© 2014 IBM Corporation
Transportation Industry CloudPoint of ViewInstitute for Business Value
Partner’s Name, Partner’s TitleDD Month YYYY
© 2014 IBM CorporationIBM Institute for Business Value2
Executive summary
Cloud computing is not new to the transportation sector, but most transport providers have only just started to understand the power of cloud computing to not just improve efficiency, but also to transform collaboration paradigms and business models
Companies in the transportation sector are hungry for cloud-driven improvements because competitive pressures and customer expectations are making it harder to sustain profits
Cloud projects are attractive in the transportation sector because they help convert capital expense into operating expense, which frees up funds for innovation and other investments
Several companies in the industry are exploring more transformative uses of cloud computing, including solutions to work around legacy back office and transaction support systems, and to collaborate more effectively with ecosystem partners
IBM is uniquely positioned to help transportation companies envision and implement innovative cloud-based strategies
© 2014 IBM CorporationIBM Institute for Business Value
3 IBM can help
2 Traditional transportation operating models will evolve
1Cloud will transform the global transportationindustry
3
© 2014 IBM CorporationIBM Institute for Business Value4
Transformative technologies are disrupting industries
Source: [1] http://www.forbes.com/sites/peterhigh/2013/08/05/meg-mccarthys-climb-from-cio-to-evp-of-operations-and-technology-at-aetna/ [2] Joint IBV/EIU Cloud-enabled Business Model Survey of 572 business & IT leaders
Mobile revolutionConnectivity, access and participation are growing rapidly
Social media explosionQuickly becoming the primary communication & collaboration format
Hyper digitizationDigital content is produced and accessed more quickly than ever before
The power of analyticsReal time analysis, predictive analytics and micro-segmentation emerging
Transformational cloud – Cloud’s attributes make it a powerful delivery model enabling new business models, cost benefits, flexibility and large on-demand capacity
Gmail is a pioneer example of cloud computing, supported well by advertisement based revenue model, cloud’s low cost delivery model enabled and sustained free email service
Ecosystem of connected health and wellness apps that delivers a consolidated view of users’ health. Strong & growing ecosystem with 12 APIs and 7 Apps that cover all aspects of health care 1
Xerox Mobile Print platform uses cloud to convert and process print requests, removing complexity, reducing costs and enabling diverse devices and print configurations 2
© 2014 IBM CorporationIBM Institute for Business Value5
The transport sector is also impacted by these disruptions; necessitating innovation and agility to drive profitable growth
FORCES SHAPINGGLOBAL TRANSPORTATION
IMPLICATIONS FORCES SHAPINGCLOUD COMPUTING
Market demand for cloud solutions is fueling rapid innovation across all industries and markets
Costs and complexity of maintaining legacy systems is skyrocketing, making modernized variable cost based alternatives more attractive
Competition among cloud providers is driving down costs
Unrelenting competition, unconstrained capacity growth, and continued focus on price keep transport margins low
Customers have grown weary of onerous requirements to connect to back office systems
Customers express interest in alternative transport solutions
Many providers will struggle to maintain status quo solutions
Many customers require significantly more
flexibility in transport interactions
Transportation companies and their
customers are eager to adopt cloud solutions
© 2014 IBM CorporationIBM Institute for Business Value6
Relentless pressure on margins coupled with modest growth in transport demand require low-to-no cost industry improvements
Low margins across all transport sub-sectors
Shipping and Tracking struggle with particularly low margins, typically less than 3%
Even the most profitable transport segment, air freight and freight services produces margins that are less than 5%
Compared to the services sector, all areas of transportation produce modest returns on equity
With no profit, shipping produces no return on equity
Source: Yahoo finance industry analysis tool, YTD June 2014: http://biz.yahoo.com/p/773qpmu.html
Relative Return on Equity, 2014
Relative Profit Margins, 2014
Services Air Delivery & Freight Services
Trucking Shipping
Services Air Delivery & Freight Services
Trucking Shipping
28%23%
14%
0%
5.8%
4.9%
2.7%
-0.3%
© 2014 IBM CorporationIBM Institute for Business Value
As they advance along their transformational journey, transportation leaders focus on four key imperatives
7
CREATE A CUSTOMER –
FOCUSED ENTERPRISE
INCREASE FLEXIBILITY AND
STREAMLINE OPERATIONS
DRIVE INNOVATION WHILE MANAGING
COST
OPTIMIZE ENTERPRISE RISK
MANAGEMENT
Cloud computing improves efficiency, expands innovation potential and drives revenue growth
Optimize data and leverage analytics to adapt to new behaviors, cultivate trust, and drive profitable growth
Improve operating leverage with variable cost structures that increase flexibility and reduce risk
Deliver new services quickly that decrease cost per transaction and drive competitive differentiation
Maximize return on equity, combat fraud and mitigate operational risk while achieving compliance objectives
© 2014 IBM CorporationIBM Institute for Business Value8
In order to address industry challenges and manage changes, business leaders can leverage cloud to transform their businesses
Shifts CapEx to OpEx Shifts cost from fixed to variable, pay as you
goCost flexibility
Business Scalability
Market adaptability
Masked complexity
Context-driven variability
Ecosystem connectivity
Allocate and release resources based on demand
Gain from scale economics
Speeds time to market Supports rapid prototyping and innovation
Expands product sophistication Simpler for customers/users
Drives context-driven, user-centric experiences (preferences, movements, behaviors)
Facilitates new value nets of partners, customers and other external players
Enables industry platforms
Cloud empowers six potentially “game changing” business enablers
Cloud computing is a pay-per-use consumption and delivery model that enables real-time delivery of configurable computing resources (for example, networks, servers, storage, applications, services).
Resource Pooling
Broad Network Access
Rapid Elasticity
On-demand self service
Measured service
Cloud’s essential characteristics
Source: NIST, IBM IBV Power of cloud study
© 2014 IBM CorporationIBM Institute for Business Value9
Cloud enabled collaboration, analytics, and mobile delivery, increases flexibility and make it easy to compose business functions
CLOUD ENABLES COMPOSABLE BUSINESS MODELS Ability to restlessly re-invent applications, services and
processes Assembled from blocks of capability that can be rapidly
changed Small (Micro) blocks perform simple tasks reducing risk
of using and changing Well defined interfaces (APIs) makes blocks easy to
use and share Blocks share data to take advantage of analytics
A Collaborative Enterprise
Leveraging Advanced Analytics
Delivering Insight Where it is Most Needed
Employees, customers, and business partners are connected in real time to coordinate deliveries, arrange customs clearance, and process insurance claims
The days of transportation companies depending on the ‘local knowledge’ of staff and partners are gone – intelligent systems take in data and calculate optimal solutions automatically
The entire database of legacy records – information about shipper volumes, and access to unstructured market trends, will allow companies to dramatically improve forecasting and capacity planning
© 2014 IBM CorporationIBM Institute for Business Value10
Cloud enabled mobile solutions, collaboration tools and analytics will improve the customer experience and drive operational efficiency
Fully automated transaction and billing support
Touch-free interactions for both new and existing customers
Exception-driven updates for status, delays, customs processing, etc.
Seamless integration with partner and customer operational and supply chain management systems
CURRENT FRUSTRATIONS
Mostly manual quote generation
Highly dependent on employee knowledge
Significant ‘training period’ for new customers
Frequent data entry/re-entry errors
Frustrating complex rate structures
Complex back office connections
Too many incorrect invoices
CLOUD DISRUPTIONS FUTURE OF TRANSPORTATION
© 2014 IBM CorporationIBM Institute for Business Value11
Cloud enables transportation companies to drive transformation by bringing the full power of legacy data to the front line employee
Freight Rates – for each specific customer, product and market
Sales Leads – relevant to sales associates, regions, and products
Shipment Status – real time data about the location and condition of each shipment
Financial Details – always up to date information about payment terms and past performance for each customer and business partner
Insights and recommended actions delivered to the smart phones held by: Dock agents Sales associates Tracking teams Warehouse managers Dispatchers
© 2014 IBM CorporationIBM Institute for Business Value12
Cloud enables transportation companies to drive rapid enterprise transformations while coordinating across emerging eco-system
Clouds as platforms have the ability to scale as usage increases with the convenience of providing a single system and uniform processes that is accessed by people in many organizations
Cloud delivery model allows integration of the ecosystem partners to increase the reach of customer and system insight
Cloud helps in reducing the fixed IT costs for an enterprise, but also enables disruptions like creating new revenue streams and breaking into new markets
In addition to increasing efficiency with a simple dashboard, cloud computing can also provide the benefit of more immediate, near real-time data
Source: http://www.logisticsmgmt.com/article/state_of_cloud_computing_skys_the_limit
The percentage of logistics enterprises who have already adopted Cloud Solutions18%The percentage of logistics enterprises who are evaluating cloud solutions and cloud delivery models
37%By 2016, the percentage of supply chain applications which will be delivered in the combined cloud, according to Gartner
40%
© 2014 IBM CorporationIBM Institute for Business Value13
Cloud helps freight logistics and trucking companies to focus on their business as opposed to their IT infra, software versions and update schedules
Cloud solutions reduce the company’s time to market
Freight carriers are reducing asset downtime and associated risks using cloud-based solutions
Cloud solutions helps the transportation companies to speed the delivery of new products and services, and reinvent customer relationships
Transportation organizations that embrace cloud aggressively create substantial competitive advantage and differentiated growth
Source: http://public.dhe.ibm.com/common/ssi/ecm/en/xbl03022usen/XBL03022USEN.PDF, IBM Cloud POV Outline for T&T
ECOSYSTEM / PLATFORM DOMINATION
REVENUE GROWTHOPERATING EFFICIENCY
IT managers can increase efficiency by leveraging cloud capabilities to dynamically reallocate resources to different users across the transportation network to meet peak demands
Cloud enables the fleets to access their information from any Internet-enabled device from any remote location, thereby allowing multiple remote users and faster communication between drivers, fleet management and maintenance operations
Cloud simplifies the integration of partners for managing cross-company processes and offers mobile system access which are key factors for the logistics companies
The trucking and logistics companies gain flexibility from the cloud which allows them to deploy the system at a single business unit or across the whole enterprise
Rapid adoption of mobile technology, the explosion of social media, growth in “big data” and advanced analytics, and the globalization of value chains are trends directly enabled by cloud
© 2014 IBM CorporationIBM Institute for Business Value14
Transportation companies that have embraced cloud based services are already seeing significant performance improvements
Source: http://www-03.ibm.com/software/businesscasestudies/us/en/corp?OpenView&Start=31&Count=30&RestrictToCategory=corp_PowerSystems&cty=en_be
A large transportation logistics company in North America realized increase in revenues and reduction in staffing requirements by implementing advanced techniques, solutions with case management capabilities
The solution involved integration of multiple information sources and technologies - customer data, contracts, legacy systems, real-time monitoring
ECOSYSTEM / PLATFORM DOMINATION
REVENUE GROWTHOPERATING EFFICIENCY
China Railway worked with IBM to create a virtualized infrastructure, offering computing services to its many subsidiaries through infrastructure-as-a-service (IaaS) management
Apart from the reduction in time to market and costs, the cloud solution offers China Railway the IT flexibility and efficiency to keep up with growing demand
Global Port operator developed a cloud-based collaboration platform that brought port users together to share data and coordinate transactions in new ways.
The solution enabled diverse port customers such as container shipping lines, freight logistics companies, government agencies, and the port terminal operation to share data on transactions to speed port clearance and facilitate multi-party collaboration
reduction in time to market while cutting costs for equipment and systems management by one-third
Anticipated increase in revenue and 83% reduction in staffing requirements for billing operations
IBM IBV projects that the number of companies that are using cloud to drive innovation will double to 35% from 16% in next few years
50% 1Mn $ 35%
© 2014 IBM CorporationIBM Institute for Business Value15
3 IBM can help
2 Traditional transportation operating models will evolve
1Cloud will transform the transportationindustry
© 2014 IBM CorporationIBM Institute for Business Value16
Explosion of devices, data and new technologies pose a big challenge in their adoption
Source: IDC Predictions 2014
of IT spending growth will drive spending on mobile, cloud, Big Data, and social and related offerings
89%
of top 20 industry leaders in most industries will be significantly disrupted by new competitors or reinvented businesses
33%
is the ratio at which smart phones and tablets will outsell PCs, increasingly becoming touch points for consumers
2.5:1
DATA
growth is expected in data volumes exploding to 6 trillion terabytes50%
growth is expected in IT spending on Big Data, shifting toward analytics tools & apps, increasingly delivered by cloud
30%
of Fortune 500 companies will have, by 2017, an active (social technologies–enabled) customer community
80%
© 2014 IBM CorporationIBM Institute for Business Value17
Cloud expands the potential of new technologies across the enterprise
Business model change is quickly enabled by Social Media, Mobile and Analytics but delivered by Cloud
Cloud reduces costs, helps manage increasing costs of new technology adoption
Cloud moves CAPEX to OPEX, reducing upfront investments for new technologies
Cloud’s elasticity feature aligns technology spend to business demand avoiding wasted idle capacity
Cloud’s potential will enable organizations to be agile, flexible, provide on-demand access to huge computing resources but …………….cloud adoption requires careful planning
Source: IBM Center for Applied Insights Under cloud cover: How leaders are accelerating competitive differentiation
© 2014 IBM CorporationIBM Institute for Business Value18
Organizations can take a five stage approach in cloud adoption
Determine the organization goals, platform requirements & complexity associated
Develop enterprise cloud strategy, options available and roadmap
Envision the cloud architecture that will support cloud initiatives
Update IT Strategy and IT plans to align them with cloud strategy
Define business drivers to prioritize use cases for cloud
Implement a CloudFirst strategy to evaluate right blend of cloud options for new projects
Assess and evaluate from the current applications, the best candidates for cloud
Determine the applications to be moved to cloud
Define multi-sourcing models and cloud vendor selection criteria
Assess and determine how to best leverage the options of private, public and hybrid delivery models
Develop Cloud Service Catalog, SLAs and KPIs
Develop cloud cost models including transition
Finalize a cloud business case and examine its ROI including time required for initial payback
Prepare infrastructure for cloud
Develop Cloud Risk
Management plan and policies
Security and Compliance plan and processes
Transition plan including workforce transition
Assess impact on operating model; identify and plan changes required
Note: The above shows an overall plan and will include aspects of workload prioritization and migration discussed in other slides
Prepare for implementation
Develop Cloud business case
Determine cloud deployment options
Identify and prioritize workloads
Create Cloud strategy, architecture and plans1 2 3 4 5
Cloud planning should result in accelerated migration, quick wins and mitigated risks
© 2014 IBM CorporationIBM Institute for Business Value
Cloud strategy comprises four elements
BUSINESS MODELS ENABLED BY CLOUD
Promoting highly competitive initiatives at the enterprise and Industry level
APPLICATION AND DELIVERY PLATFORMS
Driving agility and productivity for the enterprise; tested strategies to improve life cycle performance
DATA PLATFORMS
Instantiating well-integrated business intelligence to manage the enterprise
INFRASTRUCTURE PLATFORMS
Delivering consumable, secure and readily available resources to enable agile execution
Enterprise Cloud
Strategy
19
1 2 3 4 5
Strategy
© 2014 IBM CorporationIBM Institute for Business Value
Enterprise innovation is realized by integrating new technologies with existing core systems
20
Cloud enables leaders to take a systematic approach to integrate these capabilities to drive
enterprise innovation
Systems of insightAdvanced analytics and cognitive computing systems that harness big data, enabling competitive advantage for enterprises
Systems of engagementLeverage mobile and social to transform relationships with customers, employees & citizens
Systems of recordThe traditional core systems such as accounting applications and product systems that record key internal data
Pervasive Security Intelligence A dynamic approach to threat reduction through a life cycle of prevention, detection and response
Enterprise Innovation
Systems of Engagement
Systems of Record
Systems of Insight
Enabled by Cloud
Security
Pervasive Intelligence
1 2 3 4 5
Strategy
© 2014 IBM CorporationIBM Institute for Business Value
Organizations should evaluate born-on-the-cloud solutions along with existing workload migration
21
Ent
erpr
ise
Clo
ud A
dopt
ion
Migrate existing workloads
Cloud First
MigrateQuantifyPrioritizeSelect
Workload analysis Wave 1 Wave 2 Wave 3
Migration Plan
Business case
New project
Replace existing app / infra
New project
Evaluate a blend of cloud options that best suit the project
requirements
BPaaS SaaS
PaaS IaaS
1 2 3 4 5
Prioritization
© 2014 IBM CorporationIBM Institute for Business Value22
Can all applications / workloads be moved to cloud? Assessment and prioritization will help determine “cloudable” workloads
The Opengroup defines the term “workload” as the type and characteristics of application(s) that can be hosted on the Cloud
Prioritization helps determine cloudable applications
Business value agility and elasticity value in rapid deployment
enhancing time to market pay-as-you-go pricing
model shifting fixed costs to variable costs
reduced capital expenditure lower operating costs
Deployment ease number & type of connections
between the application and other applications
the amount and style (batch, interactive) of data transferred
the non-functional response characteristics
the security and compliance requirements
Challenges to address:• Now that I am ready for cloud, what workloads fit my target cloud?
• What is the real cost-benefit of moving workloads to the cloud?
More ready for cloud
Evaluate: May or may not be ready
New growth workloads made possible by cloud
Workload migration categories
Migration plan
WAVE 1
WAVE 2
WAVE 3
1 2 3 4 5
Prioritization
© 2014 IBM CorporationIBM Institute for Business Value23
Optimizing workloads for cloud adoption will deliver enhanced business value for transportation companies
Note: The above is a representative example of what workloads can be moved to cloud
More ready for cloud
Evaluate: May or may not be ready for Cloud
based on their attributes or maturity
New growth workloads made possible by cloud
Many Backoffice Applications
Sensitive Data
Complex processes & transactions
Regulation sensitive
Not yet virtualized 3rd party SW
Highly customized
Analytics
Collaboration
Development & Test
Workplace, Mobile, Desktop & Devices
Infrastructure Storage
Infrastructure Compute
Business Processes
Transportation Solutions
Pre-production systems
Information intensive
Isolated workloads
Mature workloads
Batch processing
Transportation Management
Many Billing Applications
Many Risk Mgmt. Applications
Disaster Recovery
~25IBM’s experience shows that within the existing transportation applications 1 in 4 can be readily moved to cloud
%
1 2 3 4 5
Prioritization
© 2014 IBM CorporationIBM Institute for Business Value
A phased migration to cloud helps manage risks
24
1 2 3 4 5
Potential migration risks Incorrect analysis and identification of
workloads
Inability to meet non-functional requirements
Incorrect ROI analysis
Inadequate preparation of infrastructure / apps for cloud
Complex applications’ interoperability & integration
Failure to comply with security, privacy & regulatory requirements
Management complexity as resources get distributed in a virtualized environment
Discover
current assets and usage
topologies & dependencies
platforms and licenses
SLA’s, security & compliance
Analyze
cloud feature / fit
cloud providers
contract models
resource sizing
workloads
Establish the Migration Toolkit
Cloud-enable infrastructure & applications
Migrate
Infrastructure
Applications, Platforms and Data
Operations Services
Validate Migration
Phased migration approach
Migration & Validation PhaseAnalysis PhaseDiscovery Phase
Prioritization
© 2014 IBM CorporationIBM Institute for Business Value
Cloud services and deployment options enable transportation providers to adopt cloud as per their requirements and value drivers
25
1 2 3 4 5
Value drivers …
.… Customization, efficiency, availability, resiliency, security and privacy
Value drivers …
.…Standardization, capital preservation, flexibility and time to deploy
Public cloudPrivate cloud
Value drivers …
Leverage flexibility and benefits of private and public cloud while addressing data security, governance, compliance and budgetary challenges
Hybrid cloud
Deployment
Software, hardware and platforms are hosted in a data center owned by a transporter and used by different departments / units inside of the transporter
Software, hardware and platforms are hosted externally by a third party vendor who manages all aspects of the services for the organization
Software, hardware and platforms are hosted both in third party data centers as well as inside of a transporter organization
© 2014 IBM CorporationIBM Institute for Business Value
Cloud enables a global trade provider to increase agility and efficiency while reducing IT costs significantly
26
1 2 3 4 5
Source: Case Study on Cloud Implementation for a Global Trade Provider, http://www.slideshare.net/msitpro/tradefacilitate-cs-unlocked
Upfront Capital Expenses No Longer Incurred
$5341 per
server (CAPX)
$107 per month
(OPEX)
Traditional Funding
Cloud Funding
High capital expense replaced by modest operational expense, which is easier to budget for and manage
Rapid Scalability at less cost
97%Reduction in the deployment time
Growing customer
base
• Purchasing and managing additional servers replaced by addition of web roles
• Saved One-third of the cost of adding an additional server every 3 years
Business Case
Reduced IT spending on basic infrastructure leaves more time & budget to focus on strategic initiatives & growing customer needs
© 2014 IBM CorporationIBM Institute for Business Value27
Total cost of ownership (TCO) analysis at a large transportation company demonstrates the business value of cloud delivery
1 2 3 4 5
Business Case
Source: Case Study on Cloud Implementation for a Global Trade Provider, http://www.slideshare.net/msitpro/tradefacilitate-cs-unlocked
Business Challenge: The IT department was the backbone IT for a privately held Forbes 500 holding company that consisted of 50–60 companies and over 10,000 employees. The company was under pressure to add new projects, yet its server environment was not scalable or easy to manage. Many servers were underutilized. It was difficult for an already overworked IT staff to take on new projects.
Server Consolidation Improved CPU Utilization Better Capacity Planning Significant Reduction in Hardware, Software
costs and IT Operation costs Conversion of legacy systems into virtual
machines and eliminate older hardware Improve overall processes
Hardware and Software TCO Reduction - 81% Total TCO Reduction - 82% Six – Month ROI – 449% Time needed to recover a system - 6 hours
before virtualization, 10 minutes after Avg CPU Utilization – 60-65% Server consolidation ratio achieved: 7:1
VIRTUALIZATION
BENEFITS FOR IT USING CLOUD BASED VIRTUALIZATION
BOTTOM LINE RESULTS
© 2014 IBM CorporationIBM Institute for Business Value
Security, privacy and compliance issues can be readily addressed with cloud…
28
1 2 3 4 5
As transportation companies start planning to adopt cloud, key questions come up about their data & applications:
Where is our data stored? What about data sovereignty?
How do we protect our customers’ privacy?
How does cloud affect our regulatory compliance?
Is a business continuity plan available for cloud?
IT Strategy
Risk Management
Plan
Cloud SLA
Cloud requirements
Monitoring & Auditing
Risk & Security Management
processes
Physical & Logical controls implementation
Audits & reports
Critical elements to address security, privacy and compliance concerns
TR
AN
SP
OR
T
CO
MP
AN
YC
LO
UD
SE
RV
ICE
P
RO
VID
ER
Implementation
© 2014 IBM CorporationIBM Institute for Business Value
Impact of cloud is forcing transportation providers to evolve a new operating model aligned to a recalibrated business strategy
29
An operating model is a framework for formulating an operations strategy that best deploys and determines the explicit choices needed to achieve business goals
Market shifts in the digital economy necessitate adoption of new technologies like cloud, mobile, social media and analytics
To succeed with cloud, companies have to assess the impact of cloud on the operating model and all its dimensions and determine what actions are required to make cloud adoption smoother and more successful
ROADMAP FOR CHANGE
Target Operating Model
BUSINESS GOALS AND STRATEGY
TOM
CustomerExperience
PerformanceMetrics
Technology
Skills & Capabilities
Sourcing & Alliances
Assets &Locations
Organization &Governance
Processes
1 2 3 4 5
Implementation
CULTURE
© 2014 IBM CorporationIBM Institute for Business Value
Cloud will radically transform and improve client experience in the transportation industry
30
Robert, an experienced Fleet Manager, while on his way to office is accessing the fleet and driver availability details
on his mobile to assign a truck for dispatching the goods for a very important client.
Thomas, the maintenance manager receives Robert’s request when he’s on a
call with MaintenanceVendor. He opens his real time updated dashboard to check for the maintenance level of the truck assigned.
Parker, the maintenance vendor accesses the fleet maintenance data on his Tablet device.
On analyzing, he recommends Thomas to send seven of the company’s trucks for overhauling and maintenance to avoid breakdown.
Walker, the driver of the assigned truck gets the new assignment details on his mobile which includes delivery
details, maps, traffic data. On his way to delivery, he is alerted on his mobile about a road block and is suggested alternate routes.
Allen, the procurement manager of the client accesses the real time GPS position of the truck to find out the lead
time for planning his operations. On receiving the goods, he sends his acknowledgement and feedback to Robert.
Scott, the safety and compliance officer monitors the whole assignment using real-time data, GPS, speed
and mileage tracking devices and sends a report to Robert and Thomas about the truck performance and driver behavior.
1
1 2 3 4 5
Implementation
2 3
5 64
Persona Detail Persona Detail Persona Detail
Persona Detail Persona Detail Persona Detail
© 2014 IBM CorporationIBM Institute for Business Value
Efficient sourcing and management of partnerships and alliances will be major enablers of cloud adoption success
31
IMPACT
Organizations will have more partners and alliances through “Services” being offered by outside organizations
Complexity will increase in service contracts due to consumption-based billing
Service quality and availability will need more focus as they are managed through relationships and agreements with diverse third party ecosystem
IMPLICATIONS
Procurement and sourcing functions will need to be automated and have shortened cycles
Vendor and service management will be an integral part of the Procurement function
Service level agreements need to be defined clearly and governed by the need to secure and protect customer data in a shared environment
Service adoption to meet benefits realization needs to be included in the negotiating process
SOURCING & ALLIANCES
© 2014 IBM CorporationIBM Institute for Business Value
Business leaders will pro-actively redesign business architecture and processes to leverage benefits of cloud
32
IMPACT
The cloud strategy and technologies will require a shift from systems-based processes to services-based processes
Cloud’s speed of service delivery will impact current processes as they need to match and deliver at the same speed
Process framework will migrate from functional silos to an integrated set of processes spanning organizational boundaries
Cloud’s service composition model will provide freedom to engage/disengage functions as needed
IMPLICATIONS
Traditional legacy processes will need to be decommissioned or integrated into the new cloud-enabled processes
Transportation companies will need control over the continued availability, reliability and utility of the cloud based processes and the platforms underpinning them
Dynamic processes for billing and allocation of resources will be required to not be an impediment in achieving value
Processes will need to be made simpler and faster
PROCESSES
© 2014 IBM CorporationIBM Institute for Business Value
Cloud computing will enforce significant changes in organization design and governance within organizations
33
IMPACT
Major shift in how the new environment is managed and operated will have significant impact on the optimum organizational structure required in the future
Organizations and functions will no longer be constrained by the physical location of data centers, hosting providers and hardware platforms
As products and services become more ‘composable’, Governance across the ecosystem will become critical
IMPLICATIONS
Organizations will become more flexible, managing a fluid set of internal / external resources and service providers
Governance will be more centrally defined with decentralized execution
Cloud service selection will follow the overall enterprise cloud governance standards
Strong risk management systems will become critical to manage increasing risks arising out of broader cloud deployment
Current organization will need to evolve
• Organization Design, roles and responsibilities
• Management systems
ORGANIZATION & GOVERNANCE
© 2014 IBM CorporationIBM Institute for Business Value
Organizations need to overhaul performance management approach to optimize and enhance value from cloud
34
IMPACT
A dynamic financial model that measures consumption will be required
Allows transporters to move management of performance metrics off-premise
New metrics will be required that measure:
Service availability
Service quality
Responsiveness
IMPLICATIONS
Performance management strategy will
introduce new levels of complexity in
management reporting
Service level performance will be built into
third party and service management
contracts for all vendors delivering the
cloud based service so retailers can focus
on core strategies
Dynamic metrics tied back to SLAs will be
critical for measuring success for cloud
based services
PERFORMANCE METRICS
© 2014 IBM CorporationIBM Institute for Business Value
Cloud computing will drive rapid changes in skills and capabilities within the enterprise workforce
35
IMPACT
Customer and service orientation skills will be even more critical within transporters
Vendor management, contracting and relationship management skills will be critical to manage all of the vendors and alliances
IT will need to be trained in virtualization and network side technologies to manage the “cloud pipe”
IMPLICATIONS
Deeper data analytics and customer insight capabilities will be the norm
Training of staff on new skills will be required related to new and innovative services
Existing IT and other functional staff will likely need to be retrained or redeployed
Legal / operational support skills will be key to manage partnership agreements
Skills will shift to managing vendor contracts and relationships of many vendors
SKILLS & CAPABILITIES
© 2014 IBM CorporationIBM Institute for Business Value
Business leaders need to accelerate adoption of emerging technologies and technical trends to optimize benefits from cloud
36
IMPACT
The technology function will be leaner with a more strategic focus rather than operational
Cloud’s big impact on technology will be to move on-premise technology deployment to cloud
As more services migrate to cloud, Service Management, IT Vendor management and IT Quality management will become key differentiators
IMPLICATIONS
IT Strategy, Architecture and IT Plans to be reviewed and updated to reflect changes in business strategy and cloud-enabled operations
IT teams need to be retrained and redeployed
Budget for the maintenance of legacy systems may reside, so they need to be budgeted and worked into the overall costs
An IT services catalog needs to be dynamic globally and be applicable for each market
A DevOps approach needs to be implemented to get the cloud service delivered faster to achieve value
TECHNOLOGY
© 2014 IBM CorporationIBM Institute for Business Value
Organizations will have to reassess location strategies to ensure optimized and compliant adoption of cloud
37
IMPACT
Migration to the cloud will require decommissioning and consolidation of technology assets
Decommissioned assets and locations will be a factor in the future state financial model
Removal of physical / technology assets will reduce the quantity of needed remote offices and data centers
IMPLICATIONS
Decommissioned technology assets will impact book value and the existing operating budget
One-time financial write-offs will need to be factored into the overall business case
Excess data centers and remote locations will have to be repurposed or sold / leased to recoup cost
Role of branches will need to be redefined and enhanced to provide a much better customer experience
ASSETS & LOCATIONS
© 2014 IBM CorporationIBM Institute for Business Value
Cloud will lead organizations to rethink and rebuild organization culture to harness enhanced value
38
CULTURE
IMPACT
The shift to a cloud-based environment will also require changes in long-held organizational beliefs and cultural norms
Transportation companies will need to be service-orientated, with a shift in mindset toward valuing the customer experience above all else
Open and collaborative reporting and management across organizational functions and units will facilitate faster customer response
IMPLICATIONS Need to address perceived loss of control /
potential resistance by existing IT and other functions whose processes will move to cloud
Need to educate employees on this shift: How will our culture change, and why? What is the risk if we do not make this
change? What would be the consequences of continuing as is?
Requires reinforcement of expected behaviors through formal and informal mechanisms and interventions
Requires changes in• Leadership Behaviors• People practices
Need to have regular communications on changes
© 2014 IBM CorporationIBM Institute for Business Value
Shanghai Airport Authority coordinates actions between parties to gain predictive insights that improve facility-wide operations
39Source: IBM T&T – Cloud Reference Case Studies
Efficiency – the time required to generate and distribute flight update records fell from several hours to just a few minutes.
Transformation – the problem-resolution model for the facility was changed from reactive to proactive.
Collaboration – today, the airport, air traffic controllers, and carriers are on the same page.
CHALLENGETo decrease flight delays, maximize efficiency throughout one of its airports and improve the passenger experience from curb to gate, this airport authority needed greater visibility into the airport’s interconnected operations, including flights, crews and other moving parts.
SOLUTIONUsing a cloud-enabled business intelligence solution, the SAA provides insight into everything from airplane taxi times to the number of people waiting on the concourse. Airport personnel now have the information they need to identify problems and address them proactively, adjusting ground crew schedules to optimize airplane turnaround time, increasing staff at busy security checkpoints or even opening extra transit lounges to ease crowding.
Cloud-enabled Business Collaboration
© 2014 IBM CorporationIBM Institute for Business Value
Data-driven global logistic company uses cloud delivered business intelligence to quickly develop higher margin logistics solutions
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Source: http://w3-01.ibm.com/sales/ssi/cgi-bin/ssialias?appname=crmd&subtype=na&infotype=cr&htmlfid=0CRDD-9H39XT
Customer Value – sharpened its ability to answer complex analytics questions while improving the value of the services it delivers
Responsive – quicker decision making help reduce costs and optimize customer supply chains
Efficient – consolidation has resulted in 15% reductions in both time and operating costs
BACKGROUNDGlobal logistics' innovative logistics services focus on warehousing, procurement, distribution and information-driven process improvement
CHALLENGEthe company needed to improve its ability to solve complex analytics issues for its clients. It needed a better way to analyze transport and warehouse logistics because manual methods that used vast amounts of data led to slow delivery for clients.
SOLUTIONUsing a cloud-based infrastructure as a Service (IaaS) platform, global logistics implemented Cognos Business Intelligence software to conduct logistics analysis, enabling it to determine the most efficient transportation routes between warehouses and customer sites.
Cloud-enabled Business Analytics
© 2014 IBM CorporationIBM Institute for Business Value
Transportation solutions provider uses cloud to drive innovation, reduce costs and improve security
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Source: http://www.ibm.com/midmarket/us/en/att/pdf/Feat_1_DriveWyze.pdf?ca=fv1310&me=feature1&re=usartpdf
Drivewyze decided to build the Drivewyze PreClear service based on IBM SmartCloud® Enterprise+, which provides a fully managed and production-ready cloud infrastructure
IBM’s cloud offered a secure environment along with high availability, back up, recovery and monitoring features, which are critical components to the Drivewyze service
Maintaining safety on the roads for both trucks and other vehicles is a top priority for law enforcement agencies. To comply with safety measures, truckers must regularly stop at roadside inspection stations which are set up to identify unsafe vehicles
With 4.5 million trucks required to report to weigh stations in North America and only 13,000 inspectors, Drivewyze believed there had to be a better way for law enforcement to reduce needless inspections on safe trucks and focus on the unsafe ones
Drivewyze piloted a hands-free application called Drivewyze PreClear, which offers a safe and secure way for truckers to request and receive bypass clearance at both permanent weigh stations and mobile inspection sites
Cloud-enabled Business Innovation
© 2014 IBM CorporationIBM Institute for Business Value
Multi-modal port operator develops cloud-based ecosystem to benefit the entire port community
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Recognizing the frustration of Port operators and their many diverse users, IBM developed the IBM Port Community System (PCS)
The PCS was developed in conjunction with the Saudi Arabian Port Authority to give shippers, agents, port owners, and customers a way to share transactions details in a private-cloud
The PCS was developed on behalf of its users, who will, in time, own and operate the solution
Port operators are at the center of a great deal of transportation related activity, but historically, mostly as a result of the time and administrative hassle they would add to the process of delivering goods, many have been viewed less as a service than as a necessary evil
Despite their host of laborious processes, ports perform a host of valuable functions, including:
Facilitation of customs clearance
Coordination of arrival, departure, unloading, and loading
Scheduling and use of specialty equipment used for loading and unloading
The transport industry desperately needed a way to provide these services in a more efficient and customer-focused manner
Cloud-enabled Ecosystem Development
© 2014 IBM CorporationIBM Institute for Business Value43
3 IBM can help
2 Traditional transportation operating models will evolve
1Cloud will transform the transportationindustry
© 2014 IBM CorporationIBM Institute for Business Value
IBM is best positioned to serve the cloud computing needs for transportation providers
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Infrastructureas a Service
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© 2014 IBM CorporationIBM Institute for Business Value
IBM is helping our clients achieve compelling business outcomes, no matter where the entry point is
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BUSINESS PROCESSas a Service
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© 2014 IBM CorporationIBM Institute for Business Value
IBM Cloud marketplace provides easy access to our as-a-service portfolio – and is organized by key cloud buyer roles
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Over 200 IBM and Third-Party Software and Services
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IBM CLOUD MARKETPLACEYour gateway to cloud innovation
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Enterprise-grade business apps to accelerate innovation (SaaS)
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ibm.com/cloud/marketplace
© 2014 IBM CorporationIBM Institute for Business Value
IBM can support you locally and globally …
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IBM GLOBAL CONTACTSIBM REGIONAL CONTACTS
Mark Bedeman – Europe Cloud [email protected]+34-93 866 3786
Aamer Rana – MEA Cloud [email protected]+971-50-650-3162
Jeff Moyer – Americas Cloud [email protected]+941-809-9283
Raimon Christiani – IBM Global Industry Lead, Travel & Transportation [email protected]+41-79-571-08-84
Steve Peterson – Global T&T Lead, IBM Institute for Business [email protected]+720-939-7919
Anthony Marshal – Strategy & Analytics Lead, IBM Institute for Business [email protected]+720-395-0506
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© 2014 IBM CorporationIBM Institute for Business Value
IBM can support you locally and globally …
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IBM CLOUD CoC ADVISORY LEADERSIBM CLOUD CoC ADVISORY LEADERS
Cindy Warner – Managing Partner Global Cloud [email protected]
Mike Owens – Associate Partner Cloud [email protected]
Becky Carroll – Associate Partner Cloud [email protected]
Nathan Herber – Associate Partner Cloud [email protected]
IBM CLOUD CATEGORY LEADERS
Nancy Agosta – Cloud Industry LeaderCloud [email protected]