John Lucas, Director, Solution Delivery, BrightStar Partners, an IBM Business Partner

By John Lucas

Unlike commercial businesses that rely on sales to exist and succeed, non-profit cultural organizations such as zoos and museums do so by attracting patrons and philanthropic donations, recruiting new members and maintaining the goodwill of existing ones.

Yet these cultural organizations are not making the most of their data, especially when it comes to determining how to best serve and market to individual visitors, patrons and members. Membership data, sales merchandise data, financial data and visitor data piles up, building a wave of new opportunities to create personalized experiences.

In addition to this standard organizational data, there is new data generated from the exploding use of social channels, the Web and mobile devices. The strategic information that looms behind this overwhelming volume of data is often a mystery to cultural organizations.

Cultural venues deal with large, often crushing numbers of visitors to new blockbuster exhibitions. As a result, taking a strategic approach to target the individual visitor is often overshadowed by the demands of the sales cycle. How to serve so many people while still giving each visitor a personal experience is one the great challenges of the cultural organization.

But Big Data is helping uncover new ways of measuring the impact of arts and cultural exhibitions and programs to not only enhance the individual experience, but to create more targeted attractions.

For example, the Millennial generation, which has grown up on social media, has a good grasp on what is likely to be spread, shared, and well-received by peers in the varying virtual public squares, such as Twitter and Facebook. And as social media is the main touchpoint for Millennials, they typically generate – and are attracted by – word-of-mouth experiences that are shared on the social web, much more so than other generations.

Millennials also pay keen attention to new trends. If a group of young people decide to visit an attraction or exhibit and enjoy it, the subsequent number of young people that visit is likely to increase tenfold.

Cultural institutions that can cull and capitalize on this social media intelligence to supplement or complement traditional marketing methods will be much more able to tap into the collective curiosity of its target membership and patrons. For instance, many zoos and museums use social media to engage Millennials can better understand which kinds of exhibits and events draw the most interest and the effectiveness of specific programs.

Increasingly sophisticated approaches to the measurement of the structure of and activity on social channels, including sentiment analysis, are giving glimpses of a future in which it will be increasingly possible to track, measure and influence the spread of ideas and the coming together of groups of people to build momentum on an upcoming exhibit.

But what if Big Data analytics were employed throughout an organization?

Analytic insight could identify how members like to receive information, what type of programming is generating the most interest, and what time of year is best to start a fundraising campaign. It could also help executives justify decisions to the board, donors and philanthropists by presenting statistical evidence to explain that a decision was made thoughtfully, not just instinctively – thus giving those board members a reason to support more innovative and engaging work environments for curators, zookeepers, conservators, volunteers, administrative and visitor staff, and artists.

Senior cultural decision-makers need to understand the importance and the urgency to think differently about the potential of Big Data throughout an organization. It’s this analytic insight that is opening new doors for cultural venues to deliver an exceptional experience for the individual visitor.

Technorati Tags: Big Data, Big Data analytics, IBM Smarter Planet, mobile computing, smarter analytics, smarter mobile computing, social business, Zoos

Craig Sowell, Vice President, IBM SmartCloud

By Craig Sowell

With all the hype around cloud computing you’d be forgiven for thinking that it’s reached saturation. The truth is, for enterprises, it’s just beginning to take hold.

Industry watchers tell us that public cloud services will reach $131 billion in 2013. By comparison, this year enterprise IT spending will reach $3.7 trillion. In other words, we’ve barely scratched the surface.

On Tuesday, IBM, already one of the world’s largest cloud computing vendors, announced an agreement to acquire SoftLayer, the world’s largest privately held cloud infrastructure provider.

The acquisition is intended to speed IBM’s ongoing focus the Fortune 500, which have yet to capitalize on cloud computing, as well as expand our reach to new clients including born-on-the-web companies.

One of the top reasons IBM chose SoftLayer is that it will marry the security, privacy and reliability of private clouds with the economy and speed of a public cloud.

What Fortune 500 companies need is an easy “on ramp” to the cloud coupled with the choice and control they desire. They want to build, access and integrate cloud across public, private and hybrid, fully realizing the full scale, security and flexibility of a cloud infrastructure.  This allows for the true reinvention of business as cloud becomes a platform for innovation and growth.

This reflects our philosophy. Today’s public, private and hybrid cloud platforms aren’t just changing computing models, they’re changing business models.

The SoftLayer news maps to IBM’s larger Smarter Planet strategy of transformation and a shift to higher value.

With a strong cloud infrastructure from SoftLayer under our belt, we can focus on delivering to clients the business transformation. As such, the acquisition is a milestone not only for IBM, but for the industry, in changing the cloud discussion from one of reducing “IT cost” to impacting the business.

For example, a produce company in Zurich called Blattwerk, recently decided to deliver fresh fruits and vegetables directly to its customers with a fleet of food trucks. To do that, it needed to monitor its food’s freshness and distribution by linking its mobile point-of-sale scanners with its supply chain. Building this complex system in the cloud helped the company get its trucks to customers just three months after it hatched the idea.

As organizations recognize the potential for business transformation with cloud computing – and see that their security and privacy concerns have been addressed – we’ll see a major turning point and a new day will dawn for cloud.

Technorati Tags: Big Data, IBM SmartCloud, IBM Smarter Planet, Private Cloud, Public Cloud, SmartCloud, Smarter Cloud

Jane Munn, Vice President and Business Line Executive, Cloud, IBM Systems & Technology Group

By Jane Munn

When mapping out a cloud infrastructure, one of the first things that becomes clear is the bifurcation between low-end, commoditized products and enterprise-class solutions.

But even within that second category, a quick look under the covers of certain solutions often shows a patchwork of proprietary products that lack integration and optimization – a little server virtualization here, some specialized apps there, and a little “something-as-a-service” somewhere else – with no real thought to the enterprise as a whole.

For clients to gain the full advantages of this technology, a strategic cloud solution should include virtualization, standardization and provisioning for efficiency, cost-effectiveness, ease of management and fast deployment. Just as important, that solution should cover software, servers and storage, with deep roots in open standards, to ensure that clients can take advantage of cloud’s benefits today while beating a path to the future.

We see many examples of clients taking this approach, and the near- and long-term benefits are clear. Here are a few illustrations:

• The Dmitry Rogachev Clinical Center in Russia, which specializes in hematology, oncology and immunology, is using a cloud solution based on IBM PureFlex for systems and storage requirements and SmartCloud Entry for virtualization and provisioning. The solution will improve patient care by increasing access to medical files for faster and better diagnoses, and to allow researchers to better collaborate. A key requirement is to help manage the increasing growth of medical information — the center expects the volume of clinical tests to increase 5x by 2015, comprised of more than a petabyte of data, to serve more than 5,000 patients;
• The City of Bunbury in Australia is using a PureFlex solution that integrates servers, IBM Storwize V7000 storage, networking and software to provide a highly automated, simple-to- manage system that streamlines and simplifies the city’s IT infrastructure in the near term, and to create a cloud-ready environment for delivering future initiatives over time. The solution will virtualize the city’s desktops and mobile devices to reside on PureFlex, reducing hardware costs, power consumption and time spent maintaining multiple platforms supporting the city’s IT operations;
• French Managed Services Provider Zetark in France is using a solution composed of PureFlex and SmartCloud Entry to deploy their enterprise storage services. The solution provides Zetark with a fully integrated set of server, storage, network and management resources, allowing them to provision new environments for customers quickly and economically. This solutions has allowed Zetark to cut typical customer deployment times from two months to two weeks, reduce power consumption to just 750 watts per petabyte of storage, and allow customers to deploy virtual servers in 30 seconds. It also paves the way for Zetark to offer a broader set of IaaS solutions in the future.

Taking a strategic approach to cloud and focusing on open standards and creating an environment that is linked to the needs of the business, liberates clients from the dilemma of having to decide between short-term benefits or long-term advantages. That’s because it allows them to do both.

Technorati Tags: Big Data, Big Data analytics, cloud computing, IBM SmartCloud, IBM Smarter Planet, Smarter Cloud, Smarter Industries

Elizabeth O’Brien, Worldwide Sponsorship Strategy, IBM

By Elizabeth O’Brien

Big Data is a term we hear a lot about in the business world. But these days, thanks to the insatiable hunger for player, team and league stats and analysis, it’s also becoming widely used in the world of sports.

In tennis, for example, Big Data includes tournament, match and player stats, things like serve speeds, rally counts, winners and aces. But more important than what Big Data includes, is how it is used to enhance and, in many ways, transform how we experience and enjoy the sport of tennis.

This week marks the 28^th year of IBM’s partnership with the French Tennis Federation in support of Roland Garros (also known as the French Open).  IBM brings a suite of solutions to Roland Garros, all centered on real time and historic Grand Slam data. We capture, analyze, secure, store and distribute the data—in fact Big Data is the heart of our collaboration with the FFT.

Click here to view the embedded video.

There are many ways we use Big Data to enhance the game of tennis, bringing the action at Roland Garros to fans, coaches, players and media around the world. One example is through SlamTracker, an analytics tool available on rolandgarros.com that has changed the way many fans watch and enjoy tennis.

SlamTracker analyzes 8 years of Grand Slam tennis data (41 million data points per match) to identify the 3 key strategies that will affect the dynamics of a particular match for each player. We call these ‘keys to the match.’ Before matches, fans can go on the website to check out each player’s keys to the match and during the match, watch player’s progress against these keys in real time—point by point.

At this year’s tournament, we focused on helping fans gain a better understanding of how Big Data has affected and impacted coaches, players and media, IBM convened a panel discussion of tennis experts including

• Justing Gimelstob, a former player, Roland Garros mixed doubles winner (with Venus Williams) and current Tennis Channel commentator
• Sebastien Grosjean, a former #4 ATP player and current coach of Richard Gasquet
• Leo Levin a former coach and tennis analyst for whom this is his 107^th Grand Slam

These experts, with their combined 70+ years of tennis playing, coaching, analyzing and commentating, participated in a lively discussion featuring their views of the importance of Big Data in the sport of tennis, how it impacts Roland Garros and insights about players they have both coached and played against.

 The action at Roland Garros runs through June 9, and we’ll be analyzing the Big Data daily. Follow the action and insights via SlamTracker on rolandgarros.com and join the conversation on Twitter (@eryanobrien) and via daily blog posts  at http://asmarterplanet.com/gamechangers.

Technorati Tags: Big Data, Big Data analytics, French Open, French Tennis Federation, IBM Smarter Planet, innovation, smarter analytics

Troy Kanter, COO of Kenexa, an IBM company

By Troy Kanter

Successful organizations typically recognize three critical facets of their workforce. For these companies, it’s all about capability (what the workforce already knows); capacity (what it has the ability to learn); and culture (what it can do collectively).

Understanding the three C’s is just the first step in the process of creating a Smarter Workforce. In my experience, it’s critical to answer five key questions regarding the design of the workforce to help ensure success, both for the employee and the organization.

1. What are the core components that are critical to the success of your organization?

Much like buying a car, what feature or capability denotes a successful purchase? Is it safety, gas mileage, speed or something else? It’s the same with business. For some companies, they need their workforce to deliver tailored solutions for customers. For others, it’s important to deliver top-of-line customer service, or expertise or creative ideas.

2. What are the job “families” within your workforce that are critical to success?

In other words, what job families will help set your business apart from your competitors? You can determine this by analyzing workforce data and pinpointing the critical areas that impact your bottom line most. For example, one company we worked with analyzed its data to discover that customer service was the No. 1 driver to sales. When they started focusing on delivering better customer service, profits rose.

3. Now that you recognize your most critical job family, how do you attract the very best people for those jobs?

By analyzing your workforce through the scope of human insights and behavioral science, you can create a blueprint that helps you understand the capacity, capability and cultural tendencies of your most successful employees and discover ways to find more people who are like them. Until now, these characteristics were determined only by feelings and intuition. When you attract and hire the right people for the right job the first time, your employees are more engaged, turnover falls and productivity rises.

4. What motivates or demotivates your best talent?

This starts by knowing where and how to source the right people (both internally and externally) by administering assessments and employee engagement surveys that test for the attributes your workforce needs to be successful. You also must know your current workforce in terms of skill and experiences. A Smarter Workforce motivates its employees based on what they know about their most successful people.

5. What tools do you need to empower your workforce and measure success?

Smart companies use enterprise social tools to build relationships and skills, provide feedback and deliver information that is timely and useful. They survey employees to assess engagement and drive performance. And they use data analytics to glean insights into their workforce that were never available until now.

When companies discover the answers to these questions, they create a Smarter Workforce. A workforce where time-to-hire is reduced, productivity is increased, turnover is lowered and retention is increased—in turn, the business is able to get products to market faster, increase flexibility, share collective intelligence, be more creative and innovative, drive higher revenue growth and truly understand how employees impact the bottom line.

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For more information about Smarter Workforce, please see IBM’s POV* in today’s Wall Street Journal and view additional resources here.

Technorati Tags: Big Data, Big Data analytics, IBM smarter analytics, IBM Smarter Planet, innovation, Kenexa, Smarter HR, Smarter Workforce, social business, talent acquisition

Michael Zerbs,Vice President, IBM Risk Analytics

By Michael Zerbs

Sensitivity around risk management is no longer solely a concern for large financial services organizations. In an economy still freshly scarred by the global financial crisis, what we are seeing is a pervasive questioning of the fundamental assumptions that large organizations, and individual investors so easily took for granted pre-crisis.

Questions that are now top of mind include, do I fully understand risk exposures across my organization? Can I trust my governance processes to sufficiently ensure accurate risk reporting? Can I accurately quantify the riskiness of a transaction? And, is my point of reference for riskiness really reliable?

These questions – while shaped by evolving risk regulation – are business issues, not compliance issues. Organizations in a wide variety of industries now understand more than ever that risk is intrinsically bound to decision making, and that navigating this relationship between risk and decision making is critical for performance. Our clients are challenged to operate and perform optimally in an environment that is increasingly complex, regulated and competitive.  However, thanks to analytics they now have the tools at their disposal to harness insights that simply were not previously available.

Click here to view the embedded video.

IBM is excited to be leading the charge in this space, investing in key technological advancements that will address the evolving risk needs faced by our clients.

Of course, technology alone is not the answer. The successful adoption of an enterprise risk management platform requires a truly pervasive approach to risk management. To that end, IBM has sponsored The Risk Enabled Enterprise – a two-year research initiative by Chartis Research, the leading provider of research and analysis for risk technology. Research will cover key enablers such as culture, organizational structure, data, systems and processes.

To learn more about this research initiative, see last week’s blog by John Macdonald. I explore a similar theme in my latest editorial article, with a focus on trust. That is, trust in the quality and reliability of the underlying data and operational processes, trust in the integrity of the analytics, and trust in the management processes driving reliable actions emanating from risk insights.

We explored these topics and many more and from a variety of angles at Vision 2013, IBM’s premier global conference for finance, risk and incentive compensation professionals.  If you missed it, I encourage you to check out the Livestream of the Risk keynote session.

Technorati Tags: Big Data, Big Data analytics, Financial Services, IBM Smarter Planet, innovation, risk management, smarter analytics, smarter financial services

Werner Kruck, Chief Operating Officer, Security First Insurance Company

By Werner Kruck

You may think of Twitter and Facebook as a way to catch up on the latest gossip, but social media often becomes a critical lifeline and communications channel after a natural disaster. In addition to using it to locate loved one­s, friends and emergency resources, people affected by a natural disaster often turn to social media to contact their insurance company for information and to start the claims process. Homeowners insurance companies must prepare for the reality that today’s policyholders will use any means available to connect with them, including posting a question or comment on the company’s Facebook page or Twitter account.

Florida homeowners insurance companies are extremely prone to the challenge of dealing with disaster in a socially connected world – Florida has more property and people exposed to hurricanes than any other state in the nation. As the fourth largest homeowners insurance company in Florida, Security First Insurance Company understands the importance of adapting to the widespread use of social media and leveraging modern technology to improve the recovery process for our nearly 180,000 customers. As a result, we have partnered with IBM and Integritie, an IBM-business partner, to develop Social Media Capture, Control, Communication, and Compliance (SMC4).

SMC4 integrates social media and email communications, and using IBM Content Analytics with Enterprise Search and IBM Content Collector for Email, the system automatically prioritizes and routes incoming requests to the appropriate employees based on the content of the message. SMC4 enables  Security First Insurance Company to effectively manage a high volume of requests we anticipate to receive after a hurricane and improve the response time to our customers. SMC4 also uses IBM FileNet Content Manager software to archive all communication for compliance review. 

The challenge for companies responsible for assisting customers after a disaster in a socially connected world is capturing and prioritizing all incoming messages and developing a quick and appropriate response. According to the American Red Cross, at least 76 percent of the general public would expect assistance to arrive within one to three hours from posting a request for help on a social media website. Built on IBM software, SMC4 eliminates silos and redundancy—expediting the resolution process for policyholders and allowing us to follow through on our promise to be there for Floridians storm after storm, year after year.

Technorati Tags: Big Data, IBM Smarter Planet, innovation, mobile computing, smarter mobile computing, smarter social business, social media

Robert Fox, Global Telecom, Media and Entertainment Industry Leader
IBM Global Business Services

By Robert Fox

Cut throat competitiveness has been with the telecom industry since its inception nearly 140 years ago when Alexander Graham Bell beat Elisha Gray in a race to the U.S. Patent Office to lay claim to inventing the telephone.

Fast forward to today and we see a highly complex, competitive telecom environment where voice services have taken a back seat  to a growing range of data-intensive services such as streaming music, radio and video, high definition video, online gaming and social media.

Transporting all of this data through their networks is resulting in shrinking margins and network congestion for the carriers. But don’t hang up on them yet! Mindful of protecting customers’ privacy and preserving their trust, many of the carriers are annonymizing their data, or offering opt-in programs, as they start to embrace and leverage advanced analytics for competitive advantage.

A new IBM study on how telcos are using Big Data highlights this trend: 85 percent of the respondents indicate that the use of information and analytics is creating a competitive advantage for them – a 124 percent increase in the last two years.

And what types of data? That is changing too.

According to the study more than half of the telecom respondents reported using internal data as the primary source of big data within their organizations. Traditionally this has meant data extracted from phone calls, transactions, call center interactions and call detail records, like who made the call, who received it and duration of the call. But the proliferation of smartphones opens up a whole  new category of transaction records, called XDRs  which capture other transactions such as the purchase and download of a song or a video clip, a recharge on a prepaid account, or a mobile payment. Carriers are already using this type of information to improve customer experience, align solutions to customers’ needs and help predict the potential for up-selling or cross selling products and services.

Forty-six percent of the study’s respondents with Big Data efforts said they extract data from social media sources such as Twitter, Facebook, message boards and other online locations where consumers chat and post opinions. It enables them to quickly detect customer issues and consumer sentiments, and to increase revenues, reduce costs and protect their brand. And 45 percent of the carriers with active Big Data efforts use location data to do things like support intelligent marketing campaigns, detect fraud and improve network quality. The new trend is not only to understand who the customer is, but to have a more contextual, location-based and real-time view of them.

While telecoms’ extensive use of Big Data in itself may not be surprising, what is intriguing is how they’re increasingly using this competitive advantage to drive new revenue streams in completely different industry areas. For example:

• A major U.S. network operator is combining its customer record data with sentiment analysis. They’re able to determine what type of people pass by a billboard at a particular time of day, and what products or services they might be most interested in. The carrier can then sell the information to a digital billboard operator which will be able to more accurately target its billboard ads to the demographics of the actual traffic.
• In Europe we are working with Deutsche Telekom on a collaboration to help build smarter cities. By combining IBM’s expertise from thousands of smarter city engagements with Deutsche Telekom’s global M2M capabilities and advanced network connectivity we’re able to offer cities solutions designed to help them improve the quality of life for citizens, who will be able to anticipate traffic delays and bus or train arrivals when travelling, find public parking spots more easily, and gain improved access to a wide array of relevant city information and services.
• On the retail front, telcos are also looking at a number of ways to develop multi-channel marketing campaigns with real-time geo location and social media analysis. In this case, a mobile subscriber could opt into a program in which his carrier can let an electronics retailer, for example, know that the subscriber has been expressing interest in a flat screen TV via his social networks. The electronics retailer could then offer targeted discounts directly to the subscriber, either via his social channels or – using geolocation services – they could text an offer or coupon directly to the subscriber’s mobile phone when he is in the vicinity of the electronics retail store.

In this new landscape the carrier oftentimes isn’t a communications channel anymore, as much as it is an information broker, or a content distributor. The telcos are tapping their treasure trove of data and morphing into whole new industry areas. They’re definitely not your mother’s telephone company anymore.

Technorati Tags: Big Data, Big Data analytics, IBM Smarter Planet, innovation, mobile computing, smarter analytics, smarter mobile computing, telco, telecommunications

Deepak Advani, General Manager, Cloud and Smarter Infrastructure, IBM

By Deepak Advani

The Internet Age has made it possible for dramatic amounts of information to be available at our fingertips. And as capacity expands and accessibility grows, we push ever closer to the  Internet-of-things, where our physical and digital worlds are tightly coupled and leveraged.

With the ability to generate, share, store and access increasing amounts of data – Big Data – the challenge soon becomes one of management and analysis. Left alone, the mountains of seemingly disparate information are useless. But when mined intelligently, they become treasure troves of insight that can unlock benefits, such as improved customer service, equipment-saving predictive maintenance, and new business opportunities, to name a few.

Take for example, the second largest commodity rail carrier in the European Union, PKP Cargo. The company manages 63,000 wagons and 2,400 locomotives that transport more than 110 million tons of cargo every year. PKP Cargo offers one-stop logistical services that include 10 multi-system locomotives, ensuring continuous journeys along routes electrified by more than one system. These trains and wagons are used for international transport in Poland, Germany, Czech Republic, Slovakia, Austria and Belgium. On average, the company runs about 1,000 trains a day, servicing several thousand customers.

The amount of data being generated and needing to be tracked was difficult for PKP to sift through. The company realized it wasn’t just the task of tracking their wagons and trains that was vexing; it was the lack of analytics that it could turn into actionable information. Through IBM Maximo Asset Management software, PKP can now better predict when and where cargo will arrive, making sure each train is on schedule and meeting customer expectations. Just as important as tracking their assets, analytics empowers more than 10,000 of PKP’s employees with information to make more intelligent decisions, which ultimately enables PKP to expand its business. By also tracking the usage of each physical asset, PKP is using IBM analytics to predict potential repairs before failures occur and to perform preventative maintenance on its rolling stock.

PKP’s use of analytics is not uncommon and neither is the concept of gleaning intelligence from data to create new opportunities. Consider Pakistan. The country is quickly outpacing its current power generation capacity, with energy consumption growing by almost 80 percent in the last 15 years. The Pakistan Water and Power Development Authority (WAPDA) forecasts the country’s electricity demand will increase to around 40,000 megawatts (MW) by 2020. The country’s current power generation capacity is at 23,538 MW.

To meet these growing demands, Pakistan created its first hydroelectric power plant through its operator, Tenaga Nasional Bhd (TNB) Remaco. The recently-constructed $235 million plant will help meet Pakistan’s growing energy needs by adding an estimated net annual energy of 540 GWh to the national grid and enhance the hydro power generation capacity of Independent Power Producers (IPP) by 40 percent. The addition of this power source will replace about 135,000 tons of imported oil, reducing carbon emissions and saving Pakistan approximately US$100 million per year in fuel costs.

The inherent challenge, however, was managing the hydro plant operations in a way that could scale to meet business demands. Through IBM’s asset management software, TNB Remaco now employs a single, converged view of all energy data, as well as asset and service management data. That enables employees to identify problematic equipment and make better informed decisions that are critical to the operations of the plant

The moving parts of a hydroelectric plant or railroad system serve as good examples of how our world is dependent on the mechanics and operations of physical objects. But today, we can do more than just monitor these systems and machines. We can collect data from them and apply analytics to make better, more strategic decisions on how to use them. The next step will be finding ways to create “cognitive” systems that can learn, adapt and hypothesize answers.

Technorati Tags: Big Data, Big Data analytics, IBM Smarter Planet, innovation, PKP Cargo, smarter analytics, Smarter Transportation, smarter utilities

Christian Bieck, IBM Institute for Business Value, Insurance Leader

By Christian Bieck

The most urgent and strategic initiative that I currently discuss with insurers is that of “Customer Centricity.” That’s because a lot of insurers are having a hard time understanding their customers, many of whom are becoming multi-modal.

A multi-modal customer is one who interacts with a provider through a variety of modes – or interaction points – i.e., face-to-face, phone, websites or aggregators. Often, a multi-modal customer will not purchase a product or service from the interaction point they used to collect information and gather a quote.

Finding success in today’s environment means that insurers must present the right data, information and offers to the right customers, at the right time, and through the right interaction points – many of which are digital.

(Fourth in a series in support of Big Data Week.)

Closing the Trust Gap

The increasing digitization of consumer interactions is leading to a greater demand for transparency. Not surprisingly, customers are becoming harder to satisfy and maintain. IBM’s recent studies in the insurance industry are remarkably consistent in this regard, revealing that roughly 60 percent of customers do not trust the insurance industry. Those who lack trust are 25 percent more likely to switch carriers.

This gap can only be closed if insurers make an effort to better understand each customer as an individual with unique preferences, and actually act on that information by targeting customers with personalized services.

Fortunately, the technology exists today to help. Advanced analytics can be used to create a complete customer profile to better understand individual behavior patterns and preferences. These insights provide insurers with valuable new paths to engagement.

For example, a large European auto insurer used real-time Big Data insights to create a flexible pricing model that enabled drivers to pay only for the insurance they needed, based on their actual driving habits. By creating a more objective pricing structure, the company acquired 20,000 new customers within the first year of business. Customers flocked to the value of being serviced on an individual basis, versus being targeted with a mass-marketed sales pitch or even a micro segmentation.

According to IBM’s latest Big Data study, 47 percent of insurance providers seek to improve the customer experience by better understanding customer behaviors. More than half (55 percent) of all financial services providers want to apply analytics to boost customer-centric outcomes. While the industry is starting to recognize the need to better understand customers, it’s going to be essential for all insurers to do this.

The reality is that consumers can and will switch insurers if they can’t interact with their provider in the way that they want to. The ability not only to shop for and compare insurance prices online, but to compare outcomes and experiences through a variety of social interactions, puts consumers in charge like never before, making it easy for them to jump from one insurer to another with just a click of the mouse, or a swipe of a phone.

The Pay Off

IBM’s research found that all organizations – large and small – state that Big Data yields a competitive advantage. In the insurance industry, the percentage of respondents reporting a competitive advantage rose from 35 percent in 2010 to 74 percent in 2012 – a sharp 111 percent increase in two years.

So what do I tell insurers when they ask how they can become more customer centric? I tell them that it is not simply a matter of implementing a program: to stay competitive, insurers must put customers, and, more so, individuals, at the center of every decision. Providers must move away from treating customers as broad demographics and instead connect with customers as individuals. The beauty of Big Data is that it’s a treasure trove of untapped insights that can be mined to do just this – empower providers to deliver highly-targeted interactions while cementing important customer bonds.

Other stories in this series:

• Big Data Takes Flight in Aviation, by Thomas J. Wholey
• Rensselaer’s New Analytics Degree to Help Organizations Better Tackle Big Data, by T. Ravichandran
• How Big Data Analytics and Research Will Fuel the Second Wave in the Era of Smart, by David McQueeney

Technorati Tags: Big Data, Big Data analytics, IBM Smarter Planet, innovation, insurance, multi-modal, smarter analytics, Smarter Insurance