Tbr ep ibm_smarter_commerce_2012
 

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Technology Business Research is a different kind of research company. Our bottoms-up approach provides a look at the technology industry unlike anything you’ve seen before. We analyze company ...

Technology Business Research is a different kind of research company. Our bottoms-up approach provides a look at the technology industry unlike anything you’ve seen before. We analyze company performance in professional services, networking and mobility, computing and hardware, and software on a quarterly basis, leveraging our data to create industry benchmarks and landscapes that provide a business perspective on leaders and laggards and their business plans. We are experts in the business of technology.

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Tbr ep ibm_smarter_commerce_2012 Tbr ep ibm_smarter_commerce_2012 Document Transcript

  • TBR 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 Smarter Commerce solutions help clients attract the empowered customer and grow profitably IBM: Smarter Commerce Global Summit 2012 Madrid, May 22-24, 2012 Author: Elitsa Bakalova (elitsa.bakalova@tbri.com), Professional Services Practice AnalystTBR PerspectiveAs the saying goes, the customer is king and he is always right. Over the last few years the customer has evolvedfrom being right to being empowered, taking control over and influencing brand preferences and purchasingbehavior. Never before has access to information been as seamless and abundant as in the past few years.Through the Internet, social media sites and mobile connectivity, consumers are able to gain access to a broadrange of peers and experts to evaluate products and services prior to purchase, changing the commerce game byreducing vendor control of the market message.Over the past two years, IBM has invested in the development of its Smarter Commerce business both organicallyand through acquisitions. IBM positions Smarter Commerce as a key pillar of the broader Smarter Planet initiative,which will support the company’s growth through 2015. IBM’s Smarter Commerce solutions set encompass a widerange of software and services that provide businesses with the tools to both adapt to and capitalize on themature buying behavior of “the empowered consumer,” as IBM calls the new generation of consumers. Whileconsumers have the power to make drastic changes to their buying behavior, IBM’s Smarter Commerce solutionsset provides the counterbalance that helps improve the connection of businesses with the mature buying patternsof the empowered consumer. IBM continues to augment its Smarter Commerce portfolio with the latest social,mobile and cloud technologies, making its offerings even more attractive to clients. IBM’s high-valuetransformation capabilities, industry specialization and ability to integrate its offerings to cover the buy, market,sell and service commerce lifecycle and provide cross-IBM solutions make a unique value proposition. This valueproposition helps IBM gain traction with clients in both developed and emerging economies, or as IBM calls them,major markets and growth markets, respectively.In the developed economies clients often look to replace and/or refresh their legacy IT with Smarter Commerceand cloud-enabled solutions, as C-level executives find the role of IT increasingly important as it shifts from an
  • TBRinfrastructure builder and maintainer to a business value creator. In the developed economies, IBM often satisfiesdemand through short, proof-of-concept engagements that show documented ROI/TCO gains from thedeployment and then quickly scale up into broader-based transformation engagements. At the same time, a greenpatch opportunity exists in emerging economies where local clients as well as globally expanding multinationalenterprises need fast access to proven end-to-end solutions embodied in the Smart Commerce initiative.Event OverviewBetween May 22 and 24, 2012 at the Hotel Auditorium Madrid, IBM’s Smarter Commerce Global Summit 2012gathered more than 1,750 people, including 65 client speakers, 353 business partners from the Smarter Commerceecosystem, 21 business partner sponsors, 34 journalists, clients and IT analysts to learn more about IBM’s SmarterCommerce initiative and share stories around Smarter Commerce transformation. The event provided theopportunity for attendees to choose from more than 150 business and technical breakout sessions focused on newtechnologies, best practices, industry perspectives and visionary thinking that helps enterprises improve theirbusiness.Smarter Commerce is a cross-IBM business and covers the entire commerce cycle of buy,market, sell and serviceThe empowered consumers, who use multiple channels to buy goods and are influenced by social media andcommunication with each other, force change onto today’s businesses. Business leaders must redefine the valuechain to grow profitably. Businesses look to implement personalized marketing models to every customer, sell toclients in any location, prepare supply chains for the unpredictable and enable customer service to anticipateconsumers’ desires before customers realize these wants themselves.In 2011, IBM launched Smarter Commerce, calling it a five-year journey and emphasizing its focus on providingintegrated solutions across IBM, including software and services, targeting four key commerce functions: buy,market, sell and service. Analytics and cloud computing, two core areas of investment for IBM, are also embeddedin Smarter Commerce, enriching the solution set, providing clients with broader change opportunities andwidening IBM’s growth paths. While not advocating clients to buy only IBM solutions, the firm uses its cross-IBMsolution capabilities to provide unique offerings and drive competitive differentiation. The integrated offeringscapabilities play a key role in IBM’s global expansion in emerging economies as clients in such regions adopt cross-IBM solutions to drive holistic commerce transformation to outpace multinational competitors entering localmarkets.IBM increasingly focuses on the chief marketing officer (CMO) decision maker, introducing IT solutions into thesales and marketing organizations and driving value for the enterprise, improving marketing effectiveness andrevenue generation. The firm continues to scale its consulting expertise to help CMOs transform their enterprise,which will further IBM’s opportunities to cross-sell other IBM services, such as systems integration andoutsourcing.IBM leverages acquisitions and partner technologies to create its Smarter Commerce portfolioTo enable its market expansion, IBM is leveraging its financial strength to fund a series of acquisitions as it buildstoward providing a software portfolio that covers the full commerce lifecycle of buy, market, sell and service. Theacquisitions of Web commerce company Sterling Commerce, marketing analytics firm Unica, marketingoptimization firm Coremetrics, procurement company Emptoris, merchandising company DemandTec andcustomer experience management company Tealeaf account for some of the $3 billion IBM spent on commerce-related acquisitions and investments to form the baseline of functionality in Smarter Commerce. IBM alsoleverages alliance partners, including solutions and services providers Booz & Co., Sogeti and HCL, to augment its www.tbri.com
  • TBRofferings and capabilities. IBM assembled a solutions center at the Smarter Commerce Global Summit 2012 toshowcase its offerings and give the opportunity for attendants to meet with IBM’s alliance partners.IBM’s Smarter Commerce services help clients accelerate business outcomesIBM understands it needs more than a rich portfolio of Smarter Commerce solutions, and is building out IT servicesto support clients’ commerce transformation journeys. IBM Global Services, including Global Business Services,which provides consulting, SI and application outsourcing, and Global Technology Services, which provides ITO,BPO and integrated technology services, comes into play to round out IBM’s end-to-end capabilities. TBR Smarter Commerce Services and Solutions Consulting and solutions across buy, market, sell and service Systems Strategy Analytics Customer Experience Integration BPO/Global Process Services – procurement, Management and Platforms – payments, digital content management, contact center applications management, hosting, cloudSource: IBM Global Summit 2012 MadridWith Smarter Commerce transformation being largely consulting-led, IBM benefits from the depth of its consultingcapabilities and its ability to gain access to the C-suite and pitch its services portfolio at high levels inside customerorganizations. This C-level relationship excellence facilitates cross-selling opportunities across consulting, SI andoutsourcing. Some clients look at functional changes, which lead to smaller-scale Smarter Commerceengagements, while others look for larger-scale transformation, creating opportunities for IBM to pitch its cross-IBM offerings.IBM leverages Business Value Accelerators (BVAs); these short engagements last four to six weeks and helpcustomers identify their needs, benchmark their current commerce strategy, identify goals and establish roadmaps to achieve them. For example, the new Mobile Strategy Accelerator addresses clients’ needs to betterengage with customers, integrating mobile device capabilities into the business. IBM designed the accelerator tohelp clients develop an enterprise level mobile business vision and a portfolio of mobile capabilities andapplications. The engagement results in an actionable roadmap optimizing the client’s mobile opportunities andaccelerating time to market. IBM’s ability to understand client capabilities through the BVAs, apply benchmarksand best practices, set the initiatives, and put them in a logical sequence helps the firm meet the specific needs oforganizations rather than just provide a set solution.IBM leads in accommodating customer demand for “shared-risk pricing,” aligning its compensation to clients’business outcomes; for example, IBM’s pay is linked to achieved results such as revenue and/or profitimprovement for the client. The use of such outcome-based billing rather than traditional time and materials andfixed price signals the company’s commitment to driving value for its clients.While IBM has Smarter Commerce opportunities across the globe, clients in emergingeconomies are more inclined to take on cross-IBM offerings and adopt solutions fasterThe globalization of enterprises and their quick market expansion into emerging economies pushes localenterprises across fast-growth countries in APAC, LATAM and EMEA to act quickly and develop and transform theirexisting commerce structures to retain market share in their home markets. In turn, this creates opportunities forIBM to gain traction with clients in emerging economies and drive speedy adoption of the IBM Smarter Commerce www.tbri.com
  • TBRsolutions. Clients in emerging geographies have less legacy infrastructure in place, which helps IBM not only to actwith speed in terms of implementation but also to provide larger-scale, cross-IBM solutions to clients in suchregions. This generates benefits for IBM’s three core business segments including services, software and hardware.For example, clients in China and Brazil have a large amount of trust in the IBM brand; they see IBM as ‘the onlycompany that can do everything’ and are inclined to adopt a range of IBM solutions and take on broadertransformation initiatives based on that trust. In short, IBM is in vogue in emerging economies. TBR believes thisenables IBM’s penetration and expansion in emerging economies when compared to the developed economies. Atthe same time, clients in emerging economies have a high focus on measurable business outcomes, pushing IBM todrive value for its clients and be accountable for business and financial results achieved.The number of industries covered in Smarter Commerce will continue to increase as clients lookto improve customer relationships and operating modelsIBM started its Smarter Commerce initiative by focusing on five key industries, including retail, electronics,consumer packaged goods, telecommunications and banking. While retail represents the largest and most maturesegment in terms of Smarter Commerce adoption, telecommunications and banking show signs of quickly pickingup speed. In telecommunications, IBM sees increased Smarter Commerce activity on the consumer side, as inmobile retail, as well as on the B2B side. In banking, IBM works with its customers on improving clientrelationships, adopting mobile commerce capabilities and reshaping their business strategies. At the same time,increasing demand for commerce transformation helps IBM expand its list of Smarter Commerce industries.Healthcare, a growing industry for IBM, needs digitization and innovation to improve healthcare quality. In theU.S., IBM is supporting the healthcare reform by helping payers capture new consumers and link with providers oncollaborative care. In the U.K., IBM works with the utilities industry on smart metering, helping providerstransform customer care and billing and drive digital transformation. IBM provides Smarter Commerce solutions tothe U.K. public sector to transform customer/call services around visa applications, while globally, IBM’s focus forthe public sector is to improve citizens’ service structures and help government agencies, such as customs andborder agencies, streamline processes. Media & entertainment and insurance are also up-and-coming industriestargeted for IBM’s Smarter Commerce solutions.Impact and OpportunitiesIBM sees an attractive market opportunity in Smarter Commerce, and TBR expects the firm to aggressivelycapitalize on the prospects of increasing its market share across the globe. Smarter Commerce is based on a richportfolio of offerings and IBM has deployed industry best practices for years to take a leading position on themarket. According to IBM, the global Smarter Commerce market will reach $90 billion in 2012, including service,software and hardware, growing at 14% CAGR through 2015 across all major industries and geographies. Inaddition, the firm estimates the market for Integrated Commerce solutions that cover the buy, market, sell andservice cycle will grow by 28% CAGR through 2015, allowing IBM to drive sales across its broad portfolio andsupport wider transformation initiatives for clients. While IBM has well-developed software capabilities to capturea share of the IBM-estimated $20 billion Smarter Commerce software market in 2012, TBR expects the firm toramp up its services and hardware sales initiatives to compete for the $70 billion spend on services and hardware.IBM’s strong industry specialization in Smarter Commerce will help the firm drive growth across key segments,including retail, banking, healthcare, insurance, media, entertainment & electronics. IBM also has an edge over itscompetitors, since few of the IT vendors can match the continuum of what IBM offers in Smarter Commerce (i.e.,services and software and integration across the entire commerce cycle of buy, market, sell and service).Technology Business Research, Inc. is a leading independent technology market research and consulting firmspecializing in the business and financial analyses of hardware, software, networking equipment, wireless, portaland professional services vendors. Serving a global clientele, TBR provides timely and accurate market research and www.tbri.com
  • TBRbusiness intelligence in a format that is uniquely tailored to clients’ needs. TBR analysts are available to furtheraddress client-specific issues or information needs on an inquiry or proprietary consulting basis.TBR has been empowering corporate decision makers since 1996. For more information please visit www.tbri.com.©2012 Technology Business Research Inc. This report is based on information made available to the public by the vendor and other publicsources. No representation is made that this information is accurate or complete. Technology Business Research will not be held liable orresponsible for any decisions that are made based on this information. The information contained in this report and all other TBR products is notand should not be construed to be investment advice. TBR does not make any recommendations or provide any advice regarding the value,purchase, sale or retention of securities. This report is copyright-protected and supplied for the sole use of the recipient. Contact TechnologyBusiness Research, Inc. for permission to reproduce. www.tbri.com