Fortune: You head IBM’s
consulting and services business, which traditionally sells to information technology professionals. Now you are focused on what you call a front-office agenda.
Van Kralingen: We are seeing a big shift in how IT is purchased. It is becoming the priority of “CXOs”: corporate leaders, public officials, mayors, and people who lead big functions like finance and human resources. The purchase decision is moving from the technical part of the shop to front-office leaders. We believe 61% of IT spending will be made or shaped by lines of business, as opposed to the IT department.
This is where “big data” comes in, right?
Yes. The business agenda is being empowered while it’s also being challenged by the plethora of structured and unstructured data. Getting it right allows businesses to shift from automating processes to focusing much more on enabling them to do things. An example would be giving real-time data to retailers to better stock store shelves and to deliver that information to a mobile device.
How is this shift affecting IBM’s culture?
It’s leading to some interesting opportunities for us to fuse what used to be two businesses, research and consulting. In the past we’d do really cool work in research that were one-off projects. Now so many of our clients are experimenting with how to use data to engage with their clients that a lot of the mathematical research we do can scale across many clients within consulting.
Your buzzword for this is “runaway innovation.”
Right. Our clients understand that their organizations are now extremely transparent to customers. They will be rapidly evaluated. In order to segment and attack new markets they need to understand analytics, and they need it as a core capability.
You’re selling this service in what you call Interactive Experience, which sounds a lot like an advertising agency.
We call it a digital agency. We make sure our clients can deliver to their users and that everything works well on the back end and is safe and secure.
Your business is massive, but it’s not growing much. How do you address that?
Data will be the source of competitive advantage, the cloud will be the basis of business models, and engagement will be the way in which companies get and gain customers and employees. We’ve cut and trimmed a lot of things that don’t pertain to those. They are the essence of our business, and we believe they will drive growth.
Connected is an interview series with leaders of innovative organizations. Conversations are condensed and edited.
This story is from the June 16, 2014 issue of Fortune.