Big Data;

A Comprehensive
Implementation Concept
By Budi Santoso, SE., Ak., MForAccy., CA., CFE.
December, 2017
Table of contents
1 Background; Digital Disruption
2 What & Why Big Data?
3 Challenge on Data
4 Framework & Functions
5 The Benefits
6 Big Data Domains and Capabilities
7
5 Source Collect Data
8 Architecture & Design of Big Data
9 Analytics Methodology and Techniques
10 Forensic Data Analytic
11 Predictive Analytics
Table of contents
12 Advanced Analytics
13 Tools & Technologies Platform
14 Big Data and Data Analytics Challenges
15 Understanding the Digital Language
16 The Future Analytics for Internal Audit
17 Big Data Applications:
• Tax • Media
• Healthcare • Transportation & Logistics
• Procurement • Financial Sector
• Power & Utilities • Mining
• Insurance • Life Science
• CPR • Oil & Gas
 1

DIGITAL
DISRUPTION

The better the question. The better the answer.

The better the world works.
Building confidence in a
digital world
Growing and protecting businesses,
through every single element of change
 “We stand on the brink of
a technological revolution that will
fundamentally alter the way we live,
work and relate to one another. In its
scale, scope and complexity, the
transformation will be unlike
anything humankind has
experienced before.”

World Economic Forum, 2016

Digital has defined the 4th Industrial Revolution creating a new
norm of connected enablement

1700’s 1800’s 1900’s

First Industrial Revolution Second Industrial Revolution Third Industrial Revolution

Mechanical Electrical Automated

Technology was steam Electricity made possible IT enabled programmable
and water powering the division of labour and work and an end to reliance
the first factories mass production on manual labour

Unprecedented pace Extreme experiences

Today
35 days 87 %

Fourth Industrial Revolution For a new technology Percentage of customers

to reach a critical mass looking for a more seamless
of 50m users experience

Connected Connected chaos Digital natives

Cyber-physical systems, powered by IoT and fuelled by

data, create a fully interconnected society
50 bn 75 %

Internet connected “things” By 2025, the makeup of the

by 2020 including sensors, workforce is projected to be
RFID chips etc. majority digital native
For business operations, Digital is creating opportunities and
threats across an organization

More than Uber, the world’s largest taxi company, owns

no vehicles. Facebook, the world’s most
We stand on the
brink of a technological
revolution that will
10% popular media owner, creates no content.
Alibaba, the most valuable retailer, has no
inventory. And Airbnb, the world’s largest
of work will be accommodation provider, owns no real
fundamentally alter the sourced in the estate. Something interesting is happening.
way we live, work, and shared economy -Tim Goodwin
relate to one another. by 2019.
-World Economic Forum, 2016 -IDC, 2015
By 2020,
Only 3% of the potentially there will be
useful data is tagged, and
even less is analysed. 35 %
26 smart
objects for every

5
-IDC
New P&G products human being on
come from outside the Earth!
days company via it’s open -IDC, Intel, United
For a drone capturing and Innovation approach Nations, 2016
analysing high definition video of
off shore oil rigs to capture more 25–50 %

52
of the Fortune 500 since 2000 has been demolished
data than a traditional “rope lift”
Typical cost savings from RPA because of Digital disruption
team can capture in 8 weeks
enabling automation 24x7x365 % - Constellation Research
Seizing the upside of disruption

25-50% 35
Typical cost savings
from RPA enabling automation
24/7/365
%
New P&G products coming
from outside the company via
Strategy
Business model
Product
$2 k
Offered to every Zappos
its open Innovation approach Marketing customer service employee
who doesn’t buy into their
Sales “delivering happiness”
Service philosophy
Operations
Supply Chain

5 days
For a drone capturing and
Risk
Tax
HR

4 years
for Airbnb to reach the same
analysing high definition video
of offshore oil rigs to capture
more data than a traditional
“rope lift” team can capture in
Finance
Partners
Competitors
inventory level as Hilton Hotels 8 weeks Ecosystem
built
in 93 years

8 | EY Digital Tax
Understanding the digital landscape

Digital is the defining More than

mega-trend of our time but
the exponential growth has
barely begun.
10%
of work will be sourced in
We have reached critical the shared economy
inflection points in many by 2019.
colliding physical, biological — IDC, 2015
and digital technologies. Only

Digital creates risks,

3% of the By 2020,
there will be
26 smart
Digital disruption
has demolished
potentially useful
challenges and opportunities
everywhere.
data is tagged,
and even less
objects for
every human
being on
52%
of the Fortune 500
Harnessing disruption will is analysed Earth! since 2000
— IDC, Intel, United — Constellation Research
define market leaders. — IDC Nations, 2016

9 | EY Digital Tax
Digital represents an existential threat to companies in every industry…

29 75
Jobs will be
Mega-Vendors
2
displaced by
2030 as a result
of technology % %
bn advances Disruptors
Unilever’s CMO’s
At the current run rate 75% of
estimated rate of click
companies in the S&P 500 will
fraud, prompting a claim Transformers be new entrants by 2027
that the industry ws
wasting $8-10bn per
year on fake clicks

4
20
%
Of Global Group Turnover.
Maximum fine for a data
privacy breach in the
Years to catch up with the
European Union
cyber-security skills shortage
 The impact of the fourth industrial revolution will ripple through the company
from top to bottom

Strategy, innovation Build the Engage the

and growth Identify
Drive agility operating landscape
threats and
and innovation model for a without
opportunities
digital world boundaries
Customer Collect Deepen
experience Enhance
intelligence customer
Connect the
customer dots across
across touch relationships
experiences silos
points and insights
Supply chain Respond
and operations Establish a Manage Create a
quickly to
digital supply in-house and 3rd more agile
market
network party providers supply chain
changes
Balance Integrate
Technology Streamline the Fully enable digital front-office
digital digital innovation apps with
ecosystem systems with IT back-end
Risk and maintenance systems
Understand
Manage risk Keep pace with Establish a
cybersecurity as business increasing cyber
broader risks
cybersecurity
of new
transforms attacks program
technologies
Finance, legal Maximize Address
and tax Automate Digitize tax savings legal and
processes invoices and from digital regulatory
and controls documents initiatives requirements
People and Create Re-design
Transform Integrate
organization a diverse the digital
knowledge
culture of organization technologies
across the
innovation and to fit the to empower
organization
ideation digital age people
When companies stop “doing digital” and start “being digital”,
they can run like a digital leader
PROJECTS
“Digital Focus”
► Digital projects being
undertaken in pockets across
the organization
► Little strategic context
“Doing Digital”
OPERATING MODEL
“Digital DNA”
PROGRAMMES
“Digital Investment”
► Challenging business models to
create new sources of value
► Industrializing innovation
across the breadth of your
► Digital programs have been business
launched within the business
► Creating a culture that
► Program Sponsorship at a continuously iterates and
functional/vertical level improves the your experiences
► Moves with operational agility
“Being Digital”
Digital disruption continues to re-shape the business world. Traditional dynamics
have changed forever and companies must evolve if they want to remain relevant

“We are in the throes of a transition where every publication

has to think of their digital strategy.”
Bill Gates, Founder, Microsoft

. "You walk into a retail store, whatever it is, and if there's a

Digital Disruption
…a continuous form of disruption to
existing (or new) business models,
products, services or experiences, enabled
by data and technology across the
enterprise.
sense of entertainment and excitement and electricity, you
wanna be there.”
Howard Schultz, CEO, Starbucks
“Lots of companies don't succeed over time. What do they
fundamentally do wrong? They usually miss the future.”
Larry page, Co-Founder, Google Inc.
Welcome to the Digital Age*
The rise of digital is directly and indirectly impacting volumes of data and the way
you use it to succeed

Canadians everywhere are leading digitally … This is impacting customer expectations and
connected lives. ... the way they interact with organizations.

Mobility Evolving customer expectations:

► 56% of Canadians have a smartphone. ► They are known and recognized.
► 48% use their smartphone to make purchases. ► They can have frictionless and easy interactions.
► They hold the balance of power – more for less.
► Access – they have choice in where and when they interact.
Social
► 66% of Canadians socially network online.
Accessibility of organizations across the value chain:
► 79% of large enterprises have a social
media presence.
Service
Quote Renew or
Cloud Research and get
and buy terminate
help
► 43% of Canadian businesses have adopted cloud
Data and
computing. Traditional insight
Clarify and Get help
Terminate
transact
Big Data
Digital
► 90% of the world’s data has been created in the
last two years alone.
Web Opinion Quote Service Renew
search seeking

*Source: Google research and Digital Age

5 distinct digital offerings reflecting the holistic set of challenges
that digital creates for organizations

Enterprise strategy
We help our clients re-think their
business strategy and operating
model for the digital age.
Incubation and innovation
We establish an end to end
Innovation capability to incubate
new ideas and business models.
Continuous Experience
Implementation
We analyze the world of the
customer, then design and
implement new experiences.
Operations Trust
We align, enhance and automate We scan the digital risk horizon
operations and supply chain to and help our clients build agility
deliver on the promise of digital. to respond to digital risks.
2

BIG DATA (The What, Why etc.)

Big data
The term “big data” refers to the massive amount of data (internal, external, structured and unstructured) that today’s
organizations are collecting, storing and analyzing. All of the data, when collected, becomes too large and too complex to
store and process using traditional methods, such as relational databases and legacy software solutions.

www

Large transactional Activity Social Machine Location

EDW Web search Likes and posts Sensor data GPS

history Mentions RFID Proximity
ERP
Click stream
CRM Sentiments Server logs Network use
Media
HCM consumed Comments IOT Instore
Excel Digital ad
response
What is Big Data?

► Big Data refers to the set of technologies and architecture deployed to extract value from large
volumes of wide variety of data that gets generated at very high speeds. This value or insight is
then used to drive business decision that can impact top or bottom-line of a company.
► This type of data is not easily captured and managed by relational databases and hence, not
analyzed by traditional analytics or business intelligence solutions.

Select examples of how companies are leveraging Big Data to drive business growth and optimization

Big Data helps manufacturers Big Data allows organizations to

detect problems in global supply create highly specific customer
chain by analyzing data on segmentations and tailor products
customer returns for defective and services precisely to meet those
product and correlating this needs. For example, pricing car
information with the supplier insurance premiums by leveraging
information to solve supply chain telematics and analyzing data about
issues. customers’ driving behavior.

Companies can collect and analyze social network data where customers discuss their products
and services to determine ways in which those could be improved, strengthen digital marketing
strategy, drive more transactions and deepen customer relationships.
 Big Data technology is becoming mainstream, transforming massive
amounts data into insights and intelligence for better decision
making

► The NYSE captures 1 TB of

trade data during each trading
session

Volume ► Telecom operators processes

► Estimated 2.5 quintillion bytes Velocity 500 million daily call detail
(2.3 trillion gigabytes) of data (Scale of (Rate at records in real time
produced everyday data) which data
changes)

Big
Data  27% of the respondents
(insurance industry) in a survey
► 4 billion+ hours of video watched on did not know how much of their
YouTube each month Veracity
Variety customer information is correct
► 400 million tweets sent each month (Different (Quality of
forms of data)
► 30 billion pieces of shared on data)
Facebook every month
► 1 in 3 business leaders
do not trust the
information they use to
make decisions
A variety of sources generate/collect data to be analyzed using Big
Data technologies

Government
Web browsers
agencies

Consumer
Search engines
product firms

Smartphones Credit card

and apps companies

Tablets and E-commerce

apps websites

Gaming/GPS Health care

systems institutions

Banking
Telcos/ISPs
institutions
 Big Data workflow

Business
Data Creation Data Acquisition Info Processing
Processes

Producers Architects/ Engineers Analysts/ Scientists End Users

Internet of Things Physical Infrastructure Data Exploration Access Anywh.Analytics

Machines and Sensors Cloud Contextualized Data Context Aware
Transaction Logs In Memory Compute Modeling/ Scenarios Business Applications
Mobile Apps Data Hadoop Forecasting Workflow Automation
Geolocation Non Relational Dataset Processing Smart Devices
Emails and Messaging Event Management Smart Systems
Social Networks

Volume
Data Organization Discovery & Analytics Application Interface
Velocity
Physical Storage Exploration Decision Support
Variety

Strategy & Governance Business Intelligence

Data security Business Support
Privacy Rule Based Controlling
Source: IDC
How successful companies tackle big data
Use a Center of Excellence (CoE) to drive analytics as a portfolio
Functions Consider:
Product ► Establishing an analytic Center of
Finance Operations Excellence
development
► Obtaining insight from all
departments
Customer ► Creating analytic projects balancing
Marketing
care value and complexity
► Creating a prioritized road map
supported with business case(s)
Analytic CoE ► Managing value from analytics as a
portfolio across your enterprise
Common big Shared use Shared data
data platform cases sources Avoid:
► Using multiple analytic strategies
and technologies
Road map development: Complexity Value ► Using a silo approach across
departments
2013 – Projects (quick wins) Low $
► Tackling projects in an ad-hoc
2014 – Projects (fundamental) Medium $$ manner
► Hoping that exploratory analytics
2015 – Projects (strategic) High $$$ identifies opportunity
Big data program life cycle
It has been identified several key steps to help organizations
successfully start and implement big data projects.

Business Value
objective Use case Business case System Pilot planning measurement
definition and development development setup and execution and
prioritization verification

► Understand ► Create ► Analyze ROI ► On-premise ► Finalize ► Validate use

objectives, tailored or hosted requirements case and
requirements opportunity services and deliver business
lists work case

It’s important to find two to three initiatives in the beginning that will yield benefits.
However, the by-product of these initiatives will provide much greater insight.
 Big Data technology stack

► Applications with functionality required to support collaboration,

Decision support scenario evaluation, risk management, and decision capture and
and automation retention.

► This layer includes software for ad-hoc discovery, and deep analytics
Analytics and and software that supports real-time analysis and automated , rules
discovery based transactional decision making.

Data ► This layer refers to the software that processes and prepares all types
organization and of data for analysis. This layer extracts, cleanses, normalizes, tags and
management integrates data.

► Stack’s foundation consists of the use of industry standard servers,

Infrastructure networking infrastructure, storage and clustering software used for
scale out deployment of Big Data technology.

Source: IDC
Big data vs Traditional
Traditional business intelligence

Repetitive
Big data analytics
Structured
Experimental, Ad hoc Operational
Mostly semi structured GB’s to 10s of TBs
External + Operational

10s of TB to 100’s of PB’s

What is big data?

Twitter sees 600

posts per second
across its 190
million users

60m
Facebook 20 million mobile
7.8bn Internet users in
status
opportunities the UKwho can
updates
to see each access all of these
per day
comment services and files
on the move

‘Smart keys’, toll

passes, and ‘touch
and go’ automatic
Note: This is 60m Facebook posts per day x average of 130 Friends per member = 7.8bn payments

Source: EY Digital data opportunities

80% of company’s data is unstructured

Bigger opportunity to
identify anomalies

Text

Graphics Unstructured
Data
Few organizations have the
Email methodologies or technologies
CRM
80% Unstructured to efficiently address
Structured Databases Data unstructured data
Data Presentations & Spreadsheets
Accounting Systems

20% 80%
Source: Gartner Research

Focus of most audits and/or

traditional investigations
Big Data technology has several large and niche players catering to
different segments of the ecosystem
Accenture, IBM, KPMG, Deloitte, EY

Services

Dell, Teradata, Data center Capgemini, TCS, Atos

Oracle, IBM, Equinix Integration
and hardware

IBM, Cloudera, Infrastructure Large/ Oracle, SAP, SAS, IBM, Qlik

Cisco, HP, Fujitsu and network analytics ISVs Technologies, Splunk, Pivotal

Specialized Microsoft, Salesforce,

IBM, SAP, Oracle, Databases EveryAngle, MapR
ISVs
HortonWorks,
MarkLogic
Storage

Dell, EMC, Netapp, IBM, Hitachi

 Proliferation of mobiles, wearables, and embedded devices (Internet
of Things) will become a significant driver of Big Data market
Petabytes per month Global mobile data traffic: 2018E vs. 2013
18000
Select applications Select device type Region
2013–2018 CAGR 2013–2018 CAGR 2013–2018 CAGR
16000

14000 Video: 69% Smart phones: 63% Asia-Pacific: 67%

12000

10000

North America: 50%

8000

6000 Western Europe: 50%

Tablets: 87%
4000 Data: 42%
Central/Eastern Europe:
68%
2000 <1,500 Laptops: 30% Middle East and Africa:
M2M: 113% 70%
M2M: 113% Latin America: 66%
0 File sharing: 48% Non smartphones:
25%
2013 2018E 2018E 2018E
Source: Cisco Visual Network Index, February 2014
However, there are a few concerns which need to be addressed
before Big Data witnesses exponential adoption

Privacy

Data
Security
quality

Big Data

Data
Talent
access
and
and
training
control

Time and
cost
to deploy
Is big data a trend?

► Where do we find analytic

specialists to close the
Available
100 customer gap?
data

► Where does the data sit?

75
Knowledge gap
Terabytes of data

Analytic
capability
► What tools should I use?
50
Execution gap
Execution ► How long does the data
capability
need to be stored?
25

► What are the security

0 issues of all this data?
1960 1970 1980 1990 2000 2010+
Time
Gartner 2010 ► What regulations should
we be concerned with?
What is Big Data Analytics...

Analytics system

Data Information Insights

Data Sources End users
Ingestion Repository Delivery

What is it? LOW Medium High

The volume of persistent usable data in the

Volume ► Typically l<5 TB ► Typically between 5 – 50 TB ► Typically more than 50 TB
analytics system at any point in time.

The form and content of data – structured

Variety (RDBMS), semi structured (social media) or ► Batch oriented ► Near Real time/Real time ► Real time, low latency, streaming
unstructured (text/documents)

How quickly the analytics system process the

Velocity ► Structured ► Semi structured ► Unstructured
data to create insights

The complexity handled by analytics systems ► Historical ,

Complexity ► Limited analysis ► Predictive Analytics
to generate actionable insights multidimensional analysis

What is ‘Big Data Analytics’? – Some Definitions What are the characteristics of Big Data Analytics?

► Large volumes of data that cannot be sufficiently managed by

traditional, relational technologies
► Non-relational/unstructured data streaming in from new sources
► All forms of data (structured and unstructured) at massive scale
(e.g. hundreds of terabytes to petabytes)
► Various definitions and views exist for this stream, the elements of
which are age old, namely – data volume, variety of the data, speed
at which the data moves through the analytics systems and the
complexity of the analysis
Why We Need it? Big Data Analytics allows massive amount of data of varying complexity
and form to be analysed at a faster speed, providing improved business insights

Big Data Analytics Demand drivers Supply drivers

Traditional data Non traditional data Digitisation of everything Abundant computing power
Human generated Machine Human generated Social/mobile/
generated location
Social Since 2005, the investment by Since 2005, the number of cores in a
CRM Server logs Documents enterprises in the digital universe
interaction processor has increased by 6 times
has increased 50% — to $4 trillion.
and the cost has reduced by more
SRM RFID Sensors E-mails Geographic
than 50%
Billing Appliances Web content Satellite

Exploding data volumes Clever analytics applications

Creation &
consumption Since 2005, purpose built analytics
In 2011, the 1.8 ZB of
applications have grown substantially.
information will be created and
Currently there are more than 100
replicated (9 times growth in
Big Data enterprise open source analytics
Analytics 5years) applications
Actionable
Analysis
insights

Need for smarter analytics Lower TCO

Value of insights Types of analysis
Backward Forward Historical Predictive Real time Increased competition and step
Reason led
looking looking analysis analysis analysis changed in technology has forced a
Analytics driven retailer can
increase its operating margin by reduction in the costs. E.g. Teradata
Insights driven Integrated plus exploratory analysis
more than 60 percent. costs have reduced by over 40%
since 2005
3
Challenge on Data
Digitalization – a new normal?

Big data, less Digitalization - moving to digital

insights, new threats processes and business models

New markets and

New roles and skills required
products

Fragmented data across Digital Disruptive technologies and

business functions Revolution changing business models

New operating models Increased penalties for

and target pictures breach of regulations

Innovation and rapid development Complex processes and

in technology space disintegrated systems
Manage big data

The EY analytics value chain begins with leveraging leading tools and techniques
to manage and extract relevant data from big data sources.

Relevant Insights rules/

data Perform algorithms Drive
Manage
Big data Analytics Decisions

Volume In-memory
technology
Variety Organization
relevance
Velocity focus Context aware

Veracity
 Big data “Not so” big data

Volume Terabytes/Petabytes/Zettabytes Megabytes/gigabytes

Variety Unstructured (text, voice, video) Structured/relational

Velocity Data in motion (streaming) Data at rest

Veracity Untrusted/uncleansed Trusted/cleansed

► Big
data refers to a collection of data sets that are large, complex and
unstructured. It is impossible to structure them with the usual database
and tools.
Data will continue to grow and move faster than the rate of consumption by
organizations (Example: Life Science/Healthcare Industry)

$234 billion: fraudulent claims costs

4.9 billion
to the US on an annual basis
patients will use remote health
Fraudulent insurance claims monitoring devices globally by 2016

Scientific instruments
Veracity (collecting all sorts of data)

Volume Data explosion Variety

Mobile devices
(tracking all objects all the time) Sensor technology and
networks
3 million patients will be monitored by
mobile networks by 2016
Velocity (measuring all kinds of data)
Social media and networks 420 million wearable, wireless
(generating huge amount of data)
health monitors will be used
by 2014
Today Future

Estimated 50 petabytes of 50X 25,000 petabytes by 2020

data in healthcare realm

80% of the clinically relevant medical data is highly unstructured

40 | EY Digital Tax
Data characteristics vary widely across different industry verticals;
and hence the potential for Big Data technology

Communications,

natural resources
Manufacturing &

Transportation
Government

Healthcare
Banking &

media and

Education

Insurance
securities

providers
services

Utilities
Retail
Volume of data

Velocity of data

Variety of data

Potential Big Data opportunity on each dimension is:

Very hot (compared with other industries)

Hot
Moderate
Low
Very low (compared with other industries)
 Exponential growth in the volume and velocity of data generated is
creating huge opportunities for Big Data solutions
Volume of data generated (measured in Zettabytes Velocity of data generation (IP traffic per month
or 1 trillion GBs) measured in Exabytes or 1 billion GBs)

40.0 120.6
101.1
83.8
68.9
55.6
43.6
8.6
0.8 1.2 1.8 2.8

2009 2010 2011 2012 2015 (F) 2020 (F) 2012 2013 2014(F) 2015(F) 2016(F) 2017(F)

Global Big Data market (US$ billion) Big Data market breakup by segment (2013)

32.4 Infrastructure 47%

25.7
20.4 Services
16.1 Software 24%
12.6 Software
9.8
7.4 Infrastructure
Services 29%

2011 2012 2013(F) 2014(F) 2015(F) 2016(F) 2017(F) 0% 20% 40% 60%
4
Big Data Framework
And Functions
SEC priorities around forensic data analytics

– US SEC Chair Mary Jo White, prepared testimony

before the Senate Appropriations Subcommittee,
14 May 2014
The power of combining multiple data sources

Email and
instant
message

Transaction External
(e.g., sales) news and
data data feeds

Counter Fraud
Analytics

ERP and
Social
financial
media
systems
EY’s Analytics Value Chain

Analytics Value Chain

We believe that to drive better decisions, we must first ask the right business questions and then seek answers in the
data. Thus, our work moves left to right, but our thinking moves from right to left.

Descriptive analytics Predictive analytics Prescriptive analytics Forensic analytics

Involves mining past data to
report, visualize, and
understand what has already
happened — after the fact or
in real-time
Leverages past data to
understand the underlying
relationship between data
inputs and outputs to
understand why something
happened or to predict what
will happen in the future
Determines which decision
and/or action will produce the
most effective result against a
specific set of objectives and
constraints
Investigative data linking,
social networking analysis,
artificial intelligence and
predictive modelling to
proactively seek opportunities
to prevent and detect fraud,
waste and abuse
Leading organisations are using Big Data Analytics for specific
business outcomes
Gov
► Security and surveillance analysis
► Tax, revenue protection, fraud detection
► Analytics legacy modernisation
► IT performance and security analytics
► Patient care
► Customer analytics and insights
Pharma/Biotech
► Clinical research, drug discovery
► Customer analytics and insights
► Analytics legacy modernisation
► IT performance and security analytics
► Patient care
P&U/O&G
► Smart metering analytics
► Smart grid analytics
► Upstream data analytics
► Customer analytics and insights
► Analytics legacy modernisation
► IT performance and security analytics
Retail, CP, Manufacturing
► Customer analytics and insights
► Real time operations analysis
► Ad campaign and digital data analytics
► Social media analytics
► Analytics legacy modernisation
► IT performance and security analytics
TMT
► Customer analytics and insights
► Ad campaign and digital data analytics
► Social media analytics
► Analytics legacy modernisation
► IT performance and security analytics
► Operational N/W data analysis, call data
analysis
Travel, Transport, Leisure
► Customer analytics and insights
► Real time operations analysis
► Ad campaign and digital data analytics
► Social media analytics
► Analytics legacy modernisation
► IT performance and security analytics
Improving sales force effectiveness through advanced
segmentation
Analytics COE use case: Purchaser micro-segmentation. Leverage company’s vast database of
purchase behavior history to understand micro-segments and key behaviors at the buyer-level in the
market. Use the micro-segmentation to understand buyer price sensitivity, optimal time for sales
outreach and potential offer and negotiation strategies. A powerful way to drive rapid ROI with big
data in a business critical area.

Touchpoint
optimization
Mobile Purchase
apps segmentation
tracking

EY’s unique experience in big data

Customer
Pricing –
ask
behavioral segmentation AND
journeys Sales force optimization operationalizing sales support decision-
enablement making provides powerful synergies to
company in this use case.
Using big data analytics to identify potential waste, fraud and
corruption in expense management
Value hypothesis
► Apply EY’s extensive library of forensic data analytics to travel and expense (T&E) data in order to identify transactions,
employees and entities that pose significant fraud, waste and abuse risk for Company. Develop customized risk
models and data visualization dashboards to evaluate findings, define an ongoing T&E review strategy and implement
custom data analytics.
How Company would test
► Review information captured in Company’sT&E system, as well as findings from previous audits and investigations to
select relevant data analytics for both structured and unstructured data fields.
► Determine primary data sources and develop a detailed data request that specifies data extraction format and quality
control procedures.
► Deploy analytics on EY’s big data platform, flag transactions with high risk and display results in customized
exploratory dashboards.
► Develop a comprehensive risk-based scoring model that assigns customizable weights to specific tests and identifies
elements with the highest risk. Support sampling and transaction testing through EY’s web-based data review platform.
► Evaluate data analysis results and develop a cost-effective, practical roadmap for analytics integration as part of a
global compliance framework.
The EY advantage
► Multidisciplinary team of fraud examiners, data scientists, statisticians and computational linguists
► Unique big data analytics platform powered by patented data processing algorithms
► Robust library of customizable anti-bribery and corruption tests developed in conjunction with the Association of
Certified Fraud Examiners
► Global footprint that supports consistent execution of data analytics protocols and procedures worldwide
FDA across the industries

► In the financial services industry, 80% of respondents report the use of FDA for
investigating money laundering, whereas other industries reported minimal use.
► We also see that the financial services and technology, communications and
entertainment industries have the lowest reported use of FDA for bribery and
corruption investigations at 66% and 61%, respectively.
► Further, the financial services and technology, communications and
entertainment industries have the lowest use of FDA in addressing financial
statement fraud, along with the power and utilities industries.
► This risk is often compounded when the buyer/owner does not have direct,
unfettered control of the underlying payments generated by the prime contractor
or subcontractors on a capital project.
► FDA, therefore, can be a powerful tool in retrospectively analyzing historical
payments for fraud and misconduct.
FDA uses by industry
Consumer Technology,
Financial products/ communications Power and
Transportation Life sciences Oil and gas Manufacturing Mining
services retail/ and utilities
wholesale entertainment

Bribery and
82% 66% 80% 76% 74% 74% 61% 90% 77%
corruption risk

Money
30% 80% 24% 29% 23% 31% 17% 24% 17%
laundering

Asset
82% 56% 78% 86% 71% 85% 70% 90% 74%
misappropriation

Financial
79% 54% 67% 63% 71% 68% 52% 62% 51%
statement fraud

Mergers &
42% 25% 43% 29% 48% 30% 26% 41% 32%
acquisitions

Capital projects 45% 34% 50% 65% 58% 53% 48% 72% 83%

Other 6% 16% 11% 8% 10% 4% 13% 0% 13%

Q5. In which of these risk areas or types of fraud does your company use FDAs when investigating fraud and bribery? Base: (466)
Analytics: Importance of analytics for financial crime

Financial institutions are increasingly using technology and analytics to help them manage the scale and complexity
of compliance with regulation. An effective technology strategy allows financial institutions to collate, exploit and
share intelligence successfully.

► Core to the technology strategy is the bank’s information

architecture which can significantly improve the
organisation’s ability to leverage its own data and
improve transparency and collaboration.
► Big data technology such as Hadoop, NoSQL and
Elastic Search that implement distributed processing
provide highly scalable and agile platforms for efficient
information retrieval and analytics which can greatly
improve insight into risk and emerging trends.
► A recent survey in the UK found that very few institutions
are regularly using advanced analytics and modelling as
part of their intelligence analysis.
► As institutions begin to take a more holistic view use of
link analysis, data visualisation techniques, social
network analysis is becoming more prevalent.
Search & Pattern Social
Rules Visualisatio Anomaly Link
► Looking forward, machine learning and cognitive Data
Matching
Engines n Detection
Recognitio
n
Analysis
Network
Analysis
computing has great potential to support decision
making, learn effective detection methods and identify
new insights into trends and threats. Common analytical techniques used in financial crime
analytics
Analytics
Predictive analytics to better target
Predictive
suspicious behaviour and reduce alert false
analytics
positives volumes

Big data technology to centralise data and

analytics, including improved data
management such as single view of customer
Big data
and greater automation and standardised
tools for system deployment, tuning and
impact analysis

Social Social network analysis techniques to gain a

network more holistic view of activity for both risk
analysis modelling and investigations

Visualisation tools that support descriptive

Visualisation statistics and graphing for rapid data
tools discovery, analysis (should as what-if and
impact analysis) and reporting
5
Benefits of Big Data
Large organizations who consistently outperform their peers tend
to share a strategic capability of being “good with data”

Strong correlation in the use of data and financial performance:

77% companies good with data are also ahead in financial performance
Financial performance of companies “good” with data

“Big data will deliver

transformational benefits
to enterprises within two
to five years and, by
2015, will enable
enterprises adopting this
technology to outperform
competitors by 20% in
every available financial
metric.”

– Gartner, August 2012

What does it mean to be good with data?
Organizations everywhere are suffering from data chaos. To drive better decisions,
we must first ask the right business questions and then seek answers in the data.
Thus, our work moves left to right, but our thinking must move from right to left.

$$$
value chain

Relevant data Insights

Improve
Analytics

Manage Perform Drive

big data Appropriate Analytics Actions to drive decisions performance
data sources growth and
Manage risk
Transaction / behavior history

Continuous feedback loop

We are adept across a continuum of analytical techniques, We embed analytics into all our services to help
► Our primary goal with managing big from descriptive, to predictive, to prescriptive analytics our clients take action in the following areas:
data should be to help our clients cut techniques.  Customer
through the hype to leverage the
 Descriptive analytics. This technique involves mining  Supply chain
relevant data needed to drive better past data to report, visualize and understand WHAT has
business decisions. already happened – after the fact or in real-time.  Finance
 Predictive analytics. Leverages past data to understand  Fraud
Big data Not such big data
the underlying relationship between data inputs and  Risk management
Volume Terabytes / Megabytes / outputs to understand WHY something happened or to  Compliance and reporting (including Audit
petabytes gigabytes predict WHAT will happen in the future across various and Tax)
scenarios.
 Valuation
Variety Unstructured (text, Structured / relational  Prescriptive analytics. This technique is used to
 Talent management
voice, video) determine WHICH decision and/or action will produce the
most effective result against a specific set of objectives
Velocity Data in motion Data at rest
and constraints.
(streaming)  Forensic analytics. This includes investigative data
linking, social network analysis, artificial intelligence and
Veracity Untrusted / Trusted / predictive modeling to proactively seek opportunities to
Not cleansed cleansed prevent and detect fraud, waste and abuse.
How Big Data Analytics can help
Current practice and challenges
► Traditional analytics technology is not adequate
to address explosion in digital data.
► A handful of leaders have turned to Big Data
Analytics to build props such as Real Time
Bidding (advertise bidding for ad impressions in
real time), customer analytics.
How Big Data Analytics can help
High Volumes for all data
High velocity for real time data
High variety for all forms of data
High complexity for analytics
What is in it for customer?
► M/E, Telco
► Improved customer insights for targeted ad
campaign
Drive decisions

Big data and advanced analytic projects rarely create positive return on investment
(ROI) without using the insight generated by the analysis to drive change.

Relevant Insights rules/

data Perform algorithms Drive
Manage
Big data Analytics Decisions

Example departments
Example benefit areas

Brand value

Research and

Supply chain
development

Marketing

CRM
Revenue growth

Process efficiency

Market share
A leading-practice snapshot

Lagging Industry trends Leading

Data
Functional silos Users Spans enterprise
Internal Sources Internal/external
Multiple Technology/repository One trusted

Analytics
Old patterns Purpose Exploratory
Several Variables Many
Historic trends Discovery Predictive

Decisions
Gut feel Based on Data
Tenure Business case development Data
Perception Road map prioritization Data
Benefits of big data analytics
An opportunity for finance and the CFO
Finance shouldn’t ignore big data. It provides the opportunity to improve
the efficiency and accuracy of common tasks.
Anticipate customer and supplier demands
► Use speech/text analytics
► Use predictive analytics and advanced modeling

Predict sales, profits and capital efficiency

► Use what-if analysis
► Implement sophisticated forecasting
► Identify fraud

Improve efficiencies
► Rationalize data sources and platforms

► Target analytics on what matters

► Proactively manage risk

Context
Competitive advantage

What data do I have How do I put in place

and how can I get the right filters, tools Information is
value from data to give and processes so that power —
my business a I get only the data I when used to
competitive need to make better make better,
advantage? decisions?
quicker,
smarter
► Organizations are looking to safely increase decisions
production and lower their costs with minimum
risk and capital that improve
business
► 85% of FORTUNE 500 organizations believe performance
they are unable to exploit big data for and manage
competitive advantage
risk.
► Analytics is the means for extracting value from
data
► Without analytics, businesses have no way of
using their data to establish competitive
advantage
Context
Business intelligence vs. analytics

• Business intelligence systems

The Venn of data zen

Data scientist
• Analytics Systems Math

• Analytics fills the gaps between the

Math

needs of top management and the

capabilities of the business intelligence Explain
Communicate Code
Code

platform
• Analytics involves data science Domain
Domain

• Reporting on drivers and KPI’s vs solving A data scientist blends:

a bottleneck in operations
► The intellectual curiosity and domain
experience to ask the right business
questions.
► The engineering ability to get data out of
multiple technology platforms and into a
useful form using code
► The mathematical ability to write
predictive and prescriptive algorithms
► The ability to effectively communicate and
explain their analysis to stakeholders
6
Big Data Domains and
Capabilities
How can I use big data to make better decisions?
New complex data (largely unstructured) can complement an enterprise’s transactional data to support innovative
analytics and enable better business decisions.

Financial services Automotive

Has sentiment regarding our credit Is there a defect with a specific vehicle,
card brand recently changed in evidenced by a sudden increase in call center
response to a campaign or an volume and social media mentions?
external event?

Consumer products Retail

Pharmaceuticals
Can we identify a From what geographic
Is there a bottleneck in
competitor’s product locations are visitors
our supply chain that can
issue and act in real accessing our mobile
be identified by tracking
time by targeting app and how can this
product movement with
specific segments of information drive higher
RFID tags and sensors?
their customers? conversions?

64 | EY Digital Tax
Analytics
Data + Logic + Domain
Customer Supply Chain Finance People Accounting
Domain

Hiring/Vendor Analytics, FTE distribution,

Customer Profiling & Insights, Inventory Optimization, Revenue/Receivables,
Cost of Sales, Cash Flow Analysis, Contract vs Non-Contract Workforce, Span of
Sales Segment and Channel Demand Forecasting, Network Purchase/Payables, Continuous
Return on Fixed Assets Control, Performance Analysis, Attrition
Strategy Optimization, Procurement Controls, Control Configuration
Modelling

Descriptive, Predictive & Prescriptive

Analysis Statistical Modelling & Machine learning Performance Optimization Simulation

Cluster Analysis Campaign Analysis Monte Carlo Analysis
Chaid Analysis
Univariative Analytics Statistical testing - t-test, Chi-square, Pricing Analysis Conjoint Analysis
Logic

Regression Analysis
Bivariate Analytics ANOVA Survival Analysis Retention Analysis
Decision Trees
Multi variaate Analytics Latent Class analysis Pareto Analysis Survey Analysis
Neural Network
Discriminant Analysis Quality Control Analysis Lifetime Value Analysis

Hadoop, Hbaase, Hive, SAS, SPSS, R, Python, Kxen, Knime, Apache, Cloudera, Hortonworks, UIMA, Rapid Miner, Tesseract, Café,
MongoDB, CouchDb, Neo4J, Infinitie,
Spark, Storm, Splunk, Weka, MiniTab, Mahout, ilog, Matlab, MapR, IBM, Cassandra, Hypertable, Brandwatch, Crimson Hexagon,
MarkLogic, Amazon Dynamo, TITAN
Pig, Oozie Statistica, Evolver Amazon Radian6, Symosis, Lithium

Structured Data, Unstructured Data, Streaming Data

Data Architecture & Data Warehouse & Data Quality & Data Conversion & Data Governance &
Business Intelligence Appliances and Big Data
Modelling integration Profiling Migration MDM
Data

SAP Business Objects,

Informatica – Power Center, Power Exchange, IDQ,
Erwin, Microstrategy, SAP HANA, Oracle Exadata, Oracle
SAP Data Integrator, Data Services IBM, Informatica
ER/Studio IBM Cognos, Times 10, Teradata, IBM Netezza, HP
IBM Data Stage, Information Analyzer, Business glossary Riversand,
Visio, DB Designer, MS - SSRS, Power tools, Vertica
MS – SSIS, DQS, MDS Oracle, Tibco, SAP
Teradata, IBM, Oracle OBIEE, MongoDB, CouchDb, Neo4J, Infinitie,
OWB, ODI MDM
Industry packs Tableau, Spotfire, Qlikview, MarkLogic, Amazon Dynamo, TITAN
Abinitio, Pentaho DI, Talend
D3, IDL

Intermediate Mature Advanced

Big Data is changing the way information is being analyzed across
different sectors (1/2)
• Finding patterns to help
doctors identify treatments
and lower cost for hospitals
and health care insurance
companies
• Reducing the cost and the
time to market for new drugs
by enabling researchers to
identify compounds with a
higher likelihood of success
Healthcare/Life
Sciences
• Driving better customer
experience and avoid
customer churn
• Utilizing network assets more
efficiently
• Driving new information-
brokered revenue models
with partners through open
analytic web services APIs
Telecom
• Anticipating changing market
conditions and customer
preferences
• Optimizing return on equity,
combat fraud and mitigate
operational risk while
achieving regulatory and
compliance objectives
• Strengthening enterprise risk
and financial management
Financial
Services
Big Data is changing the way information is being analyzed across
different sectors (2/2)
• Analyze customer’s
demographics, purchase
history, preferences, real-
time locations, and other
facts to increase the average
purchase size.
• Marketing – cross selling, in-
store behavior analysis,
customer micro-
segmentation
• Merchandising – pricing
optimization, placement and
design optimization
• Streamline operations and
supply chain through
efficient inventory
management and distribution
and logistics optimization
Retail &
Consumer
Products
• Enabling media companies
to gain a single view of their
customers, including their
interests and buying habits
• Allows new product
development, content and
promotion to be narrowly
focused – resulting in
improved sales and margins
Media &
Entertainment
• Improving quality of citizens’
lives by using the data
collected from urban
operations to streamline city
management system
• Reducing crime rate by
developing predictive models
about when and where
crimes are likely to occur
• Defense department,
immigration, and border
police may also benefit from
thorough and continuous
monitoring of open internet
sources, text analytics, and
pattern matching to discover
important events and trends
Government &
Public Sector
Client challenges and respective EY digital services for each focal point (1/3)
Client Challenge
• Lack of digital vision and knowledge on where to bring in
digital innovation within the organization at first
• How to develop innovation strategy with respect to
Strategy and digitization within the organization
• Large gap in digital capabilities and lack of direction about
Innovation digital vision/mission of the organization
• Implementation of insight driven business strategy
• Selection of appropriate digital technologies and
investments into those technologies
• Providing enhanced customer experiences and retaining
customer loyalty
Customer • Identification of hidden consumer behavior patterns to
experience provide customized and personalized promotions, sales etc.
• Define new business models and partnerships to provide
ultimate customer experience
• How to develop an enterprise strategy that will enhance
consumer experience
• Longer product development cycle and increasing costs
Digital POV – CP&R Sector
How we help our clients
• Advise and assist organizations in building digital vision and
also in identifying key areas where they can start
implementing/adopting digital technologies
• Digital innovation strategy development and implementation
• Identify gaps in digital capabilities of employees and prepare
recruitment and training strategy accordingly
• Provide advanced analytics services to aid organizations in
developing business strategies based on insights
• Identify key digital technologies that organizations need the
most based on their business goals
• Help organizations in developing Omni channel strategy. EY
could leverage its innovation centre capabilities and invite the
leaders in CPG industry and conduct various simulation
exercises and help them identify solutions to various problems.
• Provide advanced analytics services (eg: social media analytics,
customer sentiments analysis) to identify hidden behavior
patterns in customers
• Digital enterprise strategy development focusing on enhanced
customer experience
Client challenges and respective EY digital services for each focal point (2/3)
Client Challenge
• Providing differentiated value to its customers
• Existing systems that reduce the efficiency of the
organization
• Addressing technological disruptions that could modify
existing supply chain and operations
Supply chain and • Increasing cyber attacks by hackers and other parties
operations with vested interests which could potentially hamper
the functioning of the organization
• Huge and ever increasing number of transactions
which would consume time and also need real time
addressing
Information • Lack of clarity in digital vision
• •
Technology •
IT continuity related issues
Challenges related to enabling transformation of IT
from a business enabler to business driver
• Integration of IT into digital systems and on how to
deal with legacy systems
• Managing digital data that are created owing to
increasing use of digital system
• Addressing IT skill gaps within the organization
Digital POV – CP&R Sector
How we help our clients
• Advise on how to digitise existing operations and supply chain by
preparing a roadmap and also aid in implementing the same to
enhance value given to its customers
• Advise on replacing existing systems with latest and most apt digital
technologies (cloud, In-memory computing etc.,) for the organization
•
to improve its efficiency.
Advise on leveraging the nexus forces (SMAC) to address the
disruptions that these can provide enabling modification of supply
chain and operations
• Provide IT risk assessment, cyber security assessment, cyber
security ensuring guidelines and also on the relevant steps that needs
to be taken to secure the digital information
• Advice on leveraging technologies like In memory computing to
provide real time transaction and analysis of large amount of data
thereby improving efficiency of the organization
• Aid in preparing the digital vision of the organization
•
Aid in developing and maintaining IT continuity frameworks
Help in addressing IT transformation requirement by aiding in
preparing IT transformation roadmap
• Can advise organizations on how to replace their legacy
systems with latest IT systems and also help them by preparing
IT implementation roadmap
• Advice organizations on digital data management, guidelines
that needs to be followed and also provide digital asset
management services to the clients
• Provide training to the employees of organization
Client challenges and respective EY digital services for each focal point (3/3)
Client Challenge
• Increasing risks due to threats related to cyber security
• Complex digital laws that varies from country to
country and also lack of deep understanding of cyber
Risk and cyber laws and its effects
• Increasing importance of business continuity
security management as a part of digital strategy
• Data security concerns for online sales and e-
commerce businesses
• Lack of consolidated view on digital risks
• Monitoring, measuring and analysis of increasing
digital transactions
• Lack of knowledge about ever changing digital tax laws
Finance, Tax and • Ensuring security of financial transactions and financial
data in the system
Legal • Evolving digital laws and regulations across various
geographies
• Challenges due to cultural resistance
People, • Implementation challenges due to lack of knowledge
about the digital vision among the employees
organization and • Lack of innovative ideas emerging from within the
change •
organization
Digital related skill gaps in the organization
• Lack of understanding on the importance of analytics
Digital POV – CP&R Sector
How we help our clients
• Offer IT risk assessment, cyber security and digital risk services to asses
and mitigate those digital risks that could impact the organization
• Advice organizations on the digital laws across geographies and
strategies to adopt in respective geographies
• Business continuity management services to ensure business continuity
services to mitigate the risks in case of any digital or cyber threats
• Provide services to ensure secure online business and prepare learning
modules to educate on digital risks
• Advice on the security of the transactions that occur though digital
channels
• Advice on the ever changing digital tax law landscape and provide
Digital tax services to the organizations
• Ensure safe financial payment gateways by leveraging the experience
that EY has in FS sector
• Advice the organizations based on the laws and regulations specific to
geographic locations that could of interest to them
• Advice on digital strategy implementation and how to let the
employees know and understand the new digital vision
• Provide learning modules for the employees of the organization to
educate them about digital vision and what they need to do towards
•
achieving the same
Skill gap assessment and aiding in bridging the gaps by providing
training
• Leverage EY’s Innovation center capabilities to show the impact of
analytics
7
Collect Data Source
 Data Information
Data Sources Information Delivery
Ingestion Repository

Data Integration SQL-Columnar NoSQL- Document Store NoSQL- Graph NoSQL-Key value Search
Actian BaseX AllegroGraph store Autonomy
Ab Initio
Sybase Aleri Aster Data (Teradata) ClusterPoint Sparsity Big Table (Google) Endeca
TIBCO Greenplum CouchDB (Apache) Urika (Cray) Dynamo (AWS) FAST
Infobright eXist HazelCast Kitenga
Data Integration + NoSQL-Object MemCacheDB
ParAccel JackRabbit (Apache) Reporting and analytics
Hadoop
SAND MarkLogic GemStone Ncache
Informatica ObjectivityDB Redis Birst
Sybase IQ MongoDB
IBM InfoSphere
Versant Riak KXEN
Vertica OrientDB
Talend Micostrategy
Calpont SimpleDB (AWS) Voldemort
SQL-Appliance NoSQL-Multivalue Pentaho
Terrastore
CouchBase Northgate reality QlikView
Exalytics
OpenInsight R
HANA
Rocket U2 SAS
Kognitio
SpotFire
Microsoft SQL Server NoSQL-File Based
SPSS
Netezza
Hadoop Zementis
Teradata
HPCC Tableau
Roambi
 Case : Data analytics across healthcare ecosystem is enabling efficient operations…

Data creators in the healthcare bionetwork Leveraging data analytics

across healthcare ecosystem

Pharmacies
Hospitals &
► Patient
IDNs prescription data
► Medical History
►
►
Demographics
Billing
1 Enhancing operational and
Providers information
► E-prescribing administrative efficiency
data
► Demographics
► Medical history
► Medication and

►
allergies
Immunization Payors &
2
status Administrators Big Data Improving clinical effectiveness
► Laboratory test
Patient
►
results
Radiology images
Analytics
► Vital signs ► Plan type and
► Personal statistics
like age and ►
coverage
Claim history
3
weight (medical and Increasing customer/
► Billing information pharmacy)
► Patient outcomes ► Procedures/visits patient satisfaction
data /encounters
► Co-pay and co-
insurance
Providers
via distributors LS companies &
Academia
► Clinical trial data
► Genomic data
► Consumer
Physician research
► Regulatory data
► Medical
Direct stakeholders to patients monitoring
Indirect stakeholders to patients ► Sales force data
How Sainsbury’s leverages Big Data Analytics
Sainsbury’s has established itself as a market leader in customer centricity as “data driven retailer”
How does Sainsbury’s deal with Big
Why is Sainsbury’s a market leader?
Data?

► The ability to identify and segment every customer Volume MPP, In memory

► Maintain their transactional purchase history for over 65 weeks Variety Structured
► Build models faster and score them in 60 seconds
Best Use of Data in Velocity ETL, ELT, EAI
► Perform Market basket analysis, in minutes
Retail – Award Winner
► Achieve a redemption rate of 25%, 4 times more than industry average Complexity In database

What is Sainsbury’s Solution Architecture to leverage relevant Big Data Components to be a market leader?

ETL ELT

12 major source
2 Kognitio WX2 Segmentation on 2 years
systems, 50+ interfaces, 10 TB Teradata DWH on
appliance (10TB) on HP worth of full data, user
75 Million records per Ab Initio ETL
servers queries 60 times faster
day
targeted coupons,
delivered at till while you
shop
EAI ELT (Instant /OYNO)

Brand match campaign

Behavioural and basket for instant price match
Real time POS data on (Netezza® TwinFin™ i Analytics using in data and cash back
Oracle CRT
transactions and baskets Class™ base modelling (Fuzzy
Logix) + Scoring (SAS)

Data acquisition Storage and transformation Analytics delivery Business outcome

8
Big Data Architecture
and Design
The technology vendors have largely been using open source
computing technologies to achieve the desired objectives
Top down stack view of a typical big data analytics application architecture
EY SAP HANA and Hadoop reference architecture
A fully integrated analytics platform for big data
Enterprise Data Warehouse Reporting
and analytics
SAP Business
Warehouse

Visualization

Hot
ETL Process

Operational and
SAP BODS
SAP SLT

ad hoc reporting

EDP and big data environment

Near-line storage
Sybase IQ Advanced
analytics
Smart Data Access

Warm
Mobile
Machine
information
learning
delivery
Structured Big data platform
Sqoop
(Internal and external, Data processing and exploration Real time decision processing
e.g., CRM, ERP, billing)
Pig Vora
Batch Apache
Apache Storm
Hive
Spark

Unstructured Hadoop
Flume

Cold
& legacy data
Capabilities
(Internal and external,
e.g., call notes, sensors, Streaming Cold data Discovery In platform Security and
social legacy, ERP data) storage platform analytics audit
9
Analytics
Methodology and
Techniques
It is clear that those focused on getting analytics done are growing
and benefiting faster than those who have not

% Highly mature in % Excellent at getting % Investing > 20% in % Having CDO role
data and analytics useful insight Change management &
people
70% 58%
35% 23% 27% 12% 24% 7%
Fast growing Rest

x1.5 x2.2 x3.4 x1.2

 Data is becoming the  Leading companies are  A holistic approach to  Financial services
fourth pillar of the investing in data for the data is critical for success companies are bullish
business: 83% of upside potential, about their capabilities on
companies recognize data especially in revenue  Investment is needed in analytics but many admit
as the most valuable enhancement technology, people, skills, to need more
strategic asset processes
 Only 16% of companies  Only 4 in 10 have
 31% describe their ability consider themselves appointed a CDO
to realize value as excellent at extracting
immature value from data

Source: “Competing on analytics opportunities to unlock the power of data”, EY November 2014
High growth Financial Services companies + those achieving EBITDA growth of 15% or more in each of the last two years

EY - Enabling the Intelligent Enterprise - Analytics in Insurance© 2016

There is a broad spectrum of analytical maturity within the sector
but also within individual business units

► Bestin class analytics capabilities in the industry

Leading ► Analytics is a driver for business decisions
► Champion Challenger concepts are used for continuous improvement

► Analytics is leveraged across the enterprise and teams collaborate with each other
Advanced ► Advanced analytics tools and techniques are used by a team that has a mix of statisticians, data
scientists and business analysts

► Analytics
is used in some business functions but not to the full potential
Established
► Advanced analytics is used sparingly because of lack of skill-sets and technologies

► Basicanalytics capabilities exist in some teams within the organization in silos

Developing
► Focus is more on reporting/ dashboarding and ad-hoc analysis to support daily business processes

► Limitationsin data and skill-sets pose challenges to establishing analytics capabilities

Aspiring
► Leadership commitment to establishing an analytics organization is limited due to various limitations
EY is harvesting decades of experience from across multiple
competencies to create new propositions in insurance analytics

IT & Ops Transformation:

Wellbeing (ITA, Actuarial and EI) – targeting MacBank and
Wellbeing: CBA with new proposition - creating new
analytic layers and integration point on top of
(P&OC, actuarial) – Web-based
GW reporting
portal prototype; Expansion of wellbeing IT & Ops
into insurance potential Transformation

Risk Data Data robotics:

Decisioning Robotics (combining ITAS, Actuarial, EI and Blueprism) –
Pay as you creating bots focused on automated discovery,
Risk decisioning: live social and network data ingestion
(combining Actuarial and Risk) - demonstrating
risk appetite of individuals. Business case to
expand to a tool set that could be licensed is
Pay as you live:
(combining ITA digital, Actuarial, Customer and
under way
Baseline telematics) – innovation to build a POV
and prototype for insurance purposes
Most businesses seek to develop two different analytically skilled
profiles within their organizations
Expertise

Analytic
Communications

Model Development
Business-Focused
Data Scientist
Model Evaluation and Simulation

Modeling for Insight

Analytic
Communications
Dat Preparation and Management / Big Data
Using Models

Analytics-Empowered
Professional Using Data for Insight

Analytical Thinking

Acquiring Data

Foundation, Basic Statistics

Progress over time

Advanced analytics are common and performed throughout
organizations, yet at different levels of depth

Functions performing advanced analytics

Sorted by difference

2016 EY Global Insurance Sensor Data Survey

This maturity is supported by a foundation of context required to
develop the skills most common among analytical professionals

Expertise

Analytic
Communications

Can communicate analytic insights to business

Using Models stakeholders in a compelling way that
encourages action

Using Data for Insight Understands the use of analytic models and can
draw insights from using them

Analytical Thinking Can draw basic insights from data that

contribute to the business

Acquiring Data Can frame a business problem in an analytic

context

Foundation, Basic Statistics Knows how to access the data sources;

Understands the ethical and legal Issues.

Progress over time

Benchmarking analytics adoption is a critical early step and should
include innovations from other industries
Life insurance advanced analytics adoption value chain
Risk, Product & Pricing Marketing & Distribution Service Center Back Office

Risk Product Underwriting Marketing Digital Distribution Customer Customer Enterprise

Management Management & Pricing Management Service

ERM management Product Rate Level & Lead Management SEO & Adwords Salesforce Inforce Management Renewal Processing Valuation
Architecture Structure Optimization Effectiveness & Retention
ALM / product Competitive Trend Analysis Campaign Site A/B Testing Producer Lifetime Value Call Center M&A / Closed
management Intelligence Effectiveness Compensation Effectiveness Blocks

Liquidity Risk Market Selection Underwriting Policy Optimization & Click Stream Producer Recruit & Cross-sell & Up-sell Workforce Agency Block
Attribution Analysis Selection Optimization Acquisitions

Economic Capital Flow management Fraud Detection Concept Testing Social Media Channel Risk Appetite & Next Best Action Planning &
& Risk Selection Effectiveness Surrender Recommendation Forecasting

Hedging analytics Value Prop Customer Product Record Behavioral & Needs Voice of Customer
Management Sentiment Systems Analysis

Model validation Crediting Strategy

Maturity key: Wide adoption Early adopters Leading edge Visionary

Other industry areas of influence on life insurance advanced analytics adoption

Risk, Product & Pricing Marketing & Distribution Service Center Back Office

Risk Product Underwriting Marketing Digital Distribution Customer Customer Enterprise

Management Management & Pricing Management Service

ERM management Product Rate Level & Lead Management SEO & Adwords Salesforce Inforce Management Renewal Processing Valuation
Architecture Structure Optimization Effectiveness & Retention
ALM / product Competitive Trend Analysis Campaign Site A/B Testing Producer Lifetime Value Call Center M&A / Closed
management Intelligence Effectiveness Compensation Effectiveness Blocks

Liquidity Risk Market Selection Underwriting Policy Optimization & Click Stream Producer Recruit & Cross-sell & Up-sell Workforce Agency Block
Attribution Analysis Selection Optimization Acquisitions

Economic Capital Flow management Fraud Detection Concept Testing Social Media Channel Risk Appetite & Next Best Action Planning &
& Risk Selection Effectiveness Surrender Recommendation Forecasting

Hedging analytics Value Prop Customer Product Record Behavioral & Needs Voice of Customer
Management Sentiment Systems Analysis

Model validation Crediting Strategy

Industry key: Retai Pharmaceutical Campaign / Media Banking / Cap Mkt
l
 Analytics methodology
While analytics creation is at the center, a broader framework is required to maximize impact.
Business
Imperative
“What problem are
we trying to solve?” Institutionalizing
& Learning
“What are the insights…and
how do we use these to
Analytics Creation drive change?”
Business Intelligence
Impact
Statistical Analysis
Assessment
Predictive Modeling
“Can Advanced Analytics “What are the best analytics to
move the needle?” commercialize the opportunity?”

Implementation
“Make it happen,
Data Preparation and make it stick!”
The application of Advanced Analytics
“What data can we bring requires a coordinated and
to bear on the problem?” comprehensive approach to managing
projects.

TSD / Strategy Academy 2016 – Analytics Methodology and Techniques

Specific activities, requiring appropriate attention
Business
1. Drivers of new business
Imperative
2. Business levers to drive desired results
1
3. Competitive environment
2 4 4. Problem definition
5. Problem structure
Institutionalizing
3
5
17 18 19
Analytics Creation
Business Intelligence 17. Presentation creation
/ Data Mining
Impact Assessment 18. Socialization
11 12 13 Statistical Analysis 14 15 16
19. Sign-off

Predictive Modeling
11. Transform & Select Implementation
12. Validate Hypothesis
20 21 22
13. Analysis Design
14. Model Validation
10 15. Visualization 20. Systems implementation
Data 16. Insight/Action generation 21. Process change
Prep 9
22. Results monitoring
8 10. Data integration
9. Data quality
7 8. Data management
6 7. Data collection
6. Data research

Ideation Commercialization Execution

TSD / Strategy Academy 2016 – Analytics Methodology and Techniques

How is this really done?

TSD / Strategy Academy 2016 – Analytics Methodology and Techniques

Technique: Customer Analysis and Search

Polling – How are we doing with Search?

TSD / Strategy Academy 2016 – Analytics Methodology and Techniques

Customer Analytics: Search Supporting Data
About the Customer

Product 1 – Customer Master

Product 7 – Fraud Data

Mart – single view
across systems,
documents, and
Source.1 – System relationships.
of Record Data -
Claims

Source.2 – System
or Record Data - Product 2 – Claims History
Customer Service
Product 3 – Customer Service History
Source.3 –
Supporting
Documents –
Claims and CSR
Notes

Source.4 – Credit Product 4 – Indexed Documents

Scores for Claims & CSR – Parsed
Entities & Relationships
Source.5 – Social Product 5 – Page Ranked
Research Documents – Claims & CSR
Product 6 – Claims Fraud Model – Applied to
Claims and CSR Interactions

TSD / Strategy Academy 2016 – Analytics Methodology and Techniques

Customer Analytics: Consumer Grade Search for Enterprise Use

1 Data Scope 2 Analysis Depth 3 Derived Types

• What did we index into the search?
• Traditional historical data about
the customer and their
interaction.
• Documents (notes) representing
semi-structured data about the
interactions.
• 3rd Party Data for Social
• How deep did we analyze?
• Traditional Text Analytics for the
Documents / Notes
• Parsing of Entities within
Documents
• Modeling and Analysis of Fraud
• What is created from the
content?
• Entities – People, Locations
• Graphs (Social)
• Fraud Scores
• Search Topics / Suggestions

• Search YourCo! – user:sick fraud:.5+ “bad back”

4 Speed 5 Privacy & Security 6 Personalization

• Speed of Results – Target of 100ms /
query or less for standard arch
• Speed of Suggestions – Target of 2
ms / keystroke or less for standard
architecture
• Speed of Ingest – Depends on
Business Need
• Speed of Analysis – Depends on
Business Need
• Filtering of results based on Fraud
Model scoring
• Adherence to regulatory
complaisance and privacy rules of
customer sensitive data
• Page Ranking of results based
on Graph of Users, Interactions
• Filtering of results based on
Fraud Model scoring
• For personalization, nothing
shown in example slide – but
straight forward to add
personalization of results based
on user role or other criteria

TSD / Strategy Academy 2016 – Analytics Methodology and Techniques

Technique : Network Analysis

TSD / Strategy Academy 2016 – Analytics Methodology and Techniques

Network Basics

Graph, G = (V,E)

V = Vertices or Nodes (People, Products, Locations, etc)

E = Edges (Relationships, Timestamps, Information Flow, etc)

Graphs have the ability to store information in their

nodes and edges similar to a traditional data frame

Undirected Graph Directed Graph Multi Graph

TSD / Strategy Academy 2016 – Analytics Methodology and Techniques

Degree Centrality

► Measurement of the number

of connections of a particular
node (e.g. number of direct
neighbors)
► Node 8 has highest degree
centrality

Lowest Degree Centrality

in Senate Graph
1 Kerry [D-MA]
2 Lankford [R-OK]
3 Walsh [D-MT]
Betweeness Centrality

► Measurement of how many

times a node can act as a
bridge along the shortest
path between any two nodes
► Node 6 has highest
betweeness centrality

Lowest Betweeness Centrality

in Senate Graph
1 Kerry [D-MA]
2 Lautenberg [D-NJ]
3 Sanders [I-VT]
Eigenvector Centrality

► Measurement of a node’s
influence in a network based
on high scoring neighbors
► Google’s PageRank
algorithm is a variant of
Eigenvector Centrality
► Node 8 has highest
Eigenvector centrality

Highest Eigenvector Centrality

in Senate Graph
1 Klobuchar [D-MN]
2 Bennet [D-CO]
3 Donnelly [D-IN]
10
Forensic
Data Analytics (FDA)
Relationship between Big Data and
Forensic Data Analytics (FDA)

Big Data
Forensic Data Analytics (FDA)
“Forensically analyzing and applying visualization to hundreds of millions of
company transactions in
order to quickly spot patterns and outliers of potential fraud can save millions
of dollars in losses, as well as protecting reputations.”
Jack Jia
Partner, Fraud Investigation & Dispute Services, Hong Kong

FDA Key Points

• FDA uses financial accounting data and unstructured data such as emails to quickly target
high risk areas for internal audit and compliance testing.
• FDA enhances both the risk assessment and monitoring processes to help identify potentially
unethical activity and suspicious transactions.
• Unbiased filter can be applied to large volumes of data that would otherwise have required
lengthy and costly manual review and human interpretation.
 Forensic Data Analytics (FDA)

Understanding and harnessing the data to manage the

risk of fraud and proactively detect potential fraudulent
transactions

Detect, reduce and mitigate fraud risks

Provide meaningful insights about business

through the efficient analysis of data
Reports dynamically linked to your data
Packaged Workbook Dashboards Secure Web-based Review

Media

Files E-mail

Document Review
Database & Reporting Server
Engine

Cloud PDF

Images
 Heat map of person data availability

Digital consumer data

Mobile device Digital
usage entertainment Financial Energy
Social networking Retail Transport
Google • Gmail • Android phones • YouTube • Mobile • Google • Google Anlaytics • Google maps
Powermeter (can track users and navigation
• Google +1 • Google maps on • Google search payment cancelled from search to
(social media all mobiles (e.g., for media retail pages)
ranking) content)
• Google TV/books
Facebook • Leading social • Facebook • ‘Like’ button • Shopping on
networking mobile app applied to digital Facebook
site content corporate sites
• ‘Like’ button
Supermarket • Supermarket • Clubcard/ • Stores, clubcard • Petrol stations
mobile (small transactions data, online
customer base) provide disposable store • Store locations
Organisations

income
Energy • Smart meter
retailer Potential smart meter data convergence with other data
sources data

Mobile • Large mobile • Downloads of apps, • Mobile • Mobile high • Location

network payment street stores through mobile
base mp3s, movie signal
operator
clips • Maps and
navigation apps
Home • Virgin • On demand • Virgin • Virgin Group,
broadband TV/ movies travel website
Group Group
and TV
provider

Deep knowledge of customer Some information available but not No data available
Key

behaviour market leading

Stages in utilizing data
Stages in utilising data Key considerations

Direct Indirect ► Which potentially rich new data sources are

1. Identify and capture relevant to your business?
potential data
► How can this date be captured?
opportunities
► Directly through new product launches or
technological innovation?
► Indirectly through a partnership or as part of
a trade deal — e.g., provider accessing data
from online retailers?

2. Generate Understand Product consumption — what, when, ► Can you store potentially high volumes of
customer new digital data sources?
customer how, with what?
insight ► Are your internal analytical capabilities
behaviour Satisfaction — what do they think, sufficient to turn the data into actionable
who do they tell? customer insight?

3. Internalise and Increase relevance ► Does your business have the processes and
improve relevance systems to disseminate insights to relevant
Offers Channels Message Content Timing Service/
teams?
problem
solving ► What opportunities are there to use insight
to improve relevance of your offers and
customer service?

4. Realise business Higher sales Increased More loyal Better ► Can you measure business performance
benefit conversion customer spend customers marketing ROI improvements resulting from applications of
rates new customer insights?
FDA solutions

Fraud Risk and Compliance Advanced Data Analytics

• Fraud detection and risk management • Multi data acquisition

Solutions

Tools and techniques

• Regulatory proceedings • Automated data mapping
• Bribery and corruption • Investigative data linking
• Financial statement fraud • Social network analysis
• Asset misappropriation • Data visualization
• Competition law Fraud Advanced • Statistical inference
• Quantum loss estimation risk and data • Text mining and analysis
• Transaction due diligence compliance analytics • Artificial intelligence
• Financial crime solutions FDA tools and • Predictive modelling
• Corporate restructuring techniques • Unsupervised pattern recognition
• Third-party due diligence • Programming and decision support

Customizable business process

• Contract management Customizable
Solutions

• Electronic payment systems business process

• Sales and marketing
• E-commerce
• Procure-to-pay
• Insurance claims
• Time and expense
• Human resources
• Enterprise resource planning
• Customer relationship management
 Types of Analytics

What should
be done?

What is likely
to happen?

Why did it
happen? Optimization
Foresight
What is
Skill

happening?

Insight

Information Hindsight

Value
FDA maturity model

Low Detection rate High

Matching, grouping, ordering, Anomaly detection, clustering,

Structured data
joining, filtering “Traditional” rule- risk ranking, predictive modeling
based,

descriptive queries
Statistical analysis
Unstructured data and analytics

Keyword search Data visualization, drill down into

data, text mining

Traditional keyword Data visualization

searching and text mining

High False-positive rate Low

Beyond traditional “rules-based” queries and
analytics
FDA technique
Multiformat data conversion
Using data-extraction techniques that support multiple enterprise
resource planning system and other data sources into customized formats
for on-demand analytics
Artificial intelligence analysis
Using model-based analysis automate the investigative process by
combining evidence from various methods and data sources
Large-scale data link analysis
Linking techniques that incorporate direct and fuzzy matching with indirect
sequence comparison and multilevel matching
Text mining, sentiment analysis and concept mapping
Extracting information from text sources through statistical learning and
natural language analysis
Statistical inference, representative sampling and hypothesis
testing
Verifying hypotheses and assumptions by means of query design and/or
representative sampling and statistical inference
Relationship visualization & transaction flow analysis
Analyzing social networks, highlighting patterns of relationships and
interactions between people, entities and events
The Cross-Industry Standard Process
for Data Mining (CRISP-DM)

Advantages

Industry neutral – CRISP-DM advocates for

a standard process that can be applied in
any business context

Tool agnostic – While some tools, such as

SPSS and Teradata, have embedded CRISP-
DM principles, the general process can be
applied using any software

Many common mistakes can be avoided by

using CRISP-DM as an anchor
FDA Methodology – CRISP DM

Business
Understanding

Understand the business

Discover or design the hypothesis
List the parameter or indicator to
prove the hypothesis

Data Preparation

• Data column type uniformity (e.g. amount

must be in number not text)
• Unnecessary row removal (e.g. file header,
grand total, footer)
• File conversion (e.g. flat file (.txt) to
spreadsheet (.xls))
FDA Methodology – CRISP DM

Data Validation

• Data consolidation (e.g. tie up Trial Balance with General Ledger)

• Date completeness checking (based on agreed period of review)
• Missing information checking (e.g. blank document number)

Modeling • Build dashboard

Evaluation • Evaluate the hypothesis

• Redesign the hypothesis including revision on the parameter or indicator

• Prepare report and dashboards Reporting

Main Benefits of FDA

Source: EY Global Forensic Data Analytics Survey 2014

Common FDA Mistakes
Garbage In, Garbage Out
• Using bad data, it is not possible to build a good model
• CRISP-DM process to address this issue: Data Preparation

Solving the Wrong Problem

• The best data analytic model is worthless if it solves a problem that a)
doesn’t exist, or b) doesn’t need to be solved
• RISP-DM process to address this issue: Business Understanding

Over-fitting
• Given any set of data, it is possible to find some higher-order polynomial
that fits the dataset perfectly. Unfortunately, this model will not
achieve the analysis objective
• CRISP-DM process to address this issue: Model Evaluation
Relationship between Digital Forensics &
Forensic Data Analytics
DIGITAL FORENSICS

Structured Data Unstructured Data

Accounting Data  Correspondence – Email,
 Accounts Payable calendar invites, fax,
 Accounts Receivable SMS, MMS, instant
 Vendors messaging
 Employee  Productivity – Word
 Payroll documents, presentations
 Organisational – Intranet,
extranet, websites

Recovery &
Acquisition Extraction
Hashing

FORENSIC DATA ANALYTICS

Relationship between Digital Forensics &
Forensic Data Analytics

Digital Forensics
Analyses

Timeframe File Deleted File Signature

Analysis Analysis Analysis

Forensic Data
Analytics
Further Data Summary & Data
Analyses* Enhancement Visualization

* according to the analyses required for the investigation

Relationship and entity link analysis

X Y Z O

A B C D E F G
Accounts payable stratification analysis
Geo-mapping analysis
Fraud triangle monitoring for financial
services company

In response to regulatory requirements, a leading global financial services firm

deployed FDA to monitor its trading operations for rogue activity and leakage of
material nonpublic information.

In this analysis interface, email

communications were compared to
a keyword library of opportunity
terms (A), rationalization terms (B)
and incentive/pressure terms (C) in
line with the fraud triangle7 to
identify potential rogue trading
activity.
Sales
TRANSACTION TESTS
• Revenue cut-off testing
• Listing of invoices with a due date prior to the invoice date
• Listing of invoices with duplicate customer numbers, invoice dates,
and amounts
• Comparison of customer order date, ship date, and date sale
recorded by client
• Analysis of details supporting any revenue account

CUSTOMER BALANCE TESTS

• Listing of customers and related revenue for customers with a)
missing/invalid addresses or b) drop boxes/Mail Boxes Etc. addresses
• Listing of duplicate customers on the customer master file (i.e.,
duplicate customer name, duplicate customer name and zip code,
etc.)
• Listing of the top customers with activity in the last quarter, or any
other period of time requested by the audit team
• Listing of matches between the customer master file and employee
master file (e.g., same address, phone, name, etc.)
Sales - Sample
Investigation towards fraud allegation in sales area done by employee in property
company.

Objective: identify fictitious sales, unrecorded sales, and sales understating.

Procedures performed: fuzzy matching.

No Customer ID Customer Name Address Telephone Facsimile Valid from

TA00077 AAAA Gang Besen 8, Semarang 50137 25/04/2012
1
TA000067 BBBB Gang Besen No. 8, Semarang 09/03/2012
TA00026 CCC Jl. Pandanaran No. 37 xxx8317199 xxx8317290 07/01/2012
2
TA00048 DED Jl. Pandanaran No. 37 xxx8317199 xxx8317299 30/01/2012
COR00079 ABC Jl. Pemuda No. 150 Pemuda Mas Blk B8 xxx3588828 xxx3588826 04/05/2012
3
COR00083 BCA Jl. Pemuda No. 150 Semarang xx3556201 xx3561741 04/05/2012
Procurement
TRANSACTION TESTS
• Duplicate Vendor based on similar name/bank
account/phone/address
• Duplicate Payment
• Check sequence breaks (pre-number check)
• Payments made on out of cycle or on weekends/holidays
• Benford's Law analysis on payment amount
• Frequent payments to a vendor
• Fictitious vendors and employees on vendor master file
• Transactions with prohibited vendors (officers, employees, US
Treasury Department Specially Designated Nationals List, prisoners,
etc.)
• Appropriateness of approval thresholds and monitoring of purchase
orders just under set thresholds
• Abuse of spending limits and monitoring of compliance with set
limits

VENDOR BALANCE TESTS

• Distributions of credit and debit vendor balances
• Identifies the largest positive and negative vendor balances
• Lists related party balances
• Payments made to unauthorized vendors, name, etc.)
Procurement - Sample
Investigation towards fraud allegation in procurement area done by employee in
manufacturing company.

Objective: identify duplicate payment, split payment, gaps among PO numbers, and
overpayment schemes.

Procedures performed: monthly trend analysis, inventory analysis, fuzzy matching.

Nama Supplier # PO Total_PO Invoice Number Inv Curr Total_invoice

A 107910 2,430,000 0015-I. IDR 2,385,900
0034-I IDR 287,100
B 108081 1,265,000 0014-I. IDR 1,391,500
0073-I IDR 1,391,500
C 110127 1,445,000 0199-I IDR 748,000
0200-I. IDR 841,500
D 116304 23,200,000 278/MBP/KWT/X/2011 IDR 4,964,800
279/MBP/KWT/X/2011 IDR 4,964,800
Healthcare Claim
SUSPICION OF IRREGULAR ACTIVITY OR FRAUD
• Benefit Reserves
• Claims Reserves
• Policy Reserves
• Re-opened claims
• Commissions
• Duplicate claims processing
• Over-adjudication
• Suspicious policy holders
• Fictitious medical histories affecting adverse selection and
risk pool
• Moral hazard (unnecessary extra treatment)
• Eligibility lapses
• Over and / or under payment of claims based on policy
coverage for claims from end to end (e.g., co-payment, co-
insurance percentage, coverage limits, exclusions, in / out
of network providers, etc.)
Healthcare Claim - Sample
Predictive test of agent behavior to identify high risk agents.

Objective: prevent churning scheme, fictitious customer, premium payment

embezzlement, and non-comply claim/refund.

Procedures performed: risk scoring and digital dashboard creation.

11
Predictive Analytics
Why Predictive Analytics?
Predictive analytics provides an organization with the information needed to make
decisions and transform negative events into positive occurrences.
The financial services landscape is becoming extremely competitive with respect to client acquisition,
client retention, and cost reduction. Banks are no longer competing on products, but are now competing
on process. As part of this fundamental change, financial services organizations are seeking solutions to
transform data form a cost center into a competitive asset, allowing them to adapt to shifting customer
behaviors, comply with emerging regulatory requirements and improve business performance.

Drivers Opportunities
Marketplace
Demand for new products • Customer segmentation
drivers
Customer experience • Cross/Up sell
• Client churn and win backs
Process improvement • Marketing spend

Resource allocation • Trade surveillance

• Underwriting
Cost reduction • Claims analysis
Risk management • Fraud identification
• Anti Money Laundering
Heightened regulatory requirements
• Credit risk management
Predictive analytics in Industry
Common Financial Services Applications

► CRM – Cross Sell/Upsell/Retention/Attrition/Acquisition Management

► Collections & Recoveries – Delinquency Management

► Marketing & Sales – Pro-active Targeting & Channel management

► Fraud Detection – Credit Cards, AML and Tax evasion

► Underwriting – Credit Risk assessment in retail banks

Predictive analytics can drive enormous benefits when tied explicitly to business decisions.
Types of Predictive Models
Category Objective
Scoring Produce an expectation
about the behavior of a
dependent variable
Classification May or may not require a
dependent variable.
Objective is creating
accurate groupings
Forecasting Generally similar to scoring
models, but require a time
series component (time-
series or panel data)
Simulation Identify a large number of
possible scenarios in order
to project likely (or possible)
outcomes
Benefits
Error is easily quantifiable.
Interpretation is generally
intuitive.
Extremely flexible and useful in
many business contexts. When
combined with scoring (mixture
models) can produce powerful
results.
Interpretation is generally
intuitive. Allows for flexibility
and enables sensitivity analysis
or “what-if” analysis.
Enables identification of
“boundary” scenarios and
creates insight into risk
parameters.
Notes
Some algorithms (logistic
regression) can be considered
scoring or classification
algorithms
Classification algorithms can be
prone to over-fitting. Many
algorithms create groupings, but
interpreting the logic
underpinning the classification
can be difficult (“black box”)
Forecasts are never “accurate” or
“inaccurate” – they are only
“reasonable” or “unreasonable”
Evaluation of forecasts requires
deep business knowledge and
comparing competing forecasts is
extremely subjective.
Simulation is often thought of as
“prescriptive modeling” along with
optimization; however, the line
between these classifications is
not well-defined.
Predictive Analytics Example
Predicting Employee Satisfaction

• 41% of respondents
who disagreed to
statement 55 are not
satisfied with Org X
as a place to work.
• Therefore, “Career
Opportunities” is a
key driver of
employee
satisfaction.

• 69% of respondents who disagreed to

statements 59 and 55 are not satisfied
with Org X as a place to work.
• Therefore, “Hiring and Promotion” along
with “Career Opportunities” are key drivers
of employee satisfaction.
12
Advanced Analytics
Advanced Analytics Service offerings
Discover patterns - Predict outcomes - Make optimal decisions
We enable strategic, tactical and operational decision making, driven by predictive, prescriptive and forensic analytics,
leveraging operations research, statistics, text mining, machine learning, social media analytics, and data mining on high
volume data in both structured and unstructured formats across multiple sectors.

We provide advanced analytics across numerous segments - customer, marketing, supply chain, human capital, risk and pricing, to
support service lines and sectors and in their strategy and implementations

Social Media Text analytics Customer/ Supply chain HR Pricing Risk

Analytics Marketing analytics analytics analytics analytics
analytics
Advanced analytics competencies
PREDICTIVE ANALYTICS PRESCRIPTIVE ANALYTICS FORENSIC ANALYTICS

DATA MINING ADVANCED STATISTICS OPTIMIZATION

Classification Clustering Time series Regression Non-parametric LP IP/MIP Network flow

analysis models analysis optimization optimization models

Dimensional Classification SEM NLP Heuristic

Regression Data cubes reduction optimization
optimization
Clustering Survival
Panel data
analysis

MACHINE LEARNING TEXT MINING SIMULATION

Supervised learning: Unsupervised learning: Sentiment Named Entity Text
Rule based System Agent based
classification - trees, nearest neighbor, k- Analysis Extraction classification
games dynamics simulation
discriminant analysis, means clustering,
nearest neighbor hierarchical clustering,
Text Question Topic Discrete Continuous Monte Carlo
Regression – tree,
summarization Answering models event event simulation
random forest
simulation simulation
SVM

SOCIAL MEDIA ANALYTICS OTHER COMPETENCIES STOCHASTIC MODELING

Network Sentiments Buzzword Decision Data Benchmarking
mapping modeling ingestion Quality Queuing Poisson
modeling model models
Data
Survey Data Scorecard
Predictive Network Influencer Quality
analysis munging Risk Basic Markov chain
correlation visualization data
and reporting modeling probability models
Econometric Scheduling
Gap analysis modeling
modeling problems
Customer Segmentation
Large National Energy Provider in the Middle East
Business objectives
► Middle East P&U client wanted to understand their customer needs and preferences to
segment their customers and improve the customer experience

Solution
► Implemented a step by step statistical framework to use the customer data and
developed the relevant statistical methodology to build the model and determine the ideal
number of segments. Group customers based on their service needs for better customer
experience
► Tool: SPSS

Benefit

► Identification of acquisition, cross-selling opportunities, new product positioning

► Improved customer experience and retention at lower campaign costs

Case Studies – Advanced Analytics

Credit Scorecard development
for large bank in Middle East
Business objectives
► To predict the probability that a customer may default in the future. This can be
customized for new customers (application models) as well as for the existing customers
(behavioral models) of the financial institution
► The scorecard will aid in making accept/reject decisions for granting loans on different
portfolios

Solution
► Modeling was done using the concept of logistic regression in SAS Enterprise guide.
► The necessary data partitions where done and the appropriate time periods selected for
the model development and validation.
► The developed models were validated on the in-time and out of time validation bases
using different statistics like Population stability index (PSI), Characteristic stability
index(CSI) Gini coefficient, Kolmogorov Smirnov(KS)-statistic, rank ordering trends etc.

Benefit

► Helps in identifying the risky customers and making decisions on the interest rates and loan grants

► Minimum capital computation

Case Studies – Advanced Analytics

Price Variance Data Analysis
A Global medical devices and pharmaceutical company
Business objectives
► Material prices are not consistent across suppliers & different locations. There are
differences in pricing between same/similar materials

► Objective of this project was to create a framework which captures the difference in
Pricing for materials from suppliers & different locations

Solution
► Populated the material pricing data from different supplier files into a general
consolidated template provided by the client
► Applied text analytics techniques to groups items based on similarity in the description
► Provided summary statistics such as Mean, Range, Standard Deviation, Coefficient of
variance etc. of standard price
► This tool kit was built using Excel, SPSS and Python

Benefit

► Helped the client to identify price variation in each group

► Identified anomalies in item procurement

► Helped to develop better procurement strategies

► Automation of the time consuming manual work

Case Studies – Advanced Analytics

Prescription Analytics
Demand forecasting and segmentation
Business objectives
► A descriptive and analytical framework is implemented on general practitioner’s
prescription data to understand the usage pattern and demand-supply relation of the
drugs pertaining to the demographic characteristics.
► High potential to assist pharmaceutical companies in their strategic and operational
decision making and NGO’s to track epidemiology.

Solution
► Performed a time-series analysis using forecasting techniques and predict the future
sales and revenue from a business point of view and to predict the disease pattern from a
disease control point of view.
► Developed a segmentation model using k-means clustering to identify and segment the
customer base and identify potential markets for effective business strategy. Tools used
R and Spotfire.

Benefit

► Helping the pharmaceutical companies to identify the future loss avenues and plan their strategies accordingly

► Segment the potential customer base in England in order to identify the target markets and suitably plan campaigns

► An overview on the forensic analysis to identify potential prescription frauds

Case Studies – Advanced Analytics

Big Data Democratization
Leading insurance company

Business objectives
► The objective was to provide a solution that enables to store and share client calls, web
events, policy details for further analysis using advanced visualization tools in near real
time. This helps the business users to run independent analytics projects by effectively
reducing the coordination effort between departments.

Solution
► Analyze the metrics to be included in the initial metrics
► Establish cadence for reporting data
► Define and test the data extract strategy
► Create Hadoop tagging models
► Design and implement functions to address the reporting requirements.

Benefit

► Data democratization – Provide access to business users for reporting purposes.

► Near real time access to web event, call enter and policy data.

► A central location for all the data needs

Case Studies – Advanced Analytics

Social Media Customer Satisfaction Index
Power & Utility company
Business objectives
► Organizations maintain a space in social media where customers provide feedback on
the services and products offerings. Facebook pages and Twitter handles are examples
of this. Analysing social media data is an alternative to Customer Satisfaction Survey.
► Objective of this project was to compute customer satisfaction index by automatically
processing posted messages in social media.

Solution
► This solution was built using Apache Spark based Big Data platform.
► Python based text mining toolkit NLTK was integrated with PySpark for parallel
execution of text processing.
► Word2Vec algorithm was used to identify more keywords required to generate training
data for machine learning.
► Spark based Machine learning package MLlib was also used.

Benefit

► Near real-time customer satisfaction monitoring.

► Reduction in operating costs

► Improved revenue realization

Case Studies – Advanced Analytics

Data extraction from Contract documents
for leading insurance company
Business objectives
► Spend analysis and opportunity identification project for a leading California based
insurance company required data extraction from large number of contract documents.
Manually extracting data from large number of PDF documents is a time consuming task
► Objective of this project was to automate data extraction from Contract documents and
produce excel sheets containing extracted data.

Solution
► Used open source software called PdfBox and Tesseract OCR engine to build a platform
which can be customized to extract data from PDF documents.
► Customization can be done by specifying the pattern of PDF documents in an XML
configuration file.
► More detailed customizations were implemented in Java programming language.

Benefit

► Automation of the time consuming manual work

► Scalable solution which can process large amount of data

Case Studies – Advanced Analytics

EY Warranty Analytics for SAP HANA brings together the power of
EY Advisory Services and SAP Technology to provide business services
Automobile manufacturers
spend about 2% to 3% of their
annual revenues paying
warranty claims. Aside from
the direct financial impact
(reimbursement), these claims
often carry substantial indirect
costs, such as degradation of
brand image and customer
loyalty, and even legal liability.
New tools and methods are
needed to control these costs
through improved insights
into potential claims, better
forecasting efficiencies, and
the reduction of fraud and
abuse.

EY’s Advanced Analytical

Services use data mining
and statistical models to
continuously monitor warranty
claims, uncover hidden
insights, and identify cost-
reduction and quality-
improvement opportunities.
13
Tools And
Technology
Platform
Tools and Technologies

Enterprise Data Enterprise Data Data Governance

Data Conversion Data Integration Data Quality Descriptive Analytics
Architecture Warehouse Master Data Management
Tools and Technologies

Big Data OR, Statistics and Machine Learning Social Media Analytics Text Analytics
Currently there are more than 100 Big Data Analytics vendors/products
Data Information
Data Sources Information Delivery
Ingestion Repository

Data Integration SQL-Columnar NoSQL- Document Store NoSQL- Graph NoSQL-Key value Search
Actian BaseX AllegroGraph store Autonomy
Ab Initio
Sybase Aleri Aster Data (Teradata) ClusterPoint Sparsity Big Table (Google) Endeca
TIBCO Greenplum CouchDB (Apache) Urika (Cray) Dynamo (AWS) FAST
Infobright eXist HazelCast Kitenga
Data Integration + NoSQL-Object MemCacheDB
ParAccel JackRabbit (Apache) Reporting and analytics
Hadoop
SAND MarkLogic GemStone Ncache
Informatica ObjectivityDB Redis Birst
Sybase IQ MongoDB
IBM InfoSphere
Versant Riak KXEN
Vertica OrientDB
Talend Micostrategy
Calpont SimpleDB (AWS) Voldemort
SQL-Appliance NoSQL-Multivalue Pentaho
Terrastore
CouchBase Northgate reality QlikView
Exalytics
OpenInsight R
HANA
Rocket U2 SAS
Kognitio
SpotFire
Microsoft SQL Server NoSQL-File Based
SPSS
Netezza
Hadoop Zementis
Teradata
HPCC Tableau
Roambi

Apache Hadoop products Cloud Hadoop Integrators Other platforms

Ambari HDFS Attivio
1010Data AWS Hstreaming
Avro Hive DataRush
Amazon Cloudera MapR
Cassandra Mahout RainStor
Chukwa MapReduce Apache Datameer Outerthought Splunk
Flume Oozie Platform Karmasphere
Cloudant
HBASE Pig DataStax computing Virtuoso
Hcatalog Sqoop CloudScale EMC Zettaset VoltDB
Zookeeper Yahoo HortonWorks Acunu
Key vendors in R&D (1/3)

Technology/
Vendor name Benefits achieved Example of LS companies
product
Predictive modelling, genomic
Revolution R technology
analysis
Expedite clinical trial management
gsDesign Explorer
and analysis
Revolution R technology
Genomic analysis

Accelerate design, analysis and

TIBCO reporting of
Spotfire® software clinical trial data

Improve productivity and decision-

D360 Drug Discovery Platform making from drug discovery
through drug development
Key vendors in R&D (2/3)

Technology/
Vendor name Benefits achieved Example of LS companies
product

NextBio Research Platform Genomic analysis

Expedite clinical trial data

NextBio Clinical Platform management and analysis,
Genomic analysis

Medidata Clinical Cloud ( includes

range of products to optimize
clinical trials from concept to
conclusion) Expedite clinical trial data
management and analysis

Medidata Rave

Optimize study design and

Medidata Designer
expedite clinical development
Key vendors in R&D (3/3)

Technology/
Vendor name Benefits achieved Example of LS companies
product

Improves clinical trial cost

Oracle Health Sciences ClearTrial
estimates, optimizes clinical
Track Cloud Service
development decisions

Cloud-based technology (joint Pharmaceutical data transparency

development with pharma company) (data sharing)

Financial management of clinical

Cognos Planning
trials
Key vendors in Supply chain

Technology/
Vendor name Benefits achieved Example of LS companies
product

Synchrony™ Supply Chain Integrity Supply chain integrity via effective

Suite track and trace system

Data sharing with key stakeholders

Cloud computing technology to build seamless connection

SAP Business Objects Spend performance management

Spend Performance Management across supply chain (budgeting)
Key vendors in Marketing (1/2)

Technology/
Vendor name Benefits achieved Example of LS companies
product
Forecasting sales potential of
Oracle Crystal Ball
development portfolio
Oracle’s Siebel Customer
Relationship Management (Siebel Customer relationship
CRM) and Oracle Business management
Intelligence Applications

Customer segmentation

Sales force productivity and

Spotfire Decision Site
performance

TIBCO Spotfire Sales force analytics, sales

Enterprise Analytics Platform strategy

IBM Cognos® Business Intelligence Sales force analytics

IBM SPSS software Boosting sales effectiveness

Cognos 8 Business Intelligence Integrating sales, marketing and

Dashboarding finance data for decision-making
Key vendors in Marketing (2/2)

Technology/ Example of pharma

Vendor name Benefits achieved
product companies

Customer analytics (Improved

SAP Hana customer service complaint
process and response)
14
Big Data and Analytics
Challenges
Organizational challenges have impacted the industry to realize the full benefit…

Five barriers blocking the mainstream adoption of “big data analytics”

Concern over reaping ROI Limited data access

How can we access
Does that big data analytics external and as well as
would be able to provide us Healthcare Executives internal data of other
required value ? departments?

Data security and governance issue

How can we handle Lack of data integration
data privacy and Pharma Executives
How can we achieve
security issues?
centralized integration of
big data?
Lack of resources (talent, funds)
Do we have the required
talent for big data
analytics?

It is imperative for organizations experimenting with Big Data to have a thorough enterprise-wide data
strategy in implementing the Big data analytics
Challenges - Limited Data Access

Limited or lack of internal and external collaboration for data sharing is preventing successful use of analytics

Internal data sharing

“37% of respondents are
External data sharing having difficulty gaining
access to data that is
outside the
Pharmacies
organization…

LS Companies …while 28% are

Patient struggling with access to
data that is captured
Hospital/ inside their own
Providers
organization”
-eHealth Initiative (eHI) survey for
healthcare executives in collaboration
with the College of Health Information
Academia Management Executives (2013; n= 102
Payers &
Administrators organizations)

The need of the hour is to promote a shift in mind-set — moving away from withholding the
data to having an “open data” that is widely shareable
Challenges – Lack of Resources

Current skills profile of analytics employees across healthcare ecosystem

Only 39% of the organizations

IT literate 68% are currently recruiting
Healthcare or professionals with the needed
life sciences
literate 58% balance of skills.

Business Organizations are also asking

oriented 58% existing employees to acquire
the required balance of skills…
Highly
numerate/
analytical
46%
…while two-thirds of
Balance of respondents planning to
numerate &
business
39% cultivate the required analytics
oriented skills skills through internal training
Source: IBM Institute for Business Value (2013) Analytics across the Ecosystem ; n= 190; Healthcare Provider n= 240; Healthcare Payer n= 136.

Lack of adequate “34% of respondents (n=102 healthcare organizations) have said that senior leadership
funding to support has not prioritized data analytics as a critical area for staffing. Without executive support
staffing needs for and funding, it will be extremely difficult for organizations to advance analytics programs”
- -eHealth Initiative (eHI) survey for healthcare executives in collaboration with the College of Health
analytics
Information Management Executives (2013; n= 102 organizations)
Challenges – Data Security and Governance Issues

While security and 874,667 total 85% of breaches

governance have long medical records Caused by vendors are due
been an inherent part of to either negligence or lost
exposed in data breaches or stolen devices
business intelligence, the in Q1 2013
added legal, ethical and
regulatory considerations Negative 21.7 million
of big data introduce new publicity patients
risks and expand the is one of the greatest
have had records exposed
consequences of “big data”
potential for such medical breach in healthcare data
data breaches breaches

Source: US Department of Health and Human Services, 2013; Identify Theft Resource Centre, 2013; Ponemon Institute Report, 2013

Many organizations are unsure about how to build cyber security measures into their big data analytics projects

27% of organizations have claimed 46% of organizations have aligned their

data security as a high data priority for them information security strategy with their
business strategy
Source: IBM Institute for Business Value (2012)

In an effort to manage these growing risks, organizations are looking for measures such as distributed computing, which enables application of
emerging analytics along with the reduction of privacy, security and access control risks
Finally, demonstrating adequate ROI remains a challenge in the
absence of available evidence and benchmarks

9% of healthcare organizations believe

that costs in implementing big data
Value generation concerns in the use outweigh the projected benefits
of big data analytics Source: IBM institute for business value, “Analytics: New Path to
Value”, 2012 (n=116)
► High upfront technology costs

► Productivity
challenges as workflows
change and due to the initial learning
curve
50% of executives believe big data
► Less evidence from past projects for
and predictive analytics will demonstrate
supporting business cases regarding
the big data initiatives a strong return-on-investment

Source: eHealth Initiative (eHI) survey for healthcare executives in

collaboration with the College of Health Information Management
Executives (2013; n= 102 organizations)
Understanding the Digital Language

15

157 | EY Digital Tax

Understanding the digital language
Term Definition
Digital Tax A holistic and integrated approach to both
addressing digital-related Tax risks and maximizing
digital-related Tax opportunities; Use of digital-
enabled tool and processes – both by EY and our
clients – to optimize tax strategies.
Internet of The digital-based infrastructure allowing objects –
Things (IoT) each with unique but interoperable systems - to be
sensed and controlled remotely across existing
networks, creating opportunities for integration of
the physical world into computer-based systems,
resulting in improved efficiency, accuracy and
economic benefit; Includes smart grids, smart
homes, intelligent transportation, and smart cities.
Robotics The use of actual physical machines or “robots” that
drive and support processes. Robotics Process
Automation (RPA) is EY’s service delivery that
helps companies leverage and optimize this
technology to enhance performance.
Artificial “Intelligence” – basically, mimicking cognitive
Intelligence functions regarded as learning and problem solving
-- exhibited by machines helping them to function as
a flexible and rational that perceives its environment
and takes actions that maximize its chance of
success at some goal.
158 | EY Digital Tax
What success means for our clients
Confidence in knowing that all Tax-related
systems and processes are integrated and
focused, providing holistic approach to
enterprise-wide tax strategies including
optimizing opportunities.
Enhanced understanding of how emerging
technologies provide both risk and opportunities
across strategic functions such as operations,
research and development, tax, customer
engagement, supply chain, cyber security, data
management, risk, etc.
Better leveraging technology and doing so
confidently, helps drive strategic efficiencies,
mostly in manufacturing and supply chain.
Grasping the potential benefits of AI and how to
use this technology will drive competitive
advantage into the future.
What success means to EY
Solidifies EY as a strategic provider of forward-
looking and integrated services in new and
emerging technologies, across all enterprise
functions.
The breadth and complexity brings with it lots of
ongoing risk and opportunities for the client, and
in turn, for EY. Developing an ongoing
relationship to address them will help EY clearly
guide the client in lots of areas for lots of time as
technologies emerge.
Allows the firm to demonstrate and develop its
skills in this growing area, further establishing EY
as our clients’ strategic advisor.
Allows EY to develop competencies in this
growing and complex area, further establishing
EY as a strategic advisor, especially in a
enterprisewide way.
Understanding the digital language
Term Definition
Blockchain Blocks of secure, self-contained data containing
information about transactions and related
executables beyond the amount, and linked to a
previous block showing relationships in “chain” form:
Enables an “open ledger” system.
Fintech, The use of technology and digital-enabled tools to
MedTech, address financial-related challenges and
opportunities with in each of these sectors: The use
AutoTech, etc. of digital technologies to enable, enhance, facilitate
and track transactions, operations, auditing, and the
whole range of financial-related activities and
actions.
Crypto-currency Decentralized medium of exchange to secure
transactions through cryptography to control the
creation of additional units of the currency.
Digital The increased use of digital-enabled technologies
Government by government to monitor and enforce compliance,
especially in tax-related areas.
159 | EY Digital Tax
What success means for our clients
Understanding this may help drive
efficiencies around many functions including
tax, finance, supply chain, risk and
transactions
Helps bolster compliance reporting,
customer engagement, data security, and
drive tax and finance function effectiveness
Better understanding how our clients, their
competitors and taxing authorities will use
this technology to improve efficiencies,
enhance reporting accuracy and lower
compliance costs.
Clients need to run alongside - and in front of
– tax authorities to manage expectations as
well as the technology that will do that.
What success means to EY
Allows the firm to demonstrate and develop its
skills in this growing area, further establishing
EY as a strategic advisor
Helps the account team to clearly rope off
current and future tax- financial-, finance- and
compliance-related account opportunities
This technology puts EY squarely in an areas
that crosses lots of financial, Audit, Tax- and
Transaction-related areas, reinforcing EY’s
value as a provider of global and integrated
services stretching from risk through
performance enhancement.
As taxing authorities getting more aggressive,
EY can position itself as a critical go-forward
partner in the increasingly overlapping
compliance and technology areas.
Understanding the digital language
Term Definition
Digital The increased use of digital-enabled technologies
Government by government to monitor and enforce compliance,
especially in tax-related areas.
Compliance Increasing use of digital-enabled technologies by
Tax Audits governments and tax authorities to collect, monitor
and track tax compliance and ensure reporting and
stakeholder transparency.
E-Commerce Doing business online – with their customers or
suppliers – using digitally-enabled processes and
systems that capture and facilitate transactions.
160 | EY Digital Tax
What success means for our clients
Clients need to run alongside - and in front of
– tax authorities to manage expectations as
well as the technology that will do that.
Knowing what is coming up over the Tax
compliance horizon helps clients adopt the
complex and emerging technologies and
processes that will enable quick, accurate
and cost-effective compliance and
stakeholder management.
Provides clients the confidence and comfort
of knowing that their customer engagement
processes are integrated with finance and
compliance systems.
What success means to EY
As taxing authorities getting more aggressive,
EY can position itself as a critical go-forward
partner in the increasingly overlapping
compliance and technology areas.
As taxing authorities getting more aggressive,
EY can position itself as a critical go-forward
partner in the increasingly overlapping
compliance and technology areas.
By bringing together the firm’s global financial,
auditing and compliance competencies and
reach with new and emerging technologies, EY
is more of a strategic advisor.
Robotics & Automation
Blockchain Technology
Cloud-Based Platforms & Trading Networks
Internet of Things (IoT)
Big Data Analytics & Machine Learning
Professional Social Collaboration
Robotics & Automation
Robotic Process Automation (RPA)
Is the application of a cost effective software that mimics human action and connects multiple fragmented systems together through automation, without changing
the current enterprise IT landscape.
RPA enables organizations to automate existing high volume and/or complex, multi step data handling actions as if the business users were doing the work, it
captures and interprets existing applications, manipulates data, triggers responses and communicates with other systems
Chatbots
Chatbots are service powered by rules and artificial intelligence, that you interact with via a chat interface – they can parse intentions and churn out useful
responses to practical queries
Bots are AI-driven pieces of software that converse in human terms and can inject information, intelligence, and online services into just about any scenario. They
communicate in human language through a variety of interfaces—instant messaging, email, and voice are the platforms of greatest interest now.

Activates the Corporate
Strategy
► Redistribute the workload of
procurement talent by focusing
on bigger value efforts aligned
with executive priorities
► Supports delivery of an omni-
channel experience to internal
customers/ stakeholders and
suppliers of Procurement
► On-demand and 24x7 access
to services
Optimizes Risk
► Enables fully maintained audit
trail for compliance by
improving consistency, control
and traceability
► Significant increase in process
accuracy with on time delivery,
reliability and predictability
► Significant increases in
process accuracy/ reduction in
errors with on-time delivery,
reliability and predictability
► Drives consistent user
experience (of staff, customer
and third-party groups)
Value to an organization
Drives Internal & External
Innovation
► Integration with machine
learning technologies provides
opportunities to continuously
find new ways of using bots
and automation
► Chatbots can be evolved to
add new scenarios / queries
from users
► AI engine allows interpretation
of user intent to service their
demand
Leverages Big Data
► Capable of consuming and
processing larger, disjointed
amounts of data
► Leverages artificial intelligence
engine and knowledge
databases (which are
continually evolving / being
updated), in order to respond
to user queries
Drives Financial
Stewardship
► Cuts data entry costs by up to
70% (~1/3 the cost of an
offshore FTE)
► Quick ROI with
a payback period that typically
occurs within less than a year
► Reduces lead times with real-
time fulfilment of queries, and
self-service functionality
What is Robotics?
The process automation journey
There is growing client recognition of the potential of Robotics
to transform government operations
Robotic Process Automation: a virtual workforce that organizations can use to quickly and inexpensively
develop customized automation for administrative support and business processes

Emulates human execution of Robots are a virtual workforce Sits alongside existing
repetitive processes via existing controlled by the business infrastructure, governed and
user interfaces operations teams controlled by IT

Automated solution Robots work with existing

can work 24/7 IT architecture

1/3 of the cost of offshore Robots can be trained

FTEs by business users

Double-digit reduction Cuts data entry

in error rates costs by up to 70%

Given the scale of the financial challenges facing governments, radical transformation is needed to deliver meaningful change. Other
factors—exploding volumes of data, increasing regulatory compliance, growing expectations of citizens and the need for greater agility in
meeting mission objectives—intensify the challenge for GPS organisations.
RPA has a central role to play in addressing these challenges: in the back-office, to relieve the administrative burden of high volume,
repetitive tasks; and in the front office, to improve delivery of services to citizens.
RPA provides a toolkit to quickly and inexpensively develop customized
automation for administrative support and business processes

Robots link and sit atop existing IT assets Key features:

Integration through existing user interfaces
In-house Cloud
mainframe ► Out of the box integration to standard desktop tools including MS
Office suite, email, workflow tools, internet websites, etc.

► Tools to accelerate robust screen interactions with software clients

and exported interface
► Core account ► Third-party capabilities Flexible, Maintainable Process Configuration
management ► Industry utilities
► Transaction ► Internet / intranet
processing capabilities ► Focussed on automating processes otherwise executed by people
► Core accounting ► Data storage without requiring any change to underlying systems supporting the
► Reporting process. I.e. integration through user-interfaces.

► Ability to interrogate systems with exported interfaces mainframe

Enterprise Desktop (e.g. surface automation)
automation automation
► Configurable maintenance of process flows by business users

► Captures processes that span multiple system

Process Execution, Control and Monitoring

► Workflow and rules ► Spreadsheets
► Imaging ► Word documents
► Digital channels ► PDFs ► Full audit log and MI over process execution
► Analytics / reporting ► Emails
► Collaboration tools ► Collaboration ► Process control including scheduling, triggering, load balancing,
► Data & analytical tools exception handling and configuration management

► Enterprise class solution that is secure, robust and scalable

What is Robotic process automation, commonly known as RPA?

Key features that define RPA software:

Robotic Process Automation (RPA) software allows the capture and interpretation
Integration through existing User Interfaces
of a business process (which involves existing applications for transaction
processing, data manipulation, response triggering and communication with other ► Out of the box integration to standard desktop tools including
digital systems), in a repetitive, audited and controlled manner. MS Office suite, email, workflow tools, internet websites, etc.
► Tools to accelerate robust screen interactions with software
clients and exported interfaces
Robots are a virtual They are tools which Robots sit alongside
workforce controlled by emulates human existing infrastructure,
the business operations execution of tasks via governed and controlled by
Flexible, Maintainable Process Configuration
teams existing user interfaces IT
► Focussed on automating processes otherwise executed by
Automated solution Robots work with
people without requiring any change to underlying systems
can work 24/7 existing IT landscape supporting the process. I.e. integration through user-
interfaces.

Robots can be ► Ability to interrogate systems with exported interfaces

1/3 of the cost of Software mainframe (e.g. surface automation)
trained by business
offshore FTE Robotics users ► Configurable maintenance of process flows by business users

Double-digit ► Captures processes that span multiple system

Cuts data entry
reduction in error
costs by up to 70%
rates
Process Execution, Control and Monitoring
► Full audit log and MI over process execution
An effective deployment plays to both robotic and human strengths ► Process control including scheduling, triggering, load
► Robots deliver repetitive, deterministic, high-volume tasks efficiently balancing, exception handling and configuration management
► People build relationships, provide subjective judgement, deliver low-frequency and exception tasks,
and manage change and improvement ► Enterprise class solution that is secure, robust and scalable
► RPA is unique amongst the automation spectrum for its rapid benefit delivery
RPA adoption is on the rise, with growth coming from large companies.
Technologies are evolving with the inclusion of multiple functionalities

RPA end-user spending is most strongly driven by:

►Organizational adoption mostly by very large (10,000+ employees) and large (1,000+) organizations, irrespective
of the fact that the organization has a business shared-service centre or BPO deal
►The potential for applicability of the software in every division of an organization, as RPA could be deployed into
every function. (Gartner)
RPA adoption is expected to increase multi-fold:
►By 2020, 40% of very large (10,000+ employee) global organizations will have adopted an RPA software tool,
up from an estimated less than 10% today. (Gartner)
►By 2020, 25% of organizations using RPA will have two or more RPA software tool types deployed and multiple
artificial intelligence (AI) tools. (Gartner)
RPA is maturing towards intelligent automation:
►By 2020, RPA tools will have evolved to include more types of functionality, such as AI software, but will
experience strong downward pricing pressure. (Gartner)
Adoption is high in few verticals and functions:
►Banks, insurance companies, utilities and telecommunications companies are currently the highest adopters
of RPA. (Gartner)
►RPA use is focused on IT currently, while Finance and Accounting is witnessing high adoption
swing. (HfSResearch)
EY is developing strong capabilities in the RPA space that bring
significant added value
RPA strategy RPA heat mapping
EY’s RPA
1 2

3 RPA proof of value 4 RPA production and implementation

Capabilities 5 RPA innovation lab 6 RPA operating model design

1. EY brings in the internal experience from 200+ 1. Use RPA for own SSC and 2. RPA innovation lab 3. Vendor alliances
robots being implemented within EY providing client services

2. We leverage best practices out of our RPA

innovation lab in India
3. We have master service agreements with the
big 4 RPA vendors (Automation Anywhere,
BluePrism, Redwood, UIPath) and now have a
gold rating with BP 4. Enhanced RPA 5. SSC expertise
tool Integration
4. We are co-developing cross-tool integration
features e.g. a multi-vendor control room
EY Value-Add
5. EY has shared service centre experience from
design through set-up to hands-on
implementation across the globe
6. EY has global RPA delivery capabilities 6. Global delivery 7. EY #1 in Finance advisory 8. Cognitive automation
partnerships
7. EY was rewarded by IDC and Kennedy
Research as the #1 Finance advisor, one of the
key RPA areas
8. We are a strategic partner for intelligent
automation with IBM, Microsoft and SAP
We have experience implementing RPA for large global organizations
across multiple geographies, process and functional areas
Over the past two years, we have successfully delivered business value through numerous RPA projects across the
globe. We have successfully worked in partnership with RPA automation vendors and other professional service
organizations, including system integrators, as well as client IT teams.
Credential Feasibility PoC/PoV Implementation CoE Americas Europe APAC Customer Finance HR IT

Leading car rental firm    

Leading professional
services firm
        


Leading telco major         

Leading mining
      
equipment manufacturer

Global FMCG    

Global chemical company     

Global Fortune 50
engineering company
     

Global beverage producer       

EY US Tax     

EY UK Assurance    

Global insurer       

170
Canada
The government has been a pioneer in using RPA to provide public services

► Public Works and Government Services Canada (PWGSC), Canada’s largest payroll and
pension administrator has leveraged RPA to become efficient and cost-effective:
► Undertook the Transformation of Pay Administration Initiative in 2009 to replace the
government's outdated pay system with an automated solution (called Phoenix)
► Undertook the Transformation of Pension Administration Initiative between 2007 and
2013, replacing 40-year old legacy systems with automated enterprise tools
► Service Canada, the government’s one-stop services portal used RPA to modernize the
Policy initiatives processing of employment-insurance (EI) claims, starting in 2006. In May 2016, the
government launched a review of its service quality and mandated the hiring of more people
by the at EI call centres.
government
► Canada Border Services Agency (CBSA) leveraged RPA in 2012 to automate export
declaration for exporters/agents. The Canadian Automated Export Declaration (CAED)
program has eliminated manual reporting process and enabled electronic reporting.
► Public Services and Procurement Canada, the federal government’s department for internal
servicing and administration is using RPA for hiring. It has built an automated hiring system
to offer contracts to freelancers on the principle of bidding.
► In its IT Strategic Plan 2016-2020, the government has prioritised use of RPA for testing and
release of IT solutions in-house.

► The government provided US$7.6m in funding to PCI Geomatics in 2009 to automate the
Government processing of satellite images.
funding ► In the FY16 budget, the government has earmarked US$7.3m towards emerging technologies
such as automated vehicles.

Source: PWGSC, cbc.ca, statcan, hvacbids, Government of Canada

The US
The government has launched the National Robotics Initiative (NRI) to focus on RPA
and its applications
► In 2011, the US government launched the National Robotics Initiative (NRI) ($500m plan), a
federal research partnership to focus on development of next-generation robotics. In 2016, NRI-
2.0 was launched, focusing on the theme of scalability of robots:
 Supports the research, development and use of collaborative robots in the US
 Involves the National Science Foundation, the National Institutes of Health, NASA, and the
Department of Agriculture
 Encourages collaboration between academia, industry, non-profit and other organizations
 Focuses on including robotics in educational curriculum and developing robotics workforce
► The government has a focus on the potential of robotics to replace human workers and its impact
Policy initiatives on the economy:
by the  According to deputy US Chief Technology Officer, the US government is working to integrate
government automation and AI into its operations, which may replace workers with robots
 According to the 2016 Economic Report of the President, a person earning less than US$20
per hour has 83% probability of his job being automated by robots
 In October 2016, the government recommended an interagency study to understand the
economic impact of automation on the US economy and to suggest policy responses
► The government created a Digital Services Playbook to make the delivery of government services
more effective. The playbook suggests the use of RPA to write and test codes, making the work
of developers more foolproof and efficient.
► In September 2016, the US Department of Transportation issued the Federal Automated Vehicles
policy for safe testing and deployment of automated vehicles.

Government ► As part of NRI, the National Science Foundation, the National Institutes of Health, NASA, and
funding the Department of Agriculture are funding US$70m for research on next-generation robotics.

Source: whitehouse.gov, nsf.gov, roboticsandautomationnews.com,

cio.gov, engadget, techcrunch
Nordics
Various countries in Nordics, lead by Finland, have defined multiple policies and initiatives and
have provided funding to promote adoption of automation
► Denmark: Denmark announced Digital Strategy 2016-2020 in which one of the focus areas is
to promote automation in reporting and case processing to reduce administrative burden
from the public authorities.
► Finland: In June 2016, Government defined a 2025 resolution with 23 action points for
developing and using robotics and automation. It aims at making Finland the leading country
in international robotics though some of the following key steps:
 Develop and extensively use intelligent robotics by 2025 to bring efficiency and cost
effectiveness in healthcare services, public administration, and transport services.
 Identify challenges and guidelines for speeding up the development targets.
Policy initiative
 Investments for ecosystems and networks of automation and robotisation.
► Finland: In March 2016, Finland made amendments in International Convention on Road
Traffic to allow automatic driving technologies and promote vehicle automation.
► Finland: In September 2015, Finland’s Ministry of Transport and Communications, released a
plan to formulate a legislation for promoting automation projects in the transport industry.
► Sweden: Sweden’s Robotdalen, a Swedish Robotics initiative, is financed by VINNOVA (the
Swedish Innovation Agency), the European Regional Development Fund, public institutions,
universities and the industry. The vision of the initiative is to take the lead in research,
development and manufacture of industrial, field and medical robotics.
► Denmark: In June 2015, Southern Denmark allocated US$3.7 million to promote automation
and robotics focused on SMEs to reduce outsourcing production activities out of the country.
Earlier, from May 2013 till May 2015 Southern Denmark invested US$1.5 million for
automation of production.
Funding
► Finland: Finland Ministry of Finance granted US$2.9 million to the Finnish Immigration
Service to develop electronic case management system for immigration affairs. The system
will be transferred from an authority-centric based to an interactive platform to enhance
productivity through self services, automation and dashboard function.
Source: European Commission, Robotics Business Review, The Finnish Immigration Service, Finland
Ministry of Transport and Communications, Finland Prime Minister’s Office
Australia
The government is drafting guidelines to promote adoption of automation in multiple sectors including financial
services, transportation and immigration
► The government is supporting regulatory authorities and the industry for the development of
clear guidance on the compliance obligations for digital or automated financial advice known
as robo-advice. In March 2016, Australian Security Investment Commission released a
consultation and draft regulations on digital financial product advice.
► In 2016 budget, government targets efficiencies worth US$135m by reforming visa and
migration framework through improved automation in visa processing and more self service
options.
► In Department of Finance Corporate Plan 2016-17, amongst other initiatives the government
plans to use Central Budget Management Redevelopment project and improved IT workflow
systems to enhance automation in budgeting and processes.
Policy initiative ► Australian Securities and Investments Commission is embedding analytics and machine
learning to identify misleading marketing, using algorithims to spot suspicious trading, and
social media analytics to monitor certain hotspots.
► In November 2016, Australian transport ministers planned a phased reform program to
ensure safe operation of conditionally automated vehicles on the road before 2020 and fully
automated vehicles from 2020. As next steps, the Government has released a discussion
paper to seek feedback for development of a roadmap and National guidelines for automated
vehicle trials.
► The Federal government has automated tax return filings in which certain details such as
wages, bank interest, share dividends and private health insurance information are pre-filled.
Taxpayers have to acknowledge that it is correct.

► Australia Post announced an investment worth US$1.5b to create a widespread postal

network and a universal digital platform through automation, digital mail service and
Funding expansion of retail network.
► Government funding (A$450,000) has been provided to Sentient Vision Systems Pty Ltd to
develop a solution that is able to automatically detect boats and people in the water.

Source: Australian treasury, Securities and Investment Commission, Gizmodo, Department of Finance and Deregulation, Australia Budget 2016-17, Post & Parcel, Australia National Transport
Commission, Queensland University of Technology
EY has developed its own chatbot - ELSA

Current uses in Procurement: to answer Procurement enquiries from staff and suppliers
► Q&A on pre-defined scenarios (e.g. checking status of purchase order)
► Responses based on understanding user intent using artificial intelligence
► Voice activation
ELSA offers higher functionalities and technology integration
options than other chatbots in the market
EY’s internal experience and success
800,000 hours of annual benefit within 12 months of embarking on the Robotics journey

► Implemented 100+ bots in shared services and tax in six months; plan to be at 500+ bots by the end of 2017
► Applied Robotics & Automation to more than 200 processes — some very complex
► Estimated value — 800,000 annual hours of freed-up capacity
► Robtics & Automation have been catalyst for process improvement — 200+ process improvements and greater value to clients
► Sustained business impact — driving value for our people, clients and the firm

Functional areas Cost reduction: ~$6k–10k annual license Insight into data: visibility over process
► Sales and use tax costs/bot vs. professional salary running time information — not a black box

► Property tax
Talent retention: more intellectually
► Expat tax Quality: significant increase in accuracy
challenging work leveraging potential of
with on-time delivery
► Global tax reporting people

► Asset management Client experience: improved

Agility: increased capacity to handle high
► HR recruiting and payroll responsiveness, accuracy and on-time
transaction volume
delivery driving growth
► HR onboarding
► Reporting Compliance: fully maintained audit trail for
compliance; enhanced controls and
Flexibility and reliability: automated 24/
► WOTC tracking
solution; 24/7 operations
7
Robotics & Automation
Blockchain Technology
Cloud-Based Platforms & Trading Networks
Internet of Things (IoT)
Big Data Analytics & Machine Learning
Professional Social Collaboration
Blockchain Technology

The Blockchain
► A Blockchain is a distributed ledger that receives, validates, and stores transactions permanently.
► It refers to a digital ledger formed by continuously-growing lists of ordered records called blocks. Each block contains a timestamp and a
link to a previous block. By design, this technology is resistant to alteration of data: the blocks are added in a linear, chronological order
and once recorded, the data in a block cannot be altered retroactively.
► Blockchains eliminate the need for a trusted central authority throughout the lifetime of a transaction

Value to an organization
Activates the Optimizes Risk Drives Internal & Leverages Big Data Drives Financial
Corporate Strategy External Innovation Stewardship
► Accelerates strategic ► Eliminates digital rights ► Integration with the ► Certifies and stores data ► Lower transactional costs
initiatives by providing a theft Internet of Things (IoT) to from multiple sources ► Embedded finance
secure, foundational create a more secure within immutable blocks
► Secured firewalls increases security, control
backbone for commerce connection between that cannot be changed
between smart devices and processing time
smart devices and
► Enables more capabilities ► No central authority to machines
to open up new markets, control the transaction,
identify new suppliers ► Enablement of “Pay for
eliminating risks
while ensuring performance”-smart
emanating from central
trustworthiness contracting and other
failure
agreements
Robotics & Automation
Blockchain Technology
Cloud-Based Platforms & Trading Networks
Internet of Things (IoT)
Big Data Analytics & Machine Learning
Professional Social Collaboration
Cloud-Based Platforms & Trading Networks

► The cloud is a network of external servers often managed by a third party whose computing power and storage can be rented
► Trading networks are cloud-based procurement and invoicing applications focused on Procurement Optimization
(Indirect and Direct spend)
► The web-based trading communities connect buyers and sellers to buy, sell, and manage their cash more efficiently and effectively
(POs, Invoices, A/P, A/R)

Value to an organization
Activates the Optimizes Risk Drives Internal & Leverages Big Data Drives Financial
Corporate Strategy External Innovation Stewardship
► Leverage trading ► Utilize cloud platforms ► Improved access to ► Out-of-the box analytical ► Lower transactional costs
networks to find the right for cross-functional team cloud-solution innovation suites improves ability to ► IT spend reduction
partners for initiatives reviews of supplier interpret multiple
► Enhanced collaboration Effective spend
performance dimensions of information ►
► Expand spend coverage, with suppliers and management
process coverage, and ► Enables agility throughout partners through online ► Improved visibility and
user coverage while the procurement marketplaces better decision making ► Enable invoice and
driving operational value chain commerce compliance
► Improved user- ► Gain better insights into
efficiency and automation
► Less risky than on experience purchases across all
premise solutions (i.e., “Amazon-like”) systems ► Maximize system
utilization and value
Cloud-Based Platforms & Trading Networks

We are in the midst of a disruption to procurement processes and operating models driven by …

Consumerized
procurement
processes enabled
by the cloud

Expectations Adoption Digital Organization skills

What this means:

Business users want consumer Focus equally on internal teams and Alignment of procurement technology New procurement skills required
experience — more catalogs, more suppliers — more process change with digital and mobile strategy |— change management,
direct access to suppliers driven by cloud global interaction, and analytics
to improve cloud processes
Cloud-Based Platforms &Trading Networks
Example: Ariba’s Single Business Network

1 Open 2 Intelligence 3 Comprehensive

Any Vendors, Any Protocols Commerce Graph, Real-Time, Big Data-Driven All Suppliers, All Collaborative business processes

Your applications Your trading partners

Order Order Confirmation AS2
Invoice Status Catalog
Web UI
Remittance Advice Shipment Notice
Discount Proposal Invoice/Payment Status cXML
Payment Discount Acceptance
FI PM PP Paper

MM VIM SNC Spot RFQ Spot Quote CSV

Order Status Request Order Status Response
MRP Email
TM SRM Service Entry Response Service Entry Sheet
EDI
PS SCM
Scheduling Agreement Forecast Response
xCBL
“Other” Forecast Inventory Status
Delivery Instruction Release Confirmation Smart PDF
Inventory Status
Self Billing

Collaborations — Today Collaborations — 2014 Collaborations — 2014/2015

10 Procurement, MRO, Invoicing, Payment 16 Services, Critical MRO, Quotes 24 Supply Chain, Logistics, Inventory Management
Robotics & Automation
Blockchain Technology
Cloud-Based Platforms & Trading Networks
Internet of Things (IoT)
Big Data Analytics & Machine Learning
Professional Social Collaboration
Internet of Things (IoT)

► A system of interrelated computing devices, mechanical and digital machines, and objects that are provided with unique identifiers and
the ability to transfer data over a network without requiring human-to-human or human-to-computer interaction.
► The IoT allows Procurement organizations to take advantage of real-time information and to prepare for supply in advance of absolute
need and thus reducing delays.

Activates the
Corporate Strategy
► Enables new strategies to
take advantage of the
digital world
Value to an organization
Optimizes Risk Drives Internal & Leverages Big Data Drives Financial
External Innovation Stewardship
► Enhanced capability to ► Enablement of machine ► Greater visibility into ► Gain new insights
develop holistic supply learning and advanced purchasing habits through smart, connected
risk models analytical modelling enables more accurate devices
capabilities adjustments to demand
► Asset management ► Transact via connected
monitoring reduces work ► Real-time feedback machines by integrating
stoppages and delays mechanisms with Blockchain
technology
► “Always On” connectivity
provides real-time access
to information to make on
the fly decisions
Key challenges and opportunities with IoT
The digital transformation leveraging IoT
capabilities shakes the foundations of enterprises
— larger organizations need to see smaller, more
flexible and responsive organizations as their
competition, and this challenges their business
and marketing strategies
Unclear business benefits and insufficient
expertise are the greatest barriers for those
companies that haven’t started: 80%+ of clients
have no idea how to use IoT technologies and
create a business case for them
Orchestration of workflows and processes are one
of the top challenges for organizations that plan to
begin IoT implementation
Consumers/users expect constantly growing
capabilities and intelligence from the network of
interconnected things
New IoT projects and opportunities require expert
knowledge and human resources
As sensors start to talk to each other without
human intervention, cybersecurity should be a
huge concern: multi-site medium and large
organizations require an adaptive approach to
ensure a common security level across their
locations to ensure high availability, quality and
safety of the production process as well as
protect brand reputation and customer trust
New regulations relating to data security and
Key privacy require digital lawyers to keep track
challenges
and
IoT data generated and collected can be used by
opportunities Artificial Intelligence (AI) and predictive engines to
find and learn patterns and similarities to support
decision making
Connectivity issues including technologies,
authorization and authentication, interference or
limited wireless capabilities, as well as power
supply for connected devices, will be among new
challenges for growing IoT adoption
Robotics & Automation
Blockchain Technology
Cloud-Based Platforms & Trading Networks
Internet of Things (IoT)
Big Data Analytics & Machine Learning
Professional Social Collaboration
 10101100

Big Data Analytics & Machine Learning 10010011

11010101

► Leverage on Artificial Intelligence/Machine Learning to automate and improve cleansing and classification operations
► Advanced visualization/dashboarding capability
► Transliteration capabilities (e.g., Arabic, Chinese)

Value to an organization
Activates the Optimizes Risk
Corporate Strategy
► Generate insights to ► Understand risk exposure
enable strategy for each supplier and
formulation costs of risk proactively
► Facilitate mitigation
planning to current supply
chain risks
► Monitor compliance levels
consistently and
continuously
► Increase adherence to
organizations operational
policies
Drives Internal & Leverages Big Data
External Innovation
► Drive and increase ► Reduce transaction
revenue from supplier volume, processing cost
driven innovation and time
► Monitor, assess and ► Optimize payment terms
benchmark supplier ► Improve cash flows
performance to enable
feedback and ► Measure actual P&L
improvement impact of sourcing
initiatives
► Increase ordering under
the agreed terms of a
contract and or preferred
vendor lists
► Identify root cause of
product cost fluctuations
Drives Financial
Stewardship
► Increase spend under
management
► Provide better information
to negotiate
► Increase supplier base
rationalization
► Reduce cost of
procurement as a percent
of spend
► Monitor and improve days
in payable
Robotics & Automation
Blockchain Technology
Cloud-Based Platforms & Trading Networks
Internet of Things (IoT)
Big Data Analytics & Machine Learning
Professional Social Collaboration
Professional Social Collaboration

► Professional Social Collaboration tools can be leveraged to established dynamic and real-time internal and external Procurement
communities. These dynamic communities can be used to:
► Accelerate organizational transformation by increasing speed of adoption, enable real-time communication and collaboration between stakeholders for
contract drafting, supplier innovation sessions, joint savings ideation, etc.
► Integrate processes, roles and ways of working throughout the organization and identify and share best practices in real time
► Unlock real time market intelligence and data sharing through ‘’always on’’ connected, easily accessible community tools

Value to an organization
Activates the Optimizes Risk
Corporate Strategy
► ‘’Crowdsourced’’ and ► Establish stronger
agile corporate strategy relationships with
easily able to pivot based suppliers through
on desires and needs of enhanced collaboration,
organization overall increasing trust and
minimizing risk of doing
► Much closer connection
business with those
top-to-bottom throughout
suppliers
an organization to track
how effectively the ► Identify potential issues
strategy is meeting the across the sourcing
needs of the org. supply chain and work
together to mitigate while
improving quality of life
Drives Internal & Leverages Big Data Drives Financial
External Innovation Stewardship
► Realtime innovation and ► Access to real-time data ► Connect functional
ideation sessions with in easy to use, consumer- communities
internal stakeholders ready visualizations that (e.g., employees in
(R&D, Innovation, etc.) drives stakeholders Procurement, Planning)
and external stakeholders towards meaningful and process communities
(suppliers) decisions rather than (e.g., Procurement and
complex data analysis AP for Procure-to-Pay)
► Proactive identification
to improve cycle times,
and sharing of best
enhance best practice
practices and cascaded
sharing and minimizing
quickly to the rest of the
rework.
organization
16
The Future Analytics for
Internal Audit
 Execute the
Internal
Audit plan
(audits)
How will IA deliver through analytics in the future?
Phase 5

IA Objectives What should be achieved with IA analytics?

Feedback Loop

Mobilize
analytics team Risk Assessment Audit Planning Audit Execution Audit Reporting Monitoring
to develop
DA charter

► Identify risk ► Preliminary “scan” of ► Identify anomalies, ► Provide quantifiable, ► Provide an automated
Key activity

assessment priorities relevant audit trends and potential fact-based information basis for continuous
► Determine scope of information to drive fraud indicators for reportable issues and auditing & controls
audit plan activities project scope, sampling ► Replace sample testing exceptions monitoring.
and fieldwork approaches with full- ► Visualization of audit ► Provide analytical input for
procedures coverage data findings follow-up Risk
analytics Assessment.

Risk Ranking Regional benchmarking Red Flags / Observations Report Visualizations Controls Monitoring
Example analytics

Value at Risk Analysis Key Risk Indicators Robotic Process Risk Quantification Risk / Action Monitoring
Automation

Page 192
 Execute the
Internal
Audit plan
(audits)
How will IA deliver through analytics in the future?
Phase 5

IA Objectives Analytics Workbench at play

IA
Lifecycle Risk Assessment Audit Planning Audit Execution Audit Reporting Monitoring

One end-to-end audit process:

Audit Preparation Audit execution Documentation of results

► Definition of audit scope ► Submission of ► Consumption of analytics results ► Documentation of audit results
► Definition of audit period analytics request ► Follow up red flags ► Provision of analytics feedback,
► Refinement and including effectiveness of selected
EXECUTE AUDITS

► Selection of analytics from ► Identify root causes and actions

agreement of final scope
Preparation for non-analytics analytics and suggestions for
Analytics Catalogue ► ‘Better, Faster, Different’
with Analytics team manual audit procedures improvements and / or additions
Audit Team
Search and select Submit and confirm Consume Submit

Analytics Analytics Auditee IT Data QA Control Analytics Feedback

Analytics
Catalogue Request Map Request Sheet Output Loop
Workbench

Maintain catalogue Validate Understand data ETL to file store Visualization Update catalogue
► Definition of data requirements ► Request validation ► Map IT landscape ► Request / Export Data Files ► Visualize Analytics ► Feedback review
► Definition of analytics ► Scope review incl. ► Understand systems ► Perform QA procedures ► Interpret outputs ► Updates to Analytics
► Definition of visualizations selected analytics, & Transactions ► Transform Data to file store ► Highlight red flags catalogue with
Analytics systems, timeline ► Understand access additions as required
► Mapping to RACM ► Load Data to Analytics Tool ► Document areas for
Team ► Acceptance or offer of points and IT attention & follow up ► Collaboration with
► Updates and maintenance ► Execution of the analyses
alternative scope to contacts Auditors to build new
following feedback ► Quality Assurance (QA) on outputs
Auditor and relevant analytics

Define Analytics Produce Analytics Consume Analytics

The best end-to-end experience for your auditors would be having the analytics process seamlessly embedded in the audit process.

Page 193
 Where are we today in terms of ‘lightweight IT’
automation maturity?

Challenge
tomorrow Think
Challenge
today
Perform
Intelligent or Cognitive

Value & capability

Act
Robotic Process
Automation (RPA)
Desktop ► Strategic platform for
Automation (DA) tactical change
► Broad application (use cases are
► The age of macros & workarounds not function specific)
► Pre-existing basic technologies like
► Rule-based automation of routines
VBA, auto hot keys, screen-
(able to follow instructions)
scrapping
► No intelligence
► Several toolkits, no systematic
(binary decisions only)
platform
Automation (IA or CA)
► Strategic platform for
strategic change
► Narrow application (use cases
require thoughtful consideration)
► Non-routine tasks requiring
judgment (cognitive
capabilities/dynamic rules/artificial
learning)
► Used rather to increase value than
to reduce cost

Implementation speed & solution maturity

Structured data as basis for Cognitive computing utilising
Unattended service based processing
repeatable actions unstructured data to make decisions

Page 194
 How does the journey to the future look like?
Kick Start
SHOW & IDENTIFY
SHARE INFORMATION, GAIN A
COMMON GROUND
Kick Start the transformation:
Overview on the ‘art of the possible’ for
the function of the future
What is the vision for the
next 3-5 yrs?
Presentation of megatrends and
disruptive, rapid changes to the risk
environment
Tech Update:
Presentation of ‘digital’ enablers and
beyond for IAotF
Engage with industry trends, industry
experts and leading practices
IAotF Mandate scenarios:
Presentation of IAotF scenarios and their
impact on IA Mandate & Strategy
IA today:
Identify key IA Stakeholders (C-Suite, AC,
CAE, Auditors, Auditees)
Identify IA Stakeholders key interactions
with IA today (=stakeholder journey)
Develop key personas and their
expectations of IA
Identify the key areas for improvement
along the stakeholder journey
OPTIONAL:
Perform 5-10 expectation interviews
with pre-selected IA stakeholders
IAotF = Internal Audit of the Future
Page 195
Co-Creation Event
DEVELOP
BRAINSTORM SOLUTIONS AND
EXPLORE THEIR POTENTIAL
IA Ideation & Rapid Prototyping:
Evaluation of challenges identified by
their impact on the organization
Downselect ideas for rapid development
of IAotF components based on
IAotF Mandate scenarios & Value
Proposition
Business & Operating Model Canvas
‘Digital’ enablers and beyond
Build out of Rapid Prototypes per
innovation idea
IAotF Mandate scenarios development:
Evaluate IAotF Mandate scenarios by
mapping challenges and innovation ideas
to scenarios
Derive strategic direction questions
based on the areas of improvement
identified
Create & validate the IA Value
Proposition for the Future and IA
objectives to be tackled
IA Business & Operational Model Canvas:
Development of one-page summary of
the IAotF operating model, summarizing
all key activities and elements of how IA
creates, delivers and captures value
OPTIONAL:
Pitch the idea in front of pre-selected IA
stakeholders
APPLY
CHOOSE THE WAY FORWARD
AND PLAN FOR ACTION
IAotF roadmap:
Create group alignment and intention to
action based on developed rapid
prototypes
Re-visit IA Business & Operational Model
Canvas
Challenge pre-requisites necessary for
the future operating model
Develop joint-roadmap to the future
Agree upon Design Sprint Approach and
Design Principles
IAotF decision:
Make definite decisions
Design and agrees detailed long- and
short-term action plans
Roadmap IAotF Operating Model Deployment
INIATE & ACTIVATE DEPLOY
INITIATE AND ACTIVATE IA DEPLOY IAotF OPERATING MODEL
DIGITAL JOURNEY
Digital Journey: Implement and deploy IAotF Operating Model:
Develop detailed step-by-step journey Change the operational IA processes
based on innovation ideas of co-creation Embedded in the IA Lifecycle
event and ‘digital’ enablers available Define and implement IA Governance structure
today
Define Organizational Model based on changed Operational
Engineer all aspects of the future IA IA Processes and Governance Structure
Operating Model through parallel
processing in design sprints, e.g.
Digitalization of Work Programs
IA RPA quick wins and long-term
activation
Innovative technologies application,
+
e.g. AI / blockchain
…
Engineer impact of future IA Operating
Model components in
Operational Process
Governance Model
Organizational Structure
IAotF Model
Operational Process
Governance Structure
Organizational Model
 How can an exemplary roadmap to the future look like?
IA Digitalized Visualization Established Visualized New ways of
Objectives WPs Analytics process Reports reporting

IA Target Implement and IA Reporting is New ways of

Digitalize IA Work Development of
Operating Model Programs and enrich them visualizations of establish IA enriched with reporting (e.g. IA
defined with descriptive analytics descriptive analytics Analytics WorkBench visualization video reporting) are
evaluated

Automated knowledge Predictive Advanced IA RPA IA RPA

management Analytics Analytics Analytics processes

Operational Excellence tools (e.g. IA Robotics for IA Robotics for

Predictive Data Models „Quick wins“ and additional
Analytics evaluated operational excellence
KEVIN) deployed for knowledge designed and piloted
Analytics (e.g. Process and deployed evaluated and
gathering tested and implemented Mining) implemented
deployed

Automated Analytics for Digitalized Agile IA

documentation Risk Analysis Ways of working function

Operational Excellence tools External Risk Indicators IA Engagement Protocols and Agile IA methods
(e.g. KEVIN) deployed for defined and used for Workflows completely digitalized (e.g. for Planning)
automated documentation (cont.) Risk Analysis shaped and piloted

Drones and AI and Continuous High Impact

AR/VR blockchain Analytics Audits

Advanced technologies, Continuous Risk High Impact Audits

? Drones and AR/VR
piloted for IA e.g. AI, blockchain
piloted for IA
Assessment for de-
scoping established
continuously
conducted

Analytics Protocols Visuals Automation Communication Emerging risks RPA Adv. Tech
Companies are acquiring digital technology companies to help accelerate their
digital capability

The move to a digital economy is inevitable. The first question

companies must ask themselves is whether they have the means
to develop a digital capability internally. To succeed in the digital
economy companies need to be at the forefront of rapid
innovation to gain first mover competitiveness. Superior insight is
required to be able to spot the trends and issues confronting
specific industries. Also needed is deep functional knowledge and
real world business know-how coupled with deep technical
experience on how technology can be leveraged to change the
world.

In order for organizations or our clients to build their

Digital capabilities, not only do they have to build it
internally – but also inorganically due to:

► Speed of change through innovation and rapid

developments of technologies

► Competition in the market place coming from non

traditional players

► Lack of skilled resources in the market

Companies will need to form alliances, joint ventures,

license IP or acquire innovative companies

Transportation & Logistics: Digital Transaction Insights

17 • Tax
• Healthcare
Global Trend & Big • Procurement
• Power & Utilities
Data Implementations • Insurance
• CPR
in Various Sectors & • Media
• Transportation &
Areas Logistics
• Financial Sector
• Mining
• Life Science
Key trends in Big Data and Analytics usage
Big data exploration
You should be able to find, visualize and
understand all data to improve decision-making.
Today, information is stored in many different
systems and silos. People need real-time access to
that data to do their day-to-day work and make
important decisions.
Managed archive and storage costs
Newer storage technologies cost less.
The latest technology is built for extreme
scalability and designed for extreme
volumes.
Operational analysis
Operations should perform complex analysis
and correlation across different types of data
sets to gain real-time visibility into
operations, customer experience,
transactions and behavior.
199 | EY Digital Tax
Security intelligence extension
Big data has the ability to lower risk, detect
fraud and monitor cybersecurity in real time. It
can augment and enhance cybersecurity and
intelligence analysis platforms with big data
technologies.
360 view of the customer
Cloud
Big data Big data allows businesses to build a robust
Mobile computing
data set that spans all aspects of the
customer, from all angles. The big data market
is moving toward higher volume, greater
velocity and increased variety.
Social Internet of Data warehouse modernization
Everything
Integrate big data and data warehouse
capabilities to increase operational efficiency.
Perform better indexing and partitioning for
greater performance.