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A Case Study In IBM Services Information Technology Essay

Paper Type: Free Essay Subject: Information Technology
Wordcount: 5439 words Published: 1st Jan 2015

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Improving customer relationships is the deployment and management of the customers’ CRM application. Outsourced call centre services are delivered by an IBM business partner. Customers choose the CRM application components that fit their needs: Marketing, Sales and Customer Service. Balancing cost, the customer experience and revenue enhancement are truly differentiate the contact centre (Pritchard, 2004).

The contact centre environment has changed dramatically in recent years. Early call centres were cost centres, built to take advantage of the telephony technology of the time. Typically confined to one physical location, they relied on interaction-based, frontline support and had little financial justification of costs. Frequent handoffs among agents created inconsistencies, as did paper-intensive processes and product-based structures.

Today, contact centres are becoming increasingly customer-focused and are gearing up to solve problems and generate revenue. A proliferation of channels is giving companies a variety of opportunities to communicate with their customers. And with more opportunities for up-selling and new ways to cut costs, the contact centre is transforming into a profit centre.

As organizations make this transformation, they are faced with identifying areas for change, reducing service costs, providing a differentiated service, increasing sales, supporting a multichannel customer experience and leveraging technological advances. The challenges, coupled with increasing customer expectations, have created a renewed focus on transforming the contact centre (Pritchard, 2004).

IBM Regional Contact Centre (RCC) exemplified what an ideal contact centre should be; a single contact point which provides effective, efficient and improved service to partners and clients through the consolidation of resources and services. The centre serves as a strategic component of IBM’s own “on-demand” initiatives.

Organizations are taking a new look at governance of contact center functions and the way calls are handled. Traditionally, contact centers have been organized by geography and business unit. Advance in telephony technology presents new opportunities for streamlining call handling and routing. Virtual contact center queues route calls to the appropriate agent, regardless of geography or department, allowing calls to be handled based on factors such as customer need, the type of transaction or function, the value of the customer or the particular customer segment. This can help boost cost-effectiveness and bring more value to callers, since they’ll deal with the best-qualified agent for their particular issue.

Leading companies are also adopting a cross-functional approach to the organizational structure of contact center operations. In addition to geography-based service delivery functions, companies are developing global “Centers of Excellence” for self-serve programs, customer data management, workforce forecasting and scheduling, metrics and reporting, and global queuing and call routing. These

Centers of Excellence manage key processes globally, identify opportunities for improvement and work with the operational service delivery functions to implement transformation-related change programs (IBM Business Consulting Services, 2004).

IBM Values

Dedication to every client’s success: IBM employees are passionate about building strong, long-lasting client relationships. This dedication spurs IBM to go “above and beyond” on its client’s behalf. IBM sells products, services and solutions, but all with the goal of helping its clients succeed, however they measure success.

Innovation that matters for our company and for the world: IBM employees are forward thinkers. IBM believes in progress, believes that the application of intelligence, reason and science can improve business, society and the human condition. IBM loves grand challenges, as well as everyday improvements. Whatever the problem or the context, every IBM employee seeks ways to tackle it creatively – to be an innovator.

Trust and personal responsibility in all relationships: IBM employees actively build relationships with all the constituencies of its business – including clients, partners, communities, investors and fellow IBM employees. IBM builds trust by listening, following through and keeping its word.

IBM Mission

To Drive Client Loyalty and Profitable Growth through Service Delivery Excellence

IBM Vision

To be the IT Service Provider of Choice in Asia Pacific

IBM Commitments

Growth Client Referenceability

Drive client satisfaction by aligning IBM’s efforts to its clients’ business imperatives, priorities and challenges

Delivery Service Excellence

Protect its clients’ business through a strong controls posture and operational discipline

Provide competitive high quality service through standardization and automation

Enable IBM Team for Growth

Develop and nurture IBM people to play an active role in the globally integrated enterprise

IBM Goals

Excel in delivering competitive, high quality and efficient IT services to its clients

Meet and exceed all IBM financial objectives

Achieve and exceed IBM Quality targets

Protect the IBM brand by maintaining “Satisfactory” control posture and delivering with integrity

Promote a culture where IBM work as One Team and promulgate best practice

Equip IBM’s employees with skills and knowledge to deliver quality services to its clients and make the right investment in training and certification

Accelerate the development and growth of IBM leadership talent

Foster communications to IBM staff and ensure key messages are delivered in a timely and consistent manner

Literature Review

Today, IT departments are pressured into doing more with less, and that this will require innovative approaches to management and operating staff. Innovations in technology are also supporting this, as silos within operations, and between operations and the service desk and application development, are slowly being bridged by innovative management and monitoring software solutions designed for modularity, cohesiveness and automation. Currently, IT services are delivered through a mix of structured and unstructured work activities. Structured activities rely primarily on standardized processes, procedures, and tools. In IT service support and delivery, an increasingly popular standardization effort is embodied by Information Technology Infrastructure Libraries (ITIL) which prescribes processes for capacity management, availability management, service-level management, financial management to achieve high quality IT service (Bailey, Kandogan, Haber, & Maglio, 2007). As IT departments plan to bridge this divide, it is important to keep in mind that the automation can empower us to become more efficient, but we will be sacrificing some of the gains if we are not willing to leverage the advantages of automation as a transformative, cultural and process catalyst because they are interdependent.

Definition of Terms

There are many terms involve in implementing Call Centre as an outsource business to the company and for IT outsource, it has its own standard to follow. For example, IBM conducts IT service delivery (ITSD) based on Information Technology Infrastructure Library (ITIL) standards.

IT service management (ITSM or IT services) is a discipline for managing Information Technology (IT) systems, philosophically centered on the customer’s perspective of IT’s contribution to the business. ITSM stands in deliberate contrast to technology-centered approaches to IT management and business interaction. Feldman (2007) mentioned that “Providers of IT services can no longer afford to focus on technology and their internal organization, they now have to consider the quality of the services they provide and focus on the relationship with customers.”

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The Service Delivery Structure describes accumulations of the customers accumulated in the system. The derivative between flow-in, customer flow rate, and flow-out, service completed rate, determine stock level. The dynamics of service delivery management will be comprised of four feedback structures: labor structure, capacity structure, cost structure, and service delivery structure. Service backlog or work in process, the stock of the service delivery structure, depending on customer flow or order rate and service completed rate or order fulfillment rate. Accumulations of stock stem from derivative of flow-in and flow-out at the points of time (Phoomphuang S., 2004).

Service Desk is the place where exist the receipt and resolution of service requests, technical guidance, communication, etc. The central contact point between users and IT staff (Steel, 2008). Also it is the first place that the customer contacts when they have a problem or any request.

Service Level Management (SLM) ensures that the agreed services are delivered when and where they are supposed to be delivered. SLM is a very important concept concentrating on “value” which is an intangible concept. If this “value” is destroyed by breaching any part of the Service Level Agreements (SLAs), it can have some negative consequences for the service provider as the customer will be dissatisfied.

Information Technologies Infrastructure Library (ITIL): ITIL best practices were first developed in the 1980s by the British government’s Office of Government Commerce (OGC) formerly called the Central Computer and Telecommunications Agency. ITIL is a collection of best practices that have become widely observed in the IT service industry and a detailed framework of a number of significant IT practices, with comprehensive checklists, tasks, procedures, and responsibilities that are designed to be tailored to any IT organization. ITIL suggests that any IT operation should have some form of help desk where users of IT can ask questions or resolve problems. ITIL describes recommended best practices such as how to investigate and solve reported problems called into the operations help desk. These are the best practices and processes that are necessary for IT to process its applications in an efficient, controlled environment (Moeller, 2008).

ITIL and IBM Service Delivery Process

IBM has its own implementation of ITIL for IT service management. The service starts as soon as the contract is signed between the customer and IBM. Service delivery and service support team take control after contract is signed. IBM uses its own processes in order to deliver the services agreed contractually. IBM staff has to be familiar with these processes in order to deliver the services without any problem. These processes are standard and consistent across the globe for IBM and they are collected under different folders at IBM. These can be thought as related processes defined in ITIL collected under different titles. IBM procedures are confidential and cannot be described (Nazimoglu & Ozsen, 2010).

In business, the fit between the business strategy with respect to products and services provided to external customers and the internal structure of the enterprise is critical for economic performance and efficiency.

Henderson and Venkatraman (1993) had concluded that the strategic alignment fits between external and internal business and IT strategies. Business strategy can drive IT strategy as well as the organizational and IT infrastructure, but IT strategy can also enable new and enhanced business strategies. Functional integration of business and IT makes IT a source of Competitive advantage.


The IBM Regional Contact Centre (RCC) has empowered IBM Malaysia to be more responsive, variable, focused and resilient by enabling the company to respond with flexibility and speed to any customer demand, market opportunity or external threat.

The RCC is the sixth regional centre that IBM has established in Malaysia, after the Asia Pacific South Regional Administrative Support Centre, the Asean/ South Asia Regional Technical Sales Support Centre, the Asean Regional Support Centre for Integrated Technology Services, the Asia Pacific South Accounting Centre, and the IBM Global Financing Regional Centre for Asean/ South Asia, Greater China and Korea.

The RCC supports four prime business functions: Teleweb marketing suport services, backoffice customer support services, and integrated technology support services, which cover the Asean region. The fourth business function is the strategic outsourcing helpdesk which supports the Asia Pacific region.

The RCC is the latest of the company’s 11 regional shared-services centres and is equipped with a multilingual workforce that caters for nine languages, including Tagalog, Japanese, Korean and Thai.


IBM has eleven regional centres located in Malaysia to support the IBM Corporation globally. Six of these centres are Operational Headquarters (OHQs), a status awarded by the Malaysian Industrial Development Authority (MIDA) to companies serving their offices regionally and globally. Located in Plaza IBM, headquarters in Bandar Utama, these centres are:

IBM Asia Pacific Accounting centre: Provides accounting services for IBM in Asia Pacific, such as costs and revenues, Inventory/PIMS, DSW Software Accounting, monthly financial closing and reporting, expense accounting, APSC, WTAC, IGF accounting, services accounting, business control, SOX, statutory accounts and country accounting operations.

IBM Asia Pacific Competency centre: Provides end-to-end administrative services, such as customer records, loading of customer orders, contract preparation, scheduling (negotiating with various plants in the world for supply to meet customer requirements), inventory management, billing, accounts receivable collection, systems controls and testing.

Asia Pacific IBM Global Financing centre of Excellence: Manages most of the administrative and back-office tasks for the whole of the Asia Pacific region, such as contract creation, lease inception and booking of contracts into a lease portfolio system. Supports contract management, fulfillment, pricing, financial planning and internal controls. It also centralized financial management information and planning support to IBM’s country leaders and management teams across the Asia Pacific region. Other areas of support include administration, forecasting, budgeting and financial analysis.

IBM World Wide Competency centre: Delivers efficient, global common processes, tools, and applications with standardization, simplification, and automation, in order to accelerate IBM’s positioning as a global integrated company.

ASEAN Regional Technical Sales Support centre: Provides pre-sales technical support and technical enablement to ASEAN, Asia Pacific and other parts of the world which cover IBM hardware and software offerings.

IBM Regional Contact centre (RCC): Provides integrated technology support services, pre-sales technical support and strategic outsourcing help-desk for the ASEAN region. Offers technical assistance in English, Mandarin, Cantonese, Japanese, Korea, Bahasa Malaysia, Bahasa Indonesia, Vietnam and Thai.

IBM is a company that strives to lead in the creation, development and manufacture of the industry’s most advanced information technologies (IT), including computer systems, software, networking systems, storage devices and microelectronics. The company’s business in ASEAN/SA is primarily comprised of sales and distribution of services, hardware, and software. These offerings are bolstered by IBM’s research and development capabilities. IBM can also provide financing depending on its customers’ needs. The fundamental strength of this model is IBM’s ability to assemble the optimal mix of these offerings to design tailored solutions for customers. IBM’s operations in ASEAN/SA cover countries including Singapore, India, Malaysia, Thailand, Indonesia, the Philippines and Vietnam. IBM in Malaysia is a wholly-owned onshore subsidiary of IBM World Trade Corporation. In IBM Malaysia, there are a few thousand employees of diverse backgrounds and talents serving in professional and support function roles, including regional positions. IBM Malaysia is committed to playing a major role in cultivating the use and development of IT in Malaysia, a mission that mirrors the Government’s objective of making the country a regional and global hub of knowledge-based industries.

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IBM Malaysia is to be completely local organization in terms of expertise, 52% of our employees are women. The company is also heavily involved in developing local capability through a string of alliances (Are you an IBMer, 2010). Moreover, IBMers collaborate every day with their over 390,000 colleagues with growing networks of clients, advocates, experts and peers and with our neighbors, local organizations and millions of people they have never met and never will meet. This is simply how business is done in a globally integrating economy (About IBM, n.d) to support the integration of processes and operations; IBM has Globally Integrated Enterprise (GIE) governance. It puts the focus of decision makers on end users, productivity, standards, and integration to achieve maximum value from business transformation investments (BT/IT Governance, n.d). Furthermore, the GIE governance system emphasizes cross-functional and cross-unit team. Leadership and management roles are designed to provide clear ownership of the end-to-end business model and create a means to coordinate processes and transformation initiatives across organizations (BT/IT Governance, n.d).

IBM has chosen Malaysia for its regional contact centre to serve the Asean region amid keen interest shown by other nations to have one here. The IBM Asean Regional Contact Centre (RCC) is due to start operation in Cyberjaya in the middle of the year 2003.

The RCC, to be managed by some 60 staff, would provide support services to IBM business units, business partners and customers in five Asean countries namely Indonesia, the Philippines, Singapore, Thailand and Malaysia. Currently, the numbers of IBM clients have increased and the support countries among Asia Pacific have also been added China, Japan, Korea, Vietnam, India and Australia. Thus, the numbers of IBM RCC staff now have been increased to more than 100 including both local and international staff to support clients based on native languages offer.

The support services include tele-sales and tele-marketing, customer support operations, and so on.


IBM Malaysia Sdn Bhd is investing RM 8 million to set up its Customer Support Operation (CSO) center in Malaysia that would operate as a hub for end-to-end order procurement covering 17 countries in Asean and South Asia. The CSO allows electronic ordering from IBM’S manufacturing plants, receiving orders from its customers and business partners, collaboration among co-workers through e-mail and supporting of IBM Asean and South Asia business units and partners (IBM Malaysia to Spend RM8 MLN on Customer Centre, 2000).

The location of IBM’s CSO is in Cyberjaya. This department provides integrated technology support services, pre-sales technical support technical enablement, strategic outsourcing help-desk for the ASEAN region which cover IBM hardware and software. This department also provides post sales technical support and services and also remote technical support for all IBM hardware and software. A customer support representative also will assist the clients about their contract enquires, invoice enquires. IBM CSO Offers technical assistance in English, Mandarin, Cantonese, Japanese, Bahasa Malaysia, Bahasa Indonesia, Korea, and Thai.

The case study was conducted at IBM Regional Contact Centre (RCC), Cyberjaya. The company is focusing on IT outsourcing which offering IT support; service desk or helpdesk to IBM’s clients. There are only three main departments at RCC; Human Resource Recruitment, Financial and IT department. There are many sub departments under IT department, each department has its own name based on the client or project that their handle such as IGA (IBM Global Assistance), Merk, Maxis, Michelin, DBSchenker, Singapore Airline, BMW, Lenovo, JLL, DOW, Celestica, Philips, Affin Bank, and etc.

Each department or team may have some different application based on clients’ application, but there are some applications and software that most of the team have such as Windows XP, Microsoft Office, Lotus notes, Sametime, Citrix (Mainframe), AS400 and others.

The team will have their own Knowledge Management and Knowledge Based which provided by IBM databases, so they can find their source of knowledge, better understanding and solve the problem within short period of time.

IBM provides IT outsources to the clients based on Service Level Agreement (SLA) and Service Level Objectives (SLO).

In IBM RCC, one manager and one agent can handle more than one projects, at least one person should support two projects based on Global Delivery Framework (GDF) standards. Both teams that an agent or manager handle may have some different and similar applications to support.


The case was conducting at IBM, Cyber Jaya. We made an appointment with one of Transition managers to be our interviewee. His name is Trevor Thum and his position is under Integrated Technology Delivery (ITD), End User Support. Trevor is a young manager who handles many projects. He started working at IBM RCC as first level support; service desk. After few months, he had become Windows support for Affin Bank project. Two years later, he has been promoted to be a manager.

During the interview session, there was a weakness; most of IBM information are confidential and cannot be disclosed. However, he provided us some guidance for our reference.

Referring to the organizational chart of a team, it will consist of manager, focal manager, team leader, and agents. The agents will be more than five depends on customers’ request and how large the project is. Moreover, if there is any issue from customers such as complaint, an agent will raise it to Team lead, then team leader will discuss with focal manager. Later on, both of them will have a meeting with Trevor and he will decide what should the team handle this complaint and prevent it in the future. If he cannot find the solution, he will propose it to his manager or upper level for finalize and explain to the customers for the mistaken or any other reasons.

Furthermore, when there is an additional application requested by clients, manager will have a meeting for more information and explain to team leader to train all agents to ensure that everyone is educated and ready to support users before it launches.

In addition, if there is a new client registered to IBM RCC, the top manager will assign the project to one of team manager who deserves for the project, then the team manager will have meeting with client for SLA, SLO, and other requirements based on customer’s request. After that the team manager will start to hire new agents to support customers and handle the call. For recruitments, the team manager will cooperate with Manpower on staff hiring. Once Manpower got a new candidate with qualification, they will make an appointment with team manager for interview session. Then the team manager will decide whether hire this candidate or not. If IBM team manager decide to hire that agent, the agent will be first trained by Manpower staff and proceed with the training of particular project mentors by team leader and other experience agent. After one month of training, the team leader will do test call with the agent to make sure that the agent is expert enough to handle users’ calls and ready to “Go Live” (the date of project begins with IBM starting from the day that has been signed on SLA contract. The team performance will be depended on SLA and Key Performance Indicator (KPI).

However, IBM will decide either to increase agents’ salary or monthly incentive amount based on agents’ daily performance, compliment from customers, and team contribution.

Figure 1. Team Organization Structure


Nowadays, nobody disputes the IT importance as the backbone for commerce. IT implementation helps company to reduce operational cost and increase revenue and profit significantly, although some of company not so well in utilizing IT resources. Beside many good stories from some of company, others also have the failure story in adopting IT capabilities caused by collaboration or implication on high investment, structure complexity, dependencies, changes of trends, dynamic environment, etc. Arguably, it affected the strategy direction of some company with IT and business alignment concept was proposed to improve marketplace competitiveness and increase financial performance. The concept comes at the picture to bridge the gaps of the difference between IT capabilities and business value whereby some organization fail to exploit the full potential of IT investment, adaptable infrastructure and service integration into their environment. Most company stayed still to look which product could be accepted by customer significantly and then come up with clone product with achievable or imitable capabilities like the first one. It happened because the high competition in the market place to locate, not only what product customers want tremendously but also satisfaction and prestige point as well as the consideration. It involves high risky IT investment that might lead the financial become unbalanced so some organization became really careful to make decision, better wait rather than as the pioneer.

The trend of IT and business alignment such as virtual office, electronic transaction, off shoring, utilizing private cloud, clone product, high tech consumption, etc. IBM, HP and Dell see other opportunities in renting their knowledge in technical solution as the service to other companies. For IBM, the service delivery optimization is not only about cost savings. IBM views optimization as the process of producing the highly efficient and dynamic infrastructure in exploiting full potential business value from IT investments, and of course emphasizing the responsive improvement and return on investment. IBM approached with holistic and client centre by the reduction of architectural complexity, integration and automation of IT process, business innovation support, customer expectation satisfaction and scale more effectively. IBM has gone through hundred processes engaged various customers across industries in the two decades, these experience and knowledge should be treated as the critical asset of the organization or as the intellectual capital consists of solution templates and reference architectures. In short, IBM didn’t learn service delivery optimization from a book; IBM is writing the book. By establishing a clear understanding of an organization’s optimization objectives and goals, IBM can help to ensure that IT investments are in alignment with the overall business strategy so that subsequent projects can provide real value.

The evolution of IT from a technology to a business focus consider various factor drivers those are the compliance, complexity, speed of change and cost. The need to evolve IT should involve the three key ingredients at the heart of service delivery optimization as well, which are IT governance, operating model and funding management while a deficiency in any of these areas will alter and disrupt the outcome significantly. Before the evolution takes the step closer, the identification of IT environment also necessary for opportunities and optimization those are application and data, network, computing and storage, finance and process. For example, the business strategy of one company need to integrate the decentralize data store into centralize data warehouse that need, it’s the chance to be utilized to remain competitive. Meanwhile, the different culture in organization might be consideration too, that make the difference in priorities, assets and process. IBM will elaborate the standard approach with the end-to-end solution that applies the industry’s best practice in the reference architecture concepts.

Figure 2: IBM Strategic IT Model

The strength of the relationship between customers (business side) and service providers (IT organization) decide the direction of success in service management. Beginning in 1997 and 2007 (IT optimization as a source, 2007), IBM started optimizing its own complex, far-flung environment, reaping substantial benefits in operational cost savings as the figure 1 depicted. It’s important for the IT organization to provide the lowest-cost operation, but it’s not sufficient to support business strategies and planning. IT needs to develop other strengths out of efficiency in costs, such as supporting business customers have optimistic view to compete in the markets as well as faster the operation scalability. In this case, figure 2 shows the significant changes happened in IBM company that chose to have a proven, pragmatic and holistic view that even reduce the number of manager inside the organization with the most experience person as well as single source funding by consolidating infrastructure and application at competitive rates. The level performance is also a point of developing the maturity of the service management capabilities, which drive the operation model of the technology organization. The organizations faces the dreadful challenge of increasing the quality and quantity of services provided to the business such as cloud computing and clone products, while addressing rising technical complexity, cost pressures and tension, faster trend changes and compliance issues at the same time. However, with traditional resources and system management approaches, it’s clearly impossible to provide effective support for the business and efficient use of technology resources. In the end, IT service management has evolved as the standard for managing effective service delivery optimization that requires:

Enable comprehensive business capabilities to support the complete service life cycle from service design to service optimization.

Differentiates the value of what you offer, on what terms and in what form, so that it surpasses what customers consider as alternatives.

Building a clear understanding of the uncertainty, risks, change and trends.

Gather both business and technology stakeholders to define the common goals and future goals.

Decide the important priorities and sequence opportunities to improve the financial performance.

Competitive payment terms and single-contract simplicity to increase the flexibility.

Identifying, articulating and gaining executive management support.

End-to-end solutions supported by a worldwide knowledge network as the minimum standardization for supporting business plan.

Reduce complexity and cost as well as improve value-added service to meet service levels.

Promote customer satisfaction and internal efficiencies to obtain innovativeness and creativeness.

In the easiest way, IBM tries to do approach by translating into four elements IT value in meeting with business planning which consist of enablers, improvement, reduction and promoter. The main issues in this case regard the service delivery is how to maintain the service delivery as the competitive advantages in relation with other similar offered-service company that could accommodate right solution matching with latest situation in the environment. The approach to service delivery optimization


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