IBM Launches New Predictive Analytics Software and Services

By Darryl K. Taft  |  Posted 2012-03-20

IBM Launches New Predictive Analytics Software and Services

IBM (NYSE: IBM) has announced new consulting services and software that is geared for taking the power of predictive analytics to new levels for C-suite decision makers.

The new analytic offerings address the emerging opportunities of big data to manage financial operations, decrease fraud and nurture next-generation customer relationships. Based on experiences drawn from more than 20,000 analytics engagements, the new solutions combine innovations developed by IBM Research with new predictive technologies from dozens of companies IBM has acquired.

IBM executives hope to broaden the group of clients€”specifically C-suite leaders€”who can adopt analytics, extending IBM's position in the strategic market for business analytics.

IDC estimates enterprises will invest more than $120 billion by 2015 to capture the business impact of analytics, across hardware, software and services.

€œThese new capabilities target the agendas of global business leaders operating in a world of accelerating complexity, unpredictability and massively available information,€ said Bridget van Kralingen, senior vice president of IBM Global Business Services, in a statement. €œBy integrating analytics into business processes and converting new insights into action, IBM is helping organizations transform big data from a threat into an opportunity, one that will be their most valuable natural resource.€

IBM Is Helping Organizations Transform Big Data From a Threat Into an Opportunity


In short, IBM has expanded its multibillion dollar investment in business analytics to address three vital client issues€”fraud detection, financial operations and customer service€”and help organizations increase revenues.

The IBM Smarter Analytics Signature Solutions include the IBM Smarter Analytics Signature Solution€”Anti-fraud, Waste & Abuse. Each year, health care fraud tops $250 billion, according to the Federal Bureau of Investigation. Tax fraud costs billions more. IBM€™s adaptive systems learn from the latest data, helping to protect against emerging fraud. The solution embeds advanced algorithms directly into business processes, providing government agencies and insurers with the ability to detect fraud in real time€”before funds are paid out. Using IBM€™s sophisticated analytics, the solution recommends the most effective remedy for each case, optimizing an organization€™s finite resources. For example, the system might recommend that a simple letter requesting payment be sent to resolve one case, while recommending that a full investigation be opened in another case.

The solution will help clients replicate success stories like Infinity Insurance. An insurance provider that specializes in covering higher-risk drivers is applying IBM analytics to more than 25,000 automobile claims processed monthly; the goal is to identify patterns in historic data. In the first three months, Infinity reduced the time needed to identify fraudulent claims from 14 days to 24 hours.

The second of the three new offerings is IBM Smarter Analytics Signature Solution€”Next Best Action. IBM officials said that while organizations understand the value of collecting customer data, many struggle to extract new insight and use it to create more meaningful relationships. IBM€™s solution helps organizations gain a comprehensive view of a customer, derived from traditional enterprise data and customer sentiment gleaned from social networks, logged customer service interactions and Web click-stream data. Then, real-time analytics predicts customer behavior and preferences to inform decisions on the next-best action on behalf of that customer.

These capabilities bring together marketing and customer service functions and have helped companies like Sprint, which is using IBM analytics to determine the most effective offers for existing and new customers, the company said.

The final new offering is IBM Smarter Analytics Signature Solution€”CFO Performance Insight. Financial information is growing at an astounding rate of 70 percent each year, according to IBM research. The industry€™s data sets have to be collected and cross-referenced against analyst reports, economic market data, financial reports, news stories, board notes and company balance sheets. IBM€™s capabilities provide increased insight, visibility and control over financial performance with predictive capabilities applied to key metrics and data on past performance, the company said. The predictive analytics, combined with what-if analysis, and traditional business intelligence in an executive-style dashboard, guides users with root-cause analyses. Organizations can uncover relationships among performance metrics, anticipate performance gaps and assess alternatives with scenario planning.

IBM officials said this kind of improved financial visibility is used by Alfred Angelo, a large U.S. wedding gown manufacturer and retailer. The company is using IBM analytics to move beyond spreadsheets to a more comprehensive view of its operations across product lines. By analyzing which wedding dress styles or accessories have been profitable over time, Alfred Angelo can take the SKU level €œinvestigation€ down to a particular color, size or design and then optimize its inventory to meet client demands and increase revenues.

IBM works with clients across industries and regions to apply analytics and gain a competitive advantage from analyzing big data.

€œIBM is helping Sprint manage and analyze network data 90 percent faster than before,€ Von McConnell, executive director of the Innovation and Advanced Labs at Sprint, said in a statement. €œWe can now customize new products and services in real-time and respond instantly to changing market dynamics. The insights we gain from big data allow us to create and deliver new mobile applications in minutes, instead of hours, giving Sprint the ability to stay well ahead of our competitors.€

The new solutions can be delivered by IBM consultants, supported by industry-leading applications management services capabilities and cloud offerings, IBM said. Clients can access these capabilities through IBM€™s big data technology platform that includes Hadoop, stream computing, data warehouse, and information integration and governance capabilities, along with visualization and discovery, application development, systems management and industry accelerators. To date, more than 100 business partners have adopted IBM's big data platform, IBM said.

IBM customers can access IBM€™s solutions through a global network of eight Analytics Solution Centers. Credit-qualified clients can take advantage of financing for services solutions and zero-percent loans for IBM software with IBM Global Financing.

The new analytics services and solutions are part of IBM's larger focus on business analytics and optimization, which spans hardware, software, services and research.

IBM projects $16 billion in business analytics revenue by 2015. To meet that target, IBM has established an extensive portfolio of analytics solutions; grown its business and industry expertise to almost 9,000 business analytics and optimization consultants and 400 researchers; and created global analytics solution centers in Berlin, Beijing, Dallas, London, New York, Tokyo, Washington, D.C., and Zurich.

IBM has acquired 28 companies to build targeted analytics and information expertise since 2005, and continues to expand its ecosystem, which today consists of more than 27,000 IBM business partners. IBM has also secured hundreds of patents a year in analytics, the company said.

IBM officials said these investments have enabled the company to develop breakthrough technologies like IBM Watson, a new class of industry-specific analytical capability that uses deep content analysis, evidence-based reasoning and natural-language processing to identify relationships buried in large volumes of data that can be used to improve decision making.

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