Financial Consulting Growing at IBM
Power, Carol, American Banker
Financial industry consulting has become a growth business for a transformed International Business Machines Corp.
Revenues in IBM's financial consulting division grew by about 30% last year, although specific figures were not available, and executives said they expect the division to quadruple in size over the next four years. About 500 of the 3,400 employees in the worldwide consulting group are dedicated to banking and finance.
IBM's consulting group, of which financial consulting is a subset, generated $730 million of revenue last year.
As it recasts its historical hardware and mainframe computing orientation, IBM has made a concerted effort to strengthen consulting revenues, as shown by its efforts to take on new people.
In one recent, high-profile move, the unit attracted David Partridge from Towers Perrin in San Francisco to head its retail banking efforts in the United States.
"We're growing, and our key responsibility is to have the right executives and leadership in the right place," said Jeffrey M. Lynn, vice president of the worldwide banking, finance, and securities division of IBM's Consulting Group.
"We're trying to add targeted industry skills to run our quickly growing practice," said Mr. Lynn, whose former company, Finexc Group LLC, merged into IBM consulting in 1995. (Another part of Finexc's business, which sponsors peer group forums for super community bankers, is still owned by Mr. Lynn's former partner, Anat Bird. Ms. Bird recently joined Norwest Corp. as a senior vice president.)
Mr. Lynn said Big Blue continues to hire new executives for its financial consulting business. It currently is seeking to add people with expertise in capital markets and payment systems.
The banking industry has always been a steady source of income for IBM, and last year was no different. Bank and thrift purchases of hardware, software, and services contributed about $13 billion of IBM's $76 billion in 1996 revenue.
The computer giant is increasingly emphasizing service businesses. It formed the consulting group in 1991, which IBM said has grown into the world's 10th-largest consulting group.
The financial services consulting group mainly serves midsize to large banks, Mr. Lynn said. More and more, it finds itself engaged overseas.
"We hope to pull together a truly global consulting practice," said Mr. …