Why should ibm transform its services?

painstakingly and successfully integrated disparate PricewaterhouseCoopers consulting?

how to rely on integration to effectively promote transformation? How to improve yourself instead of consuming yourself in the transformation?

understand IBM, maybe we can do it.

IBM has been around for 1 years, which is respectable; But IBM1 has been even more impressive in the past 1 years.

because in these 1 years, this former IT equipment manufacturer has achieved the most successful strategic transformation in the world so far. In 211, IBM announced that 23% of its revenue comes from software, 21% from hardware, and 56% from services-a real transformation.

IBM has not only achieved transformation, but also led the mainstream values of global enterprises-"We also want to sell services" with this great success, and triggered a follow-up frenzy of many enterprises around the world-"We also want to transform".

However, the success of classics since ancient times has been followed by a lot of stings, groans and even bones. Realizing the transition to service is far from being as simple as our generous oath in the speech. In recent years, there are countless people who have followed the transformation, but only a handful of enterprises can successfully realize the transformation from manufacturing to service like IBM.

in this issue, we will present to all our friends: why can IBM achieve a successful transformation? In the process of transformation, what has it done right that other transformation enterprises are easy to ignore or fail to do?

among them, we pay special attention to the fact that the 1 years of substantial progress in IBM's transformation is precisely the 1 years when it integrated the consulting business of PricewaterhouseCoopers. Integrating Puhua is not the starting point or the end point of the transformation, but it is a powerful propeller that is crucial for the success of the transformation.

for a mature enterprise that is in urgent need of transformation, it is bound to be very difficult to achieve comprehensive transformation only by relying on its own internal drive, even if it has systematic leadership construction. It seems thrilling to merge assets with transformation target types, especially to achieve effective integration, but it is a very important great wisdom (61519, stock bar) and a great deal to help enterprises truly realize transformation.

but integration is extremely risky; Like the transformation itself, the risk is great.

if HP's acquisition of Compaq, which was exclusively reported by China foreign management nine years ago, can be called "the mystery of century integration", then IBM's integration of PricewaterhouseCoopers is even more authentic "the classic of century integration". More classic, from more difficult. Compared with HP and Compaq, they are in different situations in the same industry, and the demand for transformation is not so obvious, but the implementation of integration is still tangled, while IBM and Puhua, the two industry bosses face each other, with different industries, different models and different values, but with the same success, the same arrogance and the same strength, who will mess with who? Who will serve who? How can they achieve win-win integration instead of lose-lose internal friction? How can we promote transformation through integration, instead of being neither fish nor fowl in a daze?

but IBM did it. It took the company 1 years to tell the world that IBM really did it! So, what happened to IBM in this seemingly impossible integration? Suffer what? What have you prepared? What did you do right? What did you achieve? What will be the inspiration that IBM has left for many China enterprises in transition or China enterprises that are about to realize transformation through merger and acquisition?

in this issue, through a multi-dimensional in-depth interview with IBM in Greater China, we will tell our friends a tortuous and wonderful actual combat story, and at the same time provide them with an enlightened practical method-that's what IBM did! And we ... maybe we can.

(yang? Light)

Merge PricewaterhouseCoopers Consulting

Elephant and Fierce Horse Dance

Text/Reporter? Sun Chunyan

Blue Giant has accomplished the perfect transformation to service so outstandingly. It was obviously a decisive strategic move to acquire the consulting business of PricewaterhouseCoopers 1 years ago.

As we all know, the difficulty of M&A is late integration, and there are too many tragedies of integration. So, how does IBM achieve perfect integration with PricewaterhouseCoopers? What can you inspire us? For the first time in 1 years, we have the opportunity to present the unknown story behind this century's integration exclusively for readers.

"Have you consulted? Do you understand? Without consulting, there is no power to speak and evaluate at all! "

Under the collective gaze of more than 3 people, Qi Yue was severely defeated by an army. The speaker left, leaving a room full of people hanging there.

"Of course, I was the first one to dry." After nine years, Qi Yue, who was then the head of finance at IBM Business Consulting Services (BCS), said leisurely. As an old IBM leader, it is the first time to be so "provocative" in public. The provocateur is his new partner, a senior leader from PricewaterhouseCoopers Consulting.

that was in 23, Qi Yue's eighth year at IBM. Just a year ago, IBM completed a century merger that caused a sensation in the industry-the consulting department of PricewaterhouseCoopers, a giant in the consulting industry, was taken into the bag for $3.5 billion, and the two sides involved as many as 3, employees and as many as 16 countries involved in operations. In China, on January 1, 23, the first day of the new year, PricewaterhouseCoopers, located in Kerry Center, officially took off the brand of PricewaterhouseCoopers consultant and replaced it with the logo of IBM.

At that time, many people were worried about this "cross-cultural marriage". No one is 1% sure.

"heavyweight" challenge

Because the internal integration of the two companies is far from as simple as changing the company logo.

in particular, this is not a lightweight "acquisition" to swallow up the small. You know, at that time, IBM had been standing as an IT giant for many years. As a listed company, it was steady and rational. As the leader of consulting industry, PricewaterhouseCoopers follows the tradition of consulting industry, insists on not going public, and is obviously more flexible and resourceful in system, just like a fierce horse. One is good at selling products, and the other is proud of selling services. Once such a team with different styles and leading industries is merged, it will have a fierce chemical reaction in the integration, which can be imagined.

you know, even in the same industry mergers and acquisitions, for example, HP's acquisition of Compaq in 21, which was carried out almost at the same time as IBM, the cultural differences between the two companies are still great, and the integration is not smooth. What's more, unlike product integration, service itself is a personal business, and integration is more difficult. If the personnel and organizational structure are not integrated, it is not a real integration.

at that time, the undercurrent surged.

"The completely different world has made me lose my sense of direction." Recalling that year, Xu Yonghua, the current vice president of IBM and senior partner of global business consulting department, told China Foreign Management. The consulting company outside the brain was in full swing, but suddenly it was told that it was sold to an equipment manufacturer! Many old Puhua's first reaction was surprise and loss. This sentiment is so strong that it lingers in the early stage of M&A..

inside IBM, unlike the fierce disagreement over HP's decision to acquire Compaq, although most people tend to agree with this strategic initiative, they are somewhat worried about the future. The violent conflicts brought about by completely different cultures and working methods have created many "firsts".

for example, qi yue. The reason why I was challenged in the meeting that day was only because of the different expressions of the statement of work in the contract. According to the customary practice of consulting industry, Puhua often lists "what we don't do" to customers, while Qi Yue thinks that it is obvious that more explanation of "what we do and how to do it" is what customers want most.

At the same time, the conflicts caused by the differences in systems are more intense. As a century-old technology enterprise and listed company, IBM relies more on processes to control, which is in sharp contrast with the partnership mechanism of PricewaterhouseCoopers. Even HP, which has coveted PricewaterhouseCoopers for a long time, gave up the idea of acquisition because it was desperate after evaluating this point.

this is not because HP is timid. At Puhua, people are used to being passionate, and they call on employees to be ready to fly to any corner of the world at any time to achieve the services that customers need. Moreover, a strong partner can lead a small team with great decision-making power. "The customer says it's too expensive, and the partner can make a 1% discount directly." But at IBM, this is simply unimaginable. Its process was once evaluated by ordinary Chinese as "strict to almost rigid". To do everything, it is necessary to communicate and coordinate with countless people and constantly submit for approval.

It is said that once a former head of PricewaterhouseCoopers' consulting department who was on vacation received an urgent call from a Shanghai customer, and habitually immediately got ready to go. However, when he immediately informed the team to gather and take a taxi to the company to declare the expenses, he could not get the funds because of the inconsistent process. Although they finally caught the latest flight of the day through direct negotiation with the CFO, the whole team kept sulking on the plane: why are IBM's regulations so complicated? So slow?

the difficulties are not only internal, but also external. Especially during the examination and approval of the merger, for the customers who were competing at that time, should we continue to compete or should one party quit first? How to ensure that the customer's ongoing projects are not affected? After the merger is announced, how can we appear in front of customers with a complete image without causing any confusion to the latter?

"1+1" in labor pains

In fact, IBM has made corresponding preparations for these entanglements and doubts.

in p>21, Zhao Lifang, the head of IBM's business innovation service department in Taiwan Province (predecessor of IBM's global enterprise consulting service department), was very busy. But in July, her boss suddenly informed her to come to the mainland to help, saying that "there is a very important project." Zhao Lifang was thus able to enter this "tough battle" of integration half a year before the announcement of this century merger.

like many major mergers, IBM has set up a special temporary organization, which is divided into several departments, including IT department and customer department, to deal with possible problems in different aspects. Different from the current overseas cooperation of many China enterprises, from the first day, they did not intend to let PricewaterhouseCoopers Consulting operate independently, but chose a real merger. That is to say, people, organizations and services provided by both sides are integrated.

but this is obviously not an easy job.

at that time, it was Luo Ruilan, the current global CEO of IBM, who was the top leader of the global business consulting service department of IBM. She immediately appointed the former business leaders of PricewaterhouseCoopers to remain as leaders, and so on, IBM appointed managers in every region and place very quickly, and never left a file. "We have to set up the team as soon as possible and make a series of control on continuity." Yu Xueli, the Asia-Pacific mastermind of the merger case integration in that year, is now the vice president of IBM and the general manager of Global Enterprise Consulting Services Division (GBS) in Greater China, recalling to China Foreign Management.

for this combination, IBM has shown its fullest sincerity. Under the planning of Zhao Lifang and others, when the senior leaders of IBM and PricewaterhouseCoopers met for the first time in 22, all IBM leaders led by Zhou Weikun, then CEO of IBM Greater China, arrived in advance and warmly welcomed every new colleague from PricewaterhouseCoopers at the other end of the red carpet, which made the latter extremely moved.

Within IBM, the word "acquisition" is deliberately avoided, but it is carefully called "merger". At the same time, IBM keeps sending the message that the purpose of merging PricewaterhouseCoopers is not to turn a leading consulting firm into another leading consulting firm, but to hope that you will drive IBM's transformation. Xu Yonghua, who always held the idea of giving it a try at the beginning of entering IBM, was deeply moved by this sentence.

Of course, if these are still soft psychological warfare, then hard actions are reflected in organizational structure, staffing, and subsequent institutional integration.

around the world, the leaders of both sides have been mixed up according to their abilities. But there can only be one leader, either from the former PricewaterhouseCoopers or from the former IBM. In order to integrate with the style of PricewaterhouseCoopers, IBM has even simplified a lot of procedures that are very cumbersome for ordinary Chinese. As a listed company, IBM even changed the leadership title of the consulting department to a common "partner" in private companies-IBM is sincerely moving closer to PricewaterhouseCoopers.

to be precise, "both sides have taken a step towards each other, so the impact is not as great as expected." Today, Wang Shouhu, vice president of IBM and senior partner of global enterprise consulting service department, said.

however, it's just "not so big". In fact, the pain in integration is inevitable.

In the first two years of the merger, this new team experienced a lot of brain drain. This includes both old Puhua and old IBM. This also directly led to the poor market performance and performance of IBM's consulting service department (GBS) in 23 and 24.

The direct reason comes from the sharp contrast between the talent promotion systems of both sides. PricewaterhouseCoopers, which pursues the partner system, is so flexible in judging talents that it almost ignores qualifications. Many young elites can be partners and are the boss in their own team. However, under the system of listed companies, the "elephant" of IBM has to go through a long process of sharpening its talents, and there are few opportunities for exceptional promotion. As a result, after the merger of the two parties, many old IBM found that the new colleagues from Puhua, who have the same qualifications as themselves, can actually be much higher than their positions; The elite of Puhua generally can't adapt to IBM's step-by-step promotion mechanism.

in this regard, IBM has taken various measures to eliminate the personnel turmoil in the merger. According to media reports at that time, IBM promised that at least until the first half of 24, the salary of Puhua consultants would remain basically unchanged, and the company's total cash would remain unchanged. In addition, IBM has arranged numerous trainings to make Puhua consultants familiar with IBM's corporate culture, decision-making process and administrative structure as soon as possible.

not only that, IBM also strives for more promotion opportunities for the former Puhua consulting staff. But looking back now, maybe not enough has been done. Until today, when mentioning regret, Zhao Lifang still said: "The only regret is the promotion of talents. If you can do it again, you should do better. We should let the headquarters understand earlier that this should be a completely different talent promotion system. "

of course, things won't get worse all the time. They are also actively recruiting fresh blood, and after the painful period in 25, there are also people who have left their jobs. Subsequently, the whole staff of the consulting service department is basically composed of 1/3 old IBM employees, 1/3 old Puhua employees and 1/3 new employees.