OR/MS Today - December 1999

December 1999

OR at IBM's Core

INFORMS Prize symbolizes computer giant's growing use of OR/MS models

Nick Donofrio, senior vice president of Technology and Manufacturing for IBM, might not know queueing theory from a cue ball, but he knows good business practice when he sees it. And that, he says, is why his new best friend is IBM's operations research team, the team that helped a wide range of IBM business units save hundreds of millions of dollars this year, while improving operations and competitive strategies.

Donofrio was on hand at the INFORMS Philadelphia Fall 1999 Meeting to accept the INFORMS Prize on behalf of the company, the latest in a string of awards the Institute and its members have bestowed upon IBM this year (see OR/MS Today, October 1999, p. 31).

The INFORMS Prize is given annually to an organization that has "repeatedly applied the principles of operations research and the management sciences in varied, novel and lasting ways to achieve great benefits." IBM more than fits the bill, according to the 1999 INFORMS Prize Committee, chaired by Hanan Luss.

Luss cited IBM for its "innovative and effective use of operations research and management science methodology throughout the corporation.

"World-class research in OR/MS and the ability to apply the results to solve business problems have further enhanced IBM's competitive edge and reputation," the citation continued. "The widespread application of OR/MS studies, models and software has resulted in significant performance improvements and cost savings to multiple IBM organizations, such as the Technology Group, the Personal Systems Group, the Server Group and Global Services. Indeed, operations research at IBM has evolved to a core competence, used on a continuous basis to address numerous strategic and tactical problems."

Donofrio couldn't agree more.

"I hated queueing theory when I was an undergraduate," Donofrio told his audience of operations researchers and management scientists in Philadelphia. "I must confess I didn't know what it was then, and I still don't know exactly what it is, but I've come to learn it's pretty neat work. I have been converted. I now believe operations research and management science is as important as you people think it is."

Donofrio put forth a technological vision of the future built around the Internet and what he described as "deep computing."

"Where we think the world is going from an information technology perspective, as it grabs hold of the Internet and this whole e-business concept, is into a space that is quickly going to require and demand something we call deep computing," he said. "It's the ability to do things we could only dream about before. It's the ability to actually represent the complexity of how we think as human beings. Over the next 10 years, we're going to build a computer that actually comes close to representing the computing capacity of the human brain.

"But none of that matters a twit if we can't figure out how to provide the business value and economic insight into these computers. The algorithms that make them do what they need to do. The brilliance of trying to understand what it is you're trying to optimize, what it is you're trying to minimize or maximize. A lot of what you people do is represented in that deep computing vision and the dream that we have for the future.

"That is why I'm so proud of our operations research team at IBM. That is why, after so many years of toiling out in the field, the team is now part of our core, part of our fabric. It's why no less than five business units are represented in this INFORMS Prize. It's happened in a way that deals with — I'll say it again — business value and economic value to the company."

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