The JPMorgan Chase news couldn’t have come at a better time…for IBM Vision 2012 that is.
According to its CEO Jamie Dimon, his bank “took far too much risk, the strategy we had was barely vetted, it was badly monitored, and it should never have happened.”
This use case really puts the spotlight on all of the key themes being discussed this week in Orlando – from financial performance to risk management to governance, and how business analytics is playing a central role.
In fact, the opening keynote sessions on Tuesday, May 15 at Vision 2012 offered interesting perspectives on taking more advantage of enterprise data, how to better leverage data-driven decision making versus intuition, and how organizations need to be better at leveraging risk-driven decision making across the enterprise.
Below are the highlights from the day one keynote sessions:
Les Rechan, GM, IBM Business Analytics
Data is the new natural resource. It’s the fuel for the enterprise and helps drive insight to action. That was Rechan’s main message.
“Sure, there’s a lot of data; but it’s really how you use it,” said Rechan. “We want to connect customers around better practices and drive the business forward around smarter outcomes.”
And that’s the goal, to leverage analytics to confront a crushing set of challenges and unlock performance potential. According to Rechan, IBM is helping customers do this by aligning around the data, anticipating what is going to happen, and most importantly, putting this analysis into action across the enterprise and embedding this intelligence at the point of impact.
To help customers achieve this objective, IBM has assembled an impressive family of products and functionality under the IBM Business Analytics banner, including IBM Cognos and TM1, IBM SPSS, IBM Cognos FSR, IBM OpenPages, Algorithmics, and the most recent addition, Varicent.
Additionally, Les emphasized establishing a culture of analytics across the organization and enhancing everyone’s AQ or Analytics Quotient. To learn more about AQ and take the AQ Quiz, go here.
“Our goal is help everyone in the organization move up along that AQ curve to transform financial processes, increase operational efficiency, manage risk, regulation and compliance, and grow, retain and satisfy customers,” said Rechan.
Michael Mauboussin, Chief Investment Strategist at Legg Mason Capital Management
“When faced with certain types of situations, the mind wants to go down one path when there is a better way to think about the problem,” said Mauboussin.
Based on this premise, which is also the central theme to his book, Think Twice: Harnessing the Power of Counterintuition, Mauboussin illustrated some interesting mistakes organizations make when it comes to their decision making:
· Inside vs. Outside View – When faced with a problem, the standard way to deal with that problem is by gathering information, combining with own inputs and then forecast into the future. By contrast, the outside view is to tap the vast amounts of information from other people who were in same situation before. Organizations and people tend toward the inside view because they fall for three types of illusions: superiority, optimism and control believing they are better than others, are more confident in their own experience and want total control.
· Undo Focus on Experts – People tend to rely on experts more than the collective group. In fact, it’s been proven that experts with more media mentions are actually worse predictors.
· Intuition is often overused. It has a role in decision making, but it only works in conditions that are stable and linear.
But at the end of the day, Mauboussin left the crowd with three central takeaways:
· Value creation should be the core focus
· Acknowledge the mistakes that we’re all going to make
· Statistics should have the proper degree of predictive and persistence value
For more information, read the recent interview with Mauboussin.
Stay tuned for the second part of the opening day keynote session with a focus on customer best practices.
You can also watch the entire opening day session via LiveStream here.
And, tune in on Wednesday, May 16 to watch IBM CFO Mark Loughridge and Alison Levine, team captain of the first American Women’s Everest Expedition.