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Algorithmically Derived Forecasts Provide a Stronger Foundation for Forward-Looking Financial Steering

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STUTTGART, Germany, Dec. 5, 2019 /Press Media Release/ Technology has enabled forward-looking steering in ways that were not possible even a few years ago. By automating and digitizing its forecasting processes, Daimler Mobility can rapidly generate forecasts about the future development of the most important factors influencing performance. The forecasts provide early guidance on the likely development of KPIs under different scenarios and on the impact these changes will have on future results. Decision makers can use this foresight to assess the attractiveness of alternative pathways that the company might take. As a result, they can make decisions to exploit opportunities and avoid adverse developments much faster than in the past.

Daimler Mobility has deployed an enriched, forward-looking approach to financial steering that helps it more effectively adjust to the ever-increasing levels of uncertainty in today’s business environment. The approach defines course corrections by analyzing algorithmically derived forecasts of the way key metrics will evolve over specific time horizons. Armed with foresight into how conditions will change, the company can take action to preempt unfavorable outcomes and promote competitive advantage. Daimler Mobility and Boston Consulting Group (BCG) discuss the model in a report, The Power of Algorithmic Forecasting, released today. The report is the first installment in a series titled “The Art of Forward-Looking Steering.”

“To master the digital transformation, a company must take a comprehensive approach to algorithm-based forward-looking steering,” said Stephan Unger, Daimler Mobility’s chief financial officer. “This includes not only advanced analytical methods, new technologies, and the right expertise, but also an engaging approach to change management.”

Daimler Mobility’s algorithmically generated forecasts predict performance for the next 18 months for more than 50 business entities, each with approximately 100 KPIs. In 70% of its predictions, the statistical forecast has proved to be the same as or more accurate than experts’ judgment—and it achieved these results faster and with far less effort than the experts did.

“This success comes from a forecasting engine managed by data scientists in collaboration with business controllers and IT experts, as well as from a rigorously designed and executed transformation,” said Marc Rodt, a BCG partner, member of the firm’s Center for CFO Excellence, and report coauthor. “The effort has yielded foresight that enables the company to shape the future by preempting negative outcomes and exploiting new opportunities.”

Adopting an algorithm-based forward-looking steering model is not easy. Among the many challenges involved are assembling a team that has statistical capabilities, setting up a new technical infrastructure, and building people’s trust in technology. In subsequent publications in this series, as well as in a video presentation, Daimler Mobility and BCG will discuss how to meet those challenges.

Source: Boston Consulting Group
www.bcg.com

Venture Capital Digest

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Slow Growth but No Recession Predicted for U.S. Economy

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Stopping just short of predicting a recession in the U.S. through its 2021 forecast horizon, the UCLA Anderson Forecast, in its third quarterly report of 2019, expects the national economy to slow to 0.4% in the second half of 2020, before rebounding to 2.1% in 2021. Given the slow growth rate nationally and the weakness in the housing market, the Forecast expects California’s unemployment rate to rise to an average of 5.1% in the fourth quarter of 2020. For the entire years of 2020 and 2021, the unemployment rate in the state is expected to average 4.6%.

The National Forecast

The latest UCLA Anderson Forecast for the nation opens by acknowledging a global economy in flux, taking into account the U.S. trade war with China, President Trump’s criticism of Federal Reserve Chair Jerome Powell, near-recessionary conditions in Europe, Brexit, slowing economies in Brazil and Mexico, and all manner of rising geopolitical tensions. But despite the fluidity, the forecast does not suggest negative growth.

“Although we are not calling for a recession over the forecast horizon, as we have noted for over a year, it is very likely that economic growth will stall in the second half of 2020 as the effects of the 2017 tax cuts wane and as trade tensions exact their toll on corporate investments,” writes senior economist David Shulman in an essay titled “The Year of Living Dangerously.” The national forecast calls for real GDP growth of 2.1% and 1.2% in 2019 and 2020. “Indeed, in the second half of 2020, growth is expected to decline to 0.4% ― not quite a recession ― but pretty close,” writes Shulman. In 2021, GDP is expected to return to 2.1% growth.

Shulman’s essay cites six concerns: the trade war with China; the weakening of business investment in equipment and structures; the negatively sloped yield curve; the slowdown in employment growth; the inability of housing activity to launch; and the stagnant stock market. As for China, Shulman quotes a Federal Reserve study that noted that trade uncertainty lowered real GDP growth about 1% in 2019, while projecting a similar drop next year. “Make no mistake,” Shulman writes, “American businesses and consumers will bear the brunt of the tariffs. And despite all of the administration’s heightened rhetoric, the real trade deficit will continue to rise as it approaches $1 trillion this year.”

On the plus side, Shulman notes that consumption ― which accounts for about two-thirds of GDP ― continues to roll along. Federal spending is advancing smartly in response to the recent budget deal and businesses continue to invest in intellectual property.

Shulman concludes his report by noting that the near 3% growth rate of more than a year ago is now a memory, with fourth quarter to fourth quarter real GDP growth for 2019 and 2020 now forecast to be 2.1% and 1.2% respectively. In addition, job growth will slow to under 70,000 per month ― well below the 200,000 jobs per month that we’ve become used to. The greatest risk to an already slowing economy are the tariff policies and their effect on exports and business investment.

The California Report

The UCLA Anderson Forecast’s September 2019 report for California ponders why the state continues to outpace the nation in terms of job creation and economic growth. The answer, according to UCLA Anderson Forecast director Jerry Nickelsburg, is found in the growth areas of the state. “California is outperforming the U.S. for the same reason it has over the past decade; productivity gains through the employment of labor-augmenting technology,” Nickelsburg writes.

Nickelsburg’s report notes that eventually the slowing national and world economies will take their toll and that toll is likely to start getting paid in the latter part of next year, right around the time GDP falls below 1%.

But the news is not all negative.

“At present, and in spite of the trade tensions between the United States and China, the economic news is positive. The July county-wide unemployment rates from Marin to Santa Clara are below 2.8%, from Sonoma through the East Bay below 3.5% and, in Southern California, Orange and San Diego, are at or below the U.S. rate of 3.7%,” writes Nickelsburg, while pointing out that L.A. and the inland regions are not doing quite as well.

The California forecast for total employment growth rates in 2019, 2020 and 2021 is 0.8%, 1.7% and 1.2%, respectively, as payroll jobs are expected to grow at a 1.6%, 1.1% and 0.9% rate across those years. “This reflects the stronger growth in payrolls over the last year, even while total employment growth was weaker,” Nickelsburg writes.

Real personal income growth for the state is predicted to be 1.3%, 1.7% and 1.9% over the three-year forecast period, as the continued growth in real personal income in 2020 reflects the changing mix of employment in California and tight labor markets in high-wage occupations. Homebuilding will be lower by about 11,000 units per year by the end of 2021 than previously forecast, as a consequence of the current weak housing market and the anticipated slowdown late next year.

Special Report: Tech Jobs, Talents and the Local Economy

In the first of a pair of additional reports, UCLA Anderson Forecast economist William Yu discusses the impact of tech job growth on U.S metroplexes; the relationship between tech job growth, local economic growth and low-skill job growth; and the relationship between human capital and tech job density. Yu’s analysis notes that the New York area employed the most tech workers as of 2018; Washington D.C. ranked second and Los Angeles third. However, it is San Francisco that saw the largest increase in such jobs from 2010 until 2018, adding 73,000 jobs in that time frame. San Jose has the highest density of tech jobs at 17.2%; Seattle ranks second with just under ten percent of the workforce in tech jobs.

Yu’s report ends with a pair of conclusions: First, the tech industry and tech jobs drive local economies as the associated high wages propel overall job growth including low-skill job growth, though wage growth of low-skill jobs is not guaranteed. Second, high human capital metros and regions are more likely to become tech clusters, as a region with high human capital and tech jobs tends to attract and recruit talent from outside the region.

Special Report: Parcel Taxes in California

In a companion essay, UCLA Anderson Forecast economist Leila Bengali examines some of the consequences of property parcel taxes, which may vary from community to community, on California real estate. Bengali’s report comments on such implications in an environment where home owners and potential home owners do not necessarily prioritize parcel taxes when making real estate decisions.

“The implications of California’s parcel tax system with imperfectly attentive consumers are mixed. Existing residents’ over sensitivity to parcel taxes may limit the number of options available both for themselves and for future residents, but future residents may not even be paying attention to the fact that they have choice,” Bengali writes. She adds that “buyers’ inattention may keep home prices higher than they otherwise would be, which is ultimately good for current residents and local governments.”

The UCLA Anderson September Forecast Conference: Focus on Technology

In addition to presentations of the U.S. and California forecasts, the September 2019 Forecast Conference, presented in partnership with UCLA Anderson’s Easton Center for Technology Management, features several panels and a keynote devoted to current trends and the implications of technology. The keynote will be delivered by Adam Miller (’94), founder and CEO of Cornerstone on Demand. The panel, moderated by Terry Kramer, director of the Easton Center, will feature a look at tech trends in Los Angeles from different perspectives. The conference takes place on September 25, 2019. Conference information may be found at bit.ly/2kQqKYf.

SOURCE UCLA Anderson Forecast
https://www.anderson.ucla.edu/centers/ucla-anderson-forecast

For Payments Players, a Tumultuous Landscape Brings New, Tougher Challenges

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Facing a Maturing Industry and Tighter Competition, Incumbents Must Accelerate Digitization, Gain Scale, Optimize E- and M-Commerce, and Tap into Developing Markets to Maintain Growth, Says New Report by BCG

As attackers continue to erode the edges of incumbent profit strongholds, established payments players must become ultra-focused to expand their businesses, concentrating on areas that are likely to be critical in the future and selecting those where they have natural advantages, according to a new report by Boston Consulting Group (BCG). The report, titled Global Payments 2019: Tapping into Pockets of Growth is being released today.

This 17th annual study by BCG outlines recent developments in the payments market globally and regionally, explores how retail providers can find the green shoots that will have the greatest impact in the 2020s and beyond, and explains why wholesale banks must reckon with digital disruption and find the most impactful areas for investment—focusing on a handful of strategic and operational areas that can deliver above-average growth. The report also offers action steps that payments providers can take to improve their competitive positions.

“The paths that global, regional, and local players take will vary tremendously,” said Yann Sénant, a Paris-based BCG partner, coauthor of the report, and global leader of the firm’s payments and transaction-banking segment. “But banks that capitalize on green-shoot growth areas, fast-track digitization, and operational improvements will reap outsize rewards.”

Market Outlook
According to analysis in the report—complemented by data from SWIFT, the world’s leading provider of secure financial messaging services—payments revenues globally should rise by a compound annual growth rate (CAGR) of 5.9% from 2019 to 2028, in line with the average CAGR of 5.8% posted since 2010. This expansion, fueled partly by a steady rise in cashless transactions, will add $1.0 trillion to the payments revenue pool, raising the total to $2.5 trillion by 2028. Rapidly developing economies will be the engine of that growth. Retail payments revenues will increase by an estimated 6.0% CAGR from 2019 to 2028, modestly outpacing wholesale payments growth (5.6%). E-commerce and other remote transactions, which BCG expects will grow by 11% annually over the next five years, should be a key driver of retail payments growth.

Retail Payments: Finding the Green Shoots
The report says that established retail payments players will have to work hard to capture their share of growth amid significant disruption in the payments landscape globally. Some of that disruption comes as regulatory bodies press for reductions in interchange rates. But perhaps the most significant shift reflects the impact of a rapidly expanding fintech presence that is accelerating technological innovation and increasing merchant power. Three factors, in particular, are poised to reshape the retail payments space in the 2020s:

Money movement is making a comeback. We are seeing massive innovation in the way money changes hands and in the infrastructure that enables that movement. Many new real-time payments rails are being launched around the world.
Increasing competitive intensity is driving mergers and blurring boundaries. In an effort to gain critical capabilities and scale, issuers and merchant acquirers are seeking partners.
Data use cases are moving beyond risk assessment. Leading players are beginning to shift their focus toward the customer experience, and the most advanced players are using data to personalize outreach and customer journeys.

Wholesale Payments: Some Parts Are Greater Than the Whole
According to the report, the wholesale payments category continues to be profoundly shaped by steady advances in digital tools and by the fast-maturing capabilities of digital attackers and fintechs. Among the most significant disruptive forces are the adoption of real-time payments systems, greater cross-border competition, and the growing number of connections and interdependencies between corporate and vendor payments systems. In response to the last dynamic, treasurers from large corporations and smaller businesses are increasingly turning to nonbank platforms to reduce the resulting complexity. To retain strong corporate relationships, incumbents need to provide a similar level of convenience, helping treasurers streamline their wholesale payments interactions and more readily gain access to cash management, account reconciliation, supply chain finance, and cross-border payments capabilities.

The report also says that wholesale banks can use their scale, resources, and other natural advantages to turn disruption into opportunity. The rapid expansion of the wholesale payments space over the past decade has created enormous complexity within the offering space, the competitive space, and the technological space. For incumbents and newer entrants alike, attacking complexity and providing simpler solutions throughout the value chain will yield the greatest returns.

“Ultimately,” said Sushil Malhotra, a New York–based BCG partner and coauthor of the report, “wholesale payments businesses must invest aggressively but selectively, focusing on a handful of strategic and operational areas that can deliver above-average growth. We recommend that banks consider building opportunities in high-value niches such as cross-border payments, trade finance, and working capital and supply chain finance.”

About Boston Consulting Group
Boston Consulting Group partners with leaders in business and society to tackle their most important challenges and capture their greatest opportunities. BCG was the pioneer in business strategy when it was founded in 1963. Today, we help clients with total transformation—inspiring complex change, enabling organizations to grow, building competitive advantage, and driving bottom-line impact.

To succeed, organizations must blend digital and human capabilities. Our diverse, global teams bring deep industry and functional expertise and a range of perspectives to spark change. BCG delivers solutions through leading-edge management consulting along with technology and design, corporate and digital ventures—and business purpose. We work in a uniquely collaborative model across the firm and throughout all levels of the client organization, generating results that allow our clients to thrive.

About SWIFT
SWIFT is a global member owned cooperative and the world’s leading provider of secure financial messaging services. We provide our community with a platform for messaging and standards for communicating, and we offer products and services to facilitate access and integration, identification, analysis and regulatory compliance. Our messaging platform, products and services connect more than 11,000 banking and securities organizations, market infrastructures and corporate customers in more than 200 countries and territories. While SWIFT does not hold funds or manage accounts on behalf of customers, we enable our global community of users to communicate securely, exchanging standardized financial messages in a reliable way, thereby supporting global and local financial flows, as well as trade and commerce all around the world. Headquartered in Belgium, SWIFT’s international governance and oversight reinforces the neutral, global character of its cooperative structure. SWIFT’s global office network ensures an active presence in all the major financial centers.

SOURCE Boston Consulting Group (BCG)
www.bcg.com

Major Industrial and Automotive Manufacturers Are Far Behind the Industrial IoT Innovation Curve, Harming Productivity, Revenues

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New Survey from Software AG Reveals that Manufacturers Are Not Scaling IIoT Across the Enterprise Due to Failure to Invest in Predictive Analytics and Innovative Integration Strategies

Software AG (Frankfurt, MDAX: SOW) today announced an original survey of over 125 North American manufacturers primarily in the heavy industry and automotive sectors that revealed they are unable to scale their Industrial Internet of Things (IIoT) investments across their enterprises, and therefore are losing millions of dollars in potential profits while falling behind competitors that have invested in enabling technologies that support IIoT across the enterprise.

The survey also revealed that the vast majority of manufacturers queried report that their IIoT investments are limited – locked in one small department or sector of their company – preventing these organizations from sharing the power of IIoT across their enterprises. This has caused these manufacturers to lose millions of dollars in potential profits as they fall behind more forward-thinking competitors that have invested in predictive analytics and innovative integration strategies that scale IIoT across the enterprise.

Other key findings include:

80% of all survey respondents agree that processes around IIoT platforms need to be optimized or they will face a competitive disadvantage but very few are doing this.
IT-OT (Information Technology and Operations Technology) integration is considered one of the most difficult tasks – with 57% of automotive manufacturers stating that this has prevented them from realizing full ROI from their IIoT investments.
84% of automotive and heavy industry manufacturers agree that the most important area of IIoT is “monetization of product-as-a-service-revenue.” However, optimizing production is still important with 58% of heavy industry and 50% of automotive manufacturers agreeing with that statement.
Curiously, defining threshold-based rules is considered almost as difficult as leveraging predictive analytics to scale IIoT. More than 60% of respondents stated that defining threshold-based rules was as difficult as integrating IT systems and IoT sensors into existing control systems.
“Manufacturers place a high value on IIoT, but they are encountering serious difficulties in unlocking the complete intended value to unleash their innovation across their organizations,” said Sean T. Riley, Global Industry Director, Manufacturing and Transportation, Software AG. “Fortunately, there is a way for them to quickly and easily resolve this problem. By investing in the right IT-OT integration strategy that leverages sensors, predictive analytics, machine learning, control applications and product quality control, manufacturers can fix this problem in less than 6-12 months while realizing other key benefits, namely extended equipment lifetime, reduced equipment maintenance costs and accessing more accurate data for production-quality improvements.”

Riley outlined five best practices for manufacturers to follow when looking to scale their IIoT investments across their enterprises and realize immediate profits and competitive advantage. Those best practices are:

Ensure clear collaboration between IT and the business by leveraging a step by step approach that starts focused and has clear near-term and long-term objectives to scale.
Create a transparent roll out process and don’t let other plants or departments move ahead outside of it.
Give IT the ability to connect at speed with a digital production platform that is proven to be successful.
Leverage a GUI-driven, consistent platform to enable an ecosystem of IT associates, business users and partners around the platform.
Enable the plant or field service workers to work autonomously without continual support from IT through GUI-driven analytics, centralized management and easy, batch device connectivity and management.
Riley also stated that it is critically important for manufacturers to select the best possible IIoT integration platform supported by key enabling technologies like streaming analytics, machine learning, predictive analytics and a larger ecosystem. Software AG’s Cumulocity IoT platform recently received the highest use case scores from Gartner Group in the brand new “Critical Capabilities for Industrial IoT Platforms” report which included Monitoring Use Case, Predictive Analytics for Equipment Use and Connected Industrial Assets Use Case for its IoT.

Cumulocity IoT is Software AG’s cloud-first and fully extensible IoT platform that lets customers start quickly and scale rapidly. Being device and protocol agnostic allows to connect, manage and control any “thing” over any network. Cumulocity IoT is an industry leading IoT solution, which is open and independent, letting customers connect to millions of devices without being locked into one single vendor.

“Our platform is already helping customers such as Gardner Denver, Nordex and Certuss find the right solution for their IIoT requirements,” said Riley. “The recognition and acceptance of our Cumulocity platform underlines our commitment to enabling customers to quickly and easily bring their ambitious IIoT visions to life. However, the ChangeMaker network has also been created to ensure the talent needs shortage can be managed and projects will be successful in the near and long term.”

The Software AG IIoT Implementation survey was completed in Q2 2019 by Software AG and an independent third-party research house. The survey queried nearly 200 respondents at large manufacturing companies across automotive, heavy industry, high-technology, electronics, pharmaceutical and medical device industries. The respondents were primarily senior executives leading manufacturing or information technology with the breakdown of 50% managers, 38% directors and 13% vice presidents or higher.

To access the full text survey, please email [email protected] Please see the following link to the Gartner Group “Critical Capabilities for IIoT Platforms” report: https://www.softwareag.com/corporate/products/internet_of_things/gartner_cc_IIoT_2019.html

About Software AG

Software AG offers Freedom as a Service. We reimagine integration, spark business transformation and enable fast innovation on the Internet of Things so you can pioneer differentiating business models. We give you the freedom to connect and integrate any technology—from app to edge. We help you free data from silos so it’s shareable, usable and powerful—enabling you to make the best decisions and unlock entirely new possibilities for growth.

Learn more about Software AG at www.softwareag.com.

300mm Fab Equipment Spending to Seesaw in Coming Years, Hit New Highs in 2021 and 2023

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300mm fab equipment spending will slowly recover in 2020 after the 2019 downturn and take off in 2021 to log a new record high topping US$60 billion, only to lag again in 2022 and rebound to an all-time peak in 2023, according to the SEMI Industry Research and Statistics group in its first edition of the 300mm Fab Outlook report.

Most of the surges in fab equipment investment over the five-year outlook will be driven by memory (primarily NAND), foundry/logic, and power. Korea will head the list of top-spending regions followed by Taiwan and China, though Europe/Mideast and Southeast Asia are also expected to show healthy increases between 2019 and 2023.

Fab equipment spending and volume fabs/lines count 2012-2023 and high-probability fab projects.

Offering projections through 2023, the 300mm Fab Outlook report details fab investments across construction and equipment, as well as fab capacities and technologies investment for DRAM, NAND, foundry, logic, and a host of other products manufactured on 300mm wafers.

The number of semiconductor fabs/lines in operation is expected to jump more than 30 percent, from 130 in 2019 to 170 in 2023, and climb even higher, to nearly 200, when lower probability fabs/lines are included in the count.

The new SEMI 300mm Fab Outlook report shows facility details by quarter through 2023 and also includes projections for fab projects through 2030 with estimates of various probabilities.

To learn more about the SEMI 300mm Fab Outlook report, click here: https://www.semi.org/en/news-resources/market-data/global-300mm-fab-outlook

About SEMI
SEMI® connects more than 2,100 member companies and 1.3 million professionals worldwide to advance the technology and business of electronics design and manufacturing. SEMI members are responsible for the innovations in materials, design, equipment, software, devices, and services that enable smarter, faster, more powerful, and more affordable electronic products. Electronic System Design Alliance (ESD Alliance), FlexTech, the Fab Owners Alliance (FOA) and the MEMS & Sensors Industry Group (MSIG) are SEMI Strategic Association Partners, defined communities within SEMI focused on specific technologies. Visit www.semi.org to learn more, contact one of our worldwide offices, and connect with SEMI on LinkedIn and Twitter.

Amazon Forecast enables developers to build applications with the same machine learning technology used by Amazon.com for forecasting future business conditions – with no machine learning expertise required

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Today, Amazon Web Services, Inc. (AWS), an Amazon.com company (NASDAQ: AMZN), announced the general availability of Amazon Forecast, a fully managed service that uses machine learning to deliver highly accurate forecasts based on the same technology that powers Amazon.com. Amazon uses forecasting to make sure that the right product is in the right place at the right time by predicting demand for hundreds of millions of products every day. Amazon Forecast uses this same technology to build precise forecasts for virtually any business condition, including product demand and sales, infrastructure requirements, energy needs, and staffing levels – with predictions that are up to 50% more accurate than traditional methods. Amazon Forecast is easy to use and requires no machine learning experience. The service automatically provisions the necessary infrastructure, processes data, and builds custom, private machine learning models that are hosted on AWS and ready to make predictions. To get started with Amazon Forecast, visit https://aws.amazon.com/forecast/.

Forecasting is the science of predicting the future. By examining historical trends, organizations can make a call on what might happen and when, and build that into their future plans for everything from product demand to inventory to staffing. Given the consequences of forecasting, accuracy really matters. If a forecast is too high, customers will over-invest in products and staff, which ends up as wasted investment, and if the forecast is too low, they will under-invest, which leads to a shortfall in raw materials and inventory; creating a poor customer experience. Today, companies try to use everything from simple spreadsheets to complex financial planning software to generate forecasts, but high accuracy remains elusive for two reasons. First, traditional forecasts struggle to incorporate very large volumes of historical data, missing out on important signals from the past that are lost in the noise. Second, traditional forecasts rarely incorporate related but independent data, which can offer important context (such as sales, holidays, locations, marketing promotions, etc.). Without the full history and the broader context, most forecasts fail to predict the future accurately.

Amazon has a wealth of knowledge in building accurate forecasts using machine learning from over 20 years of experience operating the world’s largest ecommerce business. Delivering billions of packages per year, with a multitude of delivery options in more than ten thousand zip codes, Amazon has developed advanced forecasting capabilities that incorporate the full product history and overlay context from related business activities, such as promotions and pricing changes. Due to this diverse and large-scale forecasting experience at Amazon, customers have asked AWS to share this knowledge with them to help make their own forecasts more accurate.

Today’s general availability of Amazon Forecast provides a major step toward putting the power of Amazon’s deep experience in forecasting into the hands of everyday developers in virtually every industry. Amazon Forecast produces private, custom models that can help developers make predictions that are up to 50% more accurate than traditional methods. Using machine learning, Amazon Forecast automatically discovers how variables such as product features, seasonality, and store locations affect each other. These complex relationships can be difficult to spot using traditional forecasting methods, but Amazon Forecast uses the machine learning developed at Amazon to quickly recognize complex patterns to improve forecast accuracy. Amazon Forecast automatically sets up a data pipeline, ingests data, trains a model, provides accuracy metrics, and performs forecasts. Developers do not need to have any expertise in machine learning to start using Amazon Forecast, and can use the Amazon Forecast Application Programming Interface (API) or easy-to-use console to build custom machine learning models in less than five API calls or clicks. With Amazon Forecast, customers can achieve accuracy levels that used to take months of engineering in as little as a few hours.

“Amazon Forecast now offers the forecasting expertise from Amazon’s first 25 years of building the world’s largest ecommerce business in a managed service for any company to leverage,” said Swami Sivasubramanian, Vice President, Amazon Machine Learning. “We’ve built sophisticated, machine learning forecasting algorithms over many years that our customers can now use in Amazon Forecast without having to know anything about machine learning themselves. We can’t wait to see how our customers use the service to reduce operating expenses and inefficiencies, ensure higher resource and product availability, deliver products faster, and lower costs to delight their customers.”

Amazon Forecast is available today in US East (Ohio), US East (N. Virginia), US West (Oregon), Asia Pacific (Tokyo), Asia Pacific (Singapore), and EU (Ireland) with more availability zones coming soon.

Puget Sound Energy (PSE) is the state’s largest utility, supporting 1.1 million electric customers and 825,000 natural gas customers in communities in 10 Washington counties. “At PSE, we’ve used Amazon Forecast to forecast electric and gas consumption at a typical residence. We found that even with a very limited set of historical consumption and weather data, Amazon Forecast performed very well at forecasting 30 days out with virtually no manual effort. With the increased emphasis on environmentally-friendly energy solutions, the ability to produce more accurate energy usage projections at each of our customers’ homes and businesses will be essential for energy service providers like PSE. With these enhanced analytical capabilities, PSE will be able to identify custom energy saving programs and services, ultimately reducing customer bills,” said Paul Johnson, Sr. Cloud Architect at PSE.

Accenture is a leading global professional services company, providing a broad range of services and solutions in strategy, consulting, digital, technology, and operations. “We are relentlessly focused on driving innovation and bringing increased value to our key clients,” said Takuya Kudo, a managing director and global data science innovation lead at Accenture Applied Intelligence. “Amazon Forecast is simple to operationalize for production workloads, allowing us to experiment with multiple state-of-the-art deep learning models for forecasting across our business.”

OMOTOR helps businesses improve through AI by providing them with the best of machine learning algorithms, computer vision techniques and cognitive bots that can communicate via WhatsApp and others platforms. “At OMOTOR, we use AI to innovate on behalf of our customers, so access to the most cutting-edge deep learning technologies from AWS is imperative to our client’s success. Using Amazon Forecast gives us the ability to create and refine various forecasts from time series data without having to build and train a model manually every time. We forecast real sales for the next 12 months, so we can adequately plan for inventory, estimate future profitability, track market share gain or loss, and other insights. This means we can use more contextual data, optimize more frequently, generate forecasts with upwards of 50% improvements in accuracy, and operate at a great speed. For example, we’re helping customers in the automotive industry predict sales across 185 vehicles in Brazil,” said Marcio Rodrigues, CEO, OMOTOR.

CJ Logistics is a leading integrated transportation and logistics service provider for individuals and companies in Korea. “Amazon Forecast has been applied to CJ Logistics’ parcel volume forecasting process to optimize the amount of human resources, transportation, and warehouse space we provision to meet demand,” said YoungSoo Kim, Vice President of TES Strategy Unit for CJ Logistics. “Amazon Forecast allows us to use sophisticated machine learning-based forecasting techniques without building our own system. We have a clear method for increasing our operational efficiency by using Amazon Forecast.”

Daemon Solutions is a consultancy helping clients get the most out of technology in business. “One of the most common challenges facing our retail partners is the ability to accurately predict product demand across different SKUs and store locations. Given the ease with which we have been able to use Amazon Forecast to create advanced ML models that meet the accuracy bar when it comes to forecasting as well as account for variables such as promotions and price with our test data sets, we are excited to deploy the service on behalf of our clients and solve real-life problems,” said Akram Dweikat, Head of Machine Learning and Artificial Intelligence at Daemon Solutions.

Source: Amazon Web Services
aws.amazon.com

UK Employers Continue to Seek Software Skills and Core IT Talent

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Employers in the United Kingdom continued their quest in Q2 2019 to hire software developers and programmers and professionals with core IT skills, according to an analysis of employment data by CompTIA, the leading trade association for the global technology industry.

Employers posted job openings for an estimated 141,395 information technology (IT) positions in Q2, CompTIA’s examination of data from Burning Glass Technologies Labour Insights reveals. The Q2 IT job posting numbers were down 13 percent from Q1.; and lower than Q2 2018.

“This mirrors the downward direction for all job ads in the UK employment market this year compared to the highs of a year ago,” said Amy Carrado, senior director, research and market intelligence, CompTIA.

The UK unemployment rate for the three-month period from March through May 2019 was 3.8 percent, down from 4.2 percent one year earlier, and the lowest unemployment rate since the October-December 1974 period.

Among the total Q2 job postings for IT occupations, some 50,329 positions for software programmers and developers were advertised. Other in-demand occupations organisations were looking to fill included IT business analysts, architects and systems designers (21,605 job ads), IT user support technicians (16,764), IT and telecommunications professionals (13,246), IT operations technicians (12,560), and web designers and developers (12,427).

“Clearly there is still solid market demand for fundamental technology skills in networking, security and technical support,” said Graham Hunter, CompTIA’s vice president for skills certification in Europe and the Middle East. “These foundational skills must be in place to provide the management and support for current operations as well as the emerging technologies and innovations that are taking hold.”

The UK employers with the most IT job postings in Q2 were the National Health Service, Amazon, British Sky Broadcasting Group, GCI Group, and Square One Group.

“The diversity of employers with open IT positions demonstrates that the demand for tech talent extends well beyond technology companies to all sectors of the economy,” Carrado noted.

The size of the UK IT workforce continues to grow year over year. It is projected to increase by more than 14,000 workers this year to 1.3 million. Additionally, job growth of 4 percent – 48,000 new jobs – is projected for the five-year period from 2018 through 2023.

The complete “CompTIA UK IT Employment Snapshot” for Q2 is available at https://www.comptia.org/resources/comptia-uk-it-employment-snapshot-2019-q2.

About CompTIA
The Computing Technology Industry Association (CompTIA) is a leading voice and advocate for the $5 trillion global information technology ecosystem; and the more than 50 million industry and tech professionals who design, implement, manage, and safeguard the technology that powers the world’s economy. Through education, training, certifications, advocacy, philanthropy, and market research, CompTIA is the hub for advancing the tech industry and its workforce.

SOURCE CompTIA
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Quality 4.0 Creates Substantial Value for Manufacturers, but They Must Overcome a Diverse Set of Challenges: Although Participants in a Global Survey Recognize Quality 4.0’s Importance at All Stages of the Value Chain, Few Have Defined a Detailed Strategy or Launched an Implementation Program

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Nearly two-thirds of manufacturers believe that Quality 4.0—the application of Industry 4.0’s advanced digital technologies to enhance quality management—will significantly affect their operation within five years. The benefits of this approach include reductions in defect rates and in costs related to poor quality. Nevertheless, a scant 16% say that their company has begun implementing Quality 4.0. Only 20% say that their company has started to plan for implementation, and 63% have not even reached the planning stage yet. European companies are off to a faster start: 21% have started to adopt, compared with only 6% of US companies.

These findings, from a recent global survey conducted by Boston Consulting Group (BCG) in collaboration with ASQ and German Association for Quality (DGQ), are discussed in a report titled Quality 4.0 Takes More Than Technology. The report is being released today.

The survey sought to evaluate participants’ views on Quality 4.0 as it exists today and as it will exist in 2024, to understand the most important use cases, and to identify major challenges and skills needed to implement a transformation. It was conducted as part of a broader study that included interviews with numerous experts to gain insight into industry benchmarks, the impact of use cases, and best practices.

The study found that technology is only one piece in a broader quality transformation that must also focus on people and skills. “Survey participants identified a shortage of skills as the main impediment to adoption,” said David Ryeson, a BCG partner and coauthor of the report. “Notably, participants regard soft skills—such as change management, communication, and teaming—as the most critical skills for success, even as they acknowledge the need to improve their analytics and big data skills.”

“Taken together, the findings point to the need for companies to take a multifaceted approach to Quality 4.0 adoption that addresses the full range of strategic, cultural, and technological issues,” said Bill Brody, a market research manager at ASQ.

“Companies that master the challenges will be rewarded not only with lower defect and failure rates but also with competitive advantage in the form of higher customer satisfaction and improved operational efficiency,” said Benedikt Sommerhoff, an innovation manager at DGQ.

The survey’s findings revealed a diverse set of opportunities and challenges:

Survey participants acknowledge the importance of Quality 4.0 at all stages of the value chain but see manufacturing and R&D as the areas that will benefit most. They also understand the opportunity to capture quality-related improvements in value chain steps that have traditionally been seen as lying outside the scope of the quality function, such as logistics and sales.
Participants point to predictive analytics, sensors and tracking, and electronic feedback loops as the most important technologies for driving impact. For example, more than 60% say that predictive analytics will significantly affect quality performance and the bottom line within five years, compared with only 16% who cite a significant impact today.
Survey responses to skills-related questions reveal widespread unreadiness for implementation. Only one-third of participants say that they understand how digitization will change quality management roles and skills, and even fewer believe that their company has the right people in place to run a Quality 4.0 initiative (17%) or has a clear strategy for attracting Quality 4.0 talent (5%).
Many organizations lack the basic prerequisites of a quality-focused culture. Although 57% of participants say that quality initiatives are part of their executive-level strategy, only 27% strongly believe that their company has clearly articulated its quality goals and objectives to all layers of the organization. Only 14% of participants believe that individuals across the organization understand their roles in achieving quality goals.
Both frontrunners (companies that have started to implement Quality 4.0) and followers (all others) cite a shortage of digital skills and talent as the number one challenge they face. For frontrunners, the next three most important challenges involve technology and data. In contrast, followers point to strategic and cultural challenges. These differences in appraisal suggest that technology- and data-related challenges become more visible to companies as they proceed with implementation. Meanwhile, roadblocks related to strategy and culture discourage followers from even pursuing implementation—a reflection of the importance of establishing a strategic roadmap and a quality-centered culture as enablers of technological transformation.
A copy of the report can be downloaded here.

To arrange an interview with one of the authors, please contact Eric Gregoire
at +1 617 850 3783 or [email protected]

About Boston Consulting Group
Boston Consulting Group partners with leaders in business and society to tackle their most important challenges and capture their greatest opportunities. BCG was the pioneer in business strategy when it was founded in 1963. Today, we help clients with total transformation—inspiring complex change, enabling organizations to grow, building competitive advantage, and driving bottom-line impact.

To succeed, organizations must blend digital and human capabilities. Our diverse, global teams bring deep industry and functional expertise and a range of perspectives to spark change. BCG delivers solutions through leading-edge management consulting along with technology and design, corporate and digital ventures—and business purpose. We work in a uniquely collaborative model across the firm and throughout all levels of the client organization, generating results that allow our clients to thrive.

About ASQ
ASQ is the leading membership association to help quality professionals achieve their career goals and drive excellence through quality in their organizations and industries.

ASQ provides expertise, knowledge, networks and solutions to a global membership of individuals and organizations spanning more than 140 countries. ASQ was founded in 1946 and is headquartered in Milwaukee, Wis., USA.

About DGQ
The DGQ (German Association for Quality) is the national, centralised society for quality in Germany and the first port of call for quality, quality management, and quality assurance. The umbrella organisation is a registered association comprising a unique network of more than 6,000 quality experts in more than 4,000 companies of all sizes and industries. Young professionals, experts, and managers connect, reflect, and share experiences in more than 70 regional and expert circles as well as networking events throughout Germany.

The DGQ network offers the most versatile and comprehensive platform for sharing knowledge, practical experience, and trends on quality-related topics in Germany. The DGQ is engaged in national and international initiatives, partnerships, and committees developing and accelerating key standards as well as innovation and research projects. With around 300 trainers and 1,000 practice-related training courses, the DGQ offers a wide range of trainings and awards individuals with internationally recognized certificates. It contributes effectively to anchoring “Quality made in Germany” as a principle of success in business and society. In a world of transformation, it also develops new quality approaches for the future.

SOURCE Boston Consulting Group (BCG)
www.bcg.com