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IBM Smart Planet
Transcript of IBM Smart Planet
IBM began designing and manufacturing calculators IBM products were used in over 79 countries,
that number has since doubled 1940's They first mass-produced the personal computer and sold 2,000 1973 1981 They invented the bar code The IBM PC was built, one of the first computers intended for home consumer use. The IBM PC costs $1,565. 1989 Pinnacle of success:
Invented general purpose computing for business
Helped put a man on the moon
Research won Nobel prizes
Revenue and market shares skyrocketed 1993
Biggest loss in the history of Corporate America
$8 billion loss
IBM, who had built a tradition of innovation, missed a number of key technology shifts as its internal structure made it impossible to respond effectively to the changing technological landscape HOW HAS IBM CHANGED ITS BUSINESS MODEL FROM OPERATIONAL EXCELLENCE, PRODUCT LEADERSHIP TO TOTAL CUSTOMER SOLUTIONS ...By becoming a global, integrated enterprise IBM considered that many of the challenges the planet faces were concentrated in cities: struggle with traffic congestion, water management, communication technology, smart grids, healthcare solutions, transportation...etc Internal drivers By the late 1980s it was a bloated organization of some 400,000 employees.
low margin, transactional, commodity businesses.
Redundant processes and functions
--> Its cost structure could not compete with smaller, less diversified competitors. External drivers
Changing of technological landscape
PC revolution placed computers directly in the hands of millions of people.
The Client/server revolution transformed the way customers viewed, used and bought technology.
IBM was overtaken by Companies such as Apple and Atari who better responded to the new market trends. The “globally integrated enterprise” business model emerged from massive socioeconomic changes that were occurring throughout the world in the 1990s.
Emergence of the Internet
Laying of a global network of communication cables
--> Possible for knowledge work to be performed anywhere in the world where skilled people could be found to do it. Definition In emerging economies, IBM Undertook a competitive battle on two fronts. By:
Reducing the cost and improving the quality of its service delivery.
Positioning as a catalyst of breakthrough technology and deeper client solutions.
--> IBM rapidly expanded its presence in emerging markets, attracting talent and building up its local presence through the promise of long-term, transformational work.
From : Having its own unique profit and loss centers; own legal and human departments...etc
To: Shared-services model that allowed IBM to strip away a lot of the cost and complexity while also better using our resources and talent.
--> Network of global delivery centers in India, China, Brazil and other countries.
--> Standardization of processes and outputs
Shifting the portfolio to a more balanced mix of high value offerings
Divesting low-growth, low-margin product lines and technologies
Consolidation of processes and reporting in key centers of excellence, which served clients over the world.
Elimination of all processes that made global integration difficult Overall, IBM's goal was to get to the front first, set the tone and content for the conversation and lead the way for their clients. Towards a multinational and shared services model To radical simplification IBM has evolved along with a world where computing technology is embedded in almost everything allowing users to gather and share a tremendous amount of data.
IBM is helping its clients capture and analyze all that data and extract meaning from it to make better decisions, reduce costs, improve efficiency and lower environmental impact....
An initiative they call "smarter planet.“ Datamanagement/Analytics - 18 companies acquired since 2005
Staff: T shaped + Consultancy
Extensive internal training modules Longer Term... 2) Create Unique solutions 3)Share best practices Lowering congestion and carbon emissions by influencing traffic patterns on a city scale.
Developing one of the world’s most sophisticated, smart transportation systems leveraging road pricing; integrated fare management; and deep analytics to predict and avoid traffic congestion up to an hour in advance with 85% accuracy. Singapore Big Data and business analytics solutions Vesta is able to reduce power disruptions with IBM big data solution. Vesta is able to analyze 20 petabytes of dynamic real time data. Energy optimization through innovation Chinese shipping giant, Cosco reduced emissions by 15% and its fuel costs by 25% by consolidating its distribution with help of IBM analytics solutions. Cloud based solutions Infrastructure and storage cost reductions for firms Smarter cities Crime prevention, traffic management, emergency control systems. In Memphis 30% there is reduction in serious crimes and 15% reduction in violent crimes. Water management For San Francisco public utilities company the smarter solution led to 70% increase in monitoring of critical assets. Better prediction of weather and emergency situations In Rio there is 30% decrease in response time for emergency situations. HOW IS SHARED VALUE BEING CREATED IN A SUSTAINABLE WAY? Progress and evaluation of the strategy Pre-tax income has been continuously shift from hardware to services and software, and it is expected that more than 50% revenue will come from software by 2015. revenue increase from 2010 on Smart planet Nearly 50% More than 2,000 Smarter Cities engagements globally Thank you!
Co –creation – tailoring products and services
Universities , Cities , Companies Customization Performance Improving products and service performance
Reduction of fuel cost for cargo ships and urban delivery vehicles
Influencing city traffic to reduce carbon emission
New low consumption hybrid systems for urban vehicles
New insight into physical infrastructure and mainatinace operations
Integration of energy and assets management to lower operating costs
Energy efficient scalable modular data center Newness convenience
Smart energy meters for usage information
Monitoring system for city energy management
Price /Cost reduction
Low price transportation system Price/ Cost reduction Low price transportation system Embedded sustainability into their core business Developing sustainable business solutions (max performance, minimize environment impact and improve social outcome) through
Technology innovation and
Co-creation with business leaders, civil society, governments and regulatory Re-conceiving Products and markets
8x energy footprint and floor space Under pressure - Rapid demand on IT capacity to support business growth Energy Energy Savings 1x energy footprint and floor space Operations Savings Power saving, reduce physical servers; improved scalability Operations Maintenance cost on under utilized servers; issues on agility & scalability Extend data center by increase IT capacity in the same footprint
Receive EU award Redefining productivity in
the value chain Traditional : Electrical energy loss (40% to 70%) The "Smart electricity Value-Chain" Business Benefits More reliable supply of electricity
Flexible topology – distributed generation
Improve efficiency - matching production with demand
Real time monitoring - Transparent pricing & peak curtailment Societal Benefits Reduce energy loss
Enable greater penetration of renewable energy sources
Reduce carbon footprint
Engages consumers – reduce their power bills Enabling local cluster development
“Smart city” - sustainable urban development
Better governance – manage resource & system efficiently
Better environment & living condition.Increase educated workforce
Improve productivity & Community satisfaction Reduce crime
Reduce CO2 & traffic jam
Improve health & community welfare
Anytime; anywhere real time access to info & knowledge Societal Benefits Highlights on Financial achievements Conclusion 1) Future staff (T shaped) Welcome to a smarter planet! What is IBM Smarter planet? The Smarter Planet business model is built on the notion of creating value for customers in an ever changing and hypercompetitive marketplace with new technologies.
Smarter Planet offers customized solutions and ecosystems based on latest innovations and triggers active process of building capacity in companies, government and customers to benefit business as well as overall community. In 2008, IBM observed that the world had become flatter.
Globalisation has many benefits, but also some tradeoffs: the systems (in every sense of the word, from systems in companies, to manmade systems and natural systems) - needed to become smarter, to handle and take advantage of the greater connectedness in the world.
In this context, IBM was well positioned to bring value to their customers by helping them manage their businesses better; engage in multi-dimensions; catch new opportunities while making the planet a better place. Why a smarter planet? Why smarter cities? ex: “ Green Data Center” 1953 Entering the emerging world To taking out a leadership position Internal Revamp from "mainframe" to "Smarter"
Public Affairs & Sell to government External IBM Value Proposition Business Benefits Agile company, adopting to changing environment
Turning threats to opportunities, See opportunities in change Looking ahead (opportunities) instead looking back (competition) to create highest socio-economic value for customers Smart balance of standardization and customization --> Changed business model (from equipment to intellectual property) IBM built on their strength; knowledge of software and strong customer base and Acquired knowledge; big data analytics to better insight, JIT service Strategy to reduce risks for business (out performing competitors), secure sustainable growth and gain high profit margin Smart Planet is IBM’s competitive advantage Build on
Ahead Agility Creating
Value Creativity Innovation