IBM aims consulting services at the midmarket

With a new suite of "service products," IBM hopes to make it easier and cheaper for the midmarket to buy its consulting services.

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IBM expanded its effort this week to allow midmarket customers to buy consulting services much like they would acquire software and hardware, with a suite of new plug-and-play "service products" from its IT Strategy and Architecture Services group.

The service products include the "Business of IT Executive Workshop," a workshop led by IBM consultants and attended by a customer's IT leaders. It assesses how the technologies and skills of an IT organization can better serve business priorities.

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Ken Cohn, CIO of Washington, D.C.-based energy delivery company Pepco Holdings Inc., said he bought this service a year ago. Back then it was known as a CIO assessment. IBM has renamed the service as part of its new suite of plug-and-play service products, Cohn said.

"It was a two-day session that got all the IT managers in my company together. IBM facilitated it and used their Component Business Model to help us look at where we did IT well and where we could improve," Cohn said.

Cohn said bringing his 14 IT managers together in one room to discuss the business was a "good thing," regardless of how the meeting was run.

"It's probably something that you could do on your own, but they [IBM] had a good model," Cohn said. "You always want something structured, and I thought their facilitators were excellent. Sometimes you get bogged down by the fact that you're in IT day-to-day, and it takes outsiders to bring in a different perspective. It encouraged us to take a look at a couple of different areas."

Cohn said IBM identified three areas his organization needed to focus on to improve its effectiveness. The first was technology innovation, a process in which the organization looks at technology it already owns and determines whether it can be applied to business needs other than the ones it already serves. Then it looks at how what new technologies could help business needs that can't be served by the company's current inventory of technology.

"We thought we weren't putting enough resources into technology innovation, so we structured a team to try to match user needs to both commonly owned technology and new ideas. We started to identify quick-hit items using new technology that can be beneficial to the business."

Kohn said this innovation team discovered that Lotus Notes and SAP, two technologies his company owns, had a lot of functionality that was lying dormant in his organization. The team has been exploring how to apply that functionality to meet other business requirements.

Kohn said the second area identified for improvement by IBM was workforce knowledge transfer.

Kohn said his company has been doing a good job of maintaining legacy technology within his organization, but IBM revealed that impending retirements of key employees would drain a lot of institutional knowledge about those legacy systems.

"Now we're looking at our knowledge centers and how to transfer that institutional knowledge to other employees."

Finally, IBM revealed that Cohn needed to work on "IT marketing."

"We don't let the rest of the company know in a straightforward, marketing kind of approach what IT has done and what it can do and how it can help the business. If the business doesn't know what you're capable of and you in IT don't know what the business needs are, it makes things more difficult. It's about opening a line of communication to really facilitate a process of trying to match technology with business requirements."

Other service products announced by IBM this week include service management strategy and planning, service management design, IT optimization solution framing and infrastructure strategy and planning.

"Overall, these are not completely new services for IBM, but they do represent simpler-to-understand-and-consume packaging and IBM has announced extensions to some of its methods," said Michele Cantara, vice president of middleware and SOA software and IT services at Stamford, Conn.-based Gartner Inc.

Bill Scheer, a senior research analyst at Peterborough, N.H.-based Kennedy Information Inc., said, "They're trying to make their services more plug-and-play and less customized."

He said IBM has acquired a large number of software companies in the last year, and now it wants to leverage those new assets by combining them with consulting services.

"They're packaging their services, their software and their hardware into solutions that are going to address the needs of clients in specific industries. Part of it is to bring down the cost and part of it is to make these things more applicable or usable by the midmarket."

These service products will also appeal to large companies that want to do smaller "midsized" deals rather than hire consulting services to work with a company's entire IT organization.

Scheer said IBM's approach has upsides and downsides. He said there is definitely a market for the service-products approach IBM is launching, but by packaging services with its own products, IBM is undermining its consultants' abilities to appear objective towards technology vendors. He said most major consulting firms have no direct association with vendors.

"The other questions is, whether that [objectivity] really maters," he said. "If customers are looking for product-tied offerings, then they're not looking for independent advice.

Let us know what you think about the story; email: Shamus McGillicuddy, News Writer

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