enablement of integrated digital identities, analytics and .... Advanced analytics is now proving to be ... Baier et al. discuss sales-force performance analytics.
Preface: IT-enabled business transformation at IBM The internal information technology (IT)-enabled business transformation of IBM is guided by IBM strategy, grounded in IBM values, and enabled at the intersection of process, technology, and culture. The main focus areas of the internal transformation of IBM are enablement of growth, productivity, and culture change. This issue of the IBM Journal of Research and Development focuses on the IT-enabled business transformation journey of IBM to a smarter enterprise that is globally integrated. One purpose of this special issue is to share lessons learned, along with experiences that demonstrate the track record of IBM in solving problems similar to those faced by other businesses in order to survive, grow, and innovate in the world of constant change. Because of space limitations, this issue includes papers on a few areas of the IBM transformation journey, including radical simplification of business processes, cultural and organizational transformations, the enablement of integrated digital identities, analytics and optimization, cloud computing, and supply-chain management. In the first paper of this issue, Urso et al. outline the enterprise transformation undertaken by IBM since 1993 to transform its business processes through simplification, better integration across the company, and innovative approaches and technology. The authors also introduce the concept of Value Services, defined by IBM as a group of functional units, processes, and initiatives dedicated to working collaboratively to achieve business transformation and improve productivity (a measure of efficiency of production) and effectiveness (client and business partner quality). Value Services comprise three key elements. Shared Services are globally integrated organizational/functional units providing support services (e.g., human resources, finance, and IT) to all of IBM worldwide. Globally Integrated Support Processes are focused on improving end-to-end efficiency and effectiveness of processes performed across more than one organizational function or Business Unit. Integrated Operating Model Initiatives target similarities in all worldwide processes, skills, and assets to improve integration, productivity, and globalization. Between 2005 and 2010, the Value Services collectively delivered more than $6 billion in productivity, with an additional $8 billion targeted by 2015. Finally, the authors outline the management system that has underpinned successful achievement of these benefits. In the next paper, DeViney et al. discuss various lessons on enabling organizational and cultural change that facilitates the transformation of IBM to a globally integrated enterprise
Digital Object Identifier: 10.1147/JRD.2012.2206849
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(GIE). IBM has a significant history of ongoing reinvention, and its transformation to a GIE has accelerated as the company has responded to historic shifts that have reshaped the industry and the global economy. This paper provides insights into the organizational and cultural change enablers for becoming a GIE. The authors focus on the highlights, challenges, and lessons learned, including the shifts in mindsets and behaviors that were required to operate as a GIE. Moreover, the paper outlines the organizational and cultural change approach that is being used in the key transformation initiatives of IBM to engage leaders and employees at all levels and accelerate the adoption of new ways of working. Massie and Davis describe an IBM toolkit for radical simplification of business processes. The authors note that complex global business environments are associated with increasingly interconnected economies, societies, and governments. Moreover, the proliferation of discrete markets, categories of product offerings, and individualized customer segments motivates business leaders to drastically simplify their organizations to become more agile in exploiting this complexity. Incremental changes are no longer sufficient to remain viable in volatile and uncertain environments. Internal business processes must undergo radical simplifications that reduce cycle time (a measure of responsiveness), cost per transaction (a measure of efficiency), and the number of hand-offs (a measure of how often work is transferred to another organization or business process). IBM defines radical simplification as realizing reductions in these measures of 50% or greater. To achieve these goals, IBM executives identified the need for a consistent, carefully matched set of best-practice methods, techniques, and leading-edge software tools, including scenario-based guidance to enable leaders to radically simplify their businesses. This paper describes the resulting IBM Toolkit for Radical Simplification and includes project case studies to demonstrate how the toolkit is being applied to simplify business processes for increased speed, agility, and value. Sylvia et al. discuss the transformation of the IT infrastructure of IBM. The structure, strategy, and business operation of IBM have experienced a significant transformation over the last several years. This transformation has been accompanied by an equally important transformation of the internal services and technologies that support the company. Key among such activities has been the renovation of company IT and the infrastructure it is built on. This paper describes the transformation of the internal IT infrastructure of IBM and some of the key initiatives that contributed to a smarter, optimized capability. The authors describe the activities, best practices, and lessons learned in server virtualization work, cloud computing incubation and evolution, workload location and data center consolidation, and the transformation of the internal communications network of IBM. Realizing that transformation is an on-going process, the authors conclude the paper with an exploration
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of their plans to use analytics to enable the expansion and delivery of a real-time collaboration experience, another key IT service area. To produce business results, the GIE relies on people to collaborate, make decisions, and take action. Danko et al. discuss a means for helping people embrace change in IT-enabled business transformations for these enterprises. Though guided by process and enabled by technology, people’s behavior is powerfully influenced by leadership and capacity for change. Facing continuing and sometimes large-scale transformation, IBM chose to add organizational change management to its core capabilities. This capability, coupled with a newly centralized worldwide IT organization, enables a systemic approach to the adoption of global internal transformations by IBM employees. The Blue Harmony transformation program is the premier example of the IBM focus on organizational change management. It is considered by many to be the most significant operational transformation of IBM in decades and sets the operational foundation for the next 25 years. As part of the longer-term strategy of IBM to integrate the enterprise, it simplifies, integrates, and standardizes operations globally and across Business Units. When fully implemented, Blue Harmony will change the daily work of nearly 200,000 employees as well as clients, business partners, and suppliers. In such a massive transformation, the challenges of managing change become massive as well. Lessons learned reveal the effort needed to manage stakeholder expectations and engage executives across the enterprise in leading major change. Schaffer et al. discuss the enabling of an integrated identity from disparate sources. Their paper describes the experience of IBM in creating digital identities for internal and external Web users to support social computing. IBM has sought to deploy pervasive personalization and social computing capabilities on its external Web site but finds itself faced with a number of legacy and disconnected user information systems never intended for this use. IBM has implemented a new Web user identity and profile system that draws from these existing master sources using Web services to present uniform and consistent user information to Web applications. It also provides a mechanism for the collection of user opt-in and privacy choices and provides mechanisms that ensure users’ privacy choices are respected. This paper describes the motivating business need and presents the solution architecture, followed by a summary of the results, important but unfulfilled requirements, and a brief outlook for the future of profiling. Weak economic growth, increasing business complexity, and intensifying competition are among the motivations for the growing use of analytics across organizations of all types. Apte et al. discuss business leadership through analytics. In this business environment, enterprise leadership requires new tools and new insights to make better decisions. Although analytic techniques, no matter how primitive, have been used
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to improve the effectiveness and efficiency of organizations for decades, if not centuries, capability and sophistication are now growing rapidly. Advanced analytics is now proving to be a transformational technology for businesses, providing a source of competitive advantage, and delivering significant, measurable outcomes. Risk management, sales-force productivity, workforce optimization, enterprise planning, and market intelligence are a few examples of core business processes that have significantly benefited from emerging analytical methodologies. As analytic tools used to transform business processes are integrated into enterprise IT systems for use by senior business leaders, they are driving new innovations to address the size, speed, and complexity issues faced by large, global enterprises. This position paper explores emerging trends in the leadership application of analytics in global business organizations. Baier et al. discuss sales-force performance analytics and optimization. In particular, the authors describe a quantitative analytics and optimization methodology designed to improve the efficiency and productivity of the IBM global sales force. This methodology is implemented and deployed via three company-wide initiatives, namely the Growth and Performance (GAP) program, the Territory Optimization Program (TOP), and the Coverage Optimization with Profitability (COP) initiative. GAP provides a set of analytical models to measure and optimize sales capacity and profitable sales growth. TOP develops a set of analytical models and methods for the analysis and optimization of assigning customers to sellers and other sales channels. COP provides additional recommendations on sales-coverage adjustment based on an improved estimation of customer profit. The authors discuss these three programs in detail and describe how they work together to provide an analytics-driven transformation of the IBM global sales force to improve various sales metrics, such as revenue and cost. The importance of strategic planning is universally recognized in the business world as an effective approach to enable achievement of enterprise business objectives over long periods of time. However, despite the criticality of the task, the strategic planning process often does not take advantage of analytics to support the process in a consistent way. Kapoor et al. discuss enterprise transformation, with a focus on an analytics-based approach to strategic planning. Their paper describes a transformation of the strategic planning process for a GIE through development of a planning system that provides a planning framework as well as a set of analytic capabilities to improve both efficiency and effectiveness. The system consists of a hierarchically structured data store, rules that govern relationships among data elements, and an enterprise dashboard with reports and insights supported by analytic capabilities. The hierarchical nature of the planning model can account for the needs and opportunities of individual lines of business while yielding a coherent, executable strategy at the enterprise
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level. Integrated scenario and sensitivity analysis, enterprise simulation, and other analytic capabilities enable optimal planning in the face of volatile and uncertain market conditions characteristic of a long planning horizon. In addition, the system fosters collaboration among planners and exemplifies the key attributes of a Smarter Planeti: instrumentation, interconnectedness, and intelligence. Yarter discusses a private cloud delivery model for supplying centralized analytics services. Business analytics has become vital for businesses to achieve their near-term and strategic goals. Historically, large enterprises have used a decentralized IT delivery model to meet reporting and analytics needs within each Business Unit. Rising demand for analytics, combined with the cost of decentralized delivery, has driven businesses to look at alternative delivery patterns. Chief information officers have a renewed interest in considering centralized, virtualized servicesVgiven their desire to reduce expenses without reduced business flexibility. The Chief Information Office of IBM has pioneered a private cloud delivery model for delivering analytics tooling to internal users (IBM employees), providing centralization and standardization of service. Through evaluation of analytics usage patterns, IBM developed a common analytics services strategy to reduce expenses and solution deployment time while improving business agility and insights. IBM deployed a share-all private cloud model (in which users deploy reports on the same instance of the hardware and software) on an extensible LinuxA on System zA infrastructure to deliver ubiquitous analytics service to every business process area. The IBM software-as-a-service analytics delivery model allowed its more than 190,000 business users to maintain user or user-group solution autonomy while providing access to cost-effective ($25 million savings over five years), timely commodity services. In the final paper, Dischinger et al. describe Supplier Connection, a supply-chain ecosystem for small business job growth. The promotion and growth of small business is crucial to improving the economic vitality of the United States. This paper introduces Supplier Connection, an initiative led by the IBM International Foundation in collaboration with six Fortune 500 corporations with the objective of providing economic opportunities to small businesses in order to spur U.S. job growth. This challenge requires much more than the efforts of any one company, and this paper describes a successful approach to business transformation across many companies. Large corporations typically operate independently when seeking suppliers, creating unique processes, which requires precious resources from small business and which discourages them from pursuing large enterprise contracts. Supplier Connection provides a common supplier application process and a free social business platform where small businesses have the opportunity to present their goods and services to many companies at one time with the goal of winning contracts,
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growing their businesses, and creating jobs. Supplier Connection is designed to bridge the gap between small businesses seeking new opportunities and large corporations seeking innovative new ideas and diversity in their supply-chain partners.
Jamshid Vayghan IBM Distinguished Engineer and Director Chief Technology Officer, Sales Transformation Guest Editor
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