IBM Delivers Research as a Service With New Lab

By Darryl K. Taft  |  Posted 2013-03-18

IBM Delivers Research as a Service With New Lab

In a move to spur greater innovation in the front office of the enterprise, IBM is letting its researchers loose to collaborate with its consultants to deliver unique, leading-edge solutions to customers.

IBM recently announced the creation of its new IBM Customer Experience Lab, dedicated to helping business leaders transform the way customers experience their products, services and brands through the use of mobile, social, cloud and advanced analytics technologies.

That IBM researchers are actually working on client engagements is not new. IBM's researchers have long been working with Big Blue's customers on projects to share their expertise as well as to gain some practical experience out in the field away from the lab. As far back as 2004, Paul Horn, then director of IBM Research and predecessor to John E. Kelly III, the current director, was talking about service science and how IBM researchers were getting out of the lab to work with clients.

When asked in a 2004 interview with eWEEK whether IBM researchers were working with customers, Horn said:

Absolutely. And if I want to think about my tenure here and the areas that I'm proud of, that's therein one of the biggest things. I'm proud of the change in the culture in Research and that we think about innovation in the marketplace with our customers. That's a powerful way to innovate. Because you're basically working with your customers; you're using their deep insights into their business problems. It wasn't a trivial transformation. Even this latest one in consulting. Some even wondered, 'Are we that poor that we have to supplement our salary by going out and getting consulting dollars?' And there was a little resistance because this was something that was new. But once they got into it, they really were excited about it.

Now IBM scientists and business consultants will co-create with clients to deliver systems that learn and personalize the experiences of each individual customer, identify patterns and preferences, create context from big data and drive scale economics. The IBM Customer Experience Lab will provide CEOs, chief marketing officers (CMOs), chief financial officers (CFOs), heads of sales and other C-suite executives direct access to a virtual team of 100 researchers, supported by the deep industry and domain expertise of thousands of IBM business consultants addressing the opportunities of the digital front office.

In a recent briefing for financial analysts, Bridget van Kralingen, senior vice president of IBM Global Business Services (GBS), called "front office transformation"—of sales, marketing or customer service functions—the most important wave of business change since the advent of enterprise resource planning in the 1990s.

"Business leaders realize they need to continuously transform their customer experience in order to be relevant and competitive—from the perception of innovation and value, to the quality of the interaction, to the economics of delivery," Mahmoud Naghshineh, vice president of Services Research at IBM, said in a statement. "What made them successful over the last decade, or even last year, may not be competitive in the future. We will help clients explore the possibilities presented by new assets, technologies and innovation models based on our engagement experiences with thousands of organizations across every industry."

IBM researchers have participated in more than 1,000 IT business process and consulting client services engagements; 9,000 business analytics consultants have completed more than 30,000 client engagements in the last several years alone.


IBM Delivers Research as a Service With New Lab

"The model will involve researchers working in the consulting context, but we aren't farming out researchers to do services," Clay Williams, senior manager, front office transformation, IBM Research, told eWEEK. "Researchers will be directly involved in engagements with clients in order to understand and bring real problems into the lab, help solve them and then deploy the solutions for clients.

"By bringing IBM Research into client engagements, and then taking the insights back into the lab and using it to drive a very focused agenda, we can gain deeper insights on the innovations that will matter most to clients," he continued.

IBM might even apply its Watson cognitive systems technology to the new lab environment, Williams said. "If we find the right problems, Watson technology may be used," he said. "However, machine learning is a very broad set of techniques, and there are many approaches and projects that use these techniques inside of IBM Research. Our reference to learning was pointing to the broad applicability of technologies in this area."

HfS Research analyst Jonathan Yarmis said in a report on the new lab, "Some might question the wisdom of tying the Labs more closely to actual commercial output, but we think this is a very shrewd, and ultimately necessary, move on IBM's part. Simply put, the pace of technology change and adoption requires this. It was possible for a science fiction author like Jules Verne to be more than a century ahead of commercial realities. 

"However, look at one of my favorite science fiction movies, 'Minority Report.' The movie, barely a decade old, presents "future" technologies which today are approaching mainstream deployment—personalized shopping, behavioral prediction, autonomous automobiles, touch-screen interfaces. More tightly coupling Research to real customer requirements and beyond, to customer outcomes, is a bold direction for IBM … and one we applaud," he said.

In the new age of big data and analytics, organizations are reassessing how to move from addressing mass audiences to personalized relationships. The same technologies allow enterprises to engage in new ways with their employees, allow government agencies to build new relationships with citizens or enable new models of interaction among students and educational institutions.

"The new effort reflects a couple of ongoing trends," said Charles King, principal analyst at Pund-IT. "First, IT has become so enmeshed in processes of every kind that establishing a broader, clearer view of the potential impacts of technology—from the data center to management to employees to end customers—isn't just wise, it's critical to business success.

"The other trend—the growing influence of C-level execs other than the CTO and CIO—is also reflected in IBM's Customer Experience Lab," he said. "While those executives and other high-level managers may not have the technological acumen of IT-focused leaders, they tend to have deeper insight into the business strategies that IT serves, which is why it's important for them to be more deeply involved in IT design and purchasing decisions. IBM understands these points clearly and has designed its new service to address clients' requirements in these areas."

IBM Research is developing technology assets and capabilities that can help deliver front-office capabilities as a service from a cloud, design novel products to match customer preferences, and leverage math and psychological theories of personality to improve marketing effectiveness.

"Specific things produced to date include a platform for driving recommendations and customer engagement using social analytics, new technologies supporting augmented reality in stores and analytics to help develop deep customer insights," Williams said. "Many of our capabilities will be delivered as cloud-based services, and we are seeking to develop innovations in that area, based on insights from customer engagements. We anticipate that IBM Smart Cloud with be a significant platform for hosting services.  However, we can also deploy services on other platforms that a client may select, such as private or open-source platforms."

IBM Delivers Research as a Service With New Lab

The Lab focuses on innovation breakthroughs in three primary areas:

Customer insight: Applying advanced capabilities such as machine learning and visual analytics to predict differences in individual customer behavior across multiple channels.

Customer engagement: Using deep customer engagement to drive insight and continuously deliver value by personalizing engagement, versus transactional experiences.

Employee engagement: Embedding semantic, collaborative, and multimedia technologies to foster employee engagement and insight—in person and online.

The Lab provides IBM clients with an innovation process, assets and platform to give line-of-business leaders the exclusive ability to work side-by-side with IBM researchers and business consultants to analyze business challenges and jointly create solutions that integrate next-generation mobile, social, analytics and cloud technologies. Co-creation with clients includes an innovation model called Innovation Discovery Workshops, which generate ideas, road maps, prototypes and solutions that draw on research assets, business consulting and IBM Software solutions in areas such as smarter commerce, big data, analytics, and MobileFirst products.

"If you're an enterprise that lives on the edge of technological innovation, IBM can bring incredible resources to bear," Yarmis said. "If you ever have an opportunity to tour an IBM Research lab or speak with one of their researchers, we encourage you to do so. It's amazing the breadth and depth of what IBM's working on."

The IBM Customer Experience Lab will be headquartered at the Thomas J. Watson Research Center in Yorktown Heights, N.Y., supported by researchers at IBM's 12 global labs including those in Africa, Brazil, California, China, India, Israel, Japan, Switzerland and Texas. The Lab brings together skills across disciplines including service science, industries research, mathematics and business optimization, social, mobile, smarter commerce, data mining, cloud computing, security and privacy, cognitive computing and systems management.

IBM invests more than $6 billion annually on research and development and employs about 3,000 researchers worldwide. IBM Global Business Services deploys business consulting, applications and delivery expertise globally, including market-leading business analytics, smarter commerce, mobility and applications management practices.

"By tying GBS to its world-renowned research labs, IBM is able to create offerings that virtually no one else can remotely match while at the same time providing a 'halo effect' to their services group," Yarmis said. "The breadth of IBM's social and analytics capabilities are unmatched by any other single vendor but IBM has had a hard time selling the value of the complete solution stack. In effect, IBM is now trying to change the rules of the game by adding 'the art of the impossible' into a market defined by a somewhat undifferentiated 'art of the possible.'"

Among the clients engaged with IBM on advancing their innovation process are Nationwide Building Society, a building society serving 15 million members in the United Kingdom, and Banorte, one of the largest banks in Mexico.

"Mobile and social technologies, and the ability to access information any time, anywhere, is driving significant change in the way consumers bank and in the services they expect," said Martin Boyle, divisional director of transformation at Nationwide Building Society, in a statement. "Our ability to innovate and anticipate, and not just respond, is what sets us apart from the competition. ... By partnering with IBM, we can tap into its vast research and innovation expertise and facilities, which has already proved invaluable in our transformation program and will continue to be an important part in how we continue to innovate our service for customers."

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