Another great article from Knowledge@Wharton – “Can Big Blue Succeed In BPO?“.
After decades of specializing as a computer manufacturer and provider of computer-related services, Big Blue in the past year or two has been heading into some not-terribly-technical fields. Today’s IBM processes thousands of insurance claims, ensures that Procter & Gamble employees get paid, and takes charge of repairing televisions and CD players sold by Philips Consumer Electronics.
Taking on tasks such as customer service and human resources management is part of a broader shift among traditional information technology companies to get into what’s often called business process outsourcing (BPO). […]
BPO is a fertile market, expected to grow from about $405 billion last year to $682.5 billion in 2008, according to research firm IDC. Interest in such operations – and especially in their migration to countries such as India – continues to ride high. […]
In essence, the new Big Blue sees big bucks in focusing on the “B” in International Business Machines. But the strategy carries some risks. They include competing against new foes, handling novel tasks and explaining a grandiose vision to customers. What’s more, the business process push requires a thorough understanding of different industries. Staying on top of specific industries and their changing trends should be a challenge for IBM. […]
IBM combined the roughly 30,000 employees from PwC Consulting with about 30,000 IBM workers to form a new division called Business Consulting Services. The idea behind the acquisition and new unit was to generate revenue by joining IBM’s technology prowess with PwC Consulting’s business expertise. Analysts say the PwC Consulting deal has helped IBM compete in the BPO arena. […]
A more recent acquisition further demonstrated IBM’s commitment to business process services. Earlier this year Big Blue snapped up Daksh, an Indian BPO provider with 6,000 employees. Daksh, which also has a facility in the Philippines, gives IBM an army of lower-wage employees ready to handle services such as telemarketing and transaction processing. […]