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How IoT and weather data are transforming business decisionsEnabling transformative decision making across industries with precise, accurate and integrated weather data

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The challenge for business

Weather causesUS businesses to lose $500 billioneach year.1

In 2014, the USeconomy lost nearly$500 billion

76,000 jobsin sales and

because of weather.2

$

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Weather broadly affects many industries

Energy and utilities: 78 percent of electric grid disruptions are weather-related, affecting nearly 178 million metered customers.3

Emergency management: In 2014, natural disasters cost $100 billion and claimed 7,700 lives worldwide.5

Insurance: Insurers could save as much as $25 per policyholder by providing alerts before events such as hailstorms.4

Retail: 81% of retailers that incorporate weather data into supply chain decisions report heightened on-shelf availability.6

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Move from cope and avoidto anticipate and executeTogether, IBM and The Weather Company are combining business data, weather data and data from the Internet of Things (IoT) to transform enterprise decision making.

These advances enable companies to take a proactive approach to optimizing business processes and strategies for the impacts of weather.

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Mapping the atmosphere: A big data and IoT approach to weatherAdvances in weather science, analytics, geolocation, cloud capabilities andthe IoT let The Weather Company deliver 26 billion forecasts a day.

2.2 billion weather forecast locations

Data from 40 million mobile devices

Atmospheric data from 50,000 flights per day

140,000 worldwide weather stations

200 meteorologists

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The Weather Company provides accurate and timely weather data

Precision 100× greater coverage than publicly available sources

Accuracy Rated first in the accuracy of its one- to three-day forecasts

Speed Forecasts updated every 15 minutes for 2.2 billion locations

Over 140,000 worldwide weather stations

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Businesses can do more than just react to the weather

Insurance companies alert policyholders

Utilities mitigate outages

Emergency planners respond to citizens

Retailers anticipate demand

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Help policyholders weather the storm

Engage policyholders Alert policyholders in advance of adverse weather conditions to help protect property and lives.

Mitigate claims Speed claims processing by relying on pre-positioned adjusters and extra call center staff.

Manage risk Use advanced and historical weather data to appropriately price policies and reduce risk.

Leverage telematics Combine telematics and weather data to help policyholders avoid accidents, to aid claims investigations and to deploy user-based insurance policies.

Data from IBM and The Weather Company helps insurers do the following:

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Keep the lights onIBM and The Weather Company help the energy industry to do the following:

Predict outages Power companies can integrate hyperlocal weather data and lightning prediction models with operational data to help them accurately predict potential infrastructure outages, pre-positioning crews and equipment to help mitigate outages quickly.

Anticipate asset failure Combining weather data with asset information and predictive analytics can help provide understanding of how weather affects asset failure and thus allow proactive maintenance, condition-based maintenance and efficient allocation of capital for asset purchases.

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Stay ahead ofthe stormBy integrating data from The Weather Company into the IBM Intelligent Operations Center for Emergency Management, emergency managers can do the following:

Increase lead time Proprietary 15-day probabilistic models deliver 1.5 days’ additional lead time for tropical storms and hurricanes.

Respond rapidly Using weather data at 500 m2 resolution, responders can pinpoint and remediate worst-hit areas first.

Plan for storm scenarios The Weather Company’s ensemble forecast system helps responders enhance their plans by creating multiple realistic storm scenarios.

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Anticipate shopper behaviorData from IBM and The Weather Company helps retailers do the following:

Manage supply chains By pairing long-term and seasonal forecasts with predictive analytics, retailers can proactively manage inventory and interactions with suppliers.

Predict store traffic Using hyperlocal forecasts and predictive analytics, stores can adjust staffing levels to reduce costs during periods of low traffic or can add staff to better serve customers during weather events that increase demand.

Create weather-based marketing strategies By combining customer analytics with weather and location data, retailers can create highly targeted weather-driven offers delivered to mobile devices at the point of impact.

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Learn how weather means business for youDownload your copy of the paper Weather Means Business to learn how you can transform decision making by integrating precise weather data and advanced analytics into your business processes.

Download your copy

2 Weather Means Business™

This paradigm shift in how companies actively use weather as a differential advantage is an opportunity to take the first steps toward becoming a cognitive business. A cognitive business uses every opportunity to interact with data to reason, adapt and continuously learn. Essentially, a cognitive business places a premium on making fact-based decisions using data rather than reacting after the fact. Core to this shift is the capability to tap into and synthesize myriad diverse data sets, including weather data, and combining it with business and external data to add context, depth and confidence to every business decision.

IBM and The Weather Company have partnered to bring actionable weather insight to businesses across industries. Combining weather data with traditional business data and rich data from an unprecedented number of Internet of Things (IoT)-enabled systems and devices has the potential to significantly impact enterprise decision-making.

The value of integrating weather into decision-makingWeather has a profound and widespread influence on business. We are all vulnerable to unforeseen weather events, and the inability to manage weather-related risk can limit business success, thwart economic development and threaten public safety. It is estimated that weather causes businesses to lose half a trillion dollars every year.1 In 2014, the US economy alone lost nearly USD50 billion in sales and 76,000 jobs because of weather.2

Until now, most businesses have treated weather as a force to which they can only react. Leading-edge companies today are taking a different approach, moving from a “cope and avoid” mindset to “anticipate and execute.” They can now respond to disruptive weather events, taking early action to mitigate the impact and return to normal operations more quickly. Even the calmest weather days present an opportunity for business optimization—for example, sunny skies and higher temperatures can affect everything from wildfire danger and energy demand for air conditioning, to sales of cold beverages. Leading-edge companies today are taking a

different approach, moving from a “cope and avoid” mindset to “anticipate and execute.”

IBM Analytics 3

Figure 1. Public sources (in red) versus The Weather Company sensors (in yellow).

Advances in weather analytics for better business outcomesEnterprises now can use weather-driven insights to improve business results, largely because advances in weather science, analytics, geolocation, cloud computing and the harnessing of data through the IoT have fundamentally changed the paradigm.

IBM technology and analytical capabilities, paired with very precise and accurate weather data from The Weather Company, unlock new insights. The Weather Company delivers billions of forecast requests each day in real time using its own proprietary model. The IoT enables the company to map the atmosphere, collecting weather and related information from a worldwide network of more than 140,000 private weather stations, aircraft, smartphones, buildings and homes, and even moving vehicles (Figure 1).

White PaperIBM Analytics

Weather Means Business™Enabling transformative decision-making with precise weather data for energy and utilities, insurance, retailing and the public sector

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Produced in the United States of America February 2016

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1 IBM and The Weather Company study, 2015 2 Steve Liesman, “Economy takes $50B winter weather hit: CNBC survey,” CNBC,

February 14, 20143 Weather-Related Power Outages and Electric System Resiliency, Congressional Research

Service, August 28, 20124 WSI and Insurance Company Study, 20155 Munich RE, “Review of natural catastrophes in 2014: Lower losses from weather extremes and

earthquakes,” January 7, 2015. 6 Understanding the role of weather in the supply chain, Met Office, 2015

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