Collaborative innovation in IBM

Collaborative Innovation in
IBM
- Anders Quitzau, innovation Executive

1
© 2011 IBM Corporation

Collaborative Innovation

Anders Quitzau, Innovation Executive, IBM Danmark

HD(R), Cand.Merc.Aud.

Peat Marwick Mitchell & Co, KPMG, Schøbel & Marholt Management
Konsulenter, Deloitte Consulting

1997 – 2000
Manager, IBM Oracle Services – EMEA
2001 – 2002
Business Development Manager – IBM NetGen
2002 – 2003
IBM e-business services – offering manager
2003 – 2007
Business Development Executive Emerging
Business
Opportunities –Mobile, FTTH, Sensors & Actuators
2007 -
Innovation Executive and chief technologist

Leader of IBM Global Innovation Community

3 © 2011 IBM Corporation


What is
innovation?



Why Innovate?



IBM’s early days....



Some IBM inventions.....



IBM want to be a relevant company in building a Smarter Planet
Smarter traffic Smarter power Smarter money
Help cut traffic jams, reduce Change energy consumption patterns, Build a safer, more transparent and
emissions, increase use of public manage loads better, preserve our intelligent financial system .
transport. environment.

Smarter food Safer citizens Smarter cities
Improve the quality and reduce Analyse crime patterns and Address congestion, pollution,
the cost and environmental CCTV and improve emergency health, safety, sustainability,
impact of what we eat. response and border controls energy use and water
management.

Smart shopping Smarter oil Smarter water
Use intelligence to eliminate As we move toward a renewable Monitor, measure and
inefficiency and waste and better future, shape our hydrocarbon present analyze water ecosystems, and
serve the empowered consumer to be more efficient, affordable and provide a single, reliable, up-to-
protective of the environment the minute and actionable view of
water use.

Smarter Smarter healthcare
communications Improve research, diagnosis and
treatment of serious illnesses.
Build smart networks which can
identify instrumented things and
collect relevant data from them.



Innovate what?



IBM’s definition of innovation
§ Intersection of invention and insight
§ Creates value
§ Holistic view “Innovation is a societal -- not a
– Business model technological -- phenomenon,
Sam Palmisano, CEO, IBM Corporation
– Products & services
– Operations



IBM has in a relatively short period re-innovated ourselves
Business Model, Operating Model and Workforce Transformation

Remixed our portfolio toward services, Shift in geographic mix…
software, and integrated solutions…
§ 2008 revenue:
§ Exited commoditized businesses: – 21% Asia Pacific
– PCs – 37% Europe, Middle East, Africa
– Hard disk drives – 42% Americas
– Printing Systems

§ Strengthened position in: § 71% of employees outside US
– Business Consulting – 84K in India, 60K increase in 5 years
– Service-Oriented Architecture – 16K in China, 10K increase in 5 years
– Information on demand
– Virtualization
– Open, modular systems

§ Acquired over 100 companies in last 10 years § Record Performance in 2008...
– to complement and scale our portfolio of products and – $103.6B revenue, up 5% (2010: 99.9 BUSD)
offerings – $16.7B pre-tax earnings, up 15% (2010: 14.8 BUSD)
20 $ 10 $

Pre Tax Income & Free Cash Flow ($B)
Revenue ($B)
15 $
39% Pre-tax income EPS

EPS
Free Cash Flow

34% 16% 41% 44% 6$
21%
2003 2010 9$
Segment Segment Software
49%
Profit Mix Profit Mix 57%
3 Services 4$ 2$
21% 2000 2001 2002 2003 2004 2005 2006 2007 2008

35% 25% 17% Hardware &
Financing – $8.93 Earnings Per Share, up 24% (2010: 11.52)
– Strong performance in services, software and growth markets



Where do ideas
come from?



Sources of innovation....

Internal & External Sources for New Idea Generation
Customers directly 38 %

Employees (general population) 35 %

Consultants 27 %

Internal sales and service units 25 %

Business partners 23 %

Associations, trade groups, conf boards 19 %

Competitors 17 %

Other 6%

Think-tanks 6%

Academia 6%

Internal R and D 4%
Internal Sources
Media, Publications 2%
External Sources
Internet 2%

Citizens 2%

Labs/Other Govt institutions 0%

Source: The Global CEO Survey 2006
14 IBM InnovationIBM & Bankdata Confidential


At IBM, ideas are generated from multiple sources within and
outside …
Ideation Sources

Market Institute for
Intelligence Business Value
Business Unit
ThinkPlace Strategies

Global Technology Emerging Business

Idea
Outlook Opportunity Program

First-of-a-Kind New Technologies
Program Venture program
On Demand
University Transformation Strategy
Programs

Global Innovation
Outlook


We work with venture companies to build our innovation eco-system
- and to sense what is going on ‘



Innovation is about people – Getting ideas on the table – and
implementing the best



Our philosophy of innovation is: Fail many, but fail cheap
- A new paradigme in innovation enabled by Web 2.0:
Yesterday – as was 1 Today – As is
§ Ideation and Product
Inception from the
Ideas source: expanding source for Ideas source:
Internal innovation Internal, partners and customers
idea idea idea idea
idea § Use Collaborative idea
ideaidea ideaidea idea idea
tools to solicit idea idea idea idea
interactive feedback.

Weeks to months
idea
18 months to 2 years

§ Limited
community to
foster new
innovation
Service Service Service

§ Little user
interaction and
market feedback § “Build it and
Service
§ Service silos
§ Limited reuse
they will 3 2 § Use of exposed
come” § Larger variety of
approach compelling offerings common capabilities
to offer customers to enable rapid
service assembly

Breadth



Idea management models


IBM’s innovation management process

§ Corporate R&D
Ideation § Innovation Hubs § Jam
Customers
§ Patent Portfolio § Collaboration Tools § CEO Study
Universities § IBM Divisions § InnovationJam § GIO / GTO
Partners § Market Intelligence § “Deep Dive” issue reviews

Validation
§ Innovation
TAP Discovery
BizTech § Patent
Matching
Extreme Blue

Development § ODIS
alphaworks
§ Open
Source
FOAK § Beta
EBO Program

Launch

New Market New Offerings New Technologies
Create and develop new functional Develop new and integrate existing Innovations that disrupt
markets with new products and products and services to create or redefine markets
services new value propositions

Smart Innovation


The IBM Institute for Business Value creates fact based industry and business
level thought leadership and tools that help IBM and
clients realize business value

Our Objectives Our Focus Our Research Types Our Deliverables
§ Content: Create § Distribution § Future Agendas § Executive Briefs
extraordinary, fact based
business insights § Financial Services § 3 to 10 year industry § Quick Read (Executive
§ Market Impact: Differentiate § Industrial and/or functional area Summary)
IBM in the marketplace
§ Public outlook with action § Event and Conference
§ Value Creation: Value-based oriented next steps Presentations
approach to identify and § Strategy & Change
deliver client results Innovation § Value Realization Studies § Blue Paper (What and
§
§ People Growth: Attract,
CRM § In-depth assessment of How to Sell)
retain and motivate top GBS §
today’s critical issues, § Knowledge e-cards
talent § Human Capital opportunities, and value § Pod/Webcasts
§ Supply Chain potential
Financial Management § Books
§ § CXO Surveys
Application Innovation § By-lines and articles
§ § Chief officer studies
§ Emerging Markets


IBM Danmark – Working for a Smarter Planet Anders
Quitzau, Innovationschef

INTELLIGENTE FØDEVARESYSTEMER

IBM og Superbest er ved at afprøve en mere
intelligent løsning til at sikre kvalitet og friskhed
af kød i butikkerne - og reducere madspild!

… løsningen anvender bl.a. RFID-teknik til at
spore og følge kød via leverancekæden fra
gården og ud i kølemontren.

21 01.03.2011 © 2012 IBM Corporation


Innovation as a core discipline at IBM

Mobilize Interest, Incubate,
Create Mobilize Interest, Implement,
Collaborate Prototype and
Idea Collaborate Take to Market
Validate
INSIDE

IBM Lines of
Business

Internal
Stakeholders
Global
Technology
Outlook

Clients
FOAK
OUTSIDE

Sametime 3D

Partners
IBV reports

IBM Research

IBM Research: Collaborative Innovation

China Pangoo

Zurich Tokyo
Almaden Watson Haifa

Austin India

IBM Research Lab

Global, Smarter Planet Collaborations

23


IBM er en af de væsentligste deltagere i ECOGRID - EU’s
største satsning på Smart Grid.



Container Centralen, using advanced secure RFID tags
to solve a business problem and provide opportunity for
new services
Started in 1976, the CC
system was created due
to demand for a Based on an exchange
solution to transport system, leading to
80.000 users across 22 increased efficiency and
flowers and plants countries in Europe, e.g. lower number of
growers, auctions, containers needed
transporters, exporters,
retailers



Links:

IBM Innovation: http://www.ibm.com/innovation

IBM Research: http://www.research.ibm.com/

Institute for Business Value: http://www-935.ibm.com/services/us/gbs/
bus/html/bcs_whatwethink.html

IBM Global Innovation Outlook: http://domino.research.ibm.com/comm/
www_innovate.nsf/pages/world.gio.html#

IBM Jams: https://www.collaborationjam.com/

Alphaworks: http://www.alphaworks.ibm.com/



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