Topic 1 enterprise pressures and the need for services innovation
•Télécharger en tant que PPT, PDF•
0 j'aime•557 vues
ACPS 2010, Module 6, Enterprise Pressures and the need for Services Innovation Opportunity is the mother of Innovation
![The opportunity in Service Transformation is 3-10x larger than many CXO’s understand Shared Services Traditional Optimization Percentage of Economic Opportunity Integrated Optimization Performance Improvement Opportunity Service Growth Innovation Service Model Innovation ,[object Object],[object Object],[object Object],Service Innovation Opportunity ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Traditional View of Service Opportunity Source: IBM Analysis Analysis of Service Innovation Opportunity Key Activities By Type of Service Innovation](data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///yH5BAEAAAAALAAAAAABAAEAAAIBRAA7)
Recommandé
Recommandé
Contenu connexe
Tendances
Tendances (20)
En vedette
En vedette (20)
Similaire à Topic 1 enterprise pressures and the need for services innovation
Similaire à Topic 1 enterprise pressures and the need for services innovation (20)
Dernier
Dernier (20)
Topic 1 enterprise pressures and the need for services innovation
- 1. Module 6 Services Innovation 1. Enterprise pressures and the need for services innovation
- 7. Customer satisfaction, a common senior management concern, are heavily influenced by service-related attributes Importance of Key Service Attributes To Overall Customer Satisfaction Source: IBM Survey & Analysis Research suggests that after a negative customer call center experience, 86% of customers are unlikely to buy again and 83% of customers are unlikely to recommend the company to others Source: Factiva. Product support via the web Paid product support after the purchase Ability of the retailer to provide service Warranty coverage Free product support after the purchase Product support via toll free number Return policy Financing at purchase Programming capabilities Delivery service Ease to redeem warranty Compatibility with the Internet or other products Ease of set up
- 9. Leaders recognize that real changes in service are both possible and profitable Case Study Provided service engineers with a 360° view of customer information 6% productivity increase 8% reduction in operating costs On track to save $100m over ten years Results Adopt a customer-centric approach across the entire service value chain Reduce costs through process improvements in planning and scheduling, service delivery, parts management, and contract administration and billing Increase profitability Transformation Objectives Inadequate visibility to all aspects of the data across the service value chain Too costly Make better use of services organization, but constraints of increasing staff or assets existed Transformation Drivers A leading provider of office technologies needed to drive growth in its services organization, but did not have the budget to increase headcount or investment in this division Case Study Launched a separate services division Projected first year incremental revenue $200-$300m Longer-term objective is a $1.0 billion business within 5 years Results Develop a service-based business to provide value to customers through risk sharing, access to key skills and technology, lower cost and more predictable time to market Establish a value-based pricing model leveraging the firm’s existing capabilities and intellectual property Transformation Objectives Flat market growth Two major potential growth market segments (computers and communications) were faltering Growth opportunities unavailable without a fundamental shift in the business model to improve the value proposition to customers Transformation Drivers A microelectronics supplier needed to redefine its business model and value proposition to customers in order to drive services growth Source: IBM engagement experience
- 10. Previous efforts to transform service have often been hampered by problems “ I have worked in services companies and product companies. I will state unequivocally that services businesses are much more difficult to manage …the skills required in managing services processes are very different … the business model is different . The economics are entirely different.” Lou Gerstner Former Chairman and CEO of IBM “ Who Says Elephants Can’t Dance” Service Innovation Barriers Source: Forrester Research
- 13. Enterprise pressures and opportunities IBM Global CEO Study 2006, multiple answers permitted IBM Global CEO Study 2010, point allocations products/ services/markets operations (processes) business model they must achieve... and want to innovate their... 2006 2010 In IBM’s interviews with hundreds of CEOs, they said: revenue growth cost reduction asset utilization risk management 20% 40% 60% 80% 100% 20% 40% 60% 80% 100%
- 14. Enterprise pressures and opportunities commoditization pressures new/increased competition global market opportunities adjacent market opportunities global volatility & disruption competing business models 65% 13% 22% CEOs: Extent of fundamental change needed over next two years A lot Moderate Little or no IBM Global CEO Study 2006
- 15. What could you do if all objects were intelligent… … and connected?
- 16. It’s time to take advantage of…. smart objects the connectedness of everything supercomputing for everyone information put to work collaboration & co-creation the marketplace for expertise the virtual corporation
- 17. products services business processes business models management and culture policy and society 35% CEOs/Leaders 24% Functional Mgrs 14% Division Mgrs 27% No Owner CEOs’ View: Primary Responsibility for Innovation Leadership It’s time to innovate IBM Global CEO Study 2006
- 18. How are you capitalizing on the new tools of innovation — and combinations of those tools — to differentiate your products ? And how are your competitors doing so? Are your products smart ? Do they talk to each other? How do they provide you additional data about your customers’ purchase, use and disposal of your products? products << Back to Chart #6 HONDA has become the first car manufacturer to equip vehicles in the United States and Canada with an in-car navigation system that uses an advanced speech recognition interface and text-to-speech capabilities. The system allows drivers to simply say city and street names in their natural voice to receive turn-by-turn voice guidance to their destination. MAYO CLINIC physicians, physicists and engineers developed a new MRI coil that improved hand and wrist imaging. Each one was originally hand built, but IBM engineers collaborated with Mayo to turn the MRI coil into a manufacturable product, while preserving its industry-leading imaging capability.
- 19. How can new business and technical capabilities deliver higher value to your customers? What can personalization, real-time analytics, self-service, and network-enabled services do to differentiate your company? Is your customer care as responsive and as cost-efficient as it could be? services << Back to Chart #6 BOULANGER , a French electronics retailer, needed to distribute new information daily about products and offers to its stores and consumers. It can now update Internet, store, and catalog systems simultaneously, making it easy to create cross-selling and up-selling opportunities. Energy company OXXIO will work with IBM to provide their customers with a digital meter that can be read remotely. Consumers linked to the Oxxio network will not need to send in meter readings manually. This innovative "smart meter" will help consumers save energy by managing usage at home and decrease the risk of late or inaccurate invoices.
- 20. How can you conceive of, implement, integrate and manage your processes for competitive differentiation ? Is your supply chain the most productive and efficient in the industry? Does your CRM system produce the highest customer satisfaction? Is your product development achieving the best time-to-market? Are your finance and accounting costs the most effective? business processes << Back to Chart #6 JABIL CIRCUIT has a 55,000+ workforce in over 40 facilities around the world. Acquiring additional plants required the integration of disparate processes. Building a core set of processes for its plants yielded 60% reduction in integration time and increased flexibility in implementation sequencing. AAA CAROLINAS had to expand its business, lower costs and improve customer service to compete in a national market. The AAA affiliate embraced an IBM-based service-oriented architecture solution that enables it to cross-reference customer data and create cross-promotional marketing campaigns. This helped result in a 60% customer acquisition and retention spike.
- 21. How can you use innovation tools and collaborative approaches to overturn the conventional wisdom ? How can you combine those tools and new ways of thinking to increase productivity , generate revenue, approach customers, and leverage your partners ’ scale and expertise? How do we make you the disruptive force in your industry? business models << Back to Chart #6 PARCELHOUSE , a logistics solution provider, was growing fast and its systems couldn’t support growth. They deployed e-business hosting for a flexible platform with pay-per-use cost structure resulting in a 200% user increase without raising costs -- 80% cheaper than in-house. DELTA FLUID PRODUCTS , which makes valves and fittings for gas lines and other critical environments, wanted to be the first in the industry to provide same-day delivery. IBM and Business Partner Frontline helped make that a reality by fitting the UK company with an enterprise-wide ERP system that has helped the client get a 20% reduction in inventory, a 30% increase in inventory turnover, and faster customer service.
- 22. What’s getting in the way of truly differentiating your company? Are there legacy behaviors , unnecessary financial models , and organizational structures that can be reengineered? How can we use your partnerships, new models and practices, and IBM’s assets – and our own experience – to help change the way your company works ? management & culture << Back to Chart #6 VÄGVERKET , Sweden's National Road Administration, expects to reduce traffic, increase accessibility, improve the environment, and raise funds for other initiatives through a new road-usage solution that charges a small fee for driving in central Stockholm. NORTEL and IBM established a joint development center to design and develop a next-generation suite of communication products and services for the global needs of our joint customers. This has resulted in new levels of R&D collaboration, reduced R&D costs, and the ability to quickly introduce a broader range of products.
- 23. What potential exists in partnerships with other companies, governments, and nonprofits to create breakthrough innovation? How are schools preparing the next generation of your employees? How are regulations and policies enabling open collaboration and shared intellectual capital? How can we innovate together ? policy & society << Back to Chart #6 IBM has joined AUTOSAR , a consortium of automotive companies and technology firms devoted to standardizing a platform for in-vehicle, electrical/electronics and software systems. As a Premium Member, IBM is working with AUTOSAR to create and to implement open standards in vehicles. The NATIONAL DIGITAL MEDICAL ARCHIVE stores digital images in a single, accessible database, which doctors and researchers use to find patterns in the images from mammographies. Those patterns can lead to accelerated treatment and prevention strategies in the fight against breast cancer. Individual patients can contribute to the project, access and manage their own records, and share them with the doctors they choose.
- 24. Appendix
- 26. Enterprise pressures and opportunities Percent of consumers switching brands at purchase due to online information Access to online information negatively affects brand loyalty as consumers switch brands at purchase... ...compounded by their willingness to purchase products from nontraditional providers. American Interactive Consumer Survey, 2002, Dieringer Research Group. 4,000 survey respondents, all from U.S., combination of online and clicks and mortar shoppers, as reported by IBM Institute for Business Value, The Specialized Enterprise commoditization pressures adjacent market opportunities global volatility & disruption competing business models global market opportunities new/increased competition Cars Music Movies Brokers Games Airlines << Back to Chart #3 UK Germany France Italy
- 29. Enterprise pressures and opportunities commoditization pressures new/increased competition competing business models global market opportunities International Monetary Fund, World Economic Outlook database, Sept 2005 ; Centre for Research on the Epidemiology of Disasters/ISDR adjacent market opportunities global volatility & disruption Global reported economic damages from disasters Average spot oil price << Back to Chart #3 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 US$/barrel 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000 US$* *noncurrent value
- 30. Enterprise pressures and opportunities commoditization pressures new/increased competition global market opportunities adjacent market opportunities global volatility & disruption competing business models Of CEOs already focused on business model innovation... ... 83% think it likely that changes in a competitor’s business model will change their industry Likelihood that changes in a competitor’s business model could result in a radical change to the entire landscape of the industry. (percent of business model innovators; values rounded) IBM Global CEO Study 2006 << Back to Chart #3 45% Somewhat likely 38% Quite likely 17% Not at all likely
- 31. the connectedness of everything supercomputing for everyone information put to work collaboration & co-creation the marketplace for expertise the virtual corporation smart objects << Back to Chart #5 logic memory hard disk storage While the number of transistors per square inch on integrated circuits doubles roughly every 18 months (Moore’s Law)... ... more storage can be purchased each year for the same price. Semiconductor Industry Assoc. ; Seagate (as reported by IBM Institute for Business Value: The Specialized Enterprise ); Pricewatch
- 33. supercomputing for everyone information put to work collaboration & co-creation the marketplace for expertise the virtual corporation smart objects the connectedness of everything << Back to Chart #5 Internet World Stats 0.4% of world population 15.7% of world population
- 35. information put to work collaboration & co-creation the marketplace for expertise the virtual corporation smart objects the connectedness of everything supercomputing for everyone << Back to Chart #5 Global forecast of grid computing spending, 2003-2008 $ Billions IBM Institute for Business Value, The Specialized Enterprise
- 37. collaboration & co-creation the marketplace for expertise the virtual corporation smart objects the connectedness of everything supercomputing for everyone information put to work XML = Extensible Markup Language ETL = Extract, Transformation and Load << Back to Chart #5 EIM Customer Data Integration EIM & Master Data Management EIM Technology: Analytics EIM & Compliance EIM Technology: ETL Strategic Metadata Management EIM & Enterprise Architecture EIM Organization EIM Technology: XML EIM Governance Enterprise Information Management Maturity Level and Self-Assessment for All Regions Rating (scale of 1 to 7) ” Gartner Study on EIM Highlights Early Adopter Trends and Issues ,” by David Newman, Feb 7, 2006 4.40 4.50 4.60 4.70 4.80 4.90 5.00 5.10 5.20 4.95 4.78 4.84 4.86 4.83 5.10 5.05 4.82 4.68 4.78
- 39. the marketplace for expertise the virtual corporation smart objects the connectedness of everything supercomputing for everyone information put to work collaboration & co-creation << Back to Chart #5 Business partners Customers Consultants Competitors Associations, trade groups, conference boards Academia Internet, blogs, bulletin boards Think tanks Other R&D (internal) Sales or service units Employees (general population) IBM Institute for Business Value, CEO Study 2006 5% 15% 25% 35% 45% 45% 35% 25% 15% 5% CEOs: Sources of new ideas and innovation “ We have...today a lot more capability and innovation in the [competitive] marketplace...than we [could] try to create on our own.”
- 42. smart objects the connectedness of everything supercomputing for everyone information put to work collaboration & co-creation the marketplace for expertise the virtual corporation << Back to Chart #5 $ Billions CAGR 102% Web-services-based professional services forecast IBM Institute for Business Value, The Specialized Enterprise
Notes de l'éditeur
- In 2006, CEOs were most concerned with issues like revenue growth, cost reduction, asset utilization and risk management. In this most recent survey, those issues didn’t go away by any means, but we dug a little deeper this time to find out how they thought they were going to be able to achieve those goals. Two-thirds of them said definitively that they’re looking to innovate. But they didn’t all agree about what they needed to innovate. Those who are looking to innovate their business model seemed to feel that products and services can be copied, but the business model is the true differentiator. The business process innovators think that’s the toughest thing for the competition to duplicate, so that’s where their competitive advantage will lie. Meanwhile, the product and service innovators are afraid that innovations in processes and business models are too ephemeral for their tastes. [Click NEXT to discuss the various pressures and opportunities facing enterprises today]
- Let’s take a closer look at the environment enterprises of every size face today. Some of it can feel like relentless pressure, but in many instances, there’s a flip-side for growth and opportunity. Commoditization is factor for almost every industry, whether products or services Competition can today come from halfway around the world – and from companies that used to be partners, distributors, suppliers or from enterprises that were until recently in completely different channels and industries Just as competition can come from anywhere in the world, so can revenue, even for small companies. In fact, half of the exports from some of the world’s leading economies now go to emerging economies. Competition may come from unexpected sources, but nowadays so can new market opportunities – thanks to improved analysis, flexible distribution channels, and faster time to market capabilities. These opportunities are now available, in part, because of the increased integration of the world’s economies, societies, and information – but this same interrelated nature of the world means that when disasters and price fluctuations occur in part of the world, it can create effects almost immediately, almost anywhere. And, increasingly, alternative business models that can provide another industry player with competitive advantage have to be considered both a threat and an opportunity for an enterprise today -- depending on their flexibility and openness to change. In IBM’s recent global survey of CEOs, 87% predicted they needed to enact moderate to major change in their organizations in the next two years to address the pressures and opportunities before them. [Click on any of the categories on the left for more information about that item – OR – NEXT to advance presentation to demonstrate new capabilities available ]
- [NOTE TO PRESENTER: next 2 slides will display automatically] To address all these complementary and competing issues, companies today can’t just do the same things they’ve been doing, only better. Or even just adopt the latest improvements they see elsewhere, although that’s sometimes the price of entry. To put itself ahead of the pack, a company has to differentiate itself. It has to apply new capabilities in ways that get at the heart of what this company does best, or can do best, and leave its competitors in the dust. There’s never been a better time to do this, because – along with these pressures and opportunities we’ve been discussing – there are some amazing new capabilities that are now available to enterprises of every size, in every field of endeavor. [following slide displays automatically]
- For businesses and institutions everywhere, there have never been so many new possibilities at our disposal -- a whole new generation of tools, techniques and models has come of age: Innovation enablers that are more powerful, affordable and accessible than ever before. Consider just a few. Smart Objects : They’re so common, we almost take for granted how much smaller the components of computing have become and, at the same time, how much more powerful they are getting all the time. They’ve also become so low in cost, we can use them in almost everything. They’re so abundant, they’re almost disposable, which makes the decision to use these components even easier, even for throw-away purposes. Connectedness of Everything : Another capability that’s available today is the vast interconnected web of people and things. We already have a billion people online, and we’re approaching the point where we’ll have a trillion machines, devices, and other objects connected as well. Supercomputing for Everyone : Supercomputing is an area you would expect IBM to be talking about. But what’s really different today, however, is that you don’t need to be a big Fortune 500 company or a government to access the power of supercomputing. It’s now available to companies of every size, in every industry – even individuals. Information Put to Work : The amount of data that gets generated every day is just phenomenal. But it wasn’t until recently that we actually had the capability to make effective use of all that data. In fact, we’re quickly getting to a situation where enterprises are getting a handle on all their data and are very close to getting real business intelligence from it, thanks to new technology, advanced analytics and the mass adoption of standards. Just as networking standards made the Internet possible, so data and process standards in financial services, manufacturing, retail and virtually every other field are unlocking insights, answers — and revelations. Collaboration and Co-creation : New kinds of relationships in business are creating a new understanding of how intellectual capital can be created and managed in ways that’s very different from the old notions of idea creation and ownership. Marketplace for Expertise : We already know the importance of seeking economies of scale in growing a business. The next advance is going to be what might be considered “economies of expertise,” where the wide variety and availability of different kinds of skills and expertise can be accessed 24 hours a day, 7 days a week. Virtual Corporation : People use to talk about the virtual corporation about the same way they’d refer to the paperless office. And it was about as believable. But thanks to many of the capabilities mentioned here, it somehow went from hype to reality, almost overnight. [Click on any of the categories on the left for more information about that item – OR – NEXT to advance presentation to demonstrate different kinds of innovation]
- All the capabilities we’ve just mentioned are the elements that enable innovation. But applying them is not, by itself, innovation. Innovation comes when you take those elements, integrate them with your products, your operations and your corporate culture. You combine them in a new ways with some new thinking about why you’re in business and what you have to offer your customers, and then you can start to tackle the things shown here on the left. We’ll walk through each of those. On the right, you can see how CEOs responded in IBM’s most recent global study. Who’s responsible for implementing innovation in the company? Over a third of the CEOs say they and their direct teams are. Others spread the responsibility around, and more than a quarter of CEOs admit that there really isn’t anyone driving an innovation agenda for their organizations. There isn’t necessarily a right answer here, though it obviously requires a commitment and a focus from corporate leaders, or else it just won’t happen. But it can’t just be another top-down initiative like “quality” and “excellence” and such things we’ve seen before. That’s because innovation requires collaboration, it requires openness and a willingness to “let go to grow.” In other words, every part of the company has a part to play if an enterprise is to be an innovation organization. And it’s only with a cross-company focus that you’re able to innovate the following ways... [NEXT to discuss innovation in products]
- In a world of commoditized goods, some companies are developing and bringing to market products that stand out -- in feature, function, cost, availability, or just in being in the right place at the right time. They’re able to do this by applying advanced technology in both product design and in product features... ...and also by innovating in products through collaborative relationships with developers and other companies. [NEXT/CLICK to reveal HONDA example] [NEXT/CLICK again to reveal MAYO CLINIC example] [NEXT slide to discuss innovation in services]
- The services companies that distinguish themselves will be those that do two things well: 1) they customize – especially when their competitors offer one-size-fits-all; and 2) they cut prices – and thereby beat their rivals who aren’t capitalizing on the new tools of innovation. Similar to the “grow-revenue-while-cutting-costs” imperative, these two approaches to success in services would seem to be at odds, except for the possibilities now available from technology and in business models. [NEXT/CLICK to reveal BOULANGER example] [NEXT/CLICK again to reveal OXXIO example] [NEXT slide to discuss innovation in business processes]
- To create more than just innovative products and services, and instead produce, deliver and sell them in innovative ways requires some rethinking across the company. One of the ways to do that is to look at the company not as a collection of brands or vertical silos, but as a set of process components that can be extended, shared, and even outsourced to maximum effect. By combining advanced technology and leveraging industry-specific expertise, an enterprise can manage its business needs at a lower cost and with greater flexibility to address new challenges and new opportunities. [NEXT/CLICK to reveal JABIL CIRCUIT example] [NEXT/CLICK again to reveal AAA CAROLINAS example] [NEXT slide to discuss innovation in business models]
- With business rethought as a set of components, and the transformation itself being provided by someone like IBM, the next step many companies take is to re-cast their actual business model, the basic design and operation of their business. It’s far easier to do this today than it used to be, thanks to capabilities such as global integration, new kinds of expertise, and new forms of collaboration. And by doing so, a business can concentrate on the one or two aspects that differentiate the company. It can even rethink them, along with whatever legacy notions of ownership, sales and trade still left over from the twentieth century’s industrial economy that may no longer be useful. [NEXT/CLICK to reveal PARCELHOUSE example] [NEXT/CLICK again to reveal DELTA FLUID PRODUCTS example] [NEXT slide to discussion innovation in management and culture]
- This is the hardest part of enterprise innovation, naturally -- because this is where the human element comes into play. It requires deliberate choices on the part of management to reward risk-taking -- and risk-sharing. It requires a culture of empowerment and enablement, and a strong bias in favor of collaboration. Instead of doing everything itself, an enterprise today needs to build collaboration into its process, to constantly unlock new ideas. Instead of hoarding intellectual property, it may be better to leverage -- and refresh and contribute to -- common stores of intellectual capital. [NEXT/CLICK to reveal V Ä GVERKET example] [NEXT/CLICK again to reveal NORTEL example] [NEXT slide to discuss innovation in policy and society]
- As corporations innovate in these multiple dimensions, it raises broader implications -- for privacy, piracy, digital rights, intellectual property, global trade and more. These days, in our increasingly interconnected world, innovation as we’ve been describing it pretty soon leads you to the dimension where innovation impacts on policy and society It will often include the entire ecosystem of players and participants: people in academia and government; researchers and advocates; employees, managers, and shareholders. It covers a lot of subject-matter territory, too. Everything from workplace practices, education, and supply chain responsibility, to intellectual property, trade and financial regulations, and issues of safety and security; as well as issues and practices that haven’t even yet been defined. [NEXT/CLICK to reveal AUTOSAR example] [NEXT/CLICK again to reveal NATIONAL DIGITAL MEDICAL ARCHIVE example] [NEXT slide to close]
- Just about every industry faces commoditization pressures. Some companies can differentiate themselves by selling commodity products or services more efficiently, in greater volume and more profitably than any other competitor. Other companies must work to differentiate their products and services with added and higher value, to avoid commoditization. [NEXT slide to discuss “new/increased competition” -- OR – CLICK on “commoditization pressures” to return to the menu]
- We’re used to thinking of the Internet opening up all sorts of possibilities for businesses in every category – but going from “bricks” to “clicks” can also mean you no longer have a captive audience. And the Internet isn’t the only place where all this other consumer choice takes place. Companies are looking to enter adjacent markets but that means new competitors are entering the field every time. Cable companies now provide telephone service. Barnes & Noble faces competition online from Amazon.com and from the Wal-Mart store down the road. And what used to be very strict demarcations between financial institutions are now all over the map. [NEXT slide to discuss “global market opportunities” -- OR – CLICK on “new/increased competition” to return to the menu]
- It’s not all bleak news and “survival of the fittest.” For example, we’ve heard a lot about how globalization increases competition a thousand-fold – but it also increases opportunity just as greatly. And, as these facts show, developing countries have as much or more potential as emerging markets as they do as suppliers. Half of the exports from some of the world’s leading economies now go to emerging economies. And the European Union is now exporting twice as much to emerging economies as they are to the U.S. and Japan – combined. [NEXT slide to discuss “adjacent market opportunities” -- OR – CLICK on “global market opportunities” to return to the menu]
- Mobile phones are a good example of how product and service offerings can evolve into new markets, because they’ve become so prevalent in both mature and emerging economies, and people are still trying to figure out all the ways they want to be able to use their phone, for what purposes. For example, in the U.S., one survey shows that so far only about 4 percent of cell phone users use their phones to download and listen to music, but already nearly one in five users outside the U.S. do so. 1 [NEXT slide to discuss “global volatility & disruption” -- OR – CLICK on “adjacent market opportunities” to return to the menu] - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 1 TNS Global, reported in Research Alert, Nov 18 2005
- You only need to read the headlines of any newspaper – whether that’s the front section or the business section – to know that the increasingly interconnected nature of the world means any major event can have global implications within hours, even minutes. Whether these events are occurring more frequently or not can be debated. But the question itself may be immaterial. The end result is still a greater frequency of global causes and effects, whether that’s due to geopolitical crises, natural disasters, local regulation of global enterprises, or the broad societal and demographic shifts that affect mature economies, developing countries, and the diversity across the planet of races, religions, beliefs and aspirations.. [NEXT slide to discuss “competing business models” -- OR – CLICK on “global volatility & disruption” to return to the menu]
- In my opening slide, I pointed out that the CEOs we surveyed were focusing their innovation priorities in three areas, primarily: products or services; operations, which include their business functions and processes; and business models. Of those CEOs who were looking to revamp their business models to give themselves a competitive advantage, 83% were worried that a competitor might beat them to it. These are obviously CEOs trying to steer their way to success in some highly competitive industries. Increasingly, however, one has to ask: What business models today don’t face pressures from new entrants with new models and fresh approaches? And if any such industries exist -- what kind of margins do they have today compared to yesterday? [CLICK on “competing business models” to return to the menu]
- Moore’s Law is a concept we use in the technology business to describe the doubling rate of technological development using the example of the complexity of an integrated circuit, with respect to minimum component cost. Or, to put another away, over the last several decades, the technology industry has been doubling the computing power of those chips and storage discs we’ve been putting in more and more products for more and more reasons. [NEXT slide for further details -- OR – CLICK on “smart object” to return to the menu]
- So we now see microprocessors, RFID tags, controllers, actuators, memory, storage devices and more being embedded in everything from appliances, to shipping containers, to roadways, to pacemakers. We have smart cars, smart pipelines, smart refrigerators -- even smart hearts. Even game consoles, televisions and medical diagnostic devices can do things that used to be the sole province of supercomputers. The new Cell processor we developed with Sony and Toshiba, for example, makes this possible. So our work, increasingly, is to help clients figure out the possibilities and benefits of embedding intelligence into their products and the other aspects of their business – such as their supply chain operations and or their service delivery. [CLICK on “smart object” to return to the menu --OR— NEXT slide to discuss “connectedness of everything”]
- In considering this new environment, most of us think first of how the Internet connects people all over the world to each other. Far from being a novelty, we now almost take it for granted that we can communicate, collaborate, conduct our work and be entertained, thanks to the Internet. There are more than a billion people online today, and that’s an increase of 170 percent since the year 2000. In places like Africa, the Middle East, and Latin America and the Caribbean, the growth has been over 300 percent in that time. [NEXT slide for further details -- OR – CLICK on “connectedness of everything” to return to the menu]
- What’s less obvious – but literally a thousand times more far-reaching -- is the way things themselves are increasingly interconnected as well. Today we have cars, packages, clothes, medical instruments and buildings, all with IP addresses. Pretty soon the number of things networked together will reach a trillion, if it isn’t there already. As a result, people, devices and businesses are generating phenomenal amounts of data compared to what was produced only a few years ago. Our clients can now put this interconnection of everyone and everything to good use for their enterprise. They can sense and respond to opportunities, they can track their inventory, they can repair products remotely, or get ahead of warranty problems before they arise, and they work in distributed global teams. In other words, they really can be an On Demand Business. [CLICK on “connectedness of everything” to return to the menu --OR— NEXT slide to discuss “supercomputing for everyone”]
- Grid computing is one of the ways that supercomputing capabilities are being made available to businesses and research organizations without buying and installing a massive mainframe supercomputer. That’s because it works by taking advantage of many networked computers to model a supercomputer. And, as shown here, more and more businesses are taking that advantage. [NEXT slide for further details -- OR – CLICK on “supercomputing for everyone” to return to the menu]
- Of course, mainframes haven’t gone away, they’re more popular and being used in more ways than ever. For instance, the world’s most powerful supercomputer today, IBM’s BlueGene/L, is capable of more than 280 trillion calculations per second, is based on IBM’s innovative Power Architecture technology, and runs on the open source Linux operating system. Powerful computers can also be assembled by “virtualizing” separate blade servers or grids of PCs — and can be tapped on demand. And thanks to new visualization capabilities, they can simulate how the real world works — from traffic patterns, to fluid dynamics, to biological systems. [CLICK on “supercomputing” to return to the menu --OR— NEXT slide to discuss “information put to work”]
- This chart shows the results of a recent survey by Gartner, in which they asked respondents to rate their own companies’ maturity level in addressing various issues involved in an enterprise-wide information management strategy. They define EIM as a strategy for improving the integrity, efficiency, relevance and accessibility of all information assets – both structured and unstructured content – across an enterprise. Gartner’s conclusion was that an enterprise-wide information strategies are still in the early adopter phase, given the outsized optimistic self-assessments they found on a number of these criteria. However, another, larger conclusion might be drawn from looking at this survey: Those focus areas with the highest perceived maturity level are those with which these companies are already most familiar. That means they’re likely to become basic requirements to do business in a particular industry, the “table stakes” any company will need just to compete. For example, integration of customer data is one of the highest priorities across most industries – except, perhaps, for government organizations, which ranked it lower – but no industry scored as high in its assessment as the financial services industry. That means the rest of that industry is already playing catch-up to the early adopters who have been working toward integrating customer data for awhile now. Conversely, those areas with less attention so far – such as data governance, information organizations that apply across the enterprise, and XML adoption – could still be still fertile ground for staking out advanced positions. [NEXT slide for further details -- OR – CLICK on “information put to work” to return to the menu]
- The overall point here is that, while the amount of information is multiplying every day, it’s now possible to integrate data no matter where it's housed -- and to analyze what it's really telling us. And when we do that, amazing things happen. For example, integrating patient records and clinical data can lead to lower healthcare costs and improved treatment. And analyzing the information across a business’s supply chain can lead to higher productivity, efficiency and responsiveness. Every business and institution has troves of invaluable data like this. It's buried throughout the enterprise and extended partner networks -- data about consumer behavior, skills, supply, demand, quality and more. Fortunately, it’s easier to integrate and analyze all that data than ever before, thanks to powerful analytics and the emergence of open standards in virtually every industry. [CLICK on “information put to work” to return to the menu --OR— NEXT slide to discuss “collaboration and co-creation”]
- This chart shows all the various answers CEOs gave in our most recent survey as to where they get their best ideas. Notice that they’re seeing almost as many good ideas coming from their business partners as from their employees who work with those partners. And they’re getting about twice as many innovation insights from customers as they are from the sales and service units who work directly with those customers. What they’re realizing -- in some of the ways we’ve learned from our work in open source and open standards, and from many of our joint development projects -- is that we no longer have to create – and own -- everything ourselves, as we once believed. [NEXT slide for further details -- OR – CLICK on “collaboration & co-creation” to return to the menu]
- Today, radically new forms of collaboration are possible -- within a company, between companies, with online communities of experts and even with countless unknown individuals in the world. Employees can share ideas and work on projects together with unprecedented ease. Engineers and experts can team with those of another company. And any business can engage with the entire networked world to learn, to capture feedback -- or to turn their customers into co-creators. [CLICK on “collaboration & co-creation” to return to the menu --OR— NEXT slide to discuss “the marketplace for expertise”]
- As a consequence of economies of expertise and a flexible, open IT infrastructure linked to the Internet, the best processes are quickly becoming quickly available worldwide. Which means the best experts on those processes – wherever they are – are also now available to a worldwide market. The result will be &quot;industry ecosystems,&quot; affording businesses access to expert business processes from a partner or service provider. What this means for individual companies comes down to some new ways of working their business. More and more, even small companies are seeing the benefit of tapping expertise that’s readily available and world-class. Not just IBM’s expertise in the things we do, but expertise in almost every area, for every possible function, process and skill. And once a company discovers the wealth of expertise available to help it run its business, it’s often able to take the next step and ramp up its own capabilities to offer its own services more widely. [CLICK on “marketplace for expertise” to return to the menu --OR— NEXT slide to discuss “the virtual corporation”]
- So when all these other capabilities are put into play, we start to see the rise of what have been variously called “virtual corporations,” or “specialized business,” or the “networked enterprise.” It doesn’t really matter what it’s called; what’s more valuable is that, today, you can actually design, build and manage one. One piece of evidence of that is the growth of these services that can be bought, delivered, and seamlessly integrated within one’s own operations and processes. Part of this development comes from a completely new understanding of what an enterprise is, at heart, and can be. Part of it comes from new models and architectures in technology, especially the rise of service-oriented architectures, which enable an technology infrastructure that can support a mix-and-match, plug-and-play way of building a business from the ground up, or re-engineering it from the outside in. [NEXT slide for further details -- OR – CLICK on “virtual corporation” to return to the menu]
- With massive processing power connected by the Internet, easier and more successful integration of enterprises, a wider understanding and acceptance of the need to collaborate, and the new services and service delivery models from new entrants in that market segment... ...it’s now actually possible to create and run a company that can concentrate on the one thing it does best. Companies today can integrate their partners into their business – partners handling everything from supply chain and accounting, to the actual development of the products they sell and the relationship they have with their own customers. This has never been possible before quite to the extent it is now. That’s because, as we said, every one of these elements, and every other element of a business’s operations, has been broken down into components that can be mixed and matched. That helps an enterprise see which components it should do itself and which it can rely on a partner to contribute. [CLICK on “virtual corporation” to return to the menu]