© 2011 IBM Corporation

Smarter CommerceBuilding a customer-centric business

Industry Solutions Sales Marcelo Cabane, Director – Latin America

© 2011 IBM Corporation2

We have entered the age of the new customer

Social networking and mobile commerce have dramatically changed the dynamic between buyer and seller.

Customer expectations of service, price and delivery is soaring.

This is changing the entire way products are sourced, manufactured and distributed—and making business more complex than ever.

“Worldwide economic change now occurs simultaneously and instantly.”CEO, Telecom Industry

“When the business model is innovative, operations and the product will follow automatically.”Ronald de Jong, CEO Philips CL, Germany

Customers now have unlimited access to information and can instantly share it with the world

"Social networking and the Internet will allow us to drive more new ways of interacting with consumers than we have ever had before.“Consumer Products CEO, United States

© 2011 IBM Corporation

These disruptive forces ripple from the customer through the enterprise and across whole industries

Individuals The connected consumer The networked workforce The empowered citizen

Industries Value migration Value chain redefinition Fragmentation

Enterprises New business models Optimized digital operations Connected enterprise

Business Challenges

• Increased customer expectations• Accelerated speed of change• Different ways to engage digitally

• Industry disruption from new competitors

• Value migration creates winners and losers

• New types of collaboration

• Redefined customer value• Managing across digital and physical• Significant risk, security, compliance

and privacy concerns

Source: IBV Analysis

© 2011 IBM Corporation4

Power has shifted to the customer compressing margins, forcing companies to transform their approach to commerce

In this new era, businesses need to:

Understand and anticipate customer behavior based on customer insights across all channels

Adapt sourcing and procuring of goods and services based on customer demand and optimize supplier interactions across extended value chains

Market, sell and fulfill the right product and service, right price, right time and place

Service customers flawlessly, predict and drive customer loyalty

© 2011 IBM Corporation5

It helps you more effectively buy, market, sell and service

At IBM, we call it Smarter Commerce

Smarter Commerce is a strategic approach that places the customer at the center of your business operations

It gives you increased margins, better opportunities and new revenue streams

It boosts efficiency and identifies opportunities at every stage of the commerce cycle

It synchronizes your entire value chain to provide better outcomes

It capitalizes on the insight generated through social and mobile commerce and collaboration to enhance, extend and redefine customer value

© 2011 IBM Corporation6

Smarter Commerce can help transformevery phase of the commerce cycle

BuySourcing, controlling and procuring of goods and materials

MarketTargeted and personalized marketing across all customer interactions

SellSelling and fulfillment of products and services across all channels

ServiceServicing customer needs across all interaction channels

Customer

Integrated Value Chain

An international transportation company reduced partner integration time by more than

95%

A retail pet company increased open and click-through rates to 5x the industry average with more sales per web visitor by

41%

A leading provider of teaching, learning,and research solutions grew direct-to-consumer commerce revenues year over year by70%

A US-based national communications service provider reduced customer churn by delivered a ROI

376 %

Sell I Order I Fulfill

Source I Control I Procure

© 2011 IBM Corporation7

IBM’s integrated portfolio for Smarter Commerce

Buy Market Sell Service

Core business processes

WORKLOAD OPTIMIZED SYSTEMS

CORE BUSINESS SOLUTIONS

VALUE CHAIN STRATEGY AND SERVICES

ADVANCED ANALYTICS Store analytics | Purchase analytics | Consumer loyalty | Predictive and prescriptive | Social Analytics | Master data management

Market and customer mgmtAligning sales, marketing and operations to engage with customers

Innovation and business valueInnovating and aligning business models to drive value to the customer

• Trading Partner Mgmt• Supplier Management• Supply Chain Visibility• Logistics Management• Inventory Optimization

• Predictive Analytics/Modeling• Behavioral Segmentation• Cross-channel Campaign Mgmt• Search Optimization, Ad

Targeting• Marketing Resource Mgmt

• B2B / B2C Cross-channel commerce

• Distributed Order Orchestration

• Fulfillment and Supply Chain Optimization

• Mobile Commerce

• Delivery & Service Scheduling

• Customer Self Service Enablement

• Reverse Logistics• Case Management

Operating and Organization ModelsDesigning operations, supply chain and the

organization model to deliver customer value

© 2011 IBM Corporation8

Buy Market Sell Service

Core business processesCORE BUSINESS SOLUTIONS

VALUE CHAIN STRATEGY AND SERVICES

Sourcing and procuring goods and materials required to

deliver products and services to meet customer demand

Developing, delivering, and measuring relevant and consistent messages across multiple channels

to drive demand

Selling and fulfillment of products and services across multiple

channels to drive sales

Servicing customer needs across all interaction channels to drive

repeat sales and enhance lifetime value of a customer

• Cross-Channel Order Capture, Cart and Catalog

• Customer-centric Shopping Experience• B2C/B2B Storefronts• Precision Marketing

Coremetrics• Analytics• Segmentation• Reporting• Search Optimization• Mobile

Sterling Commerce• Cross Channel Order

Management • Configuration• Pricing• Multi-vendor catalog• Quoting

Sterling Commerce• Distributed Order Management• Warehouse Management• Transportation Management• Supply Chain Visibility Sterling

Collaboration Network/B2B Services

Unica• Resource Mgmt • Campaign Mgmt• Marketing execution • Performance• Analysis

ILOG Supply Chain• Network Optimization• Transportation Optimization

Sterling Commerce• Warehouse Management• Transportation Management• Supply Chain Visibility• Sterling Collaboration

Network/B2B Services

ILOG Supply Chain• Product Optimization• Inventory Optimization

Retail Store Solutions • Retail POS Solutions• Self-Service Portal/Kiosk• POS Applications

Sterling Commerce• Delivery & service Scheduling• Reverse Logistics

IBM Case Manager• Case Design, Run-time, Analytics• Collaboration• Rules & Events

Unica• Service messaging• Notifications

PureScale Application Systems

Smart Analytics System BPM Suite

Integration across best-of-breed products to deliver industry focused solutions

ADVANCED ANALYTICS Store analytics | Purchase analytics | Consumer loyalty | Predictive and prescriptive | Social Analytics | Master data management

WORKLOAD OPTIMIZED SYSTEMS

© 2011 IBM Corporation9

INNOVATION

RESEARCH

INVESTMENT

EDUCATION

Integrated Solutions: $2+ billion investment in best of breed buy-market-sell software and expertise to deliver integrated solutions for our clients

New GBS Practice: Global Business Services expanding its consulting and solutions capabilities for commerce with a new practice

IBM Smarter Commerce: Making it Real

IBM Research Innovation: Comprised of over 3000 researchers, IBM Research includes R&D in the areas of customer insight, financial management, social business and supply chain, working with clients to develop innovative approaches to deliver business value

Enabling our Ecosystem: A IBM Smarter Commerce University dedicated to on-ramping business partners, new hires and consultants

Extension of our Business Analytics & Optimization: Leverage >$14 billion in analytics focused acquisitions. The BAO practice has 8,000+ dedicated business consultants with industry expertise & includes a Customer, Marketing & Sales Analytics focusSmarter Computing: Over 25,000 hardware and 25,000 software developers WW, IBM is investing in Workload Optimized Systems to help companies manage the high transactional & real-time business insights needs driven by commerce applications.

© 2011 IBM Corporation10

© 2011 IBM Corporation11

What is IBM Smarter Commerce?Smarter Commerce is a new approach that transforms the speed in which clients manage and adapt their buy, market, sell, and service processes putting the customer at the center of decisions and actions. It drives new levels of company differentiation leading to greater customer loyalty, revenue / margin growth, and agility.

IBM’s approach to Smarter Commerce is comprehensive, integrated, outcome driven and flexible. We will help companies:

Understand and anticipate customer behavior based on customer insights across all channels

Adapt sourcing and procuring of goods and services based on customer demand and optimize supplier interactions across extended value chains

Market, sell and fulfill the right product and service, right price, right time and place

Service customers flawlessly, predict and drive customer loyalty

© 2011 IBM Corporation12

For Staples, a $24B retailer, Smarter Commerce means transforming the customer experience across all interaction channels by delivering a personalized buying experience for over 10,000 B2C and B2B customers in 27 countries

For ING Bank, serving over 85M customers, Smarter Commerce means transforming their marketing so personalized product offers can be delivered across multiple channels in real time resulting in €20M increase in corporate earnings, 35% reduction in marketing costs, and shorter cycle times

For Crocs, a $700M manufacturer, Smarter Commerce means transforming their fulfillment operations and supply chain so internet customer orders are filled with 100% accuracy through their network of suppliers at the lowest cost

What does Smarter Commerce mean to these clients?

© 2011 IBM Corporation13

IBM Smarter Commerce – Leverage IBM’s Brand Differentiators

Setting the shared agenda

Making the case with expertise and proven outcomes

Charting the client’s path to

deliver that value

Collaborating with experts to define

future value

Belief

Participation Evidence

Realized value

Build a NetworkOf Influencers

IBV Studies

Analysts and thought leadership whitepapers

Press coverage, bylined articles, op-

eds and client references

Digital webcast

series

Op Ads

Microsite & CXO site

Third party and IBM events &Roundtables

Videos / podcasts

Innovation Discovery and Classroom to Client

Workshops

Smarter Commercemarketing

and progression paths

© 2011 IBM Corporation14

IntegratedComprehensive

Outcome Driven Flexible and Open

What is unique about IBM’s Smarter Commerce?

Spans the complete commerce lifecycle across buy and sell-side commerce

Packages software, consultative and integration services and infrastructure

Integrated products and capabilities to deliver industry focused solution offerings

A strong set of integrated analytics to track customer behavior across all channels

Drives measureable business outcomes to industry specific business owners

Delivers powerful optimization capabilities around all aspects of the commerce lifecycle

Flexible deployment models that include on-premises, as-a-service, hosted or hybrid models

Modular offerings and flexible consumption

14

Integrated Solution

Suppliers

Influencers

PartnersCustomers

© 2011 IBM Corporation15

ING Bank coordinating marketing outreach to consumers

€20 million increase in corporate earnings attributed to increased marketing effectiveness Annual direct mail costs reduced by 35% Campaign cycle time reduced to maximum of 4 weeks

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

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 campaigns

Challenge

Solution

Results

Customer Profile

ING offers banking, investments, life insurance and retirement services to over 85 million private, corporate and institutional clients in more than 40 countries.

© 2011 IBM Corporation16

Dal-tile delivers perfect order orchestration

A sales center could only see what they had available in their individual store Existing system was costing them time and

money due to its inflexibility Manage all of the customer needs through a

single sales center

IBM® Sterling Order Management reduced order fulfillment costs by efficiently orchestrating order and service fulfillment Flexibility for future growth required to meet

changing customer demands

Challenge

Solution

Results

Stores can capture and modify orders through a single system for all delivery methods — including home delivery, in-store pickup, and plant delivery

Enables Dal-Tile to keep inventory at a minimum and reduce their inventory costs

A sales center could only see what they had available in their individual store

Existing system was costing them time and money due to its inflexibility

Manage all of the customer needs through a single sales center

IBM® Sterling Order Management reduced order fulfillment costs by efficiently orchestrating order and service fulfillment

Flexibility for future growth required to meet changing customer demands Customer Profile

Dal-tile designs, manufacturers, and distributes ceramic, porcelain, glass, metal, and natural stone tile products to the construction and development, architecture, and do-it-yourself markets.

© 2011 IBM Corporation17

Challenge

Solution

Results

Customer Profile

Staples enables customers to shop seamlessly across all channels

Automated support for diverse policies, contracts, buyer roles on a single platform

Over $1Billion (70%) of total B2B sales driven through site

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

Single IBM commerce platform handles both B2B and B2C 10,000+ buying organizations each see contract-

specific pricing and policies

Staples sells office supplies, technology, furniture and business services to consumers and businesses in 27 countries around the world.

© 2011 IBM Corporation18

Challenge

Solution

Results

SXC health solutions enables secure information exchange

Comprehensive integration serving as their hub for inbound and outbound data

Secure and reliable exchange of data

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

IBM® Sterling Business Integration Suite Process provides visibility allowing SXC to check all attributes of their files and exchange data securely

Customer Profile

SXC is a key player in the pharmacy supply chain, providing eligibility, enrollment, payment, claims and reporting data.