Software is IBM’s main profit generator. Services (GBS) is waning in importance. Implication: Software gets the new investment, leaving fewer career opportunities in Services.
Simple rule: Biggest cost for services is people, so either reduce people or reduce the cost of people.
Implications for current / potential new employees:
A. Long term focus to reduce US based headcount in favor of off shore or "landed" resources. Ask yourself why IBM will not publish its US population numbers anymore
B. Extremely limited education and training (now nearly 100% on your own time, almost exclusively with online training)
C. Downward pressure on pay. Maybe starting pay will be good (hires are treated better than current staff), but low increases/bonuses for top performers. Cheap college hires may not notice this until about five years when reality hits
D. Benefits are a cost versus a attraction/retention of good talent. IBM has been at the "cutting edge" in the pension reform.
E. If you are a professional hire, at a senior level, know that your tenure is short. It is unsustainable versus the low cost replacement headcount, especially when coupled with increasing performance bar (now, lower band levels are expected to do work that was once the responsibility of those one or two levels higher). College hires are now hired into lower band levels than in the past decade.
Simple rule: Headcount x Utilization = Revenue.
Implication:
A. Vacation and work-life balance are almost meaningless. Every year utilization targets go up. Any earned vacation with years of service has to be “made up” to meet your targets. You also have to “make up” for bench time or take a performance hit. At higher bands you will be loaded up with signings, utilization targets, and manage people. The burden is not accounted for, so you will be working late evenings, weekends and your vacation time. For the ambitious one who gambles to take a run at top performer recognition – there is no life.
B. There is no room for Education/Training unless you do it all on your own time and dime.
C. Like a contractor, you are responsible for finding your next gig. IBM will not carry you for long. If you get a poor rating because of missed targets, you will be on the list for cuts.
C. You are more on your own from a personnel point of view. Your manager has less time than ever. You cannot rely on your manager alone for a “fair” performance review.
D. As a manager, you will have to choose between time spent on employees versus time on your targets versus time with your family. Executives will beat you up on all but your family. .
Simple rule: Targets rule - they dictate behavior.
Into the management and executive layers, it becomes apparent quickly that behavior is shaped by their measurements. This has the tendency to reduce the cooperation between divisions and between sectors within Services, and even managers within service areas. It is hard to articulate the magnitude of the impact of this without going into examples - impossible to do here. Cannot say that this is worse than other companies, but can say that it has become more of a problem of late.
Implication:
A. You will feel more like a number than a valued employee, since there is less room than ever to make long term commitments and career plans. Focus is on ute and signings, not your career.
B. You will be positioned for more of the same in your next role. It will be rare to work on something truly "innovative". The safe road is the tried and true and no investment will be made without payback before the calendar year, if not quarter.
C. You will have limited opportunity to move across sectors or divisions - impacts manager's/executive's headcount in the short term.
D. You may be blindsided by the outfall of some squabble or issue between executives - keep an eye out and build multiple relationships (invest yet more of your time) is all you can do.
E. Above all, look out for yourself, as nobody is going to look out for you - it takes too much time and there is no bonus tied to it. In fact, the shareholders are rewarding the current behavior.
