Just Add Weather: Effective Use of Weather Intelligence in a Business Context

Recognizing that weather affects virtually all businesses, IBM acquired The Weather Company (TWC) in early 2016. Nearly simultaneously, IBM took the step of creating within its Global Business Services the Global Weather Integration Team (GWIT) to act as the ‘tip of the spear’ for extracting business value from the weather data produced by TWC. Last year, the GWIT commissioned a study by IBM’s Institute for Business Value (IBV) to examine attitudes amongst business executives towards weather impacts on their companies. The study surveyed 1,000 global C-level executives representing 13 industries and 15 countries. The results reveal that most executives believe that the insights derived from weather data can help improve profitability, reduce costs, mitigate financial exposure and provide a competitive advantage. Most of the polled business leaders believe that weather impacts are predominantly negative and that the benefits from improved weather insights could be as much as 2 to 5 percent of revenue. In fact, aggregating the estimates cited in the study across the Global Fortune 500 suggests that effective use of weather information could grow annual revenue for the group by over $500 billion!

Despite the widespread recognition of weather data’s value, the survey also uncovered perceived challenges in the implementation of a weather integration strategy. The most-cited impediments included uncertainty about how to use weather data, difficulty integrating weather data into operational processes and uncertainty about using weather in the decision-making process. Technical challenges were also cited, including accuracy, availability and automation of weather data ingestion and analysis. The GWIT has demonstrated that the aforementioned challenges can be overcome by developing a comprehensive strategy to uncover an organization’s weather exposures, model the business-weather relationships and operationalize the resulting insights. A key finding of the IBV study illustrates that those companies with the most positive view of weather impacts on their outcomes are also those that have positioned themselves to implement a weather integration strategy. This presentation will present in detail the IBV findings and provide an overview of success stories in which weather insights helped mitigate business costs and increased profitability. The presentation will also identify lessons learned from companies that have successfully overcome these challenges and shares how actionable insights can help organizations quickly move from “blaming the weather” to capitalizing on it. Two successful weather integration use cases will be presented separately at this conference: a route weather safety application for Idaho National Laboratory and a fire weather monitoring application for a large California utility.