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A cautionary (services) tale from IBM

October 28, 2014

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Monday, October 20th was the 10th anniversary of the Boston Red Sox epic comeback win on the ALCS over the New York Yankees. The day didn’t get any better for New Yorkers at IBM’s NY headquarters as the company announced their 3rd quarter results:

  • Sales decreased 4%, the 10th consecutive quarter of flat or declining sales
  • Profits down sharply

Since a close of $182.05 on 10/15, the venerable IBM ticker is currently $161.89, a decline of 11%

The aftermath was telling.

During the company earnings conference call, Senior Vice President and CFO, Martin Schroeter said IBM would “remix its portfolio to target higher customer value,” and “accelerating the use of automation in our data centers and being more aggressive in our use of global delivery skills and intellectual property across our service lines.”

Huh? Not a word about people, although that seems to be a huge issue. Disengaged employees can’t provide a great service experience, and many industry pundits point to “the services problem” as the problem, and since many services are delivered by people, one financial analyst wrote:

“A stakeholder considering an investment – or a current stakeholder before reinvesting – should ask IBM to discuss, publish and benchmark its customer satisfaction and employee morale measurements.”

As the software industry races to the “as a service” model, the “service” may be more important than the “software,” and at Kronos, we’re focused on making both great. So when we receive customer satisfaction awards and recognition as a “Best Place to Work,” it’s no coincidence that Kronos “as a service” offerings continue to “grow exponentially.”

In his article, Mr. Robert X. Cringely put it simply for IBM and any other “as a service” provider:

“As goes Services, so goes the whole corporation.”

One Comment leave one →
  1. October 29, 2014 8:08 am

    Nailed It! It has never been easier in many respects for customers to opt-in or out of our services; especially those in the cloud. By way of this approach, we must be the very best at what we do and surely means we must be great servants for our customers and the Kronos solutions they use.

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