>>From around the globe. It's the queue with digital coverage of IBM. Think 20, 21 brought to you by IBM, welcome back to IBM. Think 2021. And we're going to dig into the intersection of finance and business strategy. My name is Dave Vellante and you're watching the cubes continuous coverage of IBM. Thinking with me is Brian Hoffman is the chief operating officer of IBM global financing. Brian, thanks for coming to the cube today. Good morning. Great to be here. Hey, good morning. So I think we've heard a lot about the impact of hybrid cloud AI, digital transformation, and I wonder as a finance person and a former CFO, what do you see and how do you think about some of the key considerations in financials and strategies that are supporting these major projects? Right. We've got to come to the CFO and say, Hey, we want to spend some money and here's the benefit. Here's the cost? How can CEOs and their teams work with CFOs to try to really accelerate that digital transformation? >>Right, right. Great question. And actually that question, I think I might've answered it a little bit differently. Like two years ago, a year ago before the pandemic, I think it's actually changed a little bit with the pandemic. Um, in, in my experience as a CFO, people would come into me for projects and there was three ways that you could justify it, right? You can justify short-term immediate quick payback kind of hitters. You can justify it with, um, you know, improving our efficiency or effectiveness, um, you know, reducing costs in the long run or making the client experience better or more from a strategic point of view. Um, you know, uh, growing revenue, getting to new clients, uh, improving margins, right? And so the, the hybrid cloud transformation journey really still addresses those three things. And when we come in, a lot of people focus, like you said, on that third strategic point. >>Uh, but, but all three of those come into play. And what's really interesting now is as I'm dealing with it, I'm talking to other CFOs. Uh, the pandemic is really, if you will throw in a wrinkle in here, right? So the, the, the clients that I'm talking to the IBM clients, they have to operate their business very differently. And, and their business models, some of them are changing. Clearly their clients, their business models are changing. They're operating differently as well. Um, so, so our clients have to react to that and hybrid cloud, and that, that, that type of a, of a structure really can support that. So there's really an emphasis here now to act with much more speed on this journey to get moving on it, to get there, because you have to make these changes and doing those two things in concert really has a ton of business value. >>Yeah. I mean, the CFOs that I've talked to and the CIO is it's really kind of industry dependent, right. If you're an airlines or hospitality, it was like, yeah, we got to cut costs. A lot of organizations said, okay, we're going to support remote workers, put in VDI or deal with end point security or whatever it was, but we're actually going double down on our digital transformation. This is where we're going to lean in. There's an opportunity for us to come out stronger. How did you guys approach it in terms of your own internal digital transformation? >>Yeah, we, we, um, we were working on our digital transformation, uh, you know, a little bit before the pandemic and it kind of followed those, those three, uh, those three items when they, when they first started implementing it, they came in and said, Hey, if we can, if we can move to a cloud, uh, platform, our infrastructure savings will be pretty significant. You know, the it infrastructure savings will be 30 to 40%. So, you know, quick payback, CFO types love that. So, you know, we went forward with that. Um, but then quickly we saw the, the real benefits of moving to a, a hybrid cloud strategy. So just as an example, as we were making some of these changes, we found a workflow tool in one of our markets in Europe. That was a great tool. And, uh, if we wanted to implement that across the business, um, in the old days, you know, we're in 40 countries, we've got 2,500 employees, three lines of business. >>It would have been very complex cause our, our operating structure is, is very robust, very complex. Um, it probably would've taken us a year, two years to do that, but since we are now on a cloud platform, we got that rolled out that workflow tool rolled out across our business in months saving, you know, 20 to 30% of, of workload being much more efficient in getting to our clients and reacting quilted with them. And in fact, that tool got adopted across IBM because that cloud platform enabled that to happen. And then the great thing, which I didn't even realize at the time, but now thinking more strategically, um, our, my it resource earlier was running at about 50, 50, 50 people were working on maintenance. He kind of thinks we 50 on development as we've now transitioned to this cloud, my it resources now 70 plus percent dedicated to new development. So now we can go attack new things that really provide customer value in the pandemic. You know, the first thing you look at is can we get into more, um, you know, electronic contracts, e-signatures things that, that would provide value to customers anyway, but in the pandemic is like really, uh, a significant, uh, no differentiator for us. So, so all those things were enabled by that, that, uh, journey that we've been taking. >>I know most of the CFO, in fact, every CFO I know of a public company took advantage of, you know, cheap debt and improving their balance sheets. And, you know, liquidity is not the problem today, especially in the tech industry. Uh, and at the same time, you know, I'm interested in how companies are using financing. They don't want to necessarily build out data centers, but they do want to fund their digital transformation. So what are you seeing in terms of how your customers are using financing? You know, what's the conversation, like, what advice are you giving? >>Yeah. So, um, you know, it, it depends a little bit on the type of customer, like you said, you know, we, we deal with a lot of the biggest strongest customers in the world. And, and as, as we deal with them, financing really helps the return on their investment, right. Aligning the payments of those cash flows for when they're getting the benefits. Uh, and, and we see a real good value in improving the return on those investments and helping, you know, if it's something that's going to go to the board, that really makes a difference to them. Uh, so you know, that that's always been a value proposition. It continues to be, um, the other thing that's helped them now, like you said, is, is even in this environment, people want to accelerate this transition. Um, but it's a, it's a, it's a big time of uncertainty. >>So, you know, some of the smaller clients, some of the more, uh, um, you know, the industries that are a little more cash, constrained airlines, et cetera, you know, they're looking for the, the immediate cashflow benefits. Um, but many of the C F O is, you're saying, Hey, listen, you know, I can, I want to go as fast as I can help me put together a structure that lets me, you know, get this in place as quick as possible. Uh, but not blow my budgets, not make me take too much risk in this time of uncertainty, uh, but keeps me moving. And I think that's where financing really comes in as well. Um, and we're, we're kind of talking much more about that value proposition than just if you will, the improved ROI proposition that we've had all along. >>I want, we can talk a little bit more about IBM global financing. I mean, people may have a lot of times people misunderstand it. You know, when you look at IBM's debt, you gotta, you gotta take out the, the piece that I've hit in global financing, because that's a significant portion and that's sort of self, you know, self fulfilling. Uh, but what do people need to know about, uh, IBM global financing? >>We actually run three different businesses, uh, and we've been transforming our strategy over time. So, you know, right now with, with, uh, IBM being all in on hybrid, we are very focused on helping IBM and IBM's clients on this digital journey on IBM growing their revenue. Um, you know, we, we, in the past had been more of, if you will, the full service, it finance are doing a lot more than just IBM, but we are really focused now on, on helping IBM. So I think the best thing for, for IBM clients to know is as you're talking to IBM about the total solution, that total value prop, that IBM brings that financing, that cashflow solution should be embedded in what they're looking at and can provide a lot of value. Um, you know, the second thing I think most people know is we provide, uh, financing for IBM's channels. >>So, you know, distributors, resellers, et cetera, if you're an IBM distributor or reseller, you know, about us, because just about a hundred percent of IBM's partners use us to provide that working capital financing. Uh, you know, we ha we have state-of-the-art platforms. We're, we're, uh, we're just so integrated with them. Again, I don't have to, I don't have to be a sales pitch on that because they all know us. Um, and the third one, just because people might not realize this is we do have an, we call it an asset recovery business. Um, it's a pretty small business, you know, springing back equipment that comes off lease or that, uh, is used by IBM internally. Um, and while, you know, it's not, it's not, uh, as well known, I'm pretty proud of it because it really does help with the focus that the world that IBM has on sustainability and reuse and, um, and making sure that, that, you know, we're, we're treating the planet fairly here, so that that's a, a small but powerful piece of our business. >>Well, you're quite broader than leasing mainframes in the eighties. That's for sure. So talk a bit more about, let me give you a double click on that sort of hybrid cloud and obviously machine intelligence is a big piece of those digital transformation. So, so how specifically are you, are you helping clients really take advantage of things like hybrid cloud? >>So, yeah, so, um, what we have typically have been doing, and I can, you know, give you a couple different examples if you will, you know, for, for larger clients, what we tend to be doing is helping them, like I said, accelerate their business. So, um, you know, they're looking to modernize their applications, uh, but they still have a big infrastructure in place. And so they'll run into, uh, you know, budget constraints and, and, you know, cash is still be careful advantage. So for them, we are much more typically focused on, on, you know, if you will, project based financing that allows those cash flows, uh, to line up with the savings. Again, those are tend to be bigger projects that often go to boards that return, uh, benefit is very important, uh, a little bit different value proposition for more, uh, mid-market customers. So, you know, uh, as I was kinda just looking recently, we have a couple of different customers like form engineering, um, or, or Novi still there, there are two smaller, uh, compared to some of the other customers we use, uh, they are again, much more focused on, on how do I, how do I conserve and best use my cash immediately. >>Uh, but they want to get this, they want to get this transformation going. So, uh, you know, we provide flexible payment plans to them, so they can go at the rate and pace that they need to, they can align up those cash flows with their budgets, for their business cycles, et cetera. So again, we're, we're smaller customers where timing of the cash flow in their business cycle is very important. We provide that benefit as well. >>You know, I wonder if I could ask you, so you remember, of course, the early days of, of public cloud, one of the first tailwinds for public cloud was the pen was not the pandemic, the, uh, the, the, the, the financial crisis of 2007. And a lot of CFOs said, okay, let's shift to, uh, to an OPEX model. Uh, and now you could always provide financial solutions to customers, but it seems like today, you know, when I talk to clients, it's, it's much more integrated. It's not just the public cloud, you can do that for on premises. And again, you always could do that, but it seems like there's much more simpatico, uh, in the way in which you provide that, that, that solution. >>Yeah. Yeah, absolutely. And this might be a little too finance geeky, I don't know, but if you go back, well, if you go back to the financial crisis and all that, and at that time, um, a lot of people were looking to financing for you called it, but, you know, if a CFO is talking about off balance sheet transaction, right. Um, and, and, you know, between regulation, et cetera, et cetera, that, that balance sheet thing, first of all, are seeing through it that much more clearly. But second, you know, the, the, uh, financial disclosure say, you kind of have to show that stuff. So that, that if you will, window dressing benefit has gone away. So now, which is great for me, we really get to talk about what's the real benefit. What is the, you know, what is the real benefit of, you know, you, you want to make sure that you have known timed, uh, expenditures, you know, that if your business grows, that, that your, your expenses can grow evenly with those, with that business growth, you don't have to take big chunky things. And so, you know, uh, financing under the covers of an integrated solution, and IBM has a lot of those integrated solutions allows businesses to have that, you know, known timing, known quantities, most of the benefits that people were looking for from that op ex cloud model, um, without, you know, some of the, the, uh, the problems that you have when you try to have to go straight to a public cloud for very, you know, big sensitive businesses, confidential, confidential, uh, data, et cetera. >>Right. Thanks for that. So, okay. We're, we're basically out of time, but I wonder if you could give us the bumper sticker or key takeaways, maybe you could summarize for our audience. >>Yeah. If for those that know, uh, IBM global financing or dealing with IBM, my view would be, uh, in the past, we, might've been a little more, you know, uh, out there with our own, with our own banner, et cetera, in the future. I think that, that you should expect to see us very well integrated into anything you're doing. I think our value prop is clear and compelling and, and, and will be included in these hybrid cloud transformations to the, to the benefit of our clients. So, uh, that's, that's our objective and, and we're well on our way there, >>Great. Diane work anywhere. I'm going to go for more, more familiar, obviously. ibm.com. You've got some resources there, but there was there any.com >>There's, there's a, I think you just probably a slash financing, but yeah, there's, it's loaded with information. Yeah. >>Excellent. Brian, thanks so much for coming to the cube. Really great to have you today and appreciate the time. Yeah, my pleasure. And thank you for watching everybody. This is Dave Volante for the cube and our coverage of IBM think 20, 21, the virtual edition, right back.

>>from >>Around the globe, it's the cube with digital coverage of IBM think 2021 brought to you by IBM. >>Welcome back to IBM Think 2021 we're gonna dig into the intersection of finance and business strategy. My name is Dave Volonte and you're watching the cubes continuous coverage of IBM thinking with me is brian Hoffman is the chief operating officer of IBM Global financing, brian, thanks for coming on the cube today. >>Good morning, Great to be here. >>Hey, good morning. So I think we've heard a lot about the impact of hybrid cloud ai digital transformation and I wonder as a finance person in a former CFO, what do you see? And how do you think about some of the key considerations and financials and strategies that are supporting these major projects? Right? We got to come to the CFO and say, hey, we want to spend some money and here's the benefit, here is the cost. How can see IOS and their teams work with CFOs to try to really accelerate that digital transformation. >>Great question. And actually that question, I think I might have answered it a little bit differently, like two years ago, a year ago before the pandemic, I think it's actually changed a little bit with pandemic in my experience is the CFO people would come into me for projects and there's three ways you can justify it, but you can justify short term immediate, quick payback kind of hitters, you can justify it with, you know, improving our efficiency or effectiveness, um you know, reducing costs in the long run, making the client experience better or more from a strategic point of view, um you know, growing revenue getting to new clients, improving margins right? And so the the hybrid cloud transformation journey really still addresses those three things and when we come in, a lot of people focus like I said, on that third strategic point, but but all three of those come into play, and what's really interesting now is is as I'm dealing with it, I'm talking to other Cfos. The pandemic is really, if you will throw in a wrinkle in here, right? So the clients that I'm talking to, the IBM clients, they have to operate their business very differently and and their business models, some of them are changing clearly. Their clients, their business models are changing their operating differently as well. Um So, so our clients have to react to that and Hybrid Cloud and that that that type of of a structure really can support that. So there's really an emphasis here now to act with much more speed on this journey to get moving on it to get there because you have to make these changes and doing those two things in concert really has a ton of business value. >>Yeah I mean the cfos that I've talked to in the C. I. O. S. It's really kind of industry dependent, right? If you're in airlines or hospitality was like uh we got to cut costs. A lot of organizations said okay we're gonna support remote workers put in V. D. I. Or deal with endpoint security or whatever it was. But we're actually gonna double down on our digital transformation. This is we're gonna lean into an opportunity for us to come out stronger. How did you guys approach it in terms of your own internal digital >>transformation? Yeah. We we we were working on our digital transformation uh a little bit before the pandemic and it kind of followed those those three uh those three items when they when they first started implementing it, they came in and said hey if we can if we can move to a cloud platform, our infrastructure savings will be pretty significant. You know the I. T. Infrastructure savings will be 30 to 40%. So you know, quick payback CFO types love that. So you know, we went forward with that. Um but then quickly we saw the real benefits of moving to a hybrid cloud strategy. So just as an example as we were making some of these changes, we found a workflow tool in one of our markets in europe, that was a great tool and uh if we wanted to implement that across the business um in the old days, You know, we're in 40 countries, we've got 2500 employees, three lines of business. It would have been very complex because our operating structure is is very robust, very complex. Um Probably have taken a year, two years to do that. But since we are now on a cloud platform we got that rolled out that workflow tool rolled out across our business in months, Saving 20-30 of of workload. Being much more um efficiently getting to our clients and reacting quickly to them. And in fact that tool got adopted across IBM because that cloud platform enabled that to happen. And then the great thing which I didn't even realize at the time but now thinking more strategically um are my I. T. Resource earlier was running at about 50 50 50 people working on maintenance. The kind of things with 50 on development as we've now transition to this cloud. My I. T. Resources now 70 plus percent dedicated to new development. So now we can go attack new things that really provide customer value in the pandemic. You know the first thing to look at is can we get into more um you know electronic contracts, E signatures, things that would provide value to customers anyway. But in the pandemic is like really a significant, you know differentiator for us. So all those things were enabled by that journey that we've been taking, >>interesting. I mean most of the CF I uh in fact every CFO I know of a public company took advantage of cheap debt and improving their balance sheets. And liquidity is not the problem today, especially in the tech industry at the same time. You know I'm interested in how companies are using financing. They don't want to necessarily build out data centers but they do want to fund their digital transformation. So what are you seeing in terms of how your customers are using financing? You know, what's the conversation like? What advice are you giving? >>Yeah. So um you know, it depends a little bit on the type of customer, like you said, you know, we we deal with a lot of the biggest, strongest customers in the world. And, and as we deal with them, financing really helps the return on their investment, right, aligning the payments of those cash flows for when they're getting the benefits. Uh And and we see a real good value in improving the return on those investments in helping, you know, if it's something that's going to go to the board that really makes a difference to them. Uh So, you know, that that's always been a value proposition. It continues to be. Um The other thing that's helping now, like you said, is even in this environment, people want to accelerate this transition. Um but it's a, it's a, it's a big time of uncertainty. So, you know, some of the smaller clients, some of the more uh you know, the industries that are a little more cash constrained airlines, et cetera, you know, they're looking for the the immediate cash flow benefits. Um But many of the cfos are saying, hey, listen, you know, I can I want to go as fast as I can help me put together a structure that lets me, you know, get this in place as quick as possible, but not below my budget is not make me take too much risk in this time of uncertainty, but keeps me moving and I think that's where financing really comes in as well. Um And we're kind of talking much more about that value proposition than just if you will be improved ri proposition that we've had all along. >>I want to talk a little bit more about IBM global financing. I mean, people, a lot of times people misunderstand it. You know when you look at I. B. M. S. Debt, you gotta you gotta take out the piece that IBM global financing because that's a significant portion and that's sort of self self fulfilling. But what do people need to know about IBM global financing, >>We actually run three different businesses and we've been transforming our strategy over time. So you know right now with with IBM being all in on hybrid, we are very focused on helping IBM and IBM clients on this digital journey on IBM growing their revenue. Um you know, we we in the past have been more of if you're really full service. It finance are doing a lot more than just IBM but we are really focused now on on helping IBM. So I think the best thing for for IBM clients to know is as you're talking to IBM about the total solution, the total value profit IBM brings that financing, that cash flow solution should be embedded in what they're looking at and can provide a lot of value. Um You know, the second thing I think most people know is we provide financing for IBM s channel, so you know, distributors, resellers etcetera, if you're an IBM distributor or reseller, you know about us, because just about 100% of IBM partners use us to provide that working capital financing, uh you know, we have a state of the art platforms were just so integrated with them. Again, I don't have to I don't have to do a sales pitch on that because they don't know us. Um and the third one just because people might not realize this is, we do haven't we call it an asset recovery business, um it's a pretty small business, you know, it's bringing back equipment that comes off lease, so that uh is used by IBM internally. Um and while, you know, it's not, it's not as well known, I'm pretty proud of it because it really does help with the focus that the world that IBM has on sustainability and reuse and um and making sure that, you know, we're treating the planet fairly here, so that that's a small but powerful piece of our business well, >>You're quite broader than leasing mainframes in the 80s, >>that's for sure. >>Talking more about give, you can double click on that sort of hybrid cloud and obviously machine intelligence is a big piece of those digital transformation. So, so how specifically are you, are you helping clients really take advantage of things like hybrid cloud? >>So yeah, so um what we have typically had been doing and I can give you a couple different examples if you will, you know, for larger clients. What we tend to be doing is helping them like I said, accelerate their business. So um, you know, they're looking to modernize their applications but they still have a big infrastructure in place and so they'll run into uh you know, budget constraints and and you know, cash is still be careful to managed. So for them we are much more typically focused on, you know, if you will project based financing that allows those cash flows to line up with the savings. Again, those are tend to be bigger projects that often go to boards that return benefit is very important. Ah a little bit different value proposition for more mid market customers. So, you know, as I was kind of just looking recently, we have a couple of different customers like form engineering um or or Novi still there to smaller uh compared to some of the other customers we use uh they are again much more focused on how do I, how do I conserve and best use my cash immediately? But they want to get this, they want to get this transformation going. So you know we provide flexible payment plans to them so they can go at the rate and pace that they need to, they can align up those cash deals with their budgets for their business cycles etcetera. So again, where smaller customers where timing of the cash flow in their business cycle is very important. We provide that benefit as well. >>You know, I wonder if I could ask you. So you remember of course the early days of public cloud, one of the first tail winds for public cloud was the pen was not the pandemic, the for the financial crisis of 2007. And a lot of CFO said, Okay let's shift to uh to an apex model. And now you can always provide financial solutions to customers. But it seems like today when I talk to clients, it's it's much more integrated, it's not just the public cloud, you can do that for on premises and again you always could do that. But it seems like there's much more simpatico uh in the way in which you provide that that that solution is that >>fair? Absolutely. And this might be a little to finance geeky, I don't know. But if you go back, well if you go back to the financial crisis and all that and at that time um a lot of people were looking to financing for you call that ah please. But you know if if I was talking about off balance sheet transactions right? Um and and you know between regulation etcetera etcetera, that that off balance sheet thing. First of all, people are seeing through it that much more clearly. But second, you know the the uh financial disclosure say you kind of have to show that stuff so that that if you will, window dressing benefit has gone away. So now which is great for me, we really get to talk about what's the real benefit, what is the, you know, what is the real benefit of? You know, you want to make sure that you have known timed expenditures. You know that if your business grows that your your expenses can grow evenly with those with that business growth, you don't have to take big chunky things and so you know uh financing under the covers of an integrated solution and IBM has a lot of those integrated solutions allows businesses to have that, you know, known timing known quantities. Most of the benefits that people were looking for from that affects cloud model. Um without, you know, some of the problems that you have, when you try to have to go straight to a public cloud for very, you know, big sensitive businesses, confidential confidential data etcetera. >>Thanks for that. So, okay, we're basically out of time. But I wonder if you could give us the bumper sticker and key takeaways, maybe you could summarize for our audience. >>Yeah. For those that noah global financing or dealing with IBM, my view would be in the past we might have been a little more, you know, out there with our own with our own banner etcetera. In the future. I think that you should expect to see us very well integrated into anything you're doing. I think our value proper is clear and compelling and and and will be included uh in these hybrid con transformations to the benefit of our clients. So that's that's our objective and we're well on our way there. >>Great. Anywhere, anywhere I'm gonna go for more, more familiar, obviously IBM dot com. You got some resources there. But there is >>there any Absolutely dot com? There's there's a thank you. Just probably a slash financing. But yeah, there's >>were >>loaded with information of people. >>Excellent brian thanks so much for coming to the cube. Really great to have you today. >>I appreciate the time. >>My pleasure. Thank you for watching everybody's day. Volonte for the Cuban. Our coverage of IBM think 2021, the virtual edition right back.