IBM Business Consulting Services. How electronics companies can become more resilient and adaptable in a chaotic world. deeper.

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1 IBM Business Consulting Services How electronics companies can become more resilient and adaptable in a chaotic world deeper Executive Brief

2 A workplace that is distributed, connected, adaptable, flexible, services and web-enabled and moves seamlessly between space and cyberspace is the source of huge competitive advantage. Most importantly, creating a workplace may now be a matter of enterprise and organizational survival. The Agile Workplace, Gartner Group Report, May 2002

3 Contents 1 Introduction 1 Adding new twists to old concepts 3 Realizing the rewards of an on demand workplace 4 The IBM On Demand Workplace starts with the individual 5 Case study 7 For more information Introduction The world of information has grown in complexity. With so much data available from a massive number of sources, people are struggling to do their jobs effectively. Duplication of effort is rampant. Time is wasted. And when an unpredictable event occurs, an inflexible infrastructure could very well let you down. Consider this: A semiconductor company facing a prolonged and severe downturn considers the idea of using manufacturer s representatives instead of their internal sales force. Why? The representatives are only paid when a deal closes, meaning lower fixed costs. The downside? On the big deals, this approach could get expensive for commissions of two percent or more. At the end of the day, the VP of sales decided that having a more variable salesforce was a better choice, given more extreme and shorter business cycles. Or this: During the height of the SARS outbreak, companies had to make quick and immediate trade-offs between potentially endangering workers health or losing revenues due to foregoing obligations in affected areas. Manufacturing plants were shut down. Sales meetings and conferences were cancelled. Yet, companies with a highly mature, mobile workforce and processes seemed more resilient to the crisis, deploying global staff as necessary and using remote technologies to keep dispersed teams working. Given the new realities of the marketplace, companies that operate with a business as usual mindset may not be able to compete in an intense business environment. New thinking about the way people do their jobs is required. Anticipating risk is just the beginning companies need to plan for the unexpected while building in sufficient flexibility to react quickly when unpredictable events inevitably occur. Adding new twists to old concepts In the 1990s, electronics companies differentiated through product innovation. It was all about speeds and feeds. Today, as price to performance ratios have ratcheted up, technology has become good enough. Electronics companies have discovered a new approach to customers and solutions. The result? People not technical performance are the new measure of differentiation. Companies of the 21 st century are required to make decisions faster, to manage more complex partner relationships and to increase an employee s productivity. But how do you manage that complexity when it seems to increase exponentially? 1

4 Electronics companies are answering that question by applying the same technical sensibilities and innovations to people management, while bringing new twists to old concepts to create dynamic organizations. Most companies take great care in managing their financial capital, however, little is done to help employees enhance their productivity and effectiveness. New approaches include: New skills: Technology companies are looking for knowledge workers and problem solvers steeped in industry understanding that can help customers solve business issues with technology. Business, not bits and bytes, is the language of technology now. Electronics companies are now required to reassess what skills provide differentiated advantage and what can be outsourced or transformed (e.g., automation or global resources) to achieve bestin-class capabilities. Different understanding of intellectual property (IP): Return on invested capital for most companies has been declining. There are too many patents, too few applications and too little knowledge leveraged. Knowledge management is the new IP. According to an IBM Research CRM study, 70-80% of customer knowledge existed in people s heads more than could ever be reflected in systems meaning critical customer data is lost every time a sales agent is switched to a new account. Managing people resources as a supply chain: Managers need to develop new staffing models that operate with the same efficiency that they have built into configure to order supply chains. This means understanding what resources are needed when and where, developing contingent staffing models that adjust to demand, and increasing variable pay to vary costs to performance. New measures of return on resources are required, as well as the ability for human resources to partner with businesses, forecast emerging needs, and to determine appropriate resources, sources and supply. Flexible and adaptive governance models: In a time when product cycles are shorter, speed to market is critical. Decisions have to be made faster, more efficiently and closer to markets. Governance models and management systems have to adapt as well. Electronics companies are moving from contractual service level agreements to sophisticated incentive systems that reward partners for doing the right thing and allowing them to manage performance, not processes. (One technology company developed a paperless board of directors through its portal in order to get faster decisions.) The Web paradox: It is easier to (find and) access a file created by a kid in New Zealand, than to access a file created on your colleague s desktop. IBM Research Group 2

5 The portal evolution: For years, companies have used the portal to create a workplace strategy that effectively reduces cost and creates revenue opportunities. As businesses become more complex, its role is even more critical as a technology foundation that enables a single, integrated, on demand workplace. It effectively integrates people, processes, data, and applications within the context of overall organizational strategy including governance rules, roles definition and appropriate workflow. Decision-making is thereby brought closer to markets and between partners. The key to this new approach to people management is in information right-time data and analysis that can help you make decisions, move resources and adapt organizational processes in equal time with changing business dynamics. This demands increased levels of data integration and access, comprehensive analytical tools for applying data, and autonomic performance management and optimization tools. We call this the IBM On Demand Workplace. Realizing the rewards of an on demand workplace Flexible. Variable. Resilient. Adaptable. Acknowledging the beneficial attributes of an on demand workplace is one thing. But how do these attributes play out in real life? What does an on demand workplace actually look like? It starts by rethinking the whole idea of work. In an aligned workplace, everyone can become a knowledge worker getting realtime analysis of markets and account information in order to anticipate and shape demand, creating optimally efficient design teams that are dispersed across many continents using grid computing, mobile communications and hosted workbenches, and using self-service tools and distance learning options to increase returns on human resources. Together, enterprisewide collaborative functions can transform the way partners and colleagues communicate, employers relate to employees, and the way people perform their basic work activities. An effective On Demand Workplace solution gives users safeguarded and consistent access to people and information through any number of channels: Web browsers, wireless phones, PDAs, self-service kiosks, and more. Employees get the information they need on demand which boosts productivity and reduces time-wasting navigation and process redundancies. The result? Better information flow across business units, enriched collaboration, and a simplified, unified infrastructure. After all, the ultimate success of your company depends on the efficiency and capabilities of your workforce. 3

6 IBM has learned from its own success that adopters of On Demand Workplace can achieve the proverbial brass ring: comprehensive workforce strategies, enhanced productivity, informed collaboration and resilience and flexibility in the face of disaster. Resulting cost and process efficiencies offer the potential for rapid and quantifiable ROI resulting in tangible savings. Through its own workplace transformation, IBM has established thought leadership and best practices which can be customized for our customers, so they too can enjoy benefits including reduced risks, rapid deployment and reliable ROI. The broad spectrum of business results can easily be achieved by companies willing to take the first step. It starts by eliminating the obstacles that are standing in the way. Fix fragmented functions, redefine roles, and create seamless integration among individuals. Get to the heart of your organization by determining: What skills are differentiating and what can be delivered more efficiently through other means What are the best staffing models to ascertain variability both of cost and skills What data is needed and in what timeframe for you and your partners to act in equal time with demand What employees need, what they are asking for, then change the way they do their jobs What technology infrastructure will support these new requirements The IBM On Demand Workplace starts with the individual During the past five years, IBM has created its own On Demand Workplace for its 320,000 employees. On Demand Workplace is designed to simplify the way employees communicate and collaborate, both internally and externally, by providing a dynamic, easy-to-use, role-based interface for accessing critical work tools from content to applications to business processes to people. By making it easier and faster to communicate and collaborate, our portal allows us to integrate a global enterprise, thereby helping to achieve optimum efficiency. On Demand Workplace changes the way people work by providing a powerful, single point of access to an employee s work environment virtually anytime, anyplace. It is designed to: Manage people resources like a supply chain with focus on nomadic sourcing, variable staffing models and alignment with business goals Bring the marketplace inside Equip employees for the journey with all the components they will need along the way 4

7 Tap into the partner and company s collective knowledge Reduce the complexity of the work environment, allowing employees to do their work faster and more efficiently and to focus on high value activities Enable responsiveness and reduce cost through rapid communications and decision support both internally and across the extended enterprise Increase IT flexibility and adaptability to an ever-changing workplace environment Enable a more dynamic manager/workplace relationship On Demand Workplace helps enable organizations to deploy the right skills at the right time, and makes it easier for employees to focus on core competencies. A single, consistent view through which you can deliver information and tools integrates with existing applications and helps make it easier for your employees to access the information they need. Ultimately, users construct their own work experience the one that makes the most sense for them. Case Study: IBM Pioneers the On Demand Workplace Solution Challenge IBM in the early 1990s was a company in dire need of simplification. Sales had slowed and the company was losing money at an alarming rate. With the advent of e-business, IBM decided it was time to render the complexity of the company irrelevant for employees. Solution As part of a massive business transformation project, and using IBM s intranet as the foundation, IBM s employee collaboration initiative integrated e-business and knowledge management capabilities. Technology is now leveraged to provide a virtual workplace on the company s w3 intranet where people can connect, work and learn, enhancing the productivity of employees worldwide. Employee collaboration capabilities fall into the following core groupings: Expertise IBM aims to efficiently leverage the knowledge and skills of its over 300,000 employees through expertise location. IBM s worldwide employee directory, BluePages, provides searchable employee-created Persona Pages that facilitate the identification and location of a subject-matter expert based on an individual s projects, teams, expertise and business interests. Content Via the intranet s on demand workplace, employees can access profile-driven, customized portals or portlets which enable employees to receive personalized internal, industry, and competitor news, as well as collaborate, learn, find knowledge and/or experts, and share and access productivity-enhancing tools. 5

8 Collaboration The intellectual capital management asset web, knowledge cafes and team rooms provide a centralized system for information sharing as well as intellectual capital management. The teamroom a versatile and user-friendly collaborative database is now in use by 15,000 teams and more than 150,000 IBM employees around the world. Web conferencing provides a virtual space for collaboration with other employees or customers. e-learning IBM conducts nearly half (43 percent) of its entire employee training via e-learning, avoiding more than $395 million in related costs in IBM has used the Web exclusively to deliver programs such as core body of knowledge training and accreditation, which has improved effectiveness, and reduced costs by nearly 70 percent. Employee self-service/self-support The strong transactional capabilities and rich information of IBM s intranet have led to widespread usage of selfservice functions. Indeed, more than 88 percent of US employees who enrolled for health benefits did so via the intranet. The company s Travel Web site allows employees to research travel policies and resources and make airline, car rental and hotel reservations. The site is also integrated with Expense Accounting 2000, IBM s online expense reimbursement application, radically streamlining the travel expense accounting processes. To date, three quarters of IBM s expense accounts flow through this system. Benefits The numbers speak for themselves. In 1985, IBM needed 405,000 employees to generate $50 billion in revenue. In 2002, IBM generated nearly $90 billion in revenue with a workforce of 316,000. It is important to note that in that time the company has become much more services-oriented. In just over four years, the company s global intranet and other B2E enhancements have saved the company US$6.2 billion. While the savings speak for themselves, the impact on how people work may be even greater. For the first time ever, the e-workplace is cited by a majority of IBM s roughly 320,000 employees as the most credible, most preferred, most useful source of information. IBM employees say they use it, need it, and trust it. Eighty percent say they access the intranet daily. Fifty-eight percent view the intranet as crucial to their jobs. Sixty-two percent rate the intranet as their most preferred information source. Source: IDC e-business Case Study. IBM: Business transformation through end-to-end integration 6

9 For more information To learn more about our electronics industry services, contact your IBM representative or visit: ibm.com/bcs/electronics IBM On Demand Workplace for the electronics industry can help your company achieve a truly resilient, flexible organization. To find out how IBM can put some of our best On Demand thinking to work for you, contact your IBM representative, or visit: ibm.com/ondemand/workplace 7

10 Copyright IBM Corporation 2003 IBM Global Services Route 100 Somers, NY U.S.A. Printed in the United States of America All Rights Reserved IBM, the IBM logo, the e-business logo, the e(logo) business on demand lock-up and e-business on demand are trademarks or registered trademarks of International Business Machines Corporation in the United States, other countries, or both. Other company, product and service names may be trademarks or service marks of others. References in this publication to IBM products and services do not imply that IBM intends to make them available in all countries in which IBM operates. G