World Economic Forum: The power of analytics for better and faster decisions by Dan DiFilippo
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This document summarizes the key findings of PwC's 2016 Global Data and Analytics Survey. The survey polled over 2,100 senior business leaders across 50 countries and 15 industries about their strategic decisions between now and 2020. The survey found that most respondents believe their strategic decisions will significantly increase shareholder value but that they face limitations in decision-making due to resource constraints rather than limitations in data analysis capabilities. Additionally, the survey found that while companies are ambitious about improving decision speed and sophistication through greater use of machine learning and analytics, they expect to fall short of these ambitions by 2020.
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World Economic Forum: The power of analytics for better and faster decisions by Dan DiFilippo
- 1. PwC‘s Global Data and Analytics Survey 2016: Big Decisions™ The power of analytics for better and faster decisions 27 June, 2016 WEF Annual Meeting of the New Champions
- 2. PwC‘s Global Data and Analytics Survey 2016: Big Decisions™ PwC PwC’s 2016 Global Data and Analytics Survey Big DecisionsTM Why • Strategic decisions create value for an organisation. • Decision-makers are now face-to-face with an opportunity to learn from massive amounts of data. • How can we apply data analytics to create greater value? Who • 2,100+ senior decision- makers • 50+ countries • 15 industries 2 What • What types of decisions will you need to make between now and 2020? • What types of data and analytics do these decisions require? • What is the role of machines in decision making? • What’s your ambition for improving your company’s decision speed and sophistication to make these decisions?
- 3. PwC‘s Global Data and Analytics Survey 2016: Big Decisions™ PwC 90% of respondents think their next strategic decision will increase shareholder value, ranging up to a 200% increase. 3 What is a big decision?
- 4. PwC‘s Global Data and Analytics Survey 2016: Big Decisions™ PwC Approximately 1/3 of business leaders plan to make decisions around the development of a new product or service by 2020 4Note: Survey data is still being collected and final results may change. Which one of the following best describes this key strategic decision?
- 5. PwC‘s Global Data and Analytics Survey 2016: Big Decisions™ Polling question Which of the following best describes decision-making in your organisation? 1. Highly data-driven 2. Somewhat data-driven 3. Rarely data-driven 5PwC
- 6. PwC‘s Global Data and Analytics Survey 2016: Big Decisions™ PwC The landscape is changing 6 ChinaGlobal Developing or launching new products and services Entering new markets Highly data-driven Somewhat data- driven Rarely data-driven … and data-driven companies are making these strategic decisions A high percentage of companies consider themselves data-driven…
- 7. PwC‘s Global Data and Analytics Survey 2016: Big Decisions™ PwC Sophistication Low High LowHigh SpeedSpeed • Time to answer question • Time to decide action • Time to implement and measure Why look at decision speed and sophistication? Improving both can help maximise return on investment 7 Sophistication • Analytics maturity • Data breadth and depth • Decision approach PwC’s Decision Sophistication & Speed Matrix (n=# of decisions)
- 8. PwC‘s Global Data and Analytics Survey 2016: Big Decisions™ PwC Ambition is high to improve decision speed and sophistication Orange shows today; blue shows where companies want to be by 2020 8 Global China
- 9. PwC‘s Global Data and Analytics Survey 2016: Big Decisions™ PwC Capabilities vary by country for speed and sophistication… 9 Low High LowHigh Speed Sophistication High LowHigh Speed Sophistication Low Low High LowHigh Speed Sophistication Low High LowHigh Speed Sophistication Low High LowHigh Speed Sophistication LowHigh
- 10. PwC‘s Global Data and Analytics Survey 2016: Big Decisions™ PwC 10 LowHigh Speed Low High Sophistication Government and Public Sector LowHigh Speed Low High Sophistication Insurance LowHigh Speed Low High Sophistication Technology … and the same is true for industries The Insurance industry is known for advances in analytics. Compared with other sectors, they give today’s capabilities only modest marks.
- 11. PwC‘s Global Data and Analytics Survey 2016: Big Decisions™ Polling question What is more critical to you? 1. Improve speed in decision making 2. Improve sophistication of analysis 11PwC
- 12. PwC‘s Global Data and Analytics Survey 2016: Big Decisions™ PwC Everyone will fall short of their ambition – but less so in China 12 ChinaGlobal Existing Likely in 2020 Needed in 2020
- 13. PwC‘s Global Data and Analytics Survey 2016: Big Decisions™ PwC A significant role for machines is emerging and companies are taking advantage of what machines offer Why? Machines don't replace human judgment but the right mix of mind and machine can reduce the impact of human bias, yield more accurate answers and de-risk the decision - even for complex problems. 13 What will the analysis informing your next decision require? 41% Machine analysis/algorithms 59% Human judgment
- 14. PwC‘s Global Data and Analytics Survey 2016: Big Decisions™ PwC Companies can de-risk decisions by using machines 14 ANALYSIS Reliance on Judgment vs. Machine Analysis by Risk Profile (n= # of Decisions) Known Manageable...Unknown, Uncertain RISK MachineAlgorithms....HumanJudgment Global
- 15. PwC‘s Global Data and Analytics Survey 2016: Big Decisions™ PwC The use of human judgment and machine algorithms varies by country 15 United StatesChina Japan UK Germany
- 16. PwC‘s Global Data and Analytics Survey 2016: Big Decisions™ PwC The survey reinforces that data driven companies are using machine algorithms more pervasively… 16 Global Human Judgment Machine Algorithms
- 17. PwC‘s Global Data and Analytics Survey 2016: Big Decisions™ PwC …and also shows that data driven companies are much more likely to be using predictive and prescriptive analytics. 17 Predictive Prescriptive Diagnostic Descriptive ChinaGlobal
- 18. PwC‘s Global Data and Analytics Survey 2016: Big Decisions™ PwC What limits decision-making? Decision-makers say it’s not data or the ability to analyse it 18 Decision-makers feel least constrained by… • Ability to analyse data • Data limitations These areas hold them back more… • Availability of resources • Budgetary considerations • Issues with implementation • Leadership courage • Operational capacity to act • Policy constraints/regulation of data • Poor market response
- 19. PwC‘s Global Data and Analytics Survey 2016: Big Decisions™ PwC 19 What we’ve learned • More and more organisations are taking a data-driven approach to making strategic decisions. Are you? • Data-driven organisations are using machines to de-risk their decisions. • Executives have great ambition to increase decision speed and sophistication. • But, everyone expects to fall short of their ambition. What’s your expectation? • Organisations face many limitations in their decision making, however data and the ability to analyse data are the least of their concerns.
- 20. PwC‘s Global Data and Analytics Survey 2016: Big Decisions™ This publication has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication, and, to the extent permitted by law, PricewaterhouseCoopers LLP, its members, employees and agents do not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it. © 2016 PricewaterhouseCoopers LLP. All rights reserved. In this document, “PwC” refers to PricewaterhouseCoopers LLP which is a member firm of PricewaterhouseCoopers International Limited, each member firm of which is a separate legal entity. Thank you For more information visit, www.pwc.com/bigdecisions Continue the conversation with us online, follow: Dan DiFilippo, Global and US Data and Analytics Leader, @DanDGlobal PwC Advisory Services, @PwCAdvisory 21