I attended the IBM Business Analytics and Optimization (BAO) briefing yesterday at the IBM Research facility in Hawthorne, NY.   At the meeting, IBM executives from Software, Global Business Services, and Research (yes, Research) announced its new consulting organization, which will be led by Fred Balboni.   The initiative includes 4000 GBS consultants working together with the Software Group and Research to deliver solutions to customers dedicated to advanced business analytics and business optimization. The initiative builds off of IBM’s Smarter Planet . 

 

IBM believes that there is a great opportunity for companies that can take all of the information they are being inundated with and use it effectively.  According to IBM (based on a recent study), only 13% of companies are utilizing analytics to their advantage.  The business drivers behind the new practice include the fact that companies are being pressured to make decisions smarter and faster.  Optimization is key as well as the ability for organizations to become more predictive.  In fact, the word predictive was used a lot yesterday. 

 

According to IBM, with an instrumented data explosion, powerful software will be needed to manage this information, analyze it, and act on it.  This goes beyond business intelligence and business process management, to what IBM terms business analytics and optimization.  BAO operationalizes this information via advanced analytics and optimization.  This means that advanced analytics operating on lots of data will be part of solutions that are sold to customers.  BAO will go to market with industry specific applications

 

‘Been doing this for years

 

IBM was quick to point out that they have been delivering solutions like this to customers for a number of years Here are a few examples:

 

·        The Sentinel Group , an organization that provides healthcare anti-fraud and abuse services, uses IBM software and advanced analytics to predict insurance fraud.

·        The Fire Department of New York is using IBM software and advanced analytics to “ build a state of the art system for collecting and sharing data in real-time that can potentially prevent fires and protect firefighters and other first responders when a fire occurs”.

·        The Operational Risk data exchange (ORX) is using IBM to help its 35 member banks better analyze operational loss data from across the banking industry.  This work is being done in conjunction with IBM Research.

 

These solutions were built in conjunction with the members of IBM Research who have been pioneering new techniques for analyzing data.  This is a group of 200 mathematicians and other quantitative scientists.  In fact, according to IBM, IBM research has been part of a very large number of client engagements.  A few years back, the company formalized the bridge between GBS and Research via the Center for Business Optimization.  The new consulting organization is yet a further outgrowth of this. 

 

The Dawn of a New Era

 

The new organization will provide consulting services in the following areas:

·        Strategy

·        Biz Intelligence and Business Performance Management

·        Advanced Analytics and Optimization

·        Enterprise info management

·        Enterprise Content management

 

It was significant that the meeting was held at the Research Labs.  We lunched with researchers, met with Brenda Dietrich, VP of Research, and saw a number of solution demos that utilized intellectual property from Research.  IBM believes that its research strength will help to differentiate it from competitors.

 

The research organization is doing some interesting work in many areas of data analysis including mining blogs, sentiment analysis, and machine learning and predictive analysis.  While there are researchers on the team that are more traditional and measure success based on how many papers they publish, there are a large number that get excited about solving real problems for real customers.   Brenda Dietrich requires that each lab participate in real-world work. 

 

Look, I get excited about business analytics, it’s in my blood.  I agree that world of data is changing and companies that make the most effective use of information will come out ahead. I’ve been saying this for years.   I’m glad that IBM is taking the bull by the horns.  I like that Research is involved. 

 

It will be interesting to see how effectively IBM can take its IP and reuse it and make it scale across different customers in different industries in order to solve complex problems.  According to IBM, once a specific piece of IP is used several times, they can effectively make it work across other solutions.  On a side note, it will also be interesting to see how this IP might make its way into the Cognos Platform.  That is not the thrust of this announcement (which is more GBS centric), but is worth mentioning.