IBM's Digital Front Office paves the way for new routes to market for the firmDocument Transcript
T E C H N O L O G Y B U S I N E S S R ES E AR C H , I N C .
TBR EVENT PERSPECTIVE
IBM’s Digital Front Office paves the
way for new routes to market for the
IBM: Digital Front Office Day
London, Nov. 6, 2013
Author: Elitsa Bakalova (email@example.com), Professional Services Practice Analyst
The digital era changes buying behavior, as the balance of power shifts from business-controlled market messages
to crowd-sourced information gathering. Customers rely less on company-created marketing collaterals, instead
researching their purchases through the Internet from the device of their choice. IBM’s longevity stems from its
innate business sense and ability to harness technology to improve commercial productivity, and it has been ahead
of this phenomenon for quite some time. In 2011, IBM launched Smarter Commerce, a wide range of services and
software solutions that provide businesses with the tools to adapt to and capitalize on the mature buying behavior
of the empowered consumer, and improve vendor-customer connections. With success in high-value, early
adopter markets of retail, banking, healthcare, consumer products goods and automotive reaching a maturation
point, IBM extended its Smarter Commerce messaging play into a broader strategic initiative called Digital Front
Office, which combines IBM Smarter Commerce, social, mobile, cloud and business analytics.
To justify a market segment IBM expects to reach $77 billion by 2015, IBM references a study from its Institute for
Business Value. This study indicates that while 90% of the customers expect personalization, only 32% of firms
claim they effectively engage individual customers. IBM believes it can close this business gap through IBM’s Digital
Front Office. With customer experience at the forefront of IBM’s Digital Front Office, IBM leverages services and
technologies to transform the way people connect and interact with companies, organizations and governments,
thus generating value for everyone involved.
IBM regularly talks of addressing the new technology buyers. Large-scale, enterprisewide opportunities will still
exist from massive CEO-driven transformation engagements, while IBM will also target smaller customer platform
implementations and discrete focused work. These smaller opportunities require packaged offerings easily scaled
across low-cost delivery channels that will provide white space opportunity for its partner base and provide IBM
with “land and expand” opportunities in net new accounts.
IBM is not alone in its focus on this segment. Indeed, it is a crowded space, with Accenture one of its top rivals in
the CEO-led transformation space. On Dec. 3, Accenture launched Accenture Digital, a new growth platform that
combines the firm’s digital assets, software and services across digital marketing, mobility and analytics.
IBM compares favorably in head-to-head competition with Accenture and, being a solutions firm, exceeds
Accenture in software capabilities. While Accenture has its own marketing software, it often partners with
software vendors to augment its capabilities. IBM’s $6 billion annual R&D budget compared to $715 million R&D
spent for Accenture in FY2013, and integration of research in the Digital Front Office strategy, allows IBM to
differentiate from its competitor and spur innovation for clients.
On Nov. 6, 2013 TBR attended IBM’s Digital Front Office Day, held at the IBM Client Center in London. IBM
presented its capabilities and global perspective on Digital Front Office (DFO) and the approaches and methods
IBM uses for its work. IBM conveyed the information through a series of main keynotes followed by breakout
sessions that provided insights to some of IBM’s DFO work around the world, augmented by clients’ views on how
IBM’s DFO offerings are transforming their businesses, which generated a complete view of IBM DFO in action. The
conference succinctly highlighted the three pillars of IBM’s digital strategy:
IBM’s end-to-end solutions capabilities that cover creative, design thinking and innovation exceed most,
if not all, in the market.
IBM’s global scale provides it cost advantage due to labor arbitrage and the ability to build highly skilled
and scalable Centers of Excellence around emerging technologies.
IBM further leverages its global workforce through continued IP development, automating its services
delivery to maintain a cost advantage over its competition.
IBM drives holistic transformation for clients by integrating cross-IBM
capabilities and industry expertise
The whole of IBM’s offerings exceeds the sum of its parts. IBM differentiates from competitors by providing endto-end capabilities to deliver the full benefits of the DFO for its clients. The DFO emphasizes use of emerging
mobile, social, business analytics and cloud technologies and integrates IBM’s Global Business Services (GBS)
capabilities with IBM Software and IBM Research to drive holistic transformation for clients. IBM combines its
customer-focused strategy consulting in IBM GBS, its cross-IBM capabilities in IBM Big Data and Analytics, IBM
Smarter Commerce, and IBM Cloud Services and Technologies with IBM Design (which provides user experience
design services to customers), IBM Watson, IBM Interactive, the firm’s global interactive agency, and the IBM
Customer Experience Lab. IBM builds customer engagement platforms, transforms the customer experience,
drives business transformation across the buy, market, sell and service commerce life cycle and creates business
outcomes for enterprise and public sector clients.
The breadth of IBM’s products and services allows it to reach customers at different stages of technology adoption
and transformation along the commerce life cycle. Some clients embark on a broad transformation path, driven by
the CEO function that changes their entire go-to-market model. This option could entail the transformation of a
client’s marketing, sales and services functions through development of a business strategy and an operating and
delivery model, the leverage of customer analytics as well as development of a customer and digital strategy,
customer experience design and customer platforms. Other clients take a step-by-step approach, which can
include building and implementing customer engagement software from IBM’s Smarter Commerce offerings or
from major software partners such as SAP H N O L O G Y B U S Istarting withCa mobile or customer analytics program.
T E C and Oracle or N E S S R ES E AR H , I N C .
Whichever approach customers prefer, IBM leverages its business consulting capabilities in GBS to help clients
develop their digital strategies. IBM’s strategy consultants work with clients to address end-user needs and design
a transformation road map across the value chain through IBM’s Accelerated Visioning method, which delivers an
innovative and achievable strategy in 12 weeks. Industry-specific versions of the Smarter Commerce Maturity
Assessment tool allow IBM to assess client’s status based on individual needs tied to the client’s industry of
operation. The firm develops customer journeys, and provides interactive demonstrations and prototypes to show
the client’s future business status after the digital transformation.
IBM supplements key global hubs with regional and local delivery centers to
scale resource deployment and meet client needs on a case-by-case basis
IBM leverages its global delivery model to provide DFO, thus attracting local and multinational clients across the
globe. Local resources with industry-specific and domain-specific skills are combined with nearshore resources,
such as Egypt for mobile experts, and with global delivery resources such as India, China and Brazil, allowing the
firm to address specific delivery needs. IBM also leverages its network of Global Centers of Competence to
enhance its industry, solution and technical capabilities.
The IBM Labs, IBM Research and IBM’s own transformation provide additional
value to the DFO solutions
A core differentiator for IBM is its ability to integrate the IBM Labs, IBM Research and its experience around digital
transformation while developing digital road maps for its clients. The IBM Interactive Labs are leveraged to build
prototypes, develop applications that will be used by clients, support the consulting and sales teams during the
strategy stages and in the upfront sales cycle, and support the delivery of the project. The IBM Design Labs, joint
initiatives between IBM’s Corporate Marketing and Communications and IBM’s CIO organization, are developed
for critical IBM programs and used as incubators for new digital experiences at IBM. IBM applies what it utilized
and learned during its own digital transformation in offerings and engagements, improving clients’ customer
IBM’s Customer Experience Lab (CXLab), launched in March 2013, helps IBM invent the next generation of digital
experiences by focusing on the front-office transformation and leveraging IBM’s $6 billion annual R&D budget to
innovate at early stages and feed into future client solutions. A dedicated team of 100 researchers drive customer
experience and innovation, and draw on IBM’s 12 Research Labs with 3,000 researchers across the globe. The
CXLab advances digital solutions by creating and implementing innovation for clients. It combines digital
consultants from IBM GBS, industry and functional experts from IBM’s Research Labs and C-level client leaders to
redefine business models, improve customer experience and differentiate from competitors. The CXLab invents
across social, mobile, cloud and analytics, drawing on capabilities around the globe and ongoing partnerships with
clients. The CXLab works with clients on first-of-a-kind initiatives, which bring together IBM Research and clients to
test technologies on business issues, develop assets and commercialize IBM Watson technologies. Creative teams
with ideas apply technologies, develop prototypes and launch live solutions for clients.
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