IBM_logo_2009.jpg A little less than a year after IBM (news, site) announced the launch of its Business Analytics and Optimization Services, a client-focused consultancy to provide business analytics, it has announced the opening of a global hub in China for the development of new predictive analytics software.

The new hub is to be part of IBM's China Development Laboratory (CDL), IBM's largest network of software labs with more than 5,000 software engineers, and follows a pattern that IBM has laid down over the past year that has seen business analytics hubs being opened in locations as far apart as the UK and India.

Business Analytics And CDL

CDL will focus on developing advanced business analytics for world-wide clients across all verticals and aims to bring new products to market based on IBM patented analytics capabilities and assets that address specific, targeted analytical applications.

IBM cites the example of social media combined with their analytics portfolio. IBM is throwing together advanced customer analytics and social media analytics to develop products for the telecommunications, retail and financial services industries to increase customer profiling and retention.

Business Analytics and Optimization Strategy

Last year’s launch of its Business Analytics and Optimization (BOA) strategy was the first new service line introduced by IBM’s Global Business Services after its launch in 2002. Since then, on the business analytics side alone, it has spent US$ 12 billion on acquisitions and opened a network of seven analytics centers of excellence.

BAO is Big Blue’s strategy of applying advanced analytics to helping organizations predict the likely impact of actions so as to improve decision-making.

According to IBM, most companies manage their unstructured data separately from their structured data -- the kind that resides in applications and databases. The solution proposed by IBM is to look at those two types of data in a unified way and analyze them both in order to change the way companies do business.

IBM And Global Business Analytics

The opening of the China hub as part of its BAO strategy will strengthen its hold on a global market that is growing rapidly and one in which IBM is only second to SAS Institute.

Research carried out for the company earlier on this month which was published in the IBM's 2010 Global Chief Financial Officer Study showed that the most successful organizations of  the 1,900 surveyed globally consistently demonstrated two things:

  • Common process and data standards across organizations
  • Maturity level of finance talent, technology and analytical capabilities dedicated to providing business optimization, planning and strategic insights.

Business analytics, the research says in one of its conclusions, will enable enterprises to implement effective cost cutting, reduce market risks and increase profits using predictive analytics.

This is backed-up by a study last September of more than 2,500 Chief Information Officers (CIOs) that showed that more than four out of five (83 percent) survey respondents identified business intelligence and analytics as the way they would enhance their organizations’ competitiveness.

At the time of IBM’s acquisition of SPSS last year, market research company IDC suggested that it held a 0.5% share of the US$ 1.5 billion worldwide advanced analytics market in 2008. Combined with SPSS, IBM now holds 14.5% share of the market, trailing only SAS Institute Inc.'s 33% share.