Points of View

The Progressive BPO Train has Left the Station – Is IBM on It?

Since the divestment of its voice business to Concentrix (see link), HfS has been focusing on IBM’s medium-term strategy with its BPO business lines, with the prime focus of enterprise clients shifting towards a two-pronged requirement of operational and transformational (what HfS terms as “Progressive”) service needs. 
Clearly, IBM is evaluating areas of its business where it may be losing its competitive edge and/or profit margins are simply getting too squeezed, which explains its other recent sell-off of its x86 server business to Lenovo (see link). Two years into the job, it is clear that Ginni Rometty is focusing on high-margin cloud software, analytics and services, as opposed to commodity computing and storage. So if the cheap, low-margin business is a no-goer for the firm, where does this leave their BPO business, which has grown up on the transactional, highly scaled, low-wage employee model?

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