Business Analytics and Optimization –

An IBM Growth Priority

Paul Fitzpatrick
Director, WW Industry ISV Partners
IBM ISV & Developer Relations
Best Student Recognition Event
July 6-8, 2011 – EMEA IBM Innovation Center La Gaude, France
 Agenda

1. BAO – A 2015 IBM Growth Priority

2. The BAO Market Opportunity

3. IBM BAO Leadership Strategy

 IBM’s strategy and growth initiatives for 2015

IBM’s Growth Landscape

New

Focus
Focus on
on open
open technologies
technologies
and
and high-
high- value
value solutions
solutions Growth Smarter

Markets/Buyers
Markets Planet

Deliver
Deliver integration
integration and
and Cloud
innovation
innovation to
to clients
clients Computing

Business
Industry Analytics
Become
Become the
the premier
premier Globally
Globally Frameworks,
Integrated
Integrated Enterprise
Enterprise Smarter
Computing
Traditional
Traditional New
Offerings

3
 Business Analytics and Optimization represents the next
major evolution of business change and client investment

2X Client Investment in Business Analytics $125B Business

and Optimization Projects is growing over 6% CGR Analytics and
twice as fast as Business Automation Optimization

Business Automation
Business Analytics $566B
and Optimization 3% CGR

GBS BAO

STG
GTS • ISAS
• Outsourcing • POWER7
• Support Business • System x
• Storage
Analytics
Business Intelligence

Resource Planning SWG / IM SWG / BA

• Base Info Mgmt • Cognos
• ILOG • SPSS

Business Automation
 Information is at the center
of a new wave of opportunity…
2 Billion Internet
users by 2011
1.3 Billion RFID tags in 2005
30 Billion RFID
tags by 2010 4.6 Billon
Mobile Phones
World Wide

Capital market
data volumes grew Twitter process
1,750%, 2003-06 7 terabytes of
content every day

World Data Centre for Climate Facebook process

220 Terabytes of Web data 10 terabytes of

9 Petabytes of additional data content every day
 We are not optimizing our use of data to
solve key Smarter Planet challenges….

40-70% percent of In our healthcare One in five people Congested roadways

energy around the systems, electronic living today lacks in the US cause 11
world is lost due to health records could access to safe billion litres of wasted
grid inefficiencies. save 100,000 lives a drinking water. gas.
year.
 … And Organizations Need
Deeper Insights
44x
as much Data and Content
Business leaders frequently
Over Coming Decade
1 in 3 make decisions based on
information they don’t trust, or
don’t have

1 in 2
Business leaders say they don’t
have access to the information
they need to do their jobs

2020
35 zettabytes
2009
800,000 petabytes

Sources:
• The Guardian, May 2010
• IBM Institute for Business Value, 2009
• IBM CIO Study 2010
• TDWI: Next Generation Data Warehouse Platforms Q4 2009
 CIOs Top Priority

Business Analytics 83%

Virtualization 76%
Risk Management & Compliance 71%

Mobility Solutions 68%

Customer & Partner Collaboration 68%
Self-service Portals 66%
Application Harmonization 64%
Business Process Management 64%
SOA / Web Services 61%
Unified Communications 60%

8
 3x 5.4x
Organizations who are Top Performers are 5.4X
leading in analytics more likely to use an
outperform those just analytic approach over
beginning by 3X intuition

Source: Analytics: The New Path to Value, a joint MIT Sloan Management Review and IBM Institute of Business Value study. Copyright © Massachusetts Institute of Technology 2010.
 Imagine If Decision Makers Could…

…determine factors …reduce churn and

…predict and treat retain the most loyal
…detect and prevent most likely to drive
infection in premature customers to
fraudulent activity to customers to choose
newborns 24 hours maximise profitability?
reduce risk? my product vs. the
earlier?
competitor’s?

Retail Sales Telco Call

Physician Loan Officer
Associate Center Rep

…optimise every transaction, process and decision at

the point of impact, based on the current situation,
without requiring that everyone be an analytical expert
 Business Analytics and Optimization Solutions
Bridge the Gap Between Information and Outcomes

Drive Efficiency Support Innovation

Gained 30% Enhancing Information

performance improvement Services Delivery

Cut DBA workload 2/3rd reduction in time

by 25% to process valuations

Reduced storage 30% increase in coupon

by 40% redemption rates
 Providing the software, hardware and expertise
to deliver the outcomes you need

Enhance
Customer Understanding
• More than $14B in Acquisitions
Since 2005
• More than 10,000 Technical
Optimize
Professionals Real-Time Decisions

• More than 7,500 Dedicated

Consultants Foster
Collaborative Decisions
• Largest Math Department
in Private Industry
Enable
• More than 27,000 Business
Enterprise Visibility
Partner Certifications

Build an Information
Management Foundation
BAO Leadership Strategy

1. Build Best-of-breed solutions

2. Develop domain & industry expertise

3. Fund unparalleled research

4. Invest substantial capital ($20B) for

inorganic growth
Prescriptive

Predictive

Descriptive
 To deliver breakaway performance, increasing the organization’s level
of analytical sophistication is needed
Analytics Sophistication

What
happened? What could
happen?
Simulation
Captured
How many,
how often,
Detected where? What if
How can we
these
achieve the best
trends
Inferred What outcome?
continue?
exactly is Optimisation
Forecasting
the
problem?
Use Structured Data & Made consumable and How can we
Unstructured Content accessible to everyone, What will
achieve the best
happen
optimised for their What
next if?
outcome and
specific purpose, at the actions are address variability?
Predictive
needed? Stochastic
point of impact, to Modelling
Optimisation
deliver better decisions
and actions through: Descriptive Predictive Prescriptive
Analytics Analytics Analytics
BAO Leadership Strategy

1. Build Best-of-breed solutions

2. Develop domain & industry expertise

3. Fund unparalleled research

4. Invest substantial capital ($20B) for

inorganic growth
 Retail Healthcare& Life
Sciences
• Store Operations (P&L) • Provider Performance
Performance

• Clinical Analytics
• Merchandise Performance
Management
• Sales Quota Allocation
• Promotions Planning

Banking Manufacturing

• Risk Insight and Optimization • Supply Chain Performance

• Branch Insight and Performance • Sales and Operations Planning

• Customer Care and Insight • Demand Planning

IBM Industry Frameworks package best practices with IBM
software
IBM is forming deep relationships with complementary
partners through solution validation
Government Telecommunication
Industry Framework: Government Industry & Industry Framework: Service
Network Centric Operations Provider Delivery Environment

Banking Healthcare
Industry Framework: Banking Industry Industry Framework: Health
& Financial Markets Integration

Chemical & Petroleum

Industry Framework:
Integrated Information
Energy & Utilities
Industry Framework: Solution
Architecture for Energy & Utilities
Retail
Industry Framework: Retail
Industry Framework

Travel & Transportation Electronics

Industry Framework: Travel and Industry Framework: Product and
Transportation Service
BAO Leadership Strategy

1. Build Best-of-breed solutions

2. Develop domain & industry expertise

3. Fund unparalleled research

4. Invest substantial capital ($20B) for

inorganic growth
 Technology Trends Influencing Innovation

• Real-time, Predictive
• Scenario Modeling
• Internet Scale Data
• Social Media Analytics
• Pervasive Analytics
 Better Business
Outcomes

Cognos 10

• Massive scale
analytics

• Many Eyes

• System z
support
• Smart
Analytics
• New System
• Content Analytic
• Cognos 8
• Cognos • Cognos Analytics Applications
Mashup
TM1 Express Service
Information regarding potential future products is intended to outline our general product direction and it should not be relied on in
making a purchasing decision. The information mentioned regarding potential future products is not a commitment, promise, or legal
obligation to deliver any material, code or functionality. Information about potential future products may not be incorporated into any
22 contract. The development, release, and timing of any future features or functionality described for our products remains at our sole
discretion.
 Watson

A computing system that rivals a human’s ability to answer questions posed in

natural language, interpreting meaning and context and retrieving, analyzing and
understanding vast amounts of information in real-time.
BAO Leadership Strategy

1. Build Best-of-breed solutions

2. Develop domain & industry expertise

3. Fund unparalleled research

4. Invest substantial capital ($20B) for

inorganic growth
 Services Customer
Analytics
Federal Govt
Security
2009 2010
BAO Software

Web
Analytics
Predictive 2010
Analytics Financial Reporting
2009 2010
Governance, Risk
& Compliance
2010

Data Data Integrity

Foundation

Discovery & MDM

2009 2010
Data Warehouse
Database Monitoring
& Protection Appliances
2009 2010
Cloud Data
Integration
Data Capture & 2010
Content Management
2009
 • Analytic Applications
• Business Intelligence
Business Analytics • Predictive Analytics
• Financial Performance
Enterprise Management
Content Management • Governance, Risk & Compliance
• Web Analytics

• Advanced Case Management

• Content Analytics
• Document Imaging and
Capture
• Information Lifecycle
Governance
• Social Content Management

Information Integration & Federation

• Information Integration
• Master Data Management
• Data Warehousing
• Big Data and Streams

Data Management Information

Governance
• Database Software
• Database Management • Data Lifecycle Management
Tools • Data Security and Privacy
 Imagine the Possibilities
…in a World with No Limits

Information Radical Extreme

from Everywhere Flexibility Scalability

• Data & content • Virtualization at • “Big data” analytics

• Apps, web & sensors every level • Real-time stream
• At rest & in motion • Automated administration processing
• Integrated & federated • Easy-to-use analytics • Efficient parallelism
• Workload-optimized
 3 Takeaways

BAO is one of four key growth areas for IBM

BAO solutions address many of the most critical

business and government challenges
IBM is a BAO leader and is innovating through
targeted investments

The Opportunity of a Lifetime!

Links to additional Information

Academic Initiative
http://www.ibm.com/ibm/developerworks/academicinitiative

Smarter Planet
http://www.ibm.com/ibm/ideasfromibm/us/smartplanet/in
dex.shtml

Business Analytics & Optimization

http://www-
935.ibm.com/services/us/gbs/bus/html/bcs_centeroptimization.
html

Information Management Software

http://www-01.ibm.com/software/data/

Research Services
http://domino.research.ibm.com/odis/odis.nsf/pages/index.
html