Archive for category business channel ecosystem

IBMs Vision for Analytics in the Midmarket: gaining deeper business insight

I recently attended an IBM analyst meeting focused on solutions for the midmarket.  What caught my attention was the focus on analytics as an important and growing revenue opportunity for IBM.  In fact, IBM mentioned during the meeting that 70 percent of midsized firms are looking for analytics solutions.  It is clear from this meeting that IBM wants to bring a comprehensive set of analytical tools to the midsize companies.  Unlike some of IBM’s packaging, analytics tools are being packaged specifically for the midmarket so that they can be more consumable and affordable.

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.

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Can a small business act like a giant with SaaS?

It isn’t easy being a small fish in a big pond.  How does a small mortgage company leverage its ability to be nimble in a competitive market? I believe that SaaS offerings are initiating a revolution with broad implications for business models and competitiveness. It is becoming increasingly clear that with the advent of sophisticated software as a service (SaaS) environments combined with process as a service, it is possible and even commonplace for a small company to be competitive.  I had the opportunity to spend some time at IBM’s LotusSphere with a small mortgage company called Signature Mortgage based in Ohio.  By leveraging a combination of IBM’s LotusLive platform combined with Silanis Technology’s electronic signature platform, Signature Mortgage has been able to differentiate itself in an extremely complex market dominated by Fortune 500 companies.

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.

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Cashing in on the Cloud

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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