With about two lakh servers that it manages worldwide and an ever-growing stream of data from various sources, IBM is developing its strengths in Business Analytics and Optimisation (BAO) to create a 'smarter planet'. The IT giant is helping companies and governments tread the green path using sensors and monitoring systems for rivers, water pipelines, electricity grids and road traffic.
“Smarter Planet is an initiative that is based on the digitisation of the world. As transistors have exploded, everything is digitised — the phone, car, appliance and utility network. Now we are seeing the digitisation of the natural world,'' Frank Kern, Senior Vice-President, IBM Global Business Services, told invited journalists at the company's headquarters in Armonk, New York.
IBM wants to develop the fast-growing area of analytics to offer differentiated solutions. To this end, the company has announced six analytics centres around the world where skills in particular areas will be incubated. Besides, a Business Analytics Centre of Competency has been opened in Bangalore. The expertise gained in specialised areas in these centres will be available to clients globally.
While the Beijing centre is focussed on railways and transport to make them 'smarter', Tokyo and Berlin work on smarter cities, New York on healthcare and public services, London on financial systems, and Washington DC on cyber security.
Analytics skills are different from classic IT skills. They deal with collection, aggregation, relationships, cause and effect of data; they are a core competence, not just skills on the side.
“The six analytics solutions centres are designed to be hothouses of talent,” said Fred Balboni, Global Leader, BAO, Global Business Services, IBM. Applications of analytics include lowering of health insurance fraud, inventory control in supply chains, optimising automobile manufacturing and repair processes, pollution and resource wastage, and even crime reduction.
IBM's work represents a shift over time — from plain information technology to the use of IT in business. That is because a significant part of the economy in several countries is made up of services, enabling new learning in services, productivity, technology re-use, data and analytics.
This understanding moved IBM, which achieved a record revenue of $103.6 billion during 2008, from being a component supplier, to the centre of the clients' business.
The company began to think how it could really make the planet better, smarter, more efficient, and less wasteful. “It placed us in the services economy,'' says Robert JT Morris, Vice-President of Services Research, who was responsible for the development of the Deep Blue chess machine that famously played Garry Kasparov.
Investment in research
IBM today invests $6 billion a year in research, engaging about 3,000 experts, mostly Ph.Ds in computer science, mathematics, behavioural sciences, physics and so on. The company has spent $12 billion over five years to build capabilities in BAO.
A good case study of analytics creating value is its partnership with the city of Dubuque in Iowa, U.S. With a community of 60,000, Dubuque is small; 40 per cent of America's population lives in similar cities with fewer than two lakh people, and the results in Dubuque will have national and perhaps global appeal. So what is IBM doing here?
The city was looking for ways to improve sustainability, covering water management, energy and transport. The goal was to reduce the carbon footprint. Water management is the first area that IBM took up as part of its year-long, 250-house pilot that began in August. That project is based on an existing problem: A quarter of the households and buildings in the U.S. have some sort of water leak.
The solution planned is to gather data using electronic water meters that record the smallest leaks that conventional meters cannot. “We will bring the data from the meters and do analytics on it,'' says Dr. Mahmoud Naghshineh, Director, IT Services Research at IBM.
Explosive growth in mobile telephony in India also provided some insights. It convinced researchers that if you “don't make it too complex,'' adoption becomes easier and the results are good. “You can get 60 or 70 per cent with what you already have,'' says Dr. Naghshineh, referring to simple data collection opportunities.
In Chicago, an IBM project deals with one of the largest video security deployments anywhere. The Office of Emergency Management and Communications (OEMC) wanted the technology to develop a video network that monitors traffic patterns continuously, while also being able to detect suspicious activity and potential public safety concerns. The result appears futuristic.
The experience gained from “millions of tickets of work'' around the globe is helping Big Blue pursue its Smarter Planet initiative.
The extensive knowledge base can potentially be deployed for clients worldwide. Analytics and optimisation is driving IBM to create greater value and deliver it globally.