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© 2011 IBM Corporation
IBM Business Analytics and Optimization The Path to Breakaway Performance Portorož, November 23, 2012
Oliver Oursin Worldwide Product, Business Intelligence and EMEA Presales Executive - IBM Business Analytics
© 2011 IBM Corporation
Watson answered a grand challenge
Can we design a computing system that rivals a human’s ability to retrieve, analyze and interpret vast amounts of information in real time, arriving at the highest probability correct answer in less than three seconds?
Business Analytics and Optimization
© 2011 IBM Corporation
What if you had all the answers you need to succeed?
Which
customers are
thinking of
leaving?
Which
transactions are
fraudulent?
Which new
product has the
greatest
chance of
success?
How can I
extract insight
from all of my
information?
The ultimate differentiator today…
…is being able to make more informed choices with
confidence, to anticipate and shape business outcomes.
Business Analytics and Optimization
4
© 2011 IBM Corporation 5
Business Analytics & Optimization (BAO) Making Smarter Decisions at the Point of Impact…
Lack of
Insight
Inability
to Predict
Inefficient
Access
Variety
Volume Velocity
Predict and Act
Real-time, Fact-driven
Breakaway Approach
Sense and respond
Instinct and intuition
Traditional Approach
Automated
Skilled analytics experts
Back office
Optimized
Everyone
Point of Impact
…Results in Rapid, Informed and Confident Actions
Business Analytics and Optimization
© 2011 IBM Corporation
Organizations embracing BAO are breaking away
Top Performers are more likely to use an analytic approach over intuition*
Source: Analytics: The New Path to Value, a joint MIT Sloan Management Review and IBM Institute of Business Value study. Copyright © Massachusetts Institute of Technology 2010.
Organizations that lead in analytics outperform those who are just beginning to adopt analytics
*within business processes
5.4x 3x
Analytics correlates to performance
Business Analytics and Optimization
6
© 2011 IBM Corporation 7
How are
top performers breaking away?
Common characteristics of top performers
© 2011 IBM Corporation
Top performers are armed with state-of-the-art solutions to support decisions …
Above average BAO platforms and toolsets
Analytical and
predictive tools
Content
management
Dashboards and visualisation
Master data
management
Data
integration
tools
2.7x
2.5x 4.4x 2.0x 2.4x
Business direction Trusted information
Business
rules
management
2.4x
Key: Top performers (i.e., 1st quintile relative to industry peers)
Lower performers (i.e., 4th and 5th quintile relative to industry peers)
Relative difference of top performers to lower performers
Source: Breaking Away with Business Analytics and Optimization: New intelligence meets enterprise operations at www.ibm.com/gbs/intelligent-enterprise.
17% 17%
23% 24% 27% 27%
55%
65% 60%
56%
45%
74%
8
Common Characteristics of Top Performers
8
© 2011 IBM Corporation 9
… and apply analytics versus intuition in key business processes
Common Characteristics of Top Performers
Tendency to
Apply Intuition
Tendency to
Apply Analytics
Source: Analytics: The New Path to Value, a joint MIT Sloan Management Review and IBM Institute of Business Value study.
Copyright © Massachusetts Institute of Technology 2010.
© 2011 IBM Corporation
Information Management Foundation
Customer
Understanding
The Market
Enterprise
Visibility
The Organization
Real-Time
Optimization
Collaborative
Decisions
Processes,
Employees
Organizations are focusing BAO initiatives in four key areas
Common Characteristics of Top Performers
10
© 2011 IBM Corporation
Consumer Experience Framework – 10 years ago
Marketing
Sales
Support/Services
Use
Product
Purchase (More) Products
Get Customer
Service
© 2011 IBM Corporation
Define strategy
Run the business
Make decisions
based on actual situation
Act
Execute
Watch what is/has happening/happened
Observe
Monitor & Report
Make sense of the big picture
Orient
Assess & Analyze
Know & choose what to do
Decide
Determine & Improve
Conceptual Framework for Decision Management
© 2011 IBM Corporation
Customer Experience Framework today
Research
Product
Marketing
Sales
Support/Services
Feedback Management
Social Intelligence Research
Product
Purchase
Product
Use
Product
Advocate
Product
Get Customer Service
Up/Cross
Sell
© 2011 IBM Corporation
Enhance Customer Understanding
20% Reduction in Churn
7x Improvement in
XML Processing
Time
Customers Most
Likely To Leave
(and Why)
Dropped Calls
Calling Patterns
(Big Data)
Rate Plans
Integrate/Cleanse/ Deduplicate
Data Warehouse
Predictive Modeling
Customer Churn: Why do people leave and how
can you intervene before it’s too late?
Key Technologies
• Customer Analytics
• Predictive Analytics
• Data integration with
Common Metadata
• Master Data Mgmt
• Big Data
• Warehouse Scalability
• Compression and Archiving
Ongoing insight Master Data
Management
Common Characteristics of Top Performers
Customer
Understanding
Customer
UnderstandingEnterprise
Visibility
Enterprise
Visibility
Real-Time
Optimization
Collaborative
Decisions
Real-Time
Optimization
Collaborative
Decisions
14
© 2011 IBM Corporation
Enable Enterprise Visibility
Operations
Managers
Finance
Buyers
Store
Managers
Warehouse
Retail Outlets
Distribution
Cubing and
Mining
Suppliers
Demand Visibility: How could supply chain
visibility inform decisions at the point of impact?
3,623% ROI via supply
chain visibility
3 clicks to build predictive
model
465 industry
accelerators
Key Technologies
• Supply Chain Analytics
• Scorecards / Dashboards
• Master Data Management
• Industry Models
• Information Agenda
Master Data
Management
Common Characteristics of Top Performers
Customer
Understanding
Customer
UnderstandingEnterprise
Visibility
Enterprise
Visibility
Real-Time
Optimization
Collaborative
Decisions
Real-Time
Optimization
Collaborative
Decisions
15
© 2011 IBM Corporation
Optimize Real-Time Decisions
Fraud Protection: How can you detect fraud
before transactions are accepted?
Key Technologies
• Finance Analytics
• Real-Time Analytics
• Identity Insight
• Stream Processing
• Pattern Detection
• Self-Learning
Batch Real-Time
Transaction Accepted
Transaction Rejected
Attempted Collection
Transaction Accepted
Batch Fraud Identification
Real-Time Fraud Identification
Incoming Transaction
Transaction Processed
Incoming Transaction
Transaction Processed
11.4M Messages per second
Common Characteristics of Top Performers
Customer
Understanding
Customer
UnderstandingEnterprise
Visibility
Enterprise
Visibility
Real-Time
Optimization
Collaborative
Decisions
Real-Time
Optimization
Collaborative
Decisions
$1.2B savings
© 2011 IBM Corporation
Foster Collaborative Decisions
Approval
Denial
Fast Track
Collaboration
Existing Customer
Details
Real-Time Data Gathering
External Policies
Automated Scoring/Pricing
Credit Monitoring
Credit Monitoring
Loan Origination: How can you maximize
customer service while minimizing risk?
6 Days to
5 seconds new loan
processing
Key Technologies
• Content Analytics
• Advanced Case Management
• Master Data Mgmt
• Business Rules
• Integrated Collaboration
Master Data
Management
Common Characteristics of Top Performers
Customer
Understanding
Customer
UnderstandingEnterprise
Visibility
Enterprise
Visibility
Real-Time
Optimization
Collaborative
Decisions
Real-Time
Optimization
Collaborative
Decisions
17
© 2011 IBM Corporation
Foundation for Business Analytics and Optimization
Analyze
Integrate
Manage
Business Analytics
Applications
External
Information
Sources
Cubes
Streams
Big Data
Master Data
Content
Data
Streaming
Information
Govern
Quality
Security & Privacy
Lifecycle
Data Warehouses
Standards
Transactional
& Collaborative
Applications
Content
Information
Governance
Trusted Relevant Governed
Common Characteristics of Top Performers
18
© 2011 IBM Corporation 19
How is IBM
partnering with organizations
to optimize outcomes?
What is IBM Providing? How are Customers Benefiting?
© 2011 IBM Corporation
A world-class BAO services practice…
Client Needs Analytic Solution
Focus Areas
Business
Productivity
Improve control, bottom line and stop losses
Risk, Fraud and
Finance
Focus on
growth
Intelligent profitable growth
Customer, Marketing
and Sales
Infrastructure
Productivity
Take-out cost and improve efficiency
Information Management Foundation
(IMF)
Supply Chain
Human Capital
BI & Performance
Management
Advanced Analytics &
Optimization
Enterprise Content
Management
Enterprise Information
Management
BAO Strategy
Skills and
Competencies
20
Partnering with our Clients
© 2011 IBM Corporation
Offering a comprehensive set of integrated BAO capabilities
Software
First of a Kind Projects
Research Advisors
Analytics Patents
Analytic Research Assets (COBRA, DIOS, TACS, etc)
Research Systems Services
BAO Strategy
Customer, Marketing and Sales Analytics
Risk, Finance and Fraud Analytics
Supply Chain Analytics
Information Management
Foundation Enterprise Information Management
Enterprise Content Management
Storage and Data Services
Big Data Services
Human Capital Analytics
Workload Optimized Systems
and Appliances
PureScale Application System
Smart Analytics System
Netezza Appliances
Business Analytics and Optimization
Business Analytics Business intelligence
Predictive analytics
Analytic applications
Fin. Performance and Strategy Mgmt
Governance, risk and compliance
Information Management Data management
Info integration & federation
Data warehousing
Info governance
Big data platform
Enterprise Content Mgmt Advanced Case Mgmt
Content analytics
Document imaging and capture
Info lifecycle governance
Social content mgmt
Enterprise Marketing Mgmt Web Analytics
Decision Optimization Optimization and analytical decision support
21
Partnering with our Clients
© 2011 IBM Corporation 22
IBM has assembled a leading BAO portfolio…
Autonomic Operations
Developer Productivity
Deep Compression
pureXML
pureScale
Pervasive Content
Stream Computing
Content Analytics
Advanced Case Management
Workload Optimized Systems
Social Analytics/Consumer Insight
2011
2005
Decision Management
More than $14B in Acquisitions
Since 2005
More than 10,000 Technical
Professionals
More than 7,500 Dedicated
Consultants
Largest Math Department
in Private Industry
More than 27,000 Business
Partner Certifications
Partnering with our Clients
© 2011 IBM Corporation 23
What is the
path to breakaway performance?
Leading practices for operationalizing analytics
© 2011 IBM Corporation
“The New Path to Value” Leading Practices for Operationalizing Analytics
24
Focus on the Biggest
and Highest Value
Opportunities
Start with Questions,
Not With Data
Use an Information
Agenda to Plan for the
Future
Embed Insights to Drive
Actions and Deliver Value
Keep Existing
Capabilities While
Adding New Ones
Source: Analytics: The New Path to Value, a joint MIT Sloan Management Review and IBM Institute of Business Value study.
Copyright © Massachusetts Institute of Technology 2010.
The Path to Breakaway Performance