IBM CEO Ginni Rometty says big data and predictive decisions will reshape organizations, and computers that learn, like Watson, will be tech's next big wave.
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Cloud, mobile and social computing are driving the big data era, and the difference between the winners and losers in this era, according to Ginni Rometty, CEO of IBM, will be in decision making, value creation and value delivery. That's true for business, government and nonprofit organizations, Rometty said.
This was the message Rometty delivered Thursday night in a speech before more than 170 business leaders at the Council on Foreign Relations, a New York-based think tank specializing in U.S. foreign policy and international affairs. The speech, one of Rometty's first major public appearances since becoming IBM's first female CEO 15 months ago, laid out a surprisingly brand- and technology-neutral vision for how organizations should adapt to the emerging big data era.
Cloud, mobile and social may be the buzzwords of the day, but the real impact of these trends, said Rometty, will be in the data that they generate. "Many more decisions in your company or entity will be based on predictive analytics, not gut instincts or experience… because they can be based on all this data," she said.
Rometty cited the example of the Memphis Police, an IBM customer that reduced citywide crime by 31%, in large part through a program called CRUSH (Crime Reduction Utilizing Statistical History). But rather than elaborating on IBM's products, Rometty stressed that the hard part in embracing predictive decisions will be overcoming mindsets and corporate culture. "People will have to unlearn how they make decisions," she said, whether that's within hospitals, schools or companies.
On value creation, Rometty described social networks as "the new production line." Here she cited the example of Mexican cement manufacturer Cemex, which used social networking among far-flung product-development teams to launch a global brand in one-third the time it previously required to launch a local brand.
Now that all employees are essentially accessible at all times, "your value will be not what you know, but what you share," Rometty said.
IBM itself will prove this point in the near future, she said, by having employees rate each other and asking customers to rate employees. "You'll be rated by the information you create, how you share it, its value, and maybe we'll even pay you that way," she said. "Five stars, one compensation level, two stars, no [incentive] compensation."
Value will be delivered to individuals, not segments, in the future, Rometty predicted. So instead of serving 17- to 25-year-old males, people at a certain income level, or groups of people by zip code, businesses will sell to, service and interact with individuals by collecting and relying on the data behind those interactions.
"If you have a call center, it's no longer about a script, it's about a dialogue," she said. "If you're in advertising, it's not about a promotion, it's about a two-way discussion ... and every one of us will expect something in return, whether you're a citizen or an employee or a customer."
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