A couple of weeks ago, the Philippines played host to an annual marketing analytics conference for the first time. The one-day event brought together data scientists and digital experts from all over Asia to talk about the many ways organizations can harness the power of big data. Earlier in the year, an advanced data engineering company based in the US announced that it was open for business for Philippine-based companies in need of analytics consulting services, among other things.
Analytics used to revolve around the analysis of a company’s transactions and the data it generates, with an eye toward ensuring compliance with business policies, industry standards and regulations. This kind of analytics typically resided within the internal audit function.
Due to advances in technology and the volume of data these developments have generated and have made accessible to organizations, we are now living in what Deloitte calls an “everywhere analytics” world, where analytics, science, data and reasoning are embedded in the decision-making process every day, everywhere in an organization.
In light of this, Deloitte has been closely monitoring analytics trends for the past three years with a goal toward helping businesses make better decisions and smarter investments. These trends impact not only the governance, risk and compliance space, but also how businesses operate.
In this first in a series of articles on analytics, I focus on one trend that Deloitte predicts will have a high impact on both society and businesses, and is likely to peak in the next five years.
Trend #1 The Internet of Things—and of people, too!
Mobile as medium of choice
According to Deloitte’s 2015 Global Mobile Consumer Survey, 70 percent of Filipino millennials have access to a smartphone or a similar device—the average for the Southeast Asian region is about 74.8 percent. Across SEA, smartphone adoption has overtaken computer (or PC) adoption and is clearly the preferred medium of choice due to portability, cost and uneven distribution of internet access.
Source of innovation
The Internet of Things, or IoT, has allowed these smartphones to rapidly evolve into tools that track people as “things.” The data captured by these devices is aggregated and analyzed by companies to form new business models, giving birth to game changers such as Uber.
In western countries, auto insurance firms are now using customer smartphone data to power “pay as you drive” applications. Several health insurance firms are monitoring—and giving discounts for—customer fitness activities as revealed by wearable tracking devices. In the business-to-business (B2B) industry, cargo ships, long-distance trucks and locomotives equipped with GPS and other sensor devices are enabling companies to offer services that optimize routes, analyze driving and make recommendations regarding the cheapest places to fuel up.
All these innovations will definitely catch up with us here in the Philippines.
Connectivity and urban living
Aggregation and analysis of data have also allowed businesses to influence people’s behavior.
How many of us check our mobile phones or gadgets in the morning to determine the route we have to take to get to the office? Most of us who live in Metro Manila have incorporated this into our daily driving routine.
Additionally, the simplification of transactions and deliveries of online retailers have also influenced the shopping behavior of Philippine consumers, 20 percent of whom now browse e-commerce sites at least once a week.
Overall, IoT-based innovations will benefit the broader Philippine society. Transportation is likely to become more energy- and time-efficient. Partnerships between cities and businesses could lead to more transparent and economical government services.
Garbage trucks, for example, could be equipped with devices that recognize potholes in streets and alert city officials about them. Parking apps could reduce the time and energy that drivers waste looking for open spaces.
Indeed it is difficult to think of an industry that can’t be transformed or improved by the IoT.
While considerable effort is still needed to develop IoT standards and link up sensor-based data, there are already many possible applications that can provide value today, including helping people improve fitness, enhance efficiency and save money.
Where investments are being placed
We are seeing these innovations take place in both consumer-focused and B2B industries. International Data Corporation estimates that the worldwide IoT market will grow from $655.8 billion in 2014 to $1.7 trillion in 2020. Devices, connectivity, and IT services are likely to make up two-thirds of the IoT market in 2020, with devices (modules/ sensors) alone representing more than 30 percent of the total.
Building on existing infrastructure
Many businesses are finding that much of the infrastructure to capture data is already in place. The challenge is to harness this data and digest it to come up with meaningful information in a timely manner. This is what’s needed to help companies develop innovative solutions that could significantly transform the way we live our lives.
In our next article in the Analytics Series, we will discuss the blurring of the man-machine dichotomy: Are machines really coming for us? Stay tuned and follow this space.
The author is a Director with the Risk Advisory group of Navarro Amper & Co., the local member firm of Deloitte Southeast Asia Ltd., a member firm of Deloitte Touche Tohmatsu Limited—comprising Deloitte practices operating in Brunei, Cambodia, Guam, Indonesia, Lao PDR, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam.