IBM practice looks beyond borders

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IBM Corp. will announce today a new practice that will assist companies in globalizing their Internet strategies. The practice, GoGlobal, will be available in 160 countries but concentrate on the U.S., U.K., Ireland, Germany, France and Japan.

New York-based GoGlobal, which is part of IBM consulting unit IBM Global Services, is intended to help Fortune 500 companies and dot-coms with services such as:

• Planning a global Internet strategy.

• Consulting on cultural, language and regulatory e-business issues.

• Web site construction and hosting.

• Building transborder Web payment platforms.

IBM's move comes amid a flurry of reports on e-business globalization--including warnings that the U.S. is lagging. By 2004, only 30% of 602 million worldwide users will be from the U.S., according to a recent report from International Data Corp. Yet today, U.S. companies garner only 10% of their e-commerce revenue from foreign users.

Additionally, Forrester Research Inc. indicates U.S.-based b-to-b sites turn down half their international orders because of problems such as an the inability to capture foreign addresses.

Other Web players--Razorfish, for one--already do much the same work as GoGlobal. None, however, have IBM's global breadth. GoGlobal's core team now consists of 20 people and will include 100 within a year. Additionally, IBM Global Services' 138,000 employees, scattered in offices from Paris to Tokyo to Frankfurt, will regularly join in on projects, said Mark Wiesman, e-commerce offering executive.

Regulatory expertise

IBM's key advantage over incumbents will be its e-business regulatory expertise, said Larry Hawes, analyst at Delphi Consulting Group Inc. a Boston Internet consultancy.

"B-to-b is not limited to geography," said Hawes. "IBM can bring its global presence and understanding of the legal markets into play."

Indeed, IBM is betting the international taxation labyrinth will drive business its way, Wiesman said. "Global companies doing business on the Internet are dealing with various taxing schemes. Europe has VAT taxes [value-added taxes], for example. Plus, there are privacy issues in the U.S. and Europe that are different."

GoGlobal operates under the premise that business and cultural issues, not technical issues, stand in the way of companies succeeding in e-business outside their borders, Wiesman said. For example, a U.S.-based exchange might expect its customers in Denmark to use Visa cards, because that is typical of its domestic clients, said Mads Toubro, global offering executive. But in Denmark a debit card, Dankort, is the preferred e-business currency.

B-to-b focus

Much of GoGlobal's focus will be on b-to-b, especially in intrinsically global businesses such as finance and manufacturing, Wiesman said.

It is launching now largely because of an onslaught of requests from U.S. customers for global services, he said. IBM is piloting the program with 10 companies, which Wiesman would not reveal.

GoGlobal's costs vary widely. An introductory two-week strategy consulting session costs between $30,000 and $40,000. From there, implementation can last months and costs hundreds of thousands of dollars, Wiesman said.

The practice will be advertised in ongoing campaigns for IBM Global Services, Wiesman said. He could not offer details on venues or timing, citing early planning stages.

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