IBM Finance.

On Day 4 05.20.10 Alan Knight who was the director of finance for IBM Global Financing presented the discussion on IBMs role as an option for financing in the global market place especially IBMs role as a service center in Hungary around the world. Before Alan went into financing he was an accountant for Price Waterhouse Coopers in the U.K. after graduating from Oxford. He left accounting in search for more engaging opportunites. In 1995 he joined IBM with the Global financing credit corp. He also got his start with IBM working with the IRS (International rely systems) for five years in Australia, Italy and Germany. He was a U.K. manager in accounting for IBM and then became an operations manager after two years.

The Agenda for the discussion that we had was to go over the culture, the Hungary service center, and IBM Global financing. IBM as a global company has its head quarters in Armonk, N.Y. where 60% of their revenue is generated outside of the U.S. serving 170 companies. In 1936 IBM was founded in Hungary as (Watson Electronic Tabulator LTD) through Thomas Watson. One of the biggest focuses of IBM is their on demand "peaks in usage" IBM today consists of 58% services with Global financing consisting of $95.8 billion of their revenue. He went on to discuss how IBM is a value company with a focus on dedication, innovation, trust and personal responsibility. The ISSC of Budapest is made up of sectors namely Human Resources Service, Accounts payable, Global Procurment, Strategic Sourcing, IBM Global Financing, and IBM EMEA Accounting. IBM Global financing is used as a common company support system along with HR, Business controls, Quality LIT and operations.

The benefits of financing are how you can have a complete multivendor solutions in one contract. In other words IBM can become a one stop shop. You can lease out IBMs products while obtaining the financing for this product through them as well. The Finance function of IBM also had a transition to an on demand environment. This eliminates the risk of technology obsolescence. They have created payment schedules to match cash flow, and then adjust capacity to match demand. This means that they can add or upgrade capacity to meet dynamic business needs. This makes assets disposal easy at the end of the lease. With every price that IBM puts out for financing risk is priced in. All of their financing has a variable cost that isn't a purchasing price but rather a financing price. They are big on relational financing to keep existing customers.

IGF (International Global Financing) is a supplement to the bigger operations of IBM. The contributions to IBM are detailed as follows.
IGF (2009)
3,400 Employees ( < 1% of total company)
30 billion USD in assets.
24.4 billion USD in debt.
2.6 billion USD in revenue.

The IGF of IBM operates in 51 countries with three lines of business which are Enduser financing, Commercial financing, and Global Asset recovery. IBM has 5 different service centers in five different countries. Budapest is the main service center for IBM IGF.

When looking for areas of service centers they look for areas with people who have multiple language skills, a population with university skills, low crime rates, an area with a central European Universtiy, an area with good infrastructure, and investment grants as an incentive. Some difficulites are the challanging labor laws such as no working on a public holiday which they have actually been fined for.

The flow of their business actions consists of sales, credit, pricing, contract transaction, business support centers, accounting and financial planning.

Skills that they look for in an IBMer are great intellectual capacity, team players, learning ability and desire, fluent in english and former work experience with companies like IBM.