SPSS finds a place in IBM's information-led transformation

Helena Schwenk

In a teleconference last week, Ambuj Goyal, General Manager of IBM's Information Management (IM) group, spent time promoting the notion of an information-led transformation as part of its Information On Demand strategic initiative. The concept is aimed at allowing companies that are driven by the need to leverage growing volumes of information to make substantial efficiency gains from optimising the decision-making process. SPSS plays a key role in enabling this vision, but it is not the only element. It is the combination of the company's software, services and research expertise that provides the real 'secret sauce' behind its information transformation initiative.

Micro optimisation concepts bring SPSS into sharper focus
Behind the marketing gloss, IBM is using the information-led transformation theme to describe how the next generation of business efficiencies will come from applying realtime analytics to optimise decisions at the point of impact - what IBM labels as 'micro optimisation'.

In contrast to macro optimisation, which requires the analysis of large amounts of data by dedicated analysts, IBM believes micro optimisation will allow individuals within companies to move from a 'sense and respond' paradigm towards one in which they can 'predict and act' in the context of their everyday job and without being an expert. And this is where the future role of SPSS comes into sharper focus.

In particular, by using the company's analytic processing capabilities, IBM is able to serve up realtime suggestions to users about what action to take. So, for example, loan officers can adjust credit lines as transactions are occurring to account for risk fluctuations, or sales assistants can determine who to offer discounts to at the time of sale instead of offering a promotion to everyone.

The vision is familiar, but IBM's combined approach brings more credibility
While the concept of realtime analytics and decision-making is nothing new (vendors such as Teradata, SAS and FICO have been advocating similar concepts for some time), it still remains a very complex, time-consuming and costly IT venture. IBM is clearly hoping the acquisition of SPSS, with its text mining and predictive analytic technology, will make the vision of an information-led transformation a more realistic prospect for companies.

Of course, SPPS is not the only software or services element needed to embark on an information-led transformation. For those customers that are up for the challenge, IBM is leveraging a range of IM software, hardware, professional service and research initiatives to help enable this vision via industry-specific solutions.

This plays to the company's strengths. IBM has an incredible number of products, services and R&D resources at its disposal, which it can bring to the information-led transformation table. So while IBM's IM group takes the lead in driving the information initiative, virtually every other business unit contributes key resources to the overall effort. And although its extensive range of product and services provides several political and integration challenges of its own, it is the company's breadth and depth that also allows it to really differentiate itself. However, the information transformation approach is obviously one that requires customers to have particularly deep pockets.

SPSS brings fresh capabilities to its BAO unit
Regular IBM watchers will also recognise that some of the concepts and terms used to describe an information-led transformation map closely and overlap with those used for the company's Business Analytics and Optimisation (BAO) practice. In fact, the BAO unit could arguably be described as the services element to an information-led transformation. BAO was launched in April 2009 with an aim to deliver solutions that are dedicated to advanced analytics and optimisation. It is primarily a consulting initiative backed by 4,000 consultants who work with IBM's software group and IBM research labs to deliver industry-specific solutions.

The big difference now compared with when BAO was first launched is that the SPSS acquisition brings fresh capabilities and more credibility to the unit's aims and objectives, as well as helping to fill a big void in the company's IM software portfolio.

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This article is an extract taken from Ovum's Straight Talk service. This daily email bulletin provides our expert's views and opinions on important news and events in global IT and telecoms.