Get a piece of IBM's mind - Business - research and development consulting services - On Demand Innovation Services unit

Chief Executive, The, May, 2003

If you were a CEO with a seemingly impossible technological challenge, wouldn't you like to have the world's best scientists solving it? And wouldn't it be great not to pay their salaries, just rent their minds?

As far-fetched as it may seem, that's what IBM is starting to offer. Big Blue, once solely a hardware and software provider, turned the technology world upside down in the 199 Os when it started offering consulting vices. Now it is trying to add a new element to its business: access to some of the 3,000 scientists who work at IBM Research, arguably the world's finest R&D machine.

The job of making all of IBM's gears mesh falls to Peggy Kennelly, 47, vice president of the company's On Demand Innovation Services unit. "This will be a historic transformation in Research," says Kennelly, a career IBM'er and mathematics graduate of the University of Virginia. "It is the first time Research has ever had an organization dedicated to being customer-facing. It's also a big change for the market. There isn't anybody out there who can do the same thing."

Kennelly comes from IBM's Business Consulting Services, which includes consultants from the former PricewaterhouseCoopers. The new On Demand offering can connect outside businesses with Big Blue's consultant/research scientist teams in a couple of different ways. In one scenario, IBM consultants will find a customer with a tough technological challenge. The consultants then turn to Kennelly, who scours the labs to find the right scientist. About 200 scientists have been earmarked for her, but she can also seek out others. In the second option, IBM researchers get in direct contact with a customer with a particularly vexing challenge; the scientists then bring in the consultants as part of the IBM team.

IBM announced the On Demand unit last November, and it started in earnest this January. It has worked on only 10 projects so far, but they offer a hint of what might be in store.

One CEO of a Midwest-based distribution company came to Hawthorne, N.Y, north of New York City, where IBM Research is headquartered. He was fascinated by IBM's "optimization" work, in which scientists develop different business models and tweak them to make them most effective. That's just what the CEO needed to help decide whether to offer regional or flat-rate pricing. IBM's scientists fixed him up with some brand-new algorithms. "What the researchers like is the ability to build something that is very complex," says Kennelly.

On Demand is also working with an auto company to mine information coming from service and call centers. It has helped a large government organization to optimize its transportation network, and another agency to scan millions of documents into a computer system and make them secure.

In most cases, Kennelly is dealing with top-level decision-makers. "Frequently, the projects are strategic to the client," she says. "We're trying to solve problems they can't solve on their own." Brains for hire, anyone?