1 © 2011 ibm corporation challenges in succeeding in the new economic environment september, 2011...
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1© 2011 IBM Corporation
Challenges in succeeding in the new economic environment
September, 2011
1© 2011 IBM Corporation
BAO capabilities play a strategic role in driving a firm’s global competitivenessBAO capabilities play a strategic role in driving a firm’s global competitiveness
2© 2011 IBM Corporation
What you need to do …
…Transforming the business, reducing cost, foundation for growth
Alice:Can you tell me, please, which path I ought to take from here?
The Cheshire cat: That depends on where you want to get to.Alice: I don't much care where.The Cheshire cat: Then it doesn't matter which way you walk.Lewis Carroll Alice in Wonderland
3© 2011 IBM Corporation
Succeeding in the New Economic Environment – Companies need to do three things:
Do more with less Cash/capital focus Flexibility
Focus on the core Businesses Initiatives
Re-align relationships Financial solidity of
suppliers, partners and customers
Revisit/renegotiate
Capture share Disrupt weak competitors Acquisitions
Build future capabilities Protect & acquire talent Develop required assets
Change your industry Bold moves Position globally
Manage change Clearly communicate
simple goals Seek and leverage
experience
Leadership Get the information to act Set the agenda
Risk & Transparency Business performance
management & analytics Risk management
Focus on ValueExploit
opportunitiesAct with Speed
4© 2011 IBM Corporation
Capture share Disrupt weak competitors Acquisitions
Build future capabilities Protect & acquire talent Develop required assets
Change your industry Bold moves Position globally
Succeeding in the New Economic Environment – What is required to survive
Do more with less Cash/capital focus Flexibility
Focus on the core Businesses Initiatives
Re-align relationships Financial solidity of
suppliers, partners and customers
Revisit/renegotiate
Manage change Clearly communicate
simple goals Seek and leverage
experience
Leadership Get the information to act Set the agenda
Risk & Transparency Business performance
management & analytics Risk management
Focus on ValueExploit
opportunitiesAct with Speed
These deal with“now”
& survival in therecession
5© 2011 IBM Corporation
Capture share Disrupt weak competitors Acquisitions
Build future capabilities Protect & acquire talent Develop required assets
Change your industry Bold moves Position globally
Succeeding in the New Economic Environment – Focusing on the future
Do more with less Cash/capital focus Flexibility
Focus on the core Businesses Initiatives
Re-align relationships Financial solidity of
suppliers, partners and customers
Revisit/renegotiate
Manage change Clearly communicate
simple goals Seek and leverage
experience
Leadership Get the information to act Set the agenda
Risk & Transparency Business performance
management & analytics Risk management
Focus on ValueExploit
opportunitiesAct with SpeedClients also want to see
strategies and propositions which equip them to
compete through and beyond any economic
recoveryperiod
6© 2011 IBM Corporation
Business Analytics and Optimization
7© 2011 IBM Corporation
Business Analytics and Optimization
A new imperative has emerged for enterprises to aggressively pursue business
analytics and optimize their businesses in order to address important and
complex business and societal opportunities.
8© 2011 IBM Corporation
Overview
New complexity creates an imperative
for change
Enterprises must fundamentally change
the way they work
Comprehensive solutions enterprises
need
The growing velocity of the volume, variety and
granularity of information is driving unprecedented
complexity.
Intelligent enterprises leverage information to
reach better, faster decisions, optimal actions,
and more predictable outcomes.
IBM is creating a new GBS service line - Business
Analytics and Optimization - to bring
together world class capabilities for our clients.
9© 2011 IBM Corporation
There is lots of room for improvement across the board with some big differences in the details
(1) Extract Relevant
Information
(2) Prioritize Relevant
Information
(4) Apply Info for More Predictive
Outcomes
(5) Apply Info to Understand
Risk
(3) Apply Info to optimize operations
To what extent do you feel that your organization is operating with major “blind spots” — gaps or lack of trust in information — in regard to the following areas?
Source: EIU launch survey for IBM BAO, March 2009, n=225, Question 3: Early adopters have programs well underway to take advantage of new analytics for business advantage and Unaware declare having “not thought about the opportunity”; Out- and under-performance is relative to peers; Services-based industries: financial, professional services, entertainment, media, publishing, telecommunication, education, government, transportation. Goods-based industries: technology, manufacturing, energy, pharmaceuticals, automotive, consumer goods, retail, agriculture, real estate, chemicals and aerospace/defense.
Material blind spots
Many blind spots
Some blind spots
Few blind spots
No blind spots
Early adopters
Unaware
Out-performers
Under-performers
Services-based Organizations
Goods-based Organizations
Bars represent entire sample set. Triangles (hash marks) represent break point between ‘Few Gaps’ and ‘Some Gaps’ for subsets of the data as follows:
Bar color coding:
*Callout note: Material and many combined
Out- exceed Under- performers 2 to 1
Out- exceed Under- performers 2+ to 1
Early adopters exceed unaware 2:1 AND
Services-based exceed Goods-based ~2 to 1
Early adopters exceed unaware
3+ to 1
10© 2011 IBM Corporation
One in two organizations neither connect the dots internally nor share much with external partners and suppliers
Have sufficient information from across your organization to do your job? 2
Share critical information with partners and suppliers for mutual benefit? 1
3 in 5 don’t
To a great extent
To some extent
To a limited extent
Completely
To a limited extent
To some extent
To a great extent
1 in 2 don’t
Early adopters
Unaware
Out-performers
Under-performers
Services-based Organizations
Goods-based Organizations
Bars represent entire sample set. Triangles (hash marks) represent break point between ‘To a Great Extent’ and ‘To Some Extent’ for subsets of the data as follows:
Source: EIU launch survey for IBM BAO, March 2009, n=225. 1Question 1 : 2Question 5: Early adopters have programs well underway to take advantage of new analytics for business advantage and Unaware declare having “not thought about the opportunity”; Out- and under-performance is relative to peers; Services-based industries: financial, professional services, entertainment, media, publishing, telecommunication, education, government, transportation. Goods-based industries: technology, manufacturing, energy, pharmaceuticals, automotive, consumer goods, retail, agriculture, real estate, chemicals and aerospace/defense.
Completely
Not at all
11© 2011 IBM Corporation
Lack of information forces decision makers to be most reliant on their intuition
Source: EIU launch survey for IBM BAO, March 2009, n=225: 1Question 2; 2Question 6
To what extent do you make business decisions based on the following factors? 2
“Guestimation” has worked up to a point (arguably we’ve passed it), but is prone to serious failure in new circumstances, greater complexity and higher speed
25 %9 %
19 %
54 %
43 %
43 %
15 %
35 %
28 %
5 %14 %
9 %
To a great extent
To a little extent
Analytically-derived
Personal experience and intuition
Collective Experience
How often have you made major decisions with incomplete information or
information you don’t trust? 1
Never
Rarely
Sometimes
Frequently
Always
1 in 3 often do
12© 2011 IBM Corporation
Most organizations recognize the opportunity for analytics, but are still very early in the adoption process
Is your organization taking advantage of new opportunities to leverage information for its advantage?
2
Would more predictive information drive better decisions? 1
No, we have not even thought about it
Yes, we do it now and it is
well underway
Yes, we recognize,
but we’ve just begun to act
Yes, we recognize the
opportunity27%
41%
13%
18%
Nearly 3 in 4 said
yes
To some extent
To a great extent
Completely
To little or no extent
2 out of 3 are still getting started
1 out of 5 does not get it
Source: EIU launch survey for IBM BAO, March 2009, n=225: 1Question 7; 2Question 9
13© 2011 IBM Corporation
Out-performers recognize and pursue the value much more than On-par and Under-performers
Does your organization have a plan in place to improve all of thefollowing: its ability to collect and analyze data, present relevant
information, and empower people to act on it?
Out-performers On Par Under-performers
Yes, Enterprise-wide Yes, for Some Units/Groups No, But We Want to Do So No, Not a Priority
Don’t recognize the value at any level
Pursuing the value at enterprise level
81%
58% 56%
Source: EIU launch survey for IBM BAO, March 2009, n=225: Question 10. Out-, on-par and under-performance is relative to peers.
25%16%
3%
42%53%
56%
17%
2%
36%
7%
27%
17%
14© 2011 IBM Corporation
The growing velocity of the volume, variety, and granularity of information is driving new, unprecedented complexity
Today, the processing power of the web is about equivalent to one human brain. By 2040, it will exceed the total processing
power of all of humanity
Every day, 15 petabytes of new information are being generated. This is eight times more
than the information in all U.S. libraries
INFORMATIONDuring 2010, the amount of digital information exceeded 1 Zettabytes (1 trillion gigabytes)
80% of new data growth is unstructured content
We are approaching a “do or die” moment:
enterprises that act will survive to prosper, and those that don’t will be
washed away
* Source: TED 2007: Predicting the Next 5000 Days of the Web. IBM analysis
Tomorrow’s issues and opportunities will be bigger and harder to solve in ways that defy our imaginations today
Timelines for action will be compressed
beyond current ability to respond
15© 2011 IBM Corporation
The Analytics imperative is familiar to CFOs
Globally mandated standards
Standard chart of accounts
enterprise-wide
Common data definitions
enterprise-wide
Standard common processes
enterprise-wide
Components of an Integrated Finance
Org
Source: IBM Global Business Services, The Global CFO Study 2008
Growth rates 5 year CAGR
Enterprises with an IFO
Enterprises without an IFO
Outperform industry peers/market
More time spent on analytical activities
Ability to report more deeply
Increased resilience and decision support
Increased confidence in data
More effective at executing CFO agenda
Benefits and Results
Enterprises with an Integrated Finance Organization (IFO) outperform their peers and are effective at executing their agendas
Increased effectiveness in driving integration of information enterprise-wide
16© 2011 IBM Corporation
Business Optimization
Business Intelligence
Resource Planning
Business Automation
CFOs will see Business Analytics and Optimization as the next bow wave of business change in their enterprises
2XClient Investment in
Business Optimization Projectsis growing over twice as fast as
Business Automation
$105B8% CGR*
$105B8% CGR*
BusinessBusinessOptimizationOptimization
BusinessBusinessOptimizationOptimization
Business Automation
$566B3% CGR*
•Source: IBM Analysis, includes addressable hardware, software and services opportunity. CGRs 2009-2012
17© 2011 IBM Corporation
1 in 3business leaders frequently make critical decisions without the information they need
53%don’t have access to the information across their organization needed to do their jobs
According to our 2009 study of 225 business leader, operating effectiveness is hindered by blind spots
Source: Business Analytics and Optimization for the Intelligent Enterprise, April 2009. http://www-935.ibm.com/services/us/gbs/bus/pdf/gbe03211-usen-00.pdf
Factors supporting major decisions
79 %
52 %
62 %
To a little extent
To a great extent
AnalyticsPersonal Experience
Collective Experience
18© 2011 IBM Corporation
Industry out-performers recognize and pursue the value much more than under-performers
Source: Business Analytics and Optimization for the Intelligent Enterprise, April 2009. http://www-935.ibm.com/services/us/gbs/bus/pdf/gbe03211-usen-00.pdf
8XIndustry out-performers are 8X more likely to pursue BAO at an enterprise level than industry under-performers
50% Roughly half of organizations are pursuing BAO at a functional level (e.g., Finance, Sales, Marketing)
2%
17%
Not interested in pursuing BAO at any level
Under-performers Over-performers
19© 2011 IBM Corporation
The greatest value is where information integral to business operations and insight is integrated into operations
Business Optimization
Business Analytics
How the business applies information to achieve it’s goals
• Policies • Biz Processes
How the business manages information and learns from it
BAO Maturity Stage
Heroics
Foundational
Competitive
Differentiating
Break-away
•Spreadsheets•Extracts
•Data Warehouses•Data Governance•Production reporting
•Contextual Business rules
•Pattern recognition
•Process Automation and Workflow
•Master Data Management•Metrics•Dashboards/Scorecards
•Command and control
•Task automation (eg, ERP)
•Workgroup Design
•SOPs
•“Predict and Prevent”•Intelligent Enterprise
•Customer and Partner Collaboration
•Business Process Integration
20© 2011 IBM Corporation
Watson
• Watson, named after IBM founder Thomas J. Watson, is a breakthrough analytical computing system that specializes in analyzing natural human language over a nearly unlimited range of knowledge and provides specific answers to complex questions with confidence and at rapid speeds.
• Watson is the latest outcome of IBM’s commitment to R&D and extends IBM’s heritage of scientific achievement that can help transform the way the world works
• Watson is the first non-human contestant on the quiz show Jeopardy!. It uses technology currently available from IBM, harnessing IBM’s commercially-available POWER7 system and showcasing how it is optimized to process thousands of simultaneous tasks at rapid speeds
• Watson’s ability to understand the meaning and context of human language, and rapidly process information to find precise answers to complex questions -- holds enormous potential for businesses
• Watson, named after IBM founder Thomas J. Watson, is a breakthrough analytical computing system that specializes in analyzing natural human language over a nearly unlimited range of knowledge and provides specific answers to complex questions with confidence and at rapid speeds.
• Watson is the latest outcome of IBM’s commitment to R&D and extends IBM’s heritage of scientific achievement that can help transform the way the world works
• Watson is the first non-human contestant on the quiz show Jeopardy!. It uses technology currently available from IBM, harnessing IBM’s commercially-available POWER7 system and showcasing how it is optimized to process thousands of simultaneous tasks at rapid speeds
• Watson’s ability to understand the meaning and context of human language, and rapidly process information to find precise answers to complex questions -- holds enormous potential for businesses
Watson Overview
21© 2011 IBM Corporation
Watson answers a grand challenge
Can we design a computing system that rivals a human’s ability to answer questions posed in natural language, interpreting meaning and context and
retrieving, analyzing and understanding vast amounts of information in real-time?
Watson Overview
22© 2011 IBM Corporation
Watson Launch: Taking on a quiz show - Jeopardy!
• Jeopardy! is a quiz show covering a broad range of topics including:
– History, literature, politics, arts and entertainment, and science
• Jeopardy! poses a grand challenge for a computing system:
– Broad range of subject matter
– Speed of accurate responses and confidence
– Requires analyzing subtle meaning, irony, riddles, and other complexities – tasks that humans excel at but which computers traditionally do not.
Watson Overview
23© 2011 IBM Corporation
DeepQA: The Technology Behind WatsonGenerates and scores many hypotheses using Natural Language Processing, Information
Retrieval, Machine Learning and Reasoning Algorithms. These gather, evaluate, weigh and balance different types of evidence to deliver the answer with the best support it can find.
Answer Scoring
Models
Answer & Confidence
Question
Evidence Sources
Models
Models
Models
Models
ModelsPrimarySearch
CandidateAnswer
Generation
HypothesisGeneration
Hypothesis and Evidence Scoring
Final Confidence Merging & Ranking
Synthesis
Answer Sources
Question & Topic
Analysis
EvidenceRetrieval
Deep Evidence Scoring
Learned Modelshelp combine and
weigh the Evidence
HypothesisGeneration
Hypothesis and Evidence Scoring
QuestionDecomposition
Watson Overview
24© 2011 IBM Corporation
How can Watson capabilities address your company’s grand business challenges?
From battling humans at Jeopardy! to transforming business
Watson Overview
25© 2011 IBM Corporation
Analytics Proof-of-Value
Information Management Foundation Strategy & Roadmap
Targeted projects identified during the BAO Deep Insight project
IBM Research First-of-a-Kind project
BAO Deep Insight explores Watson capabilities, envisions the possibilities, and enables results through a BAO action plan
• Confirms a client’s Watson focus areas and identifies 2-3 subjects to be explored
• Provides insight on Watson capabilities and analytics use cases that align witha client’s area of interest
• Creates BAO action plan with next steps and a list of strategic analytics initiatives
BAO Deep Insight
Potential Follow-on Activities
BAO Deep Insight – Project Overview
26© 2011 IBM Corporation
Early adopters ride the wave … What if?
What if we could actually and accurately forecast the weather?
What if you could trace food straight through from the farm to your fork?
What if insurance claim data could be make people healthier and
reduce their costs?
What if a medicine’s speed to market saved a life? Or a million lives?
27© 2011 IBM Corporation
In a smarter planet, opportunity and progress is clear
Smarter traffic: In Singapore, the ability to predict where traffic jams will occur at any given hour minimizes congestion and reduces carbon levels
The Operational Riskdata eXchange Association: A consortium serving 18 countries and 50 leading financial institutions improves statistical modeling and more accurately quantifies risk exposure
QuickTime™ and a decompressor
are needed to see this picture.
European Retailer: Leverages a Dynamic Inventory Optimization Solution to meet demand for any of 40,000 products in more than 80 outlets with low replenishment and storage costs - boosting customer service ratings to 99%.
Hospital Research Center: Created a continually updated reservoir of clinical and genomic information to accelerate research while cutting administrative costs by 75%.
28© 2011 IBM Corporation
Hristo Hristov, IBM GBS Manager
29© 2011 IBM Corporation
Overview
New complexity creates an imperative
for change
Enterprises must fundamentally change
the way they work
Comprehensive solutions enterprises
need
The growing velocity of the volume, variety and
granularity of information is driving unprecedented
complexity.
Intelligent enterprises leverage information to
reach better, faster decisions, optimal actions,
and more predictable outcomes.
IBM is creating a new GBS service line - Business
Analytics and Optimization - to bring
together world class capabilities for our clients.
30© 2011 IBM Corporation
Organizations will need to adopt new ways of working to improve speed to insight and speed to impact
Traditional Approach New Approach
Instinct and intuition Fact-driven
Corrective Directive
Efficient Optimized
Years, months, weeks Hours, minutes, seconds
Human insight Applied semantics
Decision support Action support
31© 2011 IBM Corporation
The value is immediate and strategic for the smarter organization
Intelligent profitable
growth
Cost take-out and
efficiency
Proactive risk
management
Improve opportunities for growing customers, improving relationships, identifying new markets, and developing new products and services
Better predict and identify risk events and build resiliency and agility of the organization to respond and act.
Optimize the allocation and deployment of resources and capital to create more efficiency and manage costs smartly
Different organizations may identify different priorities for business analytics
32© 2011 IBM Corporation
The intelligent enterprise is…
Anticipating
Precise
Aware
Questioning
Empowering
Gathers, senses, & uses structured and unstructured information from every node, person, and sensor within the environment
Predicts and prepares for the future and doesn’t only react or correct actions, but also steers
and evaluates trade-offs
LinkedConnects internal and external functions front to back across geographies in a way that aligns to desired business outcomes
Enables and extends employees' memory,
insight and reach, as well as the authority to decide
and act
Reserves the right to get smarter by challenging its
status quo while creating new opportunities
Uses only the most relevant information to support timely decisions/actions closer to the point of impact and consequence
33© 2011 IBM Corporation
Aware
Gathers, senses, & uses structured and unstructured information from every node, person, & sensor within the environment
Today’s enterpriseWhat if the smarter enterprise
could
Collects data from its own transactional systems and internally generated data
Collect and analyze data from anywhere, including external sources, new instrument data, and unstructured and societal data
Processes some large databases in batches to create snapshots of the past
Process incredible quantities of data at incredible new speeds as needed
Interprets information differently by different people and different departments – with limited levels of detail
have “one version of the truth” across the enterprise – with appropriate granularity
Keeps large just-in-case stores of information that are un-interpretable, un-understandable, and ultimately un-usable
Gain insights from previously un-quantifiable and un-usable data
What if an investor could mine every broker’s e-communication, each consumers’ public Facebook post, and multiple companies’ annual reports at the same instant?
What if your city’s ability to read satellite images, to capture historic traffic data, and to sense moving vehicles meant it could predict and prevent traffic jams in real time?
34© 2011 IBM Corporation
Anticipating
Predicts and prepares for the future and doesn’t only react or correct actions, but also steers and evaluates trade-offs
What if you could orchestrate and dynamically reroute a global logistics and international trade operation based on your ability to model and predict how global weather patterns affect shipping and air routes?
What if human resource managers had the insight and capability to hire and train entire workforces in enough time to meet sudden waves of demand, but not a second earlier?
Today’s enterpriseWhat if the smarter enterprise
could
Uses personal experience and informed guess-work to make decisions
Build simulations and models to understand future implications for alternatives based on facts, not just instinct
Uses historical data for ‘post-mortem’ reporting and tracking
See opportunities and threats as they happening and beforehand
Recognizes events based upon the noise they make and responds on an ad-hoc basis
Track events in real-time applying sophisticated rules enabling the automation and speed of response
Manages performance and risk separately with all future variance and chance managed reactively
Be informed for opportunity and risk, know what to do tactically about events well before action is needed
35© 2011 IBM Corporation
Precise
Uses only the most relevant information to support timely decisions/actions closer to the point of impact and consequence
What if repairmen servicing thousands of different types of intelligent grids had the instrumentation to sense breakdowns and inefficiencies? They would be automatically alerted and deployed based on their skill, location and availability and fed all the metrics, history and solutions they need. Schematics are beamed to screens on their goggles or wireless devices. Then their actions and data are added to the collective repair history of the entire grid.
Today’s enterpriseWhat if the smarter enterprise
could
Uses content and structured information transactionally, i.e., used for its primary purpose and then discarded or archived
Manage and analyze vast stores of content, including prose, email, voice, SMS, images, and video
Has users who must be seek out information based on the immediate need
Prepare data and automate analysis to ensure the quality and timeliness of information
Does not give the information employees need when they need it
Deliver information in ways that are useful to the context of the situation being handled
Delivers volumes of data separately and rarely in context of the situation or parceled together into actionable packages
Deliver just the right amount of quantitative data, definitions, knowledge bases, unstructured data, and expert networks to meet the decisions-maker’s need at the point of need
36© 2011 IBM Corporation
Questioning
Reserves the right to get smarter by challenging its status quo while creating new opportunities
What if an auto manufacturer could monitor driving behavior via dashboard-embedded computers – and analyze the patterns it discerned to understand what new features would be most appreciated?
What if a procurement specialist could initiate comparative audits of suppliers’ environmental practices when sensing that their proposals are “too good to be true”... and then based on audit results provide new guidelines for responsible pricing levels in specific geographic regions?
Today’s enterpriseWhat if the smarter enterprise
could
Focuses on getting today’s job done
Get the job done today with enough extra employee bandwidth to think about and improve tomorrow
Views innovation as a discrete function of R&D or product managers
Put all knowledge workers on a path to innovate and improve
Views questioning and exploration are ‘hobby’ activities, encouraged only when there is time
Include questioning and exploration as part of people’s jobs and reward them for doing it
Makes its decisions and moves on with little interest in whether expectations are met
Evaluate outcomes relative to expectations, tracking and understanding exceptions both good and bad
37© 2011 IBM Corporation
Empowering
Enables and extends employees' memory, insight and reach, as well as the authority to decide and act
What if a service agent knew how to, and was able to, go above and beyond the norm to delight a top- customer who had had two bad experiences in the last week?
What if large, multidisciplinary teams of sales people could close the next big multimillion dollar deal in hours instead of months because they can reconfigure complicated schedules of prices and resources over years of contract length?
Today’s enterpriseWhat if the smarter enterprise
could
Piles more work on employees, adding headcount to meet demands
Automate and orchestrate routine tasks in order to focus people on new, unsolved issues and opportunities
Takes decisions up and down the flagpole and to be vetted and approved by layers upon layers of management
Delegate decision making to the best agents for the situation whether they are employees, workflows, bots or customers, requiring less managerial and administrative oversight as employees solve issues immediately and locally
Aligns incentives to how much someone works or what they produce
Align incentives to smart results while also considering how the results were achieved
Hunts, searches, and compiles information but guestimate answers, when it’s too hard to get the facts
Give people access to user-friendly fact-based tools available over the channels and devices of their own choosing
38© 2011 IBM Corporation
Linked
Internal and external functions are connected front to back in a way that aligns to desired business outcomes
What if an oil rig could constantly “speak” to its production supervisors in the control room ... which is connected to the supply chain planning systems, which are connected to the oil markets, which are connected to the pump? Each change in the actual petroleum supply could inform the entire value chain.
What if retailers used loyalty card information to identify shoppers while still in the store, and inform them of new meat and poultry products that meet their personal requirements for humane husbandry practices?
Today’s enterpriseWhat if the smarter enterprise
could
Works with each other locally, but work is constantly ‘thrown over the wall’ to other departments down the line
Mobilize a federation of experts to work together both within the enterprise as well as collaborate with external entities for mutual advantage
Has expertise and accesses wisdom based upon who you know and who’s close by
Generate a new type of collective wisdom from larger and more sophisticated crowds of experts
Uses information for its sole job at hand without attention to impact on related activities
Keep information more relevant and use it beyond its spot application, having implications both up and down the value chain (e.g., the flow from suppliers to customers)
Finds it too difficult to work across boundaries
Connect people, systems, and external entities so they could ‘speak’ to each other seamlessly
39© 2011 IBM Corporation
Traditional transactional and human-authored enterprise data is rapidly
growing
Unstructured data is growing at geometric and exponential
progressions, and most of it is not used in analytics
The unblinking eyes of instruments and sensors are producing tireless
streams of new data
The enterprise has not kept up and cannot keep up
To survive, business leaders must act
Existing tools cannot access or analyze the growing data effectively and aren’t positioned to handle the
data deluge
Decision making is based on instinct, subjective information, and often the
wrong facts
Decisions need to be made based on a new set of facts based on the
entirety and richness of the information base
Mental bandwidth needs to be reallocated towards harder and more
pressing decisions
Huge amounts of data are ignored, mismanaged, or under-utilized
People at all levels need better information and executives need to
make decisions more quickly
We are approaching a “do or die” moment: enterprises that act on the opportunity will survive to prosper, and those that don’t will be lost
The information environment is at a tipping point
Why change and why now?
40© 2011 IBM Corporation
Overview
New complexity creates an imperative
for change
Enterprises must fundamentally change
the way they work
Comprehensive solutions enterprises
need
The growing velocity of the volume, variety and
granularity of information is driving unprecedented
complexity.
Intelligent enterprises leverage information to
reach better, faster decisions, optimal actions,
and more predictable outcomes.
IBM is creating a new GBS service line - Business
Analytics and Optimization - to bring
together world class capabilities for our clients.
41© 2011 IBM Corporation
Business Analytics and Optimization is the next bow wave of change where operational execution meets new opportunity
Task/Process Automation
Business Efficiency
Cross-Functional Integration
Enterprise Integration
Aggregation and data
warehouse
Recording and
Reporting
Performance measurement
Detection, direction & prediction
Business process management and
Business Intelligence
Resource planning (e.g., ERP, CRM, SCM)
Transactional automation adoption (POS, accounting)
Business Optimization
Analytics and Intelligence
Business Analytics
and Optimization
Change
42© 2011 IBM Corporation
Business Analytics & Optimization
BAO Strategy
Business Intelligence & Performance Management
Advanced Analytics and Optimization
Enterprise Information
Management
Enterprise Content
Management
• BAO Strategy and Roadmap
• BAO Process Improvement
• BAO Governance
• Dashboards & Scorecards
• Planning, Budgeting, & Forecasting
• Business Analytics & Reporting
• Advanced Analytics
• Analytic Applications
• Predictive Modeling
• Business Optimization
• Visualization
• Data Integration
• Data Quality
• Data Architecture
• Master Data Management
• Document & Records Management
• Web 2.0 / Web Content Management
• Digital Asset & Rights Management
• Archiving & Record Management
43© 2011 IBM Corporation
BAO will address critical client needs through big plays in key areas
Intelligent profitable
growth
Efficiency and cost take-out
Proactive risk
management
Risk and Fraud Analytics
Advanced Customer
Insight
• Need for risk transparency and advanced modeling techniques
• Losses due to unmanaged Risk
• High rates of Fraud and Abuse• Increased regulatory oversight• Limited view of customer and
counterparty credit risk
• Limited access to customer data• Limited view of unstructured information• No view of Customer Profitability
• Need for Customer Loyalty• Need for Revenue Assurance• Need for Cost Reduction
Analytics and Data
Optimization
• Duplicated Data• Need Platform for Growth• Need Data Simplification• Need for Cost Take Out• Siloed Data • Complexity due to Acquisitions• Inconsistent Reporting