The Power of 62: Transform Weather Forecasts into Business Outcomes

Paul Zikopoulos, VP, Competitive & Product Strategy, BigData and Analytics, IBM
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Paul Zikopoulos, VP, Competitive & Product Strategy, BigData and Analytics, IBM

What does the number 62 mean to you? Would you be surprised to learn it’s the most important number in the world and affects everything that you care about (and perhaps don’t for that matter). Within that number, life happens. Injecting data from the “Karman Line” (the name of 62 mile boundary between Earth’s atmosphere and space) will drastically change the way your business thinks, reacts, and decisions. Think about that for a moment: 62 miles (~100kms)—that’s shorter than some people’s daily commute, and yet within this distance all things happen—agriculture, flights, traffic, rainbows, celebrations, disasters,and our economy (it’s been estimated that weather impacts one-third of global GDP … daily).

To Connect the Dots, You Have to Collect the Dots

I always say, in a BigData world, to connect the dots you have to collect them, and that’s exactly what wrapping weather as a first class citizen into your decision making processes is all about. When you start the journey where weather becomes a critical decisioning input variable, you’re going to end up leveraging a cloud-based weather data provider. Think about it this way, Google has mapped the earth and it changed a lot of things in our day to day and professional lives; their location data services are laid atop data patterns and apps everywhere.Now think about how hard it would be to map the astrosphere, because weather is changing all the time! This data isn’t static like a building.

  Companies need to wrangle weather with other data on a daily basis to figure how to get better clarity on the data they have and translate their existing data into meaningful action  

What would you do with a map of the atmosphere?You’d have access to a heck of a lot of data, that’s for sure. Data from satellites, airplanes, radars, cars, weather stations, buildings, sensors in forests, lakes, rivers, and so much more. If there is one truism aboutthe Internet of Things (IoT) world in which we live in today, it’s that everything can be instrumented and measured. In fact, the BigData challenges I most often see today rarely have anything to do with data collection at all—that’s a 24x7 business the world has solved—perhaps all too well. It’s the 24x7 decisioning category where we lack and factoring in the power of 62 in this process doesn’t just have the potential to yield, it will yield tremendous business outcomes.

Big Data Without Analytics is Just a Bunch of Data

Wrapping weather as a first class citizen into your decision making processes and appreciating the influence of weather on your ability to generate better outcomes starts with a cultural shift. This involvesappreciation around data decisioning, and not collecting.

The first industry that has to come to mind when thinking about industries can benefit from weather data has to be aviation (as it turns out, they are one of the most trodden industry paths using weather data). How does weather effect the comfort and safety ofyour journey (turbulence), on time departures or arrivals (storms) and what are the downstream costs associated with weather-related travel events (delays, re-bookings, baggage, lost fuel due to planes held in a waiting patterns, missed connections, and more).

What about insurance? Consider this: a single hail storm in the middle of Phoenix once caused $20M USD in damages! In the US, there is a 1/1000thchance that an insured driver will file a claim for hail damage each year; and the average cost of a hail claim is $3,200 USD per car.Now consider the relationship between you and your auto insurance company? Most of today’s auto insurance business models don’t feel like a relationship at all because you pay a policy charge to get coverage in force, and live life fearful at using the policy because if you do, it’ll drive the costs of that policy up. Most digital insurance apps available for your mobile device are all about how to file a claim, not prevent them!

Imagine an insurance company that as part of their digital transformation became partners in prevention of claims versus just administrators of them.It’s been shown that 52 percent of people that receive a car-related weather alert with a damage warning take action–this is a win-win situation for insurer and insuree. What should not be lost in this partnership is such a prevention app would serve as touch points to the client and when that happens more than 5 times a year, insurance studies suggest it assists in client retention.

One company that caught my eye on such a journey is Security First Insurance (SFI) and their digital transformation partner Point Source. SFI’s mobile insurance app allows even people that aren’t their customers to receive mobile weather alerts for their own ‘of-interest’ assets (SFI is a home insurance provider). What a great idea! What a transformation! I could attach my grandmother’s house in Florida to this app and not only understand impending events, but be in contact with her for personal safety. That’s a partner and is it any wonder why SFI grew their customer base with this digital transformation lead with a culture change and weather?

Early warning systems and getting people out of perilous situations is another use case for BigData and weather. There are Asian populations that rely on weather and Twitter to warn entire populations about tsunamis and typhoons. They skip infrastructure because … well … they don’t have it. They are using weather data to save lives and that’s a pretty cool business outcome found at the intersection of weather and data.

It’s About Outcomes

So what outcomes is your business hoping to achieve? Are you in the business of making people safer—perhaps transporting them from point A to B in the safest and fastest way possible? Is your job to make your business smarter—from EBIDTA to logistics?

Weather has such a huge impact on all of us. Basically everybody on the globe lives their lives based on weather forecasts, so you can use that to see how it shapes consumer demand, what people need, what motivates them, and so on. Companies need to wrangle weather with other data on a daily basis to figure how to get better clarity on the data they have and translate their existing data into meaningful action. How ironic, the business of weather data is anything but a pure forecasting business.

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