Name

Title:

Smarter Commerce: Redefining Commerce in the Age of the Empowered Customer

Dulles Krishnan | Director, Smarter Commerce, Growth Markets

Sridhar Hari

|Smarter Commerce Leader, IBM India

Deepak Vinchhi

| Program Director, B2B & Commerce Solutions, IBM Labs

Agenda

2

4

3

1

Smarter Commerce Centre of Excellence

Smarter Commerce @ Work

Smarter Commerce from IBM

Q&A

Customers today are more empowered than ever, and are reshaping businesses

Understand and anticipate customer behavior and needs based on customer insights across all channels

4

Adapt

sourcing and procurement based on customer demand and optimize supplier interactions across extended value chains

Market, sell and

fulfill the right

product and service

at the right price,

time and place

Service

customers flawlessly, predict and drive customer loyalty

Power has shifted to the customer — compressing margins and changing paradigms

In this new era, businesses need to:

Successful companies are staying competitive by transforming their approach to commerce

5*Case studies based on Coremetrics, Sterling Commerce and Unica solutions

95%Amount a major transportation company reduced partner integration time*.

14%Reduction in working capital requirements and 10% reduction in logistics costs by a major Indian confectionery company after supply chain network optimization

376%Amount a US-based national communications service provider boosted ROI by reducing customer churn.

36%Percentage uplift in revenues that a leading Indian bank achieved from customers contacted through marketing campaigns. Significantly improved campaign performance, enhanced cross-sell, retention and service quality

Successful companies are staying competitive by transforming their approach to commerce

6*Case studies based on Coremetrics, Sterling Commerce and Unica solutions

95%Amount a major transportation company reduced partner integration time*.

41%Amount a retail pet company increased sales per unique web visitor. Also increased open and click-through rates to five times the industry average*.

50%Amount a leading provider of teaching, learning and research solutions grew direct-to-consumer commerce revenues year over year*.

376%Amount a US-based national communications service provider boosted ROI by reducing customer churn.

Successful companies are staying competitive by transforming their approach to commerce

7*Case studies based on Coremetrics, Sterling Commerce and Unica solutions

14%Reduction in working capital requirements and 10% reduction inn logistics costs by a major Indian confectionary company after supply chain network optimization

36%Percentage uplift in revenues that a leading Indian bank achieved from customers contacted through marketing campaigns. Significantly improved campaign performance, enhanced cross-sell, retention and service quality

14%Reduction in working capital requirements and 10% reduction inn logistics costs by a major Indian confectionary company after supply chain network optimization

376%Amount a US-based national communications service provider boosted ROI by reducing customer churn.

Drives growth

At IBM we call the path forward: Smarter Commerce

8

Places

the customer at the center

Increases margins

Synchronizes your entire value chain

Maximizes insight Capitalizes on social and mobile

improves collaboration and visibility

Customer

Smarter Commerce can help transform every phase of the commerce cycle

9

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

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

•

Supplier Integration & Management

•

Supply Chain Optimization•

Logistics Management•

Payments and Settlements

•

Customer Awareness & Analytics•

Social Media Marketing•

Brand Experience•

Cross-channel Campaign Mgmt•

Digital Marketing Optimization•

Marketing Resource Mgmt

•

Cross-channel Selling•

Distributed Order Management•

Customer Integration & Collaboration

•

Fulfillment•

Store Solutions•

Payments & Settlements

•

Delivery, Service, & Support•

Customer Self-Service•

Reverse Logistics•

Case Management

What is unique

about IBM’s Smarter Commerce?

11

IntegratedComprehensive• Optimizes the complete

commerce lifecycle• Leading software, services

and infrastructure

• Integrated analytics• Integrated focused

industry solutions

Outcome Driven Flexible and Open• Measureable

business outcomes

• Outcomes tailored to business domains

• Flexible deployment• Modular offerings and

flexible consumption

Suppliers

Influencers

PartnersCustomers IBM Smarter Commerce

IBM is the right partner for Smarter Commerce

12

• Leading industry capabilities and offerings

o Analytics, B2B Integration, Decision Optimization, Enterprise Marketing Management, Order Management, Selling and Fulfillment

o Modular approach to address key challenges today and grow with confidence

• Leader in research and development

• $2.5 billion invested since 2010 to create a truly smarter approach to commerce

• New services practice with more than a thousand dedicated experts

• Expertise in over 20 industries to help create a solution customized for your specific needs

• Leader in Smarter Computing -

Over 50,000 hardware and software developers

optimizing systems to manage needs driven by commerce applications

Recognized leadership for E-Commerce, B2B Integration, MFT, Order Management

13

IBM LeaderThe Forrester Wave™: B2C eCommerce Platforms, Q4 10Sterling Commerce: LeaderForrester Wave™: Order Management Hubs, Q3 10Sterling Commerce: LeaderForrester Wave™: B2B Service Providers, Q4 09

Gartner

IBM: LeaderGartner Magic Quadrant: E-Commerce, Q2 10

Sterling Commerce: LeaderGartner Magic Quadrant: Managed File Transfer, Q3 09

Sterling Commerce: LeaderGartner Magic Quadrant: Integration Service Providers, Q4 09

Recognized leadership in enterprise market management

14

Unica: LeaderThe Forrester Wave™: Enterprise Marketing Platforms, Q108

Coremetrics: Leader

The Forrester Wave™: Web Analytics,

Q309

Unica: Leader

The Forrester Wave™: Cross-Channel Campaign Mgmt, Q409

Unica:

The Leader

Gartner Magic Quadrant: Multi-Channel Campaign Mgmt, Q210

Unica:

Leader

Gartner Magic Quadrant: Marketing Resource Mgmt, Q109

Unica:

Visionary

Gartner Magic Quadrant: Enterprise Marketing Mgmt, Q410

Gartner

Agenda

2

4

3

1

Smarter Commerce Centre of Excellence

Smarter Commerce @ Work

Smarter Commerce from IBM

Q&A

IBM’s integrated portfolio for Smarter Commerce

Buy Market Sell Service

Core Business ProcessesCORE BUSINESS SOLUTIONS

VALUE CHAIN STRATEGY AND ENABLERS

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

•

Supplier Integration & Management

•

Supply Chain Optimization•

Logistics Management•

Payments and Settlements

•

Customer Awareness & Analytics

•

Social Media Marketing•

Brand Experience•

Cross-channel Campaign Mgmt•

Digital Marketing Optimization•

Marketing Resource Mgmt

•

Cross-channel Selling•

Distributed Order Management•

Customer Integration & Collaboration

•

Fulfillment•

Store Solutions•

Payments & Settlements

•

Delivery, Service, & Support•

Customer Self-Service•

Reverse Logistics•

Case Management

Operating and Organization Models

Designing 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

How the empowered customer is changing how you “Buy”

Increasing price pressure due to pricing knowledge of competitive products

Expecting instant product availability

Expecting quick new/enhanced product introductions

Demanding customizable product configurations

17

Empowered Customers are: It’s changing the way you “buy”

Deliver the highest quality products with lowest costs and on timeEasily share information across

internal systems and connectivity with suppliers

Collaborative environment to capture, evaluate, process and retain supplier and product information Detect and resolve compliance issues

as they happen, and predict before they happenContinually analyze and refine

the “buying process”

Customer

Companies are in a challenging environment...

18

The average number of

trading partners has

increased 300%

over

the last 10

years

$10+ to process a manual

document and $53 to reconcile

manual errors

Competitive pressures of

today’s economy demand more information and

flexibility

70% of supply chain officers

report the lack of visibility has a

significant impact on their

supply chain and 55%

report cost

containment concerns

64% of organizations don’t know or don’t measure

the average cost to manage a

supplier annually

19

...that require new critical success factors

Analysis of supplier

community and spend for efficient

purchasing processes

Seamless and secure

integration of key business

processes with suppliers

Secure, efficient, and consistent

means of accessing and

exchanging information with

suppliers

End-to-end visibility from

order creation to payment and

tracking supply chain events in

real-time

End-to-end performance management and advanced

analytics to drive continuous

improvements with supplier community

What can YOU do?

Develop global sourcing to optimize supplier relationships

Build a supplier portal to streamline processes

Centralize contract lifecycle management

Automate procure to pay processes

Establish vendor managed inventory to boost availability

Analyze supplier performance and refine buying process

20

Some initiatives that can help

21

Leveraging supply chain intelligence to shift inventory & execute regional promotionsOffer regional product promotions and optimize inventory distribution• Sterling Supply Chain Visibility monitors flow of inventory vs. annual norms• ILOG

is used to optimize the logistics network • Network details are deployed into the Sterling Transportation Management System• WebSphere

Commerce leverages this intelligence to issue custom regional promotions

Sterling Supply Chain

VisibilitylLOG

Logistics Network OptimizationSterling Transportation Management

Regional promotion to sell Denver inventory faster

Trigger an inventory movement of snow blowers from Denver to Boston

WebSphere

Commerce Precision Marketing

Capture results for future supply and inventory

Solution Scenario

Meanwhile, a cold spell in Boston is causing back orders due to lack of inventory

Warm winter in Denver results in excess snow blower inventory…

Challenge

Solution

Results

22

Needed to find a new inventory replenishment and vendor management application to replace their internally supported solution that was being removed from the market.

Supplier Integration and Management• Supplier Collaboration

• IBM Continuous Replenishment Service

Manufactures and markets packaged retail food products under more than 70 brands with more than $1 billion annual sales. Kraft employs about 109,000 people in more than 150 countries.

• Improves retailer relationships and collaboration• Increases customer service levels and responsiveness• Faster inventory turns and lead times• Reduces inventory errors • Optimizes transportation logistics and costs• Improves promotion planning and execution

Customer Profile

Kraft Foods facilitates better collaboration among large number of vendors and retail trading partners

How the empowered customer is changing how you “Market”

Increasingly using new technologies to interact with companies

Vocal is saying what they feel about products and services

Emerging social and mobile channels

Internet has changed the way consumers want to interact with brands

23

Empowered Customers are: It’s changing the way you “market”

Critical to understand what customers are sayingDetermine best response to engage them with clear targeted messagingEffectively manage communications across all channelsManage huge volume and variety of data from various sources

Customer

In response, leading Chief Marketing Officers are driving key investments in Smarter Commerce

Harness the potential of social analytics for customer-centric marketing

Optimize cross-channel marketing spend in real-time

Establish and cultivate advocate relationships

Recast channel relationships via 360 customer insight

Embrace a fully-realized

Social media marketing strategy

Customer

24

What can YOU do?

Centralize cross-channel decisions to improve targeting

Track online behavior to make informed marketing decisions

Capture data from inbound customer interactions for real-time marketing

Automate to tightly align and integrate marketing sand sales

Apply technology to increase marketing relevancy

25

Some initiatives that can help

Planning, coordinating & executing marketing campaigns to stimulate commerce demandManage 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

Marketing messages and campaigns are defined and planned using Unica

Campaign

Deliver custom landing pages, mobile and retail store programs with targeted messages and promotions via WebSphere

Commerce Precision Marketing

• Optimize display and search results with Coremetrics

AdTarget

and

Coremetrics

Search• Generate demand with Unica

eMessage

(email creation, delivery, tracking)

Insights from social media , websites , and other sources drive relevant messages

Capture responses and refine

Solution Scenario

26

Increasing Customer Loyalty Through Event Based Marketing

About the CompanyAbout the Company

27

Selected Unica

for enterprise marketing management. Main reasons for selection: ease of use, quick implementation as well as its robust modeling, customer analysis, and right-time interaction management capabilities.

Boosted incremental customer retention by 4%

Reduced acquisition costs by 60% in campaigns

Can now simultaneously access its multiple data systems resulting in a complete view of its customers across channels and products.

Run 2,200 event based campaigns per year, using 400+ different triggers

2 -

5x improvement over regular campaigns

Overachieved pilot objectives by a factor of 25, and reached annual target in 6 months

Challenges & GoalsChallenges & Goals

Leading private sector bank in India growing at 38% CAGR

Nationwide network of 1725 branches & 4232 ATM's in 779 India towns & cities with a customer base touching 19 million

Facing rapid growth, needed an effective way to market products and services by detecting meaningful customer behavior

Customer data resided in multiple systems, making it difficult to run campaigns

Key Goals: Increase share of wallet, acquire profitable customers, and boost customer loyalty, while reducing operating costs and measuring marketing performance across all channels

Unica: The Smart SolutionUnica: The Smart Solution

The empowered customer is changing the way companies “Sell”

Store / Dealership Create Order Check StatusCancel Order

Initiate/Track Return

Schedule DeliveryChange Order PickupResearch

Product

Create Order Check StatusCancel Order

Initiate/Track Return

Schedule Delivery or PickupChange Order

Schedule Store Pickup

Research ProductMobile

Create Order Check StatusCancel Order

Schedule Delivery or PickupChange Order

Schedule Store Pickup

Research ProductWeb

Initiate/Track Return

Call Center Create Order Check StatusCancel Order

Initiate/Track Return

Schedule Delivery or PickupChange Order

Schedule Store Pickup

Research Product

28

How the empowered customer is changing how you “Sell”

Start order process in one channel and continue seamlessly other channels

Enabled by technology share research , opinions and ratings in real-time

Want to configure products and services per their preferences and wishes

Interact across multiple channels and touchpoints

and consumer devices

29

Empowered Customers are: It’s changing the way you “sell”

Provide a platform to engage with customers where they want to buy and make it easier for them to do so.

Extend and strengthen supplier and vendor relationships for better supply chain visibility

Integrate information from social media and other sources to aid customer's decision making process

Customer

What can YOU do?

Provide a common platform for all customer interactions

Implement global inventory visibility to improve order fulfillment commitments

Expand customer's fulfillment and delivery options to improve experience

Enable customer to buy online and pickup/return at a physical location

Automate manual processes to drive down b2b sales costs

30

Some initiatives that can help

31

A unified, cross-channel shopping experience

Take action based on a consistent view of a consumer’s order across multiple 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 to maximize POS sales

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

Consumer completes the purchase using WebSphere

Commerce

Consumer phones the call center or engages online to change the order from delivery to pickup.

Consumer 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!

Consumer decides to extend the order from a mobile device

Capture responses and refine

Sterling Order Management

Solution Scenario

Challenge

Solution

Results

1-800-flowers.com enables customers to seamlessly interact, shop, and buy multiple brands within the same online experience

•

Increase enterprise share of wallet and overall customer value

•

Seamless and intuitive multi-brand shopping experience (unifying the customer experience)

•

Obtain efficiencies migrating to a common best in class ecommerce platform for stability, time to market & roadmap progression

Needed to replace multiple, diverse, siloede-commerce systems with a unified technology platform supporting call center, web, mobile & social

Implemented WebSphere®

Commerce, Coremetrics, Sterling Call Center, Sterling Order Management, and Sterling Warehouse Management, facilitating individual and cross brand merchandising, marketing, logic, and promotions capabilities. Running on POWER7 systems. Involved GBS and Global Financing.

Customer Profile

World's leading florist and gift shop with gifts for every occasion, including fresh flowers, plants, gift baskets, gourmet foods, confections, candles, balloons and plush stuffed animals.

Blogs

32

How the empowered customer is changing how you “Service”

33

Empowered Customers are: It’s changing the way you “sell”Customer

•Customers are much more likely to jump to a different brand than ever before if they feel they are not getting the proper service

•Providing the right tools to support the multiple ways your customer wants to interact with you is critical:

•According to Gartner, by 2012 consumers will be willing to perform all possible customer service functions themselves.•Social Media is becoming more mainstream and companies need to pay attention to what consumers are saying about their company•Customers get frustrated with irrelevant data when looking for answers

• The ability to provide accurate promised dates based on type of item being sold and service requested

• The ability to empower customers with conversations and information sharing capabilities such as wikis, blogs, forums, communities, ratings, commenting, tagging, and shared bookmarks & files.

• Providing real-time information to call center representatives to improve customer interaction and to optimize cross-sell / up-sell opportunities

• Improve online customer experience by providing access to information 24x7 via a self service website

What can YOU do?

Grant personnel mobile access to information for timely services

Assess performance metrics against desired SLAs

Sell premium delivery services to increase revenue

Provide customers a self-service portal to get information and perform many customer service functions themselves

Make it a practice to offer targeted services at the time of sale

Use data analysis and appropriate metrics to improve customer satisfaction

34

Some initiatives that can help

Addressing Self Service and Support Requirements for Multiple Channels

35

Challenge

Results Customer Profile

#1 specialty retailer in US for consumer electronics, personal computers, appliances, and more -

$20B+ annual revenue

Solution

Multiple legacy systems prevented: Unified cross-channel customer experience and redundant and inaccurate inventory data across channels

i

Single

instance, multi-channel enterprise order managementEnables coordination and fulfillment of complex customer ordersSourcing and allocation of product and services across multiple fulfillment sources

Real-time inventory visibility across internal and external fulfillment partnersHome delivery, vendor special order, in-home installations and other services

Increased Annual Sales & MarginVendor Special order, expanding service business (in-home and in-store services)Increased Customer Loyalty due to ease of fulfillment and capturing the orderReduced retail store order admin costs & call centre expenses

Seamless Customer Experience across multiple Interaction Channels• Web (WebSphere

Commerce & Portal)• Mobile (WebSphere

Commerce Mobile Store)• In Store POS & Kiosks (Retail Store Solutions)• Call center (Sterling Order Management –

Call Center)• Social Media

WebSphere

Commerce & Portal

Retail Store SystemsSterling Order Management –

Call Center

Customer

“Call Center”

“Social Networks”

“Web”

“Mobile”

“Store POS & Kiosks”

Delivering Unparallel Customer Experience via Human, Digital, Mobile & Social Interactions

36

Solution Scenario

Agenda

2

4

3

1

Smarter Commerce Centre of Excellence

Smarter Commerce @ Work

Smarter Commerce from IBM

Q&A

Launching…

Smarter Commerce

Centre of Excellence

Bringing the Software Labs to you…

Objectives of Smarter Commerce CoE

• Help our customers in selecting & deploying the best Smarter Commerce solution

• Provide expert help from product development teams, architects, & domain experts

• Help with solutioning

and proof of concepts

IBM Smarter Commerce CoE

will help you to tap cutting edge expertise from the Lab

• Close to 800 developers & architects

• Working on global product development, implementation, customization & product support

• Working with marquee customers all over the world

• Deep expertise in deployment, technologies, domains and in solving customer problems

Smarter Commerce Centre of Excellence Capabilities

• More than 5000 person years of experience

• ‘Solutioning’

capability and deep knowledge of products across the entire Smarter Commerce portfolio to ensure best possible deployment, scalability, maintainability, performance and security

• Deep domain knowledge in key verticals like Retail, Distribution & Logistics, Banking, Manufacturing

• Knowledge of global best practices and ability to leverage cutting edge expertise from across worldwide –

helps in

leapfrogging to the next level of Commerce expertise

• Performance engineering, sizing & tuning capabilities

Agenda

2

4

3

1

Smarter Commerce Centre of Excellence

Smarter Commerce @ Work

Smarter Commerce from IBM

Q&A