© 2011 IBM Corporation
September 2011
Smarter Commerce Redefining the value chain in the age of the customer Presenter: Scott Lewis - IBM
© 2011 IBM Corporation
This is changing the entire way products are sourced, manufactured and distributed—and making business more complex than ever.
Customer expectations of service, price and delivery is soaring.
Customers now have unlimited access to information and can instantly share it with the world
Social networking and mobile commerce have dramatically changed the dynamic between buyer and seller.
We have entered the age of the empowered customer
95 million Number of tweets sent via Twitter each day
75% Percentage of people who believe companies don’t tell the truth in advertisements
$93 billion Amount in sales missed due to out of stock inventory
© 2011 IBM Corporation
Disruptive forces signal an end to business as usual
Individuals
The connected consumer
The networked workforce
The empowered citizen
Industries
Value migration
Value chain volatility
Customer-insight driven innovation
Enterprises
Evolved business models
Optimized digital operations
Connected enterprise
“Time is ticking for pure product
companies. They need to become
experience providers.”
Consumer Electronics, Europe
"We seem to have more data but our information is worse, as it is more difficult to sift out what information is most important.”
CEO, Electronics Manufacturing Services, North America
Source: IBV Analysis
“We need to do a better job at finding a
way to use this information. The value
chain needs to be connected to bring the
most value to our customers.” Electronics company CEO, Canada
© 2011 IBM Corporation
…with B2C and B2B commerce models converging B2C
Research / Product Reviews
Personalization Social Media
Configure Bundles of Products &
Services
Drop-Ship strategies
Visibility
Market Sell Fulfill
Market Sell Fulfill
B2B
“I get product ratings & reviews for a $20 book – why not for a $1,000
industrial battery assembly?”
“How do I offer product recommendations to my B2B
customers?”
“How can I leverage the power of social networks with my B2B
customers?”
B2B customer (buyer) expectations are set by B2C sites – they want a rich user experience too
B2B sellers are adopting B2C-like marketing techniques to shift from “order-taking” to “order-making”
B2B sellers want to use social networks to promote their brands; buyers want feedback from the community on products and services
© 2011 IBM Corporation
Power has shifted to the customer - compressing margins and changing paradigms
In this new era, businesses need to:
Service customers flawlessly, predict and drive customer loyalty
Market, sell and fulfill the right product and service at the right price,
time and place
Understand and anticipate customer behavior and needs based on
customer insights across all channels
Adapt sourcing and procurement based on customer demand and
optimize supplier interactions across extended value chains
© 2011 IBM Corporation
It drives growth by enhancing, extending, and redefining the value you provide
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 your entire value chain to deliver consistent and predictable outcomes
It maximizes the insight generated through customer interactions
It capitalizes on social and mobile commerce
It improves collaboration and visibility for your customers & partners
Customer
© 2011 IBM Corporation
Smarter Commerce focuses on three dimensions centered around the customer
You need an approach that
allows you to more effectively
connect, collaborate, conduct
commerce and create a
differentiated customer
experience
In today’s world of instant
business, you need deep
insights, in real-time that you
can turn into immediate action
Customer Insight 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 - profitably
Customer Value Strategy
Customer & Partner Engagement Customer
…increasing the value companies generate
for their customers and partners in a rapidly
changing digital world
© 2011 IBM Corporation
Smarter Commerce can help transform every phase of the commerce cycle
8
Buy Drives intelligent,
adaptive and optimized
extended supply chains based on
customer demand
Market Creates
personalized and relevant offers
with unified cross-channel
marketing
Service Anticipates
behavior and delivers flawless customer service
across all channels
Sell Enables
customers and partners to
buy what they want, when and
where
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
Market Buy
Service Sell
Customer
Insight Strategy
Engagement
© 2011 IBM Corporation
IBM’s integrated portfolio for Smarter Commerce
Buy Market Sell Service
Core Business Processes
CORE BUSINESS SOLUTIONS
VALUE CHAIN STRATEGY AND ENABLERS
Advanced Analytics Store analytics | Purchase analytics | Consumer loyalty | Predictive and prescriptive | Social Analytics | Master data management
Market and customer mgmt Aligning sales, marketing and operations
to engage with customers
Innovation and business value Innovating and aligning business models to
drive value to the customer
• Supplier Integration &
Management
• Supply Chain Optimization
• Logistics Management
• Payments and Settlements
• Customer Awareness & Analytics
• Social Media Marketing
• Brand Experience
• Cross-channel Campaign Mgmt
• Digital Marketing Optimization
• Marketing Resource Mgmt
• Cross-channel Selling
• Distributed Order Management
• Customer Integration &
Collaboration
• Fulfillment
• Store Solutions
• Payments & Settlements
• Delivery, Service, & Support
• Customer Self-Service
• Reverse Logistics
• Case Management
Operating and Organization Models Designing operations, supply chain and the
organization model to deliver customer value
Workload Optimized Systems (Z-Enterprise, Power, X, Storage and Systems Software)
focused on agility, integration and automation to drive relevant business outcomes
© 2011 IBM Corporation
How the empowered customer is changing how you “Buy”
Increasing price pressure due to pricing knowledge of competitive products
Expecting instant product availability
Expecting quick new/enhanced product introductions
Demanding customizable product configurations
Empowered Customers are: It’s changing the way you “buy”
Deliver the highest quality products with lowest costs and on time
Easily share information across internal systems and connectivity with suppliers
Collaborative environment to capture, evaluate, process and retain supplier and product information
Detect and resolve compliance issues as they happen, and predict before they happen
Continually analyze and refine the “buying process”
Customer
© 2011 IBM Corporation
Supplier relationships are changing
More than 85%
of companies expect the
complexity of their supply
chains to grow significantly by
2012
$15+ to process
a manual document and
$53 to reconcile
manual errors
Competitive pressures of
today’s economy
demand more information and
flexibility
70% of supply
chain officers report the lack of
visibility has a significant impact
on their supply
chain and 55%
report cost containment
concerns
64% of
organizations don’t know or don’t measure
the average cost to manage a
supplier annually
© 2011 IBM Corporation
Companies need new capabilities to capitalize
Analysis of supplier
community and spend for efficient
purchasing processes
Seamless and secure
integration of key business
processes with suppliers
Secure, efficient, and consistent
means of accessing and
exchanging information with
suppliers
End-to-end visibility from
order creation to payment and
tracking supply chain events in
real-time
End-to-end performance management and advanced
analytics to drive continuous
improvements with supplier community
© 2011 IBM Corporation
IBM defines the Supplier Integration & Management Lifecycle
Supplier Integration and Management enables enterprises to continuously improve supplier relationships with more efficient supplier sourcing, automated
and optimized information movement, universal access to that information… and the use of business analytics to monitor, measure, and improve
performance and compliance.
© 2011 IBM Corporation
Drive business growth and cost savings by optimizing your supplier
community through business analytics, technologies and services
Supplier Integration and Management enables you to:
Improve supplier performance through collaboration, visibility and
business analytics
Synchronize your supplier community and reduce risk through B2B
integration and automation
© 2011 IBM Corporation
Supplier Integration and Management helps continuously improve every phase of the supplier lifecycle
Sourcing B2B
Integration
Collaboration
Performance
Analytics
and
Compliance
Allows
companies to
improve and re-
evaluate their
purchasing
activities and
suppliers
Provides seamless
and secure
integration of key
business processes
Enables companies to
better manage their
supplier interactions
and significantly
improve relationships
between vendors and
suppliers
Provides
companies
with end-to-
end supplier
performance
management
and business
analytics
© 2011 IBM Corporation
Projects to make you more successful…
© 2011 IBM Corporation
Automate Procure-to-Pay Process - delivers process integration across an agile supply chain
© 2011 IBM Corporation
Commerce begins with your supply chain partners: Have you automated the process? Do you know the cost of doing business with suppliers
manually?
What is the cost of reconciling errors introduced during manual processing?
Do you have the confidence in your supply chain to compete and win new business?
Can your suppliers see into your supply chain?
Bottom line: A comprehensive approach to supplier integration is critical to customer satisfaction and your margins
© 2011 IBM Corporation
There is opportunity in automating supplier integration
68% of executives report that integration challenges impede collaborative relationships with partners
$93 billion Amount in sales missed due to out of stock inventory
$15 - $20 Is the cost of manually processing a customer order
© 2011 IBM Corporation
The benefits of automating 100% of your procure-to-pay processes are...
Reduce operational costs Improve service level agreements with customers and
partners Compete and win new business through an agile supply
chain Make it easier to do business with your company
Buy
© 2011 IBM Corporation
IBM Sterling B2B Integration Solutions
Carriers
Banks
Partners
Suppliers
Customers
Pre-connected
partners IBM Sterling
B2B Cloud Services
IBM Sterling B2B Gateways
IBM Sterling Transformation Engines
IBM Sterling
B2B Process
Applications
© 2011 IBM Corporation
Projects to make you more successful…
© 2011 IBM Corporation
Build a Supplier Portal - Streamlines the
way suppliers access and act on information
and strengthens relationships
© 2011 IBM Corporation
Deliver on customer’s expectations by simplifying supplier collaboration: Have you optimized the process? Do you know the cost of doing business with suppliers manually?
Can you exchange sales and inventory information with suppliers to ensure and predict appropriate inventory replenishment levels?
Can you quickly publish accurate, current product information across channels?
How long does it take you to onboard new suppliers? What is the impact on your business?
Do you have a way to personalize content for your top suppliers?
Are your suppliers able to quickly and easily manage their own users on your site?
Bottom line: A robust supplier portal can allow you to better manage supplier interactions and significantly improve supplier relationships
© 2011 IBM Corporation
There is opportunity in supplier collaboration
68% of executives report that integration challenges impede collaborative relationships with partners
$1.2 trillion Value of excess merchandise stockpiled in supply chains configured for long lead times - Goldman Sachs
50% Of businesses plan to adopt more collaborative sourcing models
© 2011 IBM Corporation
The benefits of establishing a supplier portal are...
Reduce operational costs –10%-30% reduction in operational costs
Make it easier to do business with your company
–Reduce erroneous payments by up to 75% Onboard new suppliers quickly and easily
–Up to 50% reduction in contract negotiation cycle time Improve service level agreements with suppliers
Compete and win new business through an agile supply
chain
Buy
© 2011 IBM Corporation
supplier
purchasing/ procurement
• Pre-built, customizable collaborative solution speeds supplier portal deployment • Self-service for suppliers including supplier maintenance, access to standard documents and customized reports • Quickly publish accurate, current product information across channels • Streamline content publishing by putting into the hands of the SMEs • Outsource procurement operations via on-shore, near-shore or off-shore resources and IT solutions
contracts trade allowances
product information
forms concept development
trade allowances communications
supplier
contracts product information
orders pricing
ERP PIM/MDM TMS
Supplier Portal
Customized Reports
Real-time information
sharing
Supplier Maintenance
Supplier On-Boarding
- Contracts, finance
- Inventory, logistics
- Sales
- Performance
- Sample forms
- Add new members
- Manage users
IBM Collaboration Solutions from on-boarding to personalized information sharing
© 2011 IBM Corporation
Projects to make you more successful…
© 2011 IBM Corporation
Refine Supplier Compliance Management- Detect and resolve compliance issues as they happen, and predict before they happen.
© 2011 IBM Corporation
Supplier Compliance is key to efficient supplier management: What level of visibility can you provide your suppliers?
How do you identify suppliers worldwide who are not compliant?
How do your suppliers rate on performance? How do you measure their performance?
How do you notify and resolve chargebacks or SLA penalties with your suppliers?
Can your accounts receivable team quickly resolve supplier disputes?
How much of your PO, SO and shipment information resides in different systems?
Can you provide intelligible and actionable business data to your suppliers?
Bottom line: Establishing a single point of access for all supplier content and communications can reduce risk, improve cycle times, reduce costs, support growth and facilitate efficient supplier management
© 2011 IBM Corporation
As companies strive to reduce costs, improving supplier performance is now a best practice
45% Respondents experienced a supply chain disruption
within the past 12 months
41% Respondents have
experienced supplier failure
50% Respondents that
experienced a disruption also lost an estimate of
over $1 Million
© 2011 IBM Corporation
The benefits of real-time supplier compliance management...
Improve supplier performance through real-time non-compliance detection, notification, and chargeback calculation
Reduce costs by enabling non-EDI suppliers to comply with buyer configured compliance guidelines
Improve efficiency in supply chain operations by automating the inbound receiving and compliance resolution process
Buy
© 2011 IBM Corporation
Enable supplier communication and collaboration using IBM Sterling Supply Chain Visibility Vendor Compliance
Another
VAN
IBM® Sterling B2B
Collaboration Network
EDI Suppliers
EDI Carrier / Outsourced
Logistics Provider
Non-EDI Suppliers
Buyer Enterprise
Logistics
Procurement
Supply
Chain
Warehouse
Finance
IBM® Sterling Supply Chain Visibility Vendor Compliance
IBM® Sterling Supply Chain Visibility
Non-EDI Carrier
IBM® Sterling Supplier Portal
© 2011 IBM Corporation
IBM’s integrated portfolio for Smarter Commerce
Buy Market Sell Service
Core Business Processes
CORE BUSINESS SOLUTIONS
VALUE CHAIN STRATEGY AND ENABLERS
Advanced Analytics Store analytics | Purchase analytics | Consumer loyalty | Predictive and prescriptive | Social Analytics | Master data management
Market and customer mgmt Aligning sales, marketing and operations
to engage with customers
Innovation and business value Innovating and aligning business models to
drive value to the customer
• Supplier Integration &
Management
• Supply Chain Optimization
• Logistics Management
• Payments and Settlements
• Customer Awareness & Analytics
• Social Media Marketing
• Brand Experience
• Cross-channel Campaign Mgmt
• Digital Marketing Optimization
• Marketing Resource Mgmt
• Cross-channel Selling
• Distributed Order Management
• Customer Integration &
Collaboration
• Fulfillment
• Store Solutions
• Payments & Settlements
• Delivery, Service, & Support
• Customer Self-Service
• Reverse Logistics
• Case Management
Operating and Organization Models Designing operations, supply chain and the
organization model to deliver customer value
Workload Optimized Systems (Z-Enterprise, Power, X, Storage and Systems Software)
focused on agility, integration and automation to drive relevant business outcomes
© 2011 IBM Corporation
Consumer expectations are driving business changes
Empowered Consumers are:
Expecting instant product availability
Using social network tools for recommendations and validation for product selection
Demanding access to detail product information and reviews via multiple channels
Partners are carrying consumer expectations into the B2B experiences
Forcing change to:
Automation of manual processes to increase product availability
Monitoring and responding to social channels for end consumers
Support upstream channels with more content
Build socially-infused web experiences for partners
Customer
© 2011 IBM Corporation
B2B customer relationships are changing
Partner
mandates
require your
compliance
(Tech, SLA,
Business rules)
Big Box retailers
dictate protocols,
response times and
penalties
Velocity of
business
processes are
increasing
Drive to lower
inventory is causing
order size to
decreasing, while
order frequency is
increasing
Smaller
partners rely on
costly manual
business
processes
Lack of technical
expertise is costing
money, $10+ to
process a manual
document
Getting closer
to their
customers is a
high priority
Quickly changing
demand is driving
the need for better
feedback loops.
© 2011 IBM Corporation
Become easier to
do business
Drive cost and
inefficiency out of
manual B2B
processes
Connect people
together to drive
innovation and
revenue
Connect Automate Collaborate
IBM Customer Integration & Collaboration enables you to…
• Any standard, any
protocol, any format
• Full range of integration
patterns and
technologies
• Community recruitment,
provisioning and
onboarding
• Security, governance
and compliance
• Business process
management
• Automated exception
handling
• Small partner
automation
• Mobile-enabled web
experiences
• Personalized portals
• B2B process visibility
and SLA
management
© 2011 IBM Corporation
… and leverage social media in B2B customer interactions
© 2011 IBM Corporation
Projects to make you more successful…
© 2011 IBM Corporation
B2B Customer Engagement optimizes customer interactions
© 2011 IBM Corporation
Commerce is not just about consumers, Have you engaged your B2B customers?
How are you leveraging mobile and social technology for your
dealers/distributors?
Can your partners help each other, instead of just depending on you?
What other paths to market could you enable to sell more products and services?
Bottom line: Connect people together to drive innovation and revenue
© 2011 IBM Corporation
There is opportunity in B2B customer engagement
43% of baby boomers (55-64) use social media in Dec. 2010, up from 9% in Dec. 2008
5.3 Billion Mobile subscriptions by the end of 2010 (almost 80% of the world population)
32% of instant messages were in enterprises versus public in 2009
© 2011 IBM Corporation
The benefits of better B2B customer engagement are...
Reduce operational costs (one customer reduced call center support calls by 30%) Collaboration that can drive innovation and new revenue streams
(a customer has 31,000 dealer users who share ideas and support each other) Make it easier to do business with your company (customer
enables web experience to mobile devices)
Sell
© 2011 IBM Corporation
© 2011 IBM Corporation