This is a new reality and to continue its rapid services revenue growth IBM is taking some of its best practices that it learned as an asset based company and is now applying them to the skills of its employees. In January 2004 IBM launched its Workforce Management Initiative (WMI) to develop a common expertise taxonomy to request, identify, assess and fulfill client resource needs. For example, if a client needs a French and Italian speaking consultant with a PhD in nanotechnology to be in Rome on June 25, WMI can find the best available IBMer or contractor as quickly as your can say Google. The US DOD is doing the exact same thing.
WMI will enable IBM to increase profitability and create a flexible resource pool and allow us to adapt to changing business conditions and market needs in a much more efficient and structured manner. Already well underway, this past year it has reduced the cost of our services business by more than $2.4 billion and has increased the visibility of resource deployment resulting in a 3-5 percent improvement in utilization.
So according to Bruce Richardson, Vice President, AMR Research, he believes this is a one of the seven supply chain trends AMR is tracking and IBM is ahead of the curve.