Cloud enabled collaboration, analytics, and

Report
Transportation Industry Cloud
Point of View
Institute for Business Value
Partner’s Name, Partner’s Title
DD Month YYYY
© 2014 IBM Corporation
Executive summary
 Cloud computing is not new to the transportation sector, but most transport providers have
only just started to understand the power of cloud computing to not just improve efficiency,
but also to transform collaboration paradigms and business models
 Companies in the transportation sector are hungry for cloud-driven improvements because
competitive pressures and customer expectations are making it harder to sustain profits
 Cloud projects are attractive in the transportation sector because they help convert capital
expense into operating expense, which frees up funds for innovation and other investments
 Several companies in the industry are exploring more transformative uses of cloud
computing, including solutions to work around legacy back office and transaction support
systems, and to collaborate more effectively with ecosystem partners
 IBM is uniquely positioned to help transportation companies envision and implement
innovative cloud-based strategies
2
IBM Institute for Business Value
© 2014 IBM Corporation
1
Cloud will
transform the
global
transportation
industry
2
Traditional
transportation
operating models
will evolve
3
IBM can help
3
IBM Institute for Business Value
© 2014 IBM Corporation
Transformative technologies are disrupting industries
Mobile revolution
Connectivity, access and
participation are growing
rapidly
Social media explosion
Quickly becoming the primary
communication &
collaboration format
Transformational cloud – Cloud’s attributes make it a
powerful delivery model enabling new business models,
cost benefits, flexibility and large on-demand capacity
Gmail is a pioneer example of cloud computing,
supported well by advertisement based revenue
model, cloud’s low cost delivery model enabled
and sustained free email service
Hyper digitization
Digital content is produced
and accessed more quickly
than ever before
Ecosystem of connected health and wellness
apps that delivers a consolidated view of users’
health. Strong & growing ecosystem with 12
APIs and 7 Apps that cover all aspects of health
care 1
The power of analytics
Real time analysis, predictive
analytics and microsegmentation emerging
Xerox Mobile Print platform uses cloud to
convert and process print requests, removing
complexity, reducing costs and enabling diverse
devices and print configurations 2
Source: [1] http://www.forbes.com/sites/peterhigh/2013/08/05/meg-mccarthys-climb-from-cio-to-evp-of-operations-and-technology-at-aetna/
[2] Joint IBV/EIU Cloud-enabled Business Model Survey of 572 business & IT leaders
4
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© 2014 IBM Corporation
The transport sector is also impacted by these disruptions;
necessitating innovation and agility to drive profitable growth
FORCES SHAPING
GLOBAL TRANSPORTATION
 Unrelenting competition,
unconstrained capacity
growth, and continued focus
on price keep transport
margins low
IMPLICATIONS
Many providers will
struggle to maintain
status quo solutions
 Customers have grown weary
of onerous requirements to
connect to back office
systems
Many customers require
significantly more
flexibility in transport
interactions
 Customers express interest in
alternative transport solutions
Transportation
companies and their
customers are eager to
adopt cloud solutions
5
IBM Institute for Business Value
FORCES SHAPING
CLOUD COMPUTING
 Market demand for cloud
solutions is fueling rapid
innovation across all
industries and markets
 Costs and complexity of
maintaining legacy systems is
skyrocketing, making
modernized variable cost
based alternatives more
attractive
 Competition among cloud
providers is driving down
costs
© 2014 IBM Corporation
Relentless pressure on margins coupled with modest growth in
transport demand require low-to-no cost industry improvements
 Low margins across all transport sub-sectors
Relative Return on Equity, 2014
28%
 Shipping and Tracking struggle with
particularly low margins, typically less than
3%
23%
14%
 Even the most profitable transport segment,
air freight and freight services produces
margins that are less than 5%
0%
Services
Air Delivery & Trucking
Freight Services
Shipping
 Compared to the services sector, all areas of
transportation produce modest returns on
equity
Relative Profit Margins, 2014
5.8%
4.9%
 With no profit, shipping produces no return on
equity
2.7%
-0.3%
Services
Air Delivery & Trucking
Freight Services
Shipping
Source: Yahoo finance industry analysis tool, YTD June 2014: http://biz.yahoo.com/p/773qpmu.html
6
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© 2014 IBM Corporation
As they advance along their transformational journey, transportation
leaders focus on four key imperatives
CREATE A
CUSTOMER –
FOCUSED
ENTERPRISE
Optimize data and
leverage analytics to
adapt to new behaviors,
cultivate trust, and drive
profitable growth
INCREASE
FLEXIBILITY AND
STREAMLINE
OPERATIONS
Improve operating
leverage with variable
cost structures that
increase flexibility
and reduce risk
DRIVE INNOVATION
WHILE MANAGING
COST
OPTIMIZE
ENTERPRISE RISK
MANAGEMENT
Deliver new services
quickly that decrease
cost per transaction and
drive competitive
differentiation
Maximize return on
equity, combat fraud and
mitigate operational risk
while achieving
compliance objectives
Cloud computing improves efficiency, expands innovation
potential and drives revenue growth
7
IBM Institute for Business Value
© 2014 IBM Corporation
In order to address industry challenges and manage changes,
business leaders can leverage cloud to transform their businesses
Cloud computing is a pay-per-use
consumption and delivery model
that enables real-time delivery of
configurable computing resources
(for example, networks, servers,
storage, applications, services).
Cloud’s essential
characteristics
Cloud empowers six potentially “game changing” business
enablers
Cost flexibility
 Shifts CapEx to OpEx
 Shifts cost from fixed to variable, pay as you go
Business Scalability
 Allocate and release resources based on
demand
 Gain from scale economics
Market adaptability
 Speeds time to market
 Supports rapid prototyping and innovation
Broad
Network
Access
Rapid
Elasticity
Masked complexity
 Expands product sophistication
 Simpler for customers/users
On-demand
self service
Measured
service
Context-driven
variability
 Drives context-driven, user-centric experiences
(preferences, movements, behaviors)
Ecosystem
connectivity
 Facilitates new value nets of partners,
customers and other external players
 Enables industry platforms
Resource Pooling
Source: NIST, IBM IBV Power of cloud study
8
IBM Institute for Business Value
© 2014 IBM Corporation
Cloud enabled collaboration, analytics, and mobile delivery,
increases flexibility and make it easy to compose business functions
CLOUD ENABLES COMPOSABLE BUSINESS MODELS
 Ability to restlessly re-invent applications, services and
processes
 Assembled from blocks of capability that can be rapidly
changed
of using and changing
 Well defined interfaces (APIs) makes blocks easy to
use and share
 Blocks share data to take advantage of analytics
 Small (Micro) blocks perform simple tasks reducing risk
A Collaborative
Enterprise
Leveraging
Advanced Analytics
Delivering Insight
Where it is Most Needed
Employees, customers, and
business partners are
connected in real time to
coordinate deliveries, arrange
customs clearance, and
process insurance claims
The days of transportation
companies depending on the
‘local knowledge’ of staff and
partners are gone – intelligent
systems take in data and
calculate optimal solutions
automatically
The entire database of legacy
records – information about
shipper volumes, and access
to unstructured market
trends, will allow companies to
dramatically improve forecasting
and capacity planning
9
IBM Institute for Business Value
© 2014 IBM Corporation
Cloud enabled mobile solutions, collaboration tools and analytics
will improve the customer experience and drive operational
efficiency
CURRENT FRUSTRATIONS
CLOUD DISRUPTIONS
FUTURE OF TRANSPORTATION
 Mostly manual quote
generation
 Fully automated transaction
and billing support
 Highly dependent on employee
knowledge
 Touch-free interactions for both
new and existing customers
 Significant ‘training period’ for
new customers
 Exception-driven updates for
status, delays, customs
processing, etc.
 Frequent data entry/re-entry
errors
 Seamless integration with
partner and customer
operational and supply chain
management systems
 Frustrating complex rate
structures
 Complex back office
connections
 Too many incorrect invoices
10
IBM Institute for Business Value
© 2014 IBM Corporation
Cloud enables transportation companies to drive transformation by
bringing the full power of legacy data to the front line employee
Freight Rates – for each
specific customer,
product and market
Sales Leads – relevant
to sales associates,
regions, and products
Shipment Status – real
time data about the
location and condition of
each shipment
11
Financial Details – always up to
date information about payment
terms and past performance for
each customer and business
partner
IBM Institute for Business Value
Insights and recommended
actions delivered to the
smart phones held by:
 Dock agents
 Sales associates
 Tracking teams
 Warehouse managers
 Dispatchers
© 2014 IBM Corporation
Cloud enables transportation companies to drive rapid enterprise
transformations while coordinating across emerging eco-system
 Clouds as platforms have the ability to scale as
usage increases with the convenience of providing
a single system and uniform processes that is
accessed by people in many organizations
18%
The percentage of logistics
enterprises who have already
adopted Cloud Solutions
37%
The percentage of logistics
enterprises who are evaluating
cloud solutions and cloud
delivery models
40%
By 2016, the percentage of
supply chain applications which
will be delivered in the combined
cloud, according to Gartner
 Cloud delivery model allows integration of the
ecosystem partners to increase the reach of
customer and system insight
 Cloud helps in reducing the fixed IT costs for an
enterprise, but also enables disruptions like
creating new revenue streams and breaking into
new markets
 In addition to increasing efficiency with a simple
dashboard, cloud computing can also provide the
benefit of more immediate, near real-time data
Source: http://www.logisticsmgmt.com/article/state_of_cloud_computing_skys_the_limit
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IBM Institute for Business Value
© 2014 IBM Corporation
Transportation organizations that embrace cloud aggressively
create substantial competitive advantage and differentiated growth
OPERATING EFFICIENCY
IT managers can increase efficiency
by leveraging cloud capabilities to
dynamically reallocate resources to
different users across the
transportation network to meet peak
demands
Cloud enables the fleets to access
their information from any Internetenabled device from any remote
location, thereby allowing multiple
remote users and faster
communication between drivers, fleet
management and maintenance
operations
REVENUE GROWTH
ECOSYSTEM / PLATFORM
DOMINATION
Cloud helps freight logistics and
trucking companies to focus on their
business as opposed to their IT infra,
software versions and update
schedules
Cloud simplifies the integration of
partners for managing cross-company
processes and offers mobile system
access which are key factors for the
logistics companies
Cloud solutions reduce the company’s
time to market
The trucking and logistics companies
gain flexibility from the cloud which
allows them to deploy the system at a
single business unit or across the
whole enterprise
Freight carriers are reducing asset
downtime and associated risks using
cloud-based solutions
Cloud solutions helps the
transportation companies to speed the
delivery of new products and services,
and reinvent customer relationships
Rapid adoption of mobile technology, the explosion of social media, growth in “big data” and advanced analytics, and the
globalization of value chains are trends directly enabled by cloud
Source: http://public.dhe.ibm.com/common/ssi/ecm/en/xbl03022usen/XBL03022USEN.PDF, IBM Cloud POV Outline for T&T
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© 2014 IBM Corporation
Transportation companies that have embraced cloud based
services are already seeing significant performance improvements
OPERATING EFFICIENCY
50
%
reduction in time to
market while cutting
costs for equipment and
systems management by
one-third
REVENUE GROWTH
1
Mn $
Anticipated increase in
revenue and 83%
reduction in staffing
requirements for billing
operations
China Railway worked with IBM to
create a virtualized infrastructure,
offering computing services to its
many subsidiaries through
infrastructure-as-a-service (IaaS)
management
A large transportation logistics
company in North America realized
increase in revenues and reduction in
staffing requirements by implementing
advanced techniques, solutions with
case management capabilities
Apart from the reduction in time to
market and costs, the cloud solution
offers China Railway the IT flexibility
and efficiency to keep up with growing
demand
The solution involved integration of
multiple information sources and
technologies - customer data,
contracts, legacy systems, real-time
monitoring
ECOSYSTEM / PLATFORM
DOMINATION
35
%
IBM IBV projects that the
number of companies
that are using cloud to
drive innovation will
double to 35% from 16%
in next few years
Global Port operator developed a
cloud-based collaboration platform
that brought port users together to
share data and coordinate
transactions in new ways.
The solution enabled diverse port
customers such as container shipping
lines, freight logistics companies,
government agencies, and the port
terminal operation to share data on
transactions to speed port clearance
and facilitate multi-party collaboration
Source: http://www-03.ibm.com/software/businesscasestudies/us/en/corp?OpenView&Start=31&Count=30&RestrictToCategory=corp_PowerSystems&cty=en_be
14
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© 2014 IBM Corporation
1
Cloud will
transform the
transportation
industry
2
Traditional
transportation
operating models
will evolve
3
IBM can help
15
IBM Institute for Business Value
© 2014 IBM Corporation
Explosion of devices, data and new technologies pose a big
challenge in their adoption
DATA
50%
30%
80%
growth is expected in
data volumes
exploding to 6 trillion
terabytes
growth is expected in
IT spending on Big
Data, shifting toward
analytics tools & apps,
increasingly delivered
by cloud
of Fortune 500
companies will have,
by 2017, an active
(social technologies–
enabled) customer
community
89%
of IT spending growth
will drive spending on
mobile, cloud, Big
Data, and social and
related offerings
33%
of top 20 industry
leaders in most
industries will be
significantly disrupted
by new competitors or
reinvented businesses
2.5:1
is the ratio at which
smart phones and
tablets will outsell PCs,
increasingly becoming
touch points for
consumers
Source: IDC Predictions 2014
16
IBM Institute for Business Value
© 2014 IBM Corporation
Cloud expands the potential of new technologies across the
enterprise
 Business model change is quickly enabled by
Social Media, Mobile and Analytics but delivered
by Cloud
 Cloud reduces costs, helps manage increasing
costs of new technology adoption
 Cloud moves CAPEX to OPEX, reducing upfront
investments for new technologies
 Cloud’s elasticity feature aligns technology spend
to business demand avoiding wasted idle capacity
Cloud’s potential will enable organizations to be agile, flexible, provide on-demand access to huge
computing resources but …………….cloud adoption requires careful planning
Source: IBM Center for Applied Insights Under cloud cover: How leaders are accelerating competitive differentiation
17
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© 2014 IBM Corporation
Organizations can take a five stage approach in cloud adoption
1
Create Cloud
strategy,
architecture
and plans
Determine the
organization goals,
platform requirements
& complexity
associated
Develop enterprise
cloud strategy, options
available and roadmap
Envision the cloud
architecture that will
support cloud initiatives
Update IT Strategy and
IT plans to align them
with cloud strategy
2
Identify and
prioritize
workloads
3
Determine
cloud
deployment
options
4
Develop Cloud
business case
Define business drivers
to prioritize use cases
for cloud
Define multi-sourcing
models and cloud
vendor selection criteria
Develop cloud cost
models including
transition
Implement a
CloudFirst strategy to
evaluate right blend of
cloud options for new
projects
Assess and determine
how to best leverage
the options of private,
public and hybrid
delivery models
Finalize a cloud
business case and
examine its ROI
including time required
for initial payback
Assess and evaluate
from the current
applications, the best
candidates for cloud
Develop Cloud Service
Catalog, SLAs and
KPIs
5
Prepare for
implementation
Prepare infrastructure
for cloud
Develop
 Cloud Risk
Management plan
and policies
 Security and
Compliance plan and
processes
 Transition plan
including workforce
transition
Assess impact on
operating model;
identify and plan
changes required
Determine the
applications to be
moved to cloud
Cloud planning should result in accelerated migration, quick wins and mitigated risks
Note: The above shows an overall plan and will include aspects of workload prioritization and migration discussed in other slides
18
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© 2014 IBM Corporation
Cloud strategy comprises four elements
Strategy
1
2
3
4
5
APPLICATION AND
DELIVERY PLATFORMS
BUSINESS MODELS
ENABLED BY CLOUD
Driving agility and productivity
for the enterprise; tested
strategies to improve life cycle
performance
Promoting highly competitive
initiatives at the enterprise
and Industry level
INFRASTRUCTURE
PLATFORMS
Enterprise
Cloud
Strategy
Instantiating well-integrated
business intelligence to
manage the enterprise
Delivering consumable,
secure and readily available
resources to enable agile
execution
19
DATA PLATFORMS
IBM Institute for Business Value
© 2014 IBM Corporation
Enterprise innovation is realized by integrating new technologies
with existing core systems
Strategy
1
2
3
4
5
Systems of insight
Advanced analytics and cognitive computing
systems that harness big data, enabling
competitive advantage for enterprises
Systems of
Insight
Enterprise
Innovation
Systems of
Record
Systems of
Engagement
Enabled by Cloud
Security
20
Systems of engagement
Leverage mobile and social to transform
relationships with customers, employees & citizens
Systems of record
The traditional core systems such as accounting
applications and product systems that record key
internal data
Pervasive Security Intelligence
A dynamic approach to threat reduction through a
life cycle of prevention, detection and response
Cloud enables leaders to take a systematic
approach to integrate these capabilities to drive
enterprise innovation
IBM Institute for Business Value
© 2014 IBM Corporation
Organizations should evaluate born-on-the-cloud solutions along with
existing workload migration
Prioritization
Enterprise Cloud Adoption
1
2
3
4
Cloud First
5
New
project
New
project
Replace
existing
app / infra
BPaaS
PaaS
SaaS
IaaS
Business
case
Migrate existing
workloads
Select
Prioritize
Workload
analysis
21
Evaluate a blend of cloud options
that best suit the project
requirements
IBM Institute for Business Value
Quantify
Migrate
Migration Plan
Wave 1
Wave 2
Wave 3
© 2014 IBM Corporation
Can all applications / workloads be moved to cloud? Assessment
and prioritization will help determine “cloudable” workloads
Prioritization
1
2
3
4
5
The Opengroup defines the term “workload” as the type and
characteristics of application(s) that can be hosted on the Cloud
Challenges to address:
• Now that I am ready for cloud, what workloads fit my target cloud?
• What is the real cost-benefit of moving workloads to the cloud?
Prioritization helps determine cloudable applications
Migration
plan
Business value
Deployment ease
 agility and elasticity
 number & type of connections
between the application and
other applications
More ready for cloud
WAVE 1
 the amount and style (batch,
interactive) of data transferred
Evaluate: May or may
not be ready
WAVE 2
New growth workloads
made possible by cloud
WAVE 3
 value in rapid deployment
enhancing time to market
 pay-as-you-go pricing
model shifting fixed costs to
variable costs
 reduced capital expenditure
 lower operating costs
22
Workload migration
categories
 the non-functional response
characteristics
 the security and compliance
requirements
IBM Institute for Business Value
© 2014 IBM Corporation
Optimizing workloads for cloud adoption will deliver enhanced
business value for transportation companies
Prioritization
1
2
3
4
More ready for cloud
Analytics
5
Many Billing
Applications
Infrastructure
Storage
Information
intensive
Isolated
workloads
Sensitive
Data
Highly
customized
Transportation
Management
Many Backoffice
Transportation
Applications
Solutions
Many Risk
Mgmt. Applications
Collaboration
Workplace, Mobile,
Desktop & Devices
Mature
workloads
~25 %
IBM’s experience
shows that within
the existing
transportation
applications 1 in 4
can be readily
moved to cloud
Business Processes
Not yet virtualized
3rd party SW
Evaluate: May or may
not be ready for Cloud
based on their
attributes or maturity
New growth workloads
made possible by cloud
Preproduction
systems
Complex
processes &
transactions
Batch
processing
Regulation
sensitive
Disaster Recovery
Development & Test
Infrastructure
Compute
Note: The above is a representative example of what workloads can be moved to cloud
23
IBM Institute for Business Value
© 2014 IBM Corporation
A phased migration to cloud helps manage risks
Prioritization
1
2
3
4
5
Potential migration risks
 Incorrect analysis and identification of
workloads
Phased migration approach
Discovery Phase
Analysis Phase
 Inability to meet non-functional
requirements
Discover
Analyze
 Incorrect ROI analysis
 current assets
and usage
 cloud feature /
fit
 topologies &
dependencies
 cloud providers
 Inadequate preparation of infrastructure
/ apps for cloud
 Complex applications’ interoperability &
integration
 platforms and
licenses
 Failure to comply with security, privacy
& regulatory requirements
 SLA’s, security
& compliance
 Management complexity as resources
get distributed in a virtualized
environment
24
Migration &
Validation Phase
Establish the
Migration Toolkit
Cloud-enable
infrastructure &
applications
 contract
models
Migrate
 resource sizing
 Applications,
Platforms and
Data
 workloads
 Infrastructure
 Operations
Services
Validate
Migration
IBM Institute for Business Value
© 2014 IBM Corporation
Cloud services and deployment options enable transportation
providers to adopt cloud as per their requirements and value drivers
Deployment
1
2
3
4
5
Private cloud
Hybrid cloud
Public cloud
Software, hardware and
platforms are hosted in a data
center owned by a transporter
and used by different
departments / units inside of the
transporter
Software, hardware and
platforms are hosted both in
third party data centers as well
as inside of a transporter
organization
Software, hardware and
platforms are hosted externally
by a third party vendor who
manages all aspects of the
services for the organization
Value drivers …
.… Customization, efficiency,
availability, resiliency, security
and privacy
Value drivers …
Leverage flexibility and benefits
of private and public cloud while
addressing data security,
governance, compliance and
budgetary challenges
Value drivers …
.…Standardization, capital
preservation, flexibility and time
to deploy
25
IBM Institute for Business Value
© 2014 IBM Corporation
Cloud enables a global trade provider to increase agility and
efficiency while reducing IT costs significantly
Business Case
1
2
3
4
5
Upfront Capital Expenses No Longer
Incurred
97%
Reduction in the deployment time
Rapid Scalability at less cost
Growing
customer
base
• Purchasing and managing
additional servers
replaced by addition of
web roles
• Saved One-third of the
cost of adding an
additional server every 3
years
Traditional
Funding
Cloud
Funding
High capital
expense
$5341 replaced by
modest
per
$107
server operational
expense, which
per
(CAPX)
is easier to
month
budget for and
(OPEX)
manage
Reduced IT spending on basic infrastructure
leaves more time & budget to focus on
strategic initiatives & growing customer
needs
Source: Case Study on Cloud Implementation for a Global Trade Provider, http://www.slideshare.net/msitpro/tradefacilitate-cs-unlocked
26
IBM Institute for Business Value
© 2014 IBM Corporation
Total cost of ownership (TCO) analysis at a large transportation
company demonstrates the business value of cloud delivery
Business Case
1
2
3
4
5
Business Challenge: The IT department was the backbone IT for a privately held Forbes 500 holding
company that consisted of 50–60 companies and over 10,000 employees. The company was under
pressure to add new projects, yet its server environment was not scalable or easy to manage. Many
servers were underutilized. It was difficult for an already overworked IT staff to take on new projects.
VIRTUALIZATION
BENEFITS FOR IT USING CLOUD BASED
VIRTUALIZATION




Server Consolidation
Improved CPU Utilization
Better Capacity Planning
Significant Reduction in Hardware, Software
costs and IT Operation costs
 Conversion of legacy systems into virtual
machines and eliminate older hardware
 Improve overall processes
BOTTOM LINE RESULTS




Hardware and Software TCO Reduction - 81%
Total TCO Reduction- 82%
Six – Month ROI – 449%
Time needed to recover a system - 6 hours
before virtualization, 10 minutes after
 Avg CPU Utilization – 60-65%
 Server consolidation ratio achieved: 7:1
Source: Case Study on Cloud Implementation for a Global Trade Provider, http://www.slideshare.net/msitpro/tradefacilitate-cs-unlocked
27
IBM Institute for Business Value
© 2014 IBM Corporation
Security, privacy and compliance issues can be readily addressed
with cloud…
Implementation
2
3
4
5
As transportation companies start planning to
adopt cloud, key questions come up about their
data & applications:
 Where is our data stored? What about data
sovereignty?
 How do we protect our customers’ privacy?
 How does cloud affect our regulatory
compliance?
Critical elements to address security, privacy and
compliance concerns
IT Strategy
TRANSPORT
COMPANY
1
Risk
Management
Plan
Monitoring &
Auditing
CLOUD SERVICE
PROVIDER
 Is a business continuity plan available for
cloud?
28
Cloud
requirements
IBM Institute for Business Value
Cloud SLA
Risk & Security
Management
processes
Physical &
Logical controls
implementation
Audits & reports
© 2014 IBM Corporation
Impact of cloud is forcing transportation providers to evolve a new
operating model aligned to a recalibrated business strategy
Implementation
1
2
3
4
5
 An operating model is a framework for
formulating an operations strategy that best
deploys and determines the explicit choices
needed to achieve business goals
BUSINESS GOALS AND STRATEGY
Target
Operating
Model
 Market shifts in the digital economy
necessitate adoption of new technologies like
cloud, mobile, social media and analytics
 To succeed with cloud, companies have to
assess the impact of cloud on the operating
model and all its dimensions and determine
what actions are required to make cloud
adoption smoother and more successful
Customer
Experience
Sourcing &
Alliances
Assets &
Locations
CULTURE
Technology
TOM
Skills &
Capabilities
Processes
Organization &
Governance
Performance
Metrics
ROADMAP FOR CHANGE
29
IBM Institute for Business Value
© 2014 IBM Corporation
Cloud will radically transform and improve client experience in the
transportation industry
Implementation
1
2
3
4
5
1 Persona Detail
2 Persona Detail
3 Persona Detail
Robert, an experienced
Fleet Manager, while on
his way to office is
accessing the fleet and
driver availability details
on his mobile to assign a truck for
dispatching the goods for a very
important client.
Thomas, the
maintenance manager
receives Robert’s
request when he’s on a
call with Maintenance
Vendor. He opens his real time
updated dashboard to check for the
maintenance level of the truck
assigned.
Parker, the
maintenance vendor
accesses the fleet
maintenance data on
his Tablet device.
On analyzing, he recommends
Thomas to send seven of the
company’s trucks for overhauling and
maintenance to avoid breakdown.
4 Persona Detail
5 Persona Detail
6 Persona Detail
Walker, the driver of the
assigned truck gets the
new assignment details
on his mobile which
includes delivery
details, maps, traffic data. On his way
to delivery, he is alerted on his mobile
about a road block and is suggested
alternate routes.
Allen, the procurement
manager of the client
accesses the real time
GPS position of the
truck to find out the lead
time for planning his operations. On
receiving the goods, he sends his
acknowledgement and feedback to
Robert.
Scott, the safety and
compliance officer
monitors the whole
assignment using realtime data, GPS, speed
and mileage tracking devices and
sends a report to Robert and Thomas
about the truck performance and
driver behavior.
30
IBM Institute for Business Value
© 2014 IBM Corporation
Efficient sourcing and management of partnerships and alliances
will be major enablers of cloud adoption success
SOURCING & ALLIANCES
IMPACT
IMPLICATIONS
 Organizations will have more partners and
alliances through “Services” being offered by
outside organizations
 Procurement and sourcing functions will
need to be automated and have shortened
cycles
 Complexity will increase in service contracts
due to consumption-based billing
 Vendor and service management will be an
integral part of the Procurement function
 Service quality and availability will need more
focus as they are managed through
relationships and agreements with diverse
third party ecosystem
 Service level agreements need to be
defined clearly and governed by the need to
secure and protect customer data in a
shared environment
 Service adoption to meet benefits
realization needs to be included in the
negotiating process
31
IBM Institute for Business Value
© 2014 IBM Corporation
Business leaders will pro-actively redesign business architecture
and processes to leverage benefits of cloud
PROCESSES
IMPACT
IMPLICATIONS
 The cloud strategy and technologies will
require a shift from systems-based processes
to services-based processes
 Traditional legacy processes will need to be
decommissioned or integrated into the new
cloud-enabled processes
 Cloud’s speed of service delivery will impact
current processes as they need to match and
deliver at the same speed
 Transportation companies will need control
over the continued availability, reliability and
utility of the cloud based processes and the
platforms underpinning them
 Process framework will migrate from
functional silos to an integrated set of
processes spanning organizational
boundaries
 Cloud’s service composition model will
provide freedom to engage/disengage
functions as needed
32
 Dynamic processes for billing and allocation
of resources will be required to not be an
impediment in achieving value
 Processes will need to be made simpler
and faster
IBM Institute for Business Value
© 2014 IBM Corporation
Cloud computing will enforce significant changes in organization
design and governance within organizations
ORGANIZATION & GOVERNANCE
IMPACT
IMPLICATIONS
 Major shift in how the new environment is
managed and operated will have significant
impact on the optimum organizational
structure required in the future
 Organizations will become more flexible,
managing a fluid set of internal / external
resources and service providers
 Organizations and functions will no longer be
constrained by the physical location of data
centers, hosting providers and hardware
platforms
 As products and services become more
‘composable’, Governance across the
ecosystem will become critical
 Governance will be more centrally defined
with decentralized execution
 Cloud service selection will follow the
overall enterprise cloud governance
standards
 Strong risk management systems will
become critical to manage increasing risks
arising out of broader cloud deployment
 Current organization will need to evolve
• Organization Design, roles and
responsibilities
• Management systems
33
IBM Institute for Business Value
© 2014 IBM Corporation
Organizations need to overhaul performance management
approach to optimize and enhance value from cloud
PERFORMANCE METRICS
IMPACT
IMPLICATIONS

A dynamic financial model that measures
consumption will be required


Allows transporters to move management of
performance metrics off-premise
Performance management strategy will
introduce new levels of complexity in
management reporting

Service level performance will be built into
third party and service management
contracts for all vendors delivering the
cloud based service so retailers can focus
on core strategies

Dynamic metrics tied back to SLAs will be
critical for measuring success for cloud
based services

34
New metrics will be required that measure:

Service availability

Service quality

Responsiveness
IBM Institute for Business Value
© 2014 IBM Corporation
Cloud computing will drive rapid changes in skills and capabilities
within the enterprise workforce
SKILLS & CAPABILITIES
IMPACT
IMPLICATIONS

Customer and service orientation skills will
be even more critical within transporters
 Deeper data analytics and customer insight
capabilities will be the norm

Vendor management, contracting and
relationship management skills will be critical
to manage all of the vendors and alliances
 Training of staff on new skills will be
required related to new and innovative
services

IT will need to be trained in virtualization and
network side technologies to manage the
“cloud pipe”
 Existing IT and other functional staff will
likely need to be retrained or redeployed
 Legal / operational support skills will be key
to manage partnership agreements
 Skills will shift to managing vendor
contracts and relationships of many
vendors
35
IBM Institute for Business Value
© 2014 IBM Corporation
Business leaders need to accelerate adoption of emerging
technologies and technical trends to optimize benefits from cloud
TECHNOLOGY
IMPACT
IMPLICATIONS
 The technology function will be leaner with a
more strategic focus rather than operational
 IT Strategy, Architecture and IT Plans to be
reviewed and updated to reflect changes in
business strategy and cloud-enabled
operations
 Cloud’s big impact on technology will be to
move on-premise technology deployment to
cloud
 As more services migrate to cloud, Service
Management, IT Vendor management and IT
Quality management will become key
differentiators
 IT teams need to be retrained and
redeployed
 Budget for the maintenance of legacy
systems may reside, so they need to be
budgeted and worked into the overall costs
 An IT services catalog needs to be dynamic
globally and be applicable for each market
 A DevOps approach needs to be
implemented to get the cloud service
delivered faster to achieve value
36
IBM Institute for Business Value
© 2014 IBM Corporation
Organizations will have to reassess location strategies to ensure
optimized and compliant adoption of cloud
ASSETS & LOCATIONS
IMPACT
IMPLICATIONS
 Migration to the cloud will require
decommissioning and consolidation of
technology assets
 Decommissioned technology assets will
impact book value and the existing
operating budget
 Decommissioned assets and locations will be
a factor in the future state financial model
 One-time financial write-offs will need to be
factored into the overall business case
 Removal of physical / technology assets will
reduce the quantity of needed remote offices
and data centers
 Excess data centers and remote locations
will have to be repurposed or sold / leased
to recoup cost
 Role of branches will need to be redefined
and enhanced to provide a much better
customer experience
37
IBM Institute for Business Value
© 2014 IBM Corporation
Cloud will lead organizations to rethink and rebuild organization
culture to harness enhanced value
CULTURE
IMPACT
 The shift to a cloud-based environment will
also require changes in long-held
organizational beliefs and cultural norms
 Transportation companies will need to be
service-orientated, with a shift in mindset
toward valuing the customer experience
above all else
 Open and collaborative reporting and
management across organizational functions
and units will facilitate faster customer
response
38
IMPLICATIONS
 Need to address perceived loss of control /
potential resistance by existing IT and other
functions whose processes will move to
cloud
 Need to educate employees on this shift:
 How will our culture change, and why?
 What is the risk if we do not make this
change? What would be the
consequences of continuing as is?
 Requires reinforcement of expected
behaviors through formal and informal
mechanisms and interventions
 Requires changes in
• Leadership Behaviors
• People practices
 Need to have regular communications on
changes
IBM Institute for Business Value
© 2014 IBM Corporation
Shanghai Airport Authority coordinates actions between parties to
gain predictive insights that improve facility-wide operations
Cloud-enabled Business Collaboration
CHALLENGE
To decrease flight delays, maximize efficiency
throughout one of its airports and improve the
passenger experience from curb to gate, this
airport authority needed greater visibility into the
airport’s interconnected operations, including
flights, crews and other moving parts.
SOLUTION
Using a cloud-enabled business intelligence
solution, the SAA provides insight into everything
from airplane taxi times to the number of people
waiting on the concourse. Airport personnel now
have the information they need to identify problems
and address them proactively, adjusting ground
crew schedules to optimize airplane turnaround
time, increasing staff at busy security checkpoints
or even opening extra transit lounges to ease
crowding.
39
Source: IBM T&T – Cloud Reference Case Studies
Efficiency – the time required to generate and
distribute flight update records fell from several
hours to just a few minutes.
Transformation – the problem-resolution model for
the facility was changed from reactive to proactive.
Collaboration – today, the airport, air traffic
controllers, and carriers are on the same page.
IBM Institute for Business Value
© 2014 IBM Corporation
Data-driven global logistic company uses cloud delivered business
intelligence to quickly develop higher margin logistics solutions
Cloud-enabled Business Analytics
BACKGROUND
Global logistics' innovative logistics services focus
on warehousing, procurement, distribution and
information-driven process improvement
CHALLENGE
the company needed to improve its ability to solve
complex analytics issues for its clients. It needed a
better way to analyze transport and warehouse
logistics because manual methods that used vast
amounts of data led to slow delivery for clients.
SOLUTION
Using a cloud-based infrastructure as a Service
(IaaS) platform, global logistics implemented
Cognos Business Intelligence software to conduct
logistics analysis, enabling it to determine the most
efficient transportation routes between warehouses
and customer sites.
Customer Value – sharpened its ability to answer
complex analytics questions while improving the
value of the services it delivers
Responsive – quicker decision making help
reduce costs and optimize customer supply chains
Efficient – consolidation has resulted in 15%
reductions in both time and operating costs
Source: http://w3-01.ibm.com/sales/ssi/cgi-bin/ssialias?appname=crmd&subtype=na&infotype=cr&htmlfid=0CRDD-9H39XT
40
IBM Institute for Business Value
© 2014 IBM Corporation
Transportation solutions provider uses cloud to drive innovation,
reduce costs and improve security
Cloud-enabled Business Innovation
Maintaining safety on the roads for both trucks and
other vehicles is a top priority for law enforcement
agencies. To comply with safety measures,
truckers must regularly stop at roadside inspection
stations which are set up to identify unsafe vehicles
With 4.5 million trucks required to report to weigh
stations in North America and only 13,000
inspectors, Drivewyze believed there had to be a
better way for law enforcement to reduce needless
inspections on safe trucks and focus on the unsafe
ones
Drivewyze piloted a hands-free application called
Drivewyze PreClear, which offers a safe and
secure way for truckers to request and receive
bypass clearance at both permanent weigh stations
and mobile inspection sites
Drivewyze decided to build the Drivewyze PreClear
service based on IBM SmartCloud® Enterprise+,
which provides a fully managed and productionready cloud infrastructure
IBM’s cloud offered a secure environment along
with high availability, back up, recovery and
monitoring features, which are critical components
to the Drivewyze service
Source: http://www.ibm.com/midmarket/us/en/att/pdf/Feat_1_DriveWyze.pdf?ca=fv1310&me=feature1&re=usartpdf
41
IBM Institute for Business Value
© 2014 IBM Corporation
Multi-modal port operator develops cloud-based ecosystem to
benefit the entire port community
Cloud-enabled Ecosystem Development
Port operators are at the center of a great deal of
transportation related activity, but historically,
mostly as a result of the time and administrative
hassle they would add to the process of delivering
goods, many have been viewed less as a service
than as a necessary evil
Despite their host of laborious processes, ports
perform a host of valuable functions, including:
 Facilitation of customs clearance
 Coordination of arrival, departure, unloading, and
loading
 Scheduling and use of specialty equipment used
for loading and unloading
The transport industry desperately needed a way to
provide these services in a more efficient and
customer-focused manner
42
Recognizing the frustration of Port operators and
their many diverse users, IBM developed the IBM
Port Community System (PCS)
The PCS was developed in conjunction with the
Saudi Arabian Port Authority to give shippers,
agents, port owners, and customers a way to share
transactions details in a private-cloud
The PCS was developed on behalf of its users,
who will, in time, own and operate the solution
IBM Institute for Business Value
© 2014 IBM Corporation
1
Cloud will
transform the
transportation
industry
2
Traditional
transportation
operating models
will evolve
3
IBM can help
43
IBM Institute for Business Value
© 2014 IBM Corporation
IBM is best positioned to serve the cloud computing needs for
transportation providers
Strategize how to use
cloud to drive savings
and revenue growth
44
Build and run your
private or hybrid cloud
Utilize cloud services
delivered from IBM Cloud
Cloud Strategy
and Design
Expert
Integrated
Systems
Business Process
as a Service
Cloud
Implementation
Cloud Platform
Technologies
Software
as a Service
Cloud Migration
Services
Cloud
Infrastructure
Technologies
Platform
as a Service
Cloud Security
Services
Hybrid Cloud
Technologies
Infrastructure
as a Service
IBM Institute for Business Value
© 2014 IBM Corporation
IBM is helping our clients achieve compelling business outcomes,
no matter where the entry point is
BUSINESS PROCESS
SOFTWARE
PLATFORM
INFRASTRUCTURE
as a Service
as a Service
as a Service
as a Service
Automating Business
Innovation
Marketplace of High Value
Consumable Business
Applications
Rapid App Development
through Composable and
Integrated Platform built using
open standards
Enterprise Class, Optimized
Infrastructure built using
open standards
45
Business Process:
Marketing
Mobile
Compute
Recruiting
Commerce
Security
Networking
Accounting
Supply Chain
Big Data & Analytics
Storage
Procurement
Talent Management
Development & DevOps
Payment Processing
Analytics
Integration
Help Desk
Collaboration
Integration/ API Mgmt.
IT Management
Traditional Workloads
IBM Institute for Business Value
© 2014 IBM Corporation
IBM Cloud marketplace provides easy access to our as-a-service
portfolio – and is organized by key cloud buyer roles
IBM CLOUD MARKETPLACE
Your gateway to cloud innovation
Explore hundreds of IBM and Business Partner services from across the cloud spectrum.
Sign up to offer your cloud services in the marketplace today.
Enterprise-grade business
apps to accelerate innovation
(SaaS)
Powerful services and APIs
via an integrated cloud
platform (PaaS)
Self-service IT
infrastructure configurable
to your needs (IaaS)
Biz
Dev
Ops

Over 200 IBM and Third-Party Software
and Services

Leverage world-class IBM partner ecosystem

Curated solution pages with IBM expertise

Easy access to build, consume, deploy and
purchase services
ibm.com/cloud/marketplace
46
IBM Institute for Business Value
© 2014 IBM Corporation
IBM can support you locally and globally …
IBM REGIONAL CONTACTS
[FACE
PIC]
IBM GLOBAL CONTACTS
Mark Bedeman – Europe Cloud Leader
[email protected]
+34-93 866 3786
Aamer Rana – MEA Cloud Leader
[email protected]
+971-50-650-3162
Jeff Moyer – Americas Cloud Leader
[email protected]
+941-809-9283
47
[FACE
PIC]
Raimon Christiani – IBM Global
Industry Lead, Travel & Transportation
Industry
[email protected]
+41-79-571-08-84
[FACE
PIC]
Steve Peterson – Global T&T Lead,
IBM Institute for Business Value
[email protected]
+720-939-7919
[FACE
PIC]
Anthony Marshal – Strategy & Analytics
Lead, IBM Institute for Business Value
[email protected]
+720-395-0506
IBM Institute for Business Value
© 2014 IBM Corporation
IBM can support you locally and globally …
IBM CLOUD CoC ADVISORY LEADERS
IBM CLOUD CoC ADVISORY LEADERS
Cindy Warner – Managing Partner
Global Cloud Advisory
[email protected]
313.903.8787
Nathan Herber – Associate Partner
Cloud Advisory
[email protected]
916.616.5350
IBM CLOUD CATEGORY LEADERS
Mike Owens – Associate Partner Cloud
Advisory
[email protected]
951.375.9588
Nancy Agosta – Cloud Industry Leader
Cloud Category
[email protected]
919.481.3233
Becky Carroll – Associate Partner
Cloud Advisory
[email protected]
858.204.6723
48
IBM Institute for Business Value
© 2014 IBM Corporation
49
IBM Institute for Business Value
© 2014 IBM Corporation
IBM Institute For Business Value Transportation Industry Cloud Point of View
Thank You
© 2014 IBM Corporation

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