European Service Innovation Centre conference 2014-09-09 Helsinki - approach to service markete market

© 2014 IBM Corporation

European Service Innovation Centre Conference9-10 September, 2014 in Helsinki, Finland

IBM’s global approach to service market

Juha Hulkkonen – [email protected]

09 September 2014

© 2014 IBM Corporation2

How IBM has conquered the world with its service offering?

What is the business philosophy of IBM – unveiling the rationale behind radical innovations and service approach.

What is the future of services in IBM?

Continuous development of service operations?

What should policy-makers know and understand about today’s service markets?

James Manyika, McKinsey: “…for the first time, we now have

technology affecting every single sector of the economy.”

Agenda

Source: McKinsey


Quality of life depends directly on the quality of service systems

3

Systems

that govern

Systems

that move, store,

harvest, process

Systems

that enable

healthy, wealthy,

and wise people

Source: Steven Woods, Jim Spohrer

We all are embedded in tens of service systems

The footprint of our new digital lives


What are the (system) trends? What are the (service) needs?

Digital Immigrant

Born: 1988

Graduated university:

2014

Digital Native

Born: 2014

Enters university:

2032

Digital Survivor

Born: 1959

Graduated university:

1984

Source: Internet


Customer experiences with new platform technologies and business models are dramatically increasing expectations

Source: 2011 IBM Digital Transformation Study, IBV Analysis

Organizations are playing catch-up to meet rapidly expanding expectations

Customers are empowered through technology, with ever-growing influence

Customers have an insatiable desire for sophistication in all areas of life

Organizations are increasingly pressured to provide something

beyond what they do today


Enabling technologies are driving change through economic and societal forces

Source: 2011 IBM Digital Transformation Study, IBV Analysis

Enabling technologies

Connected and Open

Simple and Intelligent

Fast and Scalable

� Proliferation of mobile devices and internet access

� Trust and accountability with partners and consumers

� Reduced and masked complexity

� Analytics and insights to drive decision-making

� Faster and more frequent interactions

� Reduced cost of collaboration

SocialMobile

Analytics

Cloud

3-D Printing

Internet of Things

Nanotech

Organizations must embrace

new technologies to drive

innovation

Forces


Anywhere, anytime Contextual Autonomous

CircularCognitive Situational

The age of smarter service systems is starting in every sector

Source: Corning; IBM; MIT MediaLab


The time required to start a business has decreased from months to weeks or days; the cost from millions to thousands

.

Starting a new business

InboundLogistics

OperationsOutboundLogistics

Marketing& Sales

Service

Alibaba.com 3-D Printing UPS Amazon ShopifyShipstation

Blogosphere

2014 Days

Source: http://www.economist.com/news/special-report/21593580-cheap-and-ubiquitous-building-blocks-digital-products-and-services-have-caused; Organizational Science

2004 Weeks or months

Sourc

e

Mate

rials

Custo

mer

Serv

ice

Sto

rage

Pro

duct

Assem

bly

Packagin

g

Sto

rage

Ord

er

Fulfillm

ent

Inte

rnet

Sto

refro

nt

Pa

yment

Retu

rns

Advertis

ing

Salesforce.com

Running a business


Service organizations will need to understand the forces and reinvent their businesses appropriately

Customer demands expand rapidly

Quality of life depends on service systems

Organizations should (and can) act now

We are embedded in nested service systems

The service systems framework enables organizations to identify their service ecosystems

Forces

Connected & Open

Simple & Intelligent

Fast & Scalable

Consumers are demanding greater sophistication

Organizations are increasingly pressured to catch-up

Organizations must rethink services based on the environment in which they find themselves

Changes are necessitating smarter service systems

Sou

rce

Mate

rials

Custo

mer

Serv

ice

Sto

rag

e

Pro

duct

Assem

bly

Packag

ing

Sto

rag

e

Ord

er

Fulfillm

en

t

Inte

rnet

Sto

refro

nt

Paym

en

t

Retu

rns

Ad

vertis

ing

Technology expands what is possible

Adopt agility and new pace of change both in mindset and in technology


For further information:

� Brown, Eric, https://www.youtube.com/watch?v=np1sJ08Q7lw, IBM

� Ernst and Young, http://www.ey.com/GL/en/Issues/Business-environment/Six-global-trends-shaping-the-business-world

� Forbes, http://www.forbes.com/sites/rebeccabagley/2014/07/15/how-the-cloud-and-big-data-are-changing-small-business/

� Gartner, http://www.gartner.com/technology/research/top-10-technology-trends

� IBM Institute for Business Value, The new age of ecosystems, http://www-935.ibm.com/services/us/gbs/thoughtleadership/ecosystempartnering/

� McKinsey, http://www.mckinsey.com/insights/business_technology/why_every_leader_should_care_about_digitization_and_disruptive_innovation

� McKinsey, http://www.mckinsey.com/insights/business_technology/accelerating_the_digitization_of_business_processes

� Moore, Geoffrey A, Escape Velocity, HarperCollings Publishers, New York

� PricewaterhouseCoopers, http://www.pwc.com/techforecast

� Spohrer,Jim, http://www.slideshare.net/spohrer, IBM

� Woods, Steven, Digital Body Language, New Year Publishing, Danville

European Service Innovation Centre conference 2014-09-09 Helsinki - approach to service markete market

Services