Reasons why IBM sees its future in acquiring a consulting firm
The International Business Machine (IBM) is one of the businesses that have carved their niches in the technology sector. With the growing change in technology, the company sees its future in acquiring a consulting firm to assist organizations to manage the inevitable change. IBM sees a gap in organizations that outsource business processes in terms of how they manage their IT services and employees among others (Nickolett, 2008). If IBM acquires a consulting firm, it would be able to fill the gap in organizations mentioned above by providing the required services, hence making good margins. For IBM, merging consultancy with technology is the future for organizations that are aiming at flexibility and optimization of resources.
Many technology firms are not sure of how to add value through consultancy services except for IBM that has taken up the challenge through Sam Palmisano who is its chairperson and CEO. Through the progress that IBM has made by engaging PwC as a consulting firm, its future is hopeful since business processes will be redesigned, hence becoming more flexible. Additionally, when IBM acquires a consulting firm, it will differentiate itself from its competitors with its ability to integrate many businesses in one entity. Therefore, organizations will be more willing to engage IBM where they can get all services from a single entity.
How consulting will add value to IBM
A consulting unit will be a plus for IBM since many organizations need consultancy services for reengineering purposes. Consulting will take IBM to another level of doing business away from the normal business of developing computers. IBM has analyzed the market trend, which indicates that better profit margins are no longer for developers of disc drives, but for providers of services such as consultancy and software programs.
Consultancy will give IBM an edge over its competitors because it has ventured in the majority of the industries relating to information technology. IBM will have a wide scope of services to offer to its customers in a personalized manner. Consulting will provide a wholesome solution to IBM from the point of analyzing problems to implementing change thereby adding great value to organizations (Kumar, 2012).
Features that IBM should look for in a consulting firm to make a good acquisition
It is important for IBM to analyze a consulting firm before making the final decision to acquire a firm. The ability of consultants to come and work as a team together with other IBM’s employees is a key feature to consider. Consultants should blend well with other employees for all processes to run smoothly. Value addition should be another feature to look for in a consulting firm (Czerniawska, 2002). The consulting firm coming in should bring on board experienced staff members who have worked in diverse environments and circumstances while delivering quality services to their clients.
IBM should also consider a consulting firm that is efficient in terms of carrying a project from its start to the end. The firm should be able to provide a reliable project that will not have hitches when consultants are absent. A good consulting firm should carry its project from the testing phase to the roll out phase while adding value to clients. To accomplish this role, the consulting firm should be familiar with the market. It should also have knowledge and technical ability to handle any business. IBM should look for these features in the acquisition of a consulting firm to retain its leading market position.
Reference List
Czerniawska, F. (2002). Value-based Consulting. New York, NY: Palgrave. Industries. England: Palgrave Macmillan.
Kumar, B. (2012). Mega Mergers and Acquisitions, Case Studies from Key Industries. England: Palgrave Macmillan.
Nickolett, C. (2008). What to look for in a Consultant and Consulting Company. Brookfield: Comprehensive Solutions, Inc.