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