SSA & Company Notebook | Fall 2016

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Ideas That Made Us Think

How Augmented Reality is Changing Business Operations

Companies including DHL, ExxonMobil, and De Beers are applying augmented reality (AR) to drive efficiency in operations. DHL partnered with wearables expert Ubimax to test using AR for order picking. Graphics interplayed over smart glasses guide warehouse staff. The test resulted in 25% efficiency increases, allowing employees to work faster, hands free, and with fewer errors. Retailers like De Beers are using AR to allow customers to virtually try on jewelry, improving customer experience and hopefully decreasing returns. While relatively nascent, AR technology is already driving operational improvements across industries, including education, automotive, and retail. In the energy sector, companies like ExxonMobil use the technology for simulated maintenance training, which reduces costs and improves safety.

Uncovering Working Capital in the Supply Chain through New Financial Technology

Financial Technology (FinTech) firms are transforming the way businesses interact with their suppliers. They act as a transactional intermediary, allowing the buyer to extend payables, while accelerating payment to the supplier. FinTech benefits both suppliers and buyers—suppliers get paid immediately, and buyers experience decreased complexity with only one firm to pay to and increased flexibility on when they pay. This software can automate various processes, resulting in deeper discounts and a quicker cash-to-cash cycle that impacts P&L—particularly beneficial in meeting quarterly earnings targets for public companies. Major companies, including P&G and Kellogg’s, use FinTech to extend accounts payable in order to improve working capital. Forward-thinking firms may even be able to utilize the supply chain as a source of cheap funding.

What the Future of Value-Based Purchasing Means for Healthcare Operations

The future of value-based reimbursements in healthcare will hinge on the quality of results, cost-effective delivery, and patient satisfaction. Often, poor cost transparency leaves payors and providers ill-equipped to cope with changing reimbursement schemes. According to this HBR article from economist and Harvard Business School professor Michael Porter, poor measurement of cost and outcomes means that “effective and efficient providers go unrewarded, while inefficient ones have little incentive to improve.” With advanced analytic tools, companies can streamline operations and share information among stakeholders—factoring costs of supplies, devices, pharmaceuticals, and their associated clinical outcomes into real-time decisions. We recently expanded our healthcare practice to help services businesses, payors, and providers drive operational and digital transformation and cope with alternative payment methods. Big Data, Big Ideas

Big Data Transformation Requires Executive Leadership Buy-In

Big data and advanced analytics have propelled the next wave of business transformation—yet for many businesses, the benefits have not lived up to the hype. Both present huge opportunities for big results, but to succeed, “CEOs must be personally accountable for driving the big data shift and working it into the company’s DNA,“ write Deb Henretta, former Global President of e-business at Procter & Gamble and Sandy Ogg, founder of CEO.works and former Operating Partner at Blackstone. In Data Informed, they note five key actions CEOs must take to harness the potential of big data analytics to transform business operations for growth.

Pipeline Perspectives: Four Opportunities for Effectively Managing the Bust Cycle

Oil and gas pipeline developers can utilize preventative maintenance programs, advanced analytics, and supply chain optimization to survive in a low price commodity environment. To control costs, developers should implement a preventive maintenance program, including a comprehensive metric system of real-time data and a bill of material documentation for all assets and spare parts. Developers can also employ advanced analytics to identify ordering patterns to better manage suppliers and install sensors to monitor for cost-intensive breakdowns. With unpredictable oil prices, planned pipeline investment may fall sharply in 2017. The pipeline developers who find innovative ways to improve operations and reduce costs will deliver more predictable performance and survive downturns.

How Nontraditional Data Sources Can Change Healthcare

Google announced it will use its search data to display lists of conditions related to symptoms described in searches, along with information on self-treatment options and what might warrant a doctor’s visit. By analyzing social data—including photos, videos, and tweets—providers can monitor and predict a broad range of health issues and deliver real time interventions. Innovative companies can use non-traditional data sources to identify the most clinically- and cost-effective venues in which patients will receive care. Accountable care organizations may be the first to jump on using social data as they are incentivized to manage the care continuum, not just provide episodic medical treatment. Social data offers tremendous growth opportunities for forward-thinking healthcare companies who find innovative ways to use data.

Analytics Drives Customer Experience for Airlines

Airlines are using data analytics to improve customer experience in new ways. Qantas used external data sources, including weather forecasting, to predict and respond to operational issues that cause delays. “If we see there’s an expected weather event in Sydney—rather than wait for it and react, we can go to our customers the night before,” said Qantas Head of Operations Paul Frasser. “Analytics [is] putting the decision back in the customer’s hands.” Another airline, Avianca Brazil, is using analytics to study customer feedback as well as social media interactions. In an industry frequently at odds with its customers over fees, delays, and cancellations, airlines that use data transparency to improve the experience can reestablish trust and boost loyalty.

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