IBM had to “turn itself upside down,” to meet the challenges of the digital age,” said Kevin Eagan, IBM’s chief digital experience officer and general manager of digital platforms, in the opening keynote address at NCTA’s State of Technology 2017 event in Durham on Friday.
Eagan, who was with Microsoft for 20 years, joined IBM to help “transform a 104-year-old company” by building a new playbook. Digital disruption threatens every company and in five years, half of today’s Fortune 500 companies will no longer be relevant unless they too transform, Eagan said.
The exec made the remarks not far from IBM’s huge campus – one of its largest – in RTP where work on several emerging Big Blue initiatives such as Bluemix and cloud data is taking place.
[Note: For recent reports about continuing changes at IBM, see stories linked to this post.]
For IBM, that meant changing corporate culture so that decisions no longer come only from the C-suite. Instead, it is empowering people “on the frontlines” by providing decision making data and analytics to them so they can make decisions without getting approval from top management.
“Information can’t be locked up in the C-suite,” he said. He admitted adjusting IBM’s traditional top down decision making process is sometimes a struggle.
Redefining the customer
Also, Eagan said, “IBM changed who it defined as its customers. Buyers are no longer just CIOs and buyer behaviors have fundamentally changed. Buyer behavior is defined by people with digital devices, who expect things such as nearly immediate delivery of a software product.
Citing research from a variety of sources, he posted a slide noting that:
- 70 percent of a buyers journey today is done before any face-to-face encounter.
- 71 percent of leads are from a digital sources.
- 92 percent of buying decisions are influenced by digital engagement.
- 46 percent of B2B buyers are digitally connected millennials.
- 80 percent of marketers expect digital to be their primary differentiator in 2017.
- 50 percent of developers will embed cognitive capabilities in their apps.
IBM (NYSE: IBM) developed a method it calls “North Star” to alter itself and meet these challenges. It built a “vision of the future,” establishing a digital management system, culture of experimentation, and focus on the total customer experience.
Watson was underused
“Build and adapt your own version of this,” Eagan said. He pointed out that companies can use many of IBM’s high powered advanced tools, available for free trials, to assist their own transformations. “We use Watson to get 100 data points of customer feedback to decide if someone would recommend an IBM product to others,” he said.
“Watson itself was underused because its marketing tools were too complex and daunting. We misunderstood the customer experience,” Eagan said. Once the company cleaned up the Watson marketing tools, slashing jargon and making it easier to use, sales doubled and it had a 500 percent increase in usage.
“A bold, tightly integrated digital strategy is what will differentiate companies that win and the biggest payouts will go to companies that initiate digital disruption,” Eagan said, quoting Gartner research.