putting Progress into Practice

Editor's Notes

• #2: IBM in the UK & Ireland
• #3: Who are we and what do we stand for? It’s not straightforward to describe what 20,000 people do, particularly as that number includes some of the brightest and the best of the nation’s talent. It is even less straightforward when the organisation has been a part of the nation’s technological fabric for more than 60 years, constantly innovating and helping to improve the way in which the UK and Ireland works. In simple, practical terms, IBM is the leading business, technology and services company in the UK and Ireland. We solve and manage complex problems and tasks for our clients. Our clients include central government ministries, large public sector organisations, local and county councils, large industrial, retail and financial corporations and many successful small and medium sized enterprises. We harness our industry knowledge and our business and technology capabilities – our consultants and experts, our software and hardware, and our financial strength – to deliver solutions that meet our clients’ strategic and operational needs. In this context, we form an integral and significant part of a great global company that celebrates its centenary in 2011. UK and Ireland is one of the largest markets for the world’s leading business brand – IBM. That means we learn and draw from – and often lead – an enterprise that has been at the forefront of significant change, from the introduction of computing to e-business to globalisation. It’s an enterprise with more patents and Nobel Prize winners than any company, investing $56bn in Research & Development since 2000. We are part of a financially powerful enterprise that is now larger outside the US than within.
• #4: We stand for progress But at IBM, what we “do” is not just about numbers, impressive though they are. We stand for progress. Whether a leap or a step, it is important if we want to make the UK and Ireland work better. Progress means furthering the aspirations of people, communities, companies and institutions. We listen to people and help solve their problems – creating new solutions and moving things on. This progress is what we “do.” British and Irish citizens experience our contribution to progress in the way that many everyday transactions have been transformed – from getting the weather forecast, cash out of a hole in the wall, items off a supermarket shelf, or an insurance policy. They enjoy it when they play on the latest games console or watch Wimbledon on the television. From border control to pandemic protection to carbon saving, our people are collaborating, innovating and delivering solutions that put progress into practice. This commitment to improving business, society and the human condition is nothing new to us. We are part of an enterprise with more than 90 proud years of corporate citizenship and nearly 40 years of active and far-sighted environmental management. Today, IBM is at the forefront of building a smarter planet. For the first time in history almost anything can become digitally aware and interconnected. This provides the potential to make the world work better, less wastefully and more sustainably. In the UK and Ireland, we are already actively making such a difference to business and society.
• #5: An ever-evolving business; an unwavering focus on solving the challenges of our clients In simple, practical terms, IBM is the leading technology and services company. We solve and manage complex problems and tasks for our clients. Our clients include central government ministries, large public sector organisations, local and county councils, large industrial, retail and financial corporations and many successful small and medium sized enterprises. Through our network of more than 5,000 business partners, IBM helps to power around 4,000 SMEs in the UK and Ireland. In our near 60 years in the UK and Ireland, our business has evolved and changed considerably as we have helped to grow and shape the markets that we serve. The majority of our business has shifted from the provision of hardware to the provision of software and services. Those services deliver strategic outsourcing, business transformation outsourcing, integrated technology services, maintenance, consulting and systems integration and application management services. IBM is a new type of systems integrator, bringing together complex systems to work effectively. As a “system of systems” integrator we often work beyond IT in a broader arena, such as our work in creating smarter cities. Services account for 58 per cent of our revenues. This encompasses the work of our consultants, helping our clients through complex business projects, and our technical specialists, who manage and run massive computer systems for hundreds of clients. More of our employees are engaged in service delivery than any other activity. Worldwide, software accounts for 22.5 per cent of IBM’s business. Our primary software includes WebSphere, and the Tivoli, Rational and Lotus product families. At Hursley, we have the largest software development laboratory of any organisation in Europe. Ireland is a global centre for software development in its own right.The third strand of our business comprises systems and financing, including servers, storage, retail store solutions, microelectronics, and both commercial and client financing. As an enterprise, IBM still has the broadest range of server computers in the industry. We still hold the number one position worldwide for server revenues. Our hardware and financing sales now account for around 19.5 per cent of our total global revenue. (Global Financing is 2.4%) We have a clear focus on providing high business value to enterprises of all sizes. We are broader and deeper in our capabilities than our competitors, because we provide an end-to-end service from strategy to operations. Ref: page 28 of IBM Annual Report 2009 to see a table presents each reportable segment’s external revenue as a percentage of total segment external revenue and each reportable segment’s pre-tax income as a percentage of total segment pre-tax income.
• #6: IBM globally makes us stronger locally We have a clear focus on providing high business value to enterprises. We are broader and deeper in our capabilities than our competitors, because we provide an end-to-end service from strategy to operations. As an enterprise, IBM is more global and stronger in high-growth segments than its competitors. Committed to open standards, we are at the leading edge of defining how technology is integrated globally – and how that can make the world work better. 2000 - 2009 108 strategic acquisitions, £1.2bn spent on 6 acquisitions made during 2009 2009 earnings per share $10.01 - up 13%, 7 consecutive years of double digit growth Pre-tax earnings $18.1 billion, increase of 9% Revenue $95.8 billion $56 billion invested in R&D 2000 to 2009 $5.8 bn in 2009 70% US patents in 2009 were for software and services Source: IBM Annual Report 2009 2009 – Interbrand’s list shows Coca-Cola #1 $68,734m and IBM #2 $60,211. 2010 – IBM ranked second in the Brandz Brand Value list In the fifth annual BrandZ ranking, compiled by Millward Brown Optimor – part of the WPP Group – IBM is outranked only by Google in terms of brand value. IBM brand valued at $86 billion, an increase of 30% from last year and enough to move us from fourth position up to number two.
• #7: Putting progress into practice: The hidden IBM – woven into the fabric of everyday life What IBM “does” is not just about numbers, impressive though they are. We stand for progress. Whether a leap or a step, it is important if we want to make the UK and Ireland work better. Progress means meeting the aspirations and needs of people, communities, companies and institutions. We listen to people and help solve their problems – creating new solutions and moving things on. This progress is what we “do.” Most people will experience us through the transformation and delivery work that we execute for our clients. Our name may not be visible to the customer, the employee, the community member – but we are there in the fabric of everybody’s day. An IBM supercomputer is at the heart of UK weather forecasting and predicting climate change. All of the world’s most popular computer game consoles – the Xbox 360, the Sony Playstation 3, the Nintendo Wii – are powered by IBM. The technology behind the cash machine is IBM’s CICS, now more than 40 years old and developed in the UK. Handling millions of transactions per second, it has often been described as the backbone of business. The shelves of retailers are restocked through the use of our technology. The bills of many utility companies are generated with our help. Better insurance policies are developed in collaboration with IBM.
• #8: Our technology and services makes things work better It’s IBM technology that supports the All England Lawn Tennis Club in the running of Wimbledon Championships; there was a team of IBM specialists behind Jenson Button’s F1 Championship winning effort with Brawn GP. It is IBM people and services that ensure the co-ordination of Search & Rescue missions, maintain UK border security and keep RAF planes flying. From hospitals, town halls and universities to major government departments as well as among businesses of all sizes, IBM technology, services and employee brainpower is hard at work. Whoever we partner and collaborate in UKI, our mission remains the same – to think, to solve problems, and to create new value through innovation and progress. IBM is working with the Energy Technologies Institute (ETI) to evaluate the potential impact of electric vehicles on the UK electricity grid and assess the infrastructure required to achieve a mass market for them in the UK.
• #9: We apply intelligence, reason and science to improve business and society At IBM, we believe in the enduring idea of progress – that the application of intelligence, reason and science can improve our businesses and society. We apply intelligence to problems and ambitions to make the world work better. We challenge the status quo in order to create new value. We bring real science, research and discovery to help understand how the world works. That’s why the IBM journey has been one of amazing progress – and how a company that started out making tabulating machines and typewriters now works on the leading edge of technology. From the financial markets to London’s traffic to advanced medical research, we are putting progress into practice. As you would expect, much of this progress takes place on university campuses. At University of Southampton, for example, an IBM supercomputer will have a peak performance of 74 trillion calculations per second – that’s the equivalent of 4,000 standard office computers running simultaneously. Not only that, it is the “greenest” supercomputer on the UK’s academic landscape and the second-most energy-efficient supercomputer in the UK. Edinburgh University and IBM are engaged in a five-year joint research project to use supercomputing simulations combined with lab experiments to speed the design of drugs aimed at inhibiting infection by the HIV virus. The project includes powerful computing technology, including IBM's Blue Gene supercomputer, combined with new experimental characterization aimed at targeting the infection process itself by designing inhibitors for the part of the virus responsible for allowing the virus' genetic material to enter the human cell. In Ireland, IBM and the Marine Institute Ireland have collaborated on a large scale marine environment research project in Galway Bay – SmartBay – that is creating new opportunities for Irish industry to create new businesses for Irish technology companies as well as enhancing the viability of the seafood, shipping and water monitoring sectors. Progress also takes place in town halls and county councils, thinking about how to serve the citizen better and more sustainably. For example, we work with Essex and Somerset (South West One) County Councils as these councils seek to deliver first class front-line services and real value for money for their residents. These are truly visionary partnerships; in their scale and transformational potential, they provide a view into the future of the delivery of public services. We collaborate with entrepreneurial companies to create new business models and new means of satisfying customer demands. For example, we work with the entrepreneurial company Ecotricity, which invests heavily in new sources of green energy. IBM has helped it to re-engineer its processes, enabling it to add 1,000 customers per month. From hospitals, town halls and universities to major government departments such as the Ministry of Defence, DEFRA and the Department of Work & Pensions, as well as among businesses of all sizes, IBM technology, services and employee brainpower is hard at work. Whoever we partner and collaborate with in the UK & Ireland, our mission remains the same – to think, to solve problems, and to create new value through innovation and progress.
• #10: An enduring commitment to investing in the innovation and talent that fuels progress : We continually invest in applied innovation Be it through our state-of-the-art innovation and development centres, our industry-leading community and environmental practices or the creation of one of UK’s most diverse and talented workforces, IBM has made an enduring commitment to investing in the innovation and talent that fuels progress. Progress is alive at Hursley where, with 1,400 developers, we have the largest software development capability of any organisation in Europe. Each of Hursley’s 29 Master Inventors holds a minimum of 12 patents each. Hursley is responsible for several of the key products in the history of computing, such as the Customer Information Control System (CICS) that supports 30 billion transactions every day, and WebSphere MQ, one of the most successful distributed middleware products in the world. Ireland is the home for several global centres – the IBM Innovation Centre, the European Venture Capital Centre, the Institute for Business Value – that make vital contributions to research, software development and innovation. In March 2010 IBM announced the opening of its first Smarter Cities Technology Centre in Dublin. This “smart hub” is a place where experts and researchers from different disciplines can meet and collaborate with local authorities, central government and academia, developing and applying technologies that will help the city make more informed, better decisions for its citizens. The country’s importance within IBM has increased by an order of magnitude in the past few years; its contribution to progress no less so. Yet our commitment to progress extends beyond the commercial and technological. It is about contributing to the community.
• #11: We strive to make a difference in the community Some 20,000 people work for IBM in the UK and Ireland today. Their sense of corporate citizenship – which has its roots in the philosophy of the company’s founder Thomas J Watson Sr – is strong and inspiring. For decades, they have given their time and experience to make a difference to the communities in which they live. Our commitment to progress means that their efforts are focused on education, because we recognise the importance and value of science, technology, engineering and mathematics – the so-called STEM subjects - for future generations of British and Irish citizens. The passion and inventiveness of IBM’s volunteers has been formalised into our online network, the On Demand Community. In the UK and Ireland in 2009, 4,416 employees actively participated, giving 57,000 hours of personal time. We run an On Demand Community Challenge each year, matching volunteers to local activities. In 2009, more than 1,200 employees participated in almost 120 one-day challenges. We have a raft of education programmes, ranging from KidSmart, where we have donated and then helped nursery staff with more than 1,300 child-friendly computers, through our provision of virtual mentoring to school and university students in 18 separate projects, to our University Relations programme. As much as any organisation, we recognise the urgency of strengthening the technical skills of our next generation. We have led the development of the government’s Transition to Teaching initiative. The scheme encourages people with the relevant skills to re-train as teachers and to pass on their expertise. It is not just about time. IBM UK & Ireland has made more than 280 community grants since 2004. Annually, we contribute more than £100m of cash, equipment and services to charities and educational institutions. Many of our employees and their families are signed up to World Community Grid, a worldwide initiative launched in 2004 by IBM and leading science, educational and philanthropic organisations. Harnessing unused computer processing power, it is aiding researchers into their work on diseases such as cancer, Alzheimer’s and AIDS.
• #12: Almost 40 years of environmental leadership A commitment to making the world a better place is a core IBM value. IBM has had comprehensive corporate environmental policies since 1971. Over the past two decades, IBM globally has cut its own CO2 emissions by 3.1m metric tons – the equivalent of 45 per cent of its 1990 emissions. We are constantly working to make our existing products and processes more efficient and to accelerate the adoption of products and services that are less environmentally harmful. In the UK, two-thirds of our electricity requirements are now from renewables – the other third from combined heat and power (CHP). Since 2007, we have achieved a 60 per cent reduction in the amount of our waste that goes to landfill. It’s little wonder that we are now providing leading-edge services to our clients, helping them to manage their carbon emissions. Our contribution to British and Irish society is focused on helping to improve its talents and capabilities. It is the same focus that we apply for our individual employees.
• #13: 20,000 talents: making progress possible An enterprise cannot put progress into practice or contribute effectively as a corporate citizen without a great workforce. And here we can be proud. We believe that we have one of the most talented, capable and diverse workforces in the UK and Ireland. The talent and capability of our workforce is unquestionable. Representing more than 70 nationalities, and with more than 150,000 years of business and technology experience is stored within our 20,000 employees, we are an integral part of an enterprise with more patents and Nobel Prize winners than any company, investing $56bn on Research & Development since 2000. What’s more, there is an IBM employee in every principal UK postcode area!
• #14: A colourful, stimulating and diverse working environment promotes innovation Of course, our aspirations and achievements to be an outstanding employer are not just measured by surveys. Our efforts to promote workforce diversity go back to the days when our founder Tom Watson hired disabled veterans after World War One. Yet these surveys indicate clearly our commitment to harnessing talent from across all of society. This is not an overnight achievement. For decades, IBM has always worked hard to be an employer of choice in the UK and Ireland. In recent years, our efforts have been recognised through many independent associations. We have been rated as the Target Graduate Employer of the Year in 2007, 2008 and 2009. For six consecutive years since 2005, we have been judged as the IT Employer of the Year by The Times. We have been consistently one of the highest rated private sector organisation in the Stonewall ratings of Gay Friendly Employers – and this year we were placed top in this survey. As a result, we are a million miles away from a grey faceless corporation. We have created a colourful, stimulating working environment that is truly diverse, where people feel inspired and get the support they need to achieve something truly unique – for themselves, for their customers, and for society as a whole.
• #15: Collaboration is the essence of how we work IBM in the UK and Ireland is a rich and diverse mix – a community that encompasses technical leaders, Master Inventors, Distinguished Engineers, developers, solution architects, top-notch consultants and many gifted and experienced business managers and experts. This is the strength that IBM brings. None of our competitors has this end-to-end portfolio of consulting, technology and services, with the business insight to recommend solutions, to provide the technology and services, and to deliver and implement. How they work is important – and the common thread is collaboration. The very nature of our work – solving complex business problems – requires that we integrate our capabilities and offerings as well as ensuring that the conditions for successful change are in place with the client. Unlike others, collaboration is in the lifeblood of how we work. Communities of employees, clients, partners, vendors, alumni and other stakeholders draw on information and expertise from everywhere across the global IBM enterprise. And because collaboration fosters innovation, which is critical for business success today, we constantly look for ways to encourage and expand our collaborative capabilities. Here’s just one example. Our team of specialists who worked with the F1 Championship winning team at Brawn GP in 2009 were so closely aligned that, in the words of Matt Harris, Head of IT at Brawn GP, “it was sometimes difficult to tell which members of the team were Brawn GP and which were IBM.” For today’s innovative IBM employee, collaboration is what work is all about. In 2010 IBM won Operational Performance in the Private Sector and the Platinum Award for the best overall project for our work with the Brawn GP Formula 1 team (which has since become Mercedes GP Petronas) at the Management Consultancy Awards. Note: this is not a current engagement but represents how IBM team with clients to help them achieve success, and the awards are independent recognition of this. It’s this collaboration that stands for progress, for innovation, and for building a smarter planet.
• #16: Behind us: decades of applied innovation and transformation. Ahead of us: a smarter planet In 2011, IBM will celebrate its 60th anniversary in the UK (1951) and 55 th anniversary in Ireland (1956). This is not a point of nostalgia but proof that, through thick and thin, IBM has continually brought the best of technology and business transformation to its clients as well as managing the continual transformation of our own business. Our ability to think, to innovate and to apply our depth of real-life experience has been our strength and the way by which we have contributed to progress. And the future direction of that progress lies in the creation of a smarter planet – one that uses inter-connected technologies to make the world work better. We have moved from the computer age to the internet age; now we are moving into the age of intelligence, instrumentation and inter-connectedness. It will be a smarter UK and Ireland – and one in which IBM will play an integral part.
• #17: Ahead of us: a smarter planet There is not just the widespread potential for us to be smarter. There is an urgent, pressing need. It is a compelling mandate for progress. Here in the UK and Ireland, we are focusing our efforts on two priority areas – on smarter energy and smarter cities.
• #18: Challenges facing UK and Ireland The energy challenge facing the two countries is stark. If the UK does not change its energy consumption and management, it faces the double jeopardy of the lights starting to go out within a decade and coinciding with irreversible environmental impact. At the heart of smarter energy is smarter metering. This will provide the first step in a wave of change for the energy system. It benefits both utility companies and individual consumers. Suppliers will be able to manage demand better, will have more control over their costs and assets, and will be able to encourage consumers to use less power and thus reduce their carbon emissions. Consumers will benefit from reduced energy bills, especially as they will pay for actual use rather than quarterly estimates. And the government wants consumers to be able to sell power back to the national grid. In this vital area, IBM is one of the leaders. Globally, IBM is working on 14 of the top 20 largest smart meter programmes.
• #19: Challenges facing the UK and Ireland
• #20: The Co-operative Group Not only has Co-op earned a position as a leader in the retail space, but the organisation has established itself as a leader in social responsibility, particularly in the realm of energy conservation. For example, the organisation's head office in Manchester is Europe's largest vertical solar project, using the solar panels that cover three sides of the 25-story building to capture enough energy to power roughly 1,000 personal computers each year. Similarly, 4,000 of the organisation’s outlet stores are powered by energy from renewable resources. As part of this commitment to conservation, Co-op had established an aggressive target to reduce its company-wide energy consumption levels by 25 percent before 2012. After analysing its usage patterns, the organisation realized that it was wasting a great deal of energy by leaving various systems - particularly point of sale (POS) systems - online outside of store hours. The business realised that it made both economic and ecological sense to find a means to power down these systems when not in use. Thanks to the combined efforts of its internal IT staff and IBM, Co-op can now turn off its non-essential systems at night, saving an estimated 1.68 million kilowatt hours of electricity each year. This reduction translates into roughly £120,000 in annual savings. Even better, the organisation will be able to reduce its CO2 emissions by an estimated 722 tons, significantly lowering its carbon footprint and bringing Co-op closer to its overall energy conservation goals. Not only will this solution bring immediate, energy-saving benefits, but by powering down its systems during the night, Co-op should also be able to extend the life expectancy of its already resilient IBM POS equipment by as much as 30 percent. By extending the life of its equipment, the business can reduce future hardware purchases; Co-op will cut the amount of non-recyclable waste it needs to dispose of as well. This capability is particularly valuable in light of the strict requirements of the European Union (EU) Waste Electrical and Electronic Equipment (WEEE) directive that has increased the cost of disposing of old equipment for European businesses.
• #21: Peterborough City Council Our cities are large and complex systems with ingrained problems such as congestion and crime. The economic and social pay-off from making a positive difference to our cities is large and long-term. By bringing together the different data and infrastructures for different city responsibilities such as water, energy and transportation, it will be possible to create a holistic view on a city level – a “system of systems” – that can make an active contribution to the health and wealth of a city. Fifteen years ago Peterborough was made one of four UK Environment Cities by The Department of the Environment and is set to become one of a cluster of IBM "Smarter Cities" being developed around the world. Collaboration between IBM, Opportunity Peterborough, Peterborough City Council. Royal Haskoning and Green Ventures aims to transform Peterborough into the leading sustainable city. The Sustainable City Visualisation project, which will initially focus on building a new online platform to monitor and analyse data on Peterborough's energy, water, transport and waste systems. This data will be used to produce a real-time, integrated view of the city's environmental performance. Residents and city officials will be able to log on to the web portal and easily access the necessary information to make more informed decisions about resource usage. For example, the city will be able to make suggestions to improve home water and energy usage, while being able to work more effectively with the utilities to plan the long term energy and water infrastructure that is needed for a sustainable future. http://www-03.ibm.com/press/us/en/pressrelease/29692.wss – press release
• #22: The oxygen of a smarter planet is information and analytics To achieve this, we must improve our ability to make smarter decisions from the massive growth in unstructured data. The oxygen of a smarter planet is information and analytics, finding patterns in vast amounts of data and extract actionable business insights from them. In London, we opened our Business Analytics Solutions Centre. This will be the focal point for a UK & Ireland analytics team that will comprise 400 consultants, software specialists and mathematicians at the outset and is expected to double in size during the next few years. This multi-disciplinary expertise helps both public and private sector organisations, ranging from banks to utility companies. Linked to the expertise available at Hursley, the London base is a vital part of a global multi-million dollar investment by IBM with similar facilities in Beijing, Berlin, New York, Washington and Tokyo.
• #23: Summary and questions