Technology, innovation and new industries have slashed companies’ life expectancy. According to a new study of the turnover of the S&P 500 companies, about half of the S&P 500 will be replaced over the next 10 years. Welcome to the 4th industrial revolution and the wealth of emerging issues it brings.
The ability to understand and preempt change is historically what’s made the difference between the big winners and big losers during major transition periods.
Business has so far relied on a backward-looking, stakeholder-led materiality assessment to identify and prioritize strategic issues, but this methodology lacks structure and data where decision makers most need it: it is narrow, slow, project dependent and opinion-based.
“Traditional surveying and forecasting tools have repeatedly failed to predict key outcomes. In this fluid environment, it becomes even more important for companies to have tools that accurately identify the many ways in which issues are discussed to enable companies to understand the strategic context in which their businesses are operating.” Sean Gilbert, Sustainable Finance Center – World Resources Institute, Datamaran Technical Advisory Board
Re-thinking AI technology for business resilience
Managers are working within very short time horizons and competing for attention from their own board who face very immediate and pressing operational and strategic issues. They need a flexible and robust approach, able to provide timely, forward-looking, and data driven insights.
Determining priority issues and monitoring them can be significantly costly in terms of time and resources; especially now, with business increasingly accountable towards a myriad of stakeholders including shareholders, employees, clients, local communities, regulators, activists and the public.
This is where AI technology and machine intelligence break in to do what humans can’t do: analyse and digest vast amounts of narrative information from various sources – quickly, reliably and objectively. As Paul Druckman puts it, this is about ‘rethinking what you do with information rather than how you get it’.
Ask the Machine
At Datamaran, we teach computers how to read narrative from corporate reports, regulatory initiatives, social media and digital news sites. Currently, our AI technology-powered platform Datamaran scans and analyzes these sources against a dictionary of more than 100+ emerging issues tied to over 6,000 related synonyms – the ontology. But the key strength of our approach is its capacity to evolve.
“As new discoveries come to light, or new terminologies (or different uses of existing terms) result from defining these relationships, we need to ensure that they are captured, classified, categorized and compared in order to bring meaning to business and ensure risks are appropriately mitigated and opportunities capitalized upon. It is at this nexus that eRevalue’s ontology exists and it is this constant and fluid development that makes it so important.” Ian van der Vlugt, Carbon Disclosure Project, Datamaran Technical Advisory Board
On the basis of this continuous monitoring approach, and reflection of the changing narrative of emerging issues, the research team periodically makes key enhancements to the ontology in collaboration with our Technical Advisory Board who bring external opinion and deep technical and conceptual expertise to the process.
The next key enhancement, which will be available next week includes:
- New synonyms, expanding the coverage of existing topics
- A new flexible and adaptive system to analyse the relationship among the synonyms and reflect the context in which an issue is reported – multiplying the tracking capability of each term
- New issues tracked, such as Digitalization and Geopolitical risk
- Mapping against the SDGs with a dedicated analysis tool
In this way, Datamaran ontology agily responds to observable real-world changes that become more pressing and tangible as events unfold, providing insights beyond the “what” and into questions of “how” and “why”, necessary to survive and thrive in the modern business arena.
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