Measuring the value of Watson Studio and Watson Knowledge Catalog
Organizations have long struggled with legacy data science tools that are siloed and expensive to maintain.
In 2018, IBM commissioned Forrester Consulting to conduct a total economic impact (TEI) study to examine the value of an investment in IBM Watson Studio and Watson Knowledge Catalog for organizations looking to overcome those struggles. Forrester interviewed and surveyed several IBM Watson Studio and Watson Knowledge Catalog customers about the benefits, costs, risks and flexibility they experienced using the IBM platform.
Forrester interviewed an insurance company with roughly 2,500 employees. The organization had been using Watson Studio for one year and Knowledge Catalog for six months. Forrester also surveyed 32 IT decision makers based in the United States at organizations with more than 1,000 employees.
Prior to investing in IBM Watson Studio and Watson Knowledge Catalog, these organizations paid costly external consultants to bridge functionality gaps while data scientists spent most of their time discovering, accessing and preparing data instead of building predictive models. Survey respondents said that the single biggest challenge they faced prior to their IBM investment was that “there were valuable insights in existing data, but it was too difficult for data scientists to find or access that data”. To gain a competitive advantage, the organizations needed to streamline processes to make data more accessible, provide tools to support data-scientist productivity and provide a platform that encourages collaboration.
As a result of the investment, these organizations dramatically increased the productivity of their data scientists, enabling them to analyze more data and create more models to accelerate positive business outcomes. Data scientists add $2.5 million in incremental value, in revenue or cost savings, to major data science projects, 40 percent of which is attributed to IBM. On average, the organizations can avoid four data scientist hires by increasing the productivity of data scientists, a savings of $1.2 million over three years. The organizations also reduce administrator overhead by replacing existing tools, and they reduce the risks of penalties and fines from noncompliance, for a cost savings total of over $1.6 million over three years. The total benefits over three years is almost $6 million.
To achieve these benefits, the organizations paid for the use of Watson Studio and Watson Knowledge Catalog. The organizations also spent two months implementing the solution and building initial models with the help of IBM professional services. This implementation process included three days of formal and on-the-job training for new users. The total costs over three years is a little more than $1 million.
As a part of its analysis, Forrester also identified various risks that could inhibit the interviewed organizations’ abilities to accurately quantify the benefits and costs associated with IBM Watson Studio and Watson Knowledge Catalog. These risks include variances in the use of previous data analytics tools, the adoption of the platform, the number of major data science projects undertaken each year and the size of the data science teams. Forrester factored these risks into the business benefits and costs to create a more accurate representation of the business impact of Watson Studio and Watson Knowledge Catalog.
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For more information on the full July 2018 case study, “The Total Economic Impact of IBM Watson Studio and Watson Knowledge Catalog”, please reach out to an IBM representative.