For the purposes of our discussions, we defined innovation as: using new ideas or applying current thinking in fundamentally different ways to effect significant change.
Clearly, innovation is today’s buzzword. It seems everybody’s talking about it. From industry leaders like Rupert Murdoch to industry-leading analysts like Tom Friedman, there is general agreement that commoditization and globalization are intensifying competition as we know it today. They are allowing all players to compete and only companies that innovate and find new ways to differentiate themselves will survive and grow.
After years of cost-cutting and efficiency campaigns, business leaders in companies of every size and across the industry spectrum are refocused top-line growth — and they’re seeing innovation as the means to achieve it. Two-thirds of the CEOs interviewed for the study agreed that major changes are on the way for their business. With market forces and technological advances all forcing significant change on the business, these organizations are being compelled to act in order to gain competitive advantage. They know that exponential growth lies ahead for those who can lead the innovation movement and seize opportunities to differentiate themselves. They see the need for a more expansive and unconventional view of innovation, as well as a need for a greater mix of innovation types. Product, service and operational innovations are no longer enough. Innovation must also include the business model.
So how are CEOs implementing business model innovation? They are re-prioritizing their innovation efforts . Business model innovation is now much higher on CEOs’ priority lists and it’s playing a more prominent role in their innovation efforts. But its importance does not negate the need to focus on products, services and markets, as well as operational innovation. In the survey, where CEOs could have placed all or none of their points on any single innovation type, CEOs took a remarkably balanced approached, giving business model innovation greater weight than ever. Business model innovation has come to the fore over the last few years. As one study participant pointed out, “ There’s no growth without changing ourselves and the industry itself.” And IT is viewed as a major enabler and source of support for all innovation efforts. So CEOs are changing the business model . Most are changing the organizational structure of their operation. They are implementing major strategic partnerships. They are combining their own expertise with the specialized capabilities of partners and leveraging shared service centers . They are seeking alternative financing and investment vehicles. In general, they are pursuing new business opportunities outside their comfort zone, creating value not just for their company but for their industry as a whole. For these companies, innovation occurs proactively rather than in response to a specific events or competitive threats.
So, you will say, what did we learn from all these interviews? First of all we saw that CEOs said that their o rganizations are bombarded by change, and many are struggling to keep up Also, CEOs view increasingly demanding customers not as a threat, but as an opportunity to differentiate Nearly all CEOs are adapting their business models—two-thirds are implementing extensive innovations CEOs are moving aggressively toward global business designs, with a lot of change to get there Finally we learned that financial outperformers are making bolder plays These key insights have led us to formulate the five KEY characteristics of THE ENTERPRISE OF THE FUTURE: The enterprise of the future is: Hungry for change: The Enterprise of the Future is capable of changing quickly and successfully. Instead of merely responding to trends, it shapes and leads them. Market and industry shifts are a chance to move ahead of the competition. Innovative beyond customer imagination: The Enterprise of the Future surpasses the expectations of increasingly demanding customers. Deep collaborative relationships allow it to surprise customers with innovations that make both its customers and its own business more successful. Globally integrated: The Enterprise of the Future is integrating to take advantage of today’s global economy. Its business is strategically designed to access the best capabilities, knowledge and assets from wherever they reside in the world and apply them wherever required in the world. Distruptive by nature: The Enterprise of the Future radically challenges its business model, disrupting the basis of competition. It shifts the value proposition, overturns traditional delivery approaches and, as soon as opportunities arise, reinvents itself and its entire industry. Genuine, not just generous: Enterprise of the Future goes beyond philanthropy and compliance and reflects genuine concern for society in all actions and decisions. So now, lets take time to go through eadh of these aspects in some more detail. We will focus on some key slides, although you will see that there are extra slides available for you if you want to dive even deeper. The slides we discuss during this training are marked with a dark blue DNA string at the top left hand corner!
CEOs are most concerned about the impact of three external forces: market factors, people skills and technology. Customer expectation shifts, competitive threats and industry consolidation continue to weigh on their minds. CEOs are also searching for industry, technical and particularly management skills to support geographic expansion and replace aging baby boomers who are exiting the workforce. They rated insufficient talent as the top barrier to global integration – even higher than regulatory and budgetary hurdles. CEOs also described how technological advances are reshaping value chains, influencing products and services and changing how their companies interact with customers.
SaaS enables companies of all sizes to adopt new ways of doing business quickly, easily.
IBM’s SaaS strategy revolves around three major plays. In some application areas, IBM offers SaaS to reach new customers and markets. The most notable of these is Lotus and the Bluehouse portfolio of solutions that were announced at Lotusphere in January 2008. The Bluehouse portfolio helps companies of all sizes to perform effective meetings with their customers, suppliers and business partners by addressing the preparation and follow-up stages as well as the meeting itself. For the past 4 years, IBM has operated a PartnerWorld program that helps ISVs to offer and market SaaS solutions. IBM offers a SaaS Community to partners that are interested in SaaS education, enablement and collaboration. More that 3,000 ISVs participate in the SaaS Community today. For those ISVs that utilize a combination of IBM Hardware, IBM Middleware and IBM Managed Hosting Services, IBM provides marketing support via the SaaS Specialty. More than 170 ISVs qualify for the SaaS Specialty today, using at least two technologies from IBM to deliver their SaaS solution. IBM’s General Business Services division works with leading SaaS vendors such as Salesforce.com and SuccessFactors to help customers adopt SaaS solutions. Services from IBM include Process and Change Management, Integration Services and Data Migration.
Choice of apps: business apps, infrastructure apps…first building block with lotus foundations stack…
Complete Software - Includes everything a small business needs to get up and running. Rapid Setup - working with business partners, appliances can be installed and configured in less than a day. Ongoing management and maintenance can be done remotely! First-Class Email and Collaboration - IBM Lotus Domino ® – t he real deal, customized for the SMB (no complexity of installation, setup, and configuration), and rolled into the price. Business Tools - Integrated Customer Relationship Management, Accounting, Document management, etc. Stay in Charge - Easily host web sites (e-commerce capable), email, and file/print servers. Safety Net - Have backup copies of data created automatically. In case of disaster, recover quickly and easily: Off-site backup One button backup and restore Rapidly recover from catastrophic drive failure (server continues to boot) Keep Working - Work securely from remote – from branch or home offices, or from the road. Stop Spam & Viruses - Automatically combat spam and viruses from getting in the way of your work. Features: Unique Server Autonomics Self-managing and self-configuring SMB server Save time and costs in day-to-day IT management Integrated Business Applications for SMBs Provide SMB Applications and increase business productivity Easy to deploy and available offline Data Backup : intelligent disk backup (idb) Hot-swappable disk based backup Disaster Recovery Full system recovery in just a few minutes High level of redundancy Network Security Self-configuring firewall Integrated AntiVirus and AntiSpam options IBM Lotus Domino Collaboration Email and shared calendars Create, share and print documents
Expand revenue opportunities by offering a full menu of services to customers: Installation & configuration (remote or on-site) Maintenance (routers, firewall, VPN, Anti-virus, Anti-spam, email) Basic network security Application support and development Networking services (multi-location) Backup and disaster recovery services (on-site, remote)
WHY partner with IBM
The Enterprise of the Future CEO Study Findings & IBM’s Approach to New Delivery Models Sean Poulley, VP, Lotus Online Collaboration Services IBM Software Group
Innovation Using new ideas or current thinking applied in fundamentally different ways to effect significant change How do we define “innovation”?
CEOs and analysts agree: Innovation is essential to growth “ The only source of profit, the only reason to invest in companies in the future, is their ability to innovate and their ability to differentiate.” - Jeffrey Immelt, Chairman and CEO, GE 2 “ Economic competition in the flat world will be more equal and more intense... the most important attribute you can have is creative imagination.” - Thomas L Friedman “The World is Flat” 4 “ The world is changing very fast. Big will not beat small anymore. It will be the fast beating the slow.” - Rupert Murdoch, CEO, News Corporation 3
IBM Global CEO Study 2006 - This is what CEO’s told us
Renewed focus on top-line growth
Cost-cutting and efficiency are still important but are no longer main drivers
Innovation drives profitable growth
Numerous external forces are bearing down on the organization
CEOs are re-prioritizing their innovation efforts
Business model innovation is a higher priority
Changing the organizational structure
Implementing major strategic partnerships
Combining own expertise with specialized capabilities of partners
Leveraging shared service centers
Pursuing business opportunities outside their comfort zone
Innovating proactively, not in response to a specific event or competitive threat
“ There’s no growth without changing ourselves and the industry itself.” - Study participant Product, service and marketing innovations Operational innovations Business model innovations IT enablement and support
IBM’s Global Study 2008 Now Identify five core traits of the Enterprise of the Future
Findings from 1,130 interviews
Organizations are bombarded by change, and many are struggling to keep up
CEOs view increasingly demanding customers not as a threat, but as an opportunity to differentiate
Nearly all CEOs are adapting their business models—two-thirds are implementing extensive innovations
CEOs are moving aggressively toward global business designs, deeply changing capabilities and partnering more extensively
Financial outperformers are making bolder plays
Core Traits of the Enterprise of the Future Hungry for change Innovative beyond customer imagination Globally integrated Disruptive by nature Genuine, not just generous 1 2 3 4 5
CEOs told us these three external forces will cause the most change for their organizations over the next three years Top 3 External Factors Source: IBM Global CEO Study 2008; n (2004) = 403, n (2006) = 760, n (2008) = 1130 Market Factors are still important but less dominant Technological Factors are steady at third position People Skills are as important as market factors “ Our inability to find talent has been an inhibitor to growth globally.” Lorman Correa, Presidente, Inelectra S.A. “ External factors affect me and my competitors equally. The differentiator is talent management .” Hector Ruiz, Chairman & CEO, AMD
Customers are familiar and watching this space for vendor solutions
Of customers using software appliances, almost half will deploy more in the next 12 months
IDC, "How the Evolution of Software Appliances Will Affect You, Doc # 210414, February 2008 n = 310 5% 14% 35% 34% 12% 0% 20% 40% 60% 80% 100% Have not heard the term before Not familiar with SWAs Not familiar, but understand Familiar with SWAs Test/using SWAs 58% 13% 40% 39% 2% 48% 0% 20% 40% 60% 80% 100% Have SWAs in prod (n = 23) Considering SWAs (n = 287) Have proactive plans to deploy SWAs in next 12 mos. Will decide on deployment as prod/vendors mature No current plans to deploy more software appliances
IBM - Enabling IT innovation and disruption….. easy to acquire online services and applications to reach new customers Helping ISVs to offer and market SaaS applications
Deliver a set of services that dramatically simplifies and improves the business interactions you have with your customers and partners
Provide the essential business services that every workgroup needs in a way that is simple to acquire and easy to use
Set of integrated collaborative & social networking services for business connected to relevant business services and applications
Seamlessly work with people – outside or inside your company
Streamline communications and interactions with business partners and customers
Bring essential people and business information together quickly and easily
Create a business network of connected businesses
easy to acquire online services and applications to reach new customers
Introducing “Bluehouse” http://bluehouse.lotus.com A set of integrated Web 2.0 collaboration services that allows businesses to connect and work together easily Work better beyond the boundaries of your company Provides the essential software to help teams of people work together Securely connect from anywhere, anytime Focus on business, rather than worry about IT easy to acquire online services and applications to reach new customers
Blue Business Platform Choice of Optimize & Pre-configured Applications Powerful Business Systems Always Connected with Built-in Security & Resilience Single Point of Contact for Service & Support Application Integration Toolkit + + + Available from: IBM Hardware and Software Business Partners, ISVs and their resellers IT delivered the way SMBs require easy to acquire online services and applications to reach new customers