IT portfolio: True Blue – IBM case studies

IBM has a long history of working on IT infrastructure projects for organisations. It’s perhaps not surprising then that this kind of expertise is being put to use on e-business projects. IBM consultants lead global teams that package managerial and technical expertise into a one-stop shop of skills for each project. The work done by the consulting group with Adtranz, Arcadia and Ericsson is typical of current demands in the marketplace. Restructuring business processes, integration with the IT operation and infrastructure across the enterprise, are key priorities for many businesses today who want to take advantage of e-business to extend their market reach and attract new customers.

“With each company we prepared a realistic time-line of activities to help the customer succeed in using e-business, to move them into a new way of ‘conducting’ business,” says Aibel. Each customer was able to continue business as normal while IBM worked with their project team preparing new business models and a corresponding infrastructure for e-business.CLIENT: Arcadia Group


Arcadia is the UK’s second largest fashion retailer, with 2,000 stores and 600 concessions in high streets and shopping centres throughout the UK selling its 15 leading brands. It also reaches customers via its international outlets, home shopping catalogues and e-commerce sites. Arcadia Group has made wide use of technology across its business; but, having grown through acquisition, its IT had reached a point where it needed to be restructured. “We wanted to focus on the business and serving customers rather than on the nuts and bolts of technology,” says IT director, Robin Turner.


The Group decided it was the right time in the company’s evolution to outsource the operation of its large, complex IT environment, while retaining responsibility for IT strategy. By using an existing infrastructure and products to reap the benefits of economies of scale, an outsourcing company could help Arcadia supply a better service to its customers by speeding up transactions at the point of sale. Arcadia therefore signed a 10-year strategic IT outsourcing agreement where IBM would directly manage and support all its 5,000 electronic point-of-sale (EPoS) terminals in its UK and Ireland stores and concessions. It is hoped that the arrangement will save Arcadia more than £!m a year. This is one of the first major agreements of its kind in the retail sector and is the first deal of this type for IBM Global Services in Europe. It has involved the transfer of around 50 Arcadia staff to IBM.

Arcadia Group has already made wide use of technology across its business to gain competitive advantage and improve efficiencies. These include the use of the Internet to review and monitor its supply chain and working with IBM to extract maximum benefit from e-business and e-commerce in every aspect of the organisation, from initial garment design to online purchasing and supply chain management. IBM is using the successful technology infrastructure that it has built to support its existing customers. It currently supports over 1.6 million desktops worldwide.

Arcadia Group’s in-store systems initiative (ISSI) has seen new EPoS terminals rolled out to all stores over the last two years. New Windows-based terminals have improved customer service by speeding up customer transactions. The new system also enables the Group’s stores to accept all major currencies. In addition, the time taken to train staff to use the tills has been significantly reduced.

“Years ago Arcadia saw us as a hardware supplier. We did a number of pieces of work with the company in the services arena which demonstrated our capabilities there. Over time its understanding of IBM grew and they saw what the company could bring to it as an innovator in IT as being key to delivering their business, leaving them to manage the core business themselves,” says Brian Allott, IBM Global Services’ business development director for the Arcadia project. CLIENT: Adtranz


Adtranz is one of the world’s leading providers of railway systems, products and solutions. It is the largest company in the rail industry, with marketing, development and production in 60 countries, representations in another 40, and 24,000 employees worldwide.

Railway operators are not interested in fancy technologies, but instead demand highly efficient, reliable and affordable railway systems. Moreover, providers are expected to offer everything from engineering to project financing and maintenance, as well as meet the changing needs of a shifting marketplace. At the start of the 21st century the railway industry still faces enormous challenges. Over the last few years, the market for railway systems has been characterised by a dramatic move towards significantly reduced delivery periods and a markedly lower product cost. Worldwide, customers whose expectations have been heightened by economic liberalisation and competition are demanding highly efficient, attractive, reliable and affordable railway systems. Under these rapidly changing conditions, only those providers who deliver new and innovative answers will be successful.


Due to the process of strong consolidation over the last 10 to 15 years, with its mergers and amalgamations, the railway industry faces the problem of dealing with the clash of widely divergent production standards and philosophies. This is one of the main reasons for numerous quality problems plaguing the railway industry during the last two or three years. As an example, Adtranz is the reincarnation of what were more than 30 independent companies just a decade and a half ago. It is also a case study in a dynamic take-charge approach to eliminating previous problems. “The rail industry was historically a very national one and our challenge at the moment is to pull all these national ‘elements’ of our company together into one,” says the company’s senior vice-president for IT, John Sillitoe.

“So instead of each doing its own thing for design, engineering and IT, we want to turn these individual parts into one company. The main issue is to be able to radically change the service we offer so that it competes effectively with another transportation service. To do that, we have to be able to produce and deliver our products to market significantly faster and cheaper. There’s also a shortage of specialist engineering skills in the rail industry, so we need to make sure we make maximum use of those skills we have around the organisation,” he adds.

“Because of the way the company has grown up, you might have three specialists in one country, another three in another, and so on. Somehow you’ve got to bring them together virtually as one team. As much as you’d like to move them physically into one office, in reality you can’t because people won’t move. With specialist skills they can opt to work for the competition down the road without having to relocate.”

The answer is concurrent engineering, and IBM initially came on board to research this approach of pulling workgroups together to work on a common process. “IBM started supporting us by helping us to find out how to create a common engineering process for the company. Traditionally, engineering has been done locally, and designs produced manually,” continues Sillitoe. “They got us to start thinking how we produced trains. Their international weight coupled with our national teams was important.”

Designing and manufacturing parts using concurrent software engineering techniques ensures the whole design and manufacturing team has access to the same model of data, the common use of which reduces errors and duplication. The design and development stages of a project occur in parallel and data can be shared with “downstream” applications, such as product analysis and manufacture. This process cuts down lead time – the period it takes for a part or product to reach the market from the drawing board stage. This is why many European manufacturing companies are adopting the technology. Using CAD/CAM software, lead times can be reduced by up to 50 percent: “Whatever product needs to be made we can now have input from a number of countries’ design teams to produce it,” says Sillitoe.

Essentially, IBM is involved with the front, middle and back end of Adtranz’s business as a series of separate groups. IBM is working on an IT redesign project, to help the Adtranz redefine its overall IT environment, as well as on its customer support business which focuses on the maintenance of trains once they are in operation. “IBM didn’t duplicate effort unnecessarily but did focus on important tasks which needed to be done,” says Sillitoe.

“That was critical to us because we had to do some things quite quickly, and without reusing work we’d already done we would have had a problem.” CLIENT: Ericsson


Ericsson is a leading supplier in the fast-growing and dynamic telecoms and datacoms industry. But the company is under fire from all directions. The two industries are coming together, as are the computer and media industries. This is leading to market consolidation and global dominance by 10-15 companies in the telecoms operator markets. Internet and IP technology represent a tidal wave sweeping through, and changing, all companies and industries. Wireless technology will spread into all aspects of communications in the future, and will transform the way we live, work and play. These trends will converge at a single point and profoundly change the industry and the marketplace to create a new telecoms world where customer focused product solutions and personal service will be the norm.


When he became president and CEO in 1998, Sven-Christer Nilsson reviewed Ericsson’s business strategy, technology focus, organisation and management.A new organisational structure has been introduced to better meet the current and future demands of its customers. The company has adopted a strategy built on customer focus and is now a much more customer-oriented and flexible organisation.

Ericsson’s operations are now divided into three business segments each serving different customer categories: Network Operators and Service Providers ( infrastructure – building base stations, and all the products a network operator needs); Enterprise Solutions (corporate products – data switches, switches for office phones, etc), and Consumer Products (terminal-related products – phones and goods going through retailers directly to consumers).

To reinforce its strong focus on customers and markets, the company has boosted its local as well as global presence and an executive team keeps in touch with those markets from four new corporate offices, in addition to corporate headquarters in Stockholm. Not surprisingly, IT is playing an hugely important role in delivering the effect of this corporate change programme.

Working with IBM, a corporate-wide e-business strategy has streamlined business processes by linking Ericsson’s front-end sales channel to its back-end manufacturing arm. “We saw there was an increasing demand for trading business-to-business and business-to-consumer electronically.

We also needed to show one face to our customers and provide them with an interactive Ericsson experience,” says Ericsson’s IT programme manager, Jonas Hammar. But without a common approach, each business segment was trying to create its own web presence using a mixture of technologies.

IBM helped Ericsson sell the big picture view internally. “One of the roles of consultancies like IBM is to translate what we’ve decided corporately into the language the local people can understand and sign up to,” adds Hammar.

An Ericsson-IBM Task Force was also set up to manage the development of the one e-business environment. “The front-end is where we’re focused at the moment. We’re trying to meet the customer demands in all the different segments, and provide our marketing units with a way of quickly implementing their solutions on the appropriate platforms,” adds Hammar.

IBM is helping Ericsson establish a framework that will support front and traditional back-end systems, as well as a new SAP implementation.

“The company can bring in resources from wherever they need them,” says Hammar. “IBM is also skilled in understanding how to integrate its solutions with other vendors, especially back-end systems. Other players might be equally good or better at integrating the front-end applications, but if you want the full picture, that’s unique to IBM.”

Clive Couldwell is a freelance journalist

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