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© Copyright IBM Corporation 2008Global CEO Study | May 20081
IBM Global CEO Study
The Enterprise of the Future
15th May 2008,
© Copyright IBM Corporation 2008Global CEO Study | May 20082
ANALYSIS
Quantitative and Qualitative
Respondents’ current behavior, investment patterns
and future intent Choices made by financial outperformers Multivariate analysis to identify clusters of responses Selective case studies of companies that excel in
specific areas
IntroductionCEO Study 2008: The Enterprise of the Future Takes Shape
SCOPE & APPROACH
1130 CEOs and Public Sector Leaders
One-hour interviews using a structured questionnaire
78% Private and 22% Public Sector
Representative sample across 32 industries
33% Asia, 36% EMEA, 31% Americas
80% Established and 20% Emerging Economies
SCOPE & APPROACH ANALYSIS
© Copyright IBM Corporation 2008Global CEO Study | May 20083
The collective wisdom of these CEOs has led us to the five core traits of the Enterprise of the Future
1
Hungry for change
2
Innovative beyond customer imagination
3
Globally integrated
4
Disruptive by nature
5
Genuine, not just generous
Core Traits of the Enterprise of the Future
© Copyright IBM Corporation 2008Global CEO Study | May 20084
The Enterprise of the Future is …
Hungry for Change
© Copyright IBM Corporation 2008Global CEO Study | May 20085
The Enterprise of the Future is Hungry for Change
In two years the gap between the ability to manage change and the challenge ahead has tripled
The number of companies reporting limited or no success has surged 60%
Outperforming organizations are significantly better than their peers at successfully navigating change
More CEOs than ever before – 8 in 10 – anticipate turbulent change, and plan bold moves in response
Source: IBM Global CEO Study 2008; n (2006) = 709, n (2008) = 1104
ExpectedChange
Past ChangeSuccess
* Difference or ‘gap’ between expected level of change needed and past success in managing change
ExpectedChange
Past ChangeSuccess
2006 2008
Expected Change
No/limited Change
Moderate Change
Substantial Change
No/limited Success
Moderate Success
Successful
Past Change Success
22%CHANGE GAP*8
%CHANGE GAP*
6%11%
83%
19%
20%
61%
13%
22%
65%
12%
31%
57%
© Copyright IBM Corporation 2008Global CEO Study | May 20086
ABB, through a series of transformation initiatives is now well-positioned for the future as an organization hungry for change
Switzerland-based ABB repositioned itself as a global leader in power and automation technology by driving a succession of enterprise-wide change programs and focusing on its strengths
• In 2007, ABB’s net income increased to a record US$3.8 billion
Launched Step Change Program in 2003• To improve productivity and cut costs• Resulting in annual savings of more than US$900 million
Launched One Simple ABB Change Program in 2005• To reduce organizational complexity• Establishing common, global processes for support functions
ABB’s change program success factors• Broad portfolio of initiatives designed to deliver specific business and financialobjectives• Programs driven by Global Executive Committee with regional accountability
ABB: Engineering enterprise-wide change
Do you manage change as a structured program and measure change management effectiveness?
Do you manage change as a structured program and measure change management effectiveness?
© Copyright IBM Corporation 2008Global CEO Study | May 20087
The Enterprise of the Future is …
Innovative Beyond Customer Imagination
© Copyright IBM Corporation 2008Global CEO Study | May 20088
The Enterprise of the Future is Innovative Beyond Customer Imagination
CEOs accelerate investments directed at informed and collaborative customers – up 22% in 3 years – while outperforming organizations plan a 36% increase
CEOs focused on informed customers place new operational capabilities, increased transparency and new customer segments at the top of agenda
Three-quarters of CEOs view increasingly demanding customers not as a threat, but as opportunity to differentiate
Investment past 3years
Investment next 3years
22%INCREASE
16.7%20.4%
“We’ve been surprised by the impact that just a few consumers can have with their blog
entries.”
Ron Hurlbut, CEO, Attune Foods
Investment* in informed and collaborative customers
Source: IBM Global CEO Study 2008, n = 609; * Total investments: all asset investments + all investments in R&D, marketing and sales
© Copyright IBM Corporation 2008Global CEO Study | May 20089
When customer preferences shift, are you the first to understand and act on this or do your competitors react more quickly?
When customer preferences shift, are you the first to understand and act on this or do your competitors react more quickly?
Nintendo is well-positioned for the future – an organization innovative beyond customer imagination
To regain its leadership position, Nintendo leveraged the loyalty and expertise of its core customer segment
• Established online community of experienced and loyal gamers called “Sages”
• Offering incentives in return for customer information and community contributions
• Gaining valuable insights into market needs and preferences
Nintendo successfully connected with two new customer groups• New customer groups included women and older men• Influencing everything from game offerings to new product design• Regaining market leadership with 44% market share after a low of 22% in
the mid-2000s
Nintendo: Building market share through customer collaboration
© Copyright IBM Corporation 2008Global CEO Study | May 200810
The Enterprise of the Future is …
Globally Integrated
© Copyright IBM Corporation 2008Global CEO Study | May 200811
The vast majority of CEOs aggressively move toward global integration – and radically reconfigure business designs
Partner extensively
Globalize brands/products
Drive multiple cultures
Optimize operations globally
Deeply change mix of capabilities, knowledge
and assets
Grow through mergers & acquisitions
Do everything in-house
Localize brands/products
Strive for one culture
Optimize operations locally
Grow organically
32%
35%
33%
32%
34%
Defend your coreActively enter new markets 37%
Maintain current mix of capabilities, knowledge and assets
Source: IBM Global CEO Study 2008; private sector responses
Equally Important
•57%
•55%
•43%
•40%
•39%
•24%
•30%
•32%
•35%
•37%
•33%
•32%
•50%
•34%
•10%
•11%
•20%
•27%
•29%
•26%
•36%
© Copyright IBM Corporation 2008Global CEO Study | May 200812
Cluster analysis* revealed four common approaches toward global integration
Blended Thinkers
17%
Extensive Globalizers
31%
Globalizers 33%
Localizers 19%
Source: IBM Global CEO Study 2008; * see appendix for details of cluster analysis
29%
32%33%
39%
17%
12%
21%
17%
Underperformers* Outperformers*
Extensive Globalizers Globalizers
Blended Thinkers Localizers
© Copyright IBM Corporation 2008Global CEO Study | May 200813
IBM is a textbook example of the “Globally Integrated Enterprise”
Networks 31 1
Procurement 300 Centers 3 Centers
Product Development Separate/Non-standard Integrated Product Development
Research Centers Individual & Specialized 8 Integrated Teams
IBM PAST IBM CURRENT
Marketing Hundreds of Individual Programs 1 Global Framework
Sales Local/Multiple Processes 1 Standard Global Sales Process
IT 155 Data Centers/16,000 Apps 10 Data Centers/4,757 Apps
Supply Chain Multiple & Local Integrated & Global
Finance Local/Multi/Non-integrated Integrated & Better Bus. Controls
HR Local Systems/Skills Definitions Global Plan/Standardized Skills
© Copyright IBM Corporation 2008Global CEO Study | May 200814
Li & Fung is well-positioned for the future – a globally integrated organization
Hong Kong-based Li & Fung Limited sources from virtually anywhere in the world and builds customized solutions for its retail customers
Network of 10,000 suppliers and staff in 40 different countries Orchestrating the supply chain for customers without owning any piece of it
Li & Fung steadily moved up the value chain Changing its capability and asset mix to provide more sophisticated and profitable
services
Li & Fung is able to be both locally relevant and globally optimized Established a significant onshore presence in the US to provide product design and
brand development services Acquisitions are key to grow market share in target geographic markets
Li & Fung is growing through global integration Revenue CAGR 1992 to 2006 of over 22%
Li & Fung Limited: Growth through global integration
Are you effectively integrating differentiating capabilities, knowledge and assets from around the world into networked centers of excellence?
Are you effectively integrating differentiating capabilities, knowledge and assets from around the world into networked centers of excellence?
© Copyright IBM Corporation 2008Global CEO Study | May 200815
The Enterprise of the Future is …
Disruptive by Nature
© Copyright IBM Corporation 2008Global CEO Study | May 200816
The Enterprise of the Future is Disruptive by Nature
More than 2 in 5 pursue business models that are more externally collaborative
More than 1 in 5 pursue an even more disruptive path: redefining their markets, moving into or creating wholly new industries
More outperformers (28%) choose the most difficult transformation - disrupting industries - and more (49%) choose collaborative business models
More than two-thirds of CEOs strongly focused on the most sustainable form of innovation – business model transformation
24%20% 19%
50%
13% 13%
24%
37%
EnterpriseModel
RevenueModel
IndustryModel
MultipleTypes
Established Economy
Emerging Economy
Focus on Business Model Innovation by Type
© Copyright IBM Corporation 2008Global CEO Study | May 200817
Eli Lilly is well-positioned for the future – an organization disruptive by nature
U.S. pharmaceutical maker Eli Lilly and Company is constantly evolving its business model
• Bringing new medicines to market faster through integrated partner network
In 2001 Lilly launched open marketplace for innovation – InnoCentive• Marketplace for scientific challenges with members from 175 countries • Best solutions can earn financial awards up to US$1 million• Lilly has spun off InnoCentive while retaining partial ownership
Lilly established Fully Integrated Pharmaceutical Network (FIPNet)• Pioneering risk-sharing relationships with partners to develop new compounds
Lilly’s collaborative business models offer several benefits• Reducing costs, increasing development capacity, accelerating drug
development process and better leveraging own and partner’s assets• Revenue CAGR 2002 to 2007 of over 11%
Eli Lilly: Building pipeline through collaborative business models
Are you able to create space for entrepreneurs and innovative business models while continuing to drive performance today?
Are you able to create space for entrepreneurs and innovative business models while continuing to drive performance today?
© Copyright IBM Corporation 2008Global CEO Study | May 200818
The Enterprise of the Future is …
Genuine, not just Generous
© Copyright IBM Corporation 2008Global CEO Study | May 200819
The Enterprise of the Future is Genuine, Not Just Generous
Since 2004 three forces of change consistently rose on CEOs’ agendas; all are linked to corporate social responsibility (CSR)
CEOs plan their largest increase in customer investment to meet CSR expectations
CSR-focused CEOs put developing new products and services at the top of their agenda
CEOs view of increasing customer expectations of CSR
“The consumers’ concept of quality will no longer be measured by only the physical
attributes of a product – it will extend to the process of how the product is made, including
product safety, environmental and social responsibility compliance.”
Victor Fung, Chairman, Li & Fung
Faced with rising customer expectations of corporate social responsibility, more than two-thirds take a positive view, and plan to innovate
Negative impact 12%
No impact
20% Positive impact
68%
© Copyright IBM Corporation 2008Global CEO Study | May 200820
Marks & Spencer is well-positioned for the future – an organization genuine, not just generous
To meet growing corporate social responsibility expectations, British retailer Marks & Spencer (M&S) has embarked on a £200-million, five-year plan
• Impacting almost every aspect of its operations• Engaging customers in solving issues (e.g., giving shopper bags “for
life”)
M&S established online supplier exchange• Connecting the thousands of factories, farms and fisheries that
supply its products• To simultaneously improve efficiency and sustainability
M&S has proven it is possible to do well while doing good• Operating profit CAGR of over 14% over past five years
Marks & Spencer: Serious about social responsibility
Are you offering employees and value chain partners the opportunity to personally make a difference?
Are you offering employees and value chain partners the opportunity to personally make a difference?
© Copyright IBM Corporation 2008Global CEO Study | May 200821
Are Indian companies asking themselves the right set of questions to evolve as a successful enterprise of the future?
Do you manage change as a structured program, measure change
management effectiveness and have visionary challengers
When customer preferences shift, are you the first to understand and act on
this or do your competitors react more quickly?
Are you effectively integrating differentiating capabilities, knowledge and
assets from around the world into networked centers of excellence?
Are you able to create space for innovative business models while
continuing to drive performance today?
Are you offering employees the opportunity to personally make a difference?
HUNGRY FORCHANGE
GLOBALLYINTEGRATED
DISRUPTIVE BY NATURE
GENUINE, NOT JUST GENEROUS
INNOVATIVE BEYONDCUSTOMERIMAGINATION
Building the Enterprise of the Future
© Copyright IBM Corporation 2008Global CEO Study | May 200822
Are You Building Your Enterprise of the Future?
Ad hoc and reactive change
Customer intelligence
Exploring global opportunities
Exploring Business Model Innovation opportunities
Regulatory compliance
Project driven change
Customer information transparency
Driving specific global initiatives
Experimenting with BMI
Strategic philanthropy
Change portfolio and program
Two-way customer interaction
Building global capabilities systematically
Implementing BMI initiatives
Values based self-regulation
Anticipating and proactive change
Customer collaborative development
Global centers of excellence
Multiple BMI strategies
Efficiency through CSR
Change becomes the strategy
Expanding customer aspirations
Global enterprise innovation
Radical and pervasive BMI
CSR as growth platform
HUNGRY FORCHANGE
GLOBALLYINTEGRATED
DISRUPTIVE BY NATURE
GENUINE, NOT JUST GENEROUS
INNOVATIVE BEYONDCUSTOMERIMAGINATION
Building the Enterprise of the Future
© Copyright IBM Corporation 2008Global CEO Study | May 200823
IBM Global CEO Study
Building the Enterprise of the Future Realizing greater business value from Application Portfolios
15th May 2008,
© Copyright IBM Corporation 2008Global CEO Study | May 200824
IBM Application Services can help you adopt the characteristics of the Enterprise of the Future and become an Outperformer
1 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.
IBM is a leader in designing, developing and managing applications that enable our clients to drive change and demonstrate industry leadership
2 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.
IBM’s continuous alignment model speeds adoption of truly collaborative capabilities
3 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.
IBM has more global experience and investment in global capabilities and skills than any other systems integrator or application outsourcing firm
4 Disruptive 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.
IBM best practices draw upon experience with a wide range of industry business models and delivery approaches to deliver business model and industry innovation with application services
© Copyright IBM Corporation 2008Global CEO Study | May 200825
Outperformers who are adopting characteristics of the Enterprise of the Future focus on innovating their enterprise and industry models, while underperformers on innovating their revenue model
Underperformers* Outperformers*
Revenue ModelInnovation
Industry ModelInnovation
Enterprise ModelInnovation
Source: IBM Global CEO Study 2008; * Performance based on industry comparisons within survey sample of absolute profit margin (average of 2003 and 2006) n (underperformers) =120, n (outperformers) =109
“For us, enterprise model innovation is primarily about having the right business model to enter other markets and secure new capabilities.”Andrew Brandler, CEO, CLP Holdings Limited
22%
28%
49%
36%
44%
20%
© Copyright IBM Corporation 2008Global CEO Study | May 200826
Change Needed Past ChangeSuccess
Although CEOs are more confident about managing change, the gap between their capability and the challenge ahead is growing
The Change Gap* Triples
* Difference or ‘gap’ between expected level of change needed and past success in managing change
“We have seen more change in the last ten years than in the previous 90.”Ad J. Scheepbouwer, CEO, KPN Telecom
Change Needed Past ChangeSuccess
2006 2008
Source: IBM Global CEO Study 2008; n (2006) = 709, n (2008) = 1104
Change Needed
No/limited Change
Moderate Change
Substantial Change
No/limited Success
Moderate Success
Successful
Past Change Success
22%CHANGE GAP*8%
CHANGE GAP*
6%
11%
83%
19%
20%
61%
13%
22%
65%
12%
31%
57%
© Copyright IBM Corporation 2008Global CEO Study | May 200827
Many companies today face significant challenges in unlocking business value and innovation from their application portfolios to drive change
Support Growth and Productivity
Build and deploy new products, services, processes
Inhibitors Expensive to develop and deploy
changes into existing applications Slow in time-to-market of new
products and services Limited sources of capital
Clients tell us: "We need to reduce costs, increase productivity and support business growth, but…. “
Reduce Costs and Optimize Applications
Decrease fixed costs, increase variable costs
Inhibitors High fixed application maintenance costs
as proportion of application development Application maintenance spend not
aligned to business needs
High fixed Infrastructure
cost
© Copyright IBM Corporation 2008Global CEO Study | May 200828
Business Model & Underlying Processes
Changes in business model or processes require an optimized application strategy, yet many organizations struggle to tame complexity and extract business value from application portfolios
• Changes in business model or process layers are enabled by the application portfolio
• Applications enable new business opportunities
• Application landscape and architecture provides cost savings that can be invested in projects that drive innovation and growth
Application landscape grows in complexity and becomes a patchwork of initiatives that are not aligned with business strategy.
Pace and quality of application development slows time-to-market
Over time majority of application spend goes therefore into maintenance starving strategic new development of funding
Resource management and ability to quickly source new skills becomes barrier to change
Desired State Typical Reality Which Means…
• Business model change is delayed
• New products are delayed or poorly deployed
• Competitive positioning suffers
• Top and bottom line growth are delayed
• Mistakes are more likely, with regulatory or public consequences
• Ability to integrate acquired companies is impaired
• Economies of scale and synergy benefits are not realized
Infrastructure & Operating
Environment
© Copyright IBM Corporation 2008Global CEO Study | May 200829
IBM Application Services delivers leading application design, development and management capabilities that directly support clients’ business strategies and desire to innovate and manage change
Client Priorities
Financial Analytics
HR /WorkforceAnalytics
SupplyChain
Analytics
CustomerAnalytics
StrategicAnalytics
Capabilities
Custom & PackageApplication
Development
ApplicationManagement
Complex Systems
Integration
Delivery Excellence
Industry Expertise
Change &
Innovation
Innovation Unlocked by Technology
Managing Change
New customers & new
markets
Global Integration
As the leading provider of consulting, systems integration and application services, IBM
has unrivalled experience optimizing our clients
application investments and aligning them with business
requirements.
Operational Efficiency
© Copyright IBM Corporation 2008Global CEO Study | May 200830
IBM end-to-end application lifecycle services offer extensive business and IT value that increase competitiveness
Co
st
Go-live IBMDesign-Build-Manage
Services
Time
Design and build (implementation) Management
Self-support
Go-live design,build and self-support
IBM Design-Build-Manage Services
25 to 40 percent per year of implementation cost
18 to 25 percent per year of implementation cost
10 to 15 percent faster and
20 to 30 percent lower cost
We can help you optimize your application environmentBusiness value to you Speeds collaboration and
innovation in your industry End-to-end capability
(business strategy throughIT operations)
Integrated consulting and application services
Security and business continuity expertise
Business and IT innovation Lower total cost of ownership
IT value to you Scale and global support Application porting expertise Integration testing and
performance testing New technologies (e.g.,
service-oriented architecture, Web services)
Proven complex program capability
Application performance modeling
© Copyright IBM Corporation 2008Global CEO Study | May 200831
IBM Application Services can help you adopt the characteristics of the Enterprise of the Future and become an Outperformer
1 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.
IBM is a leader in designing, developing and managing applications that enable our clients to drive change and demonstrate industry leadership
2 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.
IBM’s continuous alignment model speeds adoption of truly collaborative capabilities
3 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.
IBM has more global experience and investment in global capabilities and skills than any other systems integrator or application outsourcing firm
4 Disruptive 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.
IBM best practices draw upon experience with a wide range of business models and delivery approaches to deliver business model and industry innovation with application services
© Copyright IBM Corporation 2008Global CEO Study | May 200832
IBM can help clients accelerate change by optimizing their application portfolio and aligning it more strongly to business priorities
Strategy
Tactics
Execution
ConsumerRelationship
CustomerRelationship
Manufacturing Supply Chain &Distribution
BusinessAdministration
Category/Brand Strategy
Brand P&L Management
Matching Supply and Demand
Marketing Development & Effectiveness
Product Ideation
Marketing Execution
Product Directory
Category/Brand Planning
Assessing Customer Satisfaction
Customer Insights
Account Management
Value-Added Services
Customer Account Servicing
Retail Marketing Execution
Customer Directory
Manufacturing Strategy
Supplier Relationship Management
Production and Materials Planning
Manufacturing Oversight
Supplier Control
Make Products
Plant Inventory Management
Manufacturing Procurement
Assemble/Pkg. Products
Distribution Oversight
Distribution Center Operations
Transportation Resources
En route Inventory Management
In-bound Logistics
Corporate Strategy
Alliance Management
Line of Business Planning
Business Performance Management
External Market Analysis
Organization and Process Design
Legal and Regulatory Compliance
Treasury and Risk Management
Facilities and Equipment Management
IT Systems and Operations
HR Administration
Customer Relationship Strategy
Customer Relationship Planning
Supply Chain Strategy
Supply Chain Planning
Out-bound Logistics
Accounting and GL
Indirect Procurement
Corporate Planning
Concept/Product Testing
Product Development
Product Management
Consumer ServiceIn-store Inventory Mgmt
Category/Brand Strategy
Brand P&L Management
Matching Supply and Demand
Marketing Development & Effectiveness
Product Ideation
Marketing Execution
Product Directory
Category/Brand Planning
Assessing Customer Satisfaction
Customer Insights
Account Management
Value-Added Services
Customer Account Servicing
Retail Marketing Execution
Customer Directory
Manufacturing Strategy
Supplier Relationship Management
Production and Materials Planning
Manufacturing Oversight
Supplier Control
Make Products
Plant Inventory Management
Manufacturing Procurement
Assemble/Pkg. Products
Distribution Oversight
Distribution Center Operations
Transportation Resources
En route Inventory Management
In-bound Logistics
Corporate Strategy
Alliance Management
Line of Business Planning
Business Performance Management
External Market Analysis
Organization and Process Design
Legal and Regulatory Compliance
Treasury and Risk Management
Facilities and Equipment Management
IT Systems and Operations
HR Administration
Customer Relationship Strategy
Customer Relationship Planning
Supply Chain Strategy
Supply Chain Planning
Out-bound Logistics
Accounting and GL
Indirect Procurement
Corporate Planning
Concept/Product Testing
Product Development
Product Management
Consumer ServiceIn-store Inventory Mgmt
Current Application Portfolio
Component Business Model™
Which applications support which processes?
Do I have the flexibility to support and drive change?
What are my priorities?Which processes are strategic?
Which are core (differentiating)?
Desired End State
Service delivery aligned with budget and business priorities
Costs aligned to business or IT usage metrics
Alignment of business and IT Right-sized application
portfolios aligned with business processes that can be reconfigured for business model innovation
© Copyright IBM Corporation 2008Global CEO Study | May 200833
Additional investment freed up for strategic business initiatives
Application Management Budget Today
Cost savings
20-40%
Time to Market
25-50%
End User Productivity
+30-50%
Business Results Achieved
New solutions
Enhancements of existing applications
End user support
Application maintenance
Application maintenance
New solutions
End user support
Application Management Budget Tomorrow
New application enhancements
Enhancements of existing applications
IBM Application Services frees up funds from supporting applications that may be used for new solutions and to enable the level of change that companies are hungry for
© Copyright IBM Corporation 2008Global CEO Study | May 200834
1 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.
IBM is a leader in designing, developing and managing flexible applications that enable our clients to drive change and demonstrate industry leadership
2 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.
IBM’s continuous alignment model speeds adoption of truly collaborative capabilities
3 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.
IBM has more global experience and investment in global capabilities and skills than any other systems integrator or application outsourcing firm
4 Disruptive 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.
IBM best practices draw upon experience with a wide range of industry business models and delivery approaches to deliver business model and industry innovation with application services
IBM Application Services can help you adopt the characteristics of the Enterprise of the Future and become an Outperformer
© Copyright IBM Corporation 2008Global CEO Study | May 200835
IBM Application Services’ approach is an end-to-end process for continuous alignment to support business priorities and customer collaboration
OptimizationOptimize application
management using efficient methods and metrics-based pricing
• Help increase delivery efficiency and quality• Help reduce costs
Growth and Innovation
Transform business applications, leveraging new
technology
• Help enable flexibility to support business growth
• Help speed time to value•Helps speed innovation and
customer collaboration
Business ProductivityAlign applications to business priorities to help increase business
productivity and effectiveness
Align
TransformManage
Continuous alignment
Self-funded via savings
© Copyright IBM Corporation 2008Global CEO Study | May 200836
1 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.
IBM is a leader in designing, developing and managing flexible applications that enable our clients to drive change and demonstrate industry leadership
2 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.
IBM’s continuous alignment model speeds adoption of truly collaborative capabilities
3 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.
IBM has more global experience and investment in global capabilities and skills than any other systems integrator or application outsourcing firm
4 Disruptive 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.
IBM best practices draw upon experience with a wide range of industry business models and delivery approaches to deliver business model and industry innovation with application services
IBM Application Services can help you adopt the characteristics of the Enterprise of the Future and become an Outperformer
© Copyright IBM Corporation 2008Global CEO Study | May 200837
The IBM strategic global delivery and support capability keeps your applications up and running regardless of worldwide events and extends well beyond India to China, the Americas and Europe.
IBM’s scale of global delivery provides the flexibility to access skills from multiple global locations and thus mitigate risk
Strategic growth locations for IBM Application Management Services global delivery
Regional Global Delivery Centers
AS Worldwide
>Eight strategic delivery centers
>742 Major Accounts
>93,000 professionals
>50 Countries
AS Worldwide
>Eight strategic delivery centers
>742 Major Accounts
>93,000 professionals
>50 Countries
© Copyright IBM Corporation 2008Global CEO Study | May 200838
Application Services establishes the ability to easily scale projects and support resources dynamically to drive business model innovation
Adjust your resources to handle dynamic cycles, new projects and unforeseen events.
The IBM global resource model provides the skills you need, when and where you need them.
Resources on demand
Time
Cli
en
t c
ap
ac
ity
ne
ed IBM resourcing capability
Project and peak support demands
Routine support
• More than 93,000 global professionals distributed around the world with regional and global experience
• Industry expertise• Certified, best-of breed technical and business skills
© Copyright IBM Corporation 2008Global CEO Study | May 200839
1 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.
IBM is a leader in designing, developing and managing flexible applications that enable our clients to drive change and demonstrate industry leadership
2 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.
IBM’s continuous alignment model speeds adoption of truly collaborative capabilities
3 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.
IBM has more global experience and investment in global capabilities and skills than any other systems integrator or application outsourcing firm
4 Disruptive 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.
IBM best practices draw upon experience with a wide range of industry business models and delivery approaches to deliver business model and industry innovation with application services
IBM Application Services can help you adopt the characteristics of the Enterprise of the Future and become an Outperformer
© Copyright IBM Corporation 2008Global CEO Study | May 200840
IBM’s application services delivery blends best-of-breed, industry expertise with technical methodologies and best practices to help you innovate your business model
Industry Expertise
Aerospace Automotive Chemical & Petroleum Electronics Industrial Products
Banking Financial Markets Insurance
Education Defense Government Healthcare Postal
CPG Life Sciences/Pharma Retail Travel & Transportation
Energy & Utilities Media & Entertainment Telecommunications
Key Technical Competencies
Complex Systems IntegrationComplex Systems Integration
Package ApplicationsPackage Applications
Enterprise ArchitectureEnterprise Architecture
TestingTesting
ModernizationModernization
Interactive ServicesInteractive Services
© Copyright IBM Corporation 2008Global CEO Study | May 200841
1 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.
IBM is a leader in designing, developing and managing flexible applications that enable our clients to drive change and demonstrate industry leadership
2 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.
IBM’s continuous alignment model speeds adoption of truly collaborative capabilities
3 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.
IBM has more global experience and investment in global capabilities and skills than any other systems integrator or application outsourcing firm
4 Disruptive 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.
IBM best practices draw upon experience with a wide range of industry business models and delivery approaches to deliver business model and industry innovation with application services
IBM Application Services can help you adopt the characteristics of the Enterprise of the Future and become an Outperformer
“How do I get started in optimizing my application
portfolio and moving closer to becoming an Enterprise of the
Future?
© Copyright IBM Corporation 2008Global CEO Study | May 200842
Typical client options IBM Application Services Value focus
Design, develop or manage my application portfolio with me or for me
Business Innovation
Alignment with Business Requirements
Close Skill Gaps
Increase IT Staff Productivity
Reduce Cost
Improve Risk Management
Increase Quality
Leverage Existing Assets
Get help with specific application initiatives or projects
Collaborate with IBM - transform your IT organization to a high-performance unit through targeted transformation strategies and hands-on staff mentoring
Outsource everything – Improve organizational capability by leveraging IBM accountability and expertise
Modernize Applications – Leverage existing assets
Flexible entry points
Utilize specific skills – off-shore or on-shore under your direction to design, develop, test, manage or support applications
Clients can evolve their enterprise and industry models by choosing an Application Services entry point that helps bridge the innovation gap
Leverage IBM skills
Address a Problem - Let us help you with a critical or troubled project
Deliver on SLAs - Improve quality of service, flexibility and scalability
© Copyright IBM Corporation 2008Global CEO Study | May 200843
Collaborate with a trusted partner to drive enterprise and industry innovation to become an Enterprise of the Future
• Services to address your needs for future growth and competitiveness
• Continuous development, alignment, transformation and management to innovate your enterprise and industry models
• A secure environment and accountability for reduced business risk
• A global delivery model to support capacity aligned to business needs
• Application management to reduce the cost of doing business
IBM Application Services wants to be your service partner providing:
Let us discuss where to go from here…