The Professional Computer Services Industry
History, development and growth: International Business Machines (MM) Global Services in operating in a changing environment, Sine December 1996, when IBM established MM Global Services (GIGS), had achieved outstanding business result. Legs had grown faster than the Industry, and IBM Global Services was then widely recognized as the largest computer services company In the world. Being led by Its CEO Mr..
Greener, CICS Is facing a changing tide where they must make a strategic decision to either continue to be “everything or everyone” or shift towards providing solutions for costumers facing E-Business challenges In sourcing and Implementation. The mall Issue to be resolved by John, chief financial officer of International Business Machines (MM) was to create an enterprise wide strategy that would differentiate IBM Global services from Its competition: Figure( 1 ) identifies the segments of IAMB (hardware, global services, software, global financing, enterprise investments ‘other) and the company’s percentage of revenue by segment.
Figure 1: IBM Company’s percentage of revenue by segments 2000 42. 7 35. 4 Software 1999 43.
3 1998 44. 2 Global services Hardware 37. 5 36. 7 14. 3 14.
5 14. 5 Global financing investments/other 1. 6 3. 9 1. 9 3.
6 3. 5 Enterprise Total 2. 4 100 100 source: IBM Annual Report (2001) MM Global Services is well positioned in the professional computer services industry includes three broad categories of services; processing services (data entry ,credit card authorization, billing payroll processing),network services (electronic data
Interchanging services, electronic funds transfer) and professional computer services (technology consulting, custom programming, system integration, and outsourcing). The industry had strong growth. This rapid growth was stimulating Increased competition as well as high acquisition and alliance activity. However major Impediment to sustained growth was the shortage of computer processionals, Including programmers and system designers.
This shortage was also significantly Increasing the labor costs within this Industry.
In the light of Ice’s declining financial ND Its overall Importance to the future success of the IBM corporation . GIGS Immediate task was to make several strategic decisions In the areas of target customers, services to be offered geographic market, expansion, and changes to Its management system to take advantage of the industry trends, and to attract and retain skilled resources. In the first option faced by GIGS they will shift their full operations towards providing E-business solutions to firms in the different industries covered.