Data's use and analysis are becoming the big differentiators for modern organizations. That's the word from IBM CEO Ginni Rometty.
Speaking last Thursday at an event sponsored by the Council on Foreign Relations, Rometty described data as the "next natural resource," and said it would be the determining factor in decision-making, value creation and value delivery for businesses and governmental agencies.
She pointed out that business decisions are now often made on the basis of the decider's perspective, even on scientific matters, and that predictive analysis is beginning to replace these kind of "gut instincts."
Memphis Police and Data
Analysis, particularly predictive analysis, of Big Data is a big emphasis at IBM, as the technology giant assists organizations in dealing with the avalanche of data from buyer interactions, sensors, Internet traffic, financial transactions, environmental conditions, macro-economics, social networks and a variety of other data streams. The company recently increased its forecast of revenue from data analytics to $20 billion from the previous target of $16 billion -- and that figure was $10 billion when the target was first established in 2010.
Discerning patterns in Big Data is a key competitive advantage, not only among rival businesses but in the fight against crime. Rometty pointed to the utilization of IBM Criminal Reduction Utilizing Statistical History software analytics for the Memphis, Tenn., Police Department. That analysis helped to discover a hidden connection between outdoor pay phones and rapes. By moving the pay phones indoors, rape incidents were reduced by nearly one-third.
The value of data is also inherent in the rise of social networking tools within businesses, Rometty said. She described the social network as "the new production line in a company," and said that sharing information will be the key value of a knowledge worker, not "what they know." This variability in the informational value of such a worker, she predicted, will affect that employee's performance review and compensation.
'Third Wave of Computing'
This emphasis on data is part of what Rometty described as "the third wave of computing." Interestingly, this is not the first time that IBMers have described a third wave, but the nature of that wave is not always the same. In 1995, for instance, then-CEO Louis V. Gerstner Jr. said the third wave was networked computing, following mainframes in the first wave and microprocessors in the second.
In Rometty's third wave, a wave that she said "starts now," computers are learning by themselves, as exemplified by IBM's Jeopardy-winning supercomputer Watson. Computers learned to count in the first wave, she said, and they were programmed to follow instructions in the second wave.
Rometty said that a key result of this data learning will be the ability of organizations to offer more individualized service to customers via computers, leading to the "death of the average."