developerWorks: We're at Information on Demand Global Conference 2009. I'm Scott Laningham. I have the privilege of speaking with Ambuj Goyal, who is general manager, IBM Business Analytics and Process Optimization. Welcome.
Goyal: Thank you.
developerWorks: Thank you for your time.
Goyal: Oh, my pleasure.
developerWorks: We were talking about the theme of this conference being information-led transformation. I mean, it's a neat term, but what does it mean?
Goyal: Yes, this is about the level of maturity organizations have taken around information. So you think about information or data, in the past people have typically used data, content to run their business processes.
And people continuously ask how can we unlock the business value of information? That's why we kind of created a vision of information on demand, so we can get the right information at the right place. And tried to create a systematic way of unlocking the business value of information and we create something called an IOD stack which was, how do we get arms around information? How do we create trusted information before we analyze it, because otherwise, garbage in, garbage out. So, how do we deal with the complete supply chain of information systematically?
And we invested huge amounts of money in this area, about $12 billion invested over the last five years, $8 billion in acquisitions, and [the] remaining in organic investments. But clients still said, yes, you solved the software stack problem, but how do we get line of business and IT to work together, because line of business says if I had the right information at the right time I could make better decisions or optimize my transactions and IT guy said, look, if the line of business guys would just listen to me, we can give the right information at the right place.
So we said, there is a fundamental issue. So since we had worked with so many clients over the last four years — about 15,000 new clients and 2,200 new Business Partners — we said, how [are] people are systematically using information as a strategic asset so they can reuse it and accelerate value and capture that in a proven approach we call Information Agenda:
- You create a strategy, a roadmap, working with both line of business and IT people to create an information governance and competency environment before we think about the IOD stack.
And that Information Agenda started to deal with LOB and IT working together to deal with process improvement.
Now, some clients, as we talked about in this conference — New York Fire Department or Bharti in India — are completely changing their models leveraging information. So Bharti, who doesn't own any infrastructure, is a telecom company, all they own is the information about their client and they're growing very rapidly from 50 million customers to 100 million customers to 200 million customers without owning any infrastructure. All they're doing is they changed their complete model from just using information to optimize a process to do complete information-led transformation.
The Fire Department in New York City is saying, look, we are heroes when we fight a fire. Right? We are in the job of putting fires out. What if we change their model to prevent fires? Right? Then they will need to get building information, where the risks are, and the complete model is changing in New York City Fire Department not only to put out the fires but how to prevent fires.
So it's a maturity of an organization. Are we just unlocking the business value of information using information on demand stack? Are we treating information as a strategic asset so line of business and IT working together to solve the particular business problem and optimize a process or completely changing the way people do work because you're doing complete information-led transformation.
So it's a maturity curve that we deal with with clients. And you come to this conference not only to understand individual products and data, content, information integration, master data management, performance management, analytics, but you also understand how industry by industry, we can improve performance of a specific business problem whether it's client related, operational efficiency related, compliance and risk related, or revenue and growth related — to understand it by industry by industry by industry how to improve the business efficiencies in an organization. So that's what information-led transformation is all about.
developerWorks: What has brought us to this point of maturity? Is it the intersection of the technology being available with the demand because of just the enormous amount of data?
Goyal: I think there are a few things that have brought us to this point. I think an analogy would actually work well out here.
You imagine 20, 25 years ago when ERP came into being. At that time, a lot of people were writing applications. There were programmers who would write in C or COBOL to an application, let's say a ledger application. And ERP companies came into being and said, it's not about just writing an application — it's about treating an enterprise resource like capital well. So if you use the ERP solutions, not only you can do a ledger application, but we have captured the best practices of capital management in that particular ledger, in accounts receivable, in accounts payable applications.
We are exactly at the same space in [the] information war. Yes, lots of projects go on in a data warehouse, BI, metadata management, information integration, and so on and so forth. What we are doing by creating an information on demand stack software and a process called Information Agenda so that you systematically leverage information to do continuous process improvement, we are making the next generation of business efficiencies by leveraging information.
So there's two elements. Think about the analogy of what happened in the application-led world, the ERP company did, creating an application agenda or ERP agenda; we are doing the same thing in information and saying it's about treating information as an asset, managing it, and transforming businesses by leveraging information.
developerWorks: I'm curious, did you know looking back even a decade, this is where I would be at this point in telling this story? Or is it evolving so rapidly in a way that you wouldn't have seen this at this point in time?
Goyal: I think this problem has remained for the last 25 years. In fact, 25 years ago you could ask if I had the right information at the right place, could I make better decisions? The point was that we created so many tools for the clients that we focused on the tools, not on the business outcome.
And the time has come, because the compute-capacity exists, the capabilities exist. And one company, IBM, decided to invest in this particular space so it doesn't become just a software capability problem but it's a business process problem as well.
So it required a huge investment to solve a simple question — can I get the right information at the right place, at the right time — required an acceleration of value over the last five years, as I mentioned, $12 billion spent and 4,000 consultants that are trying to solve this particular complex problem and making it easier for our clients.
developerWorks: It gives new meaning to that word organic in all this, thinking from the business out instead of putting layers and tools upon it, right?
Goyal: Yes, that's true, it's outside in. But also this was the vision when we launched it first in 2005, Information on Demand. It was a gleam in our eyes that said this is the thing if you could actually solve, then it will create next generation of efficiency for every industry whether it's a process industry, telco, retail, whatever it is — all 17 industry we have created industry by industry case studies for how to deal with it.
So, it was a gleam in our eyes at that time that this is what we are going to do. And in the beginning of 2006, we said we are going to invest an incremental $1 billion in this particular space because anything less than that wouldn't solve this amazing problem and anything more than that, we wouldn't get the money.
But we played in the market. What we did is we played in the market and as we worked with the clients through the Center of Excellence that we had jointly established between Software Group and our consulting services, we found amazing client stories that we could solve ... client business problems that we could solve.
As we did that, we started to build out the stack and the process methodologies industry by industry. And when we saw the value [of] what we are trying to create out here, it created an amazing vision in IBM company and said yes, we should invest more in this particular space. And now you know we have a full-fledged service line around Business Analytics and Optimization, around information-led transformation, and a $12 billion spent on the IOD stack software.
So, yes it started with a thought process, but it was the demand of the clients that forced us to be in this particular space. And in this particular domain, we are the leaders. Analysts are telling us we are light years ahead of competition. You see, competition was focused on consolidating the application market, focusing on instance consolidation and so on and so forth. They're still focused on the market that is a pretty big market but not growing.
We are focused now on a market that is where two to three times more money is going because people are now leveraging information to create the next generation of efficiencies. So it is both by luck and by strategic thinking that IBM got into this particular space and accelerated the investment ahead of the market because we played the market well.
developerWorks: Is there anything else that we should touch upon?
Goyal: You know, one of the things that you think about is A Smarter Planet. What is [A] Smarter Planet? Look, many times we talk about [A] Smarter Planet, smarter cities, smarter waterways, smarter traffic, smarter healthcare. How do we make something smart?
This is about getting information at the right place to be able to make decisions or improve processes. So when we say we can reduce carbon footprint in city of Stockholm by measuring traffic and managing traffic flow, we get a lot of information, make smart decisions about it, not only improve the traffic flow but we reduce the carbon footprint. This is all about information-led transformation of the traffic problem that we have in Stockholm or in other cities that we are working on.
Or you think about electric grids; where we can take advantage of instrumentations and reduce the cost of generation of electricity or transmission of electricity. Right? Or healthcare. By connecting the healthcare information at the point of care, you can
- "A," not only improve the client ... improve the health providing or providing of health services but
- improve the quality of life.
This is all about information coming to the right place at the right time to be able to do better things. So if you think about 10 years ago there was a major movement which was called The World is Flat, everything is connected, information is flowing everywhere, the world is flat. Now you're saying, look, this information is coming in, what do we do with it? Right?
That's the investment that we have done. How do we make smarter decisions regardless of the business problem that you are facing? Information is flowing, how do we get arms around it? The velocity of decisioning is changing. The types of information that is coming in is changing. The volume of data is changing. The streaming information is changing. The sources of information is changing.
When we leverage that and harness that and deliver value, that's what [A] Smarter Planet can deliver for...that's the [A] Smarter Planet campaign that we have. And we are doing it for every industry. It's about information-led transformation. It's about analytics and business optimization.
developerWorks: We've been speaking with Ambuj Goyal, General Manager, IBM Business Analytics and Process Optimization. It's been a pleasure.
Goyal: Thank you. It's a pleasure talking to you.