IBM Industry Summit: Ginny Rometty On The Business Evolution Towards A Smarter Planet Agenda

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.

IBM Senior Vice President Ginny Rometty guides the IBM Industry Summit audience as to how companies can navigate their way to smarter business in the "new normal."

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:

1. Instrument to Manage
2. Integrate to Innovate
3. 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.

Happy Tuesday

Hey there, happy Tuesday.

I’ve back and mostly recuperated from Information on Demand 2010.

More on that in a moment.

First, congrats to the San Francisco Giants for their World Series win.  It was a bittersweet first trip to the Big Show for my Texas Rangers, but I loved every minute of it in spite of the outcome.

And I love the City of San Francisco and its surrounding environs, have many friends who live in the area, and hope they are wallowing in their well deserved victory.

Meanwhile. on the subject of speaking of recent victories, Canalys is reporting that Apple now leads the U.S. smart phone market with 26% share.

Boy, do I feel like I went to bat for the right team on this one.  I struggled with my iPhone/Droid decision (moving away from RIM), and I opted for the iPhone (even though I still maintain the Droid market will end up being much, much larger in terms of the mobile application market opportunity).

But, there’s something to be said for the proprietary, quality-control approach Apple’s taking, and apparently millions of Apple iPhone users agree. (By the way, I’ve had NO buyer’s remorse for the iPhone 4 whatsoever.  In fact, I wonder why it took me so long to switch to the iPhone!)

Now, back to IOD 2010.

First, if you missed all the action, that’s okay, we captured a number of key sessions that you can attend remotely in Information on Demand Virtual 2010. There will be two sessions: One on November 17, the other on December 15.  Check out the previous link for more details (but know you’ll be able to see keynotes from a variety of speakers, including Dr. Atul Gawande and the Freakonomics gang).

You can also check out a number of the video interviews Scott Laningham and I conducted with key IBM execs, Business Partners, customers and subject matter experts on our Livestream channel.

And of course, you can read through back some the prior Turbo posts for key session recaps.

Information on Demand 2010, Opening Session Keynote: Gain Insight, Optimize Results

At this morning’s opening keynote session of the IBM Information on Agenda 2010 event, Robert Leblanc immediately got down to the business at hand: Telling organizations everywhere the basic rules of the road on how to work towards establishing their own effective Information Agenda.

With Blue Man Group-ish performance troup Cobu first setting the agenda for the conference with a beat all its own, Leblanc answered in turn and explained the conference theme: “Gain Insight, Optimize Results.”

Robert Leblanc, IBM VP Middleware for IBM Software, expounds on the opportunities of an information agenda at Information on Demand 2010 in Las Vegas, Nevada.

 

Leblanc is the Senior Vice President, Middleware Software, for the IBM Software business, and opened his comments by citing from the IBM 2010 Global CEO Study, which had three key findings in terms of what CEOs are looking for these days: 1) Embody creative leadership; 2) Reinvent customer relationships; and 3) Build operating dexterity.

Leblanc posed a few key questions to set the stage: How do I share information in more of a two-way manner with my clients?  How can I modify my products and services to better serve clients? How can I draw insight from the organization that is specialized to the client set I’m going after?

In other words, information management professionals, CEOs need your help!

A quick sound byte, related Leblanc: There will be 44X as much data and content over the coming decade, from 800K petabytes in 2009, to 35 zettabytes in 2020.

Yet people are starved for the right info and insight.  More sound bytes:

• 1 in 3 make critical decisions without the information they need.
• 1 in 2 don’t have access to the information they need to do their jobs.

Clearly, there’s a gap between information and outcomes.

That’s partially due to the Information Explosion, wherein organizations haven’t aligned their information needs with their business processes, or determined how to make the right information available when and wherever it’s needed throughout the organization.

In short, how to get to one version of the truth.

After being joined by customers CenterPoint Energy and Visa, who explained how their own organizations are using an IBM Information Agenda to get the right information to the right people when and wherever they need it, Leblanc summarized the roadmap for establishing your own Information Agenda.

First, he said, you need to plan an information agenda that aligns with your business decisions.  Second, you need to master your information to ensure it is accurate, relevant, and governed (and with a nod to increasing governance and regulatory requirements around the globe).

And finally, you must work to apply business analytics to anticipate and shape business outcomes, because increasingly, information is going to come from everywhere, requiring a response characteristic of radical flexibility and extreme scalability.

Leblanc summarized that no matter where in the organization you sit — C-Suite, Business Analystcs, Executive — you can take the lead on mapping out and setting your own information agenda.

Who’s On First?

I’m on the plane to Vegas.  It has wi-fi, and that’s the first time ever I’ve been on a plane with wi-fi, unbelievably.

But I don’t log on to it.  I don’t take the bait.  I’m too busy contemplating what awaits me in Vegas.

Let me start with my personal dilemma.

No, it has nothing to do with my blackjack skills or my overall gambling addiction (okay, I don’t really have a gambling addition, but it makes for a better story).

It’s much simpler than all that.

I’ve been so busy of late that I never had time to sit down and figure out what my schedule is for this Information on Demand Conference.

I’m supposed to be everywhere and nowhere at once, I’m sure, and yet despite the best efforts of our support staff, I’m completely clueless.

One schedule has all the key events laid out in a PDF.  The IOD Smart Site is supposed to help me build my own personal schedule.  Our blogging and PR staff gave me another PDF outlining all the key blogger events.

I’m panicking!  It’s like one of those dreams, where the dog ate your homework right before you’re supposed to take your final exams as you fall off the tall building and then…wake up right before you hit the ground.

It’s…well, it’s kind of like many of you out there.  I’ve got plenty of information…too much, really…but I have no way of consolidating it all and making intelligent decisions about how I should spend my next five days in Vegas (well, I can think of a few ways, but most of those would get me fired).

Sound familiar, all this information overload?  Kind of like the state of your business or organization, perhaps?

So, here’s my commitment to you.  I may never quite get a handle on my own schedule for this coming week, but what I will work to do is share my key thoughts and sentiments expressed here on the ground by all the mucho-smarter-than-me people at the conference.

To wit: My next post will be on the state of the information state.