IBM: Lean program has lean success?
Technology giant IBM had revenues of $95.8 Billion in year ending 2009. 400,000 IBM employees world wide had generated a net income of $13.4 Billion. Despite a global recession, IBM management kept a steady ship with more jobs being moved to IBM India. But one of IBM’s latest cost reduction intitiatives for its customers – Project GDF – has had qualified success.
India is one of the jewels of IBM international. IBM re-entered India in 1992 after its walk out in the 1970s. Headquartered in Bangalore, IBM has offices in 14 Indian cities. IBM took over Daksh eServices to establish a huge BPO footprint in India and Philippines.
IBM Global Services (IGS) is the worlds and also India's largest information technology services and consulting provider. IGS provides the entire spectrum of customers' e-business needs -- from the business transformation and industry expertise of IBM Business Consulting Services to hosting, infrastructure, technology design and training services.
According to a senior manager from IBM Hyderabad who spoke to Techgoss on condition of anonymity, the current cost reduction initiative Global Delivery Framework (GDF) in its Global Delivery Centers is aimed at helping customers get more value for their bucks, and in the process help them sustain and grow their business. The methodology used to drive this is Lean. But how successful has this cost reduction program been?
Essentially, IBM has adopted the Toyota methodology of manufacturing into its service business, but the tech giant chose to call it Global Delivery Framework. This is not something new to the world as Indian tech giant Wipro has already done this many years ago.
The Lean program has been designed to run over a period of 19 weeks with the focus on improving productivity and quality of services. The program has multiple quality gate checks called ‘forums’ to address progress of various teams. The two key expectations in these forums are showcasing ‘possible efficiency release’ based on high level analysis of volume of work and the ‘pulse’ of people vis a vis the current environment.
The feedback on the method used to arrive at efficiency numbers is that it may require another global initiative to be adopted as there are visible gaps in the practical achievements. While this approach has resulted in great public relations with IBM clients, insiders feel that there have only been small gains in efficiency.
The other aspect of this program is to further enhance the quality of work that is being done. A true blue organisation can only drive quality externally if it nurtures the culture internally. As part of the program, survey findings of how people feel and see this initiative are reported. However, if you ask the foot soldier if anyone has come back to address any of the issues highlighted, there would not be any concrete actions.
When one of the strong supporters and leaders of the program was asked to list a win where actual improvements happened, he struggled to give a concrete example. No wonder most people are left with the feeling it’s another attempt to squeeze life out of a dry lemon.