different levels of performance. For example if we take customers who are in the business of courier service, they would always prefer to have 99% uptime. At the same time, customers with manufacturing background may go in for 95% uptime because the margin of the 4% costs around 50-60% of the service cost which if possible would be avoided by the customer. Similarly, management of costs from the grounds of the customers would also result in peak/off-peak payments. Measurement of services should take all these considerations into view while arriving at a particular conclusion because these measurements are the mercury test for the most important factor of business i.e. Customer satisfaction. As the organization caters to the need of high-end customers who value Empathy: individualized caring attention to the customers Responsiveness: Provision of prompt services with a commitment to serve Reliability: Performance of the service promised accurately and dependably Assurance: Courtesy of employees who are knowledgeable thereby exhibiting their confidence of fulfillment on the work assigned to them by the customers. (Kotler. P. & Keller. K, 2006). This organization is always in the run to exceed its customer’s expectations by taking them into surprise and delight them through sheer hard work. This commitment to serve better in every instance transforms into a stream of loyal customers who are willing to pay any price for outstanding services. However, as IT is in its down trend in the present scenario, the expectations are quite fast changing and the company has to gear up with outstanding services through improved Research and Development efforts. At this juncture, IBM technology is speeding up the processes to market, trying to reduce risk of development that too at lower costs so as to improve the return on investment so that the stakeholders stay put with the organization, which in other words is the ultimate goal of any organization. Return on investment for the stakeholders can be achieved mainly due to the organization’s clarity regarding the competitive advantage it commands in the market. Usually, in addition to the 4 P’s of marketing i.e. Product, Price, Promotion and Place, three more elements namely Provision of services for the customers, Processes and People are also to be considered in order to capture the complexity of services marketing, as a whole. A detailed analysis of these concepts in tandem to the IBM’s methodology of services marketing would help give a better understanding of the subject. Product: The product offered is mainly user end solutions. Be it ASIC, Foundry, architecture for power or any other expertise offered by the organization, the basic underlying guideline is to offer the need based best of the products to the customers so that they rely on the organization’s commitment to serve them to the very best even in the future. Price: Being the market leader, right from its inception the company can afford to command the targeted prices for its services. The customers are so much pleased with its performance; that they would not take a chance to change the solution provider given their commitment to sustain in the extremely tough situations to deliver performance for their customers. However, now that the economy is in a downturn and more and more organizations are striving hard to excel in the customer satisfaction, they would offer a lower price to attract the lower end customers. Naturally, the high-end customers would demand such reduction in prices while maintaining if not upgrading the product quality failing which, these high-end customers may start thinking of other organizations. Hence, in order to not to lose business, some modifications on the pricing front for privileged customers may always be meaningful. Promotion: Worldwide presence and brand marketing are the promotional efforts taken up by the organization to maintain the niche in the market. The essence of brand marketing can be illustrated as follows: Profiling of Prospect Evaluation and Selection of Media Advertising Awareness Promotion of sales Customization Sale Market Share Line extension. (Collins. T & Rapp. S, 1998). Here IBM first conducts a scope study of the market, evaluates the various alternative Medias of promotion, and creates awareness through its advertising about the products and the value systems embedded in its products. The famous slogan of “ideating” which means innovating new ideas in the television advertisement is well-known to every viewer for its innovative way of expressing its way of work. Place: Worldwide presence implies that it leaves nothing to chance and as such, there is no possibility of service breakout or failure. However, to attain this perfection, it needs to hire local talent and train those employees to comply with the international standards. Customers need to visualize benefits which are concrete out of the intangible ones in which placing of the service plays a very important role for on-time performance. (Kotler. P. &Keller. K, 2006). Provision of services for the customers: As enunciated in the blueprint, the company has adapted itself to a variety of solutions and the customer is also rightly guided through these services to understand the customer’s need and address them accurately. Processes: Known for its process orientation, IBM supports the niche customers who are very clear in their business objectives. These objectives are clearly presented to the organization which analyses their business needs and designs processes which are apt for the customer. Personalized attention is what one feels consistent with and this feel good factor is emphasized by the organization as its pricing is fixed in a way that only quality customers deal with them. People: Technically skilled workers are the backbone of the organization. (Venkateshwarlu. H, 2004). Usually, workers with above average Intelligence Quotient (IQ) are picked up and trained on the Emotional Quotient (EQ) fronts to manage the most stressful situations in the corporate life. There are three elements which need to be addressed while imparting such training. They are Self Awareness, Social Awareness and Social Skills to mingle with the people around and maintain cordial relations with the customers which is the key to success for customer satisfaction. (Surender. V. 2004). While these concepts explain the customer’s expectations as regards the performance of a job in an organization, getting the job done is in itself a different concept in which various management issues are involved. The foremost issue is the adoption of the appropriate management style. Typically, there are two types of management styles namely: Production-line is a process wherein the designs are prepared by the manager in line to the customer’s expectations and the subordinates just perform their jobs as guided by the manager. In this approach, the employees are not personally involved and as such, delivery of accurate service may not be quite possible. Empowerment is a process in which the employees are given the chance to take the initiative to perform the service as according to the expectations of the customer. In this style, there is every chance that new or ill-trained employees may not live up to the customer’s satisfaction and the organization may lose the customer on the whole. The best way is to impose production-line style at the time of training and check whether the employee is following the instructions with respect to the purpose of the job he is expected to perform. Once he starts delivering the required results, he needs to be involved in the management of the issues so that new ideas can be generated according to the personal experiences he had with the customers in his tenure. This in other words is also called as the internal marketing of the manager towards his employees which is dependent on the organizational structure that he gets the required things done by them while addressing their needs tactically. The structure undergoes a gradual change as the organization adapts to the external environment and when it grows by leaps and bounds like IBM, functional structure comes into picture as the overall structure becomes completely vague. The planning departments would be involved in their own job while the operational departments would be thinking of effective operations and the front-line operations would be dealt effectively by a different department and so on. It so happens that the purpose of one functional level may not be of priority to the other functionality and as such there is every chance of a conflict which in other words is the root cause of imperfect performance as it impedes creativity. Some major issues in this direction are the Change Resistance, Conflicts inter and Intra functionally and individual responsibility not taken up by the employees. The break through to these issues lies in commitment to resolve them in the most practical way keeping the organizational purpose and cost efficiency matters in view. Ultimately, each issue has to be closed as soon as possible so that confusion due to inter-mingling of issues would only result in problems which cannot be solved permanently thus denting the organizational structure itself. Wherever possible, emphasis has to be given in tying up with low-cost suppliers which IBM has already taken up with companies like amkor. (Gilmore. A, 2003). IBM is a technical services giant whose employees necessarily have to be process-oriented and creative enough that they can solve the customer’s problems with commitment to their utmost satisfaction. The key lies in placing themselves in the customer’s shoes for which they need to address each problem with stability and maturity. Then only, the organization can achieve the two generic strategies called the Differentiation and Focus. Already the organization has identified itself as a potentially different organization in terms of excellence of service and availability of the same. To achieve this kind of reputation, functional level focus is put into action that each function is taken care of by its managers and the overall performance is then considered by merging all these activities for the overall organizational performance. Naturally, to hire employees with both Emotions and Intelligence and retaining them requires with all the other Human Resource strategies, an adequate compensation has to be paid which means overall higher cost to the company. This is the only strategy on which the organization needs to shift its concentration i.e. Cost Leadership on an overall basis so that its customers do not go haywire citing reasons of high costs during these hard times of recession. (Porter. M, 1980). So, the organization has to strive to excel the current levels of perfection to sustain in the market that too at lower input cost. Lower input costs do not mean cutting down the costs meaninglessly. It means creating a purpose for every penny spent by the organization. Some of the basic fundamentals to achieve this goal are as follows: Good procedures for hiring and then training: Importance has to be given to candidates, who are responsive, competent, initiative takers, ability to solve the problems and a positive attitude. While they may exhibit only average competence also, their readinesses to follow the instructions and creatively solve the problems and serve the purpose have to be nurtured in them by giving them confidence to complete the work in the given schedule. Service performance standardization: The employees should get clear instructions regarding their work processes. Once a clear understanding of the methodologies and deadlines is explained to them, they can themselves prepare their own plans to serve the customers more satisfactorily. Monitoring: Service performance has to be monitored continually through various performance measures which create responsibility in the employee towards the organization. The organization can also start internal management techniques like hiring employees on a part-time; services sharing with like organizations, encouraging consumer participation for basic issues, efficiency maintenance in the peak times etc. and at the same time figure out the required facilities in the near future because pre-planning always save a lot of input cost. In this way cost leadership can be achieved. (Kotler. P. & Keller. K, 2006). Conclusion: It has been observed that IBM is a computer service giant which has adapted itself to the customer’s requirements, excelled itself in managing the organizational issues by carefully empowering its employees and also monitoring them on a regular basis so that they deliver the perfect service which is the key to its success. It has also initiated business tie-ups with low cost suppliers for certain lower level services. However, given the down trend, the organization needs to focus on lower cost modules by different methods of management of employee’s time and purpose based expenditure so that the company can withstand the market pressures and still rule to be the market leader in the future also. Book References: Collins. T. & Rapp. S. (1998). The essence of maxi marketing solutions . Maxi Marketing – The new direction in advertising, promotion and marketing strategy. U.S.A. Mc. Graw – Hill Inc. Pgs. 17-31. Gilmore. A. (2003). Management Styles and Emphasis for Services Marketing & Internal Marketing in Service Organizations. Services Marketing and Management. London. Sage Publications Ltd. Pgs. 126-128 & 142-149. Kotler. P. & Keller. K. (2006). Designing and Managing Services. Marketing Management. New Delhi. Dorling Kindersley (India) Pvt. Ltd. Pgs. 371, 375, 376, 383. Porter. M. (1980). Generic Competitive Strategies. Competitive Strategy. New York. Free Press. Pg. 35. Surender. V. (2004). HRM Strategies for New Millenium. Human Resource Management Industrial Relations. Hyderabad. Osmania University. Pgs. 250-251. Venkateshwarlu. H. (2004). Services Marketing. Marketing Management. Hyderabad. Osmania University. Pgs. 250-251. Internet References: Anonymous. (2009). Services. IBM. Last Accessed: 24th February, 2009. Available: http://www.ibm.com/in/ Read More