© 2011 IBM Corporation Social Business: Opportunities for Business Transformation Douglas Heintzman, Director of Strategy IBM Collaboration Solutions Business Innovation in Changing Times conference series 28 September 2011

© 2011 IBM Corporation 2 A profound change is coming to business Talent as a cloud Digital reputation and individual brands Leadership by connections Real-time teams Collective intelligence

© 2011 IBM Corporation 3 A 5th wave of IT-enabled business transformation is emerging: Social Business Mainframe Departmental PCs Internet Social

© 2011 IBM Corporation 4 The Social Business opportunity is being driven by fundamental disruptions Social Networks (over 500 million users spend700 billion minutes per month on Facebook) Analytics and Big Data (There is currently 1.2 Zetabytes of electronic data in the world) Cloud delivery (Market will grow from $46 billion in 2009 to $210.3 billion in 2015) (297Million smartphones 20 million mobile tablets sold in 2010) Mobile Deep insight into preferences and patterns Collective creativity and organizational transparency Engaging everyone all the time Bringing together value networks efficiently

© 2011 IBM Corporation 5 Social Content Social Networking Social Analytics Social Business is the convergence of 3 major technologies Transforming business processes Deriving insight from social patterns Standout organizations are 57% more likely to allow their people to use social and collaborative tools. – IBM CHRO Study % of standout organizations will focus more on “getting closer to the customer” over the next 5 years. – IBM CEO Study 2010 Engagement and Social behavior

© 2011 IBM Corporation 6 Social Business strategic technologies Reach: Social networks Identity systems Communication channels Engage: Engagement applications Social connectors Content services Discover: Social analytics Social monitoring Optimization Integrate: Process management Information integration Governance, risk and security solutions Solution lifecycle management

© 2011 IBM Corporation 7 Marketing / Customer Experience Product & Service Innovation Human Resources A Traditional Business A Social Business Harvests insights from networks of people to create value Builds trusted relationships and brand advocacy Strengthen controls, increase transparency, reduce exposure Opaque, uncontrolled Knowledge silos, ineffectiveness Socially enabling business processes Governance, Risk & Compliance Sales Push marketing, control Unclear view of customer, limited avenues Sell effectively, grow the business Shares insights to generate breakthrough ideas and speeds time to market Linear, unclear view of needs

© 2011 IBM Corporation 8 A Social Business Connecting 20,000+ consultants to staff new projects faster and realize startup cost savings Socially business examples Connecting employees and customers socially to find answers for customers in real time Harnessing social networks that are accelerating new product development from 12 months to 4 months Marketing Human Resources Product & Service Innovation Customer Experience Promoting brand identify to turn customers into advocates and expand your reach

© 2011 IBM Corporation 9 100k mobile devices in use at IBM today 65k Smartphones and Tablets 35k Blackberry IBM CIO Office study: Mobile access increases sales productivity by 11 hours per opportunity! Estimated 3 year ROI of 195% 2015 goals: 500k users 80% of all enterprise capabilities accessible from mobile devices 9 9 Mobile is a game changer Interactive access increases adoption

© 2011 IBM Corporation 10 Social Business disrupts the Business Solution Market SCM ERP PLM HCM CRM Dynamic team assembly Improved retention/ identification of leadership potential Engagement, accountability, reputation Sales pattern reuse Efficient expertise leverage Create customer advocates Harnessing communities to support sales Social Business Business application vendors are integrating social features into their applications and the dividing lines between transactional tools and social environments are fading. Gartner, Oct 2010 G Collaborative product creation Transparency across engineering teams Error reduction Accelerated ideation Flexible relationships Process coordiation across a supply chain Coordination across a business process Continuous process optimization SFA Social CRM Web Experiences

© 2011 IBM Corporation 11 Rethinking Opportunity Management: Improve Salesforce Automation with Social CRM and Deal Progression Ability to interact directly with customers, discover opportunities, find skills and recommend next best actions

© 2011 IBM Corporation 12 Rethinking Sales Management: Improved sales management with actionable intelligence Realtime data that is interactive and actionable, with a direct line to person responsible or owner. Track, monitor and initiate actions from one place, in one single source..

© 2011 IBM Corporation 13 Rethinking Workforce Optimization: Providing better insights into employee sentiment and a 'pulse' of what's going on. Improves reactive capacity and provides actionable intelligence for better decision making. Discover (uncover) new insights and take immediate action, leveraging the right communication channels

© 2011 IBM Corporation 14 Rethinking Performance Management: Increase personal performance, team performance, and eminence by providing social reputation data to be added to user's content and profile; providing feedback on value of contributions Team based decision making that is open and transparent, with real time evaluation of accomplishments, reputation and social influence.

© 2011 IBM Corporation 15 Rethinking Talent Management: Identifying all of the available talent, skills and factors that contribute to diverse, high performing teams. Support short term or long term projects. By evaluating social relationships, reputation, eminence, accomplishments

16 340,000 discrete users of Connections (>60% of employee population) 635,000 Advanced Profiles 63,262 communities (182,000 visitors per month) 18,203 active blogs (58,000 discrete visitors per month) 43,646 Wikis (152,000 discrete visitors per month) 404,576 Files (59,000 discrete visitors per month) >1,000,000 bookmarks > 3,000,000 tags 12M IMs per day 2X every 3 years 209,328 activities (56,000 discrete visitors per month) Lessons learn form an early adopter: Leveraging the social network

17 Lessons learn form an early adopter: Optimizing a workforce Industry Space Community Number of members as of June 8 Retail3,232 Financial Markets4,499 Healthcare & Life Sciences2,715 Insurance2,616 Chemical & Petroleum2,738 Education753 Telecommunications4,123 Travel & Transportation1,921 Banking3,870 Energy & Utilities3,223 Government4,025 Consumer Products3,766 Aerospace & Defense1,941 Media & Entertainment1,752 Electronics4,195 Industrial Products1,667 Automotive2, Industry Spaces communities with a membership of approximately 50,000 Sellers, Consultants and Executives supporting these industries 13,743 experts enrolled in internal expertise locator

© 2011 IBM Corporation 18 Be willing to experiment Gain business sponsorship Invest in adoption Focus on business outcomes Manage actively Collect metrics Lessons learn form an early adopter