IBM GLOBAL BUSINESS SERVICES (GBS)
The history of IBM GBS (also known as IBM Consulting) is one of our very favorite business stories of all time, and one that reminds us that even the most enormous, boring and troubled companies can re-invent themselves.
As the next installment in our popular Firm Profile series, we take a look at the evolution, reinvention, and current interview tactics of one of the world’s premier firms – IBM Consulting. Enjoy the ride!
IBM CONSULTING KEY STATS
IBM CONSULTING HISTORY
IBM was founded in 1911 and has a rich history of ingenuity, deep convictions, premier research and development, and trend setting. IBM touts its sustainability and relevance as a global services leader by pointing to historical times the firm re-invented itself as a company. It should be no surprise since it has been the birthplace of many technological advances, was one of the founders of the entire personal computer industrial revolution, and is now a leader in new software platforms, hardware infrastructure and workplace equality.
Recognizing client’s needs for help managing IT operations and resources, IBM Vice President Robert M. Howe created the IBM Consulting Group in 1992. Although it started as a tiny group, paling in comparison to the behemoth revenues of the firm’s hardware sales, this group is now known as IBM Global Services (IGS) which is responsible for 50% of IBM’s revenue globally.
IGS has 5 divisions/branches. Those divisions are IT Services, Global Business Services, Outsourcing Services, Training, and Additional Services – because it’s super clear to have an amorphous Additional Services bucket, right? The division focused on in this article is IBM Global Business Services (IBM GBS). This IBM Consulting arm is responsible for 20% of IBM’s global revenue and is one of the most profitable divisions across all of IBM.
IBM first realized customers needed more than hardware in 1989. Eastman Kodak Company and IBM completed an agreement hiring IBM to design, build and manage a new state-of-the-art data center for Kodak in Rochester, NY under the brand name Integrated Systems Solutions (ISSC). The scale of the program investment included a back-up system, which opened the door to data management and related services for ISSC as well as other clients. During this same year, IBM introduced Business Recovery Services as a formal business offering for customers, enabling them to continue operations in the event of an unplanned outage or disaster.
In 1991, IBM approved a new world-wide services strategy to make IBM a world class services company by 1994. IBM began restructuring its ISSC subsidiary to provide a broader range of outsourcing services to customers. During this same time, IBM and Coopers & Lybrand formed Meritus Consulting Services to provide strategic advice to businesses in the consumer packaged goods, pharmaceutical, aerospace, and automotive industries.
1992, IBM unveiled another service called IBM Consulting Group. This department had 1,500 consultants worldwide servicing companies and organizations in 30 countries. These services focused on business management and information technology.
During 1992 and 1993, IBM U.K., IBM Czechoslovakia, and IBM Japan created their own regional consulting services departments to meet business client service needs in each specific region.
Confused yet? Just stick with us. We were too…
Obviously, IBM’s service sector worldwide was booming, which led to unrestrained and completely disorganized growth. Their total services revenue by 1993 was $17B – not a bad growth rate. However, amazingly, IBM didn’t make a profit on services until it consolidated all the worldwide business services into a single global team branded IBM Global Services in 1995. Dennie M. Welsh was named General Manager, Global Services. Just goes to show you that revenue growth isn’t the only name of the consulting game.
Here’s a quick overview of IBM’s service offerings’ path to become IBM Global Services:
Never fear – the transition didn’t stop. However, the name remained the same – but IBM began to absorb other services companies with unique services offerings over the following 10 years.
In 1998, IBM acquired The Chem Systems Group Inc. They were a management consulting firm whose clients were chemical and petroleum companies. This acquisition was merged into IBM Consulting department of IBM Global Services.
In 2002, many large accounting firms were selling off their management and technology consulting segments. Pricewaterhouse Coopers was one of them. IBM GBS jumped at the opportunity to purchase PwC for the great price of approximately USD$3.9B in cash and stock. This about doubled the number of consultants within IGS, adding 30,000 Consultants in 52 countries.
2004 was the next major shift towards a services focus for IBM. IBM sold off its consumer-focused computing systems and PC hardware side of the business to Chinese manufacturer, Lenovo, for a historic sale of USD$1.75B. This reinforced the prominent vision and future of the Global Services division. The only IBM desktops or laptops that you can purchase from IBM today are previously owned and refurbished systems. In the mid-2000s at Bain, McKinsey and BCG, you couldn’t find a laptop that wasn’t IBM issued – it was a consultant trademark.
Fast forward to today. IBM’s target market for consulting services became the clients who were willing to pay for higher-value corporate services packages of research, software and services. The firm has landed on a high-price, high-value service offering specializing in providing the best skills – the firm has become more discriminating on client selection.
We’ll see how this strategy sticks – in recent years, IBM has grown so much (impressively so, and eclipsing virtually every competitor in the services space) that its pathway for continued revenue and profit growth is a little unclear. The firm has also grown so much, so fast that its culture has lost focus and the pursuit of so many strategies at once have left many clients unsure of what exactly IBM GBS offers at the end of the day.
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WHAT DOES IBM DO?
IBM Global Services is the world’s largest business technology services provider. The largest arms of its service sectors are Global Business Services (GBS) and the Global Technology Services (GTS) branches. So what does IBM do? We break it down by both function and industry.
IBM Global Business Services is broken down into 2 primary practice areas:
- Business Consulting and Systems Integration
- Application Management Services
There are 6 specialty areas of Business Consulting:
- Business Strategy
- Finance Risk
- Information Technology
- Marketing Sales & Service
- Operations and Supply Chain
- Organization and People
Systems Integration and Application Management Services are the implementation arms of the Business Consulting group.
IBM Consulting serves multiple industries (these are great for networking if you are an experienced hire):
- Aerospace & Defense
- Chemicals and Petroleum
- Consumer Products
- Energy & Utilities
- Financial Markets
- Life Sciences
- Media and Entertainment
- Metals and Mining
- Travel and Transportation
Most of these are similar to IBM’s offerings – business consulting advice with the hopeful follow-up sale of a system integration and ongoing management.
- Tokyo, Japan
- Moscow, Russia
- St. Petersburg, Russia
- Ha Noi, Vietnam
- Ho Chi Minh City, Vietnam
- Sydney, New South Wales
- Calgary, AB
- Montreal, QC
- Ottawa, ON
- Toronto, ON
- Copenhagen, Denmark
- Paris, France
- Toulouse, France
- Walldorf, Germany
- Berlin, Germany
- Frankfurt, Germany
- Hamburg, Germany
- Essen, Germany
- Stuttgart, Germany
- Dresden, Germany
- Dusseldorf, Germany
- Prague, Czech Republic
- Buenos Aires, Argentina
- Rio De Janeiro, Brazil
- Sao Paulo, Brazil
- Santiago, Chile
- Costa Mesa, CA
- Los Angeles, CA
- Menlo Park, CA
- Palo Alto, CA
- Sacramento, CA
- San Diego, CA
- San Francisco, CA
- San Jose, CA
- Walnut Creek, CA
- Broomfield, CO
- Denver, CO
- Hartford, CT
- New Haven, CT
- Stamford, CT
- Washington, DC
- Atlanta, GA
- Arlington Heights, IL
- Chicago, IL
- Rosemont, IL
- Baltimore, MD
- Bethesda, MD
- Boston, MA
- Burlington, MA
- Cambridge, MA
- Springfield, MA
- Detroit, MI
- Grand Rapids, MI
- Southfield, MI
- Minneapolis, MN
- Kansas City, MO
- Saint Louis, MO
- Cary, NC
- Charlotte, NC
- Greensboro, NC
- Raleigh, NC
- Jersey City, NJ
- Princeton, NJ
- Albany, NY
- Armonk, NY
- Buffalo, NY
- New York, NY
- Melville, NY
- Syracuse, NY
- Rochester, NY
- Cincinnati, OH
- Cleveland, OH
- Columbus, OH
- Dayton, OH
- Toledo, OH
- Harrisburg, PA
- Philadelphia, PA
- Pittsburgh, PA
- Knoxville, TX
- Memphis, TN
- Nashville, TN
- Austin, TX
- Fort Worth, TX
- Houston, TX
- Irving, TX
- Arlington, VA
- Fairfax, VA
- Falls Church, VA
- McLean, VA
- Richmond, VA
- Seattle, WA
- Spokane, WA
- Milwaukee, WI
New entry-level consultants are automatically a part of the IBM GBS Consulting by Degree program (CBD). This program is specifically designed to provide experience and exposure to different projects within all of the IBM Consulting arms of service. Each rotation into a new role lasts at least 3 months. Rotating through Consulting by Degree roles is meant to help you hone in what types of projects you enjoy, tests your skill levels, and become your “clinic” to motivate learning new skill sets.
IBM provides all the broad-business based training and offers some more specialized training subjects like sales training, if desired. IBM CBD is strongly supported by the senior levels of management and grads to create a clear fit towards your career at IBM following the end of this program. Inside the IBM CBD program, you move between both client engagements and internal specialty areas, which many entry-level consultants say gives them great insight into what industries and practices they are the most – or least – interested.
So, what does a career path look like in IBM GBS? Most of the consultants are within a “Band” numbered 6 to 10. Some are included in lower bands, including interns. Below is the flow:
D = Partners
Internships and IBM Intern Salary
Employment Pathways for Interns and Co-ops (EPIC) is the umbrella program setting the standard for hiring the top interns into IBM. There are 5 EPIC programs to choose from. See below:
Global Business Services (GBS) GBS Consultant Interns are assigned to project teams with mentorship and on the job training. You will take on the challenging responsibilities of helping clients integrate strategy, process, technology and information to increase their effectiveness and profitability. These projects come from a wide variety of industries and nations.
The GBS internships are the only ones that lead directly to GBS job offers – not all internship programs are created equal, and in fact it’s probably better to work outside of IBM than to take another non-GBS internship if your ultimate interest is in GBS.
The Extreme Blue Program IBM’s premier internship program for students pursuing software development and MBA degrees (but focused on those with technical backgrounds). Interns work in teams of 4 in one of the 14 Extreme Blue labs worldwide.
Sales and Distribution (S&D) Summit Intern Program Interns will work with IBM teammates to deliver software and hardware solutions through a consultative sales approach to the clients of all sizes and industries. If you are passionate about client sales or utilizing technical skills to help clients solve their business problems through the technology application, this internship could be great for you.
Research Internship Program Interns work alongside industry-leading researchers and other students around the globe to work on innovative technologies. These positions are primarily available to graduate students (mostly non-MBAs), but the brightest minds are encouraged to apply.
Custom Internship & Co-op Opportunities This is for students with a varied educational background (not crazy-varied, but out-of-the-norm-yet-still-excellent varied). There are opportunities available across all business units, including the Software Group, Systems and Technology as well as the functional departments. Areas like finance, accounting, communications, HR and marketing.
Find your potential IBM intern salary in our latest salaries report.
Without doing an exit survey at IBM (maybe we will in the future), we can’t say exactly what each segment of the armies of ex-IBMers go on to do.
Some key differences vs. MBB? Your job at IBM has fewer broadly applicable skills – you’re considered more experienced in what you have already done, rather than have IBM be an indication of what you are capable of going on to do.
Some key differences vs. other behemoths like Deloitte Strategy & Operations Consulting? At IBM, you’re more practice and capability focused, and because of the size you’re more likely than a consultant at Deloitte to be specialized in a specific field.
In summary, opportunities are plenty (we would highly recommend IBM for training, in fact), but more specific than at Deloitte or an MBB.
IBM CONSULTING CULTURE
IBM GBS culture has been defined as highly innovative – which now could be considered to be “highly innovative in light of its size.” This isn’t a Silicon Valley pioneer, but IBM is still blazing trails. Since IBM is over 100 years old, the customer base and industries that the firm services are vast and convictions on valuing people run deep. There is a lot of pride in the company and it is widely known that “you do not work for IBM, you are part of IBM.”
All IBM employees are known as IBMers. The average age of IBM GBS employee is 38 – good news for those of you coming to the party later in your career. The hours are flexible, high quality training is provided and there are plenty of highly experienced co-workers from whom to glean insight. Travel to client locations is required.
IBM invests over $1B per year in education and training for their employees. Most of the training is distance learning. In fact, CBD graduates are assigned a full-time personal development manager (PDM) to oversee the career progression, in addition to business line managers that look out for opportunities for development when business conflicts arise.
Graduate pay is known to be less than competition. Internal administrative systems are known to be cumbersome and time consuming. Advancement in the ranks is difficult to come by – because the average age is a bit higher, many people make their career at IBM which means that the firm has to slow promotion in order to avoid becoming top-heavy. Most say lateral moves within the corporation are more frequent and pay increases are nothing to write home about (but at least outpacing inflation at about 8%/year).
The core values of the IBM Global Business Services culture include:
IBM core values are the basis by which they make corporate decisions. These foundational core values are:
- Dedication to every client’s success.
- Innovation that matters to the company and the world.
- Trust and personal responsibility in all relationships.
Like many consulting firms, IBM utilizes employees who are “on the beach” to further corporate impact goals – so if you find yourself in CBD, and without anything to do for a few weeks, ask if you can pitch in on one of these themed areas – you might make a major difference in a way you never thought possible.
- ConsultingMag.com. The Top 25 Consultants (2013)(#17). Jill Puleri (VP & Global Leader for GBS). Excellence in Retail.
- Money.CNN.com. 50 Most Powerful Woman in Business 2012 (#23). Bridget Van Kralingen (Sr. VP GBS)
- ConsultingMag.com. 2012 Women Leaders in Consulting: Sharon Hodgson (GBS Partner). Client Service Award.
- National Trust of India 2007 Appreciation Letter. The Best Employer for Persons with Disabilities.
Click here for additional awards and rankings.
IBM CONSULTING INTERVIEWS
Both the interview process and time from application to offer or rejection varies widely depending on whether you applied online, applied through a staffing agency or through a target college/university. If applying online or through staffing agencies, the average interview process time line averaged 2.5 months. Applying through a target college or university averaged 3 weeks total.
The hiring process sequence may look like this:
- Possible 30 minute Telephone Interview (non-university hires) – fit questions/HR screening
- 1-2 rounds of 3 1:1 interviews, with at least 2 key fit/experience questions and 1 shorter case question by each interviewer
4 Samples of IBM interview questions include:
- Describe a difficult problem and how you handled it.
- Tell me about a time when you used your diverse ideas on a team.
- Tell me about a time you created something innovative.
- Have you ever lived abroad?
While IBM does include case studies in the interview process (learn more about case study interviews), the firm focuses 60%+ of the hiring decision on the experience/fit/behavioral part of the interview – with so much invested in training, IBM trusts its own ability to develop skill provided the incoming attitude and capability is there.
The cases are generally simple, open-ended “The client does X. What would you recommend?” IBM interviewers look for high-level structure and insight – with a little creativity (not too much, mind you) that is focused on qualitative impact (implementation or a focus on people).
Example IBM Case Study question: Company X sells hardware, software and services. Over a 5 year period they have declining revenues and flat gross profit. What would you recommend they consider to fix the problem?
The cases usually take ~15 minutes to complete and the interviewers love it if you include some form of technology implementation into your recommendation.
IBM Consultant Salary
Are you an undergrad, MBA or intern who’s interested in working at IBM Global Business Services, but you don’t know how much you’ll make? Check out our latest Management Consulting Salaries post to find out!
Here is a list of the standard target schools that IBM GBS recruits from:
- Carnegie Mellon University
- Clarkson University
- College of William and Mary
- Columbia University
- Duke University
- George Washington University
- Georgetown University
- Georgia Technical Institute
- Hampton University
- Howard University
- James Madison University
- Lehigh University
- Michigan State University
- Morehouse College
- Morgan State University
- Mount Holyoke College
- New York University
- North Carolina A&T State University
- North Carolina State University
- Northwestern University
- Ohio State University
- Pennsylvania State University
- Princeton University
- Purdue University
- Smith College
- Spelman College
- Texas A&M University
- University of Maryland
- University of Michigan
- University of North Carolina – Chapel Hill
- University of Pennsylvania
- University of Virginia
- Virginia Polytechnic Institute
- Wake Forest University
- Washington University
IBM is known for its powerful industry-leading diversity exploits, and its internal support groups are strong and cohesive. If you have alignment with any of these groups, feel free to reach out to a current member to find out about his or her specific experience at IBM.
These are the 5 key IBM diversity groups:
- IBM Global Asian Diversity Network Group
- IBM Global Black Network Group
- IBM Native Diversity Network
- LGBT at IBM
- Women at IBM
Here’s a little fun history about IBM’s focus on diversity:
1914 – IBM hired the first disabled employee.
1934 – IBM was first company in the tech industry to hire women.
1934 – IBM was the first company to set a policy stating that all women would be paid the same as men for doing the same type of work.
1953 – IBM was expanding into the southern states. IBM President sent a personal letter to all the Governors of those states firmly stating that IBM would not engage in segregation under any circumstances. He also published his statements in the newspapers for the citizens to read and be aware.
1984 – IBM set policy stating they would not discriminate against sexual orientation.
2005 – IBM set policy stating they would not discriminate against genetic differences.
IBM CONSULTING LINKS
- IBM GBS Case Interview Questions and Answers
- Rocking an IBM Interview from a Non-Target School
- Consulting Salaries
- Accenture Firm Profile