Innovations Intertwined

IBM Global services is marrying technology to business strategy.

IBM Global Services hopes to set itself apart from the likes of McKinsey & Co. and similar companies by creating a "virtuous circle" that links IBMs technology research with its services offerings.

This combination of technology innovation and business innovation is most visible at IGS new Institute for Business Value—built from resources acquired last year with its acquisition of Mainspring Inc.—which provides business executives with access to analysis and expertise in major vertical markets.

IGS officials said the approach comes as business leaders increasingly demand strategies that include a role for technology.

"The CEO understands you cant ignore the impact that technology has on strategy," said John Connolly, general manager of the IGS Strategy and Change Group, in Cambridge, Mass.

The union is not new, however.

"Big Five firms have long [provided] thought leadership, doing research on various topics and relating them to IT," said Michele Cantara, an analyst at Gartner Dataquests Consulting and Systems Integration services, in Lowell, Mass.

Accenture Ltd., in particular, is considered to be strong in both "thought leadership" and research and development, said Anna Danilenko, an analyst at International Data Corp., in Framingham, Mass. To compete effectively against Accenture and others, IGS will need to demonstrate that it can "close relationships with business executives who are increasingly involved in the IT decision-making process," Danilenko said.

Executives at BostonCoach, a subsidiary of Fidelity Investments Ltd., are demonstrating their faith in IGS in a project to improve the efficiency of their transportation services.

"We needed to model various optimizations. They worked with us to create a model that would match our business," said Hazare Ajune, BostonCoachs CIO. "They were willing to acknowledge the complexity of the solution we were trying to achieve [and] work with other vendors."

Jarir Chaar, program director at IBM Research, in Hawthorne, N.Y., manages the relationship between IBM Research and IGS. Chaar said that in the quest to embed intellectual property in services, IGS will not rely solely on IBM software.

"Based on our understanding of technology, trends and evolution, we can try new and innovative services and applications," Chaar said. "We can create these offerings, pilot them within our infrastructure with IGS and as soon as theyre mature, we can take them to the marketplace."

"We want customer influence to get the right research agenda and offer back to customers direct access to that research," said Dave McQueeney, vice president of technology assets at IGS, in Somers, N.Y. By teaming up technology innovators with business innovators under IGS new Institute for Business Value, IGS has discovered a "virtuous circle" of innovation, McQueeney said.

The institute comprises 50 consulting and research professionals located in Cambridge, Mass.; Frankfurt, Germany; and Singapore. It focuses on six industries: financial services, communications/media, industrial, distribution, health care and government.

The institute offers a series of member programs, such as the Business Value Alliance and the Institute for Knowledge-Based Organizations, which provide fact-based analysis on issues important to members and access to dedicated advisers.

The Institute for Business Value worked with consultants for the British government to develop its soon-to-be-published strategy for knowledge-enhanced government.

The knowledge management strategy, heralded by participants as the most advanced strategy introduced by any government worldwide, was developed to unify different organizations within the government to better serve the public, according to Joe McCrea, director of knowledge-enhanced government for the office of the e-Envoy, in London. (The e-Envoy was created to bring the U.K. government online and create an e-business strategy.)

At the core of the strategy is a knowledge network consisting of a Lotus Notes/Domino hub-and-spoke system that links all departments in the U.K. government.

"It brought all of the major departments into one unified communication infrastructure. We have yet to see any government thats introduced that capacity," McCrea said.

The project required working with 22 government departments, each with its own IT strategy, management and organizational structure. Having access to a "rich pool of talent" and IGS ability to manage the complexity of the project was "an immense benefit," McCrea said.

"I didnt have to worry about identifying all the capabilities we would need from an external supplier. IBM was able to do that because they have the breadth of experience within the company to do that," he said.