Big Blue

IBM CEO Rometty Says Big Data Is the Next Great Natural Resource

IBM CEO schools executives on how to make data-based decisions and predicts the decline of management by gut instinct.

Odd Andersen/AFP/Getty

Companies that make “billion-dollar decisions” based on “gut instincts” rather than “predictive analysis” of big data will be “losers” in the ever-burgeoning information-based global economy, IBM CEO Virginia “Ginni” Rometty predicted Thursday night.

Rometty, a featured speaker at the Council on Foreign Relations 2013 Corporate Conference in New York, told her fellow corporate chiefs that “data is the new natural resource.” Now in her 14th month as chairman, chief executive officer, and president of the technology giant, Rometty delivered a crystal-clear message about the new age of computing, which she envisions will revolve around how well companies understand massive amounts of data derived from social networks. Unless organizations “unlearn” old ways of managing, she said, they will lose to companies that understand “cognitive advantage” and the new corporate culture of information sharing that enables management to make fast decisions.

“The social network will be the new production line,” she said, as she explained that “big data” change the ways organizations understand what is going on with customers, how “value” is created, and how value is delivered. Computers will have to learn continually from data, because the information flow now is too immense to function with old-fashioned programs.

This evolution of big-data decision making will “force every company, country, government entity, to actually become an authentic organization.”

Without using the word “bespoke,” Rometty predicted that information sharing will prompt companies to produce goods in a more personalized way. “With this emergence of big data and social mobility, you will in fact see the death of ‘average,’ Instead, you will see the era of you.”

“If you have a call center, it is no longer about a script, it is about a dialogue,” said Rometty. “If you have a promotion, it is about collecting information.”

There was nary a hint of a sales pitch, but it must have been hard for any of the corporate executives in the room not to wonder whether they might need some new IBM computing solution to handle the brave new world Rometty was describing so neatly. Process this Rometty nugget: “You are at the 15 percent mark at what in three years is going to be flooding on you, and the majority of that isn’t text. It’s going to be information that is unstructured, video-aided conversation, etc., and it is going to be uncertain, meaning what did that actually mean? It’s going to be a different world.”

Watson, IBM’s famous Jeopardy!-playing computer, has moved on and is being reprogrammed for medical work and helping call centers. As a computer program that is continually learning, Watson is assisting WellPoint and oncology doctors diagnose and treat cancer patients by speeding the collection of information and suggesting possible treatment regimes. In call centers, Rometty said, Watson instantly compares questions and answers with the database of solutions that worked earlier for people with similar problems.

Discussing why IBM has now opened a research center in Nairobi, Kenya, Rometty said the era of putting such a facility near a great university is over. Problems are so big and data generation so enormous that such research centers now have to be located “in the middle of the problem.”