Can Palmisanos Plan Keep IBM in the Lead?

IBM tackles the dual challenge of technology leadership and business process consulting.

As Jeff Moad writes in this weeks cover story on IBMs strategy, the real challenge for the company is to maintain technology leadership while navigating its migration up the business-process-consulting food chain. In our special report on IBM and in our lead eWeek Labs review of IBMs latest WebSphere application server, we take a close look at how far up the food chain the company has climbed.

Business process consulting and its relationship to IT has changed at buzzword speed. In the past, business processes were going to be re-engineered to provide business efficiencies that were impossible with the old management architectures. Many of those projects ended amid finger pointing and budget-busting consulting fees. More recently, business process consulting was aimed at getting companies into new businesses or adopting new technologies to extend business reach, which didnt work out much better than the re-engineering era. Now, business process consulting has adapted to more conservative budgets by redefining itself again through consolidation of departments, bridging of previously noncommunicating applications and farming out operations. IBM has been active in all those areas.

If you want to consolidate departments, a good first step is to ensure IT operations speak the same language. IBM has been in the forefront of promoting open-standards computing, which serves the dual purpose of downplaying the companys heritage as the most proprietary of computer companies and putting an open-standards obstacle in Microsofts plans for enterprise success. If you want to bridge noncommunicating applications, you need to be a leader in providing the software tools and application platforms to build those bridges. IBMs proposed purchase of Rational Software provides those tools, and its WebSphere application server provides the platform.

It is in the third aspect of the new definition of business process consulting that IBM has the most work to do. The eBusiness On Demand concept championed by company Chairman Sam Palmisano is thin on reality. Is it utility computing, where you hand off your critical applications to IBMs outsourcing operations? How does the utility plan play into the idea of integrating your operations to gain those promised efficiencies? What role does IBMs Global Services operation play in creating demand for On Demand computing, and can it maintain its status as an independent consulting arm in a company where everyone is expected to get behind the chairmans message?