isham research
IBM said it best themselves:
Today marks an important moment for IBM, and in particular for EMEA. We have started a journey to change the culture of our business -- the very essence of how we operate as an organization.
Clients tell us that doing business with us can be difficult because of our complexity. Sellers tell us it is too hard to drive cross-brand/solution opportunities. And WorldJam confirmed that IBMers find it difficult to make IBM work for their clients. We need to move authority, resources and talent toward our clients, and build a culture that inspects less and trusts more so that employees feel more empowered to meet client needs.
With that as our goal, we are introducing a new operating model and leadership teams. We are embarking on a new way forward in EMEA, fully in tune with the needs and expectations of our clients and our business. This is an exciting journey that will create significant value for our clients and our company.
At the same time, IBM has announced plans for a restructuring in order to improve our competitiveness and the productivity of our operations. We have thought long and hard about this and believe it is the right thing to do to enable our business to grow. We understand that the days ahead will bring anxiety where job reductions are being considered. We are taking all measures to respect the welfare of employees who may be affected.
We have some important challenges ahead of us. But we have met many of you over the last weeks, seen the enthusiasm you share with us for making IBM in EMEA again the great company it deserves to be, and we know we will succeed together.
(A memo sent to all IBMers in Europe on 4 May 2005)
isham research has long criticised the decision-making path lengths within IBM EMEA. The very first version of the Devil's IT Dictionary put up on this site (now archived) defined EMEA thus:
EMEA n. Conclusive proof that Einstein was wrong - black holes can exist on planetary surfaces.
The new structure will divide the old EMEA into two Integrated Marketing Teams - IMTs, each of which consists of a number of Integrated Operating Teams - IOTs. IBM, as always, loves its TLAs:
We will, for the moment, gloss over the inclusion of Austria and Hungary in Northeast Europe and the Netherlands in Southwest Europe. Few Americans have any knowledge of geography.
The most significant quote comes in another IBM document accompanying the internal announcement - already quoted by Le Figaro:
In this model, where sales are driven within the local marketplace and decisions are made close to the client and where processes are aggregated and streamlined, there is no longer a need for an EMEA headquarters.
For those who have been in this business for nearly four decades, the idea of IBM Europe without EMEA headquarters is too good to be true. In today's Internet-driven world even IBM is automating more and more of its back office processes. Sam Palmisano, IBM's CEO, tasked Linda Sanford with accelerating and integrating develoment of IBM's internal systems. Surprisingly for such a supplier, IBM has never been that good at developing solutions for its own business.
Replacing managers who used to make deal-by-deal decisions with a combination of automation and empowerment of lower levels makes a good deal of sense - and it allows IBM to remove an entire level of management. If indeed increasing automation is one of the factors in this reorganisation, we will see much the same style of structure appear in other IBM geographies.
Will it save money? In some spheres there are already two of everything where there was only one before, and IBM is reported to be searching for executive-level rented accomodation in Zurich for around $20,000 per month.