Analytics is fast becoming a high priority for companies as a result of the explosion in the variety, velocity, and volume of data with a potential impact on business decision-making. Much of this data is unstructured, such as the text included in customer service records, customer sentiment data in social media, or streams of data from instrumented devices.  Making good business decisions  often requires analysis across multiple sources and types of data.  Companies often have independent systems designed to manage business processes ranging from order/inventory to point of sales, marketing research, and customer relationship management. The challenge for many of these companies is that answering the most urgent questions about the business requires analysis across all of these independent systems. Even a small company with a few hundred employees may have a dozen systems are are disconnected and keep the company from having a full picture of the business.

Therefore, it is not surprising that some midsize companies are finding they can benefit from business analytics solutions. Yet, while some midsize companies are finding ways to get the answers they want using analytics, the word needs to spread to other companies still struggling with manual spreadsheet analysis that doesn’t go deep enough.

IBM is going to market through its business partners that typically support midsize companies with a variety of solutions. These business partners are being asked by their clients in the midmarket to help them implement technology solutions that will enable them to make smarter business decisions. They want to find new ways to deeper their understanding of customer expectations and priorities. For example, a midsize retailer might be trying to figure out why certain products are returned while others sell well.  The analytics market offers huge opportunity for IBM and its partners.

The approach IBM is taking with analytics for the mid-market is to offer its partners a pre-configuration of hardware and software into a single system at a price point  that is both affordable for midsized companies, but also has enough of a margin to make it attractive to a partner channel.

However, the challenge for partners is to change the traditional way they have gone to market.  Many partners that have built successful businesses by specializing in hardware sales or a specific category of software such as IBM  Rational find that they need to meet a broader set of client requirements.  They now need to both learn the new analytics products and be ready to sell and implement solutions differently.  Selling analytics to the mid market requires much more than a technical sell. Partners need to have a thorough understanding of the business context in which the analytics will be used to help customer visualize the potential business value.

One of IBM’s offerings that partners should be looking at is  the IBM Smart Analytics System 5710, which is a database appliance for business intelligence and data analytics targeted at the SMB market. The IBM Smart Analytics System 5710 is based on IBM System x, runs Linux, and includes InfoSphere Warehouse Departmental Edition and Cognos 10 Business Intelligence Reporting and Query.  The system is designed to enable partners to get their clients up and running very quickly a broad set of  analytics and business intelligence capabilities. I expect that you will see a lot more of this type of packaging from IBM with collaboration from its solution business partners.

However, the challenge for many companies right now is how to transform their virtualized infrastructure into a private cloud that delivers on the promise of on-demand and self-service provisioning of IT resources. To make sure that business leaders gain desired cost savings and business flexibility while IT gains the optimization that can be achieved through virtualization requires an integrated strategy. At the heart of this strategy is service management of this emerging highly virtualized environment.

Why is service management important? There are good reasons why a key focus of the virtualization strategy at many companies has been on server virtualization. For example, server virtualization helps companies create a faster and more efficient IT provisioning process for users. It helps users with increased operational flexibility based on the mobility and isolation capabilities of virtual machines.

However, there is a major management problem with the typical virtualization approach in many companies. Often developers satisfy their demands for computing resources by simply creating or spinning up a new virtual machine rather than anticipating that they might not have the time or money to purchase new IT systems.  IT management in the beginning allows this practice because it is easier than trying to control impatient developers.  However, there is a price to be paid.  Each new virtual machine image requires memory and disk resources. When the number of virtual machines grows out of control, companies end up spending more time and money on disk, storage, and memory resources than was anticipated. Lack of control means lack of management. What is the answer?

At a recent IBM systems software meeting, Helene Armitage, General Manager of Systems Software, emphasized that in order to truly transform the data center into an agent of change requires a focus on manageability.  Here are the main take always from my conversations with Helene and her team.

• Virtualization is not just about server consolidation. Companies need to think differently about virtualization in order to prepare for a future marked by rapid change. For example, storage virtualization can offer big benefits to companies facing explosive demand for data storage from increased use of new technologies like embedded and mobile devices.
• Physical and virtual environments will need to be managed in a unified way and at the same time. Some may think of virtualization as a way of reducing management requirements. After all, with consolidated resources you should have less demand for power, energy, and space. However, management needs to be done right to be effective. it is important to consider how to manage across the platform and to include monitoring and configuration in combination with business service management  - delivering IT services in a structured, governed, and optimized way.
• Cloud changes the complexion of what’s important in how virtualization is approached.  In the cloud, virtualization takes on a different level of complexity.  If elements of virtualization including storage, server, and I/O virtualization are handled as isolated tasks, the cloud platform will not be effectively managed.
• System pooling is key for managing lots of systems. Systems pooling essentially means that IT treats all resources as a unified set of shared resources to improve performance and manageability.
• Enforcing standardization right from the beginning is a requirement — especially when virtualization is at the core of a cloud environment.  The only way to truly manage the virtualized environment is to apply repeatable, predictable, and standardized best practices across the entire computing environment.

The greatest challenge for companies is to think differently about virtualization.  Management will need to realize that virtualization is a foundational element in building a private cloud environment and therefore has to be looked at from a holistic perspective.

Mortgage brokers like Signature Mortgage are involved primarily in the origination process of the loan, bringing mortgage borrowers together with mortgage lenders who actually fund the money for the loan. Mortgage borrowers engage with mortgage brokers early in the mortgage process when a consumer looking for a mortgage often has a lot of choices. It can be hard at this early stage for a consumer to differentiate between mortgage brokers and if one mortgage broker takes several days or longer deliver the mortgage application documents for signing, the consumer might switch to another broker. Typically a consumer selects a mortgage broker based on the offered rate, term, and closing costs and then locks down the rate to protect against a rate change.  The broker will facilitate a complex series of steps that must take place in order to move from this initial rate lock down to the approval and closing of the mortgage.  The consumer must submit financial and personal documentation so the mortgage broker can assess the credit worthiness of the individual and appraise the property.

The process between mortgage origination and closure can take as long as 45-60 days.  To make money, the mortgage broker needs to be able to collect all the required information quickly and then be in a position to close the deal with the mortgage lender before rates change.  There is a lot at stake for both the mortgage broker and applicant during this time period. For example, missing a deadline for a signature can lead to cancellation of locked-in rates on a mortgage commitment, potentially leading to higher costs for a buyer or lost revenue for a mortgage broker.

Bob Catlin, President of Signature Mortgage explained to me that he was determined to use his company’s small size as an advantage by quickly implementing innovative technology that might take much longer in a large company with legacy policies and infrastructure. By streamlining and speeding up the mortgage origination process, he could differentiate from the larger banks, increase profits and have happier more satisfied customers.

Signature Mortgage has its customers log in to a portal designed to capture best practices for submitting application documentation, revising documents, receiving status reports and securing electronic signatures when required. All of the steps in the mortgage process are documented within the Silanis Technology portal that is based on IBM’s LotusLive collaboration platform.  The Silanis electronic signature solution is delivered as a cloud-based service, making it attractive to a small business with a limited IT staff. By implementing Silanis Technology’s solution, Caitlin has been able to shave days off the loan origination process because there are no more last minute surprises resulting from missing data or documents and delays in arranging in-person meetings.

For Signature Mortgage, the first step in tightening the timeline for the mortgage process was to consistently lock in rates in less than 15 days. Caitlin is now working on decreasing application processing time to 24 hours and shortening the total time between mortgage application and closing down to 10-15 days. Any mortgage borrower who has dealt with requests for last minute faxes for missing documentation or errors that are discovered as the rate-lock deadline approaches will understand that decreasing the time to close from the industry average of 30-45 days is a big deal. However, speed isn’t the entire benefit; managing all information related to the mortgage applications in one centralized portal improves accuracy and accountability. Using the capabilities of LotusLive and Silanis e-signature, Signature Mortgage has been able to include features that make the online mortgage process intuitive and consistent with paper-based manual processes that are familiar to many people. For example, customers click to sign where they see a virtual sticky note similar to the process used at in-person signings. The consistency and repeatability of the process helps the company to maintain compliance with legal and regulatory requirements.

With this predictable foundation, Signature Mortgage has been able to grow quickly, increase profitability and build a strong presence in the community.

I am welcoming my business partner, Judith Hurwitz as a contributor on my blog.  The following is her observations about the partner ecosystem in the cloud.

Judith Hurwitz

I have been spending quite a bit of time these days at Cloud Computing events. Some of these events, like the Cloud Camps are wonderful opportunities for customers, vendors, consulted, and interested parties to exchange ideas in a very interactive format. If you haven’t been to one I strongly recommend them.  Dave Nielsen who is one of the founders of the Cloud Camp concept has done a great job not just jump starting these events but participating in most of them around the world.  In addition, Marcia Kaufman and I have been conducting a number of half and full day Introduction to Cloud Computing seminars in different cities.  What has been the most interesting observation from my view is that customers are no longer sitting on the side lines with their arms crossed. Customers are ready and eager to jump into to this new computing paradigm.  Often they are urged on by business leaders who instinctively see the value in turning computing into a scalable utility.  So, for the first time, there is a clear sense that there may well be money to be made.

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However, is this CIO is really as in control of the situation as he thinks?  If his experience is in line with what I have heard from CIO’s at similar enterprises, then he may well be blind sighted. For example, many businesses find that while their centralized governance processes are effective at improving security, there may also be some unintended consequences. While the CIO directs his team to implement policies to monitor the flow of information between internal users, customer, and partners, there may be some people in the company who are undermining his efforts. Tighter control at the corporate level may lead to longer approval processes for IT resources.  And departments that need to complete a project quickly have never been very patient.  As a result, developers and business unit analysts are leveraging cloud delivery models for quick and cost effective access to computing resources even if it means bypassing CIO instituted governance policies. Right now, the usage of cloud computing is small and is not impacting security or the expense structure in any significant way. However, I expect that as his company becomes more involved in cloud commuting this CIO will need to pay more attention to controlling the costs of cloud services and the management of cloud security.

Controlling costs. Cloud computing is fundamentally about the economics of delivering IT resources in a cost efficient, elastic, and secure manner.  But, the price per CPU for compute power or the price to bring the first five users onto a SaaS application is only one element of the overall economic equation.  It can be so inexpensive to access public cloud resources to meet short-term requirements that it is easy for users to enter a corporate credit card number and move ahead with the project. But, over time small projects can grow larger or take longer to complete than expected. For example, a software development team has a tight deadline to evaluate the performance of a new application prior to an upcoming sales promotion.  One of the developers uses a corporate credit card to get the extra compute power needed for this short-term test and spends a lot less money and gets faster results than by requesting additional resources from his company’s data center. Job completed. Deadline met. Cost low. However, what happens when the application requires additional testing under various scenarios and goes into production? The initial payment to Amazon may have gone unnoticed, but when the development team’s use of cloud resources expands significantly the CFO and the CEO suddenly start to ask a lot of questions.

Security. CIO’s identify security concerns as one of the top reasons why they are cautious about cloud computing. In addition to checking out the security policies of the cloud vendors under their control, CIO’s worry that you may be accessing cloud-based services without their approval. One big area of concern is the increasing use of  social networking applications accessed on mobile devices and used with little or no distinction between business and personal usage. For example, you may use LinkedIn to get help from a business contact to close a deal and Twitter and facebook to connect with friends and clients. For many people, there are few boundaries between business and personal conversations conducted in the cloud and this has some CIO worried about security and compliance issues.

The bottom Line. Unfortunately, these issues and concerns are not going away any time soon. In fact, I expect that the level of oversight will only increase. The CIO will be called to task if various departments begin relying on cloud services for various mission critical projects without any oversight.  This is only the tip of the iceberg. And I suspect this is going to be a big iceberg.

While I was at the IBM Pulse2010 Conference for Integrated Service Management this week, I spoke with several IBM executives about governance issues. I’ve had SOA Governance on my mind because I was preparing for this webcast and found many opportunities at Pulse2010 to discuss governance as it relates to SOA, cloud, security, and business outcomes.

While there are many layers of complexity around governance, here is one basic truth that we discussed.  There are two types of governance  that can impact your business. One is the governance you need to do to keep out of jail – or at least out of trouble with government and industry regulators – and the second is the governance you want to do to ensure that your company has the flexibility to grow and innovate.  This is an important distinction.  You can establish tightly regulated governance policies with a goal of  passing your required audits, but without the right level of governance around business process issues you can’t anticipate change and find opportunities in unexpected challenges.

If you are hoping to obtain better business outcomes ( and who isn’t?) you will need to work hard at improving business and IT collaboration. Implementing a Service Oriented Architecture helps an organization to align IT with business goals and to succeed in rapidly changing business environments. In order for you to achieve these benefits of SOA, you will need to implement a governance model. SOA governance is critical for achieving business value from your SOA initiative by ensuring the reusability of business services.

What is SOA Governance? It helps define a methodology for creating, managing, and safeguarding your movement to SOA. It also supports the management of business rules in a standardized way across the business.

How do you create effective SOA Governance for your organization? It is important to fit your governance model to your SOA. You need to start small and grow.

Here are five key steps to effective SOA Governance.

1. Approach executive management with a justification for SOA governance.
2. Create a comprehensive plan to create the right business services with executive support.
3. Establish process for organizational change since managing change is as important as creating SOA services.
4. Balance risk with oversight to find a proper balance for SOA governance.
5. Plan for the lifecycle of business services.

SOA Governance is all about finding the right balance for your organization. You need to create the right set of business services at the right level of granularity to support the business. If your services are too narrow and technically defined, then they may not have the right meaning for the business. In order to achieve business success with SOA, you need to implement a SOA governance model that ensures business service reuse and business value.

Information governance refers to the methods, policies, and technology that your business deploys to ensure the quality, completeness, and safety of its information. Your approach to information governance must align with the policies, standards, regulations, and laws that you are legally required to follow. When a group of senior executives responsible for information security, risk, and compliance at IBM customer organizations began meeting in 2004, interest in IT governance was high, but there wasn’t as much attention focused specifically on information governance.

Books like “IT Governance: How Top Performers Manage IT Decision Rights for Superior Results” by Peter Weill and Jeanne W Ross  helped companies understand the benefit of aligning IT goals with the overall goals and objectives of the business. In addition, there were other publications at this time focused on how to take a balanced scorecard approach to managing business strategy and on best practices for implementing IT governance.   These approaches are of critical importance to business success, however there was also a need to develop a framework for understanding, monitoring, and securing the rapidly increasing supply of business data and content.

And that is what a group of IT information focused business leaders and IBM and business partner technology leaders decided to do. The amount of data they needed to collect, aggregate, process, analyze, share, change, store, and retire was growing larger every day. In addition to data stored  in traditional data bases and packaged applications like CRM (customer relationship management) systems, they were also concerned about information stored and shared in unstructured formats like documents, spreadsheets, and email.

Having more information about your companies customers, partners, and products creates great opportunity, but more information also means more risk if  you don’t manage your information with care. Council members asked each other lots of questions such as:

• How can we be sure that the right people get access to the right information at the right time?
• How can we make sure that the wrong people do not get access to our private information at any time?
• How can we overcome the risks to data quality, consistency, and security increased by the siloed approach to business data ownership that is so prevalent in our organizations?
• How can we create a benchmarking tool for information governance that will help our businesses to increase revenue, lower costs, and reduce risks?
• How can improve our ability to meet the security and protection standards of auditors and regulators?

As a result of its discussions, The Council developed a Maturity Model to help you assess your current state of information governance and provide guidance for developing a roadmap for the future. The Model identifies 11 categories of information governance.  The categories cover all the different elements of building an information security strategy such as understanding who in the business/IT is responsible for  what information, what policies do you follow to control the flow of your information in your company,  what are your methodologies for identifying and mitigating risk,  and how do you measure the value of your data and the effectiveness of governance. I read two IBM White Paper’s on the Model that add insight to the questions you need to ask to begin building a path to better information governance,  ”The IBM Data Governance Council Maturity Model: Building a roadmap for effective data governance” and  ”The IBM data governance blueprint: Leveraging best practices and proven technologies“.

So, what’s changed? FInancial crises, increasing regulation, high-profile incidents of stolen private data, cloud technology, and other factors have added substance and complexity to the questions you need to ask about information governance.  There is much to do.  One question we will explore at the conference next week is, How do you measure the effectiveness of your information governance strategy and what analytical measures are appropriate? For example, some companies are using analytical tools to look for patterns of email communication across the company and discover a greater level of insight into how information is flowing and what needs more review. Look for more on analytics and governance after the conference.

The risks of internal or external threats to your company’s data are becoming more complex as the depth and breadth of your information expands rapidly and your data is shared with business partners, suppliers, and customers.  In addition, as companies begin to take advantage of cloud services for some of their workloads, additional complexity is added to the multitude of security concerns. Many companies have deployed a disjointed approach to securing, controlling, and managing its data making it hard to anticipate and prepare for constantly changing security risks. There are lots of different ways that unauthorized users may enter your network or otherwise steal your data.  Many companies typically have a distinct solution to combat each one individually and typcially can’t each of themprotect against all of them and. For example, access control, data encryption, network traffic monitoring, vulnerability testing, and auditing may all be monitored with independent applications.

There is a good reason why many companies find they need to deploy lots of different solutions to effectively govern its information. Some of the most innovative solutions have come from emerging companies who have built a niche around a particular vertical market or some segment of the information security market. So you deploy the best solution for you biggest challenges and move on. However, as you begin to think more holistically about your needs for information governance, you will want to ensure that information security solutions are well integrated. This is one reason why emerging companies with an information security solution have become desirable acquisition candidates for larger software vendors.

Guardium, a privately-held company based in Massachusetts, is one of the most recent examples of this trend. When IBM announced its acquisition of the company in the last week of November, Guardium moved from a fast growing startup to one of the pillars of the IBM information governance strategy.The company’s technology helps clients with some of the most challenging issues around unauthorized access to critical data. Their solutions provide secure access to enterprise data – across many different database environments such as IBM, Oracle, Microsoft, Teradata and others.  In addition, customers can reduce operational costs by automating regulatory compliance tasks. While many companies may have the ability to monitor one database at a time, Guardium brings added value by enabling companies with complex environments to monitor databases across their organization.

This acquisition aligns well with IBM’s strategy to provide customers with a well-integrated and comprehensive approach to information management. IBM has spent in the range of $12 Billion over the past five years to add software assets that will help companies to make more intelligent decisions and realize more business value from their information.

IBM has, in fact, spent $12 Billion in software investments (both organic multiple acquisitions like SPSS, Cognos, Filenet, iPhrase, and Ascential Software, just to name a few) over the past 4-5 years to ensure it will be able to support its customers in their quest to unlock the business value of information. In addition, in April of 2009 IBM announced a new organization comprised of 4000 consultants focused on advanced business analytics and business optimization – teams with skills in applying business intelligence technologies like mathematical modeling, simulation, data analytics, and optimization techniques.

In an era of intense competition, tight credit, and cost concerns across global and vertical markets, this focus on getting the most value from the information you have makes a lot of sense. Companies find they are processing more information than ever before, but less of this information is being accurately and adequately used.  The quantity of available data that a business needs to manage and understand has skyrocketed along with the increase in instrumented and intelligent products. For example, RFID tags that are embedded in manufactured products,  plants and animals generate an enormous amount of data in efforts to control inventories and improve security and safety.  Trying to make decisions with inadequate,  inaccurate, or untimely  information is like driving a fast sports car down the highway with a very large blind spot impeding your view of the truck approaching on your side. You need to know about the obstacles that might appear in  your pathway before you try to make a “real-time” correction and steer your car (or your business) of a cliff.  So, students and business leaders alike please take note, I see some “analytics” in your future.

Why is this important for developers? Technology is changing too fast and the pace of the work environment it too intense for most developers to gain new skills quickly. You can research and learn a lot of material on your own, but you can get a lot smarter and produce higher quality results if you have an effective way of learning from others and collaborating across teams.   Given the economic realities of 2009, many software developers recognize that time spent keeping up with emerging technologies and understanding the business value of IT projects may make a real difference in meeting tight deadlines at work, getting a promotion or even landing a new job. These software developers often gain a lot of their information by following bloggers in their special area of interest or blog themselves to reach out to their peers. They use online reference sources, Linked In, Facebook, and Twitter to find solutions to a tough problem and keep in touch with colleagues.  My developer Works was designed to enable developers to  incorporate many of these resources and tools into one place.

Social networking is changing the way people meet, interact, and share information.  That doesn’t mean you can always make the right connections and get the right  information  in your specific technical area.   You may know you need help with a problem, but you don’t know where to find  the answer.  You may expect that somewhere in your own large company there is an expert with the expert knowledge to help you out, but it take s a week to find him because he is located in another continent.  My developer works is designed to help developers find the technical communities that will help them speed up this process. These are some of the things  that I think developers will like about My developer Works:

• The ability to create your own view by adding  feeds for favorite bloggers and online forums
• Easy ways to identify and find subject matter experts using tools  like virtual business cards
• New ways to share ideas and project details with  work teams
• Use of  keywords and tagging to locate people to help with your research and skill development

My expectation is that the true benefits of My develop Works  to developers will go beyond having one coordinated portal for  research  and blogging or twitter feeds. The unique dynamics of social software enable people to gain value from non-predictable events. It is hard to predict the right formula or set of circumstances that will lead to innovation. You sometimes get great ideas from following unplanned threads or from pulling together information across many different environments. Developers should be able to use My developerWorks to more easily locate  the right circle of  industry experts and business colleagues to help foster personal growth and innovation.

In a fast-paced work environment, time  often feels like your most limited resource. The business needs to get products to market faster and there is pressure on IT to deliver more efficient solutions in shorter time frames, and with  lower budgets.  We often needs answers faster than we can even think of the question. MyDeveloper Works is designed to help developers to become more productive at their jobs and have more fun doing it.