Transcript IBV Cloud Industry POV Template

Cloud Retail
Point of View
Institute for Business Value
Partner’s Name, Partner’s Title
DD Month YYYY
© 2014 IBM Corporation
Executive summary
 Cloud computing is not new to the retail sector, but most retailers have only just started to
understand the power cloud computing has to not just improve efficiency, but also to
transform collaboration paradigms and business models
 Companies in the retail 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 retail 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, working around legacy back office and transaction support systems and
collaborating more effectively with ecosystem partners
 IBM is uniquely positioned to help retail companies envision and implement innovative
cloud-based strategies
2
IBM Institute for Business Value
© 2014 IBM Corporation
1
Cloud will
transform the retail
industry
2
Traditional retailer
operating models
will evolve
3
IBM can help
3
IBM Institute for Business Value
© 2014 IBM Corporation
Transformative technologies are disrupting industries
Mobile revolution
Connectivity, access and
participation are growing
rapidly
Transformational cloud – Cloud’s attributes make it a
powerful delivery model enabling new business models,
cost benefits, flexibility and large on-demand capacity
Gmail, Facebook, Linkedin are pioneer
examples of cloud computing with
advertisement based revenue and cloud’s low
cost delivery model sustaining free services.
Social media explosion
Quickly becoming the primary
communication &
collaboration format
Ecosystem of connected health and wellness
apps that delivers a consolidated view of users’
health. Strong & growing ecosystem with API
partners cover all aspects of health care1.
Hyper digitization
Digital content is produced
and accessed more quickly
than ever before
The power of analytics
Real time analysis, predictive
analytics and microsegmentation emerging
The Xerox Mobile Print platform uses cloud to
convert and process print requests.
This removes complexity from end-users,
reduces costs & management of diverse
devices and print configurations.
Source: Joint IBV/EIU Cloud-enabled Business Model Survey of 572 business & IT leaders
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© 2014 IBM Corporation
The retail industry is being hit by multiple disruptive forces –
technology, ever-changing consumers and an inundation of data
Revenues ($ Trillions)
New shopping mediums
emerging (mobile, smart
sensors, social)
Revenue growth (2009-2012)
4.4
4.2
4.0
3.8
3.6
3.4
4.90%
6%
1.30%
2%
0%
2010
2011
Year
2012
Profit Margin (%)
Net profit Margin (2009-2012)
Emerging markets are becoming
even greater opportunities for growth
Consumers have access to perfect
price visibility via technology
5.10%
4%
2009
E-commerce challenging
traditional retailers
Data becoming extensive and
ubiquitous
5.30%
Revenue Growth (%)
Consumer wants and needs
changing
4%
3%
2%
1%
0%
3.10%
2009
3.80% 3.80%
3.10%
2010
Year
2011
2012
Source: IBM Whitepaper “Cloud Computing in the Age of Big Data”, http://www2.deloitte.com/global/en/pages/consumer-business/articles/global-powers-of-retailing-2014.html
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© 2014 IBM Corporation
The future of retail will be unlike the past; cloud will impact customer
experiences and operational efficiencies
Future of Retail
MOBILE “BEACONS”
 Retailers will be able via Mobile “Beacons” to send customers customized
messages to their smartphone based on geo location
CUSTOMER ANALYTICS SOLUTIONS
 Retailers will be able to use data associated with customers to create a custom
shopping experience for each customer
COMPREHENSIVE VIEWS OF SUPPLY CHAIN
 Retailers, using data and analytics, will be able to get a holistic view of their supply
chain where they can optimize inefficiencies as well as push products where they
are needed when they are needed
MOBILE PAYMENTS
 Customers will be able to scan products onto their mobile phone and pay using a
credit card without having to wait in line
SHOW-ROOMING
 Retailers will make it easy for customers to use traditional retail locations to find
what they want and order online or have online resources to allow for show rooming
Source: IBM’s ‘Digital Reinvention’ white paper, http://www.retailcustomerexperience.com/blogs/five-disruptive-retail-trends-to-watch-for/
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© 2014 IBM Corporation
Retail leaders are focusing on three key imperatives
PERSONALIZED
SHOPPING EXPERIENCES
EFFICIENT
MERCHANDISING AND
SUPPLY NETWORK
TRANSFORM AND
OPTIMIZE OPERATIONS
Vast amounts of customer
data available can be
harnessed to create a single
view of each customer, find
patterns and deliver more
relevant experiences
Smarter merchandising and
a more agile supply network,
retailers can successfully
match customers to offers
and deliver merchandise
more effectively
New tools and data allow
retailers to improve their
operations to allow for
bottom-line optimization and
top-line growth
Cloud technology improves efficiency, expands innovation
potential and drives revenue growth
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© 2014 IBM Corporation
In order to address industry challenges and manage changes,
business leaders can leverage cloud to transform their businesses
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).
Cloud’s essential
characteristics
Cloud empowers six potentially “game changing” business
enablers
Cost flexibility
 Shifts CapEx to OpEx
 Shifts cost from fixed to variable, pay as you go
Business Scalability
 Allocate and release resources based on
demand
 Gain from scale economics
Market adaptability
 Speeds time to market
 Supports rapid prototyping and innovation
Broad
Network
Access
Rapid
Elasticity
Masked complexity
 Expands product sophistication
 Simpler for customers/users
On-demand
self service
Measured
service
Context-driven
variability
 Drives context-driven, user-centric experiences
(preferences, movements, behaviors)
Ecosystem
connectivity
 Facilitates new value nets of partners,
customers and other external players
 Enables industry platforms
Resource Pooling
Source: National Institute of Standards & Technology (US), IBM IBV Power of cloud study
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© 2014 IBM Corporation
Cloud enables retailers to drive rapid transformations within
enterprise, value chains and ecosystem
 Cloud promotes standardization, supporting
flexibility and agility
 Cloud supports refocus on customer
experiences, integrating disparate set of
processes designed and engineered to
provide customer value
Under Cloud Cover survey: How leaders are
accelerating competitive differentiation
Cloud technology has led to
faster responses to shifts in
markets and changing customer
of Retailers say needs with cloud
61%
 Cloud enables next generation marketing
and omni-channel interactions that are of
interest to customers where, when and how
they want to be engaged
 Cloud transforms various functions such as
IT, from fixed cost centers to variable cost
structures
52%
Benefited from Development of
new products & services by
assembling existing best of
breed services and components
52%
Agreed that cloud has enabled
their work style to become more
web-based and collaborative
of Retailers
of Retailers
Source: IBM Center for Applied Insights Under cloud cover: How leaders are accelerating competitive differentiation. For more info, visit: ibm.com/ibmcai/globalcloudstudy.
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© 2014 IBM Corporation
Cloud also enables new dynamic business models
Cloud allows for top-line growth
and cost optimization
Oxford Bookstore, a retailer of books in
India has seen a 20% increase in
revenues after implementing a SaaS
ERP system for supply chain
management 1
Cloud enables new entrants in
an industry to start-up quickly
and disrupt traditional business
Newegg.com, Wayfair, Etsy and many
other “Born on the Cloud” retailers are
changing the way traditional “Brick and
Mortar” retailers serve customers
Cloud supports new mobile
technologies that can turn
traditional retailers into
showrooms for e-commerce
Amazon.com has recently developed
functionality called “Firefly” on their new
smart phone that allows users to snap
pictures of products and get online
pricing 2
Source:[1] http://www.cio.in/case-study/erp-solution-delivered-saas-style-bumped-oxford-bookstores-revenue-rs-34-crores [2] http://techcrunch.com/2014/06/18/amazons-fire-phoneintroduces-firefly-a-feature-that-lets-you-identify-and-buy-things-you-see-the-real-world/
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© 2014 IBM Corporation
Cloud can drive significant value creation and competitive
advantage
OPERATING
EFFICIENCY
REVENUE
GROWTH
ECOSYSTEM
DOMINATION
 Internal efficiency can be
driven by simple and faster
processes
 Customer relationships can
be more readily monetized
 Third-party services can be
extended into retailer
ecosystem
 More data to manage risk
can be enabled through
reduced complexity
 Time to market can be
enhanced
 Value-added services can
be introduced
 IT capacity can be readily
aligned to business
volumes
 Open collaboration and
sharing can be expanded
 Innovation can be
introduced enterprise-wide
systemically
Cloud enables individual retailers to offer integrated, compelling customer
experiences; in so doing, first mover retailers are more likely to lock-in customers
impeding foothold for new entrants
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IBM Institute for Business Value
© 2014 IBM Corporation
Cloud can drive significant value creation and competitive
advantage
OPERATING
EFFICIENCY
REVENUE
GROWTH
ECOSYSTEM
DOMINATION
50% reduction in
deployment time of new
applications
500 million USD
in incremental
revenue
Higher traffic
generated with
higher revenue
Blattwerk, a unique fresh-food
startup business, was able to
launch a distinctive business
and achieve fast ROI by
minimizing costs and risks 1
E-commerce retailer uses
marketing analytics insights to
coordinate merchandising
and campaign management
across diverse channels 1
Amazon created an
ecosystem of it’s online
shopping catalog, images,
prices and other details to be
used by third party vendors
via the cloud 2
Source: [1] IBM Client experience [2] http://www.pwc.com/us/en/view/issue-13/cloud-computing-gets-strategic-pg3.jhtml
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© 2014 IBM Corporation
The competitive playing field is tipping in favor of cloud adopters
OPERATING
EFFICIENCY
REVENUE
GROWTH
ECOSYSTEM
DOMINATION
10% boost in
markdown ROI
New ways of customer
interactions
98% of all vendor
funded promotions
Pricing Optimization
Coop Danmark
Mobile Technology
Walgreens
Vendor Management
Grocery Retailer
Coop Danmark, one of
Denmark’s largest retailers,
implemented a cloud based
analytics software to give
insight into local customer
preferences related to
markdown items 1
Walgreens released a cloudbased mobile app which
allowed customers to stay on
top of their health needs
easily and effectively 2
Multi-billion dollar grocery
retailer uses cloud-based deal
management solution to
collaborate with its vendors
on promotions 3
Source: See speaker notes
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IBM Institute for Business Value
© 2014 IBM Corporation
1
Cloud will
transform the retail
industry
2
Traditional retailer
operating models
will evolve
3
IBM can help
14
IBM Institute for Business Value
© 2014 IBM Corporation
Organizations can take a five stage approach in cloud adoption
1
Create Cloud
strategy,
architecture
and plans
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
2
Identify and
prioritize
workloads
3
Determine
cloud
deployment
options
4
Develop Cloud
business case
Define business drivers
to prioritize use cases
for cloud
Define multi-sourcing
models and cloud
vendor selection criteria
Develop cloud cost
models including
transition
Implement a
CloudFirst strategy to
evaluate right blend of
cloud options for new
projects
Assess and determine
how to best leverage
the options of private,
public and hybrid
delivery models
Finalize a cloud
business case and
examine its ROI
including time required
for initial payback
Assess and evaluate
from the current
applications, the best
candidates for cloud
Develop Cloud Service
Catalog, SLAs and
KPIs
5
Prepare for
implementation
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
Determine the
applications to be
moved to cloud
Cloud planning should result in accelerated migration, quick wins and mitigated risks
Note: The above shows an overall plan and will include aspects of workload prioritization and migration discussed in other slides
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Cloud strategy comprises four elements
Strategy
1
2
3
4
5
APPLICATION AND
DELIVERY PLATFORMS
BUSINESS MODELS
ENABLED BY CLOUD
Driving agility and productivity
for the enterprise; tested
strategies to improve life cycle
performance
Promoting highly competitive
initiatives at the enterprise
and Industry level
INFRASTRUCTURE
PLATFORMS
Enterprise
Cloud
Strategy
Instantiating well-integrated
business intelligence to
manage the enterprise
Delivering consumable,
secure and readily available
resources to enable agile
execution
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DATA PLATFORMS
IBM Institute for Business Value
© 2014 IBM Corporation
Enterprise innovation is realized by integrating new technologies
with existing core systems
Strategy
1
2
3
4
5
Systems of insight
Advanced analytics and cognitive computing
systems that harness big data, enabling
competitive advantage for enterprises
Systems of
Insight
Enterprise
Innovation
Systems of
Record
Systems of
Engagement
Enabled by Cloud
Security
17
Systems of engagement
Leverage mobile and social to transform
relationships with customers, employees & citizens
Systems of record
The 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
Cloud enables leaders to take a systematic
approach to integrate these capabilities to drive
enterprise innovation
IBM Institute for Business Value
© 2014 IBM Corporation
Organizations should evaluate born-on-the-cloud solutions along with
existing workload migration
Prioritization
Enterprise Cloud Adoption
1
2
3
4
Cloud First
5
New
project
New
project
Replace
existing
app / infra
BPaaS
PaaS
SaaS
IaaS
Business
case
Migrate existing
workloads
Select
Prioritize
Workload
analysis
18
Evaluate a blend of cloud options
that best suit the project
requirements
IBM Institute for Business Value
Quantify
Migrate
Migration Plan
Wave 1
Wave 2
Wave 3
© 2014 IBM Corporation
A decision framework with identified criteria helps in prioritizing migration of
existing applications to cloud
Prioritization
2
3
4
5
High
1
Infrastructure
compute
Dev/Test
BUSINESS VALUE
Infrastructure
storage
Analytics
Collaboration
Industry
applications
Business
Services
Workload migration
categories
Migration
plan
MORE READY FOR
CLOUD
WAVE 1
MAY BE READY FOR
CLOUD
WAVE 2
NOT READY FOR
CLOUD
WAVE 3
Desktop/
devices
Security
Low
Managed
backup
DEPLOYMENT EASE
Low
High
Note: The above is an indicative prioritization shown for typical workloads
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A phased migration to cloud helps manage risks
Prioritization
1
2
3
4
5
Potential migration risks
 Incorrect analysis and identification of
workloads
Phased migration approach
Discovery Phase
 Inability to meet non-functional
requirements
Discover
Analyze
 Incorrect ROI analysis
 current assets
and usage
 cloud feature /
fit
 topologies &
dependencies
 cloud providers
 Inadequate preparation of infrastructure
/ apps for cloud
 Complex applications’ interoperability &
integration
 platforms and
licenses
 Failure to comply with security, privacy
& regulatory requirements
 SLA’s, security
& compliance
 Management complexity as resources
get distributed in a virtualized
environment
20
Analysis Phase
Migration &
Validation Phase
Establish the
Migration Toolkit
Cloud-enable
infrastructure &
applications
 contract
models
Migrate
 resource sizing
 Applications,
Platforms and
Data
 workloads
 Infrastructure
 Operations
Services
Validate
Migration
IBM Institute for Business Value
© 2014 IBM Corporation
Cloud services and deployment options enable retailers to adopt
cloud as per their requirements and value drivers
Deployment
1
2
3
4
Private cloud
21
5
Hybrid cloud
Public cloud
Software, hardware and
platforms are hosted in a data
center owned by a retailer and
used by different departments /
units inside of the retailer
Software, hardware and
platforms are hosted both in
third party data centers as well
as inside of a retail organization
Software, hardware and
platforms are hosted externally
by a third party vendor who
manages all aspects of the
services for the organization
Value drivers …
.… Customization, efficiency,
availability, resiliency, security
and privacy
Value drivers …
Leverage flexibility and benefits
of private and public cloud while
addressing data security,
governance, compliance and
budgetary challenges
Value drivers …
.…Standardization, capital
preservation, flexibility and time
to deploy
IBM Institute for Business Value
© 2014 IBM Corporation
Cloud enables Trek to connect to its retailers; reducing costs and
enhancing efficiency
Business Case
1
2
3
4
5
$180k
saved every year in IT
Infrastructure costs
Wait time for server updates
Trek, a leading bicycle company in the US,
wanted to serve the needs of its retailers
better and reduce costs by moving its Ascend
retail management system to a cloud-based
service.
Trek adopted cloud-computing solutions to
meet its growing infrastructure and application
modernization needs.
Two to
six
weeks
Two
hours
Traditional IT
Cloud Computing
Source: http://www.microsoft.com/casestudies/Windows-Azure/Trek-Bicycle-Corporation/Bicycle-Firm-Moves-Retail-System-to-Cloud-Expects-to-Save-15-000-a-Month-in-ITCosts/710000002640
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© 2014 IBM Corporation
Security, privacy and compliance issues can be readily addressed
with cloud…
Implementation
2
3
4
5
As retail 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?
Critical elements to address security, privacy and
compliance concerns
IT Strategy
RETAIL
COMPANY
1
Risk
Management
Plan
Monitoring &
Auditing
CLOUD SERVICE
PROVIDER
 Is a business continuity plan available for
cloud?
23
Cloud
requirements
IBM Institute for Business Value
Cloud SLA
Risk & Security
Management
processes
Physical &
Logical controls
implementation
Audits & reports
© 2014 IBM Corporation
Regulatory requirements top retailers list of priorities during
planning workload migration to cloud
Implementation
1
2
3
4
5
Regulatory authorities have recognized cloud’s role in retailers’ business transformation, operational
efficiency and innovation and are reworking many regulations to accept cloud technologies
1
PAYMENT CARD INDUSTRY DATA
SECURITY STANDARDS (PCI DSS)
2
PII (PERSONAL IDENTIFIABLE
INFORMATION)
– regulatory body to govern the security
of credit card information [1]
– information that can be used to identify
an individual

 Gartner predicts 50% of global 1000
companies will have stored customersensitive data in the cloud by 2016 [2]

Security trends from around the
world show that many retailers are
behind in safe, secure computing
practices
Cloud can help by centralizing
security requirements managed by
the cloud service providers
 The US General Services
Administration has approved cloud
services to handle PII [3]
Source: See speaker notes
24
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© 2014 IBM Corporation
As retailers embrace cloud more aggressively, changes to their
operating model will occur that need to be addressed
Implementation
1
2
3
4
5
 An operating model is a framework for
formulating an operations strategy that best
deploys and determine the explicit choices
needed to achieve business goals
BUSINESS GOALS AND STRATEGY
Target
Operating
Model
 Market shifts in the digital economy
necessitate retailers adopt new technologies
like cloud, mobile, social media and analytics
 To succeed with cloud, retailers have to
assess the impact of cloud on the operating
model and determine what actions are
required to make cloud adoption smoother
and more successful
Customer
Experience
Sourcing &
Alliances
Assets &
Locations
CULTURE
Technology
TOM
Skills &
Capabilities
Processes
Organization &
Governance
Performance
Metrics
ROADMAP FOR CHANGE
25
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© 2014 IBM Corporation
Cloud will radically transform and improve customer experience in
Retail
CUSTOMER EXPERIENCE
26
1
2
3
Janet decides she
would like to complete a
home improvement
project to update her
kitchen with new
cabinets, paint and tile. She begins
her journey by browsing a home
improvement website to get ideas and
inspiration.
While Janet is viewing
the company’s website,
she finds a model
kitchen she loves. She
adds all items from the
image into her store profile.
Immediately she is presented with an
in-store coupon via her mobile phone.
Janet takes her mobile
phone into the home
improvement store and
is presented with a list
of the items she added
to her profile as well as where they
are in the store. She is able to checkoff each item as she goes to make
sure she gets all necessary products.
4
5
6
As Janet finishes her
shopping she is
presented with the
option on her
smartphone to pay via
her mobile app. Janet chooses to pay
using a traditional point of sale
system because she has a few
questions.
When Janet comes up
to the front desk she
simply scans her mobile
phone and the clerk is
able to see everything
she purchased while in the store.
Based on what Janet purchased the
clerk sees a special on flower pots
and asks if she is interested.
Janet is very pleased
with her experiences to
her local home
improvement retailer
and posts about it on
social media, tagging the retailer. The
social media team sees this and
sends Janet a coupon for her next
visit for providing her feedback.
IBM Institute for Business Value
© 2014 IBM Corporation
Efficient sourcing and management of partnerships and alliances
will be major enablers of cloud adoption success
SOURCING & ALLIANCES
IMPACT
IMPLICATIONS
 Organizations will have an increase in
partners and alliances as new 3rd party
services are consumed
 Procurement and sourcing functions will
need to be automated and have shortened
cycles
 Complexity will increase in service contracts
due to consumption-based billing
 Vendor and service management will be an
integral part of the Procurement function
 Service quality and availability will need more
focus as they are managed through
relationships and agreements with diverse
third party ecosystem
 Service level agreements need to be
defined clearly and governed to secure and
protect customer data in a shared
environment
 Service adoption to meet benefits
realization needs to be included in the
negotiation and partnering process
27
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© 2014 IBM Corporation
Pro-actively redesigning business architecture and processes to
leverage benefits of cloud will help retailers succeed
PROCESSES
IMPACT
IMPLICATIONS
 The cloud strategy and technologies will
require a shift from systems-based processes
to services-based processes
 Traditional legacy processes will need to be
decommissioned or integrated into the new
cloud-enabled processes
 Cloud’s speed of service delivery will impact
current processes as they need to match and
deliver at the same speed
 Retailers will need control over the
continued availability, reliability and utility of
the cloud based processes and the
platforms underpinning them
 Process framework will migrate from
functional silos to an integrated set of
processes spanning organizational
boundaries
 Dynamic processes for billing and allocation
of resources will need to be implemented to
not be an impediment in achieving value
 Lead time for getting new infrastructure and
services will be greatly reduced
28
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© 2014 IBM Corporation
Changes in organizational design and governance will lead to
successful cloud adoption
ORGANIZATION & GOVERNANCE
IMPACT
IMPLICATIONS
 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 will become more flexible,
managing a fluid set of internal / external
resources and service providers
 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
29
 Governance will become more centrally
defined with decentralized execution
 Strong risk management systems will
become more critical to manage increasing
risks arising out of broader cloud
deployment
 Current organization will need to evolve
over time as cloud adoption occurs
IBM Institute for Business Value
© 2014 IBM Corporation
Organizations need to consider their performance management
approach to optimize and enhance the value from cloud
PERFORMANCE METRICS
IMPACT
IMPLICATIONS
 A dynamic financial model that measures
consumption will be required
 Performance management strategy will
introduce new levels of complexity in
management reporting
 Allows retailers to move management of
performance metrics off-premise
 New metrics will be required that measure:
• Service availability
• Service quality
• Responsiveness
30
 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
IBM Institute for Business Value
© 2014 IBM Corporation
Cloud computing will leverage new skills and capabilities within the
organization to manage the new services and technologies
SKILLS & CAPABILITIES
31
IMPACT
IMPLICATIONS
 Customer and service orientation skills will be
even more critical within retailers
 Deeper data analytics and customer insight
capabilities will be the norm
 Vendor management, contracting and
relationship management skills will be critical
to manage all of the vendors and alliances
 Legal / operational support skills will be key
to manage partnership agreements such as
SLA’s and vendor contracts
 IT will need to be trained in virtualization and
network side technologies to manage the
“cloud pipe”
 Existing IT and other functional staff will be
retrained to manage the network and
virtualization technologies implemented by
third party vendors
IBM Institute for Business Value
© 2014 IBM Corporation
Organizations will need to increase adoption of emerging
technologies and technical trends to optimize for cloud
TECHNOLOGY
IMPACT
IMPLICATIONS
 Technology function will be leaner with a
more strategic focus rather than operational
 IT Strategy, Architecture and IT Plans
needs to be reviewed and updated to reflect
changes in business strategy and cloudenabled future retailer
 On-premise technology deployment will be
migrated to a cloud hosted model
 Significant investment in network bandwidth
will need to be made as more services are
moved to a cloud hosted model
 The overall costs need to be adjusted to
budget for maintenance of legacy systems,
as well as new bandwidth investment
 An IT services catalog needs to be globally
applicable and locally optimized for each
market
 A DevOps approach needs to be
implemented to achieve value faster
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IBM Institute for Business Value
© 2014 IBM Corporation
Organizations will have to reassess location strategies to ensure
optimized and compliant adoption of cloud
ASSETS & LOCATIONS
33
IMPACT
IMPLICATIONS
 Migration to the cloud will require
decommissioning and consolidation of
technology assets
 Decommissioned technology assets will
impact the existing operating budget if there
is existing book value present
 Removal of technology assets will reduce the
quantity of needed data centers and storespecific hardware
 Excess data centers and store-specific
hardware will be repurposed or sold /
leased to recoup cost
 Retailers will begin to adjust their retail
locations to further enhance the customer
experience
 Role of retail locations will be further
enhanced to provide an even better
customer experience
IBM Institute for Business Value
© 2014 IBM Corporation
Cloud will lead organizations to rethink their culture to harness
enhanced value
CULTURE
IMPACT
IMPLICATIONS
 The shift to a cloud-based environment will
require changes in long-held organizational
beliefs and cultural norms
 Organizational leaders will need to address
perceived loss of control / potential
resistance by existing IT and other functions
whose processes will move to cloud
 Retailers as a whole will be even more
service-orientation, valuing the customer
experience and their changing wants and
needs
 Collaborative and open reporting across
organizational functions and units will
facilitate a faster response to the customer
34
 Employee education of new shift will need
to be conducted
 Regular communications to make sure all
employees are aware of why and how the
organization is changing will need to be set
up by organizational leaders
IBM Institute for Business Value
© 2014 IBM Corporation
Cloud Software as a Service Solution gives a retailer maximum
flexibility while increasing profits
Cloud-enabled Business Optimization
CHALLENGE
With 750 stores across North America, this major
grocery retailers wanted to stay ahead of intense
competition among supermarket chains. To allow
for the most optimized and accurate pricing on
products, this retailer wanted to have a system that
could quickly execute pricing and promotion
strategies to outpace cost and competitive changes
in the grocery retail industry.
SOLUTION
This large retailer employed IBM’s sophisticated
cloud-based analytics solution to predict the impact
of pricing changes and new promotions and finetune its strategies before implementing them
across the 750 stores.
35
Improved – Sales performance through accurate
pricing and promotion forecasts
Reduced – Errors in promotions through
automated, end-to-end promotions management
Decreased – Operational costs by diminishing the
need for additional staff and likely reduction of
trade promotion spend by 80%
IBM Institute for Business Value
© 2014 IBM Corporation
Cloud Analytics Software as a Service Solution enables a retailer to
deliver a personalized multichannel experience
Cloud-enabled Customer Analytics
CHALLENGE
A leading music retailer in Japan needed to
discover how to get devoted music fans to buy
more music. The customers’ ever changing music
tastes required the retailer to have real-time
information.
SOLUTION
This retailer in Japan implemented a cloud based
customer analytics solution which allowed them to
significantly shorten their deployment cycle. This
new solution allows the retailer to take information
from several platforms to target customized
promotions for high-value customers.
Increased Revenue – Anticipated a 300%
increase in average revenue per customer in the
first full year of deployment
Personalized Communications – Improved
promotion conversion rates by delivering more
personalized and compelling offers
Added Efficiency – Reduced time spent on
designing, executing and measuring the
effectiveness of campaign strategies
36
IBM Institute for Business Value
© 2014 IBM Corporation
Cloud Infrastructure as a Services reduces a retailers’ operational
costs significantly while still allowing for business growth
Cloud-based Operational Optimization
CHALLENGE
A leading pharmacy chain growing through
acquisitions discovered it’s five independent data
centers made it hard to respond to changing
market conditions.
SOLUTION
The retailer utilized IBM cloud services to manage
their data center and adjust the cloud environment
to accommodate for changes in demand.
Efficiency – An anticipated 30% reduction in
operational costs within five years
Optimization – Helps meet challenges associated
with business growth while retaining the focus on
core business objectives
Stability – Support continuous availability for the
client’s applications, in a more stable environment
37
IBM Institute for Business Value
© 2014 IBM Corporation
1
Cloud will
transform the retail
industry
2
Traditional retailer
operating models
will evolve
3
IBM can help
38
IBM Institute for Business Value
© 2014 IBM Corporation
IBM is best positioned to serve the cloud computing needs for
retailers
Strategize how to use
cloud to drive savings
and revenue growth
39
Build and run your
private or hybrid cloud
Utilize cloud services
delivered from IBM Cloud
Cloud Strategy
and Design
Expert
Integrated
Systems
Business Process
as a Service
Cloud
Implementation
Cloud Platform
Technologies
Software
as a Service
Cloud Migration
Services
Cloud
Infrastructure
Technologies
Platform
as a Service
Cloud Security
Services
Hybrid Cloud
Technologies
Infrastructure
as a Service
IBM Institute for Business Value
© 2014 IBM Corporation
IBM is helping our clients achieve compelling business outcomes,
no matter where the entry point is
40
BUSINESS PROCESS
SOFTWARE
PLATFORM
INFRASTRUCTURE
as a Service
as a Service
as a Service
as a Service
Automating Business
Innovation
Marketplace of High Value
Consumable Business
Applications
Rapid App Development
through Composable and
Integrated Platform built using
open standards
Enterprise Class, Optimized
Infrastructure built using
open standards
Business Process:
Marketing
Mobile
Compute
Recruiting
Commerce
Security
Networking
Accounting
Supply Chain
Big Data & Analytics
Storage
Procurement
Talent Management
Development & DevOps
Payment Processing
Analytics
Integration
Help Desk
Collaboration
Integration/ API Mgmt.
IT Management
Traditional Workloads
IBM Institute for Business Value
© 2014 IBM Corporation
IBM Cloud marketplace provides easy access to our as-a-service
portfolio – and is organized by key cloud buyer roles
IBM CLOUD MARKETPLACE
Your gateway to cloud innovation
Explore hundreds of IBM and Business Partner services from across the cloud spectrum.
Sign up to offer your cloud services in the marketplace today.
Enterprise-grade business
apps to accelerate innovation
(SaaS)
Powerful services and APIs
via an integrated cloud
platform (PaaS)
Self-service IT
infrastructure configurable
to your needs (IaaS)
Biz
Dev
Ops

Over 200 IBM and Third-Party Software
and Services

Leverage world-class IBM partner ecosystem

Curated solution pages with IBM expertise

Easy access to build, consume, deploy and
purchase services
ibm.com/cloud/marketplace
41
IBM Institute for Business Value
© 2014 IBM Corporation
IBM’s BPaaS and SaaS solutions for Sell and Merchandising help
retailers put customer first
Pricing, Promotion and Product-mix
Optimization
Cross channel Selling
IBM selling solutions offer powerful cross-channel
merchandising and promotion, complex product configuration
and pricing features, and well-orchestrated fulfillment
capabilities to allow your customers to buy and pick up their
products anywhere

IBM Commerce on Cloud
Delivers an extended e-commerce platform on the cloud
to help businesses quickly establish and enhance their
online presence. It integrates marketing, selling and
fulfillment with e-commerce capabilities

IBM Sterling Configure Price Quote on Cloud
Enables your sales team and channel partners to
accurately configure, price, quote, and order complex
products

IBM Sterling Order Management
Orchestrate selling and order fulfillment processes across
a dynamic business network of customers, suppliers and
partners
42
IBM DemandTec solutions help retailers and consumer
products companies understand, plan, and predict marketing
and merchandising activities through a scientific
understanding of consumer demand
IBM DemandTec Solutions
 IBM DemandTec Markdown Optimization
 IBM DemandTec Assortment Optimization for Retail
 IBM DemandTec Shopper Insights for Retail
 IBM DemandTec Deal Management
 IBM DemandTec Advanced Deal Management
 IBM DemandTec Customer Trade Planning
 IBM DemandTec Strategic Trade Planning
 IBM DemandTec Strategic Marketing Planning
 IBM DemandTec Post Event
 IBM DemandTec Price Optimization
 IBM DemandTec Price Management
 IBM DemandTec Promotion Planning
 IBM DemandTec Promotion Optimization
 IBM DemandTec Promotion Execution
 IBM Omni-Channel Merchandise Optimization
IBM Institute for Business Value
© 2014 IBM Corporation
IBM can support you …
Retail Contacts
Retail Contacts
[FACE
PIC]
Jill Puleri
Shannon Wu-Lebron
Vice President, Global Industry Leader Retail and Consumer Products
Retail and Consumer Products Industry
- Global Business Advisor
[email protected]
[email protected]
Kali M Klena
[FACE
PIC]
Global Retail Lead, IBM Institute for
Business Value (IBV)
[email protected]
Vishwanath (Vish) Ganapathy
[FACE
PIC]
Director, Chief Technologist - IBM WW
Retail
[email protected]
43
IBM Institute for Business Value
© 2014 IBM Corporation
IBM can support you locally and globally …
IBM REGIONAL CONTACTS
[FACE
PIC]
[FACE
PIC]
IBM GLOBAL CONTACTS
Cindy Warner – Managing Partner
Global Cloud Advisory
[email protected]
313.903.8787
[FACE
PIC]
Nathan Herber – Associate Partner
Cloud Advisory
[email protected]
916.616.5350
Mike Owens – Associate Partner
Cloud Advisory
[email protected]
951.375.9588
IBM CLOUD CATEGORY LEADERS
[FACE
PIC]
44
Becky Carroll – Associate Partner
Cloud Advisory
[email protected]
858.204.6723
IBM Institute for Business Value
Nancy Agosta – Cloud Industry Leader
Cloud Category
[email protected]
919.481.3233
© 2014 IBM Corporation
45
IBM Institute for Business Value
© 2014 IBM Corporation
IBM Institute For Business Value Cloud Retail Industry Point of View
Thank You
© 2014 IBM Corporation