Ibm smarter commerce announcement industry analyst march 10

© 2011 IBM Corporation

Smarter CommerceRedefining the value chain in the age of the customer

Industry Analyst Teleconference

March 10, 2011

--Material in this presentation is under embargo until March 14, 2011--


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Hosts for Today

Craig Hayman, General Manager, Industry Solutions

IBM Software Solutions Group

Dan Hirschbuehler, Global Leader, Application Innovation Services

IBM Global Business Services


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Today’s News: IBM Smarter Commerce

Adding a new services practice with more than a

thousand dedicated experts

$2.5 billion in commerce-related acquisitions & new

software investments since 2010

Integrated & globalized product offerings

– New Cloud analytics including an IBM Coremetrics

offering to measure and optimize social presence in

such social media properties such as Facebook and

Twitter.

– IBM will also deliver software solutions that allow

companies to deliver relevant and consistent messages

across all sales and marketing channels - from the web

to email to stores to call centers.

A Smarter Commerce University dedicated to on-

ramping business partners and new hires

Communicating overall smarter commerce trend

story and IT solution need in the market

Smarter Commerce

Recent Acquisitions Position IBM as the Only Solutions Provider Integrating All Elements of the Commerce Lifecycle Spanning Buying, Marketing, Selling and Service

Consulting & Services

Software

Systems & Technology

Research

Smarter Commerce is a unique approach that

increases the value companies generate for

their customers, partners and shareholders in a

rapidly changing digital world. It is designed to

help companies better integrate and more

effectively manage their value chain, including

buy, market, sell, and service processes to put

the customer at the center of decisions and

actions leading to greater customer loyalty,

revenue / margin growth and agility.

IBM Expands Global Business Services With New Smarter Commerce Services, Software


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We have entered the age of the empowered customer

Social networking and mobile commerce have dramatically changed the dynamic between buyer and seller.

Customer expectations of service, price and delivery is soaring.

This is changing the entire way products are sourced, manufactured and distributed—and making business more complex than ever.

Customers now have unlimited access to information and can instantly share it with the world

95 millionNumber of tweets sent via Twitter each day

75%Percentage of people who believe companies don’t tell the truth in advertisements

$93 billionAmount in sales missed due to out of stock inventory


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These disruptive forces ripple from the customer through the

enterprise and across entire industries

Individuals

The connected consumer

The networked workforce

The empowered citizen

Industries

Value migration

Value chain redefinition

Fragmentation

Enterprises

Evolved business models

Optimized digital operations

Connected enterprise

“"The consumer is using new channels to

perceive value, and associated pricing

implications.“Consumer Products CEO, United States

"Profits will shift away from analog

distribution to digital distribution; we

will see increased margins in digital

distribution and increased international

distribution.“Media and Entertainment CEO, United States

Source: IBV Analysis

“Disintermediation of clients by smaller

niche players (such as mobile players) is

cause for concern.“Financial Markets CEO, Canada


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Understanding and anticipating customer

behavior and needs based on customer

insights across all channels

Adapting sourcing and procurement based

on customer demand and optimize supplier

interactions across extended value chains

Marketing, selling and fulfilling the right

product and service at the right price, time

and place

Servicing customers flawlessly, predicting

and driving customer loyalty

376%

A US-based national communications service provider boosted ROI by reducing customer churn.

70%

A leading provider of teaching, learning and research solutions grew direct-to-consumer commerce revenues.

An international transportation company reduced partner integration time.

95%

Power has shifted to the customer compressing margins

Successful companies are transforming their approach to commerce


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At IBM, we call the path forward: Smarter Commerce

Smarter Commerce is a strategic approach that places the customer at the center of your business operations

It increases margins by boosting efficiency at every stage of the commerce cycle

It synchronizes yourentire value chain to deliver consistent and predictable outcomes .

It maximizes the insightgenerated through customer interactions.

It capitalizes on social and mobile commerce.

It drives growth by enhancing, extending, and redefining the value you provide.

It improves collaboration and visibility for your customers & partners.

Customer


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Smarter Commerce focuses on three dimensions centered around the customer

In today’s world of

instant business, you

need deep insights, in

real-time that you can

turn into immediate

action

In turn, you must re-think how your

customers define value, and the

changes you must make to your value

chain so you can deliver exactly what your customers want

- profitablyYou need an approach

that allows you to more

effectively Connect,

Collaborate, Conduct

Commerce and Create a

differentiated customer

experience.

Customer Insight Customer Value Strategy

Customer & Partner Engagement

… increasing the value companies generate

for their customers and partners in a rapidly

changing digital world

Customer


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Smarter Commerce can help transformevery phase of the commerce cycle

BuyDrive intelligent,

adaptive and optimized

extended supply chains based on

customer demand

MarketCreate

personalized and relevant offers

with unified cross-channel marketing

ServiceAnticipate

behavior and deliver flawless

customer service across all channels

Sell Enable

customers and partners to

buy any offer from any supplier

across any channel

Sourcing, controlling and procurement of goods and services

Targeted and personalized marketing across all customer interactions

Selling and fulfillment of products and services across all channels

Servicing customer needs

across all interaction

channels

MarketBuy

Service Sell

Customer

InsightStrategy

Engagement


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IBM’s integrated portfolio for Smarter Commerce

Buy Market Sell Service

Core Business Processes

CORE BUSINESS SOLUTIONS

VALUE CHAIN STRATEGY AND SERVICES

Advanced AnalyticsStore analytics | Purchase analytics | Consumer loyalty | Predictive and prescriptive | Social Analytics | Master data management

Market and customer mgmtAligning sales, marketing and operations

to engage with customers

Innovation and business valueInnovating and aligning business models to

drive value to the customer

• Trading Partner Mgmt

• Supplier Management

• Supply Chain Visibility

• Logistics Management

• Inventory Optimization

• Predictive Analytics/Modeling

• Behavioral Segmentation

• Cross-channel Campaign Mgmt

• Search Optimization, Ad

Targeting

• Marketing Resource Mgmt

• B2B / B2C Cross-channel

commerce

• Distributed Order Orchestration

• Fulfillment and Supply Chain

Optimization

• Mobile Commerce

• Retail Store

• Delivery & Service

Scheduling

• Customer Self Service

Enablement

• Reverse Logistics

• Case Management

Operating and Organization ModelsDesigning operations, supply chain and the

organization model to deliver customer value

Workload Optimized Systems(Z-Enterprise, Power, X, Storage and Systems Software)

focused on agility, integration and automation to drive relevant business outcomes


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Manage Marketing across Multiple Interaction Channels– Cross-channel marketing strategy is defined and planned using Unica

– Coremetrics is used to track consumer actions, and make relevant recommendations

– The e-commerce web site and order capture is provided by WebSphere Commerce

– Customer experience with responsive interaction is guaranteed by workload optimized systems

Solution ScenarioPlanning, coordinating & executing marketing campaigns to stimulate commerce demand

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Generate demand with Unica eMessage (email creation, delivery, tracking

Marketing messages and campaigns are defined and

planned using Unica Campaign

Deliver custom landing pages with targeted messages and promotions via WebSphere

Commerce Precision Marketing

Web

MobileRetail

Store

Systems

Store

Optimize display and search results with Coremetrics AdTarget and Coremetrics Search

Insights from social media, third party websites, purchase history ,etc

Capture responses and refine


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Offer regional product promotions and optimize inventory location

– ILOG is used to optimize the logistics network

– Network details are deployed into the Sterling Transportation Management System

– Sterling Supply Chain Visibility monitors flow of inventory vs. annual norms

– WebSphere Commerce leverages this intelligence to issue custom regional promotions

OR Regional promotion to sell Denver inventory faster is

delivered via WebSphere Commerce Precision

Marketing

Warm winter in Denver results in excess snow

blower inventory…

…meanwhile, a cold spell in Boston is

causing back orders due to lack of

inventory

Supply Chain Visibility

Sterling

Trigger an inventory movement of snow blowers from Denver to Boston

lLOG Logistics Network Optimization

Solution ScenarioLeveraging supply chain intelligence to shift inventory & execute regional promotions

Capture results for future supply and inventory


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IntegratedComprehensive

Outcome Driven Flexible and Open

What is unique about IBM’s Smarter Commerce?

Optimizes the complete commerce lifecycle

Leading software, services and infrastructure

Integrated analytics

Integrated focused

industry solutions

Measureable business

outcomes

Outcomes tailored to

business domains

Flexible deployment

Modular offerings and

flexible consumption13

Suppliers

Influencers

PartnersCustomers IBM Smarter Commerce


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INNOVATION

RESEARCH

INVESTMENT

EDUCATION

Software: $2.5+ billion investment in best of breed buy-market-sell software since 2010

Services: Global Business Services expanding its consulting and solutions capabilities for commerce with a new practice

IBM Smarter Commerce: Making it Real

IBM Research Innovation: 3000 researchers , including in the areas of customer insight, financial management, social business and supply chain

Enabling our Ecosystem: An IBM Smarter Commerce University dedicated to on-ramping business partners, new hires and consultants

Business Analytics & Optimization: 14 billion in analytics focused acquisitions. The BAO practice has 8,000+ dedicated business consultants with industry expertise

Smarter Computing: Over 25,000 hardware and 25,000 software developers. IBM is investing in Workload Optimized Systems to help companies manage the needs driven by commerce applications


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What does Smarter Commerce mean to these clients?

StaplesFor Staples, a $24B retailer, Smarter Commerce means transforming the customer experience across all interaction channels by delivering a personalized buying experience for over 10,000 B2C and B2B customers in 27 countries

ING BankFor ING Bank, serving over 85M customers, Smarter Commerce means transforming their marketing so personalized product offers can be delivered across multiple channels in real time resulting in €20M increase in corporate earnings, 35% reduction in marketing costs, and shorter cycle times

CrocsFor Crocs, a $700M manufacturer, Smarter Commerce means transforming their fulfillment operations and supply chain so internet customer orders are filled with 100% accuracy through their network of suppliers at the lowest cost


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Buy Market Sell Service

Core business processesCORE BUSINESS SOLUTIONS

VALUE CHAIN STRATEGY AND SERVICES

Advanced analyticsStore analytics | Purchase analytics | Consumer loyalty | Predictive and prescriptive | Social Analytics | Master data management

Sourcing and procuring goods

and materials required to

deliver products and services to

meet customer demand

Selling and fulfillment of products

and services across multiple

channels to drive sales

Servicing customer needs across

all interaction channels to drive

repeat sales and enhance lifetime

value of a customer

• Cross-Channel Order Capture, Cart and Catalog

• Customer-centric Shopping Experience• B2C/B2B Storefronts

Coremetrics• Digital Analytics• Behavioral Segmentation• Search Optimization, Ad

Targeting, and Real-time Website Recommendations

Sterling Commerce• Cross Channel Order

Management • Configuration• Pricing• Multi-vendor catalog• Quoting

Sterling Commerce• Distributed Order Management• Warehouse Management• Transportation Management• Supply Chain Visibility Sterling

Collaboration Network/B2B Services

Unica• Cross-channel

Campaign Mgmt• Real-time Decisioning,

Event Detection, and Contact Optimization

• Operations Mgmt

ILOG Supply Chain• Network Optimization• Transportation Optimization

Sterling Commerce• Warehouse Management• Transportation Management• Supply Chain Visibility• Sterling Collaboration

Network/B2B Services

ILOG Supply Chain• Product Optimization• Inventory Optimization

Retail Store Solutions • Retail POS Solutions• Self-Service Portal/Kiosk• POS Applications

Sterling Commerce• Delivery & service Scheduling• Reverse Logistics

IBM Case Manager• Case Design, Run-time, Analytics• Collaboration• Rules & Events

PureScale Application Systems

Smart Analytics System BPM Suite

Integration across best-of-breed products to deliver industry focused solutions

Workload Optimized Systems(Z-Enterprise, Power, X, Storage and Systems Software)

focused on agility, integration and automation to drive relevant business outcomes

Developing, delivering, and measuring relevant and consistent messages across multiple channels

to drive demand


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Provide a consistent view of a consumer’s order across multiple interaction channels– Coremetrics is used to track consumer actions, and make relevant recommendations

– The e-commerce web site and order capture is provided by WebSphere Commerce

– Sterling Order Management maintains a consistent view of the consumer’s order

– The POS from Retail Store Systems integrates with the entire system

Consumer is shown a web ad for a new TV. Ad content selected by Coremetrics.

Consumer completes the purchase using WebSphere Commerce

Phones the call center or engages online to change the order from delivery to pickup. Process powered by Sterling Order Management

Visits the store to pickup the TV, views the order via the IBM RSS POS

Unica prompts the POS to recommend an offer on new speakers and local installation services … sold!

Decides to extend the order, from a mobile device

Solution ScenarioA unified, cross-channel shopping experience

Capture responses and refine


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Challenge

Solution

Results

Customer Profile

Staples enables customers to shop seamlessly across all channels

Automated support for diverse policies, contracts, buyer roles on a single platform

Over $1Billion (70%) of total B2B sales driven through site

Support a personalized, customer-centric experience for B2C customers

Support multiple B2B customers buying under multiple contracts, with buyers that have differing levels of purchase authority

Single IBM commerce platform handles both B2B and B2C

10,000+ buying organizations each see contract-specific pricing and policies

Staples sells office supplies, technology, furniture and business services to consumers and businesses in 27 countries around the world.


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ING Bank coordinating marketing outreach to consumers

€20 million increase in corporate earnings attributed to increased marketing effectiveness

Annual direct mail costs reduced by 35%

Campaign cycle time reduced to maximum of 4 weeks

Multiple bank brands, driving 60 million pieces of direct mail each year, were merged into one

Campaign management process was disconnected, costly and involved too many stakeholders

Marketing costs were increasing while response rates were declining

Unified cross-channel solution controls marketing via direct mail, email, web, call center and branches

No marketing silos: a centralized customer intelligence team has the tools to plan and execute multichannel marketing campaigns

Challenge

Solution

Results

Customer Profile

ING offers banking, investments, life insurance and retirement services to over 85 million private, corporate and institutional clients in more than 40 countries.


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Dal-tile delivers perfect order orchestration

A sales center could only see what they had available in their individual store

Existing system was costing them time and money due to its inflexibility

Manage all of the customer needs through a single sales center

IBM® Sterling Order Management reduced order fulfillment costs by efficiently orchestrating order and service fulfillment

Flexibility for future growth required to meet changing customer demands

Challenge

Solution

Results

Stores can capture and modify orders through a single system for all delivery methods — including home delivery, in-store pickup, and plant delivery

Enables Dal-Tile to keep inventory at a minimum and reduce their inventory costs

A sales center could only see what they had available in their individual store

Existing system was costing them time and money due to its inflexibility

Manage all of the customer needs through a single sales center

IBM® Sterling Order Management reduced order fulfillment costs by efficiently orchestrating order and service fulfillment

Flexibility for future growth required to meet changing customer demands Customer Profile

Dal-tile designs, manufacturers, and distributes ceramic, porcelain, glass, metal, and natural stone tile products to the construction and development, architecture, and do-it-yourself markets.


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Challenge

Solution

Results

SXC health solutions enables secure information exchange

Comprehensive integration serving as their hub for inbound and outbound data

Secure and reliable exchange of data

Due to the amount of information being sent to all aspects of the pharmaceutical supply chain, SXC must have a secure and reliable system for data exchange

IBM® Sterling Business Integration Suite Process provides visibility allowing SXC to check all attributes of their files and exchange data securely

Customer Profile

SXC is a key player in the pharmacy supply chain, providing eligibility, enrollment, payment, claims and reporting data.

Ibm smarter commerce announcement industry analyst march 10

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