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News and Opinion Concerning Health Savings Accounts, Medical Costs and Health Care Reform

• Washington Times: Employers fear loss of ERISA shield. By Gregory Lopes. Excerpts: The chorus of calls for health care reform from the campaign trail is reaching a fever pitch, raising concern among business leaders about increases in already crippling medical costs.

  Business leaders stir nervously when talk turns to undoing ERISA, a type of health plan that shields businesses from state and local regulation. Courts have struck down state efforts to mandate employer health care benefits in Maryland, New York and, in a ruling Wednesday, San Francisco.

  "The No. 1 fear among business, when it comes to health care reform, is that they'll lose their ERISA protections," said Helen Darling, president of the National Business Group on Health.

• American Medical News, courtesy of Physicians for a National Health Program: California fines plan for failing to reveal policy cancellation incentive. By Emily Berry. Excerpts: Health Net has agreed to pay the state of California $1 million for failing to tell the whole truth to regulators about how it rewarded its employees who canceled individuals’ health insurance. The company — and others — could face more fines in the future as the California Dept. of Managed Health Care continues to investigate insurance rescission practices.

  The Dept. of Managed Health Care on two occasions asked Health Net officials whether they offered incentives to employees to cancel policies and was told incorrectly that there were no such programs, department spokeswoman Lynne Randolph said. California law does not allow insurance companies to compensate claims reviewers for decisions they make on claims. ...

  Commentary by Don McCanne, MD: UnitedHealth spokesman Tyler Mason’s statement that they are helping consumers by holding down health insurance inflation applies only to healthy consumers who clear their underwriting standards. What about the consumers who really count, those who need health care? The private insurers not only leave them exposed to actual health care inflation, but they also add the impact of adverse selection, having siphoned off the healthy who are needed to dilute the costs of the sick.

  Medical underwriting is not only perverse in its impact, it is also an expensive, wasteful administrative service found only in the private sector. It is a concept that does not even exist in a public insurance program since the mission of a public program is to prevent financial barriers to health care - for everyone, not just the healthy.

• Contingencies (American Academy of Actuaries): A Prescription for the Future of Health Care in the United States (PDF). Excerpt: Health care reform is shaping up to be a major issue in the presidential election. The Canadians have had some time to work out the bugs in their system. Could it, or something like it, work south of the 49th parallel? by Donald M. Armstrong.
• New York Times: No Insurance, Poor Health. Excerpts: The case for providing health coverage for all Americans got even more compelling in the past week when two new studies presented the most comprehensive evidence yet that the lack of health insurance is seriously harmful to a patient’s health. The studies found that uninsured people suffer significantly worse outcomes from cardiovascular disease, diabetes and cancer than those who have coverage.

  One study by researchers at Harvard Medical School, published in the Journal of the American Medical Association, found that uninsured near-elderly people got sicker at a faster rate than comparable people with insurance. Those disparities were sharply reduced when people turned 65 and became eligible for Medicare. Those who previously had insurance reported no significant change in their health as they transitioned to Medicare, but those with little or no prior coverage reported a substantial slowing of the decline of their health. It was strong proof of the value of Medicare’s universal coverage for elderly Americans.

• New York Times: U.S. Curtailing Bids to Expand Medicaid Rolls. By Robert Pear. Excerpts: The Bush administration is imposing restrictions on the ability of states to expand eligibility for Medicaid, in an effort to prevent them from offering coverage to families of modest incomes who, the administration argues, may have access to private health insurance.

  The restrictions mirror those the administration placed on the State Children’s Health Insurance Program in August after states tried to broaden eligibility for it as well

  Until now, states had generally been free to set their own Medicaid eligibility criteria, and the Bush administration had not openly declared that it would apply the August directive to Medicaid. State officials in Louisiana, Ohio and Oklahoma said they had discovered the administration’s intent in negotiations with the federal government over the last few weeks.

• New York Times: Health Benefits and Retirees. Excerpts: A new federal regulation allows employers to reduce or eliminate health benefits for retirees when they turn 65 and become eligible for Medicare. Although that will cause distress for some, it is a welcome step that could help slow the deterioration of employment-based health insurance. It seems likely that the new rule will help far more people than it hurts. ...

  In late December, acting in accord with a favorable appeals court decision, the Equal Employment Opportunity Commission ruled that employers could drop coverage of older retirees or offer them plans that would supplement Medicare or comparable state insurance programs while providing better benefits to younger retirees. The age-discrimination issues may still have to be adjudicated by the Supreme Court but as a matter of sound public policy the new regulation makes sense. ...

  The regulation is clearly unfair to people who were willing to accept lower wages while working in return for lifetime health benefits that may now evaporate. Their spouses and dependents could also suffer if they are not eligible for Medicare when the retiree turns 65. Such dependents may well inflate the ranks of the uninsured, making it all the more imperative that the nation move toward universal health coverage.

New on the Alliance@IBM Site:

• From the Job Cuts Status & Comments page
  • Comment 12/31/07: The business paradigm Sammy embraces is very clear. You, the employee, are a tube of toothpaste. Sammy ensures that you are squeezed really hard until all used up then you are thrown away...replaced by a cheaper tube of toothpaste... i.e. Wipro. Find a way out, on your terms, and exit stage right. The old blue mare ain't what she used to be..... -Has Been Ben-
  • Comment 1/1/08: -Has Been Ben- I think toothpaste isn't quite right. Maybe KY -Anon-
  • Comment 1/2/08: Anon and others getting offers from AT&T...Have you really looked at the AT&T package? I would go back to AT&T without giving it a second thought. Just forced back to IBM from AT&T...Health benefits are 400% higher (in fact, my AT&T Cobra was cheaper for Dental and Vision), lost my phone concession (free local phone, long distance, internet). I received a 12-13% bonus at AT&T every year for last 4 years (how did you do at IBM?) plus a bonus when SBC purchased AT&T. Sure the 401K match is in stock but at least the stock has gone up 50% in last 4 years. At least they have a retirement plan...something IBM does not have anymore. I think you will be find AT&T to be a fair employer...but if you want to come back...I will trade you jobs any day. -IBMer again-
  • Comment 1/3/08: I drove by the east entry to the Boulder facility around elevenish today, and there was a big cloth banner saying something like 'Shame on IBM' and when I drove back past it about an hour and a half later it was gone. Anyone know about this? -Barb-
• General Visitor's Comment page:
• Pension Comments page
  • Comment 12/30/07: To the poster that said "Comment 12/28/07: America has had recessions and inflationary periods and economic down periods where business bottom line profits suffered but the companies that offered pensions didn't change pension plans, freeze pension plans, or terminate/abandon too many of the employee pensions. Why now are we seeing that pensions are no longer being offered? Perhaps companies know American workers are largely weak and naive and cannot even be compared to sheep (since sheep do know how to flock together to protect themselves the best they can). So if the average American worker doesn't flock together to protect what benefits, like a pension, that are offered by an employer these benefits will surely vanish."...

    I suggest you borrow from the library or buy a copy of Paul Krugman's latest book, "The Conscience of a Liberal"...even if you don't consider yourself to be a liberal. He explains in very clear terms how the screwing of the American middle class by the filthy rich has been in the works for decades. It's a real eye opener for people that haven't been paying attention, which is 99% of the population. -Anonymous-

  • Comment 12/31/07: I would advise EVERYONE under the IBM Personal Pension Plan reading this to print out a NetBenefits Pension Summary statement TODAY to get a hardcopy of your lump sum amount as of today, 12/31/2007. Protect yourself: get evidence of your PPA lump sum just in case IBM tries something starting in 2008. This lump sum amount should not go down on or after 01/01/2008. If a NetBenefits Your Pension Summary run after 01/01/2008 reports it down or less I would call Fidelity ASAP for an explanation. For your further information: IBM has changed the "annuity conversion factor" with the frozen PPA starting on 01/01/2008. This means if you take a monthly annuity it will be less than calculated even with the same PPA lump sum amount if you ran an estimate back in October 2007 -read_this!-
  • Comment 1/2/08: Dear IBMer: Just want to say Happy New Year 2008! You resources are the best in the business. You make us richer by the day. We thank you! By the way, enjoy your frozen pension! When you do leave IBM you can watch it thaw, melt , and evaporate right before your eyes. To all us IBM executives it is truly a marvelous, wonderful sight! Keep up all your good work for the customer in 2008 and beyond. We know we can bank on you! Best, Sam P. and the rest of the IBM executive management team -freeze out 2008-
  • Comment 1/2/08: To understand the prior plan in general and the conversion factors in particular, search for ushr113.ppdf on w3. I have saved ushr113 for the past few years, and comparing the conversion factor tables, I do not think that the conversion factors have changed. Using this document you can make a simple spreadsheet and forget the calculators. That can also help you demystify the plan. -Anon-
  • Comment 1/6/08: I have have been notified that I have an FHA (Future Health Account) from IBM / Lenovo (laid off 11/1/07). Was wondering if anyone transferred successfully transferred FHA funds into another bank or brokerage account? -Anonymous-
  • Comment 1/6/08: To Anonymous: FHA is a NOTIONAL account. No real money is put aside by IBM. You have no real money in an account. Don't you understand this??? The FHA is like poker chips. It is not transferable at all. It is all funny $, if and until IBM allows you to use the notional funds to buy health benefits from them. Join the Alliance and educate yourself now! IBM has already reneged on their promise of employee pensions. Do you think they will honor a Future Health Account now? Get a real FHA. Work towards a contract and secure retirement medical protection! -Future_Hell_Account-
• Raise and Salary Comments
  • Comment 12/30/07: Did anyone at least get a fruitcake from IBM management for the holidays as a holiday gift or bonus? -blue_blue_holidays -
  • Comment 1/3/08: Anyone here from canada with knowledge of salary range for consultants in GBS? what's the band/salary range there? -moved-
  • Comment 1/9/08: Salary = 71,500; Band Level = 8; Job Title = I/T Architect; Years Service = 18 1/2; Hours/Week = 45; Div Name = 1E; Location = Boulder; Message = After reading the article about pay, I know I have been screwed for years. Ten years as a div 07, band 7 employee told repeatedly that I couldn't be given a raise due to being at the top of my band (band penetration), and couldn't be given a band increase due to economic pressure. FINALLY switched division from 07 to 1E and got a band increase and small pay increase! -Sagemeister-
• PBC Comments
  • Comment 1/5/08: Prior Yr PBC = high; This Yr PBC = low; This Yr Bonus = les;s Prior Yr Bonus = more ;Message = Supposedly IBM has had a pretty bang up 4th QTR 2007 and will report a nice 2007 overall so expect management to now be instructed to give out more PBC "2"'s and PBC "3"'s than originally planned. If you haven't gotten your PBC yet don't be surprised if you don't get it until after the Jan. 17th quarterly announcement. 1st QTR 2008 probably might not be as good so IBM wants to limit whatever payouts doled out in March under the new bonus plan (whatever they called the thing) to help out the 1st QTR 2008 numbers by conserving the payout pool.. -crystal_ball_blue-
  • Comment 1/5/08: Prior Yr PBC = 3; This Yr PBC = none; This Yr Bonus = none; Prior Yr Bonus = 35k; Message = to: crystal_ball_blue - I expect the high 4th qtr numbers were the result of sucking 1 qtr sales into 4th quarter and cutting expenses to the bone: Typical IBM fare! 1st qtr will probably be bad because the questionable sales will have to be unbooked as usual. I don't think the bonus will have anything to do with the PBC 2 and 3 numbers. I've heard that it's a management directive to increase the number of 3's this year as a setup for more head count reductions. -RA'd bear-
  • Comment 1/7/08: crystal_ball_blue was right. Management held our staff meeting before lunch today. We were told IBM did poorly in 4th quarter, just look at our declining stock price. PBC ratings will be low and those seeing any sort of a bonus should be extremely happy as they will be far and few in between. We were also told it would be near the end of the month before we're told anything on what we got. -Anonymous-
• International Comments
  • Comment 1/2/07: Country = ireland; Union Affiliate = eire; Job Title = hawwwwwwwy; IBM Division = server; Message = IBM is a disgrace....more people here need to stand and speak up instead of the usual suspects. Guys, believe what you want to believe but server is in deep trouble. Expect serious things to go down in first 6 months of this year.....Guys, its nearly game over! Q4 was the worst Q4 I have seen in 5 or 6 years...IBM R.I.P ..........anyone with any info please reply. We need to know what's going on in this shell of a company, CU at the U.E.L ( unemployment line) peace out...cisco -Cisco101-
  • Comment 1/3/07: Country = ireland; Union Affiliate = yes; Job Title = slave; IBM Division = server; Message = The fourth quarter is the worst I have seen it in 5 years. We finish our orders 4 days before the end of year. My manager said it was the best so far, with 500 units shipped of main frame servers. But out of that 500, at least 157 were returned. Its time to wake up and give us a chance of a better future by reducing its staff levels .We want to go; but I'm not going until I have a pocket full of cash. joe. -sony-
  • Country = Ireland; Union Affiliate = yes; Job Title = eol; IBM Division = server; Message = Hi All, I find these last few comments very interesting as they seem to coming from manufacturing. But I will state on the record that IBM did have a very bad Quarter from a manufacturing point of view in Dublin. Software continues to expand and get better but from an I/P and Z point of view its not looking too great. What do you people expect? To get a memo saying sales in server are down? Come on now of course not. We will always get the same B.S about how great the quarter was. Do people really think that the USA will be the only people affected by what's going on? We need to stand firm with our brothers & sisters in the USA. Lets join a union and at least give people more time. Lets put up a fight. I can see layoffs in the forseable future and I just hope everyone is ready when the worst happens. P.S in reference to Cisco: people are not afraid to stand up, people just don't care anymore, they have given up the fight. -Sandra-

Vault Message Board Posts:

Vault's IBM Business Consulting Services message board is a popular hangout for IBM BCS employees, including many employees acquired from PwC. A few sample posts follow:

• "Moving to IBM" by "BobTO99". Full excerpt: Our IT was recently outsourced to IBM. A lot of people were also moved to IGS and ITS groups. IBM hired us at the face value, so they offered us the same salary even though our current jobs did not require travel, but the consulting jobs certainly do.

  They said they will review the bands in the next few months. I don't know what that really means. My questions to you folks:

  1. What is a typical salary range for IBM consultants?
  2. How much influence a manager has over a pay range in this case?
  3. Given that travel is now a requirement, do I have any bargaining chips come the band review time?

• "What rebadging means" by "wonderaboutibm". Full excerpt: Congratulations (?) -- you are now among the rebadged, I see. The answers to your first two questions are so extensively hashed over on this board that an answer would be repetitive. Just search the board yourself. There is also interesting salary information posted at ibmemployee.com.

  As for the travel ... well if you didn't travel before IBM, maybe you will just continue as is. But everyone is on notice, and the management is very clear about this, that travel is a condition of the job, and refusal to travel is grounds for dismissal.

• "My condolences" by "Frank_Reality". Full excerpt: Briefly what happens is that over time the IT support gets moved to existing IGS and ITS personnel. Of the people brought over to IBM, typically half are dumped by 18 to 24 months depending on complexity. That's how IBM makes money on the deal.

  It is rare that IBM allows a transfer from an outsourced IT org to the consulting side of the business - that's not to say it can't be done. Maybe someone on the consulting side of the business will comment.

  Reviewing bands is called rebanding - almost always that means dropping people to a lower band, which can means your pay is frozen for an extended length of time until your pay fits back within the new band you're placed in. Bands are ranges of pay which map to various skill levels. Example band 8 is a range of pay which is for more highly skilled work than a band 6 range of pay.

  You will find that IBM is an abysmal place to work - it's worth paying the subscription fee here to see the variety of comments. If you're not in management, stop over at http://www.allianceibm.org/ and navigate the left side to the "Your comments" link and read through the comments to see what you're getting into. Good luck.

• "Talent Shortage" by "ancientblueconsultant". Full excerpt: The reason why the pig may be quick to move any personnel it acquires through SO deals to the consulting side is that the consulting side talent shortage is horrendous. Rather than laying them off and having to pay a severance that might be better than IBM's as part of the SO deal, they move the poor bastards into GTS or GBS then work them to death. They'll quit due to workload or excessive travel and there will be no severance. Pure and simple. Save money by working them to death and force them to quit.
• "Now really" by "wonderaboutibm". Full excerpt: Now, now ... Frank and DOR, let's be fair and balanced here, like Fox News. Rebadged employees do have a variety of experiences. I have seen cases where such folks are better off at IBM than at their old employer. After all, one wouldn't expect the new IBM SO customers to be the shops running in best form before IBM took over. And with the high IBM attrition rates in the US (who needs LEAN, anyway?) and the qualified failure of IBM "Global Resources" to be able to pick up the slack, the rebadged jobs may not be in that much jeopardy.

  However, BobTO99, you are sounding a little naive. IBM employee relations are at a low now, and you just cannot assume that there is any real interest in you or what you can do for IBM beyond the IBM Finance bean counters' simplistic view of the world. Do get a job search going, just don't be frantic about it. I hate to say this, and it is a general comment beyond just IBM: straight tech jobs in the US, be they infrastructure or development, are being devalued. I don't see that changing anytime soon. You would probably be better off as an independent.

• "A tip for you" by "Dose of reality". Full excerpt: When they introduce you to a guy name Sandeep, or Ravi, don't tell them anything that you know about your operations. As soon as they suck your brain dry, you will be out on your @$$, replaced by an offshore bot. Get your resume together, and don't give them the satisfaction. No matter what they tell you, you are nothing more than a short term trainer. If you do happen to survive in the general pool, it's flat salary trajectory, no bonuses, and no career for the foreseeable future. You have been warned.
• "Rebadged Hell!" by "bluedngone". Full excerpt: Many years ago, I worked as a consultant/contractor to IBM. The project was interesting and I had a good time. While in this position, I had such and good time and was so key to the projects success, they offered me a permanent position with a hefty increase in pay. Believe it or not, that was my last joy at IBM. Although the pay and benefits were initially great, the job quickly became drudge. I was introduced to PBC's, IDP's and unlimited unpaid overtime. All my vacation time had to be made up with OT. The work assignments became very stale and it just became a job. Since then, the raises and promotions became nonexistent and because I would say, there must be a better way, I was labeled a trouble maker and RA'd. I know exactly what happens when the pig sucks the joy out of your life.

  What is happing at IBM with rebadged employees is exactly what DOR says. Their skills are being used to train Ravi or Antonio if possible. They will then be LEAN'd to the ex IBM'er junk yard. The only relationship I would ever have with IBM again is as a contract employee. I know I am just a cog. But at least I will get paid for the extra hours.

• "Circuit City - Among Top Clients" by "ancientblueconsultant". Full excerpt: Almost 4 years ago Circuit City gave IBM GBS and GTS the keys to the IT Kingdom. They also gave GBS the keys to the process, change and strategy.
  • Circuit City and IBM to Launch Technology Transformation

  Then they got into Second Life based on our advice:

  • IBM and Circuit City Join to Explore the Application of Virtual Worlds to Business
  • IBM, Circuit City go prospecting in virtual world

  Then they gave GBS and GTS the keys to all of their infrastructure and their IT operations:

  • IBM wins seven-year $775 million Circuit City contract

  So with all this expertise from the key personnel, methods and thought leadership from the retail practices, we get... "Wage Management", a losing strategy so far:

  • Circuit City: Layoffs Unlikely To Boost Bottom Line
  • Layoffs expose Circuit City's crossed wires
  • Trouble ahead for Circuit City - Analysts. Electronics retailer's plan to open stores and pump up debt is 'risky,' says Goldman analyst.

  We'll see what the results of millions of dollars of IBM Consulting expertise in the last 4 years will bring to Circuit City.

  On the POS side, growth is beginning to stagnate now that IBM has given up its signature OS to a VAR/VAD out of South Carolina. The loss of C development to Lenovo and the now rising competition from Fujitsu and Dell will eventually force the services businesses out of their cozy spot there. The only potential bright spot is data mining, but that's the realm of Software Group and the STG crowd.

  Don't take my word for it. Check the facts. Ask your retail client executives today what they think of IBM and whether they think the retail practices can be their strategic trusted advisor.

• "Have to chuckle..." by "mogrits". Full excerpt: on your message since I knew the "Client team" back when they were selling these solutions to Circuit City executives. I recall all the smiles concerning the monies to be made and commissions to be paid with little, to no, concern for the actual benefits being touted to the customer. On another note, take a look at Circuit City's stock price during this period. Typical results from a short range mentality. Price ramps up as cost cuts take effect but then customers realize that service level at stores is now abysmal because all good, experienced employees either left for greener pastures or got fired/layed off so stock price tanks.

  and the circus plays on, and on, and etc., etc. while IBM collects more money. I still don't understand why more of IBM's customers haven't run the other way when they see IBM coming. Why would anyone who has industry contacts of any kind actually believe that IBM is capable of delivering on any project? Not to say that there aren't still pockets of success for IBM but the overall picture is SO dismal. Just like IBM advertising.... if you saw any of the newer ads over the holidays you would like complete morons are in charge of spending IBM marketing dollars. Could these TV and print ads be any worse?

• "Where is the exodus?" by "jleti". Full excerpt: Now that we are into 2008, I wonder if there are any significant numbers of employees that are looking to make their exit from IBM. I heard speculation that the changes to the pension plans that are now in effect would cause a large exodus but I have yet to see any signs that this exodus has begun.
• "A Few Data Points" by "ancientblueconsultant". Full excerpt: Although the numbers will most surely be kept confidential (as they should be) here are some signs of the "Great talent drain of 2007" (words from an IBM HR Partner in GTS to me first hand last week at a party):
  1. A friend of mine who has 30+ years in the business and is a B10 in GTS told me (and showed me) that he got over 55+ "Good Bye" e-mails from 12/17 to 12/31. This included the lead developer for SameTime and NotesBuddy (Alan) and 2 IGS (one GTS and one SO) Distinguished Engineers. All of the emails came from B9-Band D types of individuals. Cream of the Americas based crop.
  2. My HA (Human Asset) team have received approximately 215 resumes from active and very recently departed IBMers. About 70% of the resumes were B9 and above and about 90% added that they weren't part of a resource action. Even if they haven't left, they are now very actively looking.
  3. The effects of the retention problem are becoming more and more visible and impossible to hide. In 2007, there was an article on Baseline Magazine about the big deal at UPMC (Univ Pittsburgh Medical Center). This deal was ballyhooed by Sam himself as the deal of the decade and the pattern for many more. The major IBM personnel that participated as deal makers were identified. What was a shock to read was that the IBM Project Executive who led the deal, Reed, has already left IBM to go to EDS.

  Several new open source companies are being led by recent IBM Websphere Distinguished Engineers, like WSO2.

  IMH, I believe the "wave" won't be visible, I think until late January or early February, when teams start getting back together from the holidays and the last of the folks leaving announce their departures. About 60-70% appear to not even announce their departure and gave only 2 week notices. I have been told that many of the oldsters that made many runs of the pension estimator showed it would take a few more months for the pension freeze to take hold.

  I also believe the company really wants to get rid of its Americas based B9-B10 older technical skills. That's part of the cost containment strategy. It was very interesting that Cringely, in his latest article, has noticed that IBM Communications has been reticent, if not flat out refused to talk about its Americas headcount numbers.

  Maybe since you are closer to the IBM Communications team than I am you could get them to announce that there hasn't been any "significant" loss of people leaving in late 2007?

• "Yes and No" by "jleti". Full excerpt: I agree with you ancient that IBM is targeting its America’s based B9-B10 older technical skills. I know a bunch of these folks myself and I have to say that many of them are not worth their salt so no great loss. In spite of the fact that I am a current IBM employee, I am not at all close to the IBM Communications team and I am quite content to keep it that way.
• "Another Data Point" by "ancientblueconsultant". Full excerpt: This came from another thread, as allegedly a New Year's message from IGS senior management: "Deeper Client Relationships: The Top Account program will continue and you will see even more differentiated investments directed towards GBS Core and Invest clients. A significant portion of our growth will be driven through fewer, more focused and carefully selected accounts - from 282 in 2007 to 111 in 2008."

  Does this sound to you like GBS has more headcount at the skilled high end levels in GBS North America? Doesn't sound like a headcount growth strategy to me!

• "Real Numbers" by "B5GovCon". Full excerpt: Here is an example that is not fabricated. My direct reporting group was/ is about 70 people. About 8 were rated 1s. 5 have left in the last year. When you lose your top talent that’s worse than losing a large percentage of employees. Since these people have left, it seems the group is struggling to keep people happy and win work. They are not losing people in droves but people are definitely looking. The other thing I find is that the people left in the group, except for a few, are having problems finding jobs since they are not the best at what they do.

  I have found this to only be true in groups that are suppose to do “management/ strategy consulting.” S&C, parts of HC, parts of FM, etc. The technology services focused groups do not seem to have this same problem.

• "IBM makes money on SO deals?" by "wonderaboutibm". Full excerpt: Everybody in IBM knows that SO deals are money losers (or, in the phraseology around here: "SO has a severely challenged business model.") The contracts between IBM and its customers make for hilarious reading; if I were teaching at a law school, these things would make great case studies of how not to write a contract. The assumptions of constantly evolving and increasing IT productivity are a real laugher.

  In fact, since most of the so contracts are vaguely worded, ambiguous in their "definitions," and sometimes self-contradictory, it's no wonder that the customer (and IBM) can interpret what is meant any damn way they choose. It's a pox on everyone's house: I can't blame the customer for feeling ripped off, and I can't blame IBM Delivery for trying to salvage what profitability they can.

  Of course, the customer and IBM can be blamed in contract negotiation for slipping in junk that they KNOW will cause disputes down the road, and for lacking the guts and the fortitude to produce clean, readable, and transparent documents.

• "Looks like a plan... :-)" by "GBS_BC". Full excerpt: Moving into 2008, we will continue to stay the course and drive our business around the “3D” strategy.
  • Deeper Client Relationships: The Top Account program will continue and you will see even more differentiated investments directed towards GBS Core and Invest clients. A significant portion of our growth will be driven through fewer, more focused and carefully selected accounts - from 282 in 2007 to 111 in 2008.
  • Differentiated Solutions: This is IBM's most unique and greatest area of opportunity. By collaborating with Software Group, Global Industry Leaders, and across Service Lines, we are starting the year with a more tightly-integrated solutions strategy, and a more industry-focused, asset-rich solutions portfolio. In addition, we will continue to improve management processes around solutions to further increase profit margins in this space.
  • Delivered Globally: As we grow global delivery, there is a direct correlation to what we can grow domestically. This is a growth strategy and we must expand the use of global resources across a greater mix of our projects.

  As we continue to evolve into a Globally Integrated Enterprise, the quality of our GBS team will prove to be our greatest asset. Therefore, it's incumbent upon each of us to continue to seek out opportunities to develop new skills and stretch ourselves. Please spend some time thinking about how you can personally continue to up your game. Collectively achieving this next level of performance will enable us to truly pull ahead of the competition.

• "Does it now?" by "wonderaboutibm". Full excerpt: Reading high-level crap like this is one of my pastimes. Is there any message in that thicket of words? If so, what is it? The ONLY thing worthy of attention in this drivel is the business about focusing on a few big clients. As I said before, you gotta feed the fat baby. That is now the GBS strategy. GBS and small to medium (SMB) clients? Never before, not now, and never in the future. And yet the lip service keeps coming, a never-ending river of you know what.
• "Hilarious" by "civilliberty". Full excerpt: 3D?. Why not move to the 4th dimension and leap-frog all competitors?. It sounds like they have woken up to the fact, after about 5 years, that the cost benefit of acquiring a consultancy requires one to rethink their business models. This should have been on the agenda before they purchased PWC, and implemented quickly to realise the cost benefit - impossible of course given IBM's internal bureaucracy and lethargic management. It will be impossible for them to pull ahead of the competition unless they jettison a lot of senior management.
• "Interesting" by "ancientblueconsultant". Full excerpt: The document stresses a number of hazy, undefined goals and objectives. Nothing is accountable. "Trust me, the future is so bright you need to buy some shades" is essentially the theme.

  The only hard detail is the number of focus accounts, which is cut by more than a half. Is this a growth strategy? IMWO, I think it's more like an admission of the lack of resources due to problems in retention and hiring to the extent that they can't cover in 2008 what they covered in 2007.

  GBS appears to be constricting and handing over the consulting business to business partners and the competition. Looks like the growth and fun in this business segment is rapidly moving to being a services professional and consultant inside a business partner.

• "Its deja vu all over again" by "kindaoldibmer". Full excerpt: Those of us old enough to have been around IBM in the late 80's will recognize this "slowly, but profitably going out of business" investment model under a different name ... "excel in the markets we choose to serve".

  In other words, we're cash cowing that Line Of Business.

  Another way to look at it is that senior management has realized that more than half their existing client base are so unlikely to buy anything more from IBM that it isn't worth the expense of aggressively marketing to them.

  I think they've pretty much squeezed all the juice out of the perform staff, and the only short term cost optimizations left is to chop the sales staff, which will make this years numbers materially better ... but it won't do great things for next year, and more so the year after.

  Does senior management have one last wave of LG granted options to cash in on this year, followed by significantly smaller grants for next year ? That would be an alternative explanation for the behavior.

• "thank you civil" by "goibmyouself". Full excerpt: I know that an admin office is being setup in Malaysia. Wondering how long it will take to move the whole org offshore. But, I'm sure the Armonk crew won't have to get 'remote' support. The Admin org reports into HR and they are a scary bunch. We admins know where the bodies are buried. We know how execs make travel arrangement to arrange meetings with mistresses and have affairs with co-workers. All on IBM's dime and time! Good times.
• "Counterpoint" by "jleti". Full excerpt: Having read all of your response I understand much better where you are coming from and I thank you for that. I have no reason to disbelieve any of your claims about your colleagues. I have no doubt that those kinds of things happened and still do happen. I know plenty of people who have retired on the job and dragging their feet. I do not know any that I would say are routinely sabotaging the business but I can believe there are some.

  You appear to be placing the blame for anti-success and underground sub-cultures on past bad IBM management. I have experienced some good and bad managers at IBM as well as at two other large corporations and I know that bad management decisions cause long-lasting negative effects. That is unfortunate but I know it happens. My experience is that the bad IBM senior managers are no worse than the bad senior managers at other large companies. I think that anyone that wants to shop around for Utopia in the world of big business is welcome to try it. I think that anyone who cannot live with some bad senior managers and believes they can do better and wants to start their own firm is welcome to try it. I think that if anyone wants to retire on the job or sabotage the company and can still look themselves in the mirror and have a clear conscience then I think they are doing themselves and the company a big disservice.

  I think there are enough good senior managers left at IBM that the effects of the saboteurs will be less and less over time. If I did not believe that I would already be gone from here.

• "Counterpoint**2" by "ancientblueconsultant". Full excerpt: Jleti, you remind me of an old colleague with a similar handle, named Jetskiman. He was always shocked that I had such access to the Blue Pig's inner circle yet was so much against them. What he didn't understand was that the worse enemy of the IBM inner circle is one of them who has regained her/his conscience and strives to make some good as a possible way to reverse past evils. The ultimate fighter is one who has learned to put their conscience aside and work with the devil incarnate as he schemes with others to stab it in the back one day.

  Now you are using the typical MBA brainwashed excuse for bad leadership. The blame cannot be management since not all managers are not bad, some are good. You are starting with the premise that a company cannot be inherently bad, just be maligned because of a few bad managers. Don't forget that the legal purpose of a corporation is to deflect legal liability from individuals and to legally avoid taxes. According to you, a company can be redeemed if only you work the system. You have "humanized" the brand into a good, comfortable emotional crutch.

  Just like communism, a company like IBM cannot be redeemed. The only way to fix it is to force its brand failure in the market place which will institute revolutionary change that will eventually decapitate and dishonor the ingrained, self adulated leadership.

  First of all, IBM is very hierarchically controlled. This came about way before your time and just after I arrived, when there was an attempt at corporate directional change and innovation which was considered by the then senior leadership an act of insubordination. In one Friday night, every leader of the company above a certain level and below a certain level (let's call it around the director level) was canned. What that famous action did was force every manager into submission. So now, every manager must follow the directive and be part of the collective or they are canned very quickly. In essence, fear of reprisal oils the wheels of progress of the company. Even the "Extreme Blue" program has a way to instill that fear....in the "Staying Extreme" document they say "we will always be watching you"....so toe the line. You must lead, but always team. Give up your individuality. Where do you think the old IBM term "You can be a wild duck as long as you stay in formation" comes from? They just re-packaged it for Gen Y and Z consumption with the new words of innovate and team!

  In my 30+ years in the pig, I met many good senior executives. However, I met not one morally driven and unafraid leader. When you go from middle management to senior leadership you surrender your conscience and your morality for the good of the team (formation). Some can do it readily (and acquire a taste for greed and meanness) and some need drink, sex or other "assistance" to keep going.

  IBM has good managers. The problem is that in a hierarchical big business there is no room for good, just subservience without conscience, always following the orders from above while you scheme to get a better position. In a hierarchical multi-national big business, you truly sell your soul to the devil of financial greed.

  You are right, there is no utopia in big business. There is only cruel, heartless leadership, desperate workers eager to leave and ignorant adulation from those who don't know which camp they are in yet.

  Don't worry. You will eventually realize it. The only question is a matter of when. Maybe very late, when the new young "Hitler Youth" and management begin to exclude you and you start sensing you are on the wrong side of the tracks, but with only burned bridges behind you.

• "Resistance is another word for it, too" by "Frank Cary". Full excerpt: Prior to the coasting that I did in that last increment of my career at the IBM Company, DM Bingham and I came up with another way to express our feelings for the Pig.

  There is a cumbersome and complicated software tool for compiling the many costs of services and h/w and s/w products that go into an SO deal. Its output goes into the Pricing Tool we all love so much.

  The first tool has long equations calculating costs in code that only a Fortran coder could love. Those equations are editable without traceability if one knows how. Thus the input can look perfect: truly aggressive cost reduction percentages and pitiful staffing levels with Band 2 workers can be shown on the input lines, which is all the boneheads in Sales and Pricing look at. But the outputs that feed the pricing model were truly extraordinary and biased high.

  During our last 24 months together, no deal was won that we touched. To this day no one ever caught on either. Eating the dust of the IBM degrading management: pitiful but necessary. Exulting while spitting in Sam's soup: priceless.

• "I can relate to some of that ABC" by "civilliberty". Full excerpt: Whilst I only worked within IBM as a band 7 (though occasionally performing band 8 duties)I never felt motivated enough to really achieve for the company because of it's attitude towards its staff in general, and myself in particular. Had you observed me over a period of time , you may have concluded that I was useless baggage. Contrast that with my time at PWC (and since, now working as a in dependant contractor and working on more challenging assignments generally) and you would have seen / would see a more dedicated, capable employee receiving the accolades from the managers, both business and technical.