Adam Gartenberg's Blog

Business Analytics and Optimization, IBM and Social Marketing

IOD EMEA 2010 Day 2 General Session


The theme of the IOD EMEA 2010 Day 2 General Session was transformation, a subject introduced by Michael Rhodin, SVP IBM Software Group and covered Adam Klaber, General Manager, GBS Service Lines and and Regina Casonato, Managing Vice President, Gartner.  As with yesterday, here is what I captured from the session.

Nicola Ciniero, GM, IBM Italy

Transformation - see great changes around us.  Industries are transforming, organizations are transforming.  Successful companies are ones who can see change as opportunity.  See new markets, new business models, new products, new ways to meet customer needs.  Information & analytics are at heart of any organization's ability to transform.

Michael Rhodin, SVP IBM Software Solutions Group

Yesterday talked about increasing stresses of infrastructure and overwhelming amount of data.  Hard to get on top of, keep under control.  Can't be content to just optimize data - need to change game, outflank competitors, change your industry.  Need to innovate, and innovation all about transformation.

Not only is data exploding, but we're seeing shifts in the data itself.  Everything is becoming instrumented.  At one time, all data was manually entered by a person somewhere - now so much is generated by automatically by sensors, RFID, etc.

1 in 3 business leaders frequently make critical decisions without info they need, 1 in 2 don't have access to the info across their org. needed to do their jobs.  3 in 4 say more predictive info would drive better decisions.

Traditional Approach

  • Instinct and intuition
  • Corrective
  • Years, months, weeks
  • Decision support
  • Efficient

Smarter Approach
  • Fact-driven
  • Directive
  • Hours, minutes, seconds
  • Action support
  • Optimized

We're data rich but insight poor.  Important decisions made on gut instincts rather than facts.  Executives don't have a view into information across their businesses.  A smarter approach is needed.  Need to turn data into info, info into insight, use insight to move organization forward.  In this Decade of Smart, our ability to move forward is contingent on making sense of data and putting it to work.

Example:  Anheuser-Busch InBev - 120k employees in 30 countries worldwide.  Needed greater view into business, from any needed dimension, all while maintaining a consistent level of operations.  Problems:  data is inconsistent, stored in separate places around world.  Unclear who was responsible for data (compared to systems, where everyone knew who was responsible for systems).  Now have consistent view of data, measure against strategy with Key Performance Indicators (KPIs).  Can align processes to strategy without compromising operations.  Info that used to be buried in different places through organization can now tell a story.

We recognize that every industry is different and every company is unique.  This is why we are taking an industry-specific view.  We want to work with you to chart course for short, medium, long term perspective in way that makes sense for your business and your industry.

We are developing industry frameworks and are proposing industry agendas, putting IBM's rich capabilities within context of your business within your industry.  Drawing on expertise of IBM's business units.  

What do industry frameworks include:  
  • Strategic business drivers - industry specific challenges, market drivers, shifts & trends
  • Industry Solutions - Industry and subject matter expertise/apps and tools
  • Industry Frameworks
  • Servers, storage, communication networks & associated services

Value add:  
  • Process models & flows
  • Information models
  • Design templates
  • Re-usable code assets
  • Industry standards
  • Common Services
...integrated on an IBM middleware platform

IBM is uniquely able to provide.  Built in connection with businesses and organizations.

One example is the Travel & Transportation framework announced a few weeks ago.  It focuses on business functionality with industry standards to facilitate communication between devices, people, etc.

Example: Netherlands Railways analyzes passenger traffic trends to predict future volumes and optimize schedules.  Europe's most densely populated country.  Determining train schedules need to account for passenger traffic, # of rail cars, maintenance schedules, etc.  Deployed model-based scheduling system that can monitor trends, scheduling and availability.  Account for 56,000 variables to assemble 5,000 trains per day. Have seen 6% savings - almost $30M a year - and free up train cars that were under-used to support higher volume routes.  2% increase in on time support, increasing revenues.

Have more frameworks like this coming out in near future.  Partnering with other major players in industry.  Building open ecosystem to enable Business Partners to deliver - IBM can't do it alone.  Also fertile ground for startups, entrepreneurs, venture capitalists.

Why work with IBM?  What makes us unique?  Software filled with expertise.  It's a key differentiator for our portfolio, and we are making a lot of investments in this space.  

How do we get started?  Smarter Business starts with an idea.  It requires collaborative approach.  Listen to other businesses about transformations they've started.  Listen to businesses in your industry and also outside your industry.  Reach out to us - we're ready to collaborate around your ideas.

Regina Casonato, Managing Vice President, Gartner

Pattern-Based Strategy: Eliminating  constraints Between Information, Business Execution and Performance

Interconnected society.  Change is a constant..

Did research with CEOs on their views of future.  Expect this decade to be much more volatile, dependent on ability to react immediately on what's happening.  IT can be significant enabler to respond quickly.  

Different way can think about decisions.  Most org. still have concept of linear thinking.  Look backward at data and find something that worked/didn't work.  That's not sufficient.  Look at signals happening around us.

Need a new way of looking at what signals telling us.  Pattern-Based Strategy.

Seek - Seek patterns that may have a positive or negative impact on your strategy or operations
Model - Model Pattern impact on strategy/operations
Adapt - Decide and execute change pursuant with requirements of the pattern.

e.g., Social networks give us more signals to model and adapt

IT is intrinsic to pattern-based strategy today.  No way to manage volume of info without IT.  
Role of IT:
  • Find and document patterns
  • Interpret, analyze and pattern impact, and define scenarios
  • Act on the results at appropriate speed

Need to make sure getting value out of unstructured content.  Content Analytics has huge potential.  In memory database will have huge impact.

IT not sufficient - need organization, too.  People, Processes essential, too.

New disciplines are required:
  • Pattern Seeking
  • Performance Driven Culture
  • Operational Tempo Advantage
  • Transparency

Summarize key takeaways:  Pattern-based strategy important because live in constantly changing situation.  Is about technology but also changing culture to adapt to new discipline.  Change from sense and respond to seek, model, and adapt.  Not about predicting future, is about advanced notice to something that could have impact on business. Not only for large organizations.

Adam Klaber, General Manager, Consulting Service Lines and Analytics, IBM

Capitalizing on complexity - Insights from the IBM CEO Study

Last year we created the BAO service line.  It now includes over 5,000 professionals around world.  It's the fastest growing and most exciting place to be within the practice.

Two days ago unveiled 3rd chief officer study - the CEO study.  (Previous studies include the CFO study and CIO study.)

Interviewed CEOs across 1500 face-to-face around the world.  Evaluated how companies performing.  There are standouts who are in top 50% in terms of both short-term, crisis performance and long-term, steady-state performance.

Found 3 ways that these standouts capitalize on complexity:
1.  Embody creative leadership - breaking with status quo of own industries.  Creativity said most important in these turbulent times
  • Embrace ambiguity
  • Take risks that disrupt legacy business models
  • Leapfrog beyond "tried-and-true" management styles
2.  Reinvent customer relationships.  Think differently not just how react, but interact.
  • Honor your customers above all else
  • use two-way communications to sync with customers
  • Profit from the info explosion
3.  Build operational dexterity.  Making quick decisions, integrating globally.  
  • Simplify whenever possible
  • manage systemic complexity
  • Promote a mindset of being fast and flexible
  • Be "glocal" - both global and local.

Customer-centric CEOs exploit the information explosion to better understand and serve customers

By embrasing complexity, CEOs, CFOs and CIOs can jointly develop new customer value propositions and lower costs

Panel:
Regina Casonato - Gartner
Marc Boumans - Achmea Insurance
Stefano Sappino - Poste Italiane

Q:  Tell us a bout about Achmea
Marc - Achmea - Around for almost 200 years.  Largest insurer in Holland.  
Position is to make sure that BI function will go to next level.  Sitting on vast amount of info and data, and company identified analystics and BI as prime focus to make sure can continue to please customers.  
Q:  Coming from IT or Business?
Coming from both IT team - identified that to need to work with business teams, need to step up.  In business part, analytics becoming more and more where can make a difference compared to competitors.  
Q:  How long is this project
Is more 3 yrs than 1 year.  Started out with reporting project with Cognos, said time to take to nexxt step.  Talk to business and analytics guys to bring it to them to create insights.  Bring insights that can really make difference to markerplace.

Stefano - Poste Italiane - founded in the 15th century. Now one of largest insurance, banks, telecom companies in Italy.  

Integration of information, understanding customers.  Customers want to have services all in one place.  See evolution of communication - why mobile operator.  

Q:  Have CRM and information management in title. Why combined?
A:  In 2006 when CRM started, was loose confederation of diff. businesses.  Data owned by individual businesses, no single view, difficult to integrate and understand meaning of specific data.  Objective was how to present data to start integration of processes at core of CRM product.  Enterprise warehouse - allowed to start CRM in a month instead of a year.  Start analytical CRM on basis of it.  Seen 60% increase in requests for analytical parts.    Business can now build offerings, building information from other offerings.  Governance - who is owner of data?  Transformation is required.  Started with 700 KPIs used by business.  Now around 400.  Shut down older reporting system.  Even if data on diff. technologies, now build everything on top of enterprise warehouse.

Achmea - Yes, same thing in Achmea.  Data Governance, MDM is in order.  Otherwise,  vast set of data just sitting there, can't be combined.  
Regina - Quality of data also very good.  

Q. Gartner - how evolving?
Gartner - Are also transforming Gartner operates and way interact with clients.  A few yrs ago used to sell research, advice in non-differentiated way.  In past few years, changed to better serve needs of clients.  Diff. products to address diff. roles people could have in organization.  CIO has diff. needs than someone purchasing tech or responsible for architecture of organization.  Also recognized that industry plays key role.  Now have analysts just focused on industries.  

As IT professional, have great potential to show the possibilities of IT.  Without IT, many of transformation that Poste Italiane went through would not be possible.  We have potential to explain possibilities.  And on other side, if don't do will be irrelevant - will just be cost issue.  Our job is to show possibilities, to show how IT can make a difference.

Marc - Lessons learned?
Have been strugling in how to interact with business colleagues.  Two of things that ook away from past year - have been very successful in taking pace of business - meeting timing requested of business.  But also making sure not doing it alone - build up capabilities on both sides.

Stefano - Lessons learned?
Start collecting info in advance, much before it's needed.  By the time you need it it will be too late to collect it.  Set up good team to analyze and integrate info even before business departments start asking for them.  Always include LOB in discussions.  And make sure have good information to feed into the analytics systems.  Best way to predict the future is to invent it.

//end of session//