July 19, 2005 7:17 AM PDT

IBM shuffles management deck

update IBM has reorganized its giant Global Services division and shuffled the top management of the unit, the company said in a memo to employees Tuesday.

A three-member team made up of Ginni Rometty, Mike Daniels and Bob Moffat will now head IBM Global Services, reporting to Chairman and CEO Samuel Palmisano, according to company spokesman Edward Barbini.


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The former head of Global Services, John Joyce--who was once seen by industry observers as a possible replacement for outgoing Hewlett-Packard CEO Carly Fiorina--has resigned to join private equity investment firm Silver Lake Partners.

"The realignment will allow us to leverage our scale globally and bring the best technology to bear in Global Services," Barbini said.

The new organization is designed to help IBM take advantage of faster-growing areas in the services industry, specifically in emerging markets and business consulting, he said.

The news of the reorganization comes one day after IBM reported strong second-quarter earnings, which were lifted in part by improvements in IBM's services unit.

Rometty, who previously headed IBM's Business Consulting group, will become senior vice president of enterprise business services. Revenue from high-end consulting services has grown faster than the rest of the company's services business.

Daniels used to oversee IBM's sales organization in the Americas and, at one point, ran Global Services. He has been promoted to senior vice president for IT services, which includes traditional areas such as outsourcing and application hosting.

"Think of it as IT services on one arm, business value services on the other arm," Barbini said.

Moffat, who was senior vice president of supply chain operations, will be senior vice president of integrated operations, focusing on IBM's services operations.

Moffat is credited with wringing $6 billion a year in costs from IBM. In his new position, he will be responsible for bringing more productivity and efficiency to service delivery, Barbini said.

Outside of Global Services, which represents about half of IBM's revenue, the company moved around some of its general managers.

Janet Perna, a 31-year IBM veteran, has retired as the general manager of its information management software division.

She will be replaced by Ambuj Goyal, who had been the general manager of IBM's Lotus division. A replacement for Goyal has not yet been named.

Marc Lautenbach, who headed IBM's small and medium-size business group, will replace Daniels as head of sales in IBM Americas.

 

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