On April 2009, IBM(NYSE: IBM) announced a new service line within their Global Business Services unit, in what is known as IBM Business Analytics and Optimization Services. They have also planned to open a network of Analytics Solution Centers around the world, beginning with five in the second quarter of 2009. IBM said these initial centers will be located in Tokyo, London, New York City, Beijing and Washington, D.C. and as part of this initiative, they will retrain or hire as many as 4,000 new analytics consultants and professionals. Within a short span of the announcement, IBM have launched 3 centers at Berlin, Tokyo and Beijing, one center per month.
- 23 June 2009: IBM opened its first European Analytics Center in Berlin, Germany
- 8 July 2009: IBM launched its Advanced Analytics Center in Tokyo
- 3 Aug 2009: IBM launched its Advanced Analytics Center in China
(Tells a lot about IBM’s ability to execute on their strategy)
“Advanced analytics are increasingly essential to help companies and organizations confronted with vast amounts of data and systemic change, and who are looking to build smarter business systems,” said Samuel J. Palmisano, IBM’s chairman, president and chief executive officer. “All organizations today need to sort through myriad choices, make smarter decisions quickly and accurately, and act decisively. IBM is ready to help. Our unique expertise in R&D, software and consulting will be brought together in our new IBM Analytics Solution Centers — helping to make our clients’ businesses into smarter enterprises, and helping to create the jobs of the future.”
Essentially, business analytics is not a new concept. For ages, every businesses are known to analyze their competitive landscape, market segment, demographics, purchasing behavior, and always striving to understand their customers better.
Business Analytics is a function that applies across all verticals and industries. It doesn’t matter whether you are in the pharmaceuticals, Oil & Gas, banking, IT service provider, hospitals, or restaurants business. All businesses are faced with strategic decisions that needs to be made to gain that competitive edge. So, how does one decide what would be the right strategic action to take? How does one spot hidden problems or traps before they occur? How does one predict future market trends? How does one retain its loyal and best customers? What are the preferences and behavior of their most loyal and best customers? How do they know all these? This is where Business Analytics function comes into the picture – by searching, examining, sifting through the vast quantity of data. Then sorting these data, correlating them, and analyzing them for patterns and trends to derive insights and knowledge that can be used to determine what would be the most appropriate actions to take for the business to gain competitive edge over its rivals. This is how Business Analytics work.
However, what is happening today is that IBM have taken advantage of the emergence of new and smarter software and systems which are interconnected and streaming real time information, and drawing on the company’s deep expertise in vertical industries, research, mathematics and information management, to transform Business Analytics from just selling a “product” into a new service offering. It suddenly became a new service opportunity for IBM. A new service to their customer base to help their customer to predict business outcomes, optimize old systems, spot trends before they happen and to improve the speed and quality of their business decisions while better understanding the consequences and business outcomes of those decisions.
The way IBM have applied the concept is to build a service layer around Business Analytics and offer it as a service across all verticals to their customer base is ingenious. The execution of this service strategy is fast and precise. This is why IBM has been growing, amidst the economic gloom, while its competitors are struggling.
Guess IBM is ramping up its Cognos business unit.
The interesting point to this news is that the way IBM have packaged it as a “service” rather than pushing products. So, whatever underlying technology is transparent to their clients. Sort of like offering a “cloud service”