Technology still matters -- and IBM helps clients to exploit it for business benefit
Three years after the dot-com implosion, the technology revolution is proceeding apace. "The quiet harnessing of the Internet to drive efficiencies in both business and government has, if anything, intensified," wrote Daniel Franklin, Editorial Director of the Economist Intelligence Unit (EIU), in that publication's 2003 e-readiness rankings. "The Internet offers solutions to the twin priorities of these harsher economic times: saving costs and reaching customers," he added.
IBM has a history of helping clients to exploit technology for business benefit. It was among the first companies to recognize the profound business implications of the Internet and related technologies - a recognition embodied in the term e-business - and in the seven years since, IBM has been hard at work on its own transformation as well as that of multitudes of clients.
For a global carmaker, IBM conducted a 100-car pilot to show the business value of telematics -- collecting real-time data from vehicles. IBM Global Business Services led the engagement, defined the requirements, set up the system and application, and did the data translation. IBM Global Business Services also brought in technology and resources from IBM Research to analyze the data. Comparing normal to abnormal behavior in the fleet of vehicles, it was clear that the company could potentially use telematics to help increase vehicle safety and quality as well as reduce warranty costs on vehicles old and new. Ultimately, the manufacturer should be able to predict -- and avoid -- many of the problems with vehicles rather than have to fix them after the fact.
For a European public interest group, IBM is designing a system to electronically store land deeds and transfer them on demand. IBM Research invented a way of securing the long-term integrity of important electronic legal documents using digital signature-based transactions. Buyers and sellers will have quick access to these documents, which should expedite the closing of land transactions.
For a large national brokerage firm, maximizing application processing efficiency was a necessity. Financial management applications require large amounts of computing power because they evaluate many options. IBM is working with the client on a computing Grid to boost processing efficiency and reduce processing time. The Grid solution that was developed as a prototype reduced the time for a portfolio rebalancing application from over four minutes to 15 seconds without using high-performance parallel processing computers. This made it a cost-effective and efficient solution. As a result, when the brokerage firm begins to implement a Grid solution it can consider new levels of customer service, such as its financial advisors sitting down with clients and exploring different portfolio options right on the spot (more information).
Unlike these companies, however, many are not using or preparing to use technology as effectively as they could. A 2002 KPMG study showed that 56 percent of publicly listed companies needed to write off at least one IT project in the previous year as a failure. Among the reasons: insufficient planning, poor scope management and, perhaps most damaging of all, inadequate communication between the IT function and the business.
Suppose your company has proprietary operating systems that can't talk to each other; computing capacity that's mostly unused at any given time; a large and expensive staff to maintain the entire IT system; IT costs that don't vary with revenues; and a field and sales force that's tethered to wireline computing and information systems. How are you going to solve these problems?
Fortunately, four key technologies are at hand to help you transform:
Grid computing is going to be one of the most important computational developments over the next five years. As it did for the brokerage firm, it could let businesses exploit the flexibility of computing, storage, networks and other information resources across organizational boundaries - around the world - with greater efficiency.
Linux is becoming a real alternative to proprietary operating systems as evidenced by the fact that it has already achieved a 15 percent to 20 percent market share for servers (source: KPMG survey, November 2002). Among other things, Linux forms the basis for Grid computing. One of its main benefits is the flexibility of its open source operating system.
Autonomic computing is a type of computing in which systems are significantly self-managing and self correcting, reducing the degree of human intervention required. IBM has a chip-making facility in Fishkill, New York that can run with almost no human intervention if need be. The projected benefits of autonomic computing include greatly reduced management costs and improved operational resilience.
A little older than the other three technologies, third generation and other wireless technologies continue to evolve. They're allowing employees of all kinds to be wherever they need to be with access to their company's IT resources. For instance, with a wireless-enabled laptop, a salesperson would be able to show something from his or her intranet to a prospective client -- even when off-site.
All of these technologies form much of the basis of what IBM calls e-business on demand. A powerful marriage of business and technology, e-business on demand involves new levels of integration: of processes and applications inside the business; of suppliers and distributors at either end of the business; of customers outside the enterprise; and of employees inside it. An on-demand business is able to make faster and better decisions, reduce risk and better exploit its core competencies. Becoming on demand is about improving speed and agility where it counts - in the marketplace - and serving customers better.
IBM defined on demand and its combination of business insight and technological prowess gives it the formidable ability to help other companies become on demand too. For more information, contact IBM Research Services.