© 2014 IBM Corporation Transportation Industry Cloud Point of View Institute for Business Value Partner’s Name, Partner’s Title DD Month YYYY

© 2014 IBM Corporation

Transportation Industry CloudPoint of ViewInstitute for Business Value

Partner’s Name, Partner’s TitleDD Month YYYY

© 2014 IBM CorporationIBM Institute for Business Value2

Executive summary

Cloud computing is not new to the transportation sector, but most transport providers have only just started to understand the power of cloud computing to not just improve efficiency, but also to transform collaboration paradigms and business models

Companies in the transportation sector are hungry for cloud-driven improvements because competitive pressures and customer expectations are making it harder to sustain profits

Cloud projects are attractive in the transportation sector because they help convert capital expense into operating expense, which frees up funds for innovation and other investments

Several companies in the industry are exploring more transformative uses of cloud computing, including solutions to work around legacy back office and transaction support systems, and to collaborate more effectively with ecosystem partners

IBM is uniquely positioned to help transportation companies envision and implement innovative cloud-based strategies

© 2014 IBM CorporationIBM Institute for Business Value

3 IBM can help

2 Traditional transportation operating models will evolve

1Cloud will transform the global transportationindustry

3


Transformative technologies are disrupting industries

Source: [1] http://www.forbes.com/sites/peterhigh/2013/08/05/meg-mccarthys-climb-from-cio-to-evp-of-operations-and-technology-at-aetna/ [2] Joint IBV/EIU Cloud-enabled Business Model Survey of 572 business & IT leaders

Mobile revolutionConnectivity, access and participation are growing rapidly

Social media explosionQuickly becoming the primary communication & collaboration format

Hyper digitizationDigital content is produced and accessed more quickly than ever before

The power of analyticsReal time analysis, predictive analytics and micro-segmentation emerging

Transformational cloud – Cloud’s attributes make it a powerful delivery model enabling new business models, cost benefits, flexibility and large on-demand capacity

Gmail is a pioneer example of cloud computing, supported well by advertisement based revenue model, cloud’s low cost delivery model enabled and sustained free email service

Ecosystem of connected health and wellness apps that delivers a consolidated view of users’ health. Strong & growing ecosystem with 12 APIs and 7 Apps that cover all aspects of health care 1

Xerox Mobile Print platform uses cloud to convert and process print requests, removing complexity, reducing costs and enabling diverse devices and print configurations 2


The transport sector is also impacted by these disruptions; necessitating innovation and agility to drive profitable growth

FORCES SHAPINGGLOBAL TRANSPORTATION

IMPLICATIONS FORCES SHAPINGCLOUD COMPUTING

Market demand for cloud solutions is fueling rapid innovation across all industries and markets

Costs and complexity of maintaining legacy systems is skyrocketing, making modernized variable cost based alternatives more attractive

Competition among cloud providers is driving down costs

Unrelenting competition, unconstrained capacity growth, and continued focus on price keep transport margins low

Customers have grown weary of onerous requirements to connect to back office systems

Customers express interest in alternative transport solutions

Many providers will struggle to maintain status quo solutions

Many customers require significantly more

flexibility in transport interactions

Transportation companies and their

customers are eager to adopt cloud solutions


Relentless pressure on margins coupled with modest growth in transport demand require low-to-no cost industry improvements

Low margins across all transport sub-sectors

Shipping and Tracking struggle with particularly low margins, typically less than 3%

Even the most profitable transport segment, air freight and freight services produces margins that are less than 5%

Compared to the services sector, all areas of transportation produce modest returns on equity

With no profit, shipping produces no return on equity

Source: Yahoo finance industry analysis tool, YTD June 2014: http://biz.yahoo.com/p/773qpmu.html

Relative Return on Equity, 2014

Relative Profit Margins, 2014

Services Air Delivery & Freight Services

Trucking Shipping

Services Air Delivery & Freight Services

Trucking Shipping

28%23%

14%

0%

5.8%

4.9%

2.7%

-0.3%

http://biz.yahoo.com/p/773qpmu.html


As they advance along their transformational journey, transportation leaders focus on four key imperatives

7

CREATE A CUSTOMER –

FOCUSED ENTERPRISE

INCREASE FLEXIBILITY AND

STREAMLINE OPERATIONS

DRIVE INNOVATION WHILE MANAGING

COST

OPTIMIZE ENTERPRISE RISK

MANAGEMENT

Cloud computing improves efficiency, expands innovation potential and drives revenue growth

Optimize data and leverage analytics to adapt to new behaviors, cultivate trust, and drive profitable growth

Improve operating leverage with variable cost structures that increase flexibility and reduce risk

Deliver new services quickly that decrease cost per transaction and drive competitive differentiation

Maximize return on equity, combat fraud and mitigate operational risk while achieving compliance objectives


In order to address industry challenges and manage changes, business leaders can leverage cloud to transform their businesses

Shifts CapEx to OpEx Shifts cost from fixed to variable, pay as you

goCost flexibility

Business Scalability

Market adaptability

Masked complexity

Context-driven variability

Ecosystem connectivity

Allocate and release resources based on demand

Gain from scale economics

Speeds time to market Supports rapid prototyping and innovation

Expands product sophistication Simpler for customers/users

Drives context-driven, user-centric experiences (preferences, movements, behaviors)

Facilitates new value nets of partners, customers and other external players

Enables industry platforms

Cloud empowers six potentially “game changing” business enablers

Cloud computing is a pay-per-use consumption and delivery model that enables real-time delivery of configurable computing resources (for example, networks, servers, storage, applications, services).

Resource Pooling

Broad Network Access

Rapid Elasticity

On-demand self service

Measured service

Cloud’s essential characteristics

Source: NIST, IBM IBV Power of cloud study


Cloud enabled collaboration, analytics, and mobile delivery, increases flexibility and make it easy to compose business functions

CLOUD ENABLES COMPOSABLE BUSINESS MODELS Ability to restlessly re-invent applications, services and

processes Assembled from blocks of capability that can be rapidly

changed Small (Micro) blocks perform simple tasks reducing risk

of using and changing Well defined interfaces (APIs) makes blocks easy to

use and share Blocks share data to take advantage of analytics

A Collaborative Enterprise

Leveraging Advanced Analytics

Delivering Insight Where it is Most Needed

Employees, customers, and business partners are connected in real time to coordinate deliveries, arrange customs clearance, and process insurance claims

The days of transportation companies depending on the ‘local knowledge’ of staff and partners are gone – intelligent systems take in data and calculate optimal solutions automatically

The entire database of legacy records – information about shipper volumes, and access to unstructured market trends, will allow companies to dramatically improve forecasting and capacity planning


Cloud enabled mobile solutions, collaboration tools and analytics will improve the customer experience and drive operational efficiency

Fully automated transaction and billing support

Touch-free interactions for both new and existing customers

Exception-driven updates for status, delays, customs processing, etc.

Seamless integration with partner and customer operational and supply chain management systems

CURRENT FRUSTRATIONS

Mostly manual quote generation

Highly dependent on employee knowledge

Significant ‘training period’ for new customers

Frequent data entry/re-entry errors

Frustrating complex rate structures

Complex back office connections

Too many incorrect invoices

CLOUD DISRUPTIONS FUTURE OF TRANSPORTATION


Cloud enables transportation companies to drive transformation by bringing the full power of legacy data to the front line employee

Freight Rates – for each specific customer, product and market

Sales Leads – relevant to sales associates, regions, and products

Shipment Status – real time data about the location and condition of each shipment

Financial Details – always up to date information about payment terms and past performance for each customer and business partner

Insights and recommended actions delivered to the smart phones held by: Dock agents Sales associates Tracking teams Warehouse managers Dispatchers


Cloud enables transportation companies to drive rapid enterprise transformations while coordinating across emerging eco-system

Clouds as platforms have the ability to scale as usage increases with the convenience of providing a single system and uniform processes that is accessed by people in many organizations

Cloud delivery model allows integration of the ecosystem partners to increase the reach of customer and system insight

Cloud helps in reducing the fixed IT costs for an enterprise, but also enables disruptions like creating new revenue streams and breaking into new markets

In addition to increasing efficiency with a simple dashboard, cloud computing can also provide the benefit of more immediate, near real-time data

Source: http://www.logisticsmgmt.com/article/state_of_cloud_computing_skys_the_limit

The percentage of logistics enterprises who have already adopted Cloud Solutions18%The percentage of logistics enterprises who are evaluating cloud solutions and cloud delivery models

37%By 2016, the percentage of supply chain applications which will be delivered in the combined cloud, according to Gartner

40%


Cloud helps freight logistics and trucking companies to focus on their business as opposed to their IT infra, software versions and update schedules

Cloud solutions reduce the company’s time to market

Freight carriers are reducing asset downtime and associated risks using cloud-based solutions

Cloud solutions helps the transportation companies to speed the delivery of new products and services, and reinvent customer relationships

Transportation organizations that embrace cloud aggressively create substantial competitive advantage and differentiated growth

Source: http://public.dhe.ibm.com/common/ssi/ecm/en/xbl03022usen/XBL03022USEN.PDF, IBM Cloud POV Outline for T&T

ECOSYSTEM / PLATFORM DOMINATION

REVENUE GROWTHOPERATING EFFICIENCY

IT managers can increase efficiency by leveraging cloud capabilities to dynamically reallocate resources to different users across the transportation network to meet peak demands

Cloud enables the fleets to access their information from any Internet-enabled device from any remote location, thereby allowing multiple remote users and faster communication between drivers, fleet management and maintenance operations

Cloud simplifies the integration of partners for managing cross-company processes and offers mobile system access which are key factors for the logistics companies

The trucking and logistics companies gain flexibility from the cloud which allows them to deploy the system at a single business unit or across the whole enterprise

Rapid adoption of mobile technology, the explosion of social media, growth in “big data” and advanced analytics, and the globalization of value chains are trends directly enabled by cloud


Transportation companies that have embraced cloud based services are already seeing significant performance improvements

Source: http://www-03.ibm.com/software/businesscasestudies/us/en/corp?OpenView&Start=31&Count=30&RestrictToCategory=corp_PowerSystems&cty=en_be

A large transportation logistics company in North America realized increase in revenues and reduction in staffing requirements by implementing advanced techniques, solutions with case management capabilities

The solution involved integration of multiple information sources and technologies - customer data, contracts, legacy systems, real-time monitoring

ECOSYSTEM / PLATFORM DOMINATION

REVENUE GROWTHOPERATING EFFICIENCY

China Railway worked with IBM to create a virtualized infrastructure, offering computing services to its many subsidiaries through infrastructure-as-a-service (IaaS) management

Apart from the reduction in time to market and costs, the cloud solution offers China Railway the IT flexibility and efficiency to keep up with growing demand

Global Port operator developed a cloud-based collaboration platform that brought port users together to share data and coordinate transactions in new ways.

The solution enabled diverse port customers such as container shipping lines, freight logistics companies, government agencies, and the port terminal operation to share data on transactions to speed port clearance and facilitate multi-party collaboration

reduction in time to market while cutting costs for equipment and systems management by one-third

Anticipated increase in revenue and 83% reduction in staffing requirements for billing operations

IBM IBV projects that the number of companies that are using cloud to drive innovation will double to 35% from 16% in next few years

50% 1Mn $ 35%


3 IBM can help


1Cloud will transform the transportationindustry


Explosion of devices, data and new technologies pose a big challenge in their adoption

Source: IDC Predictions 2014

of IT spending growth will drive spending on mobile, cloud, Big Data, and social and related offerings

89%

of top 20 industry leaders in most industries will be significantly disrupted by new competitors or reinvented businesses

33%

is the ratio at which smart phones and tablets will outsell PCs, increasingly becoming touch points for consumers

2.5:1

DATA

growth is expected in data volumes exploding to 6 trillion terabytes50%

growth is expected in IT spending on Big Data, shifting toward analytics tools & apps, increasingly delivered by cloud

30%

of Fortune 500 companies will have, by 2017, an active (social technologies–enabled) customer community

80%


Cloud expands the potential of new technologies across the enterprise

Business model change is quickly enabled by Social Media, Mobile and Analytics but delivered by Cloud

Cloud reduces costs, helps manage increasing costs of new technology adoption

Cloud moves CAPEX to OPEX, reducing upfront investments for new technologies

Cloud’s elasticity feature aligns technology spend to business demand avoiding wasted idle capacity

Cloud’s potential will enable organizations to be agile, flexible, provide on-demand access to huge computing resources but …………….cloud adoption requires careful planning

Source: IBM Center for Applied Insights Under cloud cover: How leaders are accelerating competitive differentiation


Organizations can take a five stage approach in cloud adoption

Determine the organization goals, platform requirements & complexity associated

Develop enterprise cloud strategy, options available and roadmap

Envision the cloud architecture that will support cloud initiatives

Update IT Strategy and IT plans to align them with cloud strategy

Define business drivers to prioritize use cases for cloud

Implement a CloudFirst strategy to evaluate right blend of cloud options for new projects

Assess and evaluate from the current applications, the best candidates for cloud

Determine the applications to be moved to cloud

Define multi-sourcing models and cloud vendor selection criteria

Assess and determine how to best leverage the options of private, public and hybrid delivery models

Develop Cloud Service Catalog, SLAs and KPIs

Develop cloud cost models including transition

Finalize a cloud business case and examine its ROI including time required for initial payback

Prepare infrastructure for cloud

Develop Cloud Risk

Management plan and policies

Security and Compliance plan and processes

Transition plan including workforce transition

Assess impact on operating model; identify and plan changes required

Note: The above shows an overall plan and will include aspects of workload prioritization and migration discussed in other slides

Prepare for implementation

Develop Cloud business case

Determine cloud deployment options

Identify and prioritize workloads

Create Cloud strategy, architecture and plans1 2 3 4 5

Cloud planning should result in accelerated migration, quick wins and mitigated risks


Cloud strategy comprises four elements

BUSINESS MODELS ENABLED BY CLOUD

Promoting highly competitive initiatives at the enterprise and Industry level

APPLICATION AND DELIVERY PLATFORMS

Driving agility and productivity for the enterprise; tested strategies to improve life cycle performance

DATA PLATFORMS

Instantiating well-integrated business intelligence to manage the enterprise

INFRASTRUCTURE PLATFORMS

Delivering consumable, secure and readily available resources to enable agile execution

Enterprise Cloud

Strategy

19

1 2 3 4 5

Strategy


Enterprise innovation is realized by integrating new technologies with existing core systems

20

Cloud enables leaders to take a systematic approach to integrate these capabilities to drive

enterprise innovation

Systems of insightAdvanced analytics and cognitive computing systems that harness big data, enabling competitive advantage for enterprises

Systems of engagementLeverage mobile and social to transform relationships with customers, employees & citizens

Systems of recordThe traditional core systems such as accounting applications and product systems that record key internal data

Pervasive Security Intelligence A dynamic approach to threat reduction through a life cycle of prevention, detection and response

Enterprise Innovation

Systems of Engagement

Systems of Record

Systems of Insight

Enabled by Cloud

Security

Pervasive Intelligence

1 2 3 4 5

Strategy


Organizations should evaluate born-on-the-cloud solutions along with existing workload migration

21

Ent

erpr

ise

Clo

ud A

dopt

ion

Migrate existing workloads

Cloud First

MigrateQuantifyPrioritizeSelect

Workload analysis Wave 1 Wave 2 Wave 3

Migration Plan

Business case

New project

Replace existing app / infra

New project

Evaluate a blend of cloud options that best suit the project

requirements

BPaaS SaaS

PaaS IaaS

1 2 3 4 5

Prioritization


Can all applications / workloads be moved to cloud? Assessment and prioritization will help determine “cloudable” workloads

The Opengroup defines the term “workload” as the type and characteristics of application(s) that can be hosted on the Cloud

Prioritization helps determine cloudable applications

Business value agility and elasticity value in rapid deployment

enhancing time to market pay-as-you-go pricing

model shifting fixed costs to variable costs

reduced capital expenditure lower operating costs

Deployment ease number & type of connections

between the application and other applications

the amount and style (batch, interactive) of data transferred

the non-functional response characteristics

the security and compliance requirements

Challenges to address:• Now that I am ready for cloud, what workloads fit my target cloud?

• What is the real cost-benefit of moving workloads to the cloud?

More ready for cloud

Evaluate: May or may not be ready

New growth workloads made possible by cloud

Workload migration categories

Migration plan

WAVE 1

WAVE 2

WAVE 3

1 2 3 4 5

Prioritization


Optimizing workloads for cloud adoption will deliver enhanced business value for transportation companies

Note: The above is a representative example of what workloads can be moved to cloud

More ready for cloud

Evaluate: May or may not be ready for Cloud

based on their attributes or maturity

New growth workloads made possible by cloud

Many Backoffice Applications

Sensitive Data

Complex processes & transactions

Regulation sensitive

Not yet virtualized 3rd party SW

Highly customized

Analytics

Collaboration

Development & Test

Workplace, Mobile, Desktop & Devices

Infrastructure Storage

Infrastructure Compute

Business Processes

Transportation Solutions

Pre-production systems

Information intensive

Isolated workloads

Mature workloads

Batch processing

Transportation Management

Many Billing Applications

Many Risk Mgmt. Applications

Disaster Recovery

~25IBM’s experience shows that within the existing transportation applications 1 in 4 can be readily moved to cloud

%

1 2 3 4 5

Prioritization


A phased migration to cloud helps manage risks

24

1 2 3 4 5

Potential migration risks Incorrect analysis and identification of

workloads

Inability to meet non-functional requirements

Incorrect ROI analysis

Inadequate preparation of infrastructure / apps for cloud

Complex applications’ interoperability & integration

Failure to comply with security, privacy & regulatory requirements

Management complexity as resources get distributed in a virtualized environment

Discover

current assets and usage

topologies & dependencies

platforms and licenses

SLA’s, security & compliance

Analyze

cloud feature / fit

cloud providers

contract models

resource sizing

workloads

Establish the Migration Toolkit

Cloud-enable infrastructure & applications

Migrate

Infrastructure

Applications, Platforms and Data

Operations Services

Validate Migration

Phased migration approach

Migration & Validation PhaseAnalysis PhaseDiscovery Phase

Prioritization


Cloud services and deployment options enable transportation providers to adopt cloud as per their requirements and value drivers

25

1 2 3 4 5

Value drivers …

.… Customization, efficiency, availability, resiliency, security and privacy

Value drivers …

.…Standardization, capital preservation, flexibility and time to deploy

Public cloudPrivate cloud

Value drivers …

Leverage flexibility and benefits of private and public cloud while addressing data security, governance, compliance and budgetary challenges

Hybrid cloud

Deployment

Software, hardware and platforms are hosted in a data center owned by a transporter and used by different departments / units inside of the transporter

Software, hardware and platforms are hosted externally by a third party vendor who manages all aspects of the services for the organization

Software, hardware and platforms are hosted both in third party data centers as well as inside of a transporter organization


Cloud enables a global trade provider to increase agility and efficiency while reducing IT costs significantly

26

1 2 3 4 5

Source: Case Study on Cloud Implementation for a Global Trade Provider, http://www.slideshare.net/msitpro/tradefacilitate-cs-unlocked

Upfront Capital Expenses No Longer Incurred

$5341 per

server (CAPX)

$107 per month

(OPEX)

Traditional Funding

Cloud Funding

High capital expense replaced by modest operational expense, which is easier to budget for and manage

Rapid Scalability at less cost

97%Reduction in the deployment time

Growing customer

base

• Purchasing and managing additional servers replaced by addition of web roles

• Saved One-third of the cost of adding an additional server every 3 years

Business Case

Reduced IT spending on basic infrastructure leaves more time & budget to focus on strategic initiatives & growing customer needs


Total cost of ownership (TCO) analysis at a large transportation company demonstrates the business value of cloud delivery

1 2 3 4 5

Business Case

Source: Case Study on Cloud Implementation for a Global Trade Provider, http://www.slideshare.net/msitpro/tradefacilitate-cs-unlocked

Business Challenge: The IT department was the backbone IT for a privately held Forbes 500 holding company that consisted of 50–60 companies and over 10,000 employees. The company was under pressure to add new projects, yet its server environment was not scalable or easy to manage. Many servers were underutilized. It was difficult for an already overworked IT staff to take on new projects.

Server Consolidation Improved CPU Utilization Better Capacity Planning Significant Reduction in Hardware, Software

costs and IT Operation costs Conversion of legacy systems into virtual

machines and eliminate older hardware Improve overall processes

Hardware and Software TCO Reduction - 81% Total TCO Reduction - 82% Six – Month ROI – 449% Time needed to recover a system - 6 hours

before virtualization, 10 minutes after Avg CPU Utilization – 60-65% Server consolidation ratio achieved: 7:1

VIRTUALIZATION

BENEFITS FOR IT USING CLOUD BASED VIRTUALIZATION

BOTTOM LINE RESULTS


Security, privacy and compliance issues can be readily addressed with cloud…

28

1 2 3 4 5

As transportation companies start planning to adopt cloud, key questions come up about their data & applications:

Where is our data stored? What about data sovereignty?

How do we protect our customers’ privacy?

How does cloud affect our regulatory compliance?

Is a business continuity plan available for cloud?

IT Strategy

Risk Management

Plan

Cloud SLA

Cloud requirements

Monitoring & Auditing

Risk & Security Management

processes

Physical & Logical controls implementation

Audits & reports

Critical elements to address security, privacy and compliance concerns

TR

AN

SP

OR

T

CO

MP

AN

YC

LO

UD

SE

RV

ICE

P

RO

VID

ER

Implementation


Impact of cloud is forcing transportation providers to evolve a new operating model aligned to a recalibrated business strategy

29

An operating model is a framework for formulating an operations strategy that best deploys and determines the explicit choices needed to achieve business goals

Market shifts in the digital economy necessitate adoption of new technologies like cloud, mobile, social media and analytics

To succeed with cloud, companies have to assess the impact of cloud on the operating model and all its dimensions and determine what actions are required to make cloud adoption smoother and more successful

ROADMAP FOR CHANGE

Target Operating Model

BUSINESS GOALS AND STRATEGY

TOM

CustomerExperience

PerformanceMetrics

Technology

Skills & Capabilities

Sourcing & Alliances

Assets &Locations

Organization &Governance

Processes

1 2 3 4 5

Implementation

CULTURE


Cloud will radically transform and improve client experience in the transportation industry

30

Robert, an experienced Fleet Manager, while on his way to office is accessing the fleet and driver availability details

on his mobile to assign a truck for dispatching the goods for a very important client.

Thomas, the maintenance manager receives Robert’s request when he’s on a

call with MaintenanceVendor. He opens his real time updated dashboard to check for the maintenance level of the truck assigned.

Parker, the maintenance vendor accesses the fleet maintenance data on his Tablet device.

On analyzing, he recommends Thomas to send seven of the company’s trucks for overhauling and maintenance to avoid breakdown.

Walker, the driver of the assigned truck gets the new assignment details on his mobile which includes delivery

details, maps, traffic data. On his way to delivery, he is alerted on his mobile about a road block and is suggested alternate routes.

Allen, the procurement manager of the client accesses the real time GPS position of the truck to find out the lead

time for planning his operations. On receiving the goods, he sends his acknowledgement and feedback to Robert.

Scott, the safety and compliance officer monitors the whole assignment using real-time data, GPS, speed

and mileage tracking devices and sends a report to Robert and Thomas about the truck performance and driver behavior.

1

1 2 3 4 5

Implementation

2 3

5 64

Persona Detail Persona Detail Persona Detail

Persona Detail Persona Detail Persona Detail


Efficient sourcing and management of partnerships and alliances will be major enablers of cloud adoption success

31

IMPACT

Organizations will have more partners and alliances through “Services” being offered by outside organizations

Complexity will increase in service contracts due to consumption-based billing

Service quality and availability will need more focus as they are managed through relationships and agreements with diverse third party ecosystem

IMPLICATIONS

Procurement and sourcing functions will need to be automated and have shortened cycles

Vendor and service management will be an integral part of the Procurement function

Service level agreements need to be defined clearly and governed by the need to secure and protect customer data in a shared environment

Service adoption to meet benefits realization needs to be included in the negotiating process

SOURCING & ALLIANCES


Business leaders will pro-actively redesign business architecture and processes to leverage benefits of cloud

32

IMPACT

The cloud strategy and technologies will require a shift from systems-based processes to services-based processes

Cloud’s speed of service delivery will impact current processes as they need to match and deliver at the same speed

Process framework will migrate from functional silos to an integrated set of processes spanning organizational boundaries

Cloud’s service composition model will provide freedom to engage/disengage functions as needed

IMPLICATIONS

Traditional legacy processes will need to be decommissioned or integrated into the new cloud-enabled processes

Transportation companies will need control over the continued availability, reliability and utility of the cloud based processes and the platforms underpinning them

Dynamic processes for billing and allocation of resources will be required to not be an impediment in achieving value

Processes will need to be made simpler and faster

PROCESSES


Cloud computing will enforce significant changes in organization design and governance within organizations

33

IMPACT

Major shift in how the new environment is managed and operated will have significant impact on the optimum organizational structure required in the future

Organizations and functions will no longer be constrained by the physical location of data centers, hosting providers and hardware platforms

As products and services become more ‘composable’, Governance across the ecosystem will become critical

IMPLICATIONS

Organizations will become more flexible, managing a fluid set of internal / external resources and service providers

Governance will be more centrally defined with decentralized execution

Cloud service selection will follow the overall enterprise cloud governance standards

Strong risk management systems will become critical to manage increasing risks arising out of broader cloud deployment

Current organization will need to evolve

• Organization Design, roles and responsibilities

• Management systems

ORGANIZATION & GOVERNANCE


Organizations need to overhaul performance management approach to optimize and enhance value from cloud

34

IMPACT

A dynamic financial model that measures consumption will be required

Allows transporters to move management of performance metrics off-premise

New metrics will be required that measure:

Service availability

Service quality

Responsiveness

IMPLICATIONS

Performance management strategy will

introduce new levels of complexity in

management reporting

Service level performance will be built into

third party and service management

contracts for all vendors delivering the

cloud based service so retailers can focus

on core strategies

Dynamic metrics tied back to SLAs will be

critical for measuring success for cloud

based services

PERFORMANCE METRICS


Cloud computing will drive rapid changes in skills and capabilities within the enterprise workforce

35

IMPACT

Customer and service orientation skills will be even more critical within transporters

Vendor management, contracting and relationship management skills will be critical to manage all of the vendors and alliances

IT will need to be trained in virtualization and network side technologies to manage the “cloud pipe”

IMPLICATIONS

Deeper data analytics and customer insight capabilities will be the norm

Training of staff on new skills will be required related to new and innovative services

Existing IT and other functional staff will likely need to be retrained or redeployed

Legal / operational support skills will be key to manage partnership agreements

Skills will shift to managing vendor contracts and relationships of many vendors

SKILLS & CAPABILITIES


Business leaders need to accelerate adoption of emerging technologies and technical trends to optimize benefits from cloud

36

IMPACT

The technology function will be leaner with a more strategic focus rather than operational

Cloud’s big impact on technology will be to move on-premise technology deployment to cloud

As more services migrate to cloud, Service Management, IT Vendor management and IT Quality management will become key differentiators

IMPLICATIONS

IT Strategy, Architecture and IT Plans to be reviewed and updated to reflect changes in business strategy and cloud-enabled operations

IT teams need to be retrained and redeployed

Budget for the maintenance of legacy systems may reside, so they need to be budgeted and worked into the overall costs

An IT services catalog needs to be dynamic globally and be applicable for each market

A DevOps approach needs to be implemented to get the cloud service delivered faster to achieve value

TECHNOLOGY


Organizations will have to reassess location strategies to ensure optimized and compliant adoption of cloud

37

IMPACT

Migration to the cloud will require decommissioning and consolidation of technology assets

Decommissioned assets and locations will be a factor in the future state financial model

Removal of physical / technology assets will reduce the quantity of needed remote offices and data centers

IMPLICATIONS

Decommissioned technology assets will impact book value and the existing operating budget

One-time financial write-offs will need to be factored into the overall business case

Excess data centers and remote locations will have to be repurposed or sold / leased to recoup cost

Role of branches will need to be redefined and enhanced to provide a much better customer experience

ASSETS & LOCATIONS


Cloud will lead organizations to rethink and rebuild organization culture to harness enhanced value

38

CULTURE

IMPACT

The shift to a cloud-based environment will also require changes in long-held organizational beliefs and cultural norms

Transportation companies will need to be service-orientated, with a shift in mindset toward valuing the customer experience above all else

Open and collaborative reporting and management across organizational functions and units will facilitate faster customer response

IMPLICATIONS Need to address perceived loss of control /

potential resistance by existing IT and other functions whose processes will move to cloud

Need to educate employees on this shift: How will our culture change, and why? What is the risk if we do not make this

change? What would be the consequences of continuing as is?

Requires reinforcement of expected behaviors through formal and informal mechanisms and interventions

Requires changes in• Leadership Behaviors• People practices

Need to have regular communications on changes


Shanghai Airport Authority coordinates actions between parties to gain predictive insights that improve facility-wide operations

39Source: IBM T&T – Cloud Reference Case Studies

Efficiency – the time required to generate and distribute flight update records fell from several hours to just a few minutes.

Transformation – the problem-resolution model for the facility was changed from reactive to proactive.

Collaboration – today, the airport, air traffic controllers, and carriers are on the same page.

CHALLENGETo decrease flight delays, maximize efficiency throughout one of its airports and improve the passenger experience from curb to gate, this airport authority needed greater visibility into the airport’s interconnected operations, including flights, crews and other moving parts.

SOLUTIONUsing a cloud-enabled business intelligence solution, the SAA provides insight into everything from airplane taxi times to the number of people waiting on the concourse. Airport personnel now have the information they need to identify problems and address them proactively, adjusting ground crew schedules to optimize airplane turnaround time, increasing staff at busy security checkpoints or even opening extra transit lounges to ease crowding.

Cloud-enabled Business Collaboration


Data-driven global logistic company uses cloud delivered business intelligence to quickly develop higher margin logistics solutions

40

Source: http://w3-01.ibm.com/sales/ssi/cgi-bin/ssialias?appname=crmd&subtype=na&infotype=cr&htmlfid=0CRDD-9H39XT

Customer Value – sharpened its ability to answer complex analytics questions while improving the value of the services it delivers

Responsive – quicker decision making help reduce costs and optimize customer supply chains

Efficient – consolidation has resulted in 15% reductions in both time and operating costs

BACKGROUNDGlobal logistics' innovative logistics services focus on warehousing, procurement, distribution and information-driven process improvement

CHALLENGEthe company needed to improve its ability to solve complex analytics issues for its clients. It needed a better way to analyze transport and warehouse logistics because manual methods that used vast amounts of data led to slow delivery for clients.

SOLUTIONUsing a cloud-based infrastructure as a Service (IaaS) platform, global logistics implemented Cognos Business Intelligence software to conduct logistics analysis, enabling it to determine the most efficient transportation routes between warehouses and customer sites.

Cloud-enabled Business Analytics


Transportation solutions provider uses cloud to drive innovation, reduce costs and improve security

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Source: http://www.ibm.com/midmarket/us/en/att/pdf/Feat_1_DriveWyze.pdf?ca=fv1310&me=feature1&re=usartpdf

Drivewyze decided to build the Drivewyze PreClear service based on IBM SmartCloud® Enterprise+, which provides a fully managed and production-ready cloud infrastructure

IBM’s cloud offered a secure environment along with high availability, back up, recovery and monitoring features, which are critical components to the Drivewyze service

Maintaining safety on the roads for both trucks and other vehicles is a top priority for law enforcement agencies. To comply with safety measures, truckers must regularly stop at roadside inspection stations which are set up to identify unsafe vehicles

With 4.5 million trucks required to report to weigh stations in North America and only 13,000 inspectors, Drivewyze believed there had to be a better way for law enforcement to reduce needless inspections on safe trucks and focus on the unsafe ones

Drivewyze piloted a hands-free application called Drivewyze PreClear, which offers a safe and secure way for truckers to request and receive bypass clearance at both permanent weigh stations and mobile inspection sites

Cloud-enabled Business Innovation


Multi-modal port operator develops cloud-based ecosystem to benefit the entire port community

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Recognizing the frustration of Port operators and their many diverse users, IBM developed the IBM Port Community System (PCS)

The PCS was developed in conjunction with the Saudi Arabian Port Authority to give shippers, agents, port owners, and customers a way to share transactions details in a private-cloud

The PCS was developed on behalf of its users, who will, in time, own and operate the solution

Port operators are at the center of a great deal of transportation related activity, but historically, mostly as a result of the time and administrative hassle they would add to the process of delivering goods, many have been viewed less as a service than as a necessary evil

Despite their host of laborious processes, ports perform a host of valuable functions, including:

Facilitation of customs clearance

Coordination of arrival, departure, unloading, and loading

Scheduling and use of specialty equipment used for loading and unloading

The transport industry desperately needed a way to provide these services in a more efficient and customer-focused manner

Cloud-enabled Ecosystem Development


3 IBM can help


1Cloud will transform the transportationindustry


IBM is best positioned to serve the cloud computing needs for transportation providers

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Infrastructureas a Service

Strategize how to use cloud to drive savings and revenue growth

Build and run your private or hybrid cloud

Utilize cloud services delivered from IBM Cloud

Business Processas a Service

Softwareas a Service

Platformas a Service

Hybrid Cloud Technologies

Expert Integrated Systems

Cloud Platform Technologies

Cloud Infrastructure Technologies

Cloud Security Services

Cloud Strategy and Design

Cloud Implementation

Cloud Migration Services


IBM is helping our clients achieve compelling business outcomes, no matter where the entry point is

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BUSINESS PROCESSas a Service

SOFTWAREas a Service

PLATFORMas a Service

INFRASTRUCTURE as a Service

Automating Business Innovation

Marketplace of High Value Consumable Business Applications

Rapid App Development through Composable and Integrated Platform built using open standards

Enterprise Class, Optimized Infrastructure built using open standards

Business Process:

Procurement

Payment Processing

Help Desk

Accounting

Recruiting Commerce

Supply Chain

Analytics

Talent Management

Collaboration

IT Management

Marketing

Development & DevOps

Big Data & Analytics

Security

Integration

Mobile

Traditional Workloads

Integration/ API Mgmt.

Compute

Storage

Networking


IBM Cloud marketplace provides easy access to our as-a-service portfolio – and is organized by key cloud buyer roles

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Over 200 IBM and Third-Party Software and Services

Leverage world-class IBM partner ecosystem

Curated solution pages with IBM expertise

Easy access to build, consume, deploy and purchase services

IBM CLOUD MARKETPLACEYour gateway to cloud innovation

Explore hundreds of IBM and Business Partner services from across the cloud spectrum.Sign up to offer your cloud services in the marketplace today.

Enterprise-grade business apps to accelerate innovation (SaaS)

Powerful services and APIs via an integrated cloud platform (PaaS)

Self-service IT infrastructure configurable to your needs (IaaS)

Biz Dev Ops

ibm.com/cloud/marketplace


IBM can support you locally and globally …

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IBM GLOBAL CONTACTSIBM REGIONAL CONTACTS

Mark Bedeman – Europe Cloud [email protected]+34-93 866 3786

Aamer Rana – MEA Cloud [email protected]+971-50-650-3162

Jeff Moyer – Americas Cloud [email protected]+941-809-9283

Raimon Christiani – IBM Global Industry Lead, Travel & Transportation [email protected]+41-79-571-08-84

Steve Peterson – Global T&T Lead, IBM Institute for Business [email protected]+720-939-7919

Anthony Marshal – Strategy & Analytics Lead, IBM Institute for Business [email protected]+720-395-0506

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[FACE PIC]

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IBM can support you locally and globally …

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IBM CLOUD CoC ADVISORY LEADERSIBM CLOUD CoC ADVISORY LEADERS

Cindy Warner – Managing Partner Global Cloud [email protected]

Mike Owens – Associate Partner Cloud [email protected]

Becky Carroll – Associate Partner Cloud [email protected]

Nathan Herber – Associate Partner Cloud [email protected]

IBM CLOUD CATEGORY LEADERS

Nancy Agosta – Cloud Industry LeaderCloud [email protected]



Thank You


IBM Institute For Business Value Transportation Industry Cloud Point of View

Documents

© 2014 IBM Corporation Transportation Industry Cloud Point of View Institute for Business Value Partner’s Name, Partner’s Title DD Month YYYY