Cbs essay comp smarter planet
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© 2012 IBM Corporation
Smarter Business Essay Competition
IBM Smarter BusinessAnders QuitzauInnovation Executive
1
© 2012 IBM Corporation
Smarter Business Essay Competition
The world is becoming smaller and flatter.
© 2012 IBM Corporation
Smarter Business Essay Competition
The reality of living in a globally integrated world is upon us.
§ Frozen credit markets and limited access to capital.
§ Economic downturn and future uncertainty.
§ Energy shortfalls and erratic commodity prices.
§ Information explosion and risk/opportunity growth.
§ Slowing superpowers and emerging economies.
§ Increasingly complex supply chains and empowered consumers.
The world is connected:economically, socially and technically.
IBM Denmark Smarter Planet
U.S. CPG companies and retailers lose $40 billion annually due to inefficient supply chains.
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IBM Denmark Smarter Planet
In the U.S., a typical carrot has traveled 1,600 miles, a potato 1,200 miles, a chuck roast 600 miles…
…grocers and consumers throw away $48 billion worth of food every year.
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IBM Denmark Smarter Planet
In six years the power consumption of a server has risen from 8 watts to more than 100 watts per $1,000 worth of technology.
On average, for every 100 units of energy piped into a data center, only 3 units are used for actual computing. More than half goes to cooling the servers.
In distributed computing environments 85% of computing capacity sits idle.
20 6
© 2012 IBM Corporation
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A mandate for change is a mandate for smart.
© 2012 IBM Corporation
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The world is about to geta whole lot smarter.
© 2012 IBM Corporation
Smarter Business Essay Competition
9
Our world is becoming
INSTRUMENTED
Our world is becoming
INTERCONNECTED Virtually all things, processes and ways of working are becoming
INTELLIGENT
An opportunity to think and act in new ways—economically, socially and technically.
© 2012 IBM Corporation
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Now we have the opportunity to measure and track every details and consequences in processes and life cycles.
10
By 2010, there were more than 1 billion camera phones in existence.
By 2010, 30 billion RFID tags will be embedded into our world and across entire ecosystems.
Nearly 85% of new automobiles now contain event data recorders.
1 billion30 billion 85%
Instrumented Interconnected Intelligent
© 2012 IBM Corporation
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People, systems and “things” can communicate with each other in completely new ways...
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There will be an estimated 2 billion people on the internet by 2011.
2 billionThere are an estimated 4 billion mobile phone subscribers worldwide.
4 billionSoon, there will be 1 trillion connected devices in the world, constituting an “internet of things.”
1 trillion
Instrumented Interconnected Intelligent
© 2012 IBM Corporation
Smarter Business Essay Competition
Now we can respond much faster to, and make more accurate predictions about, changes in the environment and achieve better results on future events.
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Every day, 15 petabytes of new information are being generated. This is 8x more than the information in all U.S. libraries.
15 petabytesScientists are working to prevent influenza pandemics by modeling the viruses with a supercomputer that can operate at one petaflop, or one quadrillion operations per second.
1 petaflopNew analytics enable high-resolution weather forecasts for areas as fine as 1 to 2 square acres.
1 square kilometer
Instrumented Interconnected Intelligent
© 2012 IBM Corporation
Smarter Business Essay Competition
The convergence of physical and digital has enormous value
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What is really going on?
When to act?
What to do?
How to do it?
What is happening?
Collect and interpret new data from sensor systems to determine events
Analyze events to identify insights that determine when to act
Visualization of events in business context
1.
2.
3.4.
5.
Determine the best course of action to respond to identified business situations
Manage and choreograph the processes that perform the action
© 2012 IBM Corporation
Smarter Business Essay Competition
+ + =An opportunity to think and act in new ways—
economically, socially and technically.
© 2012 IBM Corporation
Smarter Business Essay Competition
A smarter planet holds enormous promise for progress.
© 2012 IBM Corporation
Smarter Business Essay Competition
Every natural system and man-made system is becoming interconnected, instrumented and intelligent.
© 2012 IBM Corporation
Smarter Business Essay Competition
Smarter planet: Thinking and acting in new ways to make our systems more efficient, productive and responsive.
§ GREEN AND BEYOND
§ SMART WORK
§ NEW INTELLIGENCE § DYNAMIC
INFRASTRUCTURE
© 2012 IBM Corporation
Smarter Business Essay Competition
Let’s Build a Smarter Planet
Retail
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© 2012 IBM Corporation
Smarter Business Essay Competition
Changes impacting the retail industry
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IBM Internal Use Only © 2009 IBM Corporation
Building a smarter planet
3
SOCIOECONOMIC ! Global financial crisis and credit
crunch ! Consumers in major markets
spending less (constrained by income)
! Growth markets resilient ! Product and food safety ! Environmental concerns
COMPETITIVE ! Industry consolidation and
proliferation of private label ! Reduced barriers to entry and
new business models
CONSUMER BEHAVIOR ! Decreased spending ability and �Flight to value� amid job insecurity and inflation
! Technology savvy and informed, with high expectations from online ratings to e-coupons
! Increasingly concerned about food/product safety and environment
TECHNOLOGICAL ! Pace of technology change
such as pervasive connectivity ! Consumer adoption of
technology, mobile devices, and social networking
! Security and compliance
The global economic crisis has been a catalyst for change, forcing retailers to address many other changes impacting the industry.
Changes Impacting the Retail Industry
IBM Internal Use Only © 2009 IBM Corporation
Building a smarter planet
4 Limited Endless
As a result, consumers are becoming Smarter – increasingly intelligent, instruments and interconnected
Store POS
Web Site
Mobile
Source: IBM Global Retail Industry
Immersive
Call Center
Social Web
Store Kiosk
© 2012 IBM Corporation
Smarter Business Essay Competition
Consumers are becoming Smarter -
increasingly
- intelligent, - instrumental, and- interconnected
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© 2012 IBM Corporation
Smarter Business Essay Competition
Let’s Build a Smarter Planet
Banking
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© 2012 IBM Corporation
Smarter Business Essay Competition
Changes impacting the financial industry
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Building a smarter planet: Financial Services
IBM Internal Use Only © 2009 IBM Corporation 3
There are dramatic forces of change across financial institutions
CLIENTS Rapidly evolving expectations for
offerings, service unbiased advice, and convenience
REGULATION Radically increased oversight
ushering in a new era of increased government
intervention
TRUST Rebuilding trust and confidence across the system is critical to
future growth and stability
CAPITALIZATION Mature markets and
emerging markets alike focus on rebuilding their
capital reserves
COMPETITION Intensified competition with
increased M&A, divestitures and entrance of non-bank service
providers
ECONOMY Weak conditions impact
investment decisions and reduce need for financial services
© 2012 IBM Corporation
Smarter Business Essay Competition
The global financial system is highly complex with many stakeholders
23
Building a smarter planet: Financial Services
IBM Internal Use Only © 2009 IBM Corporation
The global financial system is highly complex with many stakeholders and requires new approaches to create value
4
• The global financial system is massively interconnected and interdependent
• An adaptive system which is a complex network – evolving organically
• The number of intersection points of the financial services networks across the 18 largest countries increased 14x in 20 years1
• The system moves more than $74T around the world each day
• Digitization of the “real economy” has transformed availability of information and how decisions are made
• Anonymity and susceptibility make the system an attractive target for criminal elements
• The system intermediates the needs of billions of people in 190 countries - in thousands of languages.
1 – Rethinking the Financial Network, Andrew Haldane, Executive Director, Financial Stability, Bank of England
Policy makers
Regulators Supervisors
Financial institutions
Compliance
Laws and rules
Surveillance and monitoring
Standards
Soundness Stability
Building a smarter planet: Financial Services
IBM Internal Use Only © 2009 IBM Corporation
The global financial system is highly complex with many stakeholders and requires new approaches to create value
4
• The global financial system is massively interconnected and interdependent
• An adaptive system which is a complex network – evolving organically
• The number of intersection points of the financial services networks across the 18 largest countries increased 14x in 20 years1
• The system moves more than $74T around the world each day
• Digitization of the “real economy” has transformed availability of information and how decisions are made
• Anonymity and susceptibility make the system an attractive target for criminal elements
• The system intermediates the needs of billions of people in 190 countries - in thousands of languages.
1 – Rethinking the Financial Network, Andrew Haldane, Executive Director, Financial Stability, Bank of England
Policy makers
Regulators Supervisors
Financial institutions
Compliance
Laws and rules
Surveillance and monitoring
Standards
Soundness Stability
Building a smarter planet: Financial Services
IBM Internal Use Only © 2009 IBM Corporation
The global financial system is highly complex with many stakeholders and requires new approaches to create value
4
• The global financial system is massively interconnected and interdependent
• An adaptive system which is a complex network – evolving organically
• The number of intersection points of the financial services networks across the 18 largest countries increased 14x in 20 years1
• The system moves more than $74T around the world each day
• Digitization of the “real economy” has transformed availability of information and how decisions are made
• Anonymity and susceptibility make the system an attractive target for criminal elements
• The system intermediates the needs of billions of people in 190 countries - in thousands of languages.
1 – Rethinking the Financial Network, Andrew Haldane, Executive Director, Financial Stability, Bank of England
Policy makers
Regulators Supervisors
Financial institutions
Compliance
Laws and rules
Surveillance and monitoring
Standards
Soundness Stability
© 2012 IBM Corporation
Smarter Business Essay Competition
These conditions require new approaches to create value
24
Building a smarter planet: Financial Services
IBM Internal Use Only © 2009 IBM Corporation
Winners will focus on three key imperatives
7
Develop enterprise wide capabilities to enable informed judgment, client- centricity and profitable growth
Achieve compliance objectives while mitigating operational risk, fighting crime and optimizing financial returns
Drive a simplified and streamlined agile enterprise that balances growth, efficiency and business resiliency
Integrate risk management
Develop new intelligence
Reinvent the business model
Building a smarter planet: Financial Services
IBM Internal Use Only © 2009 IBM Corporation
Winners will focus on three key imperatives
7
Develop enterprise wide capabilities to enable informed judgment, client- centricity and profitable growth
Achieve compliance objectives while mitigating operational risk, fighting crime and optimizing financial returns
Drive a simplified and streamlined agile enterprise that balances growth, efficiency and business resiliency
Integrate risk management
Develop new intelligence
Reinvent the business model
Building a smarter planet: Financial Services
IBM Internal Use Only © 2009 IBM Corporation
Winners will focus on three key imperatives
7
Develop enterprise wide capabilities to enable informed judgment, client- centricity and profitable growth
Achieve compliance objectives while mitigating operational risk, fighting crime and optimizing financial returns
Drive a simplified and streamlined agile enterprise that balances growth, efficiency and business resiliency
Integrate risk management
Develop new intelligence
Reinvent the business model
Winners will focus on three key imperatives
© 2012 IBM Corporation
Smarter Business Essay Competition
Let’s Build a Smarter Planet
Smarter Commerce
25
© 2012 IBM Corporation
Smarter Business Essay Competition
Supply-Chain Executives face three significant challenges
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VolatilityComplex market conditions causing constant flux in demand
Visibility Need for integrated, timely information to make rapid decisions
Value Constant pressure for the supply chain and operations to create enterprise value
© 2012 IBM Corporation
Smarter Business Essay Competition
Visionaries and planners are building strategic, smarter supply chain capabilities
27
4 New rules for a new decade
Visionaries also enjoy enhanced return on their efforts and investments. Based on our analysis, these enterprises experi-ence higher return on invested capital and higher revenue growth performance than the others (see page !").
New rule #1: Know the customer as well as yourself. Smooth volatility with predictive demand. From interviews conducted in our CEO study, we learned that #$ percent of top executives view volatility in the new economic environment as their largest concern." When CEOs speak of volatility they refer to deeper/faster processing cycles, such as order to cash and procure to pay. Volatility has been a serious challenge in the past several years for supply chain executives, as well.
Responding to volatility in market conditions, and the resulting customer demand patterns, has proved to be the biggest challenge for supply chain executives and, not surpris-ingly, a key investment area. Still feeling the repercussions of the worst economic downturn in decades, many companies are currently focused on stabilizing their businesses against this volatility.
Even though surveyed executives rated demand variability and changing customer expectations as their two biggest challenges – ahead of even cost containment – they are responding to these impediments in different ways. Some, such as operators, are hunkered down, focused on operational improvement and a return to “business as usual.” Operators are doing rudimentary
Visionariesq� Predict demand and immediately respond across their networks
q� Use business intelligence and analytics
q� Collaborate with supply chain partners
q� Optimize inventory, cost and their global network
q� Utilize variable cost structures
Plannersq� Employ enterprise S&OP
q� Focus on cost reduction/containment
q� Enhance visibility to key partners with dashboards
q� Use network distribution planning
Operatorsq� Use rudimentary planning
q� Emphasize cost reduction/containment
q� &NQMPZ�åYFE�TUSVDUVSFT�QSPDFTTFTq� 'PDVT�PO�QSPEVDU�æPX�XJUI�MJUUMF�JOUFHSBUJPO
Never 5-10 years 3-5 years 1-2 years Now
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Impressive
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None
Source: IBM Institute for Business Value.
Figure 2: Visionaries and planners are building strategic, smarter supply chain capabilities.
Strategic capabilities over time
Fina
ncia
l ret
urns
© 2012 IBM Corporation
Smarter Business Essay Competition
Let’s Build a Smarter Planet
Sustainability
28
© 2012 IBM Corporation
Smarter Business Essay Competition
Why sustainability?
29
Competitive differentiation and positive brand image
Cost efficiencies in energy, water and waste management
Potential for gaining share of new and growing market segments
© 2012 IBM Corporation
Smarter Business Essay Competition
Strategy
Innovators use sustainability strategy to become industry leaders
30
6 Driving performance through sustainability
Innovators standout on strategyThe innovators indicated that their sustainability strategy is core to their overall business strategy. When asked about the strategic objectives of their sustainability programs, innovators most often cited competitive advantage, followed by industry leadership and enhanced brand (see Figure !). For the rest of the population, the top response was customer demand, followed by competitive advantage and cost ef"ciency.
The innovators strive to become industry leaders, and they focus on innovative sustainable practices to achieve this goal. Their priorities focus on environmental challenges (#$ percent), social challenges (%& percent) and outside-the-enter-prise broader economic challenges (%' percent).
Many innovators are involving stakeholders in their sustain-ability activities, communicating their plans and proffering their strategies as a tool to recruit new employees. Many are engaging the extended enterprise – including customers, suppliers, partners, NGOs and other interested parties – in the co-creation of innovative sustainability strategies. In addition, realizing the importance of goal setting, innovators monitor their performance against clearly articulated goals, targets and measures and report their successes to employees, customers, business partners and shareholders.
Our innovators understand that a sustainability strategy is the foundation that supports a comprehensive program and true value achievement. Innovative companies – those leading the way with well-developed strategies – articulate a sustainability vision and accompanying strategy that are core to the overall business strategy and position them for competitive advantage.
Customer demands
Competitive advantage
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&OIBODFE�CSBOE
Regulatory compliance
*OEVTUSZ�MFBEFSTIJQ
0QFSBUJPOBM�FGåDJFODJFT
$BSCPO�GPPUQSJOU�SFEVDUJPO
Market opportunities
Differentiated products/services
4PVSDF�������*#.�*OTUJUVUF�GPS�#VTJOFTT�7BMVF�BOE�&TUZ�&OWJSPONFOUBM�1BSUOFST�4VTUBJOBCJMJUZ�3FTFBSDI�4UVEZ�
Figure 3: Strategic objectives.
What are the strategic objectives of your sustainability strategy?
27%27%
45%23%
18%23%
32%22%
27%22%
36%21%
27%19%
27%17%
32%15%
18%13% Others
Innovators
#1 differentiator
#3 differentiator
#2 differentiator
© 2012 IBM Corporation
Smarter Business Essay Competition
Let’s Build a Smarter Planet
Social Business
31
32
© 2012 IBM Corporation
Smarter Business Essay Competition
Social Businesses have distinct characteristics that distinguish them from other organizations
33
At their core, they are...Engaged deeply connecting people to be involved in productive, efficient ways
Transparent providing line of sight across traditional boundaries and better aligning actions to needs
Nimble speeding upbusiness with insight toanticipate and addressevolving opportunities
They activate networks of people that apply relevant content and expertise to improve and accelerate how work gets done, delivering unprecedented return for the time invested
© 2012 IBM Corporation
Smarter Business Essay Competition
CIOs are also reporting a shift in investment consistent with these trends
34
According to the 2012 IBM CIO Study:
66% of CIOs from top-performing organizations see internal communication and collaboration as key to innovation
74% of CIOs see collaboration and communication as a key driver in transforming their organizations
Nearly 3 times as many CIOs in top-performing organizations view Social Network Analysis as a top priority
© 2012 IBM Corporation
Smarter Business Essay Competition
Business functions will need to be redefined in a Social Business... but how?
Marketing
CustomerService
Product Development
Human Resources
Smarter Business Essay Competition
© 2012 IBM Corporation
Smarter Business Essay Competition
The way the world works is changing—and leaders must lead through the unknown.
Increase in the gap betweenleaders’ need for change andtheir ability to manage it.
8 in 10CEOs anticipate turbulentchange and bold moves.
3x
Source: 2008 IBM CEO Study
© 2012 IBM Corporation
Smarter Business Essay Competition
Six imperatives for a Smarter Business
37
© 2012 IBM Corporation
Smarter Business Essay Competition
We’ve only just begun to uncover what is possible ona smarter planet.
The world will continue to become smaller, flatter and smarter. We are moving into the age of the globally integrated and intelligent economy, society and planet.
The question is, what will we do with it?
in• Smarter Commerce• Smarter Social Business• Smarter Banking• Smarter Retail• Smarter Sustainability
© 2012 IBM Corporation
Smarter Business Essay Competition
Links for inspiration
§ IBM Smarter Planet
§ IBM Institute for Business Value
§ IBM Social Business
39
© 2012 IBM Corporation
Smarter Business Essay Competition
40
linkedin.com/in/andersquitzau
Twitter.com/Anders_Quitzau
Facebook.com/AQuitzau
Slideshare.net/AndersQuitzauIBM
Thank you