Welcome to IBM Research

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1 1 IBM Research Welcome to IBM Research Almaden Institute March 24, 2004 Global Technology Outlook 2004 Paul Horn IBM Senior VP & Director of Research 2002 IBM Corporation Do Not Distribute

2 2 IBM Research Welcome to IBM Research Innovation Almaden Institute March 24, 2004 Global Technology Outlook 2004 Paul Horn IBM Senior VP & Director of Research 2002 IBM Corporation Do Not Distribute

3 What Is Innovation? Innovation occurs at the intersection of invention and insight. It s about the application of invention the fusion of new developments and new approaches to solve problems. -- Sam Palmisano, Council on Competitiveness, October 2003 Global Technology Outlook 2004 Do Not Distribute 2004 IBM Corporation 3

4 IBM Research Worldwide Almaden Watson Austin Haifa Zurich Beijing Delhi Tokyo 2003 Global Technology Outlook 2004 Do Not Distribute 2004 IBM Corporation 4

5 External Recognition 5 Nobel Laureates 5 U.S. National Medals of Technology 5 U.S. National Medals of Science 4 Turing Awards ENIAC Mathematics of discrete optimization 20 in U.S. National Academy of Sciences Over 330 Society Fellows 57 in U.S. National Academy of Engineering #1 In U.S. Patents Global Technology Outlook 2004 Do Not Distribute 2004 IBM Corporation 5

6 Evolution of Role 1970s-80s 1980s-90s 1990s-2000s? Corporate funded research agenda? Technology transfer Centrally funded? Collaborative team? Shared agenda? Effectiveness? Work on customer problems? Services Research? Create business advantage for customers ebusiness Research Research in the marketplace Joint programs On Demand Innovation Services FOAK: First of a Kind Emerging Business Opportunities Global Technology Outlook 2004 Do Not Distribute 2004 IBM Corporation 6

7 Innovation in the 21 st Century Why now? Commoditization of technology IT Doesn t Matter, Harvard Business Review Potential to transform business processes Global Technology Outlook 2004 Do Not Distribute 2004 IBM Corporation 7

8 Growth in Outsourcing is Evidence That Businesses are Componentizing Componentization helps businesses achieve operational efficiency, flexibility as well as sharpen their focus Fine Process Element Outsourcing Granularity of component IT Outsourcing Business Process Outsourcing Coarse Physical Services Outsourcing Time Global Technology Outlook 2004 Do Not Distribute 2004 IBM Corporation 8

9 Logical Models Provide a View of Businesses as Collections of Services A componentized view yields strategic insight based on Key Performance Indicators (KPIs) Transformational View Financial View Immediate High Capital Priority Area Medium Priority High Cost Area High Cost & Capital Area No Action Illustrative Retail Client Strategy Tactics Execution Manage s Insights Merchandising Channel, Category Strategy and Relationship and Strategies Assessing Satisfaction Event, Promotion Strategy and Order Account Servicing Directory Product, Development & Pricing Strategies Vendor Relationship Strategies Matching Supply and Demand Vendor and Product Performance Execution and Product Directory Store/Channel Operations Inventory Assortment and Space and Execution Item Store/Channel Objectives & Strategy Store/Channel Labor Strategy Store/Channel Design and Layout Store Operations Store/Off-site Services Execution Supply Chain & Distribution Supply Chain Strategy and Distribution Oversight Outbound Logistics nd Logisti cs Distribution Center Transportation n Resources Inventory, Product Tracking and Tracing Finance Administration Financial and Market Risk Corporate Finance and Controls Treasury Operations Back Office Financial Accounting and GL Business Administration Corp. Alliance Line of Business Business Perf. Mgmt. External Market Assessment Organization and Process Design Legal and Regulatory Indirect Procurement Real Estate, Facilities and Equipment HR Administration Develop and Operate IT Systems Global Technology Outlook 2004 Do Not Distribute 2004 IBM Corporation 9

10 Multi-Level Models in Business Transformation Consulting 3-Layer Conversation Business Strategy Business Process IT Strategy Tactics Execution Logical Model of the Business Manage s Merchandising Store/Channel Supply Chain & Finance Business Operations Distribution Administration Administration Channel, Category Strategy and Store/Channel Objectives & Strategy Product Relationship, and Development & Store/Channel Strategies Pricing Labor Strategies Strategy Vendor Store/Channel Relationship Design and Insights Strategies Layout Assessing Matching Supply and Inventory Satisfaction Demand Event, Promotion Assortment and Space Strategy and and Execution Order Account Servicing Directory Vendor and Product Performance Execution and Item Product Directory Store Operations Store/Off-site Services Execution Supply Chain Strategy and Distribution Oversight Outbound Logistics nd Logisti cs Distribution Center Transportation n Resources Inventory, Product Tracking and Tracing Financial and Market Risk Corporate Finance and Controls Treasury Operations Back Office Financial Accounting and GL Corp. Alliance Line of Business Business Perf. Mgmt. External Market Assessment Organization and Process Design Legal and Regulatory Indirect Procurement Real Estate, Facilities and Equipment HR Administration Develop and Operate IT Systems ROI As-Is and To-Be Process Models Hot Component(s) Order Event, Promotion, Strategy and Assessing Satisfaction Implementation Global Technology Outlook 2004 Do Not Distribute 2004 IBM Corporation 10

11 Innovation in the 21 st Century Why now? Commoditization of technology IT Doesn t Matter, Harvard Business Review Potential to transform business processes Globalization of markets Societal benefits The time is right!!! Global Technology Outlook 2004 Do Not Distribute 2004 IBM Corporation 11

12 12 IBM Research Backup Global Technology Outlook IBM Corporation Do Not Distribute