Computer Assignment help on : Information Technology Practices at IBM
IBM: An Introduction
IBM is one of the most reputed American multinational firms of the world. It is a corporate giant which operates in technology and consultancy fields. The company was founded in year 1911 with the help of a merger between three companies: Tabulating Machine Company, International Time Recording Company and Computing Scale Company and named Computing Tabulating Recording Company then. It adopted its present name ‘International Blue Machine’ in year 1924. Industry experts have nicknamed it as ‘Big Blue’ because of extensive use of blue color by IBM in its products, logo and packaging.
With its headquarters in Armonk, New York, USA, IBM deals in personal computer business handling both the hardware and software components and offers consultancy solutions to a lot of businesses ranging from infrastructure to nanotechnology. The founder of the company was Charles Ranlett Flint and the current president of the company is Ginni Rometty who also happens to be the chairman and CEO of IBM (IBM 2012).
According to Fortune magazine, IBM is one of the biggest employers of the world employing 433,262 personnel. Forbes ranks it as the 31st largest company of the world in terms of revenue earned. In addition to these two statistics, Fortune ranks it as the no. 1 company for budding leaders and the fifth most admired one, Newsweek ranks it as the no. 1 green company in the world, Interbrand giving it 2nd rank for best known global brand and Fast Company ranks it as the 18th most innovative company worldwide (CNN Money 2012).
IBM is known for its culture of innovation and thus spends huge amount of money in R & D activities. It has 12 research facilities around the world and holds the record of filing most no. of patents for 19 consecutive years as of 2012. Such is the impact of IBM’s innovative culture that its employees have been awarded with five Nobel Prizes, six Turing Awards, five National Medals of Science and nine National Medals of Technology.
IBM has developed and invented a lot of scientific products that have benefitted our daily social lives in a big way. These inventions include UPC (Universal Product Code), Automated Teller Machine (ATMs), floppy disk, the hard disk, DRAM (Dynamic Random Access Memory), the financial swap, magnetic stripe card (used in making ATM, credit and debit cards), SABRE airline reservation system and Watson artificial intelligence (IBM 2012).
We are living in an age of technology. The population of this world is information-starved. So what could have been an ideal solution? Well experts thought of devising a technological structure which could easily access the information, assess it correctly and then feed it to the world. The advent of personal computer in 1980’s fueled this technological revolution even further and the introduction of internet changed the whole scenario of searching an answer for a particular query forever (Cortada 2008). Companies like Apple, Microsoft, AT&T, GE, Google, IBM and Yahoo became the pioneer of this newly founded ‘information technology’ world.
Business Objectives of Information Technology – Information Technology can fulfill following business objectives:
a) Product Development – The use of information technology speeds up the product development process in many ways. A manufacturer can access a lot of databases of computer added designing for deciding the product designing, thus saving time on this important phase. Several marketing intelligence reports can further be fetched online for deciding on the sales and manufacturing strategies of the product (Basu 2012).
b) Stakeholder Integration – Internet as well as the other developments in the field of information technology like telephones, mobile phones, Cable TV, Fax machines etc. have helped the company interact with its stakeholders seamlessly. These communication facilitating equipments ensure a 24/7 hassle-free interaction between a business and its stakeholders. These communication tools navigate the whole world and such are there reach that a customer care call originating in Dallas, USA ends up in a call-center at Mumbai, India where a customer care executive attends to the call and solves the customer queries by obtaining the relevant information related to the queries from scanning servers from Hamburg, Germany or Amsterdam, Netherlands (Cortada 2008).
c) Process Improvement – Process improvement is another important business objective that gets fulfilled by information technology measures. A component of IT like ERP helps a manager to check out all the sales, financial and operational aspects of a business objective on a single integrated software platform. An ERP process stacks dozens of files related to various divisions like human resources, marketing, sales, operations and finance in a single domain in very organized manner in such a way that managers don’t find it cumbersome while searching any important information in any of the files, thus saving a lot of precious time and money (Basu 2012).
d) Cost Efficiencies – Products related to information technology can reduce the transactional and implementation costs of a company considerably. As it happens with most of the good systems, these products too don’t come cheap and initial implementation cost could be quite substantial but the benefits that come with them simply outweigh the cost. We can take an example of personal computers. Today they cost a fraction of the price they commanded in 1980s but still, they were considered more powerful then. IT solutions, ranging from word processing to emails and various other applications have helped the companies reducing the costs on duplication and postage while simultaneously enhancing the customer satisfaction and product or services quality.
e) Competitive Advantage – The above discussed advantages of IT solutions help a company attain competitive advantage at the market place. Rapid product development, improvement in manufacturing and logistics operations and cost effectiveness ensure that you are always a notch-ahead than your competitors. We are living in such a competitive world right now where if a marketer doesn’t show a proactive approach, his competitor will get the better of him and cut his market share down. In this way, IT solutions can send you miles ahead of your competitors if you choose to employ and integrate them in your organizational systems.
f) Globalization – Companies that show the character to survive in a fiercely competitive environment usually demonstrate incredible depth of financial and operational expertise and have outstanding potential to grow locally and then internationally. International expansion becomes a priority for every marketer once the local market starts showing signs of maturity and saturation. Globalization is a phenomenon of our age and IT provides all the tools to take advantage of it. IT solutions such as telecommunications and outsourcing help a company to designate all of its noncore operations like human resources and finances to other offshore companies and concentrate exclusively on its core functions and expertise. With the help of telecommunication tools, it can interact with its overseas employee and manage them quite effectively (Basu 2012).
IBMs IT Products and Services
There are a number of information technology services offered by IBM that can help a business solve its IT problems such as energy efficiency, business resilience, data center optimization, and security. In addition to all that above mentioned IT issues, IBM can help a business in moving its servers, installing a new software or system, moving it to a cloud environment, redesigning or building a complex data center for it by providing IT solutions in a better, faster and smarter way. IBM boasts off having the best professional in the business that show unparalleled experience and unmatched expertise and their use of sophisticated methodologies make them almost unavoidable (IBM 2012).
IBM can help a business in following ways:
Providing flexible mobile workplace
Network and integrate communications
Virtualize and optimize your servers
Design, build and manage your data center
Obtain technical support services
Realize cost savings and innovation with Cloud computing
Keep your business up and running (IBM 2012)
Departmental, Corporate, and Inter-organizational Information System
IT outside the Organization
IBM’s Benchmark IT Practices
IBM is considered a pioneer in the fields of hardware and software development. With its consulting business reaching a new high consistently, IBM’s continuous evolution in its designated fields help it rake higher profit margins and exceptional growth. IBM has contributed immensely to the industries like electronics, IT and semiconductors. IBM was the earliest adapters of computer in their day-to-day operations and it eased their complexities terrifically. They developed IT products like personal computers, DRAM (Dynamic Random Access memory), floppy disks and hard disks which are now being used extensively by the whole world (David 2010). But as the experts say, every business has to face good times and bad times. IBM was simply the patron of electronics and IT industry in its heydays but it started losing market share to companies like Microsoft and Intel in the areas of manufacturing electronic chips and developing operating systems respectively. This was a time of reality check for IBM as it was the market leader in every field it operated but slowly and slowly losing its grip on these markets. IBM, which was once the patron of personal computer segment, was now thinking of opting out from this category by the late 90s as it was not making any profit whatsoever from this segment.
However, the solution was not very far away and bright minds of IBM started thinking of paradigm shift. IBM had started of shifting their core business from hardware to software development and adding a whole new vertical to their business, viz. providing consultancy services in the fields of business continuity & resilience, integrated communication techniques etc. IBM knew beforehand that in the future, selling solutions will be more profitable than the products and thus it shunned its hardware products like PCs away and later sold it its entire PC division which back then became a liability rather than a profit churning machine for IBM (Dividend Tree 2009).
The two people who were responsible for bringing out such radical changes in IBM’s operations were Louis Gerstner and Sam Palmisano, two former chief executives of IBM. They transformed IBM from a hardware behemoth into a smart software giant (Dividend Tree 2009). It was their perception of the client preferences that they started providing a ‘bundled’ solution of all the three components i.e. hardware, software and service which were tailor made according to each client’s requirements. This strategy of spinning the key component of its business off paid huge dividends for IBM as they not only shrugged off their former shelf of hardware specialist and also embraced a new cloak that made them completely invulnerable in today’s world which demand more of the software than the hardware. In all this transformation process, IT was at the core of IBM’s strategies. If IBM wouldn’t have embraced the IT solutions back then, it could have been very much possible that they become a part of history books as if now (David 2010).
Companies that Followed IBMs IT and Other Practices
Well there are innumerable companies that have benefitted from IBMs inventions and discoveries but since we are talking about IT interventions, we will concentrate only on those companies that have faced similar problems like IBM and are now trying to imitate IBMs IT practices to conquer them and stay relevant in the market. In American context, there are many prominent companies in technology sector who are experiencing a dilemma to whether keep investing in their core business operations or divest in them and look for more exciting and challenging areas and invest in them in order to expand their business horizon. Most famous examples could be given off of companies like HP and Dell (Saintvilus 2012). These companies, just like IBM, are famous for their hardware component of business like selling PCs, laptops, tablets etc. But in recent years, this once prominent business sector has brought woeful results for these companies just like IBM. However, IBM has showed everyone in the past two decades how a great vision could be transformed into outstanding result by ways of sound and brilliant execution. IBM became an enterprise service company from once a hardware behemoth. IBM’s recent hardware revenue has fallen down by 7% which again is an indication of decaying hardware business and could provide a sort of relief for both Dell and HP who are showing exactly the same signs in their hardware businesses. IBM has compensated this steep fall by showing good growth in its software and services which has grown by 4 and 1 per cent respectively. These companies are consistently losing their grounds and market shares to the hands of Cisco systems and EMC (Saintvilus 2012). They should learn from the examples set by the IBM of how to reshape your business and plan strategies that can provide you enough leverage to sustain in the market. There are other companies in the same line as Dell and HP who are finding it very hard to maintain the momentum in their core business areas. Examples could be taken of Google, Amazon, and Cisco Systems. Google is trying to provide a consumer with more than a mere search; Cisco is trying to integrate all its business components: software, hardware and consulting on a single platform; and Amazon is trying to diversify into more product categories than only selling books (Dividend Tree 2009). They are trying to emulate IBMs revolutionary IT practices to spin off their existent business categories and make a foray into new areas.
The Evolution of Information Systems
Evolution of information system started with the advent of first computer back in the 1950s when these computing machines were used to perform high volume, repetitive, transactional calculation. They were further employed to compile and summarize data related to areas like human resources, finance and marketing. These systems were called ‘transaction processing system’ (Unibz n.d.).
This system was followed by ‘management information systems’ or better known as ‘MIS’. These systems cater to various functions and access, assess and organize data for routine decision making processes. Then a need for development was felt in designing a system that could ease down and simplify clerical and office work. As a result, office automation system came into being. This development was followed by the advent of decision support systems that used to perform complicated, non-routine tasks for complex decision-making schemes. End user computing is an information system that was developed by the primary users of system’s outputs such as analysts, managers and other professionals. Intelligent support systems are those systems that use stored knowledge for clarifying the customer queries. Knowledge management system compiles all the intelligent reports from every department and put it on organization’s server in case a query arises from the inner-circle of the firm. Data warehousing is one of the most important information system devised which co-ordinates DSS, ESS and the other end-user activities (Gordon 1994).
Mobile computing is an information system which helps those employees who interact with the business partners and customers outside the physical boundaries of the organization and are always on the go. These communication exercises are held over wireless devices like telephone, wireless etc (Unibz n.d.).
IBM is one company that is closely associated with the development of very first information system ‘transaction processes system’ and recently has emerged as an expert of data warehousing, end-user computing solutions and knowledge management solutions.
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