IBM Disputes Bain Claim

January 12, 2018

I don’t read the Poughkeepsie Journal very often. However, I made a delightful exception this morning. The story “IBM Disputes Report of Redeploying Staffers” reminded me of Robert X Cringely’s The Decline and Fall of IBM and its subsequent hoo-hah. My recollection is that IBM suggested that Mr. Cringely (whom I think of as X) was off base. I am not sure he was.

The Poughkeepsie article reported:

An IBM spokesman disputed an article reporting the company plans to reassign roughly 30 percent of Global Technology Services staffers through attrition this year.

A British online publication reported that Bain was likely to help IBM on its road to recovery.

IBM, according to the Poughkeepsie source, said:

“It’s not accurate,” said Clint Roswell, spokesman for IBM’s Global Technology Services business. He did not give specifics on what information was inaccurate. “The company did not make any announcement and we don’t comment on speculation,” Roswell said. He said IBM hires “many consultants, many of whom make recommendations. It’s as simple as that.”

Okay, where did the British publication’s story originate?

Another question: If IBM hires lots of consultants, why did this particular Bain report trigger a response in the estimable Poughkeepsie newspapers?

My hunch is that a kernel of truth resides in the British report and the IBM denial.

IBM is going to have to do some fancy dancing. Whether Bain, BCG, Booz, McKinsey, or another of the blue chip consulting firms get the job of fixing IBM, the system and method will lead to the same changes I described in “IBM Watson: Fresh Out of Correct Answers?

For those who have made it through advanced degree programs, the blue chip consulting firm charm schools, and the on the job training with Type A “experts”—the thought processes lead to:

  • Reassessment of internal financial data
  • Calculations to identify cost savings and money making opportunities
  • Ranking of units and their people
  • Reorganizations
  • Sales of certain business units
  • Embedding of consultants in place of existing managers
  • An effort to work directly with the Board of Directors

These types of changes are ones that people working for a company rarely make without the help of outside expertise.

Maybe IBM is on its way to sustainable revenues and impressive growth dusted with healthy profits?

On the other hand, IBM admits it works with lots of advisers. One of those outfits will get the job to fix IBM. The result will be the same sequence of actions identified in the dot points above.

The third quarter earning come out during the week of January 15, 2018. Has IBM returned to its glory days? If so, forget the consultants with repair kits. On the other hand, if the numbers are not exciting, maybe the Bainies or another blue chip outfit will be able to flip on the chain saw and do what has to be done. I think I can safely assert that asking Watson will not be Job One.

Stephen E Arnold, January 12, 2018

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