IBM Launches New Analytics Consulting Services Line

HAWTHORNE, N.Y.—IBM has announced the creation of a new consulting organization dedicated to the market for advanced business analytics and business optimization.

At an event held at the IBM T.J. Watson Research Center here, IBM announced the creation of its new IBM Business Analytics and Optimization Services line. The new organization will draw on the company's deep expertise in vertical industries, research, mathematics and information management to help clients improve the speed and quality of business decisions while better understanding the consequences and business outcomes of those decisions.

Frank Kern, senior vice president of IBM's Global Business Services, said this marks the first launch of a new service line by IBM Global Business Services since it was formed in 2002 following the acquisition of PricewaterhouseCoopers Consulting. The new service also will draw on IBM's vast Information Management portfolio, including technologies from the recent acquisitions of Cognos and iLog, as well as the expertise of the only research department in private industry dedicated to mathematics and business analytics.

"Our clients understand they're operating in a competitive environment where more than ever before, in addition to being fast, they have to be right. That requires something beyond the traditional notion of 'sense and respond,'" said Frank Kern, senior vice president of IBM Global Business Services. "That drives the need to speed business decisions, understand the consequences of any decision and predict outcomes with more certainty—in short, moving to a new level of enterprise intelligence."

The new consulting service will have access to 4,000 consultants and will build on and extend IBM's Smarter Planet initiative, Kern said. He noted that the new technological world is becoming more instrumented, interconnected and intelligent. "This is an instrumented world we live in, and it's interconnected." he said.

Moreover, "Our clients have to become more predictive," Kern said. "If we had systems with better financial predictive capability, what would the world look like today? And you can apply those same questions to financial, security, health care, telecommunications, energy, water and other systems. Predictive analytics capability can be very powerful."

Working with more than 4,000 consultants dedicated to this effort will be experts from IBM Research's world-renowned laboratories, with more than 200 mathematicians and advanced analytics experts. The company also made significant investments in services research for the past 10 years to build technologies and intellectual property that optimize new services offerings—all culminating in this new consulting practice in support of IBM's Smarter Planet strategy, which recognizes the need for improved business insight.

"We've been incubating this for a bit," said Fred Balboni, IBM's Global Business Analytics Optimization leader and head of the new IBM Business Analytics and Optimization service line.

Balboni is the former leader of IBM's retail industry consulting practice. An expert in data-intensive industries and consultative capabilities, Balboni leads a core team of analytics experts within each industry IBM serves and will address five core areas, including strategy, business intelligence and business performance management, advance analytics and optimization, enterprise information management, and content management.

The Business Analytics and Optimization service line rounds out IBM Global Business Services' established lines of business, including Application Innovation Services, Customer Relationship Management, Financial Management, Human Capital Management, Strategy & Change, and Supply Chain Management.

Moreover, the new service line has identified "three big plays" that it will go after: analytics and data optimization, risk and fraud analysis, and advanced customer insight, Balboni said.

A survey of business executives published in a study by IBM's Institute for Business Value and released April 14 reveals that one in two business leaders say they don't have access to the information in their organization they need to do their job. With organizations facing unprecedented scrutiny, pressure and ever-shrinking margins for error, leaders are looking for new ways to inject certainty and predictability into their decision making. The survey also showed that eight out of 10 business leaders make major decisions with missing or untrusted information, IBM said.

The growing market for a more sophisticated way to use information, extract insight, and optimize business processes, models and individual business decisions has been demonstrated by IBM through a number of pilot initiatives leading to the formation of the new Business Analytics and Optimization service line.

One such pilot, the IBM Center for Business Optimization (CBO), was formed five years ago inside Global Business Services. Last year, the CBO engaged with more than 200 clients to use advanced analytics to solve complex business problems, IBM said. A related capability housed in IBM Research, On Demand Innovation Services, has completed another 1,000 client engagements during the past six years.

IBM worked with The Sentinel Group, which provides health care fraud detection and investigation services to payers throughout the United States, to enhance the fraud and abuse detection capabilities of their investigators. Through advanced analytics, IBM transformed what was once a manual process for identifying potential fraud to a data-driven process that helped the company identify over $45 million in fraudulent claims since 2005, the company said.