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Why did IBM buy PwC ?

 
#1 Why did IBM buy PwC ?
02/06/2005 11:07

gooby

Why did IBM BCS buy PwC if all the old PwC'ers have now left ? I can't see that it made any commercial sense.

BCS problems are lack of motivated staff, lack of focus on profitable and interesting business, and lack of clarity around why IBM needs a consulting business. All these issues remain, even now when most of the PwC staff have gone.

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#2 Re: Why did IBM buy PwC ?
02/06/2005 13:21

RecruitGal

Believe it or not, it did actually makes sense at the time! PWC's share price had dropped dramatically because the market was going through a bad time, and they had to sell their consulting arm because of the Enron debacle and subsquent accounting scandals. IBM on the other hand wanted to broaden their focus on broader business solutions, rather than focusing purely on the tech side. They got PWC Consulting for pennies ($3.5m), when just a year before it had been valued at $18m. On paper it sounded like a sensible move - after all, the margins in Consulting are much higher than in the IT services arena. Customers feel more comfortable dealing with big players, and you would think that PWC's good consulting reputation combined with IBM's technological might would be a good combo. What they failed to take into account was the massive difference in culture and style between the two firms, and the PWCers have been feeling seriously disheartened by the steamroller approach of the IBMers - and as you say, a lot of the exPWC people are now either gone or looking to go. A cautionary tale!!

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#3 Re: Why did IBM buy PwC ?
02/06/2005 14:12

ooops

Well put Recruitgal. These new ads that BCS are running "The Other IBM", really smack of desperation. Consulting just doesn't fit with IBM's business model, which is why BCS's staff turnover runs at more than 40%.

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#4 Re: Why did IBM buy PwC ?
03/06/2005 12:46

exIBMBCSexec

.. few things to add... IBM did enter the consulting business already in 1992 and founded the IBM Consulting Group (ICG) with around 5000 Managment Consultants - all educated and trained in Business Transformationj and IT Strategy. This group never got the market penetration Lou Gerstner want them to get, mainly because strategy consulting attitude and relatively low revenue streams never matched with big outsourcing and IT Integration business. So ICG was taken "unfriendly over" at the end of the nineties in a group called BIS. All important exec positions were placed by ex IBM System Integration guys and lots of consultants left the company. Buying exPWCC was some kind of real marketing gag because the capabilities were mainly SAP implementation - not high level strategy consulting which was promised. As the market declined and IBMs tough management engine started to kill the new organisation, blood runs over the streets and PWCC Partners are rich and IBM is what is was before!

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