the new path to value: business analytics and optimization · the new path to value: business...

© 2011 IBM Corporation

Business Analytics software

The New Path to Value: Business Analytics

and OptimizationRob Ashe, General Manager, Business Analytics

IBM Business Analytics and OptimizationJuly 21, 2011

Business Analytics

© 2011 IBM Corporation2


IMPORTANT DISCLAIMER

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Vast Majority of CEOs Experience the New Economic Environment as Distinctly Different

More volatileDeeper/faster cycles, more risk

More uncertainLess predictable

More complexMulti-faceted, interconnected

Structurally differentSustained change

Not at all/to a limited extent To a large/very large extentTo some extent

“Last year’s experience was a wake-up call, like looking into the dark

with no light at the end of the tunnel.”President and CEO,

Industrial Products, The Netherlands

Source: Q7 To what extent is the new economic environment different? Volatile n=1,514; Uncertain n=1,521; Complex n=1,522 ; Structurally different ,

18%13% 69%

21%14% 65%

22%18% 60%

21%26% 53%

The New Economic Environment



ERP Backbone

Latency

Siloed

IT/End User Polarization

Internal Data Sources

Information Backbone

Immediacy

Collaborative

Consumer/IT Balance

External Data Sources

The Shift to Analytics



Is thePriority for CIOs

Has doubled in Importance for CFOs

Source: IBM CIO Study, 2009, IBM CFO Study, 2010

#1

Information as a Strategic Asset

Information Information

ManagementManagement

Business Business

AnalyticsAnalytics



Analytics-Driven Organizations OutperformEfficiency + Business Insight Contribute to Better Financial Performance

“Business analytics is the key to enabling our clients to turn oceans of data into predictive models and actionable decisions.”

Why analytics matter...

49% moreRevenue Growth

> 20x moreEBITDA

30% moreReturn on

Invested Capital

Source: IBM Institute for Business Value, The Global CFO Study 2010 Revenue, EBITDA Growth: 5 yr CAGR (’04-08); ROIC: 5 yr Avg (04-08)

Value Integrators

All other enterprises



7

Business Analytics and Optimization is a top IBM priority

Smarter Planet

Cloud and Next Generation Data Center

Growth Markets

Business Analytics

and Optimization

Business Analytics

and Optimization

IBM Growth Initiatives

Includes software,

hardware and services

10% CAGR

2009 2015

Source: IBM Investor Relations, May 2010; $16B refers to cross-IBM revenue including Software, Services and Systems.

BAO Revenue(including SW, HW and services)



Autonomic Operations

Developer Productivity

Deep Compression

pureXML

pureScale

Mid-Market BI/PM Solution

Stream Computing

Content Analytics

Advanced Case Management

Workload Optimized Systems

Social Analytics/Consumer Insight

2011

2005

Decision Management

Investing to Enable Our Customers

• $14B+ in acquisitions since 2005

• 10,000+ technical professionals

• ~8000 dedicated consultants

• 27,000+ business partner certifications

• 8 Analytics Solutions Centers

• 100 analytics-based research assets;

almost 300 researchers

• $14B+ in acquisitions since 2005

• 10,000+ technical professionals

• ~8000 dedicated consultants

• 27,000+ business partner certifications

• 8 Analytics Solutions Centers

• 100 analytics-based research assets;

almost 300 researchers

Unified BI Workspace

8



Investment Areas

Risk solutions

Finance solutions

Customer solutions

Platform

MD13 the objective of this slide is to lay out Rob's vison for analytics. First point is that you need a platform to get analytics to everyone.second point is the customized solutions or applicaitons for Customer and Finance and Risk.Once we've communicated those thoughts, we need to transition from the points to the graphic in this slide, ending up with the visual on slide 3. This content is a critical portion of Rob's introductory comments so can you please work your magic on this one?Meg Dussault, 4/12/2011

MD14 the objective of this slide is to lay out Rob's vison for analytics. First point is that you need a platform to get analytics to everyone.second point is the customized solutions or applicaitons for Customer and Finance and Risk.Once we've communicated those thoughts, we need to transition from the points to the graphic in this slide, ending up with the visual on slide 3. This content is a critical portion of Rob's introductory comments so can you please work your magic on this one?Meg Dussault, 4/12/2011



13

• Full breadth of BI for every decision-maker

• Query, reporting, analysis, scorecards and dashboards

• Delivered where, when and how needed

• Revolutionary way to work with BI

• Unified workspace with built-in collaboration

• View of all time horizons: past, present & future

• Easy progression from viewing to exploration to more advanced analysis

• Free to answer critical business questions

• Answer “how am I doing”, “why”, and “what should I be doing?”

• Ensure organization-wide insight and alignment



Business challenge:

•Limited visibility

•Labor intensive and costly analyses

•Static and inflexible reports

Solution (or strategy):

•Web-based functionality that allows finance to publish standardized reports and tools to the Web, effectively creating department-specific portals

•The ability for staff and LOB managers to create ad-hoc and end-user reports without assistance of IT or Finance

•Java-based functionality enabling users to drill into databases or reports that are continuously updated for new transactions

Benefits:

•Improved productivity by an average of 13 % for the 120 users

•Reduced financing costs by accelerating turnover of both AR and inventory

ROI:ROI:ROI:ROI:

3,623%Payback:Payback:Payback:Payback:

11 daysSource: Nucleus Research 2009



15

• Full breadth of predictive analytics

• Data collection, statistics, data mining, predictive modeling, deployment services…

• Putting prediction in hands of the business

• Decision Management

• Driving better business outcomes

• Attract and retain more profitable customers

• Detect and prevent fraud

• Improve resource allocation



Business challenge:

•Identify fraudulent claims

•Accelerate collection of payments

•Automate workflows and data gathering

Solution (or strategy):

•Enable the company to more rapidly identify and investigate suspicious claims

•Identify unsuspicious claims so that they could be handled rapidly in order to improve customer satisfaction

Benefits:

•Accelerated payment collection

•Reduced cost of claims payments

Source: Nucleus Research 2009




17

� Simplify, structure, and automate dynamic and sustainable FP&SM practices

� Monitor and analyze business performance against targets

� Plan, forecast and control enterprise resources aligned with corporate objectives

� Close the books, consolidate results and report financial performance with confidence.



Business challenge:

•Rapid growth from acquisition, new facilities

•Reporting revenues/costs across multiple business lines was lengthy and labor intensive

•Needed operational visibility required of a public company

Solution:

•Optimize the frequency and granularity of reporting

•Increase focus on lines of business; and

•Identify, create and monitor KPIs.

Benefits:

•Reduced labor costs by $2.5M /year

•Eliminated excess inventory

•Avoided headcount

•Improved reporting – made better business decisions

ROI:

1822%

Payback:

1 month

Source: Nucleus Research 2009

Blue Mountain Ski Resort



� Enterprise requirements

� CIO has to manage multiple datamarts and point solutions for risk and compliance data

� CRO cannot get aggregate risk exposure position

� CCO cannot ensure regulatory compliance, adapt to change or manage regulator interaction

� Unifies enterprise-wide risk and compliance initiatives into a single management system

� provide visibility into risk exposure and to facilitate compliance management

� Provides synergy with Information and IT Governance, Risk Management, and Security



20

Integrated Financial Controls and Operational Risk Management

Bettercontrol…of risk and opportunity

• Reduced cost, improved efficiency and effectiveness

• Better overall view of risk and compliance posture



2121

� Ready-made packaged reporting and analyses based on the best practices

� Encompasses a comprehensive portfolio

� Workforce, customer, finance & supply chain

� Adaptable & extensible

� Adaptive Application Framework

� Source data from multiple transaction systems



� Detailed view of network performance

� 719M Euros in increased profit

Fast Time to Value with Analytic Applications

Increase Increase Increase Increase agilityagilityagilityagility…rapidly respond to opportunity



Trends and Areas of Focus

� Social Analytics/Big Data

� Advanced/Predictive Analytics

� Desktop Discovery

� Mobile

� Optimized Systems



74% integrating Web 2.0 with customer interaction

75% integrating Web 2.0 into employee day-to-day activities

71% integrating Web 2.0 with partner/supplier interaction

69% report that Web 2.0 tools have delivered measurable business benefits

Of nearly 1700 executives surveyed by McKinsey

Companies are embracing social media

?Policy

Integration

Adoption



Social Media is not only influencing consumer behaviour but creating vast amounts of new and valuable information

78%of consumers trust peer

recommendations

Source: August 25, 2009, “The Broad Reach Of Social Technologies” Forrester report

770million people worldwide visited

a social networking site.

Source: comScore, Social Networking Phenomenon



Create Relationships. Build Advocacy. Improve Loyalty.

Enhance YourReputation

Improve Yourcustomer experience

Grow YourBusiness

The foundation for the solutions is IBM Cognos Consumer Insight



In the Labs – Desktop Discovery

� Data Discovery and Visualization

solution

� On the desktop, standalone

– Guided data acquisition

– Personal modeling

– Analysis and visualization

– Dashboard assembly

– Exchange files with other users

� Connected to a Cognos server

– Plan contribution

– Access content store

– Publish dashboards

– Promote content to be managed

� Technical attributes

– Embedded in-memory analytics engine

– Look and feel of Business Insight



In the Labs – Mobile Information Delivery

Today– Smartphone support

– iPhone browser

– Blackberry app

– Active Reports for the Windows laptop

– Highly visual interactive experience

– Targeting reporting / dashboard agenda

Investment Areas– Active Reports as an iPad app

– Highly visual interactive experience

– Targeting reporting / dashboard agenda

– Broaden to other key mobile OS platforms

Key Benefits – Mobile BI & performance management

– Author once, consume anywhere



Optimized Systems: Netezza and IBM Business Analytics

� Performance – Fastest time to insight

� Simplicity – Accelerate the time to value

� Broadest Analytics – Deep and relevant insight

� Single IBM Solution – Business success and lower risk

Fastest, Broadest and Deepest Analytic Capabilities

Shashi Vangala, Manager & Chief Solutions Architect of Business Intelligence

“…“…Performance is the mantra for Performance is the mantra for usus……embed larger extents of embed larger extents of datadata……enabled extended visibility enabled extended visibility into the trendsinto the trends…”…”



The more you infuse analytics into your business, the higher your AQ and the better you and your business will perform

= Analytics Quotient

RealizedPotential

=



31

Manual, slow, error prone, cumbersome, fragmentedData quality concerns

Automated, instant, accurate, seamless, convergedData governance is in place

AQ maturity determined by:� Decision-making savvy� Readiness and capacity to leverage

analytics across critical roles and processes� Mastery of information

The AQ Journey



32

• You rely on spreadsheets with information gaps

• The rear view is your only view

STEP 1:

Novice

• You have a view into current results and a little of what’s driving them

• Results are shared with other teams within your department

STEP 2:

Builder

STEP 4:

Master

• Your VP sets the strategy

• Your department’s metrics map to other departments metrics

• You look forward as much as you review the past

STEP 3:

Leader• Top-down goal setting

• Insights flow freely across divisions and departments.

• You allocate resources, minimize risk and maximize outcomes with equal ease and speed

Manual, slow, error prone, cumbersome, fragmentedData quality concerns

Automated, instant, accurate, seamless, convergedData governance is in place

The AQ JourneyWhat's Your AQ?



� Shift to Analytics

� IBM Commitment to Analytics

� Platform, Capabilities, Solutions

� Innovation that Matters



Thank You

the new path to value: business analytics and optimization · the new path to value: business...

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