Different types of Predicative Analysis used by IBM:
Predictive Profiling: Techniques like Data mining has been used in forecasting a segment’s reaction with a certain change in behavior on service offerings from IBM, purchasing pattern of a product or service.
Predictive Mapping: With the use of different models, characteristics of profitable customers can be identified and can also be predicted as in which segment of customers can become highly profitable, which will be just profitable and also which segment turn out to be unprofitable customers in future.
CUSTOMER PYRAMID TOOL The customers are segmented and arranged in a top down structure according to their profitability and value they bring to the company, the top being the space
The technique also provides necessary information like which segment of customers likely react positively for different cross selling and upselling measures. A customer can be moved up in the label of pyramid with effective upselling in place.
Techniques used by IBM to migrate its customers from bottom to up in the pyramid structure I.e. from Lead -> Iron -> Gold -> Platinum
• Offer services to Gold customers who currently availing those services from elsewhere
• Attracting Gold customers more by providing a broad range of offerings that can satisfy their demand in a much effective manner
• Instead of reducing prices in order to avoid profit, IBM makes doing business with it much convenient and easier.
RFM TECHNIQUE:
RFM is considered to be a three dimensional techniques because it considers and evaluates three variables to distinguish the customers and categorize them as highly profitable, profitable and
IBM’s Systems and Technology(STG) division is the hardware division of the organization. It basically consists of Mainframe or System z, PowerSystem and systems storage businesses. Although initially, IBM started off primarily as a hardware company, over the years, it has increasingly lost ground in this segment. The year-on-year revenue and margin growths are on a downward spiral with both being negative in the year 2013. The System z is regarded as the cash cow of the company; however, it is cyclical and has entered into the back end of the product lifecycle.
CONTRIBUTION TO REVENUES
STG’s contribution to revenues has been following with each passing year and this was the reason why IBM hived off its low end server segment to Lenovo and moved over to the in demand “cloud computing” by increasing investments on it. HP is now in the server market leadership position while DELL and EMC are the top players in the hardware segment. A decline in demand from Emerging Economies, especially China, can be attributed to be the primary reason the STG has not been doing well these past couple of years.