IBM's New World Government

Among the legions of executives whose careers felt the pinch of IBM Corp.'s cost-conscious turnaround strategy, the name "cookie monster" became a popular alias for IBM chairman Lou Gerstner, the former head of cookie giant, RJR Nabisco.

"By making the sale of solutions repeatable across the world, we are capable of scaling this business into a worldwide model," said Thornton, general manager of IBM Worldwide Government Industries.

Rather than brag about giant defense contracts or 1,000-unit desktop agency awards, the 54-year-old Thornton instead underscores the government integrator's success in selling niche market solutions to multiple governments.

"We just took a tax collection system developed for the state of Maryland and installed it in Malaysia," said Thornton, who alludes to similar cookie-cutting feats with postal, public service and justice sector solutions.

Welcome to IBM's worldwide government, where almost every foreign nation is a local customer.

"The global trend has transcended all of IBM's commercial businesses and the government segment is now naturally following," said Bob Djurdjevic, president of Annex Research, a high-tech research firm based in Phoenix. Djurdjevic said IBM's vertical approach to worldwide government resembles the global approach now being deployed by IBM's commercial outsourcing groups in the banking and pharmaceutical sectors.

According to Thornton, certain industry executives wrongly interpreted IBM's move to sell its federal systems group to Loral in 1994 as a possible exit strategy from the government business.

"What we sold was principally a large systems integration organization that was really not related to the rest of our business. For instance, it had very good skills in aerospace, but that's not where we're headed," said Thornton, who continued to underscore the move toward worldwide government instead of an organization dominated by federal sales

Last week to emphasize its expansive global reach, IBM opened the Institute for Electronic Government in downtown Washington. According to IBM, the institute was created to offer government executives from around the world a forum to explore different electronic information strategies and problems.

Beyond its obvious marketing purposes, the institute makes clear that IBM's government executives now plan to mobilize resources from all over IBM's empire.

John Nyland, vice president of marketing, IBM Government Industry, said government customers are more than ever appreciating IBM's ability to operate in a global fashion.

"We're now working on a [global] contract where we were able to borrow a number of data warehousing experts from somewhere else in the company. That's the benefit of having global reach, because no matter where you are you can always find the people you need," said Nyland.

But leveraging IBM's global infrastructure is only part of the plan. In-house solution development is today playing a growing role in the government integrator's business model.

Dave McQueeney, a researcher who works in an IBM laboratory in Yorktown Heights, N.Y., said he has been in steady contact with Thornton's team of IBM worldwide government executives.

"What comes to mind is their work on postal systems where we've been incorporating optical character recognition technology," said McQueeney, who also indicated that IBM's government integration arm was now evaluating certain voice recognition technology.

One application now under development for government deployment has been dubbed "flash," and could soon be assisting law enforcement officials in identifying suspects through voice recognition.

"We've got a lot more to bring to the government customer than the typical systems integrator and we are now making sure we tap into those resources," said Thornton, who believes the integrator's new global government plan will encourage others to move overseas.