Catch Duncan Hewett, VP – Software, IBM Asia Pacific in a conversation with Sanchit Vir Gogia, Chief Analyst & Group CEO, Greyhound Research on Greyhound Research’s knowledge sharing series ONTrigger.
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Sanchit Vir Gogia: Today we have the good fortune of having Mr Duncan Hewett who is the Vice President, Software for IBM Asia Pacific. Duncan, thank you for taking the time out.
Duncan Hewett: Thank you
SVG: Today has been a very exciting day. We are here at the analyst day in Bangalore and I’ve learnt so much about the IBM strategy for Asia Pacific and India and how these folks are changing, given the change in the entire landscape. So how is the day been for you really?
DH: Actually we had two days and it’s actually been incredibly informative on both sides. It’s actually been a learning experience. We see clients going through major transformations both around digital, around leveraging information, how to manage in a hybrid cloud environment and with that they are looking for advice, they are looking for what should I be doing, what should I be considering, who is successful, who has had challenges and then looking for that advice. Part of the objective of these two days is a learning experience on both sides.
SVG: Excellent. So let’s break this down. Everyone is talking about the change in the client side and it’s become this 30,000 feet vision for everybody and with an objective to be solved.
When you say client is going through a change, what is going through a change, because the way we look at it as an analyst company is that the role of the CIO is changing? It’s no more about buying a hardware or software separately, it’s all about service level standards, and it’s all about quality of service. Would you agree with that?
DH: I will probably take it a little further. The challenge now for the CIO is not only he has to run his existing operations efficiently but he actually has to take on all the additional requirements and projects and so there is a trade-off. You have the CFO pressing. How do you chose the right projects and deliver the best outcome. The people who are using technology have expanded across all our clients. The number of projects, particularly for software India clients, has dramatically expanded and so the CIO’s are now trying to service those requirements across lots of different line of business pies. It’s no longer just the CMO or no longer retail banking. It’s not just a big project. We have got small projects and they want to be involved. It’s more than just throw it over the fence to the CIO. CIO now has to actually engage them because part of our biggest challenge is what’s the scope? Getting clarity around what’s the problem, how we are going to solve it, what’s the right technology actually is harder than ever.
SVG: It’s not about technology as a problem. The bigger problem is making the business case right.
DH: Actually come back a little bit further. It is even before the business cases, what is the problem? What problem we are going to solve? What problem will make a difference in their business? Now, what’s the business case and therefore, is this the right investment versus something else? What we see is much more conscious around how we are going to get to that outcome? How is it going to make a difference?
SVG: Are there different flavours? I assume that large enterprises will probably be a little more sorted out with this problem compared to their midmarket counter parts in Asia.
DH: Actually this is probably the biggest challenge across Asia Pacific which is different here then we would see in the US.
SVG: Give me some more understanding about this.
DH: That is partly around the skills, both; in the line of business and in IT to define a problem.
SVG: It’s a problem with lot of organizations. At IBM, how are you really solving this problem for the customer?
DH: Part of what we bring to the table is an industry expertise that we built up overtime. We also have a long history with clients. That history means we do have an understanding of where I come from and now where I am trying to go and there are always limitations.
There is no sought of brand new environment, you can’t just throw everything out. You actually understand what’s there today but what that does mean is if you understand there is limitation, you can understand the problem. You bring in the business in its part of defining the problem. Than you bring them in the journey is why you start seeing moves to edge of development because you start seeing clients understanding not just in IT but actually the importance of look take a step and deliver this and from that we build on that and take the next step.
SVG: ok. Interesting. So let’s talk about the fact that look last twelve quarters have been hard for IBM and this is sought of public news. Right? The numbers have been going down. Give me a sense of what’s the performance been for the last few quarters in Asia Pacific. No numbers but a sense of how you are performing?
DH: Asia Pacific like the rest of IBM is going through a transformation. So if you sort of step back, IBM has chosen to walk out of some businesses which are not profitable. Our top line numbers like out of a 100 million we have moved out of 7 billion businesses- Hardware services, micro electronics. So we have actually sold of those businesses. In Asia Pacific, you have than got clients that actually in some ways had simple requirements so they are buying servers and PCs. Our challenge is to help those clients who are now looking at the next level of complexities. How can you help me on my marketing, how can you help me engage with my clients differently and you can only go as fast as clients have the ability to consume.
SVG: Fair enough. So you are like the father of a large family, you are the vice president of the software group and software is a rather large component of IBM’s business. There are lots of brands. Again, I am sure there is a worldwide performance in terms of what segments and software are doing well but if you were to contextualize to Asia, what pillars of software are most closely solving customer needs and what are those pillars which are probably work in progress which you think for next few quarters that are going to be in demand?
DH: (Laughs) It’s actually interesting. So we have gone from a software business that had series of brands -WebSphere and Tivoli and we have moved to a series of businesses units that have analytics, security, commerce and cloud, what we found in Asia Pacific is actually clients have found it easier to relate to. Some clients have asked us so where did Websphere go?
SVG: Because you need to read the news… (laughs)
DH: There have been clients which have come on this journey with us and they have actually got used to our brands and actually what we found for us in Asia Pacific. It’s actually simplified the client engagement both for the clients to know who to ask but also for our people around having point of view and clarity around what I can do to help and it’s a journey. So you look at what we are doing with analytics and clients are looking to use that in all sorts of different ways. The maturity level is very different across because you end up with people like DBS bank who are looking to enable financial planner and just in a simple form. How do I take my best financial planner who provides the best customer support and then replicate it. So I basically leverage that skill across every client. One of our challenges across Asia Pacific is that skill difference between people who are really good at something and the whole population is a big gap.
SVG: How you are solving that gap?
DH: Interestingly for us, Watson has grown quicker here than other parts of the world and part of it is exactly this issue. You are at a tax office. How do I take my best tax agent and replicate that skill from a social security. How do I respond to my clients in a consistent manner, financial planning, how do I respond in a consistent manner. We completed one with Woodside around how do we get health and safety skills over the last 30 years all over the world and how do you help the project manager know where the issues are, how to learn from someone else. So interestingly, I am watching the investment in had I got access to the best skills and replicate it. That is a common issue across all our countries.