ibm\'s transformational journey
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Business Transformation JourneyTRANSCRIPT
© 2011 Copyright Cardinal Points Group, LLC All Rights Reserved
Cardinal Points GroupNavigating Business Success
"Experience is a hard teacher because she gives the test first, the lesson afterwards."
– Unknown
IBM’s Transformational Journey
United StatesBrazilCanadaPuerto RicoGreat BritainFranceRomaniaJapanChinaSingaporeAustraliaNew ZealandSpainAustriaBelgiumGermanyRussiaItalyBelgiumSloveniaSlovakiaSwedenDenmarkFinlandPolandNigeriaKenyaSouth Africa
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Happy Birthday100 years old and counting…
Brand Statement“No one ever got fired for buying IBM”
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VisionIts view of a “network-
centric” future driven by the desire of people and
enterprises to connect to other people and enterprises
around the world….
Cover of IBM’s1995
Annual Report
+ + =Instrumented, Interconnected, Intelligent… A Smarter Planet
NOW
THEN
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International Business Machines Corp (IBM)Jan 25, 2011: 161.61 +0.17 +0.11%
Open: 161.67 High: 161.76 Low: 160.42
Recent History
Gerstner Palmisano
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Revenue Mix (Millions)
1993 2002 2010Hardware 30,591 49% 27,456 34% 16,983 17% 13,608 -44%Software 10,953 17% 13,074 16% 21,978 22% 11,025 101%Services 17,006 27% 36,360 45% 56,943 57% 39,937 235%Finance & Misc 4,166 7% 4,296 5% 1,998 2% 2,168 -52%
62,716 100% 81,186 100% 99,900 100% 37,184 59%
Change since 1993
Full-Year 2010 highlights:• Diluted earnings per share of $11.52, up 15%, 8th consecutive year of double-digit EPS growth• Record net income of $14.8 billion, up 10% • Record free cash flow of $16.3 billion, up $1.2 billion• Gross profit margin of 46.1 percent, 7th consecutive year of increase
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Subtle Changes
Divestitures
PC CompanyNetworking DivisionHDD BusinessPrinter Division
Acquisitions
PWC Consulting DivisionISSCognosMaximoFilenet
116 Acquisitions since 2002
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Other Key Data Points
233Value Distributors
1,50010,000Business Partners400,000300,000Employees20101993
Many Untold Stories
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CopycatsDell to Acquire Perot Systems for $3.9 Billion, Creating Comprehensive, Customer-Focused IT-Solutions Company
HP to Acquire EDS for $13.9 Billion, Transaction expected to more than double HP's revenue from services, furthering its standing as world's largest technology company
Xerox to Acquire Affiliated Computer Services, for $6.4 Billion, Creating a new class of Solution Provider
“Imitation is the most sincere form of flattery”
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Food for thought…
“Culture is everything”“You can’t improve
what your not measuring”
“Expect only what you inspect”
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Sample Partner Epitaphs“We didn’t want to see it coming”
“Died from a thousand paper cuts”“Was too afraid to change”
“Not only did we miss the boat rather, we missed the ocean”
“Didn’t move fast enough”“Too little, too late”
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Tough Questions for Partners
What’s our opportunity?How do we fit in?
Are we ready for this journey?Where do we go from here?
How do we transform?What’s our Investment?How much is the ROI?
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Contact Information
Warren R. [email protected]://www.linkedin.com/in/warrenturner(O) 770-913-0048(M) 404-664-6000