Service Thinking Hypothetical Case: IBM and Social Business

Ana Cristina Garcia

Starbucks, Stefanini IT Solutions, Restorando.com

Jul 30, 2013

Outline

IBM Global 2000-Service Innovation Project July 30, 2013 Slide 2 of 20

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Company and Offering - IBM & Social Business

Three Companies Summary

Starbucks Press Release & Service Thinking Analysis

Stefanini Press Release & Service Thinking Analysis

Quasar and Restorando Press Release & Service Thinking Analysis

References & Appendix

Technology Industry Trends

Social Business Platforms

Social business trends are transforming the way companies are doing business

TechnologyConsolidation

IBM Global 2000-Service Innovation Project July 30, 2013 Slide 4 of 20

All/OnlyMobile

Cloud

Big Data

Gamification

Social Re-engineering

Social Networks

Service Oriented-Business Model

• Personalization & Customization• Fermium & Multi-sided markets• Faster product lifecycle

• Faster Access to information• Increased Productivity• Low boundaries

• Increased customer engagements

• Viral & passive marketing

• Outsourced S&HW• Enhanced Security• Collaborative Offerings

• Software defined networks

• Virtual infrastructure• Flexible design

• $10 B Market 2012• Predictive Modeling• Data Analytics

• 62% of Fortune 100 have public app• Easier to monetize• Light infrastructure requirements

• Customer Sentiment• Influence product selection• Faster Feedback

IBM Global 2000-Service Innovation Project July 30, 2013 Slide 9 of 20

Starbucks Connects its Global Partners and Improves Efficiency with IBM Social

Business Software

ARMONK, N.Y. - 29 Jan 2014: IBM (NYSE: IBM) today announced that Starbucks Corporation (NYSE: SBUX), the

world’s largest coffee retailer is using IBM social business technology to connect its large list of partners around the globe,

including the ones inside and outside the company. With this new platform, Starbucks will be able to leverage business

expertise and improve communications and efficiency in its operations.

Starbucks has a wide geographic presence, with operations in more than 50 countries. There, the company has not only a

significant number of company-owned retail stores, but also has relationships with multiple partners that include local

retailers, other suppliers, and manufacturing and IT firms. Therefore, and moving forward with its commonly known trend

of leveraging technology in order to strengthen its operations, is using IBM’s industry leading enterprise social networking

platform to transform the way it manages its partners. The software plays a key role in Starbucks’ strategy of expanding its

global retail business in both new and existing markets.

Its retail stores, which include company-operated and licensed, exceed the 18,000 in North America, Latin America,

Europe and Asia. With the intranet, powered by IBM connections, Starbucks’ 160,000 employees will be able to

collaborate and share best practices in order to perform in their daily tasks, by leveraging expertise across borders. At the

same time build up on innovations on how to provide an exceptional customer experience.

The implementation of the intranet is planned to reach North America’s employees in the first month and worldwide

workforce in a period of five months. It is expected to contain around 100 information portals over 5,000 collaboration

spaces that will provide the space for over 200,000 new connections to be formed. Using IBM’s platform, the learning

curve of employees in a new store is expected to be reduced by half, and number of innovation ideas to improve process

or product in my Starbucks idea portal is expected to improve by 100%. Both KPI’s will improve brand image and

employee’s working environment.

Starbucks will also engage its business partners through IBM social networking platform, as they are crucial for its growth

strategy. This engagement will allow partners to easily identify key contacts within the organization and better familiarize

with Starbucks’s culture and processes, especially for local retail players in new markets. Similarly, the platform will

improve collaboration and efficiency in real time particularly in product development process with coffee makers, and other

manufacturing suppliers. Overall it will maximize the partnership value, and generate cost savings in many fronts.

The implementation of the social networking platform for external partners is expected as a second phase of the project

and will begin in January of next year. It is expected to engage 30% of the key strategic partners in the first 6 months, and

the remaining before the end of the year.

Service thinking analysis of Starbucks CorporationC

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ion Q: How do we empower internal an external partners to make them the main drivers of operation improvement?

Phrase from PR: […] employees will be able to collaborate and share best practices in order to perform in their daily tasks, by leveraging expertise across borders

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Q: What is the continuous improvement discipline?

Q: How fast can it grow?

Q: How is there a shift in the way we connect knowledge, people and technology?

Q: Is there a business component for which external specialization is required?

Phrase from PR: [Starbucks] , is using IBM’s industry leading enterprise social networking platform to transform the way it manages its partners.

Phrase from PR:[Starbucks ] the world’s largest coffee retailer […] moving forward with its commonly known trend of leveraging technology in order to strengthen its operations, is using IBM’s industry leading enterprise social networking platform.

Phrase from PR: The implementation of the intranet is planned to reach North America’s employees in the first month and worldwide workforce in a period of five months.

Phrase from PR: […] the platform will improve collaboration and efficiency in real time particularly in product development process with coffee makers, and other manufacturing suppliers.

Q: What are the new KPI's implemented in the organization?

Phrase from PR: […] learning curve of employees in a new store is expected to be reduced by half, number of innovation ideas to improve process or product is expected to improve by 100%

Time efficiency

Growth Rate

Partner experience

Impact:

Global Reach

Cost Savings

Innovation

IBM Global 2000-Service Innovation Project July 30, 2013 Slide 9 of 20

IBM Consolidates its Business in Emerging Markets through Acquisition of

Stefanini IT Solutions

SAO PAULO – 14 December, 2014: Today IBM (NYSE: IBM) announced that it has completed its

acquisition of Stefanini IT solutions, a leading provider of a wide variety of IT services that include

consulting, integration and infrastructure outsourcing, and financial services. This acquisition will allow IBM

to consolidate its business in emerging countries, especially in Latin America, leveraging on Stefanini’s

talented local workforce, new connections with different stakeholders, and proven ability of revenue growth.

Operating in 28 countries and 67 cities around the world in all continents, Stefanini has a talented work

force of over 13K employees who support its operations (over 70% of them located in South America). Its

rapid expansion in China proves Stefanini’s knowledge on how to implement business practices in Latin

America’s countries in other emerging economies. To build up this knowledge, IBM will empower the

employees in their consulting or support roles, allowing them achieve the highest potential in the co-

creation of the service, and therefore generating utmost value to its clients in the targeted regions.

Stefanini well forged relationship with stakeholders within its ecosystem has given empower it to grow at a

very fast page. The company’s outsourcing services have been extensively used by Latin America’s

companies, giving Stefanini the opportunity to create long term relationships with their clients. This large

client base includes small-to-midsize local and regional companies, in different industries and markets. IBM

will be able to connect this client base with global partners, and give them access to high-end technology.

In terms of innovation, Stefanini’s constant investment in new technology gave it an edge in the region in

aspects like mobilization of technologies and business intelligence solutions for its clients. Stefanini IT

Solutions and IBM have been collaborating for a while in supplying best custom technologies for different

clients in the market. IBM will effectively adapt its current developments, to different business requirements,

being able to combine the right people, technology and knowledge.

Stefanini’s revenue increased by a factor of three from 2009 to 2012, and its financial stability and zero net

debt are proof of the company’s potential. Also, its current talent retention rate of 89% according to internal

calculations is expected to improve after their empowerment in their roles.

Service thinking analysis of Stefanini IT Solutions C

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ion Q: How do we empower stakeholders to consolidate the business in a region?

Phrase from PR: IBM will empower the employees in their consulting or support roles, allowing them achieve the highest potential in the co-creation of the service.

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Q:What is the continuous improvement discipline?

Q: How fast can it grow?

Q: How is there a shift in the way we connect knowledge, people and technology?

Q: What is the best component to acquire in order to consolidate the business in a region?

Phrase from PR: IBM will be able to connect this client base with global partners, and give them access to high-end technology.

Phrase from PR: This acquisition will allow IBM to consolidate its business in emerging countries, especially in Latin America, leveraging on Stefanini’s talented local workforce, new connections with different stakeholders, and proven ability of revenue growth.

Phrase from PR: Operating in 28 countries and 67 cities around the world in all continents, Stefaninihas a talented work force of over 13K employees

Phrase from PR: IBM will effectively adapt its current developments, to different business requirements, being able to combine the right people, technology and knowledge.

Q: What are the new KPI's implemented in the organization?

Phrase from PR: Stefanini’s revenue increased by a factor of three from 2009 to 2012 […], its current talent retention rate of 89% is expected to improve after their empowerment in their roles.

Collaborative growth

Global partners

Regional focus

Impact:

Connection

Shared Tech

Revenue

IBM Global 2000-Service Innovation Project July 30, 2013 Slide 9 of 20

IBM Builds Strategic relationships in Latin America to Promote Social Business

through Quasar Ventures and Restorando.com

SAO PAULO – 25 January 2015: Today IBM (NYSE: IBM) announced an agreement with Quasar

Ventures, a capital firm focused on creating successful tech companies in the region. The partnership is

aligned with IBM’s goal to build strategic relationships with this type of capital firms and their portfolio

companies.

IBM engages with Quasar to find growing and impactful technologies in Latin America to serve customers

in the region. IBM leverages Quasar Ventures’ business knowledge and connections by providing access to

technical expertise and international network of partners, and in this way creating an ecosystem that

promotes innovation.

IBM also will support the firm’s major current investment, Restorando.com to improve social applications in

its business. Restorando.com is a startup that enables restaurants to have different promotion channels to

fill available tables and increase revenue, and at the same time makes it easy and efficient for customers to

make reservations online in the biggest cities of Latin America, improving in that way the life of their

citizens.

Restorando.com operates as a bridge that communicates customers and restaurants, improving their

relationship and consequently adding value to the service. Using Restorando.com social application,

customers reserve tables at suggested restaurants, and also have the opportunity to share their review and

comments about the service they received in the visit to friends or to other interested customers.

The restaurants in return have access to more and more traceable data about their service, which helps

them to be more accurate when measuring their KPI’s. And also, these local businesses have access to

business analytics, which allows them to measure different aspects like customer sentiment and main

influence in product selection.

Founded in 2010, Restorando.com reached more than 1,000 restaurants in Brazil, Chile and Argentina in

18 months. Now it is also in present Colombia, Peru and Venezuela is the leading online reservation

platform in the region with over 2,000,000 subscribed customers. Supported by IBM’s social media

platform, Ristorando.com expects to be able to reach 1,000 more restaurants, and increase its presence in

social media doubling the customer base.

Service thinking analysis of Restorando.comC

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ion Q: How are customers empowered and engaged?

Phrase from PR: […] customers reserve tables at suggested restaurants, and also have the opportunity to share their review and comments about the service they received.

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Q: What is the continuous improvement discipline?

Q: How is there a shift in information shared in the system?

Q: What can be outsource to improve our service performance?

Phrase from PR: Restorando.com operates as a bridge that communicates customers and restaurants, improving their relationship and consequently adding value to the service.

Phrase from PR: Restorando.com is a startup that enables restaurants to have different promotion channels to fill available tables and increase revenue, and at the same time makes it easy and efficient for customers to make reservations online

Phrase from PR: Restorando.com reached more than 1,000 restaurants in Brazil, Chile and Argentina in 18 months. […] present Colombia, Peru and Venezuela is the leading online reservation platform in the region with over 2,000,000 subscribed customers.

Phrase from PR: The restaurants in return have access to more and more traceable data about their service, which helps them to be more accurate when measuring their KPI’s

Q: What are the new KPI’s implemented in the system?

Phrase from PR: […] these local businesses have access to business analytics, which allows them to measure different aspects like customer sentiment and main influence in product selection.

New customers

Value Added

Revenue increase

Impact:

Regional Focus

Revenue

Innovation

Q: How fast can it grow?

Service thinking principles are evident in IBM partnerships

Starbucks Corporation

• Company size: GIE Forbes2000, presentNorth America, Latin America, Asia, Middle East, Europe

• Revenue: $13.3B YE2012• Company Website:

http://www.starbucks.com/• Starbucks Connects its Global

Partners and Improves Efficiency with IBM Social Business Software

• Impact: Revenue increase: $4m Profit increase: $ 73m Brand image

improvement Working environment

• Company size: Mainly Regional: Offices in several countries, but over 70% of workforce located in South America

• Revenue: $ 913m YE2012• Company Website:

http://www.stefanini.com/• IBM Consolidates its Business in

Emerging Markets through Acquisition of Stefanini IT Solutions

• Impact Revenue increase:$0.9m Profit increase: $ 0.54m Brand reputation in Latin

America Customer data base

• Company size: Venture Capital Latin America. Startup: Argentina, Brazil, Colombia

• Revenue: About $ 0.5 m /Yr• Company Website:

http://quasar-ventures.com/• IBM Builds Strategic relationships

in Latin America to Promote Social Business through Quasar Ventures and Restorando.com

• Impact: Restorando Revenue

increase: $ 0.5 m Brand stregthening in Latin

America

Stefanini IT SolutionsQuasar Ventures and

Restorando.com

References

• Starbucks idea: http://mystarbucksidea.force.com/

• FY12 Annual Report: www.starbucks.com

• MarketLine (2012) Company Profile: Starbucks Corporation. www.marketline.com

• Datamonitor (2011) Starbucks Corporation: Company Profile www.datamonitor.com

• Fast Company: The most Innovative Companies: http://www.prnewswire.com/news-releases/fast-company-names-stefanini-one-of-the-most-innovative-companies-in-brazil-140289283.html

• Stefanini: http://www.stefanini.com/EN/

• Interview to Marco Stefanini https://www.youtube.com/watch?v=lwRYTAkLq7w-

• Near shore Americas. Stefanini Expands Brand http://www.nearshoreamericas.com/brazils-stefanini-expand-united-states/

• Corporate Slideshare Stefanini http://www.slideshare.net/marcellelaranjeira/stefanini-corporate-presentation-10013905 -

• Pehub, Restorando seals 3.2 mFY1http://www.pehub.com/2012/02/22/restorando-seals-3-2m/

• Quasar Ventures website http://www.quasar-ventures.com/

• Restorando.com http://bogota.restorando.com.co/

• Revenue Estimates for Private companies http://ryanborn.net/revenue-estimates/

IBM Global 2000-Service Innovation Project July 30, 2013 Slide 17 of 20

Appendix