predictive analytics is fast becoming a
tool to recognize key trends, patterns and
potential disruptions within supply chains.
It’s a means to protect the enterprise’s
most valuable assets while also creating
sophisticated risk resilience and mitigation models.
Exponential Benefits
A recent PricewaterhouseCoopers survey indicates that over the next five years,
the most innovative companies are set to
grow at twice the pace of the global average and three times the rate of the least
innovative.
There’s a myriad of literature available
about innovation, yet much is not particularly helpful because it tends to describe
innovation as a single element. Quite the
contrary, there are several different modes
of innovation, and a company has to be
clear about what it means when using the
term. What kind of innovation is the company looking for?
Innovation through the n+1 philosophy shows up everywhere in the form
of this question: Is there a layer of data
we’re not yet accessing that may drive us
toward a better solution? One example
can be found in catastrophe modeling.
Historically, our business has tried to understand the probability of a range of perils, such as hurricanes. Companies need
to understand both a hurricane’s location
a na l y t i c s
and intensity. But we’re also aware there
have been changes in the composition of
the atmosphere that potentially can lead
to an extreme weather event, such as a
hurricane. That said, if the temperature of
the surface of the ocean correlates with
the amount of energy that can affect the
next hurricane developing at sea, a company can use new parameters, such as
sea surface temperatures, in its analysis.
That’s the +1 layer. And each layer can
set the stage for yet another.
So, meaningful innovation today applies n+1 as its foundation and embraces
a comprehensive dialog with customers
to make sure a company truly understands its customers’ emerging needs.
From the strength of that relationship, a
business tends to realize a viable product and associated revenue much faster.
And the benefits just accrue from there:
Rather than aiming to build the solution
of all solutions, a business can produce
more refined iterations – one at a time –
and then enjoy the rewards of one success after another. ❙
Scott Stephenson is president and chief executive
officer of Verisk Analytics.
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