IBM’s strategy for growth

26 May 2011

A 30-year veteran with IBM, country manager Peter O’Neill says strategic thinking is what helped grow the company to more than 3,000 people in Ireland.

When Google rolled into town nine years ago it did so with rock star Bono’s lobbying efforts. But for the local management team of IBM, which has grown its technology operations in Ireland from a sales operation located above the Shelbourne Hotel in 1956 to today employing more than 3,000 people across a myriad of advanced functions, it was a little more strategic and hands-on.

For one thing, for a group of workers, including the current country manager Peter O’Neill, it meant going through the technology giant’s internal phone directory and ringing anybody with an Irish surname.

Peter O’Neill’s background

O’Neill, an accountant with an economics degree from UCD, worked for Guinness for five years prior to joining IBM, where he has stayed for the last 30 years. During his tenure, he has worked in sales and leadership positions in the US and Europe and, prior to taking over the country manager role from Michael Daly last year, he was financial controller at the IBM Technology Campus in Mulhuddart in west Dublin.

O’Neill says he found his time at IBM’s headquarters in Armonk, New Jersey, valuable in figuring out how decisions are made at a massive corporation like IBM.

From the early to mid-Nineties, he says there was a conscientious decision among local management at IBM in Dublin to get the company to expand its presence in Ireland from that of a sales operation.

“William Burgess, who was country manager at the time, got a senior team together in 1995 and wanted to decide what was the best strategic direction for IBM in Ireland. Around that time, we succeeded in winning investment in terms of a help desk for our consumer PC market in the US. Our objective around 2000 was to drive our presence in Ireland to over 2,000 people and every time an international executive came to town we rolled out the dog and pony show,” explains O’Neill.

Today, the workforce – which is mostly employed at IBM’s Technology Campus in Mulhuddart, and at locations in Cork and Galway – is engaged in manufacturing, R&D, software development, service delivery and sales and service support to the European market. More than a year ago, the company announced a further 200 jobs in Dublin at its first-ever IBM Smarter Cities Technology Centre, which aims to revolutionise how cities provide services such as water and transport. Many of the jobs will go to PhD graduates.

Ireland still has it

So does O’Neill believe Ireland still has it, considering the turbulent events of the past two to three years?

“Unquestionably so. We at least now know where we are in terms of the deficit in the public purse, the banking situation, and we know what needs to be fixed. But, if you actually look at today versus four years ago, in many ways we are as a country in a stronger position. Property prices are more reasonable, people are more realistic in terms of salary levels, local authorities are going to move to reduce rates.

“We’ve come a long way in terms of infrastructure and skills and, from a cost competitiveness point of view, Ireland is more attractive.

“We’re not back where Ireland was in the 1970s or 1980s. It is fundamentally different from when unemployment was 18pc and interest rates were higher. Yes, we lost the run of ourselves, but we now have better public infrastructure, better transport. In some ways we gained, and from the point of view of a multinational looking to invest in Ireland the fact is we have the right people with the right skills and the right attitude.”

Student performance at maths and science, O’Neill argues, needs to be given greater attention and we need to recover lost ground.

“There’s been a lot of good work done by Science Foundation Ireland and IRCSET of getting more people into fourth level. At our Smarter Cities Technology Centre we’re looking to hire 75 PhD graduates in 18 months.

“Some of those will come from abroad but a lot of them will come from Ireland. Ten years ago we didn’t have PhDs in Ireland so we’ve come a long way.”

While IT industry employment in Ireland is up 6pc year-on-year, O’Neill says finding skilled workers across the sector is proving difficult.

“We have software development jobs that we’re struggling to find candidates for. The Celtic Tiger exuberance saw a lot of people drop out of ICT courses.

“My fear is we have a gap between the number of people doing courses and the time it will take for them to arrive in the market. At a time of high unemployment we need to do something to close that gap. The industry and educators need to set out a blueprint of what is needed and address it in a structured way.”

100 years of IBM

So with IBM approaching its 100th anniversary, what’s next for the Irish operation?

“In terms of the mission changes over the last 10 years, the local management have done a great job in hiring people from different countries in Europe, winning new investment projects, moving out old ones and redeveloping and redeploying people.

“That is important because of the speed at which the industry is changing. Once you could predict 15 years down the road. Today, you’ve got to be prepared to say, ‘Right, I don’t know what the future is going to look like.’ What is certain is software, services and R&D are going to be the pillars upon which the future will rest. Other than that, be ready to change and have the people who are willing to change.”

O’Neill is also passionate about the Smarter Cities strategy at IBM to harness technology to make life in cities more bearable and at the same time protect the environment.

“By 2020, some 70pc of the world’s population will live in cities and that’s only going to increase.

“On the one hand it’s about quality of life, from a transport viewpoint, it’s about things like congestion and how quickly a person can get in and out of work. Maybe they wouldn’t need to stand and wait at a bus stop if they had information coming to them on the likely arrival time of the bus and could get a coffee or carry on working.

“From a water perspective, it’s a scarce resource, but there’s obviously enormous wastage in the whole water system and through smart use of technology we can prevent that. If you think about it, 50pc of water in the system is wasted before it reaches the final consumer,”
explains O’Neill.

“At a personal level, people are wasting resources like food and water all the time because we’ve forgotten how to value that resource. Technology used smartly can help eradicate wastage of time and resources.

“For example, we did a survey of an American city and learned that one-third of the cars that were on the road at any one time were looking for parking. Think of the amount of fuel and personal time being wasted. Imagine making use of technology like mobile devices, sensors and other information tools and creating a comprehensive system that directed people to available spaces seamlessly.

“Now that’s smart thinking,” he affirms.

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years