To address the competitive issues our clients face today, both technology and strategic expertise are necessary. An understanding of technology — its current capabilities as well as its future potential — is now integral to business decision making. Business leaders need partners who are at the frontiers of research and deeply steeped in the issues and dynamics of their clients’ specific industries.

IBMers have earned more than 38,000 professional certifications in areas that include: Project Management, Information Systems Security, Advanced Application Development, 300mm Fabrication Technical Skills, Solution Design and Linux. Depth of educational background: IBM has one of the most highly educated workforces in the world — more than 200,000 college graduates, nearly 54,000 with postgraduate degrees.

Collaborative innovation depends on a multiplicity of viewpoints, experiences and fields of expertise. Our business model benefits from diversity in all dimensions — beyond the traditional categories of race, gender, disability and background in which IBM has long been a pioneer.

Diversity in the economy and society of the 21st century will have a broader meaning. In an expertise-based global marketplace — and especially for a company with an innovation business model — diversity must extend to modes of thinking, disciplines, perspectives, and knowledge of local markets and cultures. This broad set of perspectives gives IBMers the ability to approach problems in new and creative ways.

Innovation by its very nature is dynamic and ever-changing. A company that exists to deliver innovation for its clients must synthesize invention with marketplace insight. Doing so continually requires a culture of learning, skill building and collaboration. Specifically, it means that technologists and business experts need to work closely together, not simply to share insights, but to create entirely new intellectual capital.

In a manufacturing economy, teamwork was mostly a matter of large-scale coordination among specialized forms of manual labor. But a business model based on innovation requires a much more individualized and deeply collaborative workforce strategy. To facilitate that, IBM has one of the world’s leading intranets — a virtual work environment that provides enterprise-wide information, applications and collaboration tools.

A pioneer in electronic work environments in the 1980s, IBM has embraced the Internet and On Demand Business throughout its internal operations. Every working day, our intranet receives a million visits from IBMers. Web-based applications and tools support virtually every process and function in the company, including development, sales, procurement, supply chain, human resources and finance. In 2004, this 21st-century workplace saved at least 3 million work hours.

Extensive information about IBM employees’ expertise — education, certifications, publications, patents, languages spoken, past work projects and more — is accessible on the intranet, and is heavily used and relied upon. In 2004, expertise searches rose from about 100,000 to almost 600,000 per month — while saving an estimated half hour each month per employee. More than 267,000 employees have updated their online expertise profiles within the past year.

Thanks to a workforce tool that automates the coordination and management of marketplace demand with service professionals’ availability and deployment, IBM Global Services was able to share the equivalent of 13,000 additional employees globally across its business lines in 2004, an increase of 28 percent over the prior year. In 2005, this system will be integrated with those from other business units, creating an enterprise-wide system to match expertise with opportunity across IBM.

The heaviest use of the On Demand Workplace is for learning and collaboration. Every day, more than 3 million instant messages are exchanged and 1,400 e-meetings are held. More than half of IBM’s training is via e-learning. IBM’s intranet is rated as the most credible and useful source of information about the company by 72 percent of our employees.

IBM scientists and researchers — including five Nobel Prize winners, ten National Medal of Technology honorees, five National Medal of Science recipients, four A.M. Turing Prize winners and two Japan Prize laureates — continually expand the frontiers of discovery, pushing information technology into some surprising fields.

We are entering research fields beyond traditional IT: Automation, Autonomic Computing, Bioinformatics and Biomedical Engineering, Information Management, Management Science, Nanotechnology, Operations Research and Statistics, Pharmaceuticals, Psychology, Services (Supply Chain, Engineering and Technology Services) and Speech Science.

IBM invested nearly $700 million in employee learning in 2004, enabling more than 15 million hours of education and career development for IBMers. Total learning participation grew by 29 percent in 2004, while program costs declined by $10 million year-to-year. U.S. employees received $22 million in tuition reimbursement at accredited institutions, and more than $400 million was focused on “market-valued skills” — areas identified as high value for our clients.

• Professional skills such as cross-brand selling, business process transformation, complex deal pricing and consultative selling.
• Industry trends and marketplace dynamics, with special focus on banking, government, retail, life sciences and small and medium-size business.
• On demand strategies such as the On Demand Operating Environment, services-oriented architectures and business componentization.
• Technology skill areas such as Web services, wireless systems, pervasive computing, security, Linux, data management, total systems management, and system design and architecture.

• More than Harvard University spent on instruction in 2003.
• Nearly double MIT’s expenditure on instruction in 2004.
• More than the endowment of the Wharton School of Business in 2004.
• More than Carnegie Mellon University’s operating budget in 2003.
• Seven times the student education budget at Paris’s Hautes Etudes Commerciales (Upper Business School) in 2004.

To extract the greatest possible value from the expertise of a global population of business and technology experts — especially when those experts must collaborate in a dynamic, on demand marketplace — requires new ways to lead people and new ways to develop that leadership.

• Consolidated tools
  The Manager Portal on IBM’s On Demand Workplace integrates the resources, articles, tools and applications managers need to perform their role. Fifty-nine percent of managers feel their Manager Portal improves their decision-making ability, and 72 percent credit it with saving them as much as two hours of administrative work each month.
• Global teams
  Advisory boards made up of managers in each geographic region meet regularly to identify common process obstacles and time constraints, test interfaces of tools in development, and outline managers’ process and IT development priorities.
• Investments in people’s potential
  Rather than waiting for employees to be promoted before they learn how to lead, IBM identifies potential managers to begin development activities as early as one to three years in advance of a promotion.
• Shared leadership model
  To enable managers, executives, sales leaders and technical leaders to achieve outstanding performance in an On Demand Business, IBM’s learning offerings for these often-overlapping job roles now use a common framework of “leadership competencies” to create personalized development programs that instill and enhance the characteristics of IBM leaders.