Can the analytic science that powers operations at Wal-Mart (WMT) and Federal Express (FDX) make inroads against terrorists? IBM (IBM) is going to give it a shot. Big Blue's Global Services Div. just landed a five-year, $20 million contract to apply its analytical know-how to the U.S. Special Operations Command (USSOCOM), the key military force in the battle against terrorism.
For years, industry has been using analytics to make so-called supply chains run well, ensuring companies are able to pull together all the pieces they need, at the right time, to build everything from airliners to chip fabs. But according to Kevin P. Green, a retired Navy vice-admiral who heads up defense consulting for IBM Global Business Services, the military has lagged behind. "In the past, they've had to depend on heroic administration, people responding on very short notice and putting together disparate systems," Green says. An operation in Afghanistan, for example, requires pulling up data on manpower, repair parts, weapons, food, and is often carried out piece by piece on different computers in place.
The new approach, which will take years to fully implement, would start with a model of the operation, and then suggest the most efficient and effective deployment of all the parts.
Lessons from World War II It's surprising that the military would be a latecomer to industrial analytics. It was during World War II that British and U.S. mathematicians began using problem-solving approaches that would later evolve into what's now known as business analytics. At the time, these scientists were trying to confront the challenge posed by German U-boats that were sinking the ships carrying arms and provisions to Britain. These teams came up with large-scale mathematical models, and figured out how to deploy them to keep attrition at a minimum. This was called optimization, and the process gave birth to operations research, one of the pillars of analytics.
Following the war, IBM dedicated the new science to making the best use of its own industrial supply chain. Over the following decades, Big Blue and others embedded this expertise in software and sold it to industrial customers all over the world. In recent years, with the explosion of digital data, IBM has been scooping up analytics companies, spending more than $10 billion in acquisitions. The most recent is the $1.2 billion buyout of Chicago-based SPSS in July.
The IBM team, Green says, will involve 12 full-time consultants with expertise in cybersecurity, defense, transportation, and the other pieces needed to model the military's Special Operations. The company has carried out similar, smaller services contracts for the armed forces in Britain and Finland. IBM's team is supported by subcontractors, including CACI International (CACI) and National Interest Security Co., both specialists in defense, intelligence, and homeland security. A spokesman for U.S. Special Operations says the bidding involved a number of tech companies, but he could not provide the names.