Archive for the ‘ibm institute for business value’ Category
In advance of IBM’s massive event next week in Las Vegas featuring all things information management, Information On Demand 2012, IBM and the Saïd Business School at the University of Oxford today released a study on Big Data.
The headline: Most Big Data initiatives currently being deployed by organizations are aimed at improving the customer experience, yet less than half of the organizations involved in active Big Data initiatives are currently collecting and analyzing external sources of data, like social media.
One reason: Many organizations are struggling to address and manage the uncertainty inherent within certain types of data, such as the weather, the economy, or the sentiment and truthfulness of people expressed on social networks.
Another? Social media and other external data sources are being underutilized due to the skills gap. Having the advanced capabilities required to analyze unstructured data — data that does not fit in traditional databases such as text, sensor data, geospatial data, audio, images and video — as well as streaming data remains a major challenge for most organizations.
The new report, entitled “Analytics: The real-world use of Big Data,” is based on a global survey of 1,144 business and IT professionals from 95 countries and 26 industries. The report provides a global snapshot of how organizations today view Big Data, how they are building essential capabilities to tackle Big Data and to what extent they are currently engaged in using Big Data to benefit their business.
Only 25 percent of the survey respondents say they have the required capabilities to analyze highly unstructured data — a major inhibitor to getting the most value from Big Data.
The increasing business opportunities and benefits of Big Data are clear. Nearly two-thirds (63 percent) of the survey respondents report that using information, including Big Data, and analytics is creating a competitive advantage for their organizations. This is a 70 percent increase from the 37 percent who cited a competitive advantage in a 2010 IBM study.
Big Data Drivers and Adoption
In addition to customer-centric outcomes, which half (49 percent) of the respondents identified as a top priority, early applications of Big Data are addressing other functional objectives.
Nearly one-fifth (18 percent) cited optimizing operations as a primary objective. Other Big Data applications are focused on risk and financial management (15 percent), enabling new business models (14 percent) and employee collaboration (4 percent).
Three-quarters (76 percent) of the respondents are currently engaged in Big Data development efforts, but the report confirms that the majority (47 percent) are still in the early planning stages.
However, 28 percent are developing pilot projects or have already implemented two or more Big Data solutions at scale. Nearly one quarter (24 percent) of the respondents have not initiated Big Data activities, and are still studying how Big Data will benefit their organizations.
Sources of Big Data
More than half of the survey respondents reported internal data as the primary source of Big Data within their organizations. This suggests that companies are taking a pragmatic approach to Big Data, and also that there is tremendous untapped value still locked away in these internal systems.
Internal data is the most mature, well-understood data available to organizations. The data has been collected, integrated, structured and standardized through years of enterprise resource planning, master data management, business intelligence and other related work.
By applying analytics, internal data extracted from customer transactions, interactions, events and emails can provide valuable insights.
Big Data Capabilities
Today, the majority of organizations engaged in Big Data activities start with analyzing structured data using core analytics capabilities, such as query and reporting (91 percent) and data mining (77 percent).
Two-thirds (67 percent) report using predictive modeling skills.
But Big Data also requires the capability to analyze semi-structured and unstructured data, including a variety of data types that may be entirely new for many organizations.
In more than half of the active Big Data efforts, respondents reported using advanced capabilities designed to analyze text in its natural state, such as the transcripts of call center conversations.
These analytics include the ability to interpret and understand the nuances of language, such as sentiment, slang and intentions. Such data can help companies, like a bank or telco provider, understand the current mood of a customer and gain valuable insights that can be immediately used to drive customer management strategies.
Update: Also check out the new IBM Big Data Hub, a compendium of videos, blog posts, podcasts, white papers, and other useful assets centering on this big topic!
So just how big IS big data?
This is your opportunity to find out, and, to contribute.
IBM’s Institute for Business Value is conducting a study on big data, and we’d like to hear from you.
The idea behind the study is simple: To develop a fact-based analysis of big data activities in the global marketplace.
Through this research, IBM hopes to help the marketplace better understand some key tenets behind the big data movement: To gain an organizational view of big data and organizations’ primary objectives for investments in this burgeoning area. To understand better the drivers and leaders of big data activities. To understand the current and planned state of big data activities, and patterns that suggest best practices of big data implementations.
The survey is slated to run through June 29, 2012, and takes approximately 10-15 minutes per respondent.
All responses will be viewed in the aggregate, and individual responses will not be disclosed beyond the survey analysis team without expression permission of the respondent.
The audience for the survey: Global business executives, management and analysts, as well as IT professionals, across all levels of the organizational hierarchy (from C-suite to data analysts).
Once the fielding is completed, the survey results will be analyzed by a wide team of subject matter experts from within IBM, along with a team of faculty from a globally recognized university.
This data will be combined with interviews and case studies to develop a final reporting of findings and big data benchmarks to be published in October of this year.
So, in short, this is your opportunity to be part of the benchmarks that will define the big data era, one that you can use to compare with your own organization.
All participants will receive a copy of the final study, and will also be eligible to download the IBM e-book entitled “Understanding Big Data.”
Here’s the link if you’d like to be part of this exciting big data discovery!
The number of enterprises turning to cloud computing to revamp outdated business models will more than double in the next three years, as business leaders move to capitalize on the rapid availability of data and the growing popularity of social media, according to a new study released today by IBM.
Businesses that embrace the transformative power of cloud will have a significant advantage in the race to introduce new products and services and capture new markets.
To better understand the shift in how organizations use cloud today and how they plan to employ it in the future IBM, in conjunction with the Economist Intelligence Unit, surveyed more than 500 business and technology executives worldwide. The findings were compiled in a new study, titled “The Power of Cloud: Driving business model innovation.”
“Companies are starting to understand — cloud isn’t just about gaining efficiencies and cost savings; it’s about driving the kind of fundamental innovation that provides lasting marketplace advantage,” said Saul Berman, IBM global strategy consulting leader and co-author of the study.
Changing Motivations for Cloud Adoption
According to the study, as they strive to better meet customers’ needs and drive future growth, business leaders will increasingly tap cloud to develop new business models that can exploit the capabilities resulting from these digital trends.
While 16 percent of the executives surveyed indicate they are already using cloud capabilities for sweeping innovation, such as entering new lines of business or reshaping an existing industry, by 2015 35 percent intend to use it to transform their business models.
While a little more than half of the respondents indicated “improving organizational efficiency” as a top business challenge today, only 31 percent anticipate it will be a top challenge in three years. Instead the study indicates that their focus is shifting to growth and competitive initiatives in the future. The objectives cited by survey respondents for adopting cloud are in line with these business goals, indicating that business needs will soon rival IT motivations for cloud adoption:
- 62 percent of survey respondents said increased collaboration with external partners is a key objective for adopting cloud;
- 57 percent cited competitive cost advantages through vertical integration as a major motivation and;
- 56 percent pointed to opening new delivery channels and markets as an important objective.
Examples cited in the report showcasing how cloud is being tapped to drive new revenue streams and enhance business models include an online marketplace for handmade goods that has taken advantage of cloud’s cost flexibility to gain access to more powerful analytics online.
The company is able to cost-effectively analyze data from the approximately one billion monthly views of its Web site and use the information to create product recommendations, providing it with access to tools and computing power that might typically only be affordable for larger retailers.
The study also cites an online health information network that enables the exchange of health information and transactions among healthcare providers, employers, payers, practitioners, third-party administrators and patients in India.
By connecting more than 1,100 hospitals and 10,000 doctors, cloud computing’s capabilities are facilitating better collaboration and information sharing — helping the network to pursue a more collaborative business model and deliver improved care at a low cost.
Masking Complexity, Enabling Consumer Needs
The study’s authors point to cloud’s capabilities to mask complexity and enable user-defined experiences, as well as its overall scalability and cost flexibility as key reasons companies are planning to move it into front office operations in the near future.
“Cloud has the power to open doors to more efficient, responsive and innovative ways of doing business, and we believe the companies that will come out on top will be the ones that find ways to leverage it as a key point of differentiation in driving business value,” Berman said. “Whether they choose to tap cloud to optimize, innovate or even disrupt their business models, they need to start working on it now.”
Visit here to download and learn more about the study.
IBM continues its business analytics drumbeat with some new research released today by MIT Sloan Management Review and the IBM Institute for Business Value which reports that organizational challenges, more so than technology hurdles, are holding companies back from fully integrating analytics across their enterprises.
According to a global survey of more than 4,500 executives, managers and analysts from more than 120 countries and 30 industries, 44 percent of organizations say cultural barriers to enterprise-wide analytics adoption, such as the requirement for new leadership competencies and organizational resistance to new ideas, are the primary barriers.
In contrast, only 24 percent point to technology concerns.
The new report, entitled “Analytics: The Widening Divide,” builds on the findings from the original study by MIT SMR and IBM in 2010 to understand how companies are embedding analytics in more of the enterprise’s processes and operations.
The 2010 study found organizations fall into one of three levels of sophistication: basic users referred to as Aspirationals, followed by the more Experienced users, and the most advanced users referred to as Transformed.
Year-to-year comparisons reveal that the more sophisticated users are expanding their deployment of analytics and widening the performance gap over their peers.
For instance, from 2010 to 2011 the percentage of respondents who cited a competitive advantage using analytics grew 23 percent for Transformed and 66 percent for Experienced organizations. These same organizations are more than twice as likely to substantially outperform their competitive peers.
In contrast, Aspirational organizations lost ground in competitiveness, falling 5 percent since last year.
“Our new research shows that the early and aggressive adopters of analytics make significant gains in both performance and overall competitiveness,” said Fred Balboni, IBM’s global leader, Business Analytics and Optimization. ”These indicators point to an urgent need for organizations to foster a data-oriented culture and drive an analytics strategy that embeds fact-based insights into decisions and processes at every level of the business.”
“We’ve found that there are three legs to the competitive analytics stool: a data-oriented culture, information management competency, and analytics expertise,” said David Kiron, executive editor for MIT Sloan Management Review. ”Companies that have all three use analytics to deliver advantage in the marketplace.”
The study found that the majority of organizations are using analytics to manage their financial and operational activities, but are less likely to rely on analytics-based insights for decisions in other key areas.
On average, less than 25 percent of Aspirational organizations, and one-half of Transformed organizations, say they rely on data and analytics to make decisions involving customers, business strategy and human resources.
Even Transformed organizations are not using analytics to their fullest potential, indicating ample opportunities for advanced users to do more and for less sophisticated organizations to create a competitive advantage by targeting analytics at key strategic activities.
While Transformed organizations use analytics more broadly across the organization than their peers, they differentiate themselves by intensely focusing on applying analytics to three areas:
- Increasing the speed of decisions – Transformed organizations are more than three times more likely than Aspirationals to focus intensely on making better decisions, faster.
- Managing enterprise risks – Eighty-six percent of Transformed organizations are addressing the full range of organizational risks that can impact their business, while none of the Aspirational organizations have the same level of focus. Transformed organizations are using analytics to not only mitigate, but also anticipate risks.
- Engaging customers – Transformed organizations are outpacing their peers in leveraging the enormous amounts of data available today to understand and engage with their customers in new ways. Two-thirds of them are putting analytical insights into the hands of customer-facing employees to drive sales and productivity — compared to one-fourth of Aspirationals.
The study examines how Transformed organizations are creating an advantage in the marketplace. The analysis shows that of all the characteristics exhibited by this group, their proficiency in six areas (represented by the percentage of Transformed companies that say they possess these characteristics) distinguished them the most:
- Ability to analyze data – 78%
- Ability to capture and aggregate data – 77%
- Culture open to new ideas – 77%
- Analytics as a core part of business strategy and operations – 72%
- Embed predictive analytics into process – 66%
- Insights available to those who need them – 65%
Go here for more information on the MIT SMR/IBM joint New Intelligent Enterprise project.
Okay, I went back and checked my NFL playoff picks for the weekend (see my last post).
Three out of four ain’t bad, and who would have thunk the New York Jets were going to beat the New England Patriots, especially after the season Tom Brady has had.
But kudos to Mark Sanchez, Rex Ryan, and the entire Jets organization — that was a helluva win and in Foxborough no less (New England’s home turf).
After watching “60 Minutes” last night and the story on sports betting guru Billy Walters, however, I don’t think I’m quite ready to start making book at $200K+ a game!
As to spending on IT in the small- and medium-sized business market, IBM just completed a global study of more than 2,000 midsize companies representing more than 20 countries.
The verdict? More than half of midsize companies are planning to increase their IT budgets over the next 12 to 18 months.
The study, entitled “Inside the Midmarket: A 2011 Perspective,” found that 70% of midsize companies were actively pursuing analytics technology to better understand their customers, make better decisions, and become more efficient.
No shocker, the study also shows growing adoption of cloud computing among midsize firms, with two-thirds either planning or currently deploying cloud-based technologies to improve IT systems management while lowering costs.
A few other choice tidbits:
- Security (63%), customer relationship management (62%) and analytics / information management (59%) were cited as their “Most Critical IT Priorities.”
- 75% plan to upgrade their core IT systems to improve performance, security and reliability.
- Top expected benefits from cloud computing include cost reduction, better manageability of IT, improved system redundancy and availability.
- Top barriers to IT adoption cited were cost, difficulty in acquiring and deploying technology solutions, and lack of IT skills and resources.
These observations suggest a far cry from a similar survey from nearly two years back, when the conversation was dominated by cost-cutting and efficiencies, rather than business expansion and gaining greater insight.
Observed Andy Monshaw, general manager of the IBM Midmarket group, “The survey findings show that midsize firms are tackling a new set of opportunities to advance their role as engines of economic growth.”
Visit here to download the full study and learn more.
At the kickoff sesion of this morning’s IBM Industry Summit, IBM senior vice president of sales, marketing and strategy, Ginny Rometty, articulated a vision for organizations around the globe on how they could practically execute against the smarter planet agenda.
But first, she helped to rearticulate the problem statement through an example many may have already forgotten, the rice shortage crisis from early 2008.
Rometty explained she was traveling in Asia, and befuddled that in this day and age there would be a run on rice.
Once back at her office, she polled several colleagues from IBM Asia, and asked them what they thought was the cause of the shortage: Market speculation, climate change, growing demographics, what? In truth, it was all these things, but the “system of systems” had been overrun by its own complexity.
And ironically, a report released over a year later from the U.S. Dept. of Agriculture stated that 2007-08 had been a record crop for rice!
Too much complexity, indeed.
There were huge inefficiencies in the vast distribution and supply chain system for rice, and not unlike the global financial crisis, it was those inefficiencies and interconnectedness that led to the rice riots to occur in the midst of the greatest rice crop in years.
With that as the backdrop, and the problem statement established, Rometty then began to explain what organizations around the globe must do if they wish to embrace the complexity of such “systems of systems,” and start to capitalize on the new opportunities they present.
Because this one example was emblematic of broader, but common challenges facing the world: All the systems that govern our businesses are really interconnected.
Also, companies everywhere have started to realize the increasing costs of their longstanding inefficiencies.
Which leads to the third understanding: We have to change. This is clearly not sustainable.
Rometty mentioned a study which revealed that since the global crisis hit, one-third of all CEOs have been replaced (Monster.com, anybody?)
To respond (and keep their jobs), CEOs must start to focus their energy on productivity and structural change, continued Rometty.
“You’re going to either take a market, or make a market.”
Therein lies the promise and the aspiration of a smarter planet. It really is a new way of thinking about your business and its opportunity in the world.
So how as a business do I get started on this concept of a smarter industry, Rometty asked?
Rometty answered the question by outlining the fact that IBM has done over 600 engagements around the globe, and half were done with partners like those in the room here in Barcelona.
Rometty then fully hit her stride and outlined for the CEOs and partners gathered in the room the three general phases people go through as they move towards a smarter business:
- Instrument to Manage
- Integrate to Innovate
- Optimize to Transform
The first step is simple: Understand the performance of your business by instrumentation.
You can’t know how fast you’re driving if your car doesn’t have a speedometer.
That’s why IBM has related this idea of embedded technology (RFID, sensor data, etc.) To bridge the digital and analog world, we have to instrument, measure, and then manage it.
As an example, Rometty mentioned a Vietnamese seafood company which uses RFID sensors to monitor, from trawler to market, its fish catches to ensure quality control, manage inventory, and prove the premium value of its catch.
Second, companies must integrate to innovate. Organizations must be willing to evolve and adapt horizontally, across all their systems and structures, so that they can then be prepared to apply business analytics more effectively.
Rometty mentioned Toyota, which built an industrial waste efficiency project that the company spun off as a separate business unit, Ecomanage Network Corporation, to help other manufacturers facing the same waste management challenges.
Rometty also mentioned how supercomputing capability has evolved during the past decade. We’ve gone from Deep Blue, a supercomputer playing a chess game (but one with ultimately finite moves) to “Watson” (named after IBM’s founder, Thomas Watson), the new supercomputer learning how to play against humans with infinite possibliities in the “Jeaopardy” TV game show.
The host provides the answers, Watson has to come up with the questions. Watson’s currently in training against other humans, but Rometty indicated that “She’s learning quite fast.”
Much laughter in the audience before Rometty moved on to the third step: Optimize to transform.
Now that you’ve built a foundation using instrumentation and new analytics, you can now move on to the art of the possible: Optimizing your system towards a specific business goal.
Predictive analytics is very different from the “looking backwards” model businesses have historically depended on.
The next decade, argued Rometty, will be one of predicting the future before it happens.
Unless you think she was now on to soothsaying, Rometty mentioned the Singapore Land Transit Authority, where technology is helping Singapore predict bus arrival times at a 98% accuracy rate, and helping commuters understand bus seat inventory via their mobile devices.
So what’s required to pull off this transformation, Rometty asked?
Three things. Leadership featuring an analytics based-culture. Systems thinking. And new forms of collaboration.
With regards to analytics, it’s actually simple to say (harder to do): Get your company and its people to move from guessing about your business via HIPPO (Highest Paid Person in the Room) and gut judgment, to one based on facts and trusted data that yields action.
Two, don’t get caught in the rice shortage paddy! Develop a culture of systems thinking so your organization is more adept and able to respond to unexpected crises, no matter their orientation.
And three, build a culture of collaboration. Your partners, your suppliers, your customers, all are key constituents in a supply chain of new ideas and possibilities for your business, but only if you facilitate and tap into their expertise and insights.
Pioneering companies which rethink their business systems and models, reinvent their outdated processes, and leverage analytics effectively moving will be poised to move beyond the “new normal” and instead realize new growth and outcomes for their companies.