I am hearing rumors IBM Consulting will be focusing primarily on a limited number of verticals and deemphasizing other segments. I’m guessing they’ll focus on Banking, Retail, telecom, etc. and shed manufacturing, industrial, etc. Does anyone know?
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They will concentrate on whatever is the easiest to forge sales numbers.
I don't think you get it. IBM has no strategy around skills or talents, but only a strategy to cut costs. Therefore, they need to let go older workers and hire younger ones that are not yet as greedy as the old ones!
IBM has no idea what skills it needs. Management is totally clueless.
3swf You are seeing IBM trying to transition to the new Redhat purchased strategy. They have plenty of consultants / manpower baked in the old strategy (HW/SW/Services). The new Redhat Hybrid platform solutions strategy (IBM’s definition of cloud), lacks experienced LINUX manpower, but IBM is hiring every young LINUX programmer they can find. If you take a step back and look critically at IBM, the Dino Baby strategy impacts Infrastructure especially hard as it’s HW focused. SW takes the least impact as it’s transitioning with Redhat already in pocket, and it has a Dino Baby need with some of the legacy being tolerated (TPP being the perfect example). Consulting is a blend of old vs new. You need to be able to explain the advantages of “Enterprise” (eg Dino baby) with the need to modernize some legacy code and front ends (eg youngster LINUX programming). Luckily Consulting turns over far more than anyone knew, so IBM is slowly restructuring. Unluckily the types of consultants that IBM needs to attract, are few and far between so it’s going to take time and money to fill the void. So what can we take from all of this? If you are one of the 30k employees within infrastructure group, you have a rather large target on you. If you are one of the 70k employees within SW group you better be LINUX experienced or have a mainframe skill that will not get retired. If you are one of the 140k consulting employees, you better gain some LINUX skills ASAP as the HW experienced employees are being phased out as IBM focuses on more specific Enterprise industries
The only one that Consulting is lucrative for is Ginni 20k a day!
This is what happens when IBM implements Dino Babies strategies, replacing old extremely experienced workers with out of college kids that have no experience. Don't get me wrong, it is not that I hate kids out of college as we do need them badly, but we have to train them and that takes years. Not to mention, that these kids hired out of college don't stay very long at IBM. They understand pretty quick that there is better out there than IBM.
@2iis — You may get downvoted since you stopped too soon, include the useless A / AA as well.
It's easy to trim down. Get rid of more useless 10/D/C/B.
IBM announced on their earnings call that consulting had 10’s of thousands of employee turnover per year. Given that IBM has to pay a premium to attract consultants (again confirmed on the analyst call) and for every one that leaves it cost between 1.15 and 1.25 to back fill, it makes sense that IBM would trim the consulting gigs down to 10-12 industries. Replacing employees by the thousands at higher costs is just running in place as far as capturing profits. The major issue right now within consulting is their gross profit margin (24.2%). Compared to most major consulting firms that’s approx 10 points of margin below the competitors. The entire consulting division has been told to improve those margins or suffer the consequences. So how do you improve margins? Lower employee turnover, raise rates, engage in gig’s where the customer definitely views you as a thought leader thus is willing to pay, and exit lower profit margin gig’s where body shops have the advantage. Expect all of these to get some traction as 2022 moves on. expect some trimming of lower margin gig’s and consolidating
Sounds about right IBM can't fix anything So bail out
Didn't SW do something similar a few months back?
Yes and no. While there are focus or priority sectors, there are also verticals in which Consulting makes a ton of money, like Industrials and Communications.
There will be premier accounts and high value clients, but no one is turning away money from a second tier sector.
Consulting is doing very well lately with higher dollar deals so there’s hesitancy to sc--w with what’s working.
That would not be a smart move. Banking, telco and government may be the biggest individual industries in terms of revenue I think but the others are all multi million/billion dollar businesses too. Not much sense in giving all that up.