Enterprise transformation: The IBM journey to Value Services

By 1993, the operations of IBM had become inefficient and inflexible with respect to a fast-changing external market. This paper outlines the enterprise transformation undertaken by IBM since 1993 to transform its business processes through simplification, better integration across the company, and innovative approaches and technology. We also introduce the concept of Value Services, defined by IBM as a group of functional units, processes, and initiatives dedicated to working collaboratively to achieve business transformation and to improve productivity (a measure of efficiency of production) and effectiveness (client and business partner value). Value Services comprise three key elements. Shared Services are globally integrated organizational/functional units providing support services (e.g., human resources, finance, and information technology) to all of IBM worldwide. Globally Integrated Support Processes are focused on improving end-to-end efficiency and effectiveness of processes performed across more than one organizational function or Business Unit. Integrated Operating Model Initiatives target similarities in all worldwide processes, skills, and assets to improve integration, productivity, and globalization. Between 2005 and 2010, the Value Services collectively delivered more than $6 billion in productivity, with an additional $8 billion targeted by 2015. Finally, we outline the management system that has underpinned successful achievement of these benefits.