As a technology consultant, I have influenced many corporate customers to purchase IBM products and services for more almost two decades. I have usually been very pleased with the response, value, and quality received. (As an independent eProductivity consultant, I do not profit on the recommendation of one vendor's products over another. I am simply paid for my expertise to design what I believe to be the best solution for my client's stated objectives.) Outside of this, the only tangible benefit to me personally is another happy client -- which is worth more to me than any consulting fee I may receive.

Unfortunately, this is changing, and I believe that the IBM's decision to outsource and their method of doing so is at least partly to blame:

Somewhere, in the process of outsourcing their most vital sales function, IBM's hardware division seems to have forgotten that customers (and their technology consultants) want to speak with people who are both knowledgeable about the products that they sell and who have access to the information and internal support services to complete the sale.


Let me share just one recent personal (and painful) experience:

Many weeks ago, I set out to order 2 rack-mount servers and 12 high-end ThinkPad laptops from IBM. I will spare you the almost unbelievable details, but I will simply say that it took over 100 communications with IBM over a 6-week period to complete the order for just the first two servers. Much to my amazement, no one that I could reach at IBM had the "information" (to be extremely polite) to be able to assist me in helping my client with their purchase. Calls to IBM management resulted only in e-mail from first level sales reps being sent back. After doing some research, I found out that I was not dealing with IBM, but an organization, located in a Southern state, to which IBM had outsourced operations.
I cannot believe that outsourcing saved IBM any money here. At least not in my case.

Disclaimer: This is not an essay about the evils of outsourcing offshore to some group that does not speak English fluently. Nor is this a rant about the potential costs in terms of U.S. jobs lost as a result. This not a rant against any particular individual at IBM or any of its outsourced divisions. This is a rant against the experience of being a technology consultant who has to deal with an outsourced organization that apparently does not understand the products, information, and process of serving its customers. The outsourced "IBM representatives" that I dealt with were --  to their credit -- all English speaking and all very polite; and, they usually responded to my email or calls within minutes. I have come to realize that these people were doing the best that they could do with what little information (or perhaps product training?) that they had access to.

The problem appears to be a complete lack of information and knowledge to complete the sale or satisfy the customer, and the unwillingness of IBM management to get involved. The walls between the outsourced organization and IBM are apparently quite high. This reminds me of why I do not shop at a certain chain of electronics store -- well-dressed people, some excellent products, but little or no information or experience on the part of the people I have to deal with to complete the sale.

If I were trying to purchase a $19.95 floppy drive or some other generic, low-markup, computer part, I might try to convince myself that there was no need for IBM to care about what I thought about the purchasing experience of their customers. This was not the case.  Just one set of purchases that could initially have reached $50,000, not to mention all of the follow-on business from this and other clients. While not a Fortune 100-sized purchase, this is still nothing to sneeze at. I'm sure that competing vendors would have been delighted to have the business.

What astonishes me is that I had previously made an almost identical purchase, apparently directly from IBM, with outstanding results. The entire process (with an IBM contact) took less than 10 days with just a few calls and emails to complete.  Both the customer and I were very pleased with the transaction. In fact, it was because of the resounding success of that purchase that I did not hesitate to give the next server order to [what I thought was] IBM again.

NOTE: Long before I decided to share this experience publicly, I tried to reach anyone in management at IBM who might have sufficient interest and authority to help me resolve my customer's problem. Finally, after 6 weeks, and after threatening to cancel this and all future orders, I received a call offering some assistance. Was it really necessary for my customer or me to go through all of that?

For any of you who have bothered to read this much of my rant, thank you. It probably will not change anything at IBM, but in a therapeutic sense, I at least feel a little better for having shared it.

As far as I can tell, IBM does not appear have an Ed Brill or a Robert Scoble on the hardware side of the house. That's too bad. Both Ed and Robert (two of my favorite bloggers) write about various software and marketing issues and they have the integrity and willingness to honestly examine the goings-on of their own companies. They are not afraid to call things as they see them - even when it concerns their own companies or divisions. In fact, Ed just blogged about this. I can only hope that this blog might encourage someone on the IBM hardware side to start blogging and change my (and my customer's) perception of this experience.

Do I plan to ever purchase or recommend IBM services to my clients again?
Possibly. I may try one more time.  Personally, I own several IBM servers and many IBM ThinkPads. ThinkPads are my favorite laptop, and I hoped to purchase a new ThinkPad T42p soon.  I even still have my first IBM PC! Many of my corporate customers are all IBM shops. IBM makes great stuff -- I just wish they made it easier for me to give them money.  Customers want to deal with people who know something about the products and who have access to the information to facilitate the sales and delivery process.  As an independent  technology consultant, I will direct my clients to purchase from those companies that provide the best service.

I am amazed that in this economy, any company would not do cartwheels to ensure that a customer -- or even a technology consultant that heavily influences his client's purchases -- was happy and that there were no impediments to receiving business from them. Happy customers and consultants will tell a few others. Unhappy ones, well,...

I believe (at least I'm hopeful) that my current problem has now been resolved. But, I still have 12 high-end ThinkPads to purchase for my clients. I really do not want to switch to another brand of Laptop. (The T42p is an awesome machine.)  So here I am, representing many IBM customers, cash in hand, trying to give IBM money, yet I'm terrified at the prospect of a repeat experience. When I told this to one sales manager that I spoke with at IBM, I was told that I would never know whether the next order experience would be better than the last unfortunate experience unless I placed the next order with them.  I will stop here.

I cannot help but wonder what the move to outsource services has "cost" IBM and other companies that have made the same choice.

I know what it has cost my clients and me, and I challenge IBM and other companies to consider that the true cost of outsourcing can be best measured in terms of their customer relationships.


What do you think? Should companies measure the cost of outsourcing in terms of customer relationships? I'd like to hear from you.

Discussion/Comments (7):

Outsourcing

Indeed! Too much outsourcing in the wrong places and you begin to loose any sense of corporate culture and vision that existed. It's too easy to end up with people 'doing their job' and as in your case leaving customers less than satisfied. Outsourcing is a most interesting and painful phenom to watch.

Posted at 7/3/2004 6:23:41 AM by Joel Millican


This is a big issue. People are learning to vote with their dollars

Personally, I just dumped Amex and moved to MBNA. Why? Amex outsources nearly everything, while MBNA put 4000 people to good work in Maine and has had a dramatic positive influence in the entire mid-coast area of my state (an area known for poor wages and benefits for nearly 300 years).

Interestingly, AMEX -- at least on some level -- knows this. When trying to drop their card, for the first time in years my call was immediately put through to a US based telemarketing room rather than their normal one in India and a clear speaking, polished middle-American accent was used by a well educated person with at least some authority and experience to try to talk me out of it.

Posted at 7/6/2004 9:38:15 AM by Andrew Pollack


The best way to influence IBM is to buy something other than ThinkPads

I know, you really want those machines. But the only thing companies who place "shareholder value" before "customer value" understand is loss of revenue. That will inevitably force changes in management, which opens the opportunity for (but not certainty of) change.

Posted at 7/6/2004 9:56:22 AM by Carol Anne Ogdin


Lotus Informer asks if I was dealing with an IBM Business Partner

Libby Ingrassia Schwarz (aka NotesGirl), of e-Pro Magazine, asked if perhaps I was dealing with an IBM business partner, and not IBM.

Good question, Libby. Yes I "may" have been dealing with one of their "business partners," but that's not the way it was represented to me. I simply called 888-ShopIBM -- the number I got from the web site.

I've responded at the e-Pro magazine site:

http://e-promag.com/lotusinformer/index.cfm?commentID=275

Eric

Posted at 7/7/2004 11:26:48 AM by Eric Mack


The Service Cost of Outsourcing

I totally feel your pain. I blogged my comment to this here:

http://geekswithblogs.net/pstathakos/archive/2004/07/09/7873.aspx

Posted at 7/9/2004 10:28:51 AM by Peter Stathakos


IBM acknowledges the problem

Unfortunately, it may be too late. Many lessons learned, hopefully for all. One of the reasons that the difficulty I had giving IBM my client's money was so frustrating to me, was that my client had a very short window for deployment. You see, I only get to meet with their staff twice a year. It is only during these brief meetings that I am able to deploy any new hardware or software. The rest of the year, anything that I do for them, must be done remotely. (That's why they Love Notes!) I knew that if I could not get the equipment in-house by early July, I would not be able to deploy it to my client, so I started communicating with IBM well in advance to get all of these orders placed. Unfortunately, due to the problems that I have already written about, I lost all of that time advantage, enough to miss the opportunity altogether.

Although I "now" have the attention of IBM senior management, I've lost so many weeks trying to get it that I have lost the opportunity. Although IBM would like to get the equipment to me, their delivery schedules (ordering at this late date) wont allow me to receive the equipment in time. That's too bad. This experience has hurt the client some, IBM lost the $, and I will lose the follow-on work - all at least for now. I still plan to specify IBM and I will try to move these purchases through for the client at the earliest opportunity. It's just a shame that the cost for all involved, was so high.

All of this could have been avoided if IBM had made sure that the right people, all the way down the organization (or in the outsourced entity) had the right information or the means to get it. The good news, as I have written, is that my confidence is being restored in my decision to recommend IBM product. I also now know who I can talk to -- people on the "inside," who know how to make things happen. According to Ed Brill's recent Blog, I owe a word of thanks to Alan Lepofsky, for bringing these posts to management's attention. Thank you, Alen!

In hindsight, I wish I had written about this many weeks ago, however, I wanted to try to resolve it through the normal channels first.

This has been a learning experience for me. Hopefully for IBM, too. If this experience will save anyone some grief in the future, that will be a consolation to me. I hope that this experience will help them improve internal operations so that we can all benefit in the future.

Posted at 7/12/2004 10:42:34 AM by Eric Mack


The true cost of IBM’s outsourcing: Customer Relationships

Everyone knows that IBM is the ultra low cost outsource leader. The Wal-Mart of IT in every respect. They get the contract because it's the cheapest.. no other criterion need be applied.

Problem with this in the long term is that you hang with the wrong crowd - those that consider IT just another burden and commodity. I have direct experience with the services division and can assure you - companies are wholesale ridding themselves of high quality (& higher cost) technical expertise only to find they're completely dissatisfied at the end of their first contract.

1/2 of all IT outsourcing projects end in failure.. many prematurely. If you were to get a 50% score on an any exam.. would you expect to pass the class? IBMs current status quo is not sustainable and senior management knows it.

We can't force a thing to become a commodity by simply shipping it overseas. It has to be something that makes sense as a commodity.. like call centers, data entry, or otherwise low skill manpower intensive activities. Most companies struggle with the 'bare minimum' you get when all that high cost intellectual capital is pruned from the organization. The gotcha is found when getting those skills back is usually at a premium when everyone wakes up form their wholesale outsourcing dream.

Posted at 10/5/2010 4:57:25 PM by George



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