Oliver Oursin Worldwide Product, Business Intelligence and EMEA Presales Executive - IBM Business Analytics IBM Business Analytics and Optimization The Path to Breakaway Performance Portorož, November 23, 2012
Business Analytics and Optimization 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 Business Analytics & Optimization 3
Business Analytics and Optimization 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. 4
Business Analytics and Optimization Business Analytics & Optimization (BAO) Making Smarter Decisions at the Point of Impact Breakaway Approach Traditional Approach Sense and respond Predict and Act Lack of Insight Instinct and intuition Real-time, Fact-driven Volume Inability to Predict Inefficient Access Variety Velocity Skilled analytics experts Back office Automated Everyone Point of Impact Optimized Results in Rapid, Informed and Confident Actions 5
Business Analytics and Optimization Organizations embracing BAO are breaking away Analytics correlates to performance 3x 5.4x Organizations that lead in analytics outperform those who are just beginning to adopt analytics Top Performers are more likely to use an analytic approach over intuition* *within business processes 2011 Source: IBM Analytics: Corporation The New Path to Value, a joint MIT Sloan Management Review and IBM Institute of Business Value study. Copyright Massachusetts Institute of Technology 2010. 6
How are top performers breaking away? Common characteristics of top performers 7
Common Characteristics of Top Performers Top performers are armed with state-of-the-art solutions to support decisions Above average BAO platforms and toolsets Business direction Trusted information 74% 65% 60% 56% 4.4x 2.4x 45% 2.4x 2.5x 2.0x 55% 2.7x 17% 17% 23% 24% 27% 27% 8 Dashboards and visualisation Analytical and predictive tools Source: Breaking Away with Business Analytics and Optimization: New intelligence meets enterprise operations at www.ibm.com/gbs/intelligent-enterprise. Business rules management Key: Content management Data integration tools Top performers (i.e., 1st quintile relative to industry peers) Master data management Lower performers (i.e., 4th and 5th quintile relative to industry peers) Relative difference of top performers to lower performers 8
Common Characteristics of Top Performers 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
Common Characteristics of Top Performers Organizations are focusing BAO initiatives in four key areas Information Management Foundation Customer Understanding Real-Time Optimization Collaborative Decisions Enterprise Visibility The Market Processes, Employees The Organization 10
Consumer Experience Framework 10 years ago Marketing Purchase (More) Products Get Customer Service Sales Support/Services Use Product
Conceptual Framework for Decision Management Run the business Decide Know & choose what to do Determine & Improve Act Make decisions based on actual situation Execute Orient Make sense of the big picture Assess & Analyze Observe Watch what is/has happening/happened Monitor & Report Define strategy
Customer Experience Framework today Social Intelligence Research Product Marketing Advocate Purchase Sales Product Up/Cross Sell Product Get Customer Service Use Product Feedback Management Support/Services
Common Characteristics of Top Performers 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 Dropped Calls 7x Improvement in XML Processing Time 20% Reduction in Churn Data integration with Common Metadata Master Data Mgmt Big Data Warehouse Scalability Compression and Archiving Calling Patterns (Big Data) Customers Most Likely To Leave (and Why) Integrate/Cleanse/ Deduplicate Data Warehouse Predictive Modeling Rate Plans Master Ongoing insight Data Management 14
Common Characteristics of Top Performers 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 3 clicks to build predictive model 465 industry accelerators Suppliers Cubing and Mining Finance Operations Managers Key Technologies Supply Chain Analytics Scorecards / Dashboards Master Data Management Industry Models Information Agenda Distribution Warehouse Master Data Management Buyers Store Managers 3,623% ROI via supply chain visibility Retail Outlets 15
Common Characteristics of Top Performers Optimize Real-Time Decisions Fraud Protection: How can you detect fraud before transactions are accepted? Customer Understanding Real-Time Optimization Collaborative Decisions Enterprise Visibility Batch Attempted Collection Batch Fraud Identification Real-Time 11.4M Messages per second Key Technologies Finance Analytics Real-Time Analytics Identity Insight Stream Processing Pattern Detection Self-Learning Transaction Accepted Transaction Accepted Transaction Rejected Transaction Processed Incoming Transaction Transaction Processed Incoming Transaction Real-Time Fraud Identification $1.2B savings
Common Characteristics of Top Performers Foster Collaborative Decisions Loan Origination: How can you maximize customer service while minimizing risk? Customer Understanding Real-Time Optimization Collaborative Decisions Enterprise Visibility External Policies Fast Track Key Technologies Content Analytics Advanced Case Management Master Data Mgmt Business Rules Integrated Collaboration Approval Existing Customer Details Real-Time Data Gathering Master Data Management Automated Scoring/Pricing Credit Monitoring Credit Monitoring Collaboration Denial 6 Days to 5 seconds new loan processing 17
Common Characteristics of Top Performers Foundation for Business Analytics and Optimization Trusted Relevant Governed Transactional & Collaborative Applications Integrate Analyze Content Business Analytics Applications Manage Master Data Big Data Cubes Data Streams External Information Sources Content Streaming Information Govern Data Warehouses Information Governance Quality Lifecycle Security & Privacy Standards 18
How is IBM partnering with organizations to optimize outcomes? What is IBM Providing? How are Customers Benefiting? 19
Partnering with our Clients 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) Risk, Fraud and Finance Supply Chain Customer, Marketing and Sales Human Capital Skills and Competencies BAO Strategy BI & Performance Management Advanced Analytics & Optimization Enterprise Information Management Enterprise Content Management 20
Partnering with our Clients Offering a comprehensive set of integrated BAO capabilities Business Analytics and Optimization Software Services Systems Research 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 BAO Strategy Customer, Marketing and Sales Analytics Risk, Finance and Fraud Analytics Human Capital Analytics Supply Chain Analytics Information Management Foundation Enterprise Information Management Enterprise Content Management Storage and Data Services Big Data Services Workload Optimized Systems and Appliances PureScale Application System Smart Analytics System Netezza Appliances First of a Kind Projects Research Advisors Analytics Patents Analytic Research Assets (COBRA, DIOS, TACS, etc) Decision Optimization Optimization and analytical decision support 21
Partnering with our Clients IBM has assembled a leading BAO portfolio 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 Social Analytics/Consumer Insight Workload Optimized Systems Advanced Case Management Content Analytics Decision Management Stream Computing Pervasive Content purescale 2011 purexml Autonomic Operations Developer Productivity Deep Compression 2005 22
What is the path to breakaway performance? Leading practices for operationalizing analytics 23
The Path to Breakaway Performance 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