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IBM: Questions | Suggestions | The Report | IBM's Say


IBM e-business Transformation: Data, Facts, Trends

The Report was received by Internet Valley January 27, 1999

Gain efficiency

IBM's internal e-business transformation is about more than just e-commerce, it's about how IBM has web-enabled its core business processes to gain efficiency and business returns with several key stakeholder groups.IBM's transformation ramped up dramatically in 98 and will continue in 99.
Efforts are focused in seven areas: e-commerce, e-procurement, e-care for customers, e-care for Business Partners, e-care for Employees, e-care for influencers and e-marketing communications. This is what IBM means by e-business as opposed to just e-commerce. IBM's Web transformation is a "practice what we preach" story. We outsource our entire Web infrastructure, including Web servers, data centers, networks and workstations from IBM Global Services. We also use IBM Global Services and Atlanta Multimedia for our Web application development. We use IBM hardware, including S390s, SP2s, AS/400s and Netfinitys; we use IBM middleware and software, including net.commerce, WebSphere, Java, Notes/Domino and DB2. IBM's transformation is being led by Dick Anderson, general manager of IBM Enterprise Web Management, a corporate organization formed in late 1997. Enterprise Web Management has a dual reporting structure into IBM's CIO office and the company's Sales & Distribution division.


IBM's December 1998 e-commerce reached $1.1B, or $35M a day. Sales were business-to-business oriented, both indirect through resellers as well as direct to our largest customers, and were primarily in the hardware area. In 1999, e-commerce revenue is expected to be between $10-15B. Examples: e-sites (enterprise extranet sites) with our largest customers, extranets with OEM partners and extranets with Business Partners


In December, we purchased $629M over the Internet. This is another area where we're on a very fast ramp up. In 1999, IBM expects to procure $12B in goods and services over the Web, saving $300M. We will also reduce the number of paper invoices we process each year from 5M to zero. By replacing more costly paper processes and implementing Web applications that expand our integration efforts with our suppliers.
e-care for Customers.  In 1998, IBM supported 14M self-service user session transactions on the Internet, avoiding approximately $300M in Call Center and field specialist support costs. IBM receives nearly one million e-mails from customers every year from the Web site. By automating the categorization, routing, and answering of these e-mails, IBM is saving $2M annually while increasing our responsiveness to our customers.


e-care for Employees

In 1998, 15% of IBM's internal education and training was done through Web-based distance learning.

We estimate that for every 1,000 classroom days converted to distance learning, $500K can be saved. In 1999, 30% of internal training will be delivered via distance learning, with anticipated savings of $100M. In the Knowledge Management area, IBM's award-winning Intellectual Capital Management AssetWeb technology is used by tens of thousands of IBMers and customers, particularly in IGS, to create, share and reuse our intellectual capital more productively and profitably.

e-care for Business Partners

IBM's Web-enabled PartnerInfo application allows IBM's more than 45,000 Business Partners worldwide to access product and marketing information in 10 languages.
PartnerInfo's commerce capability, PartnerCommerce, provides Business Partners the ability to check on supply status, purchase products, and track orders on the Web.

Features like QuickShip and IBM Global Finance's Internet Financing tool offer overnight delivery and online financing approval.

In 1999, IBM Business Partners will be able to purchase 1,800, or nearly all, IBM products on the Web.

e-care for Influencers

IBM provides key influencers, including the press, IT consultants, financial analysts and shareholders, and prospective employees, with tailored Web sites, providing easy and worldwide access to information.

IBM currently holds quarterly earnings calls with security analysts on the Web.
IBM's Investor Relations site gets more than 100,000 page views per month, spiking to 500,000 around quarterly earnings.
IBM's Press Room for the media offers access to company press releases, executive biographies and speeches, high-resolution photography and a worldwide database of press reps by beat. The site gets more than 160,000 page views per month.

e-Marketing Communications
The seventh area we're working on is how we use and the Internet in general to further the IBM brand and our marketing objectives. This includes our Internet advertising, sponsorships like the upcoming Grammy Awards, as well as Web-enabling our sales collateral, co-op advertising and other materials with IBM Business Partners.

A couple of days after IBM Enterprise Web Management's Keith Mary Rantas-Drew kindly sent to us the above report,  IBM E-commerce director Scott Gannon  clarified  to Internet Valley some additional details regarding the IBM iBusiness efforts.  Scott Gannon described an impressive landscape of the different iBusiness areas where IBM successfully developed what they believe to be the best solution of their e-commerce related problems. But we still have a couple of questions ... and suggestions.


See also: Questions | Suggestions | The Report | IBM's Say


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