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© 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--
© 2011 IBM Corporation
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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
© 2011 IBM Corporation
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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
© 2011 IBM Corporation
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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
© 2011 IBM Corporation
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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
© 2011 IBM Corporation
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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
© 2011 IBM Corporation
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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
© 2011 IBM Corporation
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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
© 2011 IBM Corporation
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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
© 2011 IBM Corporation
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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
© 2011 IBM Corporation
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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
© 2011 IBM Corporation
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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
© 2011 IBM Corporation
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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
© 2011 IBM Corporation
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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
© 2011 IBM Corporation
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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
© 2011 IBM Corporation
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© 2011 IBM Corporation
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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
© 2011 IBM Corporation
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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
© 2011 IBM Corporation
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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.
© 2011 IBM Corporation
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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.
© 2011 IBM Corporation
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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.
© 2011 IBM Corporation
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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.
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