Supplier relations IBM restructuring could mean better service and lower prices

IBM has insisted that that it will be able to improve its service to users following its announcement last week of up to 13,000...

IBM has insisted that that it will be able to improve its service to users following its announcement last week of up to 13,000 job cuts, many of which are in Europe.

IBM intends reduce staff numbers in the UK, Germany, Italy and France, and centralise its service teams. The move is part of a restructuring of the company following poor financial results. IBM has said it is facing increasingly fierce competition from India-based outsourcing providers

Roger Fulton, vice-president of research at analyst firm Gartner, said, "IBM should now be lowering the cost of delivering its more standard offerings. It is still very much a buyer's market - customers are getting better deals than they have probably ever had."

Mark Loughridge, IBM's senior vice-president and chief financial officer, said IBM will put more services staff, processes and tools in "shared centres of excellence" around the globe to "enable skilled professionals to provide support across different functions".

As a result, IBM will have a number of smaller, more flexible local operating units in Europe "to increase direct client contact".

Ray Titcombe, chairman of the IBM Computer Users Association, said other suppliers in the IT industry were facing similar challenges to IBM, and the company was likely to become more focused on its customers.

"I think the potential 'fallout' from this range of changes/cutbacks is that IBM will become a little more customer focused and maybe some customers may get better deals or options," Titcombe added.

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