Published on the 11/02/2021 | Written by Jonathan Cotton
In 2021, one thing is for certain: Certainty is in short supply…
From the ongoing ravages of a global pandemic catastrophe, to unstable elections, to the new reality of social media dominance, all truly is flux, thank you, Heraclitus.
For business, that uncertainty is a challenge to be managed; enter predictive technologies – tools that can use data patterns to give us a picture of what might be just around the corner.
“The pandemic blew more rigid demand forecasting to pieces.”
The latest on the matter is a survey from Forrester – commissioned by Dataminr – of some 410 global risk and compliance decision-makers across New Zealand, Australia, the US and the UK.
Entitled Risk In A Real-Time World, the report says the Covid-19 pandemic has ‘solely exposed’ how organisations are challenged when anticipating and responding to the unforeseen cascade of short- and long-term market impacts.
“Businesses and societies of today face extreme levels of uncertainty in regard to the threats toward safety, growth, and continuity,” says the report. “This increasingly complex and interconnected landscape of risk spans public health, global financial markets, trade policies, cyberattacks, political unrest, social movements and climate risk.
“While some events simply cannot be predicted, using real-time information (RTI) to better anticipate systemic risk can enhance organisational agility in workflows and enable effective response to drive business resiliency.”
And the survey seems to show a gap between resources and requirements.
“We found that 82 percent of enterprise risk professionals believe having visibility and insights around RTI is more necessary today than ever before,” says the report. “In addition, nearly eight in 10 (77 percent) risk decision-makers plan to leverage more risk management solutions.”
That’s despite the fact that 42 percent of those surveyed are currently ‘improvising’ when it comes to their risk management function, with the majority of those surveyed lacking ‘a holistic understanding of what real-time information really offers’.
Nevertheless, driven by the pandemic-fuelled chaos, more and more businesses are turning to real-time predictive analytics to assess risk and remain competitive.
“Predictive tech and data-driven demand forecasting have never been more important,” says Campbell Brown, CEO and co-founder of Kiwi data intelligence company PredictHQ.
Founded in 2016 by Brown and Robert Kern, PredictHQ provides a data platform that can anticipate fluctuations in demand for products and services by aggregating historical, scheduled and unscheduled event data, factoring in weather, holidays, events, airport delays and global pandemics. PredictHQ then bundles that data into a single API for its customers, who include high-profile brands Uber and Dominos.
“The pandemic blew more rigid demand forecasting to pieces, so sources of demand intelligence went from driving significant competitive advantage to mission critical in helping forecast models to adapt in real time.”
The pandemic was a ‘massive wake up call’ for many businesses, says Campbell, especially for incumbent industry leaders, with many rapidly accelerating to execute on what were 10 year plans, in 12 or even six months.
“Predictive tech is critical for this,” he says. “Many are switching to continuous forecasting to better engage with a highly dynamic situation.
“It’s become clear to many that what they thought was demand prediction was merely a relatively static approach, devoid of understanding how the real-world around them is impacting their operating models.
“In both a recovery and post-Covid world, business can better capture surges in demand to claw back losses incurred during the worst of the black swan event and mitigate against additional negatively impacting events, whether that’s a flood or an attended event needing to be rescheduled or cancelled altogether.”
In response to Covid-19 Campbell says the company has added new tracking functionality, including the ability to track lockdowns and restrictions by city, as well as specific bans on hospitality and leisure venues being open.
“For us Kiwis with a centralised government, and even for many Americans, it can be surprising just how differently each state and even city is responding to the pandemic in the USA,” says Campbell.
The company has also launched its Live TV Events category, the first ever tool that forecasts how many fans will tune into watch a sports game, says Campbell.
“Before our solution it was impossible to make broadcast sporting events part of any forecast model as no one predicted viewership in advance.”
PredictHQ models predicted the Super Bowl viewership with 99.6 percent accuracy – a full two weeks before it actually occurred.
“This provides incredible value to our quick serve restaurant, delivery and grocery customers like Dominos, who were the first to sign up for this.”
Campbell says that businesses can leverage real-time data to better inform their pricing strategies, both in times of demand and excess supply.
That includes Legion, a company which provides forecasting for retail stores in the USA, and Uber, which uses PredictHQ data to ensure they have enough drivers in the right place, at the right time.
“Imagine you run a New Zealand car hire company,” says Campbell. “Knowing a major event is coming up outside of Christchurch means you can ensure you get enough vehicles on hand to meet demand, run targeted marketing campaigns and price and package your vehicles well. If you imagine the impact of one or two companies knowing that, while others are scrambling in the week leading up to it as inquiries roll in, it becomes clear how critical demand predictions are.” And once the pandemic conditions settle, there’s still plenty more value to be unlocked in the data.
“Whether it’s pricing, labour optimisation, inventory management, predictive analytics across anything from coffee shops, Amazon Alexa to destination marketing organisations, the value extracted is multifaceted,” says Campbell.
“Our company grew throughout the pandemic, both in terms of more customers and more revenue. We’re getting more inbound customers than ever, as companies realise that our demand intelligence is one of the very few sources of information that can provide certainty to build plans upon, in uncertain times.”