With 20 years' experience helping governments and businesses, Nigel Knight at IBM's global service sector is speeding up his company's strategic shift from selling computer hardware to marketing expertise, knowledge and solutions in the China market.

 

IBM's Global Business Service (GBS), the systems integration and consulting unit, has been growing at a double-digit rate since 2004 in China, rapidly expanding its presence in banking, IT production, automobile manufacturing and energy industries.

 

"China continues to be a big market, but its service market is growing faster than we expected," Knight, managing partner of IBM GBS, Greater China Group, said in an interview with China Daily.

 

IBM's service sector takes half of its revenue globally, but in China it accounts for less than half of revenue.

 

"IBM's consulting service is taking off because of a depth of knowledge about the local market and IBM's many years' experience in the international market," Knight said.

 

IBM began to concentrate on selling IT services in China after its personal computer sector was taken over by Lenovo in 2004.

 

It has become a tough competitor for other multinational IT service providers, including Oracle, SAP and Sun Systmes, it said.

 

Companies engaged in auto, IT and energy industries have become IBM's major customers, while it has continued its huge presence in the banking industry, said Knight.

 

The auto, energy and IT sectors are China's fastest developing areas. These three sectors also face fierce competition and rapid change.

 

"As the market is changing fast, local companies are increasingly looking for international help because they are competing against international players," Knight said.

 

"So they often come to us and ask how to manage their marketing, how to run the supply chains and how to use the ERP."

 

IBM GBS is planning to add over 100 jobs by the end of the year to its offices based in Shanghai and Beijing to meet growing demand.

 

"China is undergoing a fundamental transformation as it moves from a labour-intensive manufacturing economy to a knowledge-based service economy," Knight said.

 

Research shows that the productivity of industries that use a great deal of IT is usually 10 times higher than for those that do not.

 

"We often hear that a certain company's ERP project has failed or has been aborted mid-way through, or that a certain IT project is behind schedule and requires more investment," said Knight. "That is what IBM can help sort out."

 

He said IBM GBS will also try to sell its services to the government.

 

"The public's desire to improve the governments' performance has finally been rewarded with the development of the Internet and information technologies.

 

"The ideas of service capability and performance are gradually being adopted by public sector officials across the globe, China included."

 

IBM recently signed an agreement with China's government to present the Forbidden City to a global audience. The project will bring Chinese culture to the world by creating a virtual online recreation of the museum, giving visitors access to three-dimensional representations of the palace, according to a statement from IBM's Shanghai office.

 

Knight first joined IBM in 1987. Prior to that he was an economist with the Government of Papua New Guinea from 1983 to 1986, and before that he was a manager at Unilever.

 

He said the biggest challenge for IBM GBS was not finding customers, but getting qualified employees.

 

"The challenge for us now is to find the right people to work for us. They are really important for IBM's further development."

 

IBM GBS has recruited 200 senior consultants and business experts over the past year to strengthen its team in China, while the company's Europe office is planning to cut jobs.

 

The company signed an agreement with a business school in Shanghai to train employees. The first training program will start by the end of this year.

 

"It is clear that combining leading business practices with strong technology skills is critical for success.

 

"By working closely with a local school, we have the opportunity to combine the best work experience with a university education to prepare China's top talent for this exciting period of transformation and growth," Knight said.

 

(China Daily June 28, 2006)