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ARMONK, N.Y. - 09 Dec 2009: Top-performing companies were 15 times more likely to apply analytics to strategic decisions than their underperforming peers, according to a new IBM (NYSE: IBM) study of the role information-based decision making is playing in successful business strategies during the current economic cycle.
In addition, top performers were 22 times more prepared to challenge the status quo in their organizations, rethink current strategies and business processes, and aggressively apply and act on new insights derived from analytics.
The IBM study also found that top performers were six times more likely to entrust a broader base of employees with greater authority to make decisions and act on insights.
Entitled "Breaking away with business analytics and optimization," the study is based on a blind survey of nearly 400 business executives globally, who rated their businesses versus peers. The study is thought to be the first major worldwide inquiry into the actual business impact of analytics. Published by the IBM Institute for Business Value, the full study is available today at www.ibm.com/gbs/intelligent-enterprise.
"Our study found that over the past 18 months, top-performing businesses excelled at applying analytics and empowering their people to act on these insights. We expect these organizations will emerge from the current economic condition with a huge head start over their competitors," said Fred Balboni, Global Leader, Business Analytics and Optimization, IBM Global Business Services. "A flood of information has created an entirely new set of assets, just waiting to be applied to clients' toughest challenges."
As part of the analysis, IBM consultants determined top-performing organizations are able to more fully exploit business analytics for competitive advantage. "A critical part of this success is that these organizations were able to drive change by having the right management systems, tools, and culture in place -- creating, in effect, an organization that seeks and evaluates, and is ready to act on new opportunity," said Steve LaValle, author of the study and Strategy Leader, Business Analytics and Optimization, IBM Global Business Services.
IBM's analysis also discovered having superior data governance -- assuring that data definitions were clear, relevant and accepted -- is critical the success for top performers. By a factor of three to one, the study found that top performers were much more sophisticated in their approach to governing organizational information relative to lower performing companies (42 percent versus 14 percent).
IBM itself is one of the leading users of analytics in the industry. The company recently detailed its own internal use of analytics via an initiative called Blue Insight. IBM will use this cloud computing environment to gather information from nearly 100 different information warehouses and data stores, providing analytics on more than a petabyte (1,000 terabytes or 1,000,000 gigabytes) of data. For example, IBM sales teams use analytics to better predict which products and services would deliver the most client value.
Overall, IBM also found that relatively few organizations have supported business analytics and optimization at this level. IBM's consultants have determined a number of key areas where organizations looking to position themselves to break away from the competition need to focus:
To successfully implement these business analytics projects, business leaders will need to drive support across their organizations. A key ally will be CIOs who seem to be in lock step with this objective according to a separate IBM study. In the recently released IBM Global CIO Study, 83 percent of CIOs identified business intelligence and analytics as their No. 1 priority to enhance their organizations' competitiveness.
IBM has made a significant investment in business analytics and optimization, including the creation of a consulting practice of 4,000 dedicated to analytics. IBM also has opened a network of seven Analytics Solution Centers -- in New York, Dallas, London, Berlin, Beijing, Washington and Tokyo -- and expects to retrain or hire as many as 4,000 new analytics consultants and professionals globally as part of these centers.
Live Diavlog - Breakaway Breakout
Tune in today on the IBM New Intelligence Video Studio at 3:00 p.m. ET for a live interactive video "diavlog" (video blog dialog) about the study. This session will be hosted by noted analytics expert and author James Taylor and feature Fred Balboni, Global Leader, Business Analytics and Optimization, IBM Global Business Services. A replay of the session will also be available at this location (http://livestream.com/newintelligence).
About the IBM Institute for Business Value
The IBM Institute for Business Value provides strategic insights and recommendations that address critical business challenges to help clients capitalize on new opportunities. The Institute is comprised of consultants around the world who conduct research and analysis in 17 industries and across functional disciplines including human capital management, financial management, corporate strategy, supply chain management and customer relationship management. Visit www.ibm.com/iibv.
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