Adam Gartenberg's Blog

Business Analytics and Optimization, IBM and Social Marketing

Explained: Information-Led Transformation in 4 minutes

Have you been hearing us talk about an "information-led transformation" but still aren't sure exactly what it all means and how it might relate to you?  If so, a colleague pointed me to this video of Arvind Krishna, GM Information Management at IBM, recorded by Scott Laningham at the IOD 2009 conference in October that you're going to want to check out.  He sums up in just 4 minutes why companies are looking to transform their business through information, and why IBM is putting so much focus on helping them to do so.

In the interview, he cites an example that I think perfectly exemplifies why companies need to think differently about they can make sure that they can scale data and the insights from it without scaling costs along with it:

CenterPoint Energy is rolling out smart energy meters to the households to which they supply electricity.  When completed, they will be getting meter readings every 15 minutes from 2.5 million customers.   So instead of doing 80 thousand transactions a day on meter readings, they will be doing 160 million transactions a day.  Think about what would happen if getting insight from this data required scaling costs 2,000 times along with the data.

The whole idea, as Arvind Krishna explains it, is to allow the business to scale, to be robust, and to do it with fewer people, not more.

He relates how we are at an inflection point in our industry.  If we look back in time, companies had to hire more and more labor as the business grew.  For example, if an insurance company in 1920 wrote more policies, they had to hire more staff to process it, record it, and account for it.  Once IT came in, it allowed the company to scale the business disproportionately from the costs.  That was application or automation agenda.  

Now let's fast forward to today, where we have a current economic climate where revenues aren't necessarily growing, at yet companies still need to deliver improvements to their bottom line.  One critical way to do so is to take the info they already have and act upon it in new ways.  For example, finding the most profitable customers, identifying ways to turn the least profitable into more profitable, determining which markets segments might not be worth getting into.  Arvind Krishna also cites some startling statistics about water leakage in the city of London:  45 million gallons of water a day are lost under London due to leakage from water pipes; the city could accommodate 1 million more people without needing to bring in any more water, just by fixing that leakage.

What it really comes down to is how can companies take advantage of this new inflection point, harnessing capabilities in their underlying infrastructure, and leveraging the information that may already be at their disposal to improve the bottom line in ways that are better for the enterprise and for the planet.

The most telling part for me was the simple message that he was getting over and over again in the meetings with individual companies he participated in at the conference.  The questions that kept coming up over and over again were:  How can we get started, and what help are you going to give me to succeed?  Not once - in over 50 meetings - was he asked "Why should I do this?"