“This is one of the toughest challenges, but we turned the challenges into success.” —Peter Thanel, director of customer fulfillment/Europe, IBM
Company capitalizes on fast-growing global markets
In 2009, IBM CEO Sam Palmisano laid out his company’s four-pronged growth strategy. At the top of the list: capturing more business in emerging markets such as Central and Eastern Europe, the Middle East, and Africa. In those regions, where IBM had 2010 revenues of $2.23 billion, the company expected revenues to rise at an annual rate of 10%-20%.
But before IBM could realize its vision, the company had to get its processes and support structures aligned with the changing business models in growing markets. In countries such as Russia, Egypt, Pakistan, and Morocco, IBM’s processes and support structures were country-centric, supporting activities such as contract management, invoicing, customer and business partner support, and accounts receivable. These country-centric processes didn’t support the advanced business models used by IBM’s other global businesses and, as a result, caused management concerns about business coverage and business controls.
IBM in late 2009 launched Project Magellan, an ambitious two-year effort to reengineer and standardize customer fulfillment-related processes in 30 countries in IBM’s Central Eastern Europe (CEE) and Middle East & Africa (MEA) regions. The project involved aligning core customer fulfillment-related process in those regions with standardized global processes, systems, and tools; implementing dedicated, skilled relationship roles; driving efficiency through centralized transaction management; and securing a high level of business control.
Project Magellan earned IBM a 2011 PM100 Award in Business Model Mastery.
Though still being rolled out, Project Magellan has already yielded impressive results. The reengineering effort has been completed in only eight of the targeted 30 countries so far, but IBM expects to realized $1 million in efficiency savings. The company is also seeing improved cash collection, skills development in growth countries, and customer and business partner satisfaction. IBM expects the reengineering effort at the second wave of 22 CEE and MEA countries to be completed by November.
IBM officials say Magellan’s success to date is due to IBM’s ability to clearly communicate a common goal. “This is one of the toughest challenges,” says Peter Thanel, director of customer fulfillment, accounts receivable, relationship management, and transformation projects in Europe. “But we turned the challenges into success because the people demonstrated the highest level of dedication, flexibility, creativity, and commitment while working in virtual teams.”