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Thursday, March 15, 2012

Who does your CEO Trust Today?

When it comes to computer systems today and the effectiveness of your IT organization, who can your chairman or CEO trust?  Who can come in today and conduct an objective assessment that you can trust?

In the old days prior to 1991 if you were President or Chairman of a major company, you could depend upon IBM to help you figure out a mix of technical solutions that would fit your business requirements.  If your local sales team with sales reps and systems engineers needed help, they could call upon the industry specialty team for your industry (i.e in my case it was Insurance). 

If the sales team felt that IT was not buying the right mix of hardware and software a very senior executive would come out from the industry group and walk directly into the chairman's office.  He (there were never any women in those roles) would offer to evaluate your IT organization.  He would bring in a team and do a "free" assessment that usually concluded that you needed a new CIO and that you needed to buy some IBM hardware and software.  It was done in such a way as to be totally believable by your senior most executives.  Senior executives of major corporations could trust IBM. 

They knew they were paying top dollar for computer systems (software and equipment) and they knew they could buy stuff cheaper from competitors, but...  they knew they could trust IBM to help them build or buy the systems they needed to achieve business goals.  Any savings the company could get by buying from IBM competitors was insignificant when compared against the value the company got by following IBM advice.  In those days with those people, IBM truly did put its customers first.

Lou Gerstner dismantled the field sales organization and industry specialty support groups.  He got rid of almost all of the system engineers and most of the sales organization.  He moved to a partner based sales model (similar to distributors selling crackers for Nabisco) and more importantly, he focused product development around IBM Research. Many financially oriented people will say that Gerstner saved IBM.  I would argue that he has killed it and it just hasn't laid down to be buried yet. 

The idea that IBM Research can figure out what products to create and sell to customers is ABSURD!  I'll be the first person to tell you that the folks in IBM Research are the absolute BEST technicians on the planet.  I will also be the first to tell you they know nothing and care nothing about business and business problems.  Look at IBM's cloud solutions, SAA and all of the servers built to support SAA.  Look at the IBM Portal Server, WebSphere Application Server and on and on and on.  Thanks to Lou Gerstner IBM has lost focus on business.  It is focused introspectively on brilliant technical solutions from research in search of a problem created by folks who have no clue what the market needs or wants. 

Marketing is collection of everything but professional marketing people.  Almost everyone I met from senior level VP's to low level marketeer's came from somewhere else and have no training in marketing.

As part of the cost cutting initiatives they have eliminated "user centered design teams" that would conduct user tests, video tape users using products, conduct surveys, focus groups, etc. All gone.  Basically IBM has cut itself off from reality leaving a gigantic hole in the world of corporate systems!  That is the role of a trusted adviser. Who can your senior executives trust?

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