IBM: Managing Customer Relationships as a Disciplined Process

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IBM: Managing Customer Relationships as a Disciplined Process

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Research Abstract

IBM Corporation, at $75+ billion in revenue, is the world’s largest information technology company. The company has been going through a major transformation, including the naming in April 1993 of a new CEO, Louis V. Gerstner, the first outsider to run IBM. Many still feel that the company today is a “work in progress,” but recent results have won the respect of the financial community, other industry participants, and, most importantly, customers.
IBM Global Services, with over 100,000 professionals, accounted for over $22 billion in revenue in 1996, and is one of the fastest-growing parts of IBM-up 14 percent in 1996. Global Services is made up of two parts: 1) maintenance, which accounts for 9 percent of total revenue; and 2) the services component, accounting for 21 percent of total revenue, which consists primarily of consulting, systems integration, managed operations, application development, and outsourcing. The services component grew 25 percent in 1996 (up 28 percent in the first quarter of 1997), while the maintenance business declined 6 percent.
One of the critical elements of IBM’s resurgence has been the decision to change the way the company does business. IBM has introduced a series of disciplined processes cutting across separate business functions, resulting in a stronger customer-oriented focus. By focusing on customers and the process of managing customer relations through an expanded set of services, IBM has opened itself to significantly more business opportunities. In return, IBM has become more effective in dealing with those opportunities-winning more of the right ones and avoiding wasting time on the wrong ones-all while improving customer satisfaction. This best-practice case study focuses on one of those key processes-Client Relationship Management-and how that process is being leveraged to the benefit of IBM Global Services.