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IBM Business Analytics and Optimization #bas2010


Rob Ashe and Fred Balboni kicked off the IBM Business Analytics Analyst Summit with a presentation on IBM’s overall strategy for analytics – product and consulting in an integrated view. Of course this is IBM so everything starts with Smarter Planet – and Smarter Planet begins with how to get insight to drive better performance, putting analytics at the center of this IBM vision. The Smarter Planet vision is helping IBM, making customers more willing to talk with IBM, and the power of analytics to deliver smarter decisions is core to Smarter Planet. Rob quoted from their top performers study (blogged about here) and then introduced Fred to talk about the mission for analytics inside IBM.

Fred talked about IBM’s approach to making analytics real for its customers. It needs, he says, 3 things

  • World class talent (IBM has been investing in its BAO Services line and has grown it to 8,000 people)
  • Industry expertise and capabilities (an IBM strength with its industry frameworks)
  • Advanced, repeatable analytic assets.

Taken together these deliver predictable (and predictive) analytic business outcomes more quickly. For example, Fraud and Abuse Management is an area of focus that pulls these things together to deliver results – and doing so reliably enough to be paid on outcomes only.

A focus on analytics is one of the four growth initiatives for IBM (the others are Smarter Planet, emerging markets and cloud). BAO was launched in April 2009 and has seen significant IBM investment as a result including 23 acquisitions, analytic centers around the world and hiring to bring the staffing level up to 8,000. Business Analytics is expected to grow to $15Bn by 2015.

The range of BAO capabilities that IBM has can be described along two dimensions – from operational to strategic on one hand (different kinds of decisions to use my words) and from awareness to in-context insight on the other.

  • Information Access is the baseline – broad awareness of operational information.
  • This drives a desire/need for analysis and insight to make more strategic decisions about customers to drive profitable growth – awareness of strategic issues
  • Business agility, an ability to change business processes, comes next and involves decision management (the use of rules and analytics together in the context of BAM/BPM/BEP)
  • Which leaves strategic alignment – in context information about strategy

I liked this model – I like how it pulls everything together – and it shows the range of analytic solutions IBM feels its customers need. To make this happen the key elements are:

  • Best of breed solutions
    IBM has been focused on delivering best of breed applications with things like TM1, Cognos 8 Mashup, Cognos Express, Smart Analytics Systems and SPSS. It feels it has good momentum with double digit growth for Cognos 8 BI, more than 80 System Z/Linux Cognos customers, triple digit year on year growth for some analytic applications, and some important wins for SPSS Decision Management in its first 90 days.
  • Domain, talent and skills (technical and business)
    Three types of analytics programs are being seen by IBM – infrastructure productivity (analytics simplification) followed by a focus on returning to growth (customer analytics, human capital analytics) and finally business productivity (less fraud, lower costs, better demand management). These programs require IBM to have the right skilled people.
    IBM focuses on people and assets that provide horizontal capabilities as a foundation (though this is rapidly commoditizing) but more value comes from IBM’s investment in people who can help develop a BAO foundation, do customer analytics or help with risk/fraud analytics. These services are delivered through a go to market approach focused on specific industries and packaged solutions. IBM maintains a whole set of templates and reusable assets (that use IBM software of course) to accelerate analytic projects and allow for fixed-pricing or outcome-based pricing of projects. Finally Fred emphasized how much IBM is investing in training – some 90,000 days of analytic training for consultants so that 1/3 of all IBMers will have had some business analytics training.
  • Unparalleled research
    IBM Research is the single largest privately funded research team in the world and IBM are (rightly) proud of this. Over 200 mathematicians are dedicated to BAO who are available to clients and whose work is being embedded into products much more quickly than it might have been in the past – BAO is taking a new, more aggressive approach to getting research into clients and products.
  • Broad synergy
    IBM sees, and I would agree, that advanced analytic solutions require technical consulting, business consulting and software products working together. These solutions often take advantage of new hardware solutions and the cloud too. As IBM has all these pieces it can develop synergistic solutions more easily.
  • Capital investment – billions more for inorganic growth
    Of course nothing to say about how they might spend this money!

They ended up with a set of nice customer stories as you would expect, with many showing integrated use of multiple IBM and non-IBM software products.


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