Name Smarter Commerce: Redefining Commerce in the Age of the Empowered Customer Title: Dulles Krishnan Director, Smarter Commerce, Growth Markets

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1 Name Smarter Commerce: Redefining Commerce in the Age of the Empowered Customer Title: Dulles Krishnan Director, Smarter Commerce, Growth Markets Sridhar Hari Smarter Commerce Leader, IBM India Deepak Vinchhi Program Director, B2B & Commerce Solutions, IBM Labs

2 Agenda Smarter Commerce from IBM Smarter Work Smarter Commerce Centre of Excellence Q&A

3 Customers today are more empowered than ever, and are reshaping businesses

4 Power has shifted to the customer compressing margins and changing paradigms In this new era, businesses need to: 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 Market, sell and fulfill the right product and service at the right price, time and place Service customers flawlessly, predict and drive customer loyalty 4

5 Successful companies are staying competitive by transforming their approach to commerce 95% Amount a major transportation company reduced partner integration time*. 36% Percentage uplift in revenues that a leading Indian bank achieved from customers contacted through marketing campaigns. Significantly improved campaign performance, enhanced cross-sell, retention and service quality 14% Reduction in working capital requirements and 10% reduction in logistics costs by a major Indian confectionery company after supply chain network optimization 376% Amount a US-based national communications service provider boosted ROI by reducing customer churn. 5 *Case studies based on Coremetrics, Sterling Commerce and Unica solutions

6 Successful companies are staying competitive by transforming their approach to commerce 95% Amount a major transportation company reduced partner integration time*. 41% Amount a retail pet company increased sales per unique web visitor. Also increased open and click-through rates to five times the industry average*. 50% Amount a leading provider of teaching, learning and research solutions grew direct-to-consumer commerce revenues year over year*. 376% Amount a US-based national communications service provider boosted ROI by reducing customer churn. 6 *Case studies based on Coremetrics, Sterling Commerce and Unica solutions

7 Successful companies are staying competitive by transforming their approach to commerce 14% Reduction in working capital requirements and 10% reduction inn logistics costs by a major Indian confectionary company after supply chain network optimization 36% Percentage uplift in revenues that a leading Indian bank achieved from customers contacted through marketing campaigns. Significantly improved campaign performance, enhanced cross-sell, retention and service quality 14% Reduction in working capital requirements and 10% reduction inn logistics costs by a major Indian confectionary company after supply chain network optimization 376% Amount a US-based national communications service provider boosted ROI by reducing customer churn. 7 *Case studies based on Coremetrics, Sterling Commerce and Unica solutions

8 At IBM we call the path forward: Smarter Commerce Places the customer at the center Drives growth Maximizes insight Capitalizes on social and mobile Synchronizes your entire value chain Customer Increases margins improves collaboration and visibility 8

9 Smarter Commerce can help transform every phase of the commerce cycle 9

10 IBM s integrated portfolio for Smarter Commerce Innovation and business value Innovating and aligning business models to drive value to the customer VALUE CHAIN STRATEGY AND SERVICES Market and customer mgmt Aligning sales, marketing and operations to engage with customers Operating and Organization Models Designing operations, supply chain and the organization model to deliver customer value CORE BUSINESS SOLUTIONS Core Business Processes Buy Market Sell Service 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 Advanced Analytics Store analytics Purchase analytics Consumer loyalty Predictive and prescriptive Social Analytics Master data management Workload Optimized Systems (Z-Enterprise, Power, X, Storage and Systems Software) focused on agility, integration and automation to drive relevant business outcomes

11 What is unique about IBM s Smarter Commerce? Comprehensive Optimizes the complete commerce lifecycle Leading software, services and infrastructure Suppliers Integrated Integrated analytics Integrated focused industry solutions Customers IBM Smarter Commerce Partners Outcome Driven Measureable business outcomes Outcomes tailored to business domains Influencers Flexible and Open Flexible deployment Modular offerings and flexible consumption 11

12 IBM is the right partner for Smarter Commerce Leading industry capabilities and offerings o Analytics, B2B Integration, Decision Optimization, Enterprise Marketing Management, Order Management, Selling and Fulfillment o Modular approach to address key challenges today and grow with confidence Leader in research and development $2.5 billion invested since 2010 to create a truly smarter approach to commerce New services practice with more than a thousand dedicated experts Expertise in over 20 industries to help create a solution customized for your specific needs Leader in Smarter Computing - Over 50,000 hardware and software developers optimizing systems to manage needs driven by commerce applications 12

13 Recognized leadership for E-Commerce, B2B Integration, MFT, Order Management IBM: Leader Gartner Magic Quadrant: E-Commerce, Q2 10 Gartner Sterling Commerce: Leader Gartner Magic Quadrant: Managed File Transfer, Q3 09 Sterling Commerce: Leader Gartner Magic Quadrant: Integration Service Providers, Q4 09 IBM Leader The Forrester Wave : B2C ecommerce Platforms, Q4 10 Sterling Commerce: Leader Forrester Wave : Order Management Hubs, Q3 10 Sterling Commerce: Leader Forrester Wave : B2B Service Providers, Q

14 Recognized leadership in enterprise market management Unica: Leader Gartner Magic Quadrant: Marketing Resource Mgmt, Q109 Gartner Unica: The Leader Gartner Magic Quadrant: Multi-Channel Campaign Mgmt, Q210 Unica: Visionary Gartner Magic Quadrant: Enterprise Marketing Mgmt, Q410 Unica: Leader The Forrester Wave : Enterprise Marketing Platforms, Q108 Coremetrics: Leader The Forrester Wave : Web Analytics, Q309 Unica: Leader The Forrester Wave : Cross-Channel Campaign Mgmt, Q409 14

15 Agenda Smarter Commerce from IBM Smarter Work Smarter Commerce Centre of Excellence Q&A

16 IBM s integrated portfolio for Smarter Commerce Innovation and Business Value Innovating and aligning business models to drive value to the customer VALUE CHAIN STRATEGY AND ENABLERS Market and Customer Mgmt Aligning sales, marketing and operations to engage with customers CORE BUSINESS SOLUTIONS Core Business Processes Operating and Organization Models Designing operations, supply chain and the organization model to deliver customer value Buy Market Sell Service 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 Advanced Analytics Store analytics Purchase analytics Consumer loyalty Predictive and prescriptive Social Analytics Master data management Workload Optimized Systems (Z-Enterprise, Power, X, Storage and Systems Software) focused on agility, integration and automation to drive relevant business outcomes

17 How the empowered customer is changing how you Buy Empowered Customers are: Increasing price pressure due to pricing knowledge of competitive products Expecting instant product availability Expecting quick new/enhanced product introductions Demanding customizable product configurations 17 Customer 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

18 Companies are in a challenging environment... The average number of trading partners has increased 300% over the last 10 years $10+ 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 18

19 ...that require new critical success factors 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 19

20 What can YOU do? Some initiatives that can help Develop global sourcing to optimize supplier relationships Build a supplier portal to streamline processes Centralize contract lifecycle management Automate procure to pay processes Establish vendor managed inventory to boost availability Analyze supplier performance and refine buying process 20

21 Solution Scenario Leveraging supply chain intelligence to shift inventory & execute regional promotions Offer regional product promotions and optimize inventory distribution Sterling Supply Chain Visibility monitors flow of inventory vs. annual norms ILOG is used to optimize the logistics network Network details are deployed into the Sterling Transportation Management System WebSphere Commerce leverages this intelligence to issue custom regional promotions Warm winter in Denver results in excess snow blower inventory Regional promotion to sell Denver inventory faster WebSphere Commerce Precision Marketing Meanwhile, a cold spell in Boston is causing back orders due to lack of inventory Sterling Supply Chain Visibility Trigger an inventory movement of snow blowers from Denver to Boston llog Logistics Network Optimization Sterling Transportation Management Capture results for future supply and inventory 21

22 Kraft Foods facilitates better collaboration among large number of vendors and retail trading partners Challenge Needed to find a new inventory replenishment and vendor management application to replace their internally supported solution that was being removed from the market. Solution Supplier Integration and Management Supplier Collaboration IBM Continuous Replenishment Service Results Improves retailer relationships and collaboration Increases customer service levels and responsiveness Faster inventory turns and lead times Reduces inventory errors Optimizes transportation logistics and costs Improves promotion planning and execution Customer Profile Manufactures and markets packaged retail food products under more than 70 brands with more than $1 billion annual sales. Kraft employs about 109,000 people in more than 150 countries. 22

23 How the empowered customer is changing how you Market Empowered Customers are: Increasingly using new technologies to interact with companies Vocal is saying what they feel about products and services Emerging social and mobile channels Internet has changed the way consumers want to interact with brands Customer It s changing the way you market Critical to understand what customers are saying Determine best response to engage them with clear targeted messaging Effectively manage communications across all channels Manage huge volume and variety of data from various sources 23

24 In response, leading Chief Marketing Officers are driving key investments in Smarter Commerce Harness the potential of social analytics for customer-centric marketing Establish and cultivate advocate relationships Recast channel relationships via 360 customer insight Optimize cross-channel marketing spend in real-time Customer Embrace a fully-realized Social media marketing strategy 24

25 What can YOU do? Some initiatives that can help Centralize cross-channel decisions to improve targeting Track online behavior to make informed marketing decisions Capture data from inbound customer interactions for real-time marketing Automate to tightly align and integrate marketing sand sales Apply technology to increase marketing relevancy 25

26 Solution Scenario Planning, coordinating & executing marketing campaigns to stimulate commerce demand Manage marketing across multiple interaction channels Cross-channel marketing strategy is defined and planned using Unica Coremetrics is used to track consumer actions, and make relevant recommendations The e-commerce web site and order capture is provided by WebSphere Commerce Customer experience with responsive interaction is guaranteed by workload optimized systems Insights from social media, websites, and other sources drive relevant messages Marketing messages and campaigns are defined and planned using Unica Campaign Optimize display and search results with Coremetrics AdTarget and Coremetrics Search Generate demand with Unica emessage ( creation, delivery, tracking) Deliver custom landing pages, mobile and retail store programs with targeted messages and promotions via WebSphere Commerce Precision Marketing Capture responses and refine 26

27 Increasing Customer Loyalty Through Event Based Marketing About the Company Leading private sector bank in India growing at 38% CAGR Nationwide network of 1725 branches & 4232 ATM's in 779 India towns & cities with a customer base touching 19 million Challenges & Goals Facing rapid growth, needed an effective way to market products and services by detecting meaningful customer behavior Customer data resided in multiple systems, making it difficult to run campaigns Key Goals: Increase share of wallet, acquire profitable customers, and boost customer loyalty, while reducing operating costs and measuring marketing performance across all channels Unica: The Smart Solution Selected Unica for enterprise marketing management. Main reasons for selection: ease of use, quick implementation as well as its robust modeling, customer analysis, and right-time interaction management capabilities. Boosted incremental customer retention by 4% Reduced acquisition costs by 60% in campaigns Can now simultaneously access its multiple data systems resulting in a complete view of its customers across channels and products. Run 2,200 event based campaigns per year, using 400+ different triggers 2-5x improvement over regular campaigns Overachieved pilot objectives by a factor of 25, and reached annual target in 6 months 27

28 The empowered customer is changing the way companies Sell Store / Dealership Research Product Create Order Change Order Schedule Delivery Check Status Cancel Order Pickup Initiate/Track Return Call Center Research Product Create Order Change Order Schedule Delivery or Pickup Check Status Cancel Order Schedule Store Pickup Initiate/Track Return Web Research Product Create Order Change Order Schedule Delivery or Pickup Check Status Cancel Order Schedule Store Pickup Initiate/Track Return Mobile Research Product Create Order Change Order Schedule Delivery or Pickup Check Status Cancel Order Schedule Store Pickup Initiate/Track Return 28

29 How the empowered customer is changing how you Sell Empowered Customers are: Start order process in one channel and continue seamlessly other channels Customer It s changing the way you sell Provide a platform to engage with customers where they want to buy and make it easier for them to do so. Enabled by technology share research, opinions and ratings in real-time Want to configure products and services per their preferences and wishes Interact across multiple channels and touchpoints and consumer devices Extend and strengthen supplier and vendor relationships for better supply chain visibility Integrate information from social media and other sources to aid customer's decision making process 29

30 What can YOU do? Some initiatives that can help Provide a common platform for all customer interactions Implement global inventory visibility to improve order fulfillment commitments Expand customer's fulfillment and delivery options to improve experience Enable customer to buy online and pickup/return at a physical location Automate manual processes to drive down b2b sales costs 30

31 Solution Scenario A unified, cross-channel shopping experience Take action based on a consistent view of a consumer s order across multiple channels Coremetrics is used to track consumer actions, and make relevant recommendations The e-commerce web site and order capture is provided by WebSphere Commerce Sterling Order Management maintains a consistent view of the consumer s order The POS from Retail Store Systems integrates with the entire system to maximize POS sales Consumer is shown a web ad for a new TV. Ad content selected by Coremetrics. Consumer completes the purchase using WebSphere Commerce Consumer decides to extend the order from a mobile device Consumer visits the store to pickup the TV, views the order via the IBM RSS POS Consumer phones the call center or engages online to change the order from delivery to pickup. Sterling Order Management Unica prompts the POS to recommend an offer on new speakers and local installation services sold! 31 Capture responses and refine

32 1-800-flowers.com enables customers to seamlessly interact, shop, and buy multiple brands within the same online experience Challenge Needed to replace multiple, diverse, siloed e-commerce systems with a unified technology platform supporting call center, web, mobile & social Solution Implemented WebSphere Commerce, Coremetrics, Sterling Call Center, Sterling Order Management, and Sterling Warehouse Management, facilitating individual and cross brand merchandising, marketing, logic, and promotions capabilities. Running on POWER7 systems. Involved GBS and Global Financing. Results Increase enterprise share of wallet and overall customer value Seamless and intuitive multi-brand shopping experience (unifying the customer experience) Obtain efficiencies migrating to a common best in class ecommerce platform for stability, time to market & roadmap progression 32 Customer Profile Blogs World's leading florist and gift shop with gifts for every occasion, including fresh flowers, plants, gift baskets, gourmet foods, confections, candles, balloons and plush stuffed animals.

33 How the empowered customer is changing how you Service Empowered Customers are: Customer It s changing the way you sell Customers are much more likely to jump to a different brand than ever before if they feel they are not getting the proper service Providing the right tools to support the multiple ways your customer wants to interact with you is critical: According to Gartner, by 2012 consumers will be willing to perform all possible customer service functions themselves. Social Media is becoming more mainstream and companies need to pay attention to what consumers are saying about their company Customers get frustrated with irrelevant 33 data when looking for answers The ability to provide accurate promised dates based on type of item being sold and service requested The ability to empower customers with conversations and information sharing capabilities such as wikis, blogs, forums, communities, ratings, commenting, tagging, and shared bookmarks & files. Providing real-time information to call center representatives to improve customer interaction and to optimize cross-sell / up-sell opportunities Improve online customer experience by providing access to information 24x7 via a self service website

34 What can YOU do? Some initiatives that can help Grant personnel mobile access to information for timely services Assess performance metrics against desired SLAs Sell premium delivery services to increase revenue Provide customers a self-service portal to get information and perform many customer service functions themselves Make it a practice to offer targeted services at the time of sale Use data analysis and appropriate metrics to improve customer satisfaction 34

35 Addressing Self Service and Support Requirements for Multiple Channels 35 Challenge Multiple legacy systems prevented: Unified cross-channel customer experience and redundant and inaccurate inventory data across channels Solution Single instance, multi-channel enterprise order management Enables coordination and fulfillment of complex customer orders Sourcing and allocation of product and services across multiple fulfillment sources Results Real-time inventory visibility across internal and external fulfillment partners Home delivery, vendor special order, in-home installations and other services Increased Annual Sales & Margin Vendor Special order, expanding service business (in-home and in-store services) Increased Customer Loyalty due to ease of fulfillment and capturing the order Reduced retail store order admin costs & call centre expenses Customer Profile #1 specialty retailer in US for consumer electronics, personal computers, appliances, and more - $20B+ annual revenue i

36 Solution Scenario Delivering Unparallel Customer Experience via Human, Digital, Mobile & Social Interactions Seamless Customer Experience across multiple Interaction Channels Web (WebSphere Commerce & Portal) Mobile (WebSphere Commerce Mobile Store) Web In Store POS & Kiosks (Retail Store Solutions) Call center (Sterling Order Management Call Center) Social Media Social Networks WebSphere Commerce & Portal Mobile Customer Call Center Sterling Order Management Call Center Retail Store Systems Store POS & Kiosks 36

37 Agenda Smarter Commerce from IBM Smarter Work Smarter Commerce Centre of Excellence Q&A

38 Launching Smarter Commerce Centre of Excellence Bringing the Software Labs to you

39 Objectives of Smarter Commerce CoE Help our customers in selecting & deploying the best Smarter Commerce solution Provide expert help from product development teams, architects, & domain experts Help with solutioning and proof of concepts

40 IBM Smarter Commerce CoE will help you to tap cutting edge expertise from the Lab Close to 800 developers & architects Working on global product development, implementation, customization & product support Working with marquee customers all over the world Deep expertise in deployment, technologies, domains and in solving customer problems

41 Smarter Commerce Centre of Excellence Capabilities More than 5000 person years of experience Solutioning capability and deep knowledge of products across the entire Smarter Commerce portfolio to ensure best possible deployment, scalability, maintainability, performance and security Deep domain knowledge in key verticals like Retail, Distribution & Logistics, Banking, Manufacturing Knowledge of global best practices and ability to leverage cutting edge expertise from across worldwide helps in leapfrogging to the next level of Commerce expertise Performance engineering, sizing & tuning capabilities

42 Agenda Smarter Commerce from IBM Smarter Work Smarter Commerce Centre of Excellence Q&A