information age of now: 6 innovative approaches that change the way businesses operate

© 2010 IBM Corporation

AGE of

NOW

6 Phrases that are changing the way businesses operateSuresh Shankar, Director, IBM GPS Analytics

IBM Global Process Services

© 2010 IBM CorporationPrivate & Confidential. Unauthorized Dissemination Prohibited.

2

2008Enterprise of the Future

1,130 CEO interviews

2006Innovation

765 CEO interviews

2004Your turn!

456 CEO interviews

The Global CEO Study 2010 is the fourth

biennial CEO study, building on our

insights and findings over the last 6 years

20101,541 CEO Interviews

1,541 CEO interviews


3

Standouts are also better prepared to manage the expected complexity

Complexity gap*

Note: Long-term performance: 4 year operating margin CAGR (2H03/1H04 – 2H07/1H08); Short-term performance: 1 year operating margin growth (2H07/1H08 - 2H08/1H09)

Source: Q10 How much complexity will your organization have to master over the next 5 years? n=299; Q12 How prepared do you feel for the expected complexity ahead? n=296

“Really, I am not afraid of

complexity at all. On the

contrary, this just motivates

me.”Jacques Pellas

Secrètaire Général, Dassault Aviation, France

* Complexity gap = Difference between expected complexity and

the extent to which CEOs feel prepared to manage it

Lo

ng

-term

,ste

ad

y-s

tate

p

erf

orm

an

ce

Short-term,crisis performance

Top 50 percent

Standouts

22%Gap 6%

Gap

52%Gap 35%

Gap

Top 50 percent


4

Standout CEOs understand the need to capitalize on complexity in 3 ways

Embrace ambiguity

Take risks that disrupt

legacy business models

Leapfrog beyond “tried-and-true”

management styles

Honor your customers above all else

Use two-way communications to sync with customers

Profit from the information explosion

Simplify whenever

possible

Manage systemic

complexity

Promote a mindset of

being fast and flexible

Be “glocal”

Source: IBM CEO Study 2010


5

The fundamental rules of doing business are changing because of the disruptions

caused by new consumer realities


6

How many of you here have used…

The only thing we know about the future is that it will

be different.” -- Peter Drucker

“ “


7

“Less is More”

“Free”

“Networked”

“Share of Time”

“Transparency Tyranny”

“Always ON”

1

2

3

5

6

4

The consumer reality has created an EXPECTATION economy characterized by instantaneity, the ‘AGE Of NOW’


8

Businesses need to re-invent customer relationships by responding to these

trends


FREE

$0.00

7 2 0 7 2 1 2 0 75 9

is the future of business

1


Price of everything is dropping and competitive business models are giving away products for free

10

1

Giveaway the razor,

sell disposable blades

1903: 51 razors, 168 blades2008: Revenue >$40 Billion

a

c Make the video game

console cheap, sell expensive games

$ 0.00 for razor

Willing to pay $10 for blade

Prices dropped from $1000 console to $300

$ 60 per game

c

Annual Fee Waiver…

17% APR

Giveaway the credit cards,

charge interest

Private & Confidential. Unauthorized Dissemination Prohibited.

Consumers expect & increasingly want “complimentary” services for giving

business to firms

1

Firms need to find a way to compete & sustain !!!


Firms needs to have clarity on their business model by adopting innovative cross-subsidized business models

12

1. Ecosystem of ServicesPublishers are no longer selling papers and magazines to

readers, they are selling readers to advertisers

ProFree� 100 MB monthly photo

upload limit � 2 video uploads each

month� Limited to 200 most

recent images� Only smaller (resized)

images accessible� Post images up to 10

group pools

� Unlimited photo uploads� Unlimited video uploads HD

Video� Unlimited storage� Unlimited bandwidth� Archiving of high-resolution

original images� Ad-free browsing and

sharing � Post images up to 60 group

pools

$24.95$0.00

2. Freemium: Basic vs. Pro

1

3. Free Now Pay Later:Free Cell Phones to make subscribers pay for Long Term Service Contracts or pay for

Digital content like software, games etc.

Shift in BurdenShift in Level of Service/Access

Shift in Time


TRANSPARENCY TYRANNY2


14

2

Today’s consumers have more information

at their fingertip…

Data is available….

… on anything & everything

b

a


Consumers are more informed than every

before…and are able to evaluate every aspect of

their purchase decision…

2

Firms today cannot hide information.

Can they afford to Can they afford to

provide provide

information on information on

everything?everything?

Are they Are they ‘‘responsibleresponsible’’

to provide all aspects to provide all aspects

of the information to of the information to

consumer?consumer?

However…..


16

Businesses which are transparent about their offer v/scompetition cut down evaluation cycle for consumers, and

saves time.

2

…and consumers may perceive these businesses to be transparent in other areas as

well

Thus helping businesses build an emotional Thus helping businesses build an emotional quotient for being quotient for being transparenttransparent with the with the

consumerconsumer

© 2009 IBM Corporation17

Firms that embraced transparency clearly benefit tremendously

Progressive, a key player in the insurance industry, openly compares its rates against other insurers)

By driving innovation within the industryBy driving innovation within the industry

© 2009 IBM Corporation18

…….or across other industries.or across other industries””

mySupermarket, a neutral service provider, provides price comparisons across major supermarkets

© 2009 IBM Corporation

NETWORKED3


20

We know about the exponential rise of Networks

500 million active users. The

average user has 130 friends,

People spend over 700 billion minutes per month on Facebook

500 million active users. The

average user has 130 friends,

People spend over 700 billion minutes per month on Facebook

Over 70 million members. A new member joins LinkedIn approximately Every second.

Over 70 million members. A new member joins LinkedIn approximately Every second.

3


21

Increasingly, consumers trust networks and not brands

…which make a big difference. Have some degree of trust from Brand Websites online70%

That trust extends to product preferences…

cite advice from others as the best source for product ideas, up from 67% in 1977

Source: GFK,/Roper, 2006

92%

They trust other consumers like themselves. trust recommendations from people they know

Source: The Nielson Company, 2009

90%



People don’t trust advertising. don’t believe companies tell the truth in advertising86%

3


22

Vietnam is the 17th highest engaged on line community in the world

3

Source: TNS Vietnam


And Vietnam is joining the bandwagon, in a big way...

23

3

23

Source: Ogilvy

Vietnam Social Media Landscape Info-graphic

Structure


Firms are starting to use ‘social media’ tactically as yet another vehicle to reach customers…

24

3

Standard Chartered in UAE Launches 'Get Rich With A

Click' to Increase their Fan Base on Facebook and Drive Activity & Adoption of Online Banking

24


Firms are starting to use ‘social media’ tactically as yet another vehicle to reach customers…

25

3

Standard Chartered in UAE Launches 'Get Rich With A

Click' to Increase their Fan Base on Facebook and Drive Activity & Adoption of Online Banking

25

© 2010 IBM CorporationPrivate & Confidential. Unauthorized Dissemination Prohibited. 26

and customers are sharing their reactions…

770K+ Gap Facebook Fans + 100K Tweets make the corporate revert back to the old logo

3


ALWAYS ON4

Always ONI am

always ‘ON’


WHAT’S HOTSpending Time Online: +56%Using My Mobile: +49%Sending E-Mails: +41%Social Networks: +37%

Most people keep their friends / networks

informed of their travels via ‘status updates’on Facebook or LinkedIn

60% of Blackberry owners check email in bed*

Technology has transformed the consumers digital lifestyle…Consumers are plugged in 24/7

4

Source: MTV Asia Research on Digital Trends, Neilsen

Reports, Newsweek Article**


‘Consumers’ ingrained lust for instant gratification is being satisfied by a host of novel, important (offline and online) real-time products, services and experiences. Consumers are also feverishly

contributing to the real-time content avalanchethat’s building as we speak.

4


I want it ‘HERE & NOW’ – INSTANT is the name of the game

30

�Shazam mobile app allows users to identify

music by recording a

small clip.

�>50 million users around

the world

Listen and buy music

4

- total number of tweets in real-time

Compare prices

�SnapTell allows users to

take photos of products

or scan a barcode on

their phone

Share where you are

Find what is around

you

Real-time

publishing

Real-time

search

Real-time

reviews

Real-time news

Real-time price

comparisons

Real-time

conversations


Consumers and companies in the region are adapting this rapidly across a variety of needs

31

• Dining deals and special offers

shown based on user location

• Coupon Exclusives — Flash and redeem

• ‘Camera View’ : use phone camera

to scan surroundings and nearest

dining deals will automatically pop

up

+• Use mobile to transfer money from Malaysia

• Recipients able to collect funds in cash from over 345,000

Western Union agents across 200 countries

Access the best deals

Send money across borders

Make daily payments

• Enable mobile top-ups, payments

and withdrawals over a mobile

handset

E-wallet service

4


32

Firms need to find a way to become more instant than their customers are….

4


SHARE OF TIME

Share of time

5

33


5

People face a multitude of choices on things to do with their time…

34

In the past, shortage of $ was the critical constraint

and now it is shortage of time.


Today’s currency is time

5

35

…but less & less time

Today consumers have more money & more choices…


5

The marketer who owns the customer’s time, owns the customer …. and hence his wallet!

Watcha movie

Transfer money

Chat Onlinew/friends

Send e-mails

Pay bills

Go Shopping

Reading newspaper / magazines: 1hr

A Typical Day…

Watching TV: 2.5 hrs

Surfing the web: 3 hrs

Listening to music: 4 hrs

IM, Facebook, etc: 5 hrs

Time on Mobile: 24/7!

Marketers need to shift their focus from share of wallet to share of time


What is the most valuable piece of real estate in the world?

5

2005

TODAY

Window to the

world…

1998


38

Tesco expands its service offerings to increase its share of the customer’s time

Apple increases its share of customer’s time with its App Store

Retail

Personal Finance

Fuel

Technology

+ “Acquired 1.5 mncustomers across UK, Ireland, &

Europe.”

5


39

Facebook : own ‘customers share of time’ and monetize it effectively

The third largest populated ‘territory’

Facebook ad Revenue jumps by 1000% and is estimated to be $1.5 Bn, targeted to touch $2 Bn in 2010 and is fast

poised to catch up with

5


LESS IS MORE6

40

Less is MORE


Choice is exploding for all consumers….

Paradox of choice:consumers are moving from ‘not

enough’ to ‘too many’

There is a shift in the burden of decision making with more choices

More choice = more dissatisfaction from making

the wrong choice

More choice =

escalation of expectations for the perfect good / service

6

More choice causes

consumer vertigo

= postponement of decision making

= postponement of decision making


Consumers seek simplicity and want firms to remove barriers between them and what they

want

6

More is actually less…

… and less is MORE.


Links Online Inventory to the Real World

Displaying stock from both the Web warehouse and its stores all at once @ Nordstrom

43

6

Several enterprises are simplifying their services… in simple yet innovative ways


44

6

Technology is enabling organizations simplify operations and products to better manage complexity

Online publishers creating their own ad

exchanges Directly sell the lower-priced ads

called remnants that typically run

at the bottom of Web pages or on

secondary pages

By simplifying banking experience

By cutting out middleman & reduce operational cost

By leveraging the power of the network and much

more…

Group

Discounts

The idea of Banksimple

Account

Debit Card


It’s imperative for businesses to respond to these emerging consumer needs and break with status quo within the industry, enterprise and revenue models

45

‘Free’ as a model being adopted by businesses which the consumers expect & favor

more and more

Build emotional quotient with the customers by being transparent

Consumers are using the power of the network to take charge of their consumerism

& Businesses need to leverage their consumers’ networks

With proliferation of technology businesses need to have more instant conversation

with the consumers

Understand that the share of time determines share of mind and share of wallet

Recognize that they don’t need more choice but make it easy to choose by

simplification

1

2

3

5

6

4


46

As Consumers, it is easy to relate to these trends and react positively…

As Business Managers &

Marketers, how can we stop going

back to our old ways of doing

things?


47

To serve the ‘Age of Now’ , we need to leverage data to…

…understand what can be delivered profitably & freely…

..realise what the customer prefers and combine market information to realise what

the customers’ friends prefer

… understand what can be simplified andwhat cannot be simplified

… enable instant targeting ever evolving customer need

… have clarity on business model…


48

Today we have the data to be able to leverage each of these


49

So what does it mean for businesses?

The management dilemma

By 2010, the codified information base of the world is expected to double every 11 hours

Today, 80% of new data growth is unstructured content, generated largely by email, with increasing contribution by documents, images, video & audio

Executives are being called upon to make faster decisions. Today, 45% of executives believe iterative strategies, quick decisions and execution with speed is critical

Volume of Digital Data

Variety of Information

Velocity of Decision Making


Why change and why now?

50

The information environment is at a tipping point

To survive, business leaders must act

Today’s enterprise has not kept up and cannot keep up

We are approaching a

“do or die” moment:

Enterprises that act on

the opportunity will

survive to prosper, and

those that don’t will be

lost


51

"Correlation is enough."

Who knows why people do what they do?

The point is they do it,

and we can track and measure

it with unprecedented fidelity…

With enough data, the numbers speak for themselves.

Massive amounts of data allows identifying insights without hypotheses


52

Time to respond to market is compressed beyond ability to respond through traditional methods….

Perpetual Beta Mode : Launch and Learn(launch even at 80% readiness)

Massive amounts of data allows identifying insights without hypotheses

Time available and cost of iterations is reducing rapidly….

..increasing the need and viability of real-time learning


“When it comes to the future, there are three kinds of people: those who let it happen, those who make it happen, and those who wonder what happened”

John M. Richardson, Jr.


To find out more, how we can help you in ‘Age of Now’

Suresh ShankarGeneral ManagerGPS [email protected]+65 9663 9144

information age of now: 6 innovative approaches that change the way businesses operate

Documents

unauthorized dissemination

ibm ceo study

future of business

ibm gps analyticsage

ceo interviews1

ceo interviews200420062008your

global ceo study

fourthbiennial ceo study