The International Business Machines Corporation

Published Date: 02 Nov 2017

IBM are the initials that stand for the International Business Machines Corporation and it was started back in the 1880 (Pugh, 1996). IBM was formed by a group of a few companies. This company was strengthened by a few inventions that were done by a few brilliant men like Julius E. Pitrat Alexander Dey Herman Hollerith and Willard Bundy. IBM introduced its first computer family on April 7, 1964 (Pugh, 1996). It made sale between 1964 and 1978. This first computer was a big break through; it could perform scientific and commercial work. IBM has had its success over the years. It has been one of the biggest sellers of the personal computer over the years. In late 2005 Lenovo bought the personal computer business from IBM. In 2006 a low cost data encryption hardware that could be built into a micro processor was introduced. This hardware was known as secure Blue, it brought in a gross profit of 4 billion dollars in that same year. IBM headquarters are located in Armonk since nineteen sixty four.

IBM has been one of the leading innovation companies in the world. Its financial records and status is marvelous. Over the past three years the company has seen a rise in the profit margin. IBM has invented and sold a range of products. This produces are so many it is not possible to list all of them. This company has more than 4600 different products that it sells all over the world. It has over 430,000 employees all over the world (Pugh, 1996).

YEAR 2011

In 2011 the revenue was up by 7%. The actual figure was $107 billion and the operating pretax was up by 9 percent to about $21 billion, this was recorded as the highest figure in a long time. The pretax income margin rose for the consecutively for the 9th year to a 20.2%. This was achieved due to shifting of the business mix to segments that were more profitable. About 90 percent of profit segment was from services, financing and software (Lesser et al., 2004). There was a strong EPS growth. Compared to that past year, the diluted earnings per share of 13.44 were up by 15%. By the end of 2011 year the company had generated a strong cash flow the figure for the free cash flow was $ 16.6 billion. The year also needed with great returns from cash and marketable securities (Lesser et al., 2004)

In 2011 the company invested in five acquisition areas with $1.8 billion. It also invested about $4.1 in net capital expenditures. The company made a return of 18.5 billion to its share holders. These figures were seen due to the diligent work of 400,000 employees. For the past ten years from the year 2011 the company had made strategic repositioning. This contributed in a big way to its success. The growth market revenue unit went up to 11 percent and this contributed to the rise in geographic revenue. The company saw a big opportunity in the, "big data" emergency and decided to come up with an analytic software. Today it is one of the leading software’s in business analytics (Sadagopan, 1998).

1.2 YEAR 2012

In the 2012 the company marked a straight growth of a double digit EPS. The earnings per share were $15.25. Income pre tax rose to 22%. This was the tenth year there was a consecutive growth since year 2000. The company has had a very robust cash flow. In this year free cash flow was eighteen billion. The cash flow was 6.2 billion in 2002; this shows that there has been a great improvement. The revenue was 104.5 billion dollars where else the net income grew with 8 percent which was the highest ever. The figure was $17.6 billion. The company invested for 11 acquisitions with $3.7 billion. The main areas of interests were services and software. The company was in a position of returning $15.8 billion to its share holders. In the year 2011 the increase in divided was by 13 percent. The tax profit base was added with $14.6 billion this increased the pretax by 1.7 time, cash flow with 1.7 times and cash flow with 3.6 times. From the free cash flow alone the company has generated about $150 billion (Lesser et al., 2004).

1.3 Competition

1.3.1 Microsoft Corporation Company Profile

Microsoft is one of the leading software companies in the world. It develops and sells a range of products all over the world. Microsoft owns the world leading computer operating system. Microsoft also owns the office application suite that is sold to other computer manufactures like Acer, Lenovo, Hewlett Packard, Toshiba and dell. It is also the leading company in game consoles. Microsoft uses several sophisticated information systems. Some of these information systems have been widely used by other companies for different purposes. Microsoft uses this system in order to manage its activities (Pugh, 1996).

2.0 Company’s Organization and Management of Information Systems

2.1 An example of information systems used by Microsoft is as follows:

2.1.1 Executive support system

This information system assists senior management in gathering analyzing strategic decisions. It helps the management to make better decisions. Another information system used by Microsoft is management information is system. This system mainly deals with information from internal sources. This information system helps in summarizing reports. These reports have got data from the transaction processing systems

2.1.2 Accenture plc Company

Accenture is the world leading consulting firm and is a big competitor to IBM. This company gives provision to some of the biggest companies in the world. These services include business process outsourcing technology and outsourcing. The company has used information managements systems in different fields. Examples of information management system used by Accenture are;

2.1.2.1 Decision support systems

This company is the number one leading consulting company. It therefore has applied this information system in order to help management make good d decisions it has got techniques and tools that help in collecting information and carefully analyzing it (Sadagopan, 1998)

2.1.2.2 Knowledge management systems

This information system helps Accenture to share information. When employees create new expertise and knowledge, the company ensures that the knowledge and the inventions are preserved; this kind of knowledge is later used by new employees or simply by people in the organization.

2.1.3 Hewlett-Packard Company Profile

Hewlett is another big competitor of the IBM. HP is one of the top leading companies in the manufacture of computer hardware and software. It is the biggest supplier of personal computers, servers, printers, storage devices and networking equipment. This company is 75 years old and offers BPO consultancy, application development, and system integration (Sadagopan, 1998)

An example of information system used by this company is the transaction processing system. This system processes routine transactions accurately and efficiently. Under this transaction system Hewlett has applied several other information systems under it. An example is the stock control systems to monitor processes within and out of the company.

These are some of the few information systems that have been used by the competitors. IBM does not really use information systems though it does apply one type of information system. This company would make a lot of profit if it were borrow different methods of applying information systems used by its competitors.

2.2 Technologies used by IBM to achieve competitive advantage

2.2.1 Application response measurement

Application response measurement and application programming interface is the main technology used by IBM. A.R.M has a known method of incorporating enterprises application. This technology has helped imp in knowing the start and stop of transactions. This application is used in monitoring transactions. This technology also applies instrumented applications and collects data which is later put together with other thresholds and transactions which are measured according to the users requirements (An urban, 1969).

2.2.2 Record and playback

This monitors and records all web transaction and other applications for Microsoft windows. After recording transactions, performance and availability, the recording can then be played back in case there is need for any clarification. Data on performance is required in determining if a transaction is as expected or causing problems which you can later playback. This helps in assessing availability and performance. This helps in determining whether a transaction is going as expected.

2.3 Describe how information systems enhance the companies’ business

Information systems have greatly enhanced IBM information process. One way in which it does this is through improved communication. Information technology has made communication very affordable. To add to that communication has become very fast and through the use new technologies IBM has managed to come up with the best teleconferencing technology inventions. Information systems have helped in cost effectiveness, by manufacture of cost effective money making machines. This has in turn increased a lot of productivity. These information systems in the company have also created new job vacancies. This is one of the best advantages of the information systems (Simmons et al., 1988). New jobs have been created to web designers, computer programmers and so many other interesting jobs.

By use of this systems IBM has realized large profit margins at the end of every year. The company has ventured into globalization. Customers, employees and company management are not only able to communicate quickly but also efficiently. The information systems have also helped IBM in ensuring cost effectiveness. IBM has streamlined its activities to be cost effective. IBM manufactures so many products and it has to ensure that these products are cost effective.

2.4 Ethical and/or social issues in the company’s use of information systems to manage their business.

Job insecurity

Some of these information systems that have been used require an employee to always stay updated with information in order to be at par with the company’s progress. Most employees employed by IBM have to go through a lot of training each year in order to stay up to date. Some of the training has to involve one personally and costs may be incurred (Young, 2003).

IBM noted that information systems have always brought about privacy issues like theft of important and confidential information. IBM is a leading company in the development of the business analytics application. If this software is compromised by hackers information is also compromised which might lead to expensive law suits to the company.

3.0 Company’s Information Technology Environment

3.1 Describe how the company may upgrade their information technology (IT) infrastructure from time to time.

A good information technology infrastructure is the key to success. A good information technology infrastructure is the backbone of any company. IBM may upgrade its infrastructure by ensuring that it is robust and, it is able to accommodate volumes of data from outside and inside (Lesser et al., 2004). An infrastructure that is not able to handle volumes of data will only bring loss to the company. This is because, there may be data loss id information is not managed properly. IBM infrastructure should be able to support new radio frequencies, applications or embedded systems. IBM may also apply an extensive change in the pace in which it responds to requirements. The infrastructure should deal and treat unstructured and structured information equally (Lesser et al., 2004).

3.2 Based on what you have learned about the company so far, what is your assessment of their ability to effectively secure and protect customer information and privacy

IBM has very values its customers, from all over the world. This company values private Information about its customers, they are protected by the non disclosure agreement. Communication within the company and all over the world is always encrypted. Emails travel through secure hypertext transfer protocol. Secure information systems have helped in ensuring that information about the customers is discretely preserved (An urban, 1969).

4.0 Application of Information Systems to Managing the Company’s Business

4.1 Discussions on supply chain management systems

The Supply chain management in IBM assists in chain planning. It has assisted companies in knowing what to expect, react and take control of demand and supply within the supply chain. IBM supply chain and management has helped customers in planning their shipments, it gives the skill to understand and manage the supply directly making the supply chain smarter. The Supply Chain Management helps in optimizing strategic supply and planning decisions that affect orders (Simmons et al., 1988).

5.0 Conclusion

5.1 Briefly describe your overall assessment of why information systems are of value for this company

Information systems have helped this company over the years in making a lot of progress. The company heavily relied in the new information system that was introduced in 2011 (Pugh, 1996). Most of the company activities overseas depend on the ability and accuracy of it information systems. IBM is the world leading software and application Development Company. It has brilliant employees who have invented new information systems that have been adopted by other companies like Hewlett- Packard. IBM information management systems have delivered the lowest costs in transactions.

These systems have given the company the ability of managing and distributing data. These systems have given good availability, scalability performance and security in the industry. The company has seen rise in share holder profits and rise in profit margins annually consistently over the years without any significant drop. The company Chairman, President and Chief Executive Officer Virginia M. Rometty emphasized in the 2011 report, that new inventions and shifting of business to more promising segments was necessary and any applicable method to realize better figures had to be applied. IBM has many competitors but they are yet to reach the level that IBM is in. IBM is one of the few companies that manufacture its own computers. Other companies like Hewlett-Packard, Toshiba and Samsung only brand the already manufactured product using their names. Through innovation and hundreds of inventions IBM has managed to stay ahead of the game all through.