IBM in the PHILIPPINES James G. Velasquez Country General Manager
© 2006 IBM Corporation
International Business Machines
Agenda
Corporate Overview IBM in the Philippines –IBMP Business Operations
Innovation –A Summary on the Global CEO Survey
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IBM in the Philippines | October 2006 | Confidential
© 2006 IBM Corporation
International Business Machines
Corporate Mission We strive to lead in the invention, development and manufacture of the industry’s most advanced information technologies. We translate these advanced technologies into value for our customers through our professional solutions, services and consulting businesses worldwide. 3
IBM in the Philippines | October 2006 | Confidential
© 2006 IBM Corporation
International Business Machines
IBM History Incorporated in 1911 as the Computing-Tabulating-Recording Company (C-T-R) In 1924, C-T-R became International Business Machines Corporation 1910s-60s: –
From punch-card tabulating machines to room-sized calculators to mainframe computing systems for large enterprises
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Changed the nature of accounting, calculation, and basic back-office business processes
1970s-80s –
IBM product line broadens from mainframes to minicomputers and personal computers
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Applications move beyond back-office enterprise to departmental operations and personal productivity
1990s
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With the Internet and open standards, the network computing model is embraced and advanced
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Coined “e-business” to describe how network computing can transform core business functions and transactions
IBM in the Philippines | October 2006 | Confidential
© 2006 IBM Corporation
International Business Machines
IBM Today The world’s largest information technology company The 8th largest corporation in the world Year end 2005, IBM reported: $ 91.2 billion in revenue $ 5.7 billion in R&D Present in 174 Countries More than 329,000 employees worldwide More than 670,000 stockholders of record
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IBM in the Philippines | October 2006 | Confidential
© 2006 IBM Corporation
International Business Machines
A Global Company Corporate headquarters: Armonk, NY Serving customers in 174 countries worldwide Nearly 60 percent of revenue generated outside the United States
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IBM in the Philippines | October 2006 | Confidential
© 2006 IBM Corporation
International Business Machines
Business Operations
Percent of IBM’s Total Revenue in 2005 17%
Services
4%
1%
Hardware Software 27% Financing 52% Enterprise Investments/Other
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IBM in the Philippines | October 2006 | Confidential
© 2006 IBM Corporation
International Business Machines
Business Operations Services
World’s largest business and technology services provider
Financing
– $47 billion in revenue
Hardware
– More than 180,000 employees
Software Technology Research
Helps customers: – Capitalize on IT to improve business performance – Manage IT operations and resources Principal lines of business: – Business Consulting Services with 60,000 consultants in 160 countries is the world’s largest – Integrated Technology Services – Strategic Outsourcing Services – Business Transformation Outsourcing Services
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IBM in the Philippines | October 2006 | Confidential
© 2006 IBM Corporation
International Business Machines
Business Operations Services
Financing Hardware Software Technology Research
World’s leading provider of financing and asset management services to companies selling or acquiring IT – $35 billion in assets – Operations in more than 40 countries Offers flexible leasing and financing solutions to customers and business partners – Customer Financing – Total Solution Financing – Commercial Financing – Global Asset Recovery Services
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IBM in the Philippines | October 2006 | Confidential
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International Business Machines
Business Operations Servers Services Financing
#1 server vendor in the world Offers the broadest range of servers in the industry
Hardware
– Unix servers (P5 technology is ‘1st server on a chip’)
Software
– Intel-processor-based servers
Technology Research
– Integrated Application servers – zSeries Mainframes servers – Blade servers (the fastest sales growth in IBM history) Strong supporter of open standards – More than 6300 customers running Linux
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IBM in the Philippines | October 2006 | Confidential
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International Business Machines
Business Operations Enterprise Storage Services Financing
Hardware Software Technology Research
Most comprehensive range of storage offerings – Disk, Tape, Middleware, Database, ISV applications, Services and Financing #1 in worldwide disk storage systems factory revenue – Largest disk revenue growth – #1 in UNIX external disk growth – Largest SAN revenue growth Creating foundation for new autonomic storage model – Storage tank, Virtualization, Policy-based management tools #1 Storage Services provider in the industry
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IBM in the Philippines | October 2006 | Confidential
© 2006 IBM Corporation
International Business Machines
Business Operations Services Financing Hardware
Software Technology Research
Develops, markets and supports a diverse set of software Provides foundation for the world’s critical business applications World’s second largest software provider – $15.7 billion in revenue – More than 35,000 employees Largest supplier of Internet infrastructure software – “middleware” – Systems integration and transaction processing – Data management/ Content management – Collaboration and “dynamic workplaces” – Systems management and security – Development and Quality Assurance
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IBM in the Philippines | October 2006 | Confidential
© 2006 IBM Corporation
International Business Machines
Business Operations Services Financing
Develops, manufactures, sells, and provides services for leading chip technologies
Hardware Software
– Incorporated into:
Technology Research
– IBM products – OEM customers’ products Focuses on technologies for the pervasive, network infrastructure and enterprise computing spaces – Leading producer of custom-designed chips (ASICs) – Key technology supplier to customers like Cisco, Qualcomm, Sony and Nintendo
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IBM in the Philippines | October 2006 | Confidential
© 2006 IBM Corporation
International Business Machines
Business Operations Services Financing Hardware Software Technology
Research
Produces more breakthroughs than any other company – Received a record 3,248 U.S. patents in 2004. More than 29,000 over the past 12 yrs. surpassing the total earned by IBM’s top 10 competitors combined World’s largest IT research organization – More than 3,000 scientists and engineers – 8 research laboratories and 24 development laboratories worldwide in 6 countries – The 12th consecutive year leading all companies in U.S. patents – Work ranges from physics to cognitive science to leading-edge application research – Most number of PhD’s employed – Nobel Prize winner scientists. Eg. Storage – A leader in Nanotechnology
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IBM in the Philippines | October 2006 | Confidential
© 2006 IBM Corporation
International Business Machines Our Management System
IBM has been a global company for decades
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IBM in the Philippines | October 2006 | Confidential
© 2006 IBM Corporation
International Business Machines
IBM Philippines Then and Now 1925 – H. E. Heacock started selling IBM products in the Philippines 1937 – Incorporated as Watson Business Machines with 3 employees located in Binondo (old Manila) 1954 – Renamed to IBM Philippines, Inc. located in Escolta 1966 - First mainframe at Bureau of Lands; IBM moves to Paseo de Roxas, Makati 1970 - Caltex is first S/370 customer 1985 - IBM launches the PC 1987 - IBM appoints first business partner, SSI and enters SME market 1992 - Joint venture with SM, APC formed 1996 - IBM champions e-business 2000 - IBM moves to Eastwood Libis 2001 - IBM forms 1st subsidiary, ISD 2003 - IBM re-launches in Southern Phil 2004 - IBM forms 2nd and 3rd subsidiary, IBS and Daksh 16
IBM in the Philippines | October 2006 | Confidential
© 2006 IBM Corporation
International Business Machines
Overview of IBM Philippines Established in 1937 Over 5,000 customers Over 500 business partners 3,570 Employees (as of June 2006) No. 1 in the Philippine market (as of June 2006); Leading Information technology company that transforms customers into successful ondemand businesses No. 1 in Client Satisfaction in Asia Pacific (2005)
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IBM in the Philippines | October 2006 | Confidential
© 2006 IBM Corporation
International Business Machines
The Growing IBM Philippines Family IBM Philippines IBM Sales and Distribution 220 employees
IBM Solutions Delivery IT Services 300 employees
IBM Business Services HR, Employee, and Finance Administration Services 650 employees
Asia Pacific College JV with SM Foundation
IBM Daksh Customer Care Services 2400 employees
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IBM in the Philippines | October 2006 | Confidential
© 2006 IBM Corporation
International Business Machines
IBM Philippines IBM Philippines Complete portfolio of IBM products and offerings; hardware, software, services, and personal systems IBM has an end to end solution to virtually any IT related requirement across any industry. Capability to deliver wide range of IT and IT enabled services. For example: IT & Management Consulting Services, IT Outsourcing Services, Networking Services, Business Transformation Outsourcing Major market segment: Financial & Banking, Telecom, Retail & Distribution, Manufacturing, Government Established in 1937 No. 1 in the industry IBM Plaza
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IBM in the Philippines | October 2006 | Confidential
© 2006 IBM Corporation
International Business Machines
Our Values
Dedication to every client's success Innovation that matters - for our company and for the world Trust and personal responsibility in all our relationships 20
IBM in the Philippines | October 2006 | Confidential
© 2006 IBM Corporation
International Business Machines
Innovation that Matters - for our company and for the world…. Innovation Defined :
“Innovation occurs at the intersection of invention and insight. It's about the application of invention — the fusion of new developments and new approaches to solve problems.“ Sam Palmisano President and CEO, IBM
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IBM in the Philippines | October 2006 | Confidential
© 2006 IBM Corporation
International Business Machines
Today there are 4.2 billion Internet addresses. The new Internet Protocol Version 6 addressing system will support more than 35 trillion separate subnetworks, each of which could connect millions of devices.
By the year 2010, the codified information base of the world is expected to double every 11 hours.
Last year, the world produced more transistors (and at lower cost) than grains of rice.
By 2010, supercomputers will be capable of 10 quadrillion calculations per second. 22
IBM in the Philippines | October 2006 | Confidential
The new Airbus A380 contains over one billion lines of code. GM predicts the average car will have 100 million lines of code by 2010. In comparison, Windows XP has about 40 million lines of code. © 2006 IBM Corporation
International Business Machines
Everyone is Talking about Innovation…
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IBM in the Philippines | October 2006 | Confidential
© 2006 IBM Corporation
International Business Machines
The Global CEO Study 2006: Innovation Interviewed 765 CEOs worldwide - representing 5 sectors, 21 industries, large and SMB enterprises
CEOs are taking an active role in driving an innovation agenda
CEOs: Extent of fundamental change needed over next two years
Business model innovation is now nearly as important as more traditional innovation around products/services
Moderate
CEOs believe that integrating business insight and technology capabilities enables the organization to “stay ahead of the curve” CEOs agree that internal and external collaboration is key to innovation, but many are slow to actually practice it
22% A lot
65%
Little or no
13%
CEOs are embracing change — “CEOs do not seem intimidated or content simply to cope… [Instead they see change] as both reason and license to expand their innovation horizon…” Source: IBM Global CEO Study 2006 24
IBM in the Philippines | October 2006 | Confidential
© 2006 IBM Corporation
International Business Machines
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Deep business model innovation is critical
What CEOs told us… A unique business model is essential for competitive survival –
Substantially changes how a company adds value to their own or other industry
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Hard to commoditize
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40 percent of business model innovators fear that changes in a competitor’s business model could upset the dynamics of the entire industry
Business model innovation is becoming increasingly prevalent –
Almost 30 percent of CEOs’ innovation efforts are now focused on the business model
What we found… Companies that emphasized business model innovation experienced better financial performance than those that didn’t
What is “business model innovation”? Innovation that fundamentally transforms the way a business works or drives revenue 25
IBM in the Philippines | October 2006 | Confidential
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International Business Machines
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Collaboration, particularly external collaboration, is indispensable
What CEOs told us… Over 75 percent ranked collaboration and partnering as very important to innovation Employees are the top source of innovative ideas, followed closely by business partners and customers –
Ideas are increasingly coming from external sources
What we found… Extensive collaborators outperformed their peers in both revenue growth and average operation margin Companies that used external sources more often reported higher revenue growth than those that didn’t
Most significant sources of innovative ideas* Employees Business partners Customers Consultants Competitors Associations, trade groups, etc. Internal sales or service units
Internal sources External sources
Internal R&D Academia 0
10
20
30
40
Percent of respondents * Respondents could select up to three choices
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IBM in the Philippines | October 2006 | Confidential
© 2006 IBM Corporation
International Business Machines
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Innovation can be ignited by business and technology integration
What CEOs told us… Achieving innovation potential requires integrating technology expertise with business and market insights A gap exists between CEOs’ integration aspirations and actual implementation –
Nearly 80 percent rated the integration of business and technology of “great importance” or “critical importance”
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Only about 45 percent believe their organization integrates business and technology to a sufficient extent
What we found… Companies that have extensively integrated business and technology are growing revenue 5 percent faster than their competitors
Importance vs. extent of business and technology integration Percent of respondents 100%
80%
40%
20% 0%
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IBM in the Philippines | October 2006 | Confidential
Integration gap
60%
Integration of great importance
Integrated to a large extent
© 2006 IBM Corporation
International Business Machines
CIOs & IT figure prominently in the expanding innovation horizon for CEOs..
Drive business model innovation Innovate the IT business model first - Become customer-centric - Become a credible business partner - Use componentization techniques to deepen business understanding
Create a flexible, responsive infrastructure - Open architectures, virtualization and more 28
Enable internal and external collaboration
Ignite technology and business integration
Remove technological barriers
Be a business executive first, technologist second
- Facilitate information sharing
- Close the gap between business and IT
Fully leverage collaborative technologies - Make collaboration easier and expected - Reward innovative thinking
IBM in the Philippines | October 2006 | Confidential
- Build hybrid skill sets among the IT community - Promote a new governance model - Melds business and IT leadership together
© 2006 IBM Corporation
International Business Machines
Some final words from our study participants “It’s not enough to make a difference on product quality or delivery readiness or production scale. We must innovate in areas where our competition does not act – by developing new competencies and alliances.”
“If you think you have all the answers internally, you are wrong.”
“Some of the boldest plans under consideration within our company work by leveraging the collaborative potential of service providers in other domains.” 29
IBM in the Philippines | October 2006 | Confidential
© 2006 IBM Corporation
International Business Machines
Thank you very much ! For those who are interested to get more details on the 2006 Global CEO Study, please leave your business cards with me or contact: Donna Ponciano Email:
[email protected] IBM Philippines Inc. 3F IBM Plaza Bldg., Eastwood City Cyberpark E. Rodriguez Jr. Avenue, 1110 Brgy. Bagumbayan, Quezon City, Philippines Trunk: 632-9952426 x2124 Fax: 632-9958234
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IBM in the Philippines | October 2006 | Confidential
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