If you think fraud is not your issue, think again; 1 in 13 people will be impacted by fraud. Therefore businesses that hope to maintain the trust of their customers must be able to address fraud in a consistent and predictable way. If executed well, corporations, government, and non-profits companies need to protect their constituents by being both accountable and prepared. To achieve this aim requires more than simply implementing a set of point solutions, employing individual subject matter expertise, and reviewing an IT governance playbook.
My colleague, Dan Kirsch and I recently attended an IBM meeting where they announced their Counter Fraud solution. Clearly, it is an area where IBM has strong capabilities. Led by industry veteran Bob Griffin, IBM has launched an end to end solution comprised of the integration of their best in class technology, a customer centric product roadmap, industry specific use cases that accelerate the time to value cycle with deep consulting and security experts. Our team came away from our discussions impressed.
Those who commit fraud are technology savvy, informally organized and highly adaptable. Fraudsters are not lone wolves. They collaborate and have no regard for boundaries or borders. Compounding matters, they execute their schemes from anywhere. IBM characterizes fraudsters as early adopters of technology and adaptable to change. As a result, fraudsters have the “first move” advantage, which forces Corporate America and public sectors to react and respond which is a clear disadvantage in this battle.
Fraud takes a toll on customer satisfaction, brand name, brand loyalty, revenue and overall corporate value. Recent breaches have caused corporations to miss their revenue forecast and be downgraded, negatively impacting their ability to borrow money. When a breach hits the public sector, the confidence in our public infrastructure erodes. And there are the hard costs of mitigation, litigation and regulatory compliance penalties. Think about the impact to TJX Corporation, Evernote, Federal Reserve internal site, LivingSocial, Target, Neiman Marcus, eBay to name a few. Fraud impacts all of us.
IBM Point of View and Solution
As Hurwitz & Associates has come to expect, IBM has launched a comprehensive solution. It is comprised of the integration of IBM’s best-of-breed technologies (for example – Cognos, SPSS, I2, etc) combined with the strength of over 500 IBM consultants with domain expertise in counter fraud and IBM’s services methodology.
IBM has also elevated the conversation to the business leaders ensuring that this is not just a technology issue. IBM has developed a phased implementation approach which starts with business and technology discovery sessions that identify and prioritize the challenges while defining a long term strategy. Once done, a journey map is generated followed by the execution of one or more Proof of Concept or Proof of Technology initiatives which quickly demonstrates results and creates a learning environment. This new solution includes the expansion of IBM’s security research arm, XForce, with the Red Cell team comprised of counter fraud experts who readily share their findings and make them actionable.
Cost is often a barrier to entry which prevents Corporate America and public sector from implementing an enterprise solution. Not this time. IBM instituted a creative pricing model that enables organizations to more easily navigate through the buying process and more rapidly see results. In an innovative twist on value pricing, the new pricing model makes the cost to the organization dependent on the size of the fraud or value of the fraud. This will enable smaller organizations to take full advantage of the solution. The pricing model also delivers a competitive advantage for IBM even as it ensures a greater degree of credibility and confidence in IBM’s ability to deliver on its anti-fraud promise.
In conjunction with the new solution, IBM has developed industry specific use cases, starting with the prime fraud targets:
The use cases provide each industry with a foundation to jump start the implementation. The use cases can be extended by allowing the customer to codify and include their unique business process rules, fast tracking the implementation to an effective solution.
IBM has already demonstrated leadership in security, analytics and risk solutions; all cornerstones in the counter fraud solution. Now IBM is expanding its scope by packaging a solution that is affordable and faster to implement then traditional point solutions. With this offering, IBM is well positioned to address the fraud challenge. We also believe that over time, Watson and cognitive computing will play an increasingly important role in the fight against fraud. IBM’s biggest challenge is to convince companies not to panic and look for a quick fix to what is a long term problem.