© 2010 IBM Corporation
IBM Smarter Oil and GasWhy Data Matters: Extracting Insights, Making Better Decisions
Mark Decyk
Practice Leader – Advanced Analytics and Optimization
IBM Global Business Services
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Because it can.
Because it must.
Because we want it to.
Something meaningful is happening…
“Every human being, company, organization, city, nation, natural
system,
and man-made system is becoming
instrumented, interconnected, and
intelligent.
This is leading to new savings and
efficiency—but perhaps as important,
new possibilities for progress
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1 billion transistors for each person on earth.
Because it can
1 trillion things connected to the net.
28 million Canadians online as of March 2008
By 2010, 30 billion RFID tags, embedded into our world.
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50% of Canada’s personal Greenhouse gases results from passenger road transportation.
Traffic congestion and fuel consumption costs Canada’s 9 major urban areas between $2.3 and $3.7 billion per year.
Because it must
Health-care spending is expected to grow faster than Canada's economy, outpacing inflation and population growth.
If the Energy Grid in Canada was just 5% more efficient, it would be like permanently eliminating the fuel and greenhouse gas emissions from 4 million cars.
Weather-related events inflicted $1 trillion in damage from1980 to 2003.
© 2010 IBM Corporation5
10th Annual Athabasca Oil Sands Conference Smarter oil fields Smarter traffic Smarter energy
Because we want it to
Smarter water management
Smarter food supply
Smarter architecture Smarter disease
prevention
Smarter healthcare
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instrumentedinterconnectedintelligent
peoplecompanies, institutions, industriesman-made systemsnature’s systems
Smarter Planet
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The growing velocity of the volume, variety, and granularity of information is driving new, unprecedented complexity
Today, the processing power of the web is about equivalent to one human brain. By 2040, it will exceed the total processing
power of all of humanity
Every day, 15 petabytes of new information are being generated. This is eight times more than
the information in all U.S. libraries
INFORMATIONBy 2010, the amount of digital information will grow to 988 exabytes (equivalent to a stack of books from the sun to Pluto and back)
80% of new data growth is unstructured content
We are approaching a “do or die” moment: enterprises that act will survive to prosper, and those that don’t will be
wash away
* Source: TED 2007: Predicting the Next 5000 Days of the Web. IBM analysis
Tomorrow’s issues and opportunities will be bigger and harder to solve in ways that defy our imaginations today
Timelines for action will be compressed beyond current ability to respond
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Organizations will need to adopt new ways of working to improve speed to insight and speed to impact
Traditional Approach New Approach
Instinct and intuition Fact-driven
Corrective Directive
Efficient Optimized
Years, months, weeks Hours, minutes, seconds
Human insight Applied semantics
Decision support Action support
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The value is immediate and strategic for the smarter organization
Intelligent profitable growth
Cost take-out and efficiency
Proactive risk
management
Improve opportunities for growing customers, improving relationships, identifying new markets, and developing new products and services
Better predict and identify risk events and build resiliency and agility of the organization to respond and act.
Optimize the allocation and deployment of resources and capital to create more efficiency and manage costs smartly
Different organizations may identify different priorities for
business analytics
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The intelligent enterprise is…
Anticipating
Precise
Aware
Questioning
Empowering
Gathers, senses, & uses structured and unstructured information from every node, person, and sensor within the environment
Predicts and prepares for the future and doesn’t only react or correct actions, but also steers
and evaluates trade-offs
Linked
Connects internal and external functions front to back across geographies in a way that aligns to desired business outcomes
Enables and extends employees' memory,
insight and reach, as well as the authority to decide
and act
Reserves the right to get smarter by challenging its
status quo while creating new opportunities
Uses only the most relevant information to support timely decisions/actions closer to the point of impact and consequence
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Traditional transactional and human-authored enterprise data is rapidly
growing
Unstructured data is growing at geometric and exponential
progressions, and most of it is not used in analytics
The unblinking eyes of instruments and sensors is producing tireless
streams of new data
The enterprise has not kept
up and cannot keep up
To survive, business
leaders must act
Existing tools cannot access or analyze the growing data effectively and aren’t positioned to handle the
data deluge
Decision making is based on instinct, subjective information, and often the
wrong facts
Decisions need to be made based on a new set of facts based on the entirety and richness of the
information base
Mental bandwidth needs to be reallocated towards harder and more
pressing decisions
Huge amounts of data are ignored, mismanaged, or under-utilized
People at all levels need better information and executives need to make decisions more quickly
We are approaching a “do or die” moment: enterprises that act on the
opportunity will survive to prosper, and those that don’t will be lost
The information environment
is at a tipping point
Why change and why now?
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Five key related capabilities will enable the Intelligent Enterprise
BAO Strategy
Business
Intelligence &
Performance
ManagementAdvanced Analytics
and Optimization
Enterprise
Information
Management
Enterprise
Content
Management
• BAO Strategy and Roadmap
• BAO Process Improvement
• BAO Governance
• Dashboards & Scorecards
• Planning, Budgeting, & Forecasting
• Business Analytics & Reporting
• Advanced Analytics
• Analytic Applications
• Predictive Modeling
• Business Optimization
• Visualization
• Data Integration
• Data Quality
• Data Architecture
• Master Data Management
• Document & Records Management
• Web 2.0 / Web Content Management
• Digital Asset & Rights Management
• Archiving & Record Management
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Example One:
Electronic Records Management
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Photograph (cc) Philllie Casablanca on flickr.com
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Photograph (cc) AComment on flickr.com
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Large assets generate and attract paper throughout their life…
Photograph (cc) users_lib on flickr.com
•Financial documents
•Owner’s manuals
•Engineering drawings
•Maintenance documentation
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A simplified example that pulls it all together
� Metadata
� Enterprise search
� Predictive analytics
� Records management
Structured
Unstructured
Analysis to determine
new equipment need
Purchase requisition
in Financial system
Create RFP
Receive RFP
Responses
Create asset
in Asset Mgmt
Schedule maintenance
in Asset Mgmt
Maintenance
Records
Lease/purchase asset
in Financial System
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Example Two:
Social Media Analytics
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of consumers trust other consumers
versus 13% for mobile text ads and
63% for newspaper ads1
78%
1. http://www.balladinplaine.com/sla-2008-word-of-mouth-marketing-tuesday-june-17/
Consumers are tuning out our carefully crafted advertising messages…
… and are speaking directly with each other using social media
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How can we listen in on the discussion?
� Monitor the entire public Internet.
� Read every word in detail to determine whether what is being said is interesting to us.
� Filters many thousands of daily articles down to dozens of highly relevant items.
� Highlight the most important items.
� Interpret sentiment.
� Assess emerging issues.
� Identify reputational risks.
� Monitor historical trends and patterns. COBRA is an IBM solution for Social Media Analytics
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Leading organizations benefit from monitoring social media
� Corporate Communication & PR– Watching competitors, NGOs, Regulators– Monitoring corporate and personal (egCEO) reputation
� Marketing & Category Management– Consumer and shopper insight– Analysis of contact centre data– Launch and promotion tracking– Monitoring response to advertising
� R&D– Technology scouting– Patent search
� Quality Management– Analysis of customer complaints– Monitoring press for recalls
Photograph (cc) ky_olsen on flickr.com
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The new Oil!
� “Data is the new oil!”
– Clive Humby ANA Senior marketer’s summit, Kellogg School
� "Data is just like crude. It’s valuable, but if unrefined it cannot really be used. It has to be changed into gas, plastic, chemicals, etc to create a valuable entity that drives profitable activity; so must data be broken down, analyzed for it to have value."
– Michael Palmer at http://ana.blogs.com/maestros/2006/11/data_is_the_new.html
Photograph (cc) L.C.Nøttaasen on flickr.com
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Photograph (cc) Horia Varlan on flickr
Mark DecykAssociate Partner
IBM Global Business Services
416-478-8539
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