Extending the electronics experience through services. Executive summary of IBM report. Download on http://public.dhe.ibm.com/common/ssi/ecm/en/gbe03410usen/GBE03410USEN.PDF

1. IBM GLoBaL BusIness servIces Electronics
Executive Summary
IBM Institute for Business Value
The connected
consumer challenge
Extending the electronics experience through services
Mandate for change
Both consumer demand and expanding network technology have
Overview
contributed to the rapid and continued growth of connected devices.
Today’s electronics consumers expect These connected devices allow consumers to do more things faster and
much more than quality devices – they
more easily, extending the value of their physical products. With the
demand a quality experience. Their
interest has shifted from the device itself focus shifting to consumer experiences, electronics companies need to
to what they can do with the device. expand their expertise to include services associated with products that
Electronics companies need to capitalize further enhance the consumer’s experience.
on this trend by offering not only
advanced technology via products, but
also services designed to enhance the The age of experience
consumer experience. To successfully As part of this study, we conducted a global electronics consumer
expand their focus, device manufacturers survey, as well as electronics executive interviews:
will need to build capabilities that foster
collaboration, glean customer insight,
The changing expectations of connected consumers
enhance service operations, and upgrade
their software development capabilities Purchasing: Consumers indicated they will place more importance on all
and IT infrastructure. purchasing criteria in the future. In particular, the importance of
Internet connectivity rises, surpassing both brand and design (see
Figure 1). When making future purchasing decisions, consumers will
place a much greater emphasis on what they can do with a device.
Service quality: When asked to rate satisfaction with aspects of services
they are currently using, consumers rated most at roughly 50 percent.
Obviously, there is great opportunity for progress in all aspects of
service, in particular those relating to how service providers and device
manufacturers interact with consumers.

2. IBM GLobal business services Electronics
Executive Summary
Importance of purchasing criteria
Future purchases
85% Price 3%
82% Product specification 3%
Past purchases
71% Internet connectivity 8% New focus areas
Price 82% for manufacturers
69% Brand 3%
Product specification 79%
69% Device interoperability 9%
Brand 66%
69% Design 6%
Design 63%
68% Content/service availability 9%
Internet connectivity 63%
65% Customer service 6%
Device interoperability 60%
Content/service availability 59%
Customer service 59%
Source: IBM Institute for Business Value Connected Devices Consumer Survey. N=988.
Figure 1: Consumers have a growing interest in what they can do with their devices.
Collaboration: Although only 17 percent of consumers have collaborated
with device manufacturers in the past, 73 percent are interested in
future collaboration. While the most common motivation for past
collaboration was the desire to share ideas and experiences, consumers
now are more enticed by incentives such as first use of products and
financial benefits.
Industry challenges
Eighty-eight percent of electronics executives view services as a way to
become more competitive by differentiating their offerings. The
majority believe that customer-facing functions will feel the most
effects from a move to services. Executives also expressed concern with
the challenges associated with cultural and organizational change,
perhaps recognizing the company-wide shift in mindset expansion into
services requires.
New capabilities for the age of experience
To deliver a superior consumer experience through services, electronics
companies need to focus on five key capabilities:
Open collaboration
To facilitate consumer collaboration, companies should offer incentives,
provide the right communication forums and establish collaboration
guidelines. Employee collaboration should be woven into business
processes via collaboration and social networking technologies to create
a forum where ideas can be shared and refined. Finally, to provide the
ultimate consumer experience, electronics companies need to work
more tightly with organizations within their industry, as well as players
outside their industry.

3. IBM GLobal business services Electronics
Executive Summary
Customer insight
Key Contacts Electronics manufacturers that offer services have the opportunity to
interact directly with end users and, as a result, gain more visibility into
Global
their experiences. Companies can use analytics to turn customer data
Paul Brody
into valuable insights and integrate these insights into their strategies
pbrody@us.ibm.com
and business processes.
North America Service operation
Kenneth Englund
For manufacturing-oriented companies, creating and delivering service
kenneth.englund@us.ibm.com
could be an entirely new operation. They need to establish a service
Europe organization and create effective service operations that are embedded
in daily business processes, particularly those associated with service
Samuel Auvray
design, sourcing and managing partners, and service performance
samuel.auvray@se.ibm.com
management.
Rob De Wit
Software development
rob_de_wit@nl.ibm.com
Device manufacturers need to beef up their software capabilities and
Lothar Ritter address issues such as a limited understanding of software among many
lothar.ritter@de.ibm.com industry leaders and scarce software resources within the industry. In
addition to seeking talent, companies should focus on how they can
John Kitchingman build software-related knowledge and assets.
John_Kitchingman@uk.ibm.com
Flexible infrastructure
Asia Pacific To effectively provide services, electronics companies need a flexible
Jerry WT Hsu infrastructure that allows them to create and provide the services as
wthsu@cn.ibm.com well as manage the devices. We suggest they explore ways to both
reduce the cost burden and overcome IT complexity, such as outsourc-
Alex Yangwoo Lee ing to a third party or employing a service delivery platform (SDP) in
leealex@kr.ibm.com the cloud environment.
Japan
Mikio Takashima
MIKIOT@jp.ibm.com How can IBM help?
Author • Perform strategic analysis to identify target markets and develop
collaboration strategies and methods
YangJin Kwon
• Create customer data management and analytics solutions
yangjin.kwon@kr.ibm.com
• Manage and outsource the design, development and implementa-
tion of embedded software and systems
• Develop processes and technology for service delivery platforms
and cloud infrastructures.
To learn more, download the full IBM Institute for Business Value
executive report at www.ibm.com/gbs/digitaltransformation.

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