International Business Machines Corp., part of a major reorganization earlier this month, has selected Robert C. Timpson to head up a 2,000employee unit aevoted specifically to banking and other financial firms, one of 12 new industry-specific marketing and product development teams.
The new organization, instituted by IBM chief executive Louis V.Gerstner Jr., is designed to help revive the computer giant's fortunes after it has seen its market share shrink in recent years.
While still a major force in the financial community its mainframe computers continue to be standard equipment in practically all big banks - some industry observers have been critical of Big Blue's ability to adapt to the rapidly changing computing landscape, where networks of personal computers are increasingly taking over the jobs once relegated entirely to mainframes.
Mr. Timpson, a Harvard graduate and a 25-year IBM veteran who previously headed up the company's sales force in the Northeast, recently outlined the goals for his new organization in a recent interview:
Q: Is it correct that your new responsibilities at IBM include both banking and securities firmss, but not insurance?
Timpson: Yes, but the idea here is not to get too excited about Chinese walls. For example, PrUdential has a huge trading operation. [The reorganization] is not so much to build compartments, but to build skills.
Q: These new industry-specific organizations within IBM are not designed to replace your geographic-oriented product sales force?
Timpson: That's right. You need to maintain a product specialization as well as other geographic-oriented stuff like services, local maintenance and repair people.
That's a very valuable business to us, and it's very imporrant to our customers that we not screw that up, and those activities are best delivered cally.
But a leg of the stool that t kind of been withering in recent years at IBM has been the api cation and industry focus, though we have been nurturing some services, notably our consulting business.
We have built that up to 3,000 consultants and hundreds of millions of dollars in annual revenue.
With that kind of business, customers don't want you to be geographic. They want to talk to somebody who just had lunch with Sumitomo Bank in Tokyo the day before.
Plus, we had built up a lot of skills inside the regional divisions, working with banks on projects.
But then Bank of America didn't know anything about what we were doing here in New York. So we wanted to tie the consulting businesses to the top of the food chain and link down to the locally delivered products and services.
We're not taking away from the product business, but frankly we had ratcheted down the industry focus too far, especially considering how fast things are changing.
Q: One type of technologybased service, outsourcing,. is a big part of banking today. How will your new organization work with IBM's outsourcing unit, Integrated systems Solutions Corp.?
TIMPSON: Well, due to consent decrees [with the U.S. Justice Dept.], we are required to have that operation at arm's length. But I think the linkages we will have with ISSC we will be much closer than in the past.
We are eager to get those links, because if we decided to get into the transaction processing business, that would certainly be done by ISSC.
Q: When you say "get into transaction processing" do you mean competing with businesses like First Data Resources and Deluxe Data?
TIMPSON: Yes.
Q: Now that IBM has cut it expenses, chairman Louis Gerstner now seems more focused on improving new product development, Do you agree?
TIMPSON: Oh yes, absolutely, We've had a lot of technical strength within IBM, with all kinds of wonderful inventions and Nobel Prizes, but the question has been, 'How do get money for that?' We've had some technologies languishing in labs for five years while other people made money off it.
So part of my job is stay in touch with technology and stay in touch with the finance industry and help bring the two together.
Q: Does that mean IBM will be involved in more joint development projects with banks?
TIMPSON: That would be nice, but there's a little problem in that some banks only want to work with you a proprietary basis, and they don't want to share that with their competitors. So you have got negotiate that up front.
Q: Microsoft Corp. has recently begun targeting banks specifically. How much do you view them as a competitor?
TIMPSON: I'd rather not comment on them specifically, other than to say we have a number of worthy competitors, and they are one of them.
Q: The Arnerican Banker reported that under this reorganization, all of IBM's product development teams for banking report to you, except branch automation, which will be under an IBM executive in Asia. Why?
TIMPSON: Basically it's because the technology we will be using in our branch. systems, things like very compact design and flat-panel display screens, originate in Asia.
We will still manage the marketing of those products here in United States.
Q: So if I'm a banker and an IBM customer, how is my relationship with your company going to change?
TIMPSON: What we're trying to say is, zero change in the beginning. It's a delicate balance here, and as you could see by our firstquarter profits, we're eager not to screw things up.
We're telling bankers that they're still going to see the same rep they saw yesterday, the same person who fixes the machines -- we're not changing any of that.
But additionally, hankers are more likely to see a consultant coming in from Sumitomo than they were before.
And over time, we'll get better solutions, because for the first time we've got a organization with a sales force connected all the way through to the laboratory developers. Now when we want to develop something, one organization and one person is accountable.
We're hoping customers will see us able to react faster, move faster, replicate faster, getting new technology into the marketplace.
It's that speed to market and the integration of consulting up and down the food chain that will be crucial to our success.
