Designs on Your Business: IBM’s Deals Start to Ad Up

As we observed last year, Design Thinking is emerging as a popular methodology in the As-a-Service Economy, as ambitious service providers seek to evolve their services from operational efficiency toward business outcome-oriented value for clients. It is also becoming a vital component in the application of technology to empower transformative digital business models.

HfS predicted that 2015 would be the year in which Design Thinking would come to the fore and we have seen a number of service providers embracing it, rolling out products and services that embrace this model (see the new HfS Blueprint Report: Design Thinking for the As-a-Service Economy). This trend has not abated and we are starting to see the level of investment increase significantly right across the services universe.

To this end, IBM, one of the market leaders in the new Blueprint Report, has announced the purchase of German digital ad agency Aperto, with the deal is expected to close by the end of the first quarter of 2016. Aperto will be the latest addition to the IBM Interactive Experience (IBM iX) team. Aperto’s 300 employees serve a number of high profile clients, including The Airbus Group, Volkswagen and Siemens. 

This deal comes on the back of its recent acquisition of US-based agency Resource/Ammirati, announced last week. With its 300 employees based in the US from offices in Columbus, Chicago and New York, it serves clients such as Birchbox, DSW, Nationwide, Nestlé, Newell Rubbermaid, North American Breweries, Shaw Industries, Sherwin Williams, Toys “R”Us and White Castle.

The IBM iX team now comprises about 10,000 employees and 1,000 designers, focusing on implementing projects combining design and technology to create better customer experiences. The team has access to IBM’s core technology capabilities and is looking to explore the benefits of the cognitive engine Watson. IBM’s own clients in this space include Air Canada, Boston Children’s Hospital, Citi, Staples, Nationwide, Jaguar’s Land Rover, and Wimbledon.

Our research at HfS shows that design and automation are the two biggest forces being brought to bear on the current business agenda. In some ways, the connection between them is not clear. Design is labor intensive by its nature and automation is about removing labor. However, the true power of automation is its use to free up more time for individuals to enable them design and create. Moreover, there is an intrinsic link between automation and data quality—it is challenging for firms to analyze quality data for business improvement when it is poorly automated and beset by inefficient manual interventions. The true power of design and Design Thinking only comes alive, when it is part of a systematic approach to customer feedback and uses data from customers and prospects to help guide the design process.

So more Design Thinking can leverage the efficiencies driven by automation.

The most important part of these announcements, for IBM, is that it lends them more distinctiveness as a leader in solution design. Developing IT solutions for clients has been devoid of genuine differentiation for some time, given that services tend to focus on the technical aspects of development and implementation, which are ultimately pretty uniform, when delivered at any scale. The design skills, coupled with Design Thinking will restore that layer of distinctiveness a service provider like IBM needs to remain relevant.