IBM: Manage Data Like Cash

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NEW YORK — IBM today released a report tracking the effective use of business analytics at successful businesses. The report, “Breaking away with business analytics and optimization,” said that all businesses can differentiate their performance by analyzing data better and by delivering insight to decision makers at all levels of an
organization.

Those with a successful strategy “achieve both top and bottom line impact — especially important in the current economy,” the report said.

“Business school graduates understand how to manage cash but don’t understand how to manage information,” added Ambuj Goyal, general manager for business analytics and process optimization at IBM (NYSE: IBM) in response to a question from InternetNews.com.

Goyal said that graduates learn methods for managing cash, such as return
on assets, which measure the performance of cash as an asset when deployed
in different places in the business — performance that otherwise is difficult to measure.

“We’re leaving business analytics to mathematicians,” Goyal warned.

He said that given the tremendous volume of data that every business generates today, handling the data — cleaning it and ensuring that it’s accurate — is the key challenge for every business today. “Without good data, it’s garbage in, garbage out ,” he warned.

There’s plenty of data and it’s not being used, either. Goyal noted that while cash is spent and can be hoarded, data is not expended when used. He suggested that the profitable use of data can deliver tremendous returns precisely because it is a non-rivalous resource.

Schooling data

Goyal spoke at Fordham University, which also today announced a new business analytics curriculum developed in partnership with IBM.

When a member of IBM’s marketing team asked “What does all this focus on analytics mean for students?” over Twitter, Goyal had a simple answer: “jobs!”

Evangelos Simouding, Trident Capital managing director, agreed. The venture capitalist said that of the companies in his portfolio, those focusing on analytics had survived challenging times better and have continued to hire.

Two audience members asked whether this reliance on systems and procedures
would culminate in decision making by machines. “Will machines replace
doctors,” one asked.

Goyal answered that by noting that the method by which the price of advertising on a TV show is determined shows computers will aid human beings, not replace
them. “The engine still needs a steering wheel,” he concluded.

Kamal Bherwani, CIO of New York City’s health and human services (NYC HHS), agreed. “I don’t think that machines will ever be accountable for decisions and should not have full control of decisions,” he said.

“Computers are a tool, a light that helps you see and make a better
decision,” said Bherwani. “Whether you’re a pilot or a social worker, you
need real and accurate data… Humans should have full control to override
the machine in all cases.”

NYC HHS spends tens of millions of dollars on technology each year and Bherwani noted that New York City has been very aggressive in tackling health care issues, like banning transfats and smoking in bars.

He said that his department is tracking the results of these policies. He
was particularly proud of the smoking ban. “We cut smoking from 22 percent
to 16 percent and prolonged 100,000 lives. Maybe the dry cleaners are hurting, but I think that juice is worth the squeeze,” he joked.

Of course, there are risks as more data is available. Even benign uses need
to be scrutinized. In the medical arena, Bherwani said, patients want the
right to give consent before data is used.

“But if they give consent on part of the data and not on other parts, there may be a problem. For example, the practitioner may not be able to predict the drug interactions if they lack access to all the data.”

Even the most benign uses of data should be questioned. “Who is allowed to
see data showing warning signs of abuse of a child in the school system? Who
can act on it?”