ibm business analytics and optimization the path to breakaway

© 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


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


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

© 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



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


6


How are

top performers breaking away?

Common characteristics of top performers


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

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http://www.ibm.com/gbs/intelligent-enterprise




… 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.


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


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Consumer Experience Framework – 10 years ago

Marketing

Sales

Support/Services

Use

Product

Purchase (More) Products

Get Customer

Service


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


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


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


Customer

Understanding

Customer

UnderstandingEnterprise

Visibility

Enterprise

Visibility

Real-Time

Optimization

Collaborative

Decisions

Real-Time

Optimization

Collaborative

Decisions

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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


Customer

Understanding

Customer


Visibility

Enterprise

Visibility

Real-Time

Optimization

Collaborative

Decisions

Real-Time

Optimization

Collaborative

Decisions

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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


Customer

Understanding

Customer


Visibility

Enterprise

Visibility

Real-Time

Optimization

Collaborative

Decisions

Real-Time

Optimization

Collaborative

Decisions

$1.2B savings


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


Customer

Understanding

Customer


Visibility

Enterprise

Visibility

Real-Time

Optimization

Collaborative

Decisions

Real-Time

Optimization

Collaborative

Decisions

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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


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How is IBM

partnering with organizations

to optimize outcomes?

What is IBM Providing? How are Customers Benefiting?


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

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Partnering with our Clients


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 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

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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



What is the

path to breakaway performance?

Leading practices for operationalizing analytics


“The New Path to Value” Leading Practices for Operationalizing Analytics

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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

ibm business analytics and optimization the path to breakaway

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