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BUSINESS PROPOSITION

IBM seeks to be an outsourcing point

Streamlined IBM looks to manage non-core areas for other companies



Not many people may know that IBM Thailand, which employs about 1,500 people, has only one accountant and fewer than five human resource staff members.

The large information technology (IT) company has been making use of its "globally integrated" operations to become lean by bringing together many functions at select hubs. For example, HR is centred in the Philippines, with 6,000 staff members, accounting in Malaysia and procurement in Shenzhen, China.

And IBM has not used these centres only for its internal operations. Thanwa Laohasiriwong, the country general manager of IBM Thailand, said Big Blue has initiated a new business called Managed Business Process Service (MBPS) that allows other companies to outsource their functions to IBM centres.

The benefits of such a business proposition is companies gain an economy of scale and can relieve non-core functions.

Thanwa said the needs of each organisation would be different, for instance, some may like to gain speed in the market, a few may wish to reap the same high security standards as IBM and some may not be willing to spend huge amounts on initial investments.

"We have a certain standard in these services, which customers can also gain from," he said.

MBPS is part of IBM's outsourcing service that is no longer limited to IT equipments and systems. Like its operations elsewhere, IBM Thailand now earns more than half of its revenue from services, with the rest coming in from software and hardware sales.

"Few competitors have these full-stream offerings as IBM. Businesses may come to us for consultation, such as in areas of leadership and strategy. Then they may need to apply some technology for which we have software and hardware. Or, some companies may have all the equipments but could be short on IT personnel or would just prefer to focus on their core businesses. Such organisations can outsource the IT services to us," Thanwa said.

The outsourcing services have a variety on offer - running a data centre, IT operations, providing a help desk and developing and maintaining applications.

These outsourcing contracts come in a variety of time frames - from short-term or project-based cases to multi-year and long-term contracts. Kasikorn Bank and Minor Group are among IBM's IT-outsourcing customers.



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