|Topic:||The business of innovation: driving a new era of transformation and growth|
|Organisation:||IBM UK and Ireland|
David Stokes is the Chief Executive for IBM in the UK and Ireland (UKI) where he is leading the charge in helping organisations across all industries leverage digital technology to transform; both by streamlining their business operations and by creating engaging front office systems.
David is responsible for all IBM’s operations in the UK and Ireland. This includes all of IBM’s lines of business (services, software, hardware and global financing), client and partner relationships and support functions. The UK and Ireland is one of IBM’s largest international operations and includes a number of international client delivery, development and support functions.
David has had an extensive international career holding various senior technology and business leadership roles in IBM. His roles include the launch and expansion of IBM’s Websphere (e-business middleware) business in the UK and then into Europe, Middle East and Africa, the development of IBM’s commercial business operations in the UK and a number of leadership roles across the emerging markets.
David is passionate about the role technology can play in transforming business and society and is a champion of the importance of developing Science, Technology, Engineering and Maths (STEM) skills to help solve the UK skills shortage and drive growth in the UK economy. In support of this and other important business and societal issues, he is a member of the e-Skills UK IT and Telecoms Board, the Information Economy Council and the CBI Presidents Committee.
David plays a key role in championing diversity across the business by chairing the IBM UKI Diversity Council as well as being an active advocate of the importance of gender diversity. He is also a keen sponsor of the IBM graduate, student and apprenticeship programmes.
In additional to his responsibilities leading the UK and Ireland workforce, David is a member of the global IBM Strategy team which is responsible for shaping and developing IBM’s corporate strategy.
This convergence of technological advances is creating many opportunities to exploit innovation for business value. The phenomenon of ‘social’ is a prime example – it touches every business, whether they like it or not. Customers rave and rant about their service experiences; workers may talk about their employers’ policies; the public’s response to a new ad campaign may be immediately gauged. It’s easy to dismiss the medium as trivial, but it’s not, especially if companies make the effort to use it to their advantage.
Over the last five years, businesses have been navigating the most challenging of economic conditions. While the IMF has recently increased its growth forecast — indicating that the UK is rebounding back from this unprecedented era of slow growth — business leaders are faced with a fiercely competitive market combined with the rapid emergence of a game-changing digital era.
This complex scenario is highlighted by a recent IBM survey of 4,000 C-level executives, which found that business leaders currently consider technology as the single most important external force shaping their organisations. This statistic is driven by an extraordinary phenomenon – the convergence of four disruptive technologies – social, mobile, cloud and analytics – all characterised by the explosion of data which is fuelling the next era of innovation.
In the same way that steam, oil, and electricity revolutionised the industrial age, data is a vast new natural resource that, once refined by analytics technology, can transform both industries and societies. It is this data, not old fashioned gut-instinct, which has the power to create winners and drive successful innovation because ultimately, all successful companies are in the same business – the business of innovation.
It is a common misconception that digital innovation is the purely the territory of new start-ups. The ultimate goal of any commercial business is to create value for its customers, shareholders and employees. The businesses that succeed are those that know how to leverage technological change to continuously transform and fulfill unmet customer needs in a fast moving marketplace – no matter what product or service they are offering, whether they are the smallest of start-ups or the world’s biggest multinational.
Take a look at these examples –
One regional police force has reduced crime rates to their lowest levels in a decade by leveraging advanced analytics technology to mine, share and extract intelligence from critical police data. This enables them to identify incident patterns, forecast crime ‘hot spots’ and allocate resource accordingly to reduce crime rates.
A nationwide car insurer is re-imagining its entire industry by offering personalised premiums based on individual driving behaviours. Using an on-board telematics device which captures data on driving habits, it analyses this data and set premiums based on how safely each customer drives.
Both represent innovative solutions which leverage technology and data to fulfill the needs of the customer, or in the case of the police force, the citizen.
This convergence of technological advances is creating many opportunities to exploit innovation for business value. The phenomenon of ‘social’ is a prime example – it touches every business, whether they like it or not. Customers rave and rant about their service experiences; workers may talk about their employers’ policies; the public’s response to a new ad campaign may be immediately gauged. It’s easy to dismiss the medium as trivial, but it’s not, especially if companies make the effort to use it to their advantage. Social media provides massive amounts of nearly real-time data that can be used to gain detailed insights into everything from sales strategies to pricing structures. It’s the ultimate market research panel: departments of transportation can use social media to uncover traffic trends; film studios can use it to project box office takings and retailers can use it to identify merchandising trends.
But in order to derive real value from these networks, businesses need to leverage technology that is capable of sifting through terabytes of data. Every day several hundred million tweets are posted on Twitter; more than 50 million status updates are published on Facebook; and roughly 40 million photos are posted on Instagram. Clearly, participation on social networks is not lacking. In fact, there is often too much information.
Analytics tools are key to netting down this information and extracting value as one online fashion retailer has recently discovered. This enterprise has increased revenue by almost 150% in less than a year by using analytics to understand how promotions, products and brands were perceived by its customer base. By analysing tweets and Facebook comments to gauge responses to each sale, it used the data to determine which brands to stock, which sales channels to use, and how to increase sales from existing customers.
Again, we see technology play a central role in deriving value for both the customer and the enterprise.
But technology is only part of the story. The ability of UK enterprises to succeed in the digital era depends on the right economic environment which allows data to be exploited for business and societal value. Given that innovation is vital to our national competitiveness, government policy and regulation should support new ventures as well as help to grow existing business models. Overly restrictive legislation could easily discourage the innovation needed for the UK to succeed in the digital economy.
The UK in particular, also needs the right focus on skills which enable technology-based innovation. Reports indicate that the UK is lagging behind its foreign counterparts in building core skills and estimates predict an annual shortfall of 40,000 science, technology, engineering and mathematics graduates. This will cause significant problems for the UK if not addressed. Investment in initiatives, such as apprentice schemes which help young people to build the skills and expertise which enable the digital world, will help business safeguard their own future as well as the future of the UK economy.
At IBM we believe that, with the right regulatory framework and skills, we can establish a ‘Smarter Enterprise’ approach to generate value and bring innovative ideas to market. The Smarter Enterprise recognises that adapting to and capitalising on the digital era will be vital to success. Whether it’s delivering better customer engagement or using insight-driven decision making to optimise operations and investments, data will be the new basis of competitive advantage for the Smarter Enterprise. It will drive a new era of innovation and transformation for enterprises – of all sizes – as they compete for business in the global digital economy.