Mark Smith's Analyst Perspectives

IBM’s Advances Business Analytics and Optimization in First Year

Posted by Mark Smith on Nov 28, 2010 2:41:33 PM

At its Business Analytics and Optimization (BAO) analyst summit in Washington, D.C., IBM provided direction on the state of its software and services in this category of business technology. This annual event goes back to 2005 when IBM started making BAO-related software acquisitions in earnest. I have written before about IBM’s focus on analytics and optimization (See: “IBM Fuses New Generation of Analytics for Deeper Business Optimization”), but I want to point out the company’s focus is not just on software but also on services, hardware and larger efforts. At the executive level IBM has communicated to investors and shareholders four strategic areas of focus: Business Analytics, Smarter Planet, Cloud Computing and Growth Markets. IBM sees itself as leading the business analytics market with unified services, software, hardware and a platform for them.

IBM takes a broad approach here in which software and services work together and hardware when needed. Its business analytics and optimization efforts are led by the Global Business Services group that manages business intelligence, performance management, advanced analytics, content and information management. IBM has enlisted 4,000 consultants to support these services and intends to grow that number to 6,000 this year; this is one of the largest organizations anywhere dedicated to business analytics.

IBM has been advancing its Smarter Planet initiative, which crosses global markets and industries and focuses on advanced analytics regarding customers, finance, risk and fraud and the simplification of infrastructure and support for it. At the analyst summit IBM software executives spoke about these integrated efforts in the market. The head of IBM Business Analytics software, Rob Ashe, discussed the spectrum of offerings in business analytics in terms of capabilities to understand, align, inform and adapt business for executives, analysts and IT. Through its acquisitions of Cognos and SPSS, IBM gained significant technologies that make its efforts in this area very robust. Additionally the head of Information Management software, Arvind Krishna, discussed the role of an information platform that provides an integration infrastructure and storage of data to support business analytics which IBM has its own databases but also now support Hadoop technology.

Michael Schroeck, a senior executive in BAO, talked about analytics simplification, which starts with a pragmatic foundation to create order in enterprise information. The foundation includes sourcing, integrating, storing, enriching and improving data. This base is essential as analytics requires high-quality data that can be accessed in timely fashion. IBM still has work to do to demonstrate this simplicity, not only for large global companies but also for smaller ones that need business analytics. Some customers at the summit spoke about how IBM provides smaller consulting teams for less costly projects; spokespersons from Assurant discussed its work on contact center agent analytics that drive customer routing and interactions, and representatives of the Gwinnett County, Georgia, Public Schools discussed the optimization of processes. As the twelfth-largest school district in the U.S., it actually transports more people than largest airline and serves more food than most restaurants. Both customers provided validation that the IBM approach to BAO is nimbler than most observers realize.

Looking ahead, IBM needs to boost its BAO marketing efforts to demonstrate that its software and services can span industries and lines of business and show on its Web site more than just overviews of consulting on technologies. IBM needs to prove that it has a focus that line-of-business professionals can grasp easily and that integrates easily into collaboration and mobility where business need to full leverage the analytics. That said, IBM’s global efforts are the largest in the world, and its investments demonstrate its commitment to BAO. It will be difficult for other global providers to hire as many service professionals or amass the software portfolio of IBM.

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Mark Smith – CEO & EVP Research

Topics: Operational Performance Management (OPM), Business Analytics, Business Intelligence, IBM, Business Performance Management (BPM)

Mark Smith

Written by Mark Smith

Mark is responsible for the overall direction of Ventana Research and drives the global research agenda covering both business and technology areas. He defined the blueprint for Information Management and Performance Management as the linking together of people, processes, information and technology across organizations to drive effective results. Mark is an expert in technology for business from Performance Management, Business Intelligence, Analytics to Information Management across finance, operations and IT. Mark has held CMO, product development and research roles at companies such as SAP, META Group, Oracle and IRI Software. He has experience across major industries including banking, consumer products, food and beverage, insurance, manufacturing, pharmaceutical and retail and consumer services.