IBM Smarter Commerce. Marketing in the age of customers.

1. March, 2011
Smarter Commerce
Redefining the value chain in the age of the customer
© 2011 IBM Corporation

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Today’s News: IBM Smarter Commerce
Recent Acquisitions Position IBM as the Only Solutions Provider Integrating All Elements
of the Commerce Lifecycle Spanning Buying, Marketing, Selling and Service
IBM Expands Global Business Services With New Smarter Commerce Services, Software
Adding a new services practice with more than a
Smarter Commerce
thousand dedicated experts
$2.5 billion in commerce-related acquisitions & new Consulting & Services
software investments since 2010
Software
Integrated & globalized product offerings
– New Cloud analytics including an IBM Coremetrics Systems & Technology
offering to measure and optimize social presence in
such social media properties such as Facebook and Research
Twitter.
– IBM will also deliver software solutions that allow Smarter Commerce is a unique approach that
companies to deliver relevant and consistent messages increases the value companies generate for
across all sales and marketing channels - from the web their customers, partners and shareholders in a
to email to stores to call centers. rapidly changing digital world. It is designed to
A Smarter Commerce University dedicated to on- help companies better integrate and more
ramping business partners and new hires effectively manage their value chain, including
buy, market, sell, and service processes to put
Communicating overall smarter commerce trend the customer at the center of decisions and
story and IT solution need in the market actions leading to greater customer loyalty,
© 2011 IBM Corporation
revenue / margin growth and agility.

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We have entered the age of the empowered customer
Customers now have Social networking Customer This is changing the
unlimited access to and mobile expectations of entire way products
information and can commerce have service, price and are sourced,
instantly share it with dramatically changed delivery is soaring. manufactured and
the world the dynamic between distributed—and
buyer and seller. making business
more complex than
ever.
95 million 75% $93 billion
Number of tweets sent via Percentage of people Amount in sales missed
Twitter each day who believe companies due to out of stock
don’t tell the truth in inventory
advertisements
© 2011 IBM Corporation

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These disruptive forces ripple from the customer through the
enterprise and across entire industries
Individuals
“"The consumer is using new channels to
The connected consumer perceive value, and associated pricing
The networked workforce implications.“
The empowered citizen Consumer Products CEO, United States
Enterprises "Profits will shift away from analog
Evolved business models distribution to digital distribution; we
Optimized digital operations will see increased margins in digital
Connected enterprise distribution and increased international
distribution.“
Media and Entertainment CEO, United States
Industries
Value migration “Disintermediation of clients by smaller
Value chain redefinition niche players (such as mobile players) is
Fragmentation cause for concern.“
Financial Markets CEO, Canada
Source: IBV Analysis
© 2011 IBM Corporation

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Power has shifted to the customer compressing margins
Successful companies are transforming their approach to commerce
Understanding and anticipating customer
An international
behavior and needs based on customer transportation
insights across all channels company reduced
partner integration
time.
Adapting sourcing and procurement based
95%
on customer demand and optimize supplier
A leading provider of
interactions across extended value chains teaching, learning
and research
solutions grew direct-
to-consumer
Marketing, selling and fulfilling the right commerce revenues.
product and service at the right price, time
70%
and place
A US-based national
communications
service provider
Servicing customers flawlessly, predicting boosted ROI by
and driving customer loyalty reducing customer
churn.
376%
© 2011 IBM Corporation

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At IBM, we call the path forward: Smarter Commerce
Smarter Commerce is a
strategic approach that It maximizes the insight
It capitalizes on social and
places the customer at the generated through customer
mobile commerce.
center of your business interactions.
operations
It synchronizes your
entire value chain to
deliver consistent and
It drives growth by enhancing, predictable outcomes .
extending, and redefining the
value you provide.
Customer
It improves collaboration
It increases margins by and visibility for your
boosting efficiency at every customers & partners.
stage of the commerce cycle
© 2011 IBM Corporation

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Smarter Commerce focuses on three dimensions centered around the
customer
Customer Insight Customer Value Strategy
In today’s world of In turn, you must re-
instant business, you think how your
need deep insights, in customers define
real-time that you can value, and the
turn into immediate changes you must
action make to your value
chain so you can
Customer & Partner deliver exactly what
Engagement your customers
Customer
want - profitably
You need an approach
that allows you to more
effectively Connect,
Collaborate, Conduct … increasing the value companies generate
Commerce and Create a for their customers and partners in a rapidly
differentiated customer changing digital world
experience.
© 2011 IBM Corporation

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Smarter Commerce can help transform
every phase of the commerce cycle
Buy Market
Drive intelligent, Create
adaptive and Strategy
Insight personalized and
optimized relevant offers
extended supply with unified cross-
chains based on Buy Market
channel marketing
customer demand Sourcing, controlling Targeted and
and procurement of personalized
goods and services marketing across all
customer interactions
Customer
Service Sell
Servicing Selling and fulfillment Sell
Service customer needs of products and
Enable
Anticipate across all services across
interaction all channels customers and
behavior and channels partners to
deliver flawless buy any offer
customer service from any supplier
across all across any
channels channel
Engagement
© 2011 IBM Corporation

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IBM’s integrated portfolio for Smarter Commerce
VALUE CHAIN STRATEGY AND SERVICES
Innovation and business value Market and customer mgmt Operating and Organization Models
Innovating and aligning business models to Aligning sales, marketing and operations Designing operations, supply chain and the
drive value to the customer to engage with customers organization model to deliver customer value
CORE BUSINESS SOLUTIONS
Core Business Processes
Buy Market Sell Service
• Trading Partner Mgmt • Predictive Analytics/Modeling • B2B / B2C Cross-channel • Delivery & Service
• Supplier Management • Behavioral Segmentation commerce Scheduling
• Supply Chain Visibility • Cross-channel Campaign Mgmt • Distributed Order Orchestration • Customer Self Service
• Logistics Management • Search Optimization, Ad • Fulfillment and Supply Chain Enablement
• Inventory Optimization Targeting Optimization • Reverse Logistics
• Marketing Resource Mgmt • Mobile Commerce • Case Management
• Retail Store
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
© 2011 IBM Corporation

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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
Optimize display and search results with
Coremetrics AdTarget and Coremetrics Search
Marketing messages and
campaigns are defined and
planned using Unica Campaign
Web
Mobile
Retail
Insights from Store
social media, Systems
third party
Store
websites,
purchase Deliver custom landing pages with targeted
history ,etc messages and promotions via WebSphere
Generate demand with Unica eMessage Commerce Precision Marketing
(email creation, delivery, tracking
Capture responses and refine
10
© 2011 IBM Corporation

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Solution Scenario
Leveraging supply chain intelligence to shift inventory & execute regional promotions
Offer regional product promotions and optimize inventory location
– ILOG is used to optimize the logistics network
– Network details are deployed into the Sterling Transportation Management System
– Sterling Supply Chain Visibility monitors flow of inventory vs. annual norms
– WebSphere Commerce leverages this intelligence to issue custom regional promotions
Sterling
OR Regional promotion to
Warm winter in sell Denver inventory faster
Denver results is delivered via WebSphere
in excess snow Supply Chain Commerce Precision
Visibility Marketing
blower
inventory…
…meanwhile, a cold
spell in Boston is
causing back orders
due to lack of Trigger an inventory movement of snow
inventory blowers from Denver to Boston
lLOG Logistics Network Optimization
Capture results for future supply and inventory
© 2011 IBM Corporation

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What is unique about IBM’s Smarter Commerce?
Comprehensive Integrated
Optimizes the Integrated analytics
complete commerce Integrated focused
lifecycle Suppliers industry solutions
Leading software,
services and
infrastructure
Customers IBM Smarter Partners
Commerce
Outcome Driven Flexible and Open
Measureable business Flexible deployment
outcomes Influencers Modular offerings and
Outcomes tailored to
12
flexible consumption
business domains
© 2011 IBM Corporation

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IBM Smarter Commerce: Making it Real
INVESTMENT
Software: $2.5+ billion investment in best of breed buy-market-sell software since 2010
Services: Global Business Services expanding its consulting and solutions capabilities
for commerce with a new practice
RESEARCH
IBM Research Innovation: 3000 researchers , including in the areas of customer
insight, financial management, social business and supply chain
INNOVATION
Business Analytics & Optimization: 14 billion in analytics focused
acquisitions. The BAO practice has 8,000+ dedicated business consultants
with industry expertise
Smarter Computing: Over 25,000 hardware and 25,000 software
developers. IBM is investing in Workload Optimized Systems to help
companies manage the needs driven by commerce applications
EDUCATION
Enabling our Ecosystem: An IBM Smarter Commerce
University dedicated to on-ramping business partners, new
hires and consultants
© 2011 IBM Corporation

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What does Smarter Commerce mean to these clients?
Staples ING Bank Crocs
For Staples, a $24B retailer, For ING Bank, serving over 85M For Crocs, a $700M
Smarter Commerce means customers, Smarter Commerce manufacturer, Smarter
transforming the customer means transforming their Commerce means transforming
experience across all marketing so personalized their fulfillment operations and
interaction channels by product offers can be delivered supply chain so internet
delivering a personalized across multiple channels in real customer orders are filled with
buying experience for over time resulting in €20M increase 100% accuracy through their
10,000 B2C and B2B customers in corporate earnings, 35% network of suppliers at the
in 27 countries reduction in marketing costs, lowest cost
and shorter cycle times
© 2011 IBM Corporation

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© 2011 IBM Corporation

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Integration across best-of-breed products to deliver industry focused solutions
VALUE CHAIN STRATEGY AND SERVICES
CORE BUSINESS SOLUTIONS
Core business processes
Buy Market Sell Service
Sourcing and procuring goods Selling and fulfillment of products Servicing customer needs across
Developing, delivering, and
and materials required to measuring relevant and consistent and services across multiple all interaction channels to drive
deliver products and services to messages across multiple channels channels to drive sales repeat sales and enhance lifetime
meet customer demand to drive demand value of a customer
Sterling Commerce Sterling Commerce Sterling Commerce
• Cross-Channel Order Capture, Cart
• Warehouse Management • Distributed Order Management • Delivery & service Scheduling
and Catalog
• Transportation Management • Warehouse Management • Reverse Logistics
• Customer-centric Shopping Experience
• Supply Chain Visibility • B2C/B2B Storefronts • Transportation Management
• Sterling Collaboration Coremetrics • Supply Chain Visibility Sterling IBM Case Manager
Network/B2B Services • Digital Analytics Collaboration Network/B2B Services • Case Design, Run-time, Analytics
Retail Store Solutions
• Behavioral Segmentation • Collaboration
• Retail POS Solutions
• Search Optimization, Ad • Rules & Events
• Self-Service Portal/Kiosk
Targeting, and Real-time
• POS Applications ILOG Supply Chain
Website
Recommendations • Network Optimization
ILOG Supply Chain • Transportation Optimization
• Product Optimization Unica
• Inventory Optimization Sterling Commerce
• Cross-channel • Cross Channel Order
Campaign Mgmt Management
• Real-time Decisioning, • Configuration
Event Detection, and • Pricing
Contact Optimization • Multi-vendor catalog
• Operations Mgmt • Quoting
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)
PureScale Application Smart Analytics
Systems System focused on agility, integration and automation to drive relevant business outcomes BPM Suite
© 2011 IBM Corporation

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Solution Scenario
A unified, cross-channel shopping experience
Provide a consistent view of a consumer’s order across multiple interaction 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
Phones the call center or
Consumer is shown a engages online to change Visits the store to pickup
web ad for a new TV. the order from delivery to the TV, views the order
Ad content selected by pickup. Process powered by via the IBM RSS POS
Coremetrics. Sterling Order Management
Consumer completes
the purchase using
WebSphere Commerce
Unica prompts the
POS to recommend an
offer on new speakers
Decides to extend and local installation
the order, from a services … sold!
mobile device
Capture responses and refine
© 2011 IBM Corporation

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Staples enables customers to shop seamlessly across all channels
Challenge
Support a personalized, customer-centric experience
for B2C customers
Support multiple B2B customers buying under
multiple contracts, with buyers that have differing
levels of purchase authority
Solution
Single IBM commerce platform handles both B2B
and B2C
10,000+ buying organizations each see contract-
specific pricing and policies Customer Profile
Results Staples sells office supplies,
technology, furniture and business
Automated support for diverse policies, contracts, services to consumers and
buyer roles on a single platform businesses in 27 countries around the
Over $1Billion (70%) of total B2B sales world.
driven through site
© 2011 IBM Corporation

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ING Bank coordinating marketing outreach to consumers
Challenge
Multiple bank brands, driving 60 million pieces of direct mail
each year, were merged into one
Campaign management process was disconnected, costly
and involved too many stakeholders
Marketing costs were increasing while response rates were
declining
Solution
Unified cross-channel solution controls marketing via direct
mail, email, web, call center and branches
No marketing silos: a centralized customer intelligence team
has the tools to plan and execute multichannel marketing
Customer Profile
campaigns
Results ING offers banking, investments, life
insurance and retirement services to over
€20 million increase in corporate earnings attributed to 85 million private, corporate and
increased marketing effectiveness institutional clients in more than 40
Annual direct mail costs reduced by 35% countries.
Campaign cycle time reduced to maximum of 4 weeks
© 2011 IBM Corporation

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Dal-tile delivers perfect order orchestration
A sales center could only see what they had
Challenge
available in could only see what they had available in their
A sales center their individual store
Existing store
individual system was costing them time and
money system was costing them time and money due to its
Existing due to its inflexibility
inflexibility
Manage all of the customer needs through a
single salesthe customer needs through a single sales
Manage all of center
center
Solution
IBM® Sterling Order Management reduced
IBM® Sterling Order costs by efficientlyorder fulfillment
order fulfillment Management reduced
costs by efficiently orchestrating order and service
orchestrating order and service fulfillment
fulfillment
Flexibility for future growth required to meetto meet
Flexibility for future growth required changing
changing customer demands
customer demands Customer Profile
Results Dal-tile designs, manufacturers, and
Stores can capture and modify orders through a single distributes ceramic, porcelain, glass, metal,
system for all delivery methods — including home delivery, and natural stone tile products to the
in-store pickup, and plant delivery construction and development,
architecture, and do-it-yourself markets.
Enables Dal-Tile to keep inventory at a minimum and
reduce their inventory costs
© 2011 IBM Corporation

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SXC health solutions enables secure information exchange
Challenge
Due to the amount of information being sent to
all aspects of the pharmaceutical supply chain,
SXC must have a secure and reliable system for
data exchange
Solution
IBM® Sterling Business Integration Suite Process
provides visibility allowing SXC to check all
attributes of their files and exchange data securely
Customer Profile
Results
SXC is a key player in the pharmacy
Comprehensive integration serving as their supply chain, providing eligibility,
hub for inbound and outbound data enrollment, payment, claims and
reporting data.
Secure and reliable exchange of data
© 2011 IBM Corporation