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2000 Financial Impact Optimas Award Profile IBM

Awarded to a department that has designed a program or exacted a change resulting in financial improvement or increased revenue.

July 28, 2000
Related Topics: Awards, Optimas

Real HR: Not long ago, IBM was huge, wildly profitable, and a product leader.

But all that changed when Big Blue misjudged the developing PC market. In a period of just two years (1991-93), IBM moved from a $6 billion profit to an $8 billion loss. The stock price fell from $123 a share to just $42. And 80,000 employees were laid off.

The company had to reinvent itself or disappear. At the time the company foundered, HR itself was bureaucratic and bloated.

In response, HR consolidated operations and trimmed its own workforce from 3,400 to approximately 2,000. It was not enough.

The restructuring did not address all the problems facing HR: a large and costly base of experts, ineffective technology, and a lack of well-defined processes. In 1994, HR was challenged to slash costs another 40-50%.

Real Impact: In January 1995, HR opened the National Human Resource Service Center in North Carolina.

The call center consolidated HR operations while optimizing self-service and establishing a tiered service delivery system that allowed experts to deal only with the most complex issues.

Since its inception, the center has processed more than seven million calls. In 1994-95, the HR team cut costs 40%. In each subsequent year, the number of HR subjects supported and customer requests have increased while costs have continued to be reduced.

Today, the center supports more than 700,000 customers and handles more than seven million transactions annually.

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