IBM purchase predictive analytics software provider SPSS

Updated: July 29, 2009


IBM opens the coffers and drops $1.2b on SPSS, the maker of predictive analytics software.

But what is predictive analytics and how do firms use it?
 

Quotes the Financial Times:

The technology, which analyses past patterns of behaviour to try to forecast future trends, is used in things such as online marketing campaigns, where prices and other factors can be adjusted in real time to improve effectiveness.

So data obtained from internal systems (ERP, CRM, etc.) or third party systems (magazine registrations, online trade publications, etc.) can be entered into mathematical models which optimize ways of obtaining new clients, retaining old clients, cross-selling products, optimize collections or detect fraudulent activity.

inputs:
purchases made, services requests, inquiries, etc.
position, company size, industry, location, position, etc.

outputs:
suggestions on who, how, when and with what to contact potential buyers

A common form is utilized by banks to determine the credit worthiness of loan applicants, or determine their "credit score". In the same way, firms can determine which prospects will be good candidates for a marketing campaign by analyzing their demographic information, transaction history, and prior interactions with the firm.

As for IBM's press release:


The acquisition of SPSS will add a wide array of advanced analytic capabilities to IBM's IOD software portfolio enabling many new industry-focused solutions including: customer acquisition and retention for financial services, patient care improvement for the healthcare industry, crime prevention for public sector and ideal store location for retailers and manufacturers. In addition, software capabilities that address all industries will include demand forecasting, employee hiring and retention, customer profitability, credit scoring and fraud detection. All of these new offerings will help clients drive better business outcomes within their specific industries.

IBM is displaying a shift to smarter technology, as recessionary pressure is to force firms to cut back on technology expenses, and optimize business practices.

Featured Research
  • The 2017 CRM Comparison Guide: Q2 Edition

    If you’re in the market for CRM software, we’ve got good news. We’ve updated our CRM comparison guide for Q2. more

  • 2017 Business VoIP Features

    If you’re considering an investment into a new VoIP system (or upgrading an old one), it’s important to understand what features are available and which ones your business will actually need. Especially if you want to keep costs at a minimum. more

  • 10 Reasons Why  Automated Agents  Aren't the Answer

    Automated customer service agents are a tempting option. They never need time off. You don’t have to pay them a salary. They don’t even need a physical workspace. But despite these advantages, they remain a poor substitute for live agents. more

  • Get the ERP Solution You Want in 5 Steps

    An effective Enterprise Resource Planning (ERP) solution is a must-have for any growing business looking to quickly improve the flow and efficiency of various internal processes. more

  • ERP in the Government Sector

    Enterprise Resource Planning (ERP) solutions have helped businesses improve the flow of key internal processes. That said, there’s yet another professional sector that’s benefitted, too … more