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Global Business Challenge& Digital Strategy

Ethan McCartyDigital and Social Strategy & Development

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1. We have an aggressive roadmap to deliver results to our company’s owners by 2015.Doing more of the same business-as-usual activities isn’t a scalable approach to meeting these targets…meanwhile, digital approaches are often inherently scalable.

2. The communications revolution has brought large changes to what makes effective customer interactions.We must change what we do, by leveraging how people use digital media to search for and discover information.

3. The IBM digital presence must look like, sound like, think like and perform like IBM. The quality and performance of the IBM digital experience must meet the expectations of the brand and the demands of our business.

Key challenges

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Roadmap Model assumes ~5% revenue growth

2015Roadmap

• Base business mixing to higher growth segments

• ~$20B of acquisition investment through 2015

• Full execution on growth initiatives enables revenue growth over 5%

2015Operating EPS

At Least$11.35

Base Revenue Growth

5% Revenue Growth

~0.90~0.70

~1.45

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1 pt

2 pts

2 pts

BaseGrowthRevenueMixAcquisitions

IBM’s 2015 roadmap: the growth imperative

AcquisitionsRevenue Mix

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58,000 marketing activities

8,500 events

4.5 million people targeted through outbound marketing tactics

500,000 people hosted at IBM briefing centers representing 18,000 client and partner organizations

38.3 million touches…more than 8 per person

We are not short of client-focused activity. But do we have the right mix?

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From To

Channel Network

Mass consumption Universal participation

Institutional mediation Social mediation

Content scarcity Content abundance

Attention abundance Attention scarcity

Asynchronous Real-time

Virtual reality Integrated reality

A paradigm shift in communication

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Decision-making has changed

The communications revolution has brought large changes to what is effective marketing and communications.

We must change what we do, by understanding how people use digital to search for and discover information.

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Search & Discovery

Search & discovery sits at the core of modern marketing: it is how customer need gets matched to product or service.

Two competing paradigms vie for dominance of search & discovery:

The Search Paradigm

The Social Paradigm

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People find information and make choices by typing in keywords that surface links to web pages indexed and ranked by search engines for relevance.

Underpinning this paradigm is trust in the search algorithm to return relevant search results.

You have to take it on faith that search engines will “do no evil.”

(There’s something oddly old-media about this.)

The Search Paradigm

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People find information and make choices by paying attention to what their friends or peers are reading, watching, choosing, buying and recommending.

Underpinning this paradigm is trust in people I know (personal networks) and people like me (peer networks).

The Social Paradigm

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IBM’s social business strategy is to catalog IBMers’ expertise, manage access to them and optimize their interactions with our constituents. By fully enabling the digital IBMer, we can systematically manage the way these social interactions connect with all relevant parts of IBM – and perform these functions at massive scale.

Expert Relationship Management

Social Aggregator

Social Business @ IBM

Expert Locator

Social Business Manager

Social Intelligence

IBM Social Business Strategy

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Is the IBM digital experience true to our brand?

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Social Business @ IBM

w3.ibm.com/socialbusiness/engage

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Sponsored media

Mobile app

/smarterplanet

Expert Locator

w3.ibm.com/socialbusiness/experts

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Centennial opportunity

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