world economic forum: the power of analytics for better and faster decisions by dan difilippo

PwC‘s Global Data and Analytics Survey 2016: Big Decisions™

The power of analytics for better and faster decisions

27 June, 2016WEF Annual Meeting of the New Champions


PwC

PwC’s 2016 Global Data and Analytics SurveyBig 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?


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?


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?


Polling question

Which of the following best describes decision-making in your organisation?

1. Highly data-driven2. Somewhat data-driven3. Rarely data-driven

5PwC


PwC

The landscape is changing

6

ChinaGlobal

Developing or launching new products and services

Entering new markets

Highly data-drivenSomewhat data-drivenRarely data-driven

… and data-driven companies are making these strategic decisions

A high percentage of companies consider themselves data-driven…


PwC

SophisticationLow HighLo

wH

igh

Spee

dSpeed• 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)


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


PwC

Capabilities vary by country for speed and sophistication…

9

Low High

Low

Hig

hSp

eed

Sophistication

High

Low

Hig

h

Spee

d

SophisticationLow Low High

Low

Hig

h

Spee

d

Sophistication

Low High

Low

Hig

h

Spee

d

SophisticationLow High

Low

Hig

h

Spee

d

Sophistication

Low

Hig

h


PwC 10

Low

Hig

h

Spee

d

Low High

Sophistication

Government and Public Sector

Low

Hig

h

Spee

d

Low High

Sophistication

Insurance

Low

Hig

h

Spee

d

Low High

Sophistication

Technology

… and the same is true for industriesThe Insurance industry is known for advances in analytics. Compared with other sectors, they give today’s capabilities only modest marks.


Polling question

What is more critical to you?1. Improve speed in decision

making2. Improve sophistication of

analysis

11PwC


PwC

Everyone will fall short of their ambition – but less so in China

12

ChinaGlobal

ExistingLikely in 2020

Needed in 2020


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/algorithms59% Human judgment


PwC

Companies can de-risk decisions by using machines

14

AN

ALY

SIS

Reliance on Judgment vs. Machine Analysis by Risk Profile

(n= # of Decisions)

Known Manageable...Unknown, UncertainRISKM

achi

ne A

lgor

ithm

s....

Hum

an J

udgm

ent

Global


PwC

The use of human judgment and machine algorithms varies by country

15

United StatesChina Japan

UK Germany


PwC

The survey reinforces that data driven companies are using machine algorithms more pervasively…

16

Global

Human JudgmentMachine Algorithms


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


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


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.


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

http://www.pwc.com/bigdecisions

https://twitter.com/DanDGlobal

https://twitter.com/DanDGlobal

http://www.twitter.com/pwcadvisory

http://www.twitter.com/pwcadvisory

world economic forum: the power of analytics for better and faster decisions by dan difilippo

Data & Analytics