IBM Smarter Oil and Gas - IBM WWW Page©2010 IBM Corporation IBM Smarter Oil and Gas Why Data...

© 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

© 2010 IBM Corporation2

10th Annual Athabasca Oil Sands Conference

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



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.



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.


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



instrumentedinterconnectedintelligent

peoplecompanies, institutions, industriesman-made systemsnature’s systems

Smarter Planet



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



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



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



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



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?



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



Example One:

Electronic Records Management



Photograph (cc) Philllie Casablanca on flickr.com



Photograph (cc) AComment on flickr.com



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



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



Example Two:

Social Media Analytics



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



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



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



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



Photograph (cc) Horia Varlan on flickr

Mark DecykAssociate Partner

IBM Global Business Services

[email protected]

416-478-8539

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