8 Ways of Navigating. IBM Global Business Services

Transcription

1 8 Ways of Navigating the Economic Downturn IBM Global Business Services

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3 2008 marked the beginning of the biggest global financial turmoil since A downturn felt by us all. Initially, the downturn became visible with the failures of leading American financial institutions as a result of a grand-scale mortgage crisis. The downturn quickly spread to the European and Asian markets, which in turn has led to rapidly declining stock indexes, large worldwide reductions in the market value of commodities and a marked slow down in business activity. Restricted access to capital puts us all to the test One major effect of the downturn is a liquidity shortage causing companies in all industries to be impacted and impaired by restricted access to capital. This happens as a result of strained financial institutions tightening their grip on credit and available liquid assets. Interest rates have risen, credit requirements have become stringent, and we see more regulatory measures. In addition, the demands for loan guarantees have increased, while the financial status of many companies has decreased due to a drop in share value. The lack of liquidity literally puts the breaks on any types of investment, operating costs, and causes ripples throughout companies in the Nordic countries and the rest of the world from strategic thinking and planning to the bottom line. The key question that arises is where to focus limited resources to find new sources of revenue and free up additional resources by optimizing the efficiency of our business execution? Work with the downturn not against it Experience suggests we must do more with less, focus on core businesses and strengths, realign business relationships, build future capabilities, and capture market share sooner rather than later. There is an opportunity for those who move swiftly and restructure for an uncertain future. In short, focus on value, exploit opportunity, and act with speed. At IBM Global Business Services, we are leveraging IBM s global reach, experience and capabilities to identify those areas of our client s business that provide greatest leverage in responding to the global economic challenges and we ve identified practical approaches to making the changes necessary. This brochure describes the areas that we believe warrant immediate focus by our clients, identifies a simple way to determine where to focus first and details how IBM can help. The challenges we face are being felt globally we re committed to sharing with our clients how IBM and its partners are responding around the globe and ensuring the best of our capabilities and knowledge are shared with our clients in the Nordics. Sincerely, David W. Campbell General Manager IBM GBS Nordic campdav@dk.ibm.com 3

4 Talk to our Industry Leaders IBM takes you from strategy to reality and from downturn to profit Life Sciences Consumer Products Retail Travel & Transportation Gustaf Rosell Distribution Gustaf Rosell has been with IBM since 2004 and has previous experience with global implementation of support processes in finance, sourcing, and sales. He has extensive knowledge of SAP implementation, especially in relation to packages applications and project services for ERP. Rosell also knows his way around sales management and development, outsourcing on a global scale, and pharmaceutical management. Rosell holds a Master s Degree in Computer Science from the University of Lund. Aerospace & Defense Automotive Chemicals & Petroleum Industrial Products High Tech Anders Fredholm anders.s.fredholm@se.ibm.com Industrial Anders Fredholm has 19 years of experience in consulting and IT with previous responsibility as Business Area Manager at a major global consultancy firm. Fredholm also has experience as a CEO where he managed the merger integration process of an enterprise. Fredholm is responsible for the industrial sector at IBM Global Business Services (GBS) and has a Master of Science in Technology and Business Administration. Government, Education Healthcare Christian Kleen christian.kleen@se.ibm.com Public Christian Kleen has more than 15 years of experience as a management consultant, principally in the area of government and services. He has specialized in administrative development and has practical experience in systems construction. Kleen has also worked with effectiveness studies of existing financial control routines in construction and property management companies as well as in the manufacturing industry. Moreoever he has experience from the organizational review of a number of companies. Kleen has an MBA in cost-benefit analysis and accounting from the universities of Orebro and Gothenburg. Banking, Financial Markets Insurance Gun Blom-Lundgren gun.blom-lundgren@se.ibm.com Financial Services Gun Blom-Lundgren has more than 20 years of experience within IBM serving organizations across the Nordics and Europe with primary focus on IT & business transformation and procurement. Gun has worked with the Financial Industry for the last 4 years. Before this, Gun has worked extensively with the industrial and public sector and as CEO for an application development company. Gun holds an M.Sc in behavioural science. 4

5 Intelligent Cost Reduction Framework 8 ways of creating rapid improvements with rapid returns Technology Assets and Locations M&A Integration & Divestures p. 13 IT Performance Improvement p. 6 Skills and Capabilities Workforce Transformation & Talent Management p. 7 Service Levels Strategic Profit Improvement p. 12 RAPID Customer Experience CRM Transformation (Voice of the Customer) p. 8 Organization and Governance Business Model Innovation p. 11 Sourcing and Alliances Sourcing & Procurement Transformation p. 10 Processes Transparency Risk Management p. 9 IBM Global Business Services (GBS) is the only consulting house that deals with the hardware, software and brainware part of Nordic business life. We exist to help you transform, innovate and improve your business, your IT strategy, your products and services, as well as your processes, structures and operations. We are incarnate business people who put our souls into optimizing your business processes from your overall strategy to cost-efficiency, bottom lines, component models and IT integration. Our aim is always the same: to create new opportunities and profit for your company. And in these challenging times, we can help you keep your momentum and defend your business and everyone in it. We are with you all the way from strategy to reality, from economic downturn to cost cutting, business optimization, and potential new and realised profit areas. IBM Global Financing helps you cut costs fast All 8 solutions presented in this brochure are easy to use, administer and buy. With IBM Global Financing you can buy all or some of these cost cutting solutions in a way that frees up cash almost immediately. Simply and cost-effectively. 5

6 IT Performance Improvement Tuning your IT to maximize efficiency 30-50% lower cost structure with existing clients Year-on-year performance improvement Assurance of competitiveness 50%+ improvement in predictability of project delivery New functionality at lower cost Reduced IT risk (compliance, business continuity, and security) Financial options to free cash In coping with a downturn, you need to maximize the value of what you already have. And your IT resources can work wonders if they are properly tuned according to your challenges. With IBM IT Performance Improvement, you get a full solution to help you reduce IT operational costs while improving service to the business. The solution includes: Application Rationalization Leveraging existing data and expert knowledge to analyze and segment application portfolio to reduce complexity Move functionality and data from low value or redundant applications to higher performing applications and retire the old applications to get a full cost take-out Re-architect or re-platform applications to improve cost efficiency Optimal Leverage of Global IT Sourcing Ensure that your company has a global IT sourcing strategy that provides your business with the highest quality and lowest cost for IT services through local delivery Assess IT Governance model and manage the system to ensure it is designed to effectively manage a globally integrated operation Identify opportunities for further leverage of global IT resources Accelerate transition to lower cost models to pull forward the savings IBM Global Financing capabilities related to projects and asset transfer IT Performance Improvement encompasses an agreed roadmap, action plan, and analytics for IT organizational improvement. The result is a holistic and green IT system which supports transformation throughout your company, cutting costs and improving efficiency. IT Organizational Performance Benchmark current IT organizational performance to identify opportunity areas to improve efficiency we recommend Component Business Modeling Analyze root causes in the IT processes, governance model and organization Identify quick wins and improvements with the highest potential benefits Establish improvement targets and drive change to realize benefits Effectiveness and Efficiency Reduce Retire Reward Replace Business Value 6

7 Workforce Transformation & Talent Management Driving improvements in your workforce The current economic climate is forcing most companies to rethink their HR strategies, which requires added focus on specific areas of the workforce strategy. In previous economic downswings, strategic workforce issues have often been overshadowed by the short-term demands to reduce headcounts and other variable costs quickly. However, in many industries, previous downturns and subsequent layoffs have already trimmed the fat and have left companies operating with fewer employees with greater responsibilities. Companies need to: Determine their short- and long-term workforce needs Differentiate core capabilities from non-core capabilities Make more informed decisions about the talent they need to survive and potentially grow Among the challenges is the pressure to reduce HR spending and headcount, while retaining the right talent, maintaining employee morale, and driving performance improvements in retained employees. The solution includes: A range of structured tools and rapid deployment models 3-4 week diagnostic process to assess the human capital landscape and pinpoint the highest value priority activities Rapid skills assessments to inform selection and retention programs Expert management of headcount reduction programs Review of work processes that are core to the current and future strategy and an examination of the potential for outsourcing non-core activities. Swift reduction in HR vendor spend (e.g. learning) using category expertise Identification of tactical cost reduction initiatives using ideation events to stimulate the process All of these propositions leverage pre-existing IBM assets and know-how and are targeted at delivering cost reduction and performance improvements within 3-6 months. Rapid assessment of opportunities Tangible reduction in employee costs Retention of core talent to maintain business performance Reduction in HR controlled external spending Balanced solutions to minimize negative impact on mid- to long-term performance Input for appropriate resource decisions Driving rapid improvements in employees performance IBM offers a full suite of Workforce Transformation & Talent Management solutions and capabilities to address multiple workforce and HR related challenges. Enterprise Energy Attract and Retain Deploy and Manage Transform and Sustain Performance Management Workforce Management Motivate and Develop Learning and Development Enabling enterprise innovation and performance through improved workforce effectiveness Collaboration and Portals Connect and Enable Enterprise Performance 7

8 CRM Transformation (Voice of The Customer) Staying close to customers through cost-effective channels Improved customer experience to maintain growth in recession times Cost savings by way of using digital channels to the customers Developed and improved customer experience In today s troubled times where above the line budgets are being reduced, it has become more difficult to reach out to customers and communicate value propositions. However, being close to the customers is a requirement for understanding demand, building loyalty and identifying buying needs. How can you reach out to your customers when you are on a limited budget? IBM has developed a workshop based CRM Transformation solution to help you with just that. The solution focuses on: How to replace costly above the line campaigns with digital media communication (SMS, , portals etc.) How to improve the interactions across communication channels to increase clients responsiveness to offers How to balance channels to reduce costs and drive customer satisfaction How to obtain better use of self service applications to grow revenue and cut costs 360 degree view of existing customers making it easier to identify opportunities Addressing the customer experience across channels will lead to more satisfied customers and increase the revenue potential. At the same time, this helps build long-term sustainable value for your company in a world where the modern customer expects freedom of choice, around the clock service, convenience, consistency, customization and communication. Multi-channel Management and Optimization Agent Desktop SMS and Chat Web IVR/Speech Mobile Kiosk/ATM Face to Face 3D Internet Mail Customer Management and Marketing Effectiveness Sales Productivity Service Excellence Customer Insight and Segmentation Customer Experience Management Event-based Marketing Campaign Management Customer Advocacy Dashboard Marketing Operations Management Opportunity/Account Management Partner Relationship Management ecommerce Pricing and Configuration Order Capture Sales Operations Forecasting & Planning Customer Service and Case Management Contracts and Warranties Service Event Delivery Billing Service Operations Management Retention Management Debt Management Customer-focused Foundation Master Data Management Customer, Channel, Product Knowledge Management Customer and Channel Data Warehouse Customer Rules Management Business Process Management Content Management 8

9 Transparency & Risk Management Building agility to respond quickly to the economic downturn Strong data transparency and risk management are vital to succeed in times of economic downturn. The lack of transparency is at the heart of today s financial crisis. Only companies that are able to provide timely and accurate performance information based on real insight are able to manage effectively during this economic downturn. IBM offers you a solution to drive transparency, implement effective risk management, and achieve a significant competitive advantage. We work from the understanding that each finance organization is unique and that each path forward is equally distinct. As such, our initial assessment is made to obtain a clear understanding of the current state of your business and the areas that need improvement in order to create an Integrated Finance Organization (IFO). The solution focuses on: Improved transparency for lower risk and financial truth Quicker response to market/business changes Greater control and reduced errors Closer cycle, faster source to report, and faster time to compliance Reduced cost and less work With your data turned into information and then into insight, the finance organization moves from simply providing the history of the organization to supporting a sense of its future direction and the ability to move with speed. Creation of an integrated finance organization (IFO) Cross-enterprise transparency through integration of information Greater effectiveness in executing financial activities at reduced costs Improved quality, fewer reconciliation points more control, fewer errors Finance Transformation (Strategy, Ops Improvement) Finance Enterprise Application Development Strategy Cost Reduction Improvement and Performance Organizational Design Process Diagnostics and Improvement Transparency and Risk Management Development and System Design Business Risk Management implementation Business Performance Management 9

10 Sourcing & Procurement Transformation Controlling and reducing your indirect spending Identification and prioritization of cost take-out opportunities An average of 5-15% cost cutting Stronger buying power through identification and minimization of indirect spend Leverage of the methods that IBM uses on a global scale for your own procurement In the midst of a downturn, it is crucial to be able to control your indirect spending. However, without a common spend analysis report, your buying power cannot be fully leveraged or controlled. Your challenges today typically lie in the areas of classification, data capture, measurement and system support. With our Procurement & Sourcing Transformation solution, you get a rapid opportunity assessment focused on category management and spend analysis. We leverage all the methods and capabilities that we ourselves use on a global scale. The solution includes: Structured Category Management A new perspective on spend segmentation to identify category and savings opportunities Benchmarking of key spend elements Contract assessment IBM Procurement & Sourcing Transformation provides you with a comprehensive roadmap to deliver value over the long term, but also to give you rapid results with concrete benefits within as little as 6 months. IBM consultants come to you with deep industry knowledge and experience. They know where the pitfalls are and where to look for improvements and opportunities. Achieving Global Spend Visibility Integration Support Category Management Opportunities Detailed spend information across all suppliers, Operating Companies and Categories Delivery of Quick Win Price savings Find The Money Clear identification of spend leverage opportunities across Operating Companies, Categories and Suppliers Global visibility of supplier fragmentation per Category and Operating Company Global visibility of purchasing compliance and control across Operating Companies Ongoing delivery of sustainable savings Improved Purchase Quality Improved Supplier Reliability Get The Money Global supplier visibility highlighting commonality of suppliers across Operating Companies Operational Costs Reduction Support merger synergies and rapidly identify leveraged spend opportunities Capability Development 10

11 Business Model Innovation Leveraging new business models to unlock opportunities Typical cost management and product innovation is not enough to generate and maintain a competitive advantage, especially not in an economic downturn. Successful innovators look for opportunities to reduce costs to their customers, and increase delivered value. Many successful innovations and rebirths have been the outcome of prior downturns. With IBM Business Model Innovation, you get an integrated framework covering the full business model of your company which shows you where your values and opportunities lie. In the early nineties, IBM went through a massive and rewarding transformation by implementing our own Global Integrated Enterprise solution strategy, which completely changed our company and brought us safely into the new millennium. And now you can do the same with IBM Business Model Innovation. The solution includes: A quick assessment and workshop to identify your profit opportunities and create a roadmap Assignments to investigate potential areas of Business Model Innovation Solutions to address the enterprise, offerings to customers, and industry model The necessary shifts in business model dimensions can be executed only by following the right context setting, design, and realization steps. An integrated framework covering the full business model of your company Identification of opportunities to restructure, reduce, and preserve capital and streamline operations Established methodology for evaluation and improvements of revenue models through pricing and enterprise modulation Business Model Innovation Industry Model Innovation (IM) Revenue Model Innovation (RM) Enterprise Model Innovation (EM) Innovating the industry value chain by: moving into new industries redefining existing industries creating entirely new value chains Innovating how revenue is generated through: new value propositions pricing models Innovating value chain roles by: changing the extended enterprise to be more integrated or specialized transforming networks with empolyees, suppliers, customers and others 11

12 Strategic Profit Improvement Optimizing work capital, assets and human capital Structured approach to assesses the entire value chain Increased employee focus on higher-value added activities Optimized assets and managed investments Freeing of trapped capital to fund growth Leveraging and prioritizing IT investments Traditional profit improvement tends to have a one-sided focus on reducing costs of processes and human capital. However, in order to get an appreciable increase in profits or cost cut, you need to look at the entire value chain and address several levers for optimizing: Confirm strategic context, imperatives and scope Evaluate your current state leveraging IBM capability framework Identify improvement options and related benefit potential Prepare for implementation, e.g. by establishing KPIs and tracking mechanisms IBM Strategic Profit Improvement is driven by a hardcore business strategy and a unique transformation agenda, which we set together. The solution includes Addressing of your immediate business requirements Management of the necessary commercial transformations Focus on both long-term sustainable results and the right quick-win situations you need when facing a downturn A look across your entire value chain Find out where and how to cut costs With IBM Strategic Profit Improvement, you get a complete assessment of your value chain so you can target those high-impact areas that make all the difference in transforming and coping with a downturn. The solution is extremely beneficial if you need to reduce costs right now the right way. We use it ourselves throughout IBM. SPI Framework Market Pressures Business Strategy New Product Development Business Development Customer Care Marketing and Sales Strategic Sourcing Information Technology Finance and Accounting Manufacturing or Service Strategy Human Resources Warehousing and Logistics Legal, Public Relations Increase Revenue Reduce Costs Optimize Assets Leverage Technology Structurally reduce: Capital Deployment Expenses IBM Strategic Profit Improvement looks across your entire value chain. 12

13 M&A Integration & Divestitures Delivering benefits from new companies The economic downturn opens up new opportunities to acquire companies or join forces, but also the need to divest and focus more on the core of your business. Many M&As actually fail to deliver the expected benefits. Your challenge is to minimize the risk in the M&A process while securing the fastest possible benefits realization. With yearly acquisitions of our own, we have extensive experience in the area of M&As, so do not hesitate to use us. Our integration success is twice the industry average. Thus your time to benefits realization can be lowered significantly with the support of our M&A Integration scheme. We can do a lot of your heavy lifting in Integration execution and transformation to achieve real savings and operational improvements for your company before, during and after acquisition. The solution includes: M&A strategy Synergy program Program management and functional integration Business operating model People and Change program Technology transformation IBM can support all steps of an acquisition, a merger or divestiture, from strategy development to successful execution. Increased focus on the core of your business Speed up of the acquisition/divestiture process Most M&As fail to deliver on the promised benefits/synergies Decreased M&A integration time of up to 50% with existing clients M&A Services Integration Support Synergies and Value Delivery Business Operating Model Technology People Change Integration strategy and rationale Integration blueprint and planning Day 1 actions Programme Management Office Functional integration support Value targets Performance improvement Identification and delivery Organization and physical assets Processes and sourcing options Due dilligence Strategy and planning Transformation and integration Data migration People migration Change management New ways of working IBM Differentiators Global M&A practice and unrivalled M&A experience Track record of beating synergy expectations Direct experience from IBM s own acquisitions/divestments Proven M&A framework and leading software/analysis tools Joint working and skills transfer Global capability and delivery centres Deep functional and industry expertise Deep IT and data migration capability Leading outsource provider of IT and back office services Leading global location and plant relocation service Ability to finance projects and IT investments 13

14 RAPID How we work together opportunities will be targeted in only 6 weeks No matter what solutions you choose, we work by way of a fixed, fast yet flexible approach called RAPID, in order to embrace the areas and challenges that make your company distinct. RAPID is the main approach used in the Intelligent Cost Reduction Framework and can be leveraged for all the solutions presented in this brochure. Application of the Intelligent Cost Reduction Framework will identify both cost reduction and improvement opportunities, and the RAPID approach used for the initial phase will be flexibly tailored around the specific pain points of your company. The RAPID approach identifies target opportunities in only six weeks and sets the scene for further implementation efforts. RAPID is all about the end game the implementation of tangible business benefits. RAPID: 6 weeks Weeks 7 - Objectives and Scopes Analysis Business Cases Prioritization Road Map Design Set cost and cash reduction targets Establish guiding principles CBM view Assess benchmarks Quick Wins Implementation Agree on scope (org, functional) Communicate initiative Assess change portfolio Agree target areas for action Global Delivery support Action plan to improve performance Implementation Harvest Capital Harvest Capital 14

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