Don't look now, but IBM Corp.'s hungry again, and strategy consultants are on the menu. "We have seen a significant increase in demand for strategy and change skills," says Frank Roney, the former Price Waterhouse consultant who now heads up the technology giant's newly formulated global consulting arm. The unit recently added another weapon to its arsenal when this April it acquired business strategy firm Mainspring, a mere morsel for IBM — and one that many believe could now be the appetizer preceding several more substantial courses.
Although IBM's consulting chief insists that there are no specific plans to acquire other strategy firms, strategy consulting rivals assert that the Big Blue is now determined to acquire what it has for so long struggled to build — a premier strategy consulting organization. Of course, IBM Global Services is well known for its acquisitions to fill holes in its product and services lines. Mainspring was the services group's 25th acquisition since 1992, but few consulting rivals believe it will appease the technology giant's strategy services hunger or the ambitions of its 46-year-old consulting chief.
Roney, a former partner with PW's management consulting division, once managed the firm's Michigan business unit, a geography loaded with clients inside the automotive, retail, and consumer products industries. While he enjoyed the challenges of customer business issues, he found strategy work wrapped around rapidly changing technologies a better fit. So, Roney joined IBM in 1993 as general manager of integration services. He quickly rose to become IBM's senior executive responsible for the worldwide systems integration business, and then to general manager for global operations and competencies, where he gained the additional responsibility of overseeing consulting.
"While we're very large in total, behaviorally we want to think about our customers every day in the context of their industry and competitors. We bring the scale down to a more nimble size by running practices that are industry-based, and we share our intellectual property on a global basis," says Roney. "That's how we think we can be large but act small."
Acting small is no small feat, given that IBM's consulting organization last year racked up revenues of $10.2 billion in sales and employs more than 50,000 workers — called consultants by IBM today. What's more, the unit has seen 26 percent growth in the first quarter of 2001, compared to the same quarter last year. Roney adds that the unit will continue to partner with the leading strategy pure-play firms when required, but "we think it's healthy and appropriate to have our own capabilities."
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