As individuals progress in either a supply chain or product marketing career, they tend to learn the importance of understanding the various nuances of corporate business culture and for being astute in reading into executive level communications. Those of us who have acquired many years of practical business experience have sometimes learned this lesson the hard way, but, once learned, always retained. Regardless of your experience level, when the CEO provides a direct, unfiltered message, than all had better pay close attention to that message.

A couple of weeks ago, enterprise technology provider IBM reported a very uncharacteristic and unanticipated fiscal earnings and profitability surprise. Revenues were down 5 percent and profitability slipped 1 percent. The next day, investors punished IBM stock in an 8 percent decline, eroding $19 billion in market value.  As we have observed in the recent case of Oracle’s reported fiscal performance, management blamed this poor performance on the company’s sales teams, indicating it failed to close a number of pending hardware and software deals.  One of the company’s most senior executives was immediately re-assigned. As we noted in our Oracle related commentary, in the area of technology, poor sales performance is often a symptom of other problems.

IBM CEO Virginia Rometty has since delivered what business media has characterized as a rare event in IBM culture, a company wide reprimand.

Ms. Rometty recorded a five minute internal video message to all of IBM’s employees which the Wall Street Journal characterized as “salting praise with blunt comments about speeding-up the shift to new computing models and getting back on track.” The WSJ reported that it reviewed this video and that the CEO message indicated: “Where we haven’t transformed rapidly enough, we struggled.  We have to step up with that and deal with that, and that is on all levels

In essence, this CEO’s message is that IBM is not moving fast enough to take advantage of dynamic market and customer needs.  When that message comes unfiltered, direct from the CEO, it had better be perceived as a call to action and accountability to achieve stated milestones, and that there are perhaps too many layers of management to achieve program and customer deliverables.

Since 2011, Supply Chain Matters has been commenting on the various acquisitions that IBM has made for the purpose of building broader and deeper capabilities concerning its Smarter Commerce suite offerings.  We have been impressed with the thinking concerning the strategic purposes of these acquisitions, but candidly disappointed at the overall timetables of progress in overall application to application and cloud based integration directed at solving customer business challenges. The various pieces of a broad B2B and supply chain management support capability are all present but the cohesion appears slower. This very week, SAP is conducting its combined ASUG-Sapphire customer conference and has already announced SAP HANA Enterprise Cloud. Oracle continues moving in the direction of applications deployed on both public and private clouds.

Next week, IBM will be hosting its Smarter Commerce Global Summit 2013 in Nashville, and Supply Chain Matters will be in attendance. The Summit is billed for “attendees to hear smarter ways to put customers at the center, including ways to synchronize the supply chain, optimize inventory, personalize promotions, micro-target marketing, increase relevance and exceed customer expectations at every touch point.” That in a nutshell, is a tall order of expectations and implied deliverables.

Thus, in the spirit of CEO Rometty’s charge, we will spend a lot of our time quizzing and evaluating how quickly IBM is progressing in its broad Smarter Commerce tactical rollout plans concerning the Sell, Buy, Service and other faces of B2B and supply chain technology offerings available for customers.Today, in advance of next week, IBM announced a major agreement with L’Oréal USA for expert procurement services using an advanced cloud analytics application to transform the way L’Oréal USA buys from its network of North American suppliers. The effort is characterized as a unique combination of IBM research, services and software delivery. 

Our goal during the Summit will be to provide our readers our assessment of overall cohesion and integration of various applications, and how they will make a difference for customers. We do not portend to be a blog solely for the IT community and thus our bias will be a perception from the broad functional audience of supply chain management.

If you happen to be attending this Summit as an IBM customer or partner, please seek us out and share your impressions.

Stay tuned.

Bob Ferrari