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6 posts from May 2016

31 May 2016

Chief Data Officer: Am I wasting my time?

The challenge of how far to go with the challenge of data governance is ever present in the heads of chief data officers. “How much should I spend?” “How can I demonstrate value?” “When will I know I have finished?” Are all questions that chief data officers are asking themselves.

So, it's not surprising that we might all be asking ourselves the ultimate question… “Am I wasting my time?”

I have the privilege of attending events aimed at chief data officers and also hosted a small forum where we can debate such issues.

The good thing about these events is that everyone unanimously agrees that this is the right thing to do. The problem seems to be more about the extent of the changes that are needed to do this properly.

What I think we all agree on is that there is a certain inevitability about data governance. The most successful new organisations already have it. They grew up in a world where the business model fits the new digital environment. People sign up through digital media. Their details are passed on via specialist third parties. Suppliers have emerged who act as conduits for the flow of people, order, despatch and receipt data. Things generally join up.

For those of us in the more traditional businesses that relied on people, talking, filling in paper forms, maybe even a physical presence on the high street, we have many systems that don’t join up.

For us the challenge is greater. For us the challenge is more complicated. For us we need to change to remain competitive.

So… if governance is a key driver for changing the way the business is structured, then governance is clearly not a waste of time. The only tragedy of this might be that when people recognise the need for change, then it will fail if they don’t recognise the need to implement good governance as well.

We live in a world where we need to improve on how we get the right information to run our businesses. If governance does anything, it recognises the need to do things reliably and efficiently. It roots out bad and inefficient practices. It focuses on the things that are important to run your business well.

Someone summed this up beautifully for me recently…

“If we don’t have good governance, the world will be run by Excel!!”

If you would like to discuss these issues, or the impact of emerging technology or data and analytics on your industry, then contact our Data & Analytics team.

24 May 2016

Drawing expertise from sport to disrupt though digital

by Ollie Phillips Director

It is almost a year since I walked through the doors of PwC, having previously enjoyed 12 years playing professional rugby. Although I now find myself on a totally different playing field, the power of technology and digital remains as the cornerstone of all innovation and disruption, with its unique ability to foster and cultivate change ever present.

Sport is a great example of an industry that has been transformed by technology. Gone are the days of reputation and perception being the only medium for measuring performance, now there is a new barometer for success. When I first began playing, VHS cassette was our ‘high tech’ and sophisticated way of assessing performance. Twenty three big, bulky rugby players all huddled around a television to review their efforts, trying to analyse where they could gain any improvements over their competition in the future. Now performance is analysed and presented in a very different manner. Every movement, pass, kick, tackle, scrum, and lineout is recorded; coded and then presented in whatever format you would like to see it in.

On top of this, players in today’s game have wearable technologies woven into their kit that provides a detailed insight into their performance and general well-being. Areas such as heart-rate, exertion levels, concussion protocol, illness, top speeds and fitness levels are now readily available for all to see. All of this data is delivered live, in real-time and can be scrutinised, analysed and criticised on a daily basis. Coaches now have a wealth of information at their disposal, from which they’re expected to make quick and smart decisions about their primary assets, in order to ensure that their team is firing on all cylinders and ultimately winning games. Players are now fully accountable and if they want to be competitive, then they need to make sure that they’re maintaining world-class levels of performance, both on and off the field. The provision of data, coded and presented in a format that is easy for them to digest and process is integral to them achieving that goal.

Technology has transformed sport. It’s made it more professional and has quantified what ‘world-class’ performance and preparation should look like. The result is bigger, faster and stronger athletes can deliver a level of quality on the field that has never been seen before. So what, you may ask, does any of this have to do with PwC and why did I ever walk through the door in the first place?!

Well the answer is simple, I think! PwC has enjoyed a position of power for a lot of years. It’s a professional services organisation with a long established history for providing some of the best advice in the world. Our people are our true value and the wealth of knowledge and experience tied up within those people, makes us an extremely valuable ally for any business. However, like in sport, technology is disrupting the landscape and enabling and forcing us to change.

We can no longer rely on our knowledge and experience alone. We live in a global society, that is interconnected and in constant dialogue and discussion with one another. Knowledge is now readily available and openly shared, making it very difficult to rely on that as a prized asset anymore. Technology is presenting us with a choice; do things differently, present business solutions differently and interact with our clients differently or else, get left behind.

My role within PwC is to make sure that doesn’t happen and that necessary changes happen. By approaching things from a different perspective I think I can help to enable change. Experience has taught me that embracing something new is not always plain sailing and often you have to focus on ‘selling the benefits’ in order to ensure that there is mass support for the movement. Having led a team before, both for my club and for my country, I feel that I’m well equipped to deliver on that challenge and ensure that people within the firm recognise the value and benefit that technology can bring to them.

Within PwC I now lead on several initiatives within Tax; MyTaxPartner and Flex to name a couple. Both are technology-driven projects for the firm and both have the ability to transform how we deliver tax services to our clients. They allow us to communicate and understand our client, their wants and needs, better than we’ve ever done before. It also allows us to gain phenomenal efficiencies in both process and time, so that we can focus more on the client, the relationship that we have with them, and the value that we deliver to them.

The parallels between sport and professional services are remarkably similar. Both are highly competitive environments and both are totally dependent on the performance of its people to deliver success. Technology has disrupted and changed both industries, but it’s essential that we recognise that it is the people that operate and deliver within the organisation that constantly dictate the success of such change. If the culture is right and the benefits of such transformation understood, then the organisation stands to reap the rewards from its investment. Your people are your champions and if technology can make their lives simpler and more efficient, then you’ve got an incredibly motivated and inspired team to manage.

It is a daunting challenge, but one that I think PwC is handling incredibly well. PwC is a juggernaut and perhaps not as mobile as some start-ups out on the market, but it is dynamic, innovative and always looking to embrace change…..how do you think I ended up walking through the door!

If you would like to discuss these issues, or the impact of emerging technology or data and analytics on your industry, then contact our Data & Analytics team.

by Ollie Phillips Director

18 May 2016

Quiet data revolution in real estate

by Gareth Lewis Real Estate Director

I saw a recent newspaper headline which read “Will mobile health apps make GPs redundant?” A quick straw poll of my family (all doctors) revealed that they thought this notion was absurd. It struck me how people tend to take a very binary view of these types issues depending on their experience - whether it’s a doctor or an accountant insisting he/she will never be able to be replaced by a computer or some futurist insisting that we are all going to be replaced by robots. In my view there will always be a need for a highly trained, empathetic medical professionals to manage a patient’s well-being. But it is also my view that there are almost limitless ways in which data and technology can be used to improve our health service. So the reality I’m sure will be that many aspects of a GPs work will be transformed by the use of data and technology. Indeed, this will be an absolutely critical way of dealing with the growing pressures on the NHS to address lifestyle illnesses like diabetes, obesity and the needs of a growing elderly population - where timely, low-level interventions, coupled with effective monitoring and use of technology, will be most effective.

This is a subject for another blog, but it did get me thinking about what the equivalent is for property. At the same time that people are being seen as repositories of data, so too are the buildings in which those people live, work, play, sleep, study and shop.

What is your light socket saying?

Soon our light sockets will not only hold light bulbs but will help monitor our health, check for intruders and control the heating in our homes. Tenants are beginning to expect this hyper-connected and ultra-sensitive Internet of Things technology to manage their working environment. Equally savvy occupiers are using new sensors, booking in systems and other finely-tuned measurement techniques to make effective use of their space. The potential for real estate is limitless if the industry can get to grips with its data.

Our recent Global Emerging Trends in Real Estate found an industry that has historically under invested in IT. Taking relative size into account, global corporate real estate IT spend is half of financial services and the public sector, including health care. Data is largely managed in silos and a third of the global real estate industry is still using spreadsheets as the primary tool for portfolio management. As one respondent commented ‘data is changing the world fast and real estate is just getting its head around it’.

Whilst the industry may still be getting to grips with its data, there are plenty of examples of start-ups (Proptechs) who are harnessing the power of data in real estate. Deal-X recently launched in Europe, and combines crowdsourced data on commercial property leasing transactions, public data sets and big data analytics to provide data footprints for individual property assets. Another example is Geophy, a Dutch-based company which uses algorithms to value property even if it has never been on the market. Used by some of Europe’s biggest investors, Geophy has developed a ‘quality score’ which enables investors to make better data-driven decisions. Not only are Deal-X and Geophy increasing transparency across commercial real estate they are also disrupting traditional business models.

From data on an individual occupying space in a building, collected via a wearable device, to the increasingly connected components of a building itself via the Internet of Things, the built environment offers an overwhelming amount of data. Data that needs to be understood and protected. Organisations that are able to analyse the links between productivity, the user experience of their building and compare it in real time with all aspects of a building operations must be at an advantage. And as we have seen in other sectors, businesses that are slow to embrace the potential of data are dangerously susceptible to disruption.

Perhaps there is a parallel after all between the property valuers and the GP? A property surveyor analyses a range of quantifiable data and market factors and then applies his/her insight and judgment to value property. I’m sure there will always be some need for a human being to apply insight to determine property values, but I’m also sure we will see the world of real estate valuation undergo substantial change in the coming years as more data becomes available and its uses more sophisticated.

If you would like to discuss these issues, or the impact of emerging technology or data and analytics on your industry, then contact our Data & Analytics team.


by Gareth Lewis Real Estate Director

16 May 2016

Innovation-On-Demand: Think access to analytics over ownership

In the past few years we’ve all talked a lot about the exponential growth of data, how analytics can help make sense of it and why embracing data and analytics isn’t optional any more. We all agree that innovation today is fundamentally underpinned by our ability to generate meaningful insights from data. But that doesn’t mean that achieving that is easy.

Most organisations are still struggling to put an effective innovation process in place. They’re struggling to organise their internal data, and to identify and access useful external data sources – and they’re really struggling to attract people with good data and analytics skills.

Solving these problems takes investment – but the underlying problem is that the value of future innovations is impossible to prove, so how can you possibly decide how and whether to invest in data and analytics?

Perhaps we need to look at Uber for the answer.

Uber, the world’s largest taxi company, doesn’t own a single vehicle. And that business model isn’t unusual any more: Alibaba, the world’s most valuable retailer, doesn’t own any inventory; Airbnb, the world's largest accommodation provider, owns no real estate.

The advent of services like Spotify, Uber and Kindle, has shifted our entire mindset. We no longer think of owning music, cars or books; we only think in terms of having access to them – on-demand, whenever, wherever.

So let’s learn from this when we think about data and analytics. Smart organisations should focus on access to data and analytics capabilities, rather than costly ownership – especially when the value of an idea is yet to be proven. What I’m talking about is ‘Innovation-On-Demand’.

The idea is to ‘rent’ trained data scientists, proven innovation processes and cutting-edge analytics technology until the clear value of using them is established – at which point a decision to ‘buy’ in-house capability can be made.

At PwC, we’re making this a reality with our Data Analytics Innovation Lab (DAIL).

Innovation on-demand

DAIL is a suite of services, covering everything from trained data scientists to alliances with the biggest tech companies in the world (see diagram). Organisations can access these services to test and experiment, without the need to make up-front investments in building in-house data analytics capabilities. It’s a clear, low-cost and simple way of testing data and analytics ideas, so the options that create the most value can be identified and a business case for investment made.

It’s a model that works for Alibaba and Airbnb, so why not for you? Some of the largest global organisations across different industries have already embraced this approach. Get in touch if you want to know more.

If you would like to discuss these issues, or the impact of emerging technology or data and analytics on your industry, then contact our Data & Analytics team.

10 May 2016

Leveraging Big Data and Analytics to enhance the pricing of personal lines insurance

Personal Lines insurers seeking to gain a competitive advantage have been looking at a wide variety of additional data sources to identify additional or better predictors of claims propensity. Technology advances, exponential growth in Big Data and the digital revolution have provided both opportunities and challenges to insurers – with the ease of transacting with retailers via smart phones and easy to use apps pushing purchasers of insurance to wonder why buying insurance is not as convenient and easy. At the same time, the sharing economy is starting to create demand for short-term (potentially even for only a few hours) insurance coverage, rather than the more traditional 12 months of continuous cover.

Assuming that the necessary consents required under the impending EU General Data Protection Regulation can be obtained – which would be more readily granted by customers who see themselves as good risks and therefore keen to benefit from a better price for insurance cover – some of the types of information already being captured, or which could be targeted, to enhance pricing include the following:

  • Social media – key words used in posts and tweets, behavioural indicators from the types of activities shared, hobbies, types of topics shared, magazine subscriptions, gym memberships, supermarket loyalty program membership, hotel or airline loyalty programme membership etc provide a wealth of information beyond that which can be captured during the proposal process. At least one software vendor has sought to use the number of degrees of separation from known fraudsters or criminals to provide indicators of potential untrustworthiness and the potential for subsequent insurance claims fraud, for example.
  • Switching behaviours in relation to a customer’s bank, credit card providers, utilities providers and insurers may provide insights into a given customer’s price elasticity – these types of data can be sourced from the operators of price comparison websites, for example.
  • Most visited places and the associated times of day (via GPS/Location Services on the ubiquitous smart phone) – the frequenting of gyms, bars, fast food outlets and retailers, as well as determining the workplace of a customer, provide a rich source of data around behavioural characteristics.
  • Marital/relationship status and family status (the latter providing insights into the likely exposure to weekend driving, for example).
  • Recent “Life Events” may impact on a customer’s state of mind, level of health and well-being.
  • Intensity of mobile phone usage, which could be sourced directly from smartphones – this may yield insights into a given customer’s propensity to text/talk and drive, or the potential to be readily distracted even when not driving.
  • Food and alcohol consumption via supermarket apps on customer’s smart phone – such data may provide indicators of propensity for obesity, high alcohol consumption, level of disposable income/socio-economic status etc.
  • Ownership of pets such as a dog, rather than animals that do not need to be walked or exercised regularly – this may be an indicator of a customer’s level of general responsibility and ease with routines.

Specifically in relation to motor insurance, additional items of information that could be leveraged include:

  • Where the insured drives – and the associated traffic density, speed limits on roads used, whether these are in urban vs non-urban areas etc. Whether the customer commutes to work daily by car, drops the children off at school or drives regularly to the gym, for example, provides key information on that customer’s level of exposure to risk.
  • When the insured drives – daytime vs night, rush hour vs non-rush hour and likelihood of intoxication from the same night or previous night’s activities, say, have a significant bearing on the customer’s risk profile.
  • How far the insured drives – per trip/day/month/year to provide real time information on exposure to risk. Such data could also be amalgamated by insurers to provide a basis for calculating premium rates for insurance coverage by the hour or day.
  • Style of driving (via a telematics black box, the upcoming eCall emergency black box mandated in the EU from 2018, or via a smart phone’s GPS transponder, whether or not tethered to the car’s own eCall back box or on-board computer). This is arguably one of the best predictors of risk, and has helped insurers to be able to better tailor premium rates for a given customer.
  • Points on the driver’s license, with speeding fines automatically derived via the DVLA. These can be captured in real time during the period of cover, rather than only being requested at the time of underwriting.
  • Modifications on the vehicle not advised to the insurer, such as spoilers and other aftermarket products, and engine tuning – these could potentially be determined via social media.

Insurers already providing a telematics offering will have benefitted from gathering the first four types of information listed above. The advent of the eCall or the use of smartphones to provide telematics style data will make usage-based insurance available to the masses (or at least purchasers of new cars from 2018, as well as existing owners of luxury brand vehicles) without incurring the cost of fitting a “black box”, paving the way for insurers to move towards a “telematics-only” offering. To date, the vast majority of customers taking up telematics-driven insurance cover see themselves as good risks (such as responsible young drivers), typically leading to an overall drop in premium volumes. In a usage-based insurance only world, all insured motorists would be charged premiums that more closely reflect their specific risk characteristics. That said, if driverless vehicles become the norm at some point in the future, a new approach would be required!

The staggering amounts of third party and Big Data being generated at present would likely require insurers to make more use of machine learning techniques, and open the door to using new types of modelling tools that go beyond the more traditional multivariate analysis, using generalised linear modelling techniques, say.

The benefits for insurers from embracing Big Data and technological advances are exciting, and it is easy to get carried away with the boundless possibilities and ideas being developed by fintech companies. Carefully considered use cases will provide a strong foundation for insurers to target the areas of greatest need or benefit, and help to maximise their investments.

If you would like to discuss these issues, or the impact of emerging technology or data and analytics on your industry, then contact our Data & Analytics team.

09 May 2016

Simulation modelling and Lean production: Just what the doctor ordered?

In February 2016, A&E departments across England suffered their worst ever month of recorded performance, with only 81.6% of patients treated within four hours – far below the 95% target.

The NHS faces complex issues and solving them will need analysis that’s tailored to the specific circumstances of each hospital or department. That’s why interest in simulation modelling – a simplified version of reality which can be used to better understand a system – is growing in the healthcare sector. Simulation models can help in these circumstances because they map a particular process (supported by algorithms that govern how the system behaves) such as the flow of patients through A&E. The model can be run many times – each time the outcome will be slightly different, as in real life – to get an accurate picture of the range of possible outcomes. They’re also highly visual and engaging, which is never a bad thing.

Simulation, in other words, is an ideal way to understand the impact of a new model of care before it’s tested in the real world.

Allow me to add another idea into the mix. The Lean production system, developed by engineers at Toyota after the Second World War, focused on avoiding all forms of waste or non-value adding activities: build-ups of inventory are avoided, variations are minimised and the focus is on high quality to avoid rework and reduce excess capacity. And it works; Lean manufacturing allowed Japanese manufacturers to compete with (and in many ways outperform) their more well-resourced US competitors.

Lean has been adopted in a wide range of service industries, including healthcare, call-centres, finance processes and software development – which led me to think: What could A&E managers learn from Lean manufacturing – and how can simulation help?

A simulation model could be used to show the benefits of Lean process changes before they’re made. For example, we could look at:

  • Improving flow through the department by reducing the admission wait for some patients
  • Eliminating ‘non-value adding activities’, such as waiting on trolleys
  • Identifying where and when bottlenecks are likely to occur
  • Reducing the number of decision points and hand-offs
  • Minimising inventory through improved management of medication and equipment
  • Reducing the interval between admissions by scheduling more frequent ward rounds
  • Improving the capture of information to reduce the number of times patients have to provide their personal details and medical history
  • Making changes to the size or layout of the department to match demand.

The beauty of simulation is that it shows which of these changes will help a department the most and which won’t help at all: It’s a safe sandbox in which to experiment.

Any system involving humans is notoriously difficult to model. Nevertheless, a number of hospitals have successfully used Lean production principles and have managed to improve patient outcomes as a result. Simulation modelling, coupled with Lean, could help solve some of the most vexing issues the NHS faces today.

Simulation model

A screenshot of a simulation model developed during a recent project

If you would like to discuss these issues, or the impact of emerging technology or data and analytics on your industry, then contact our Data & Analytics team.