Deloitte leverages AI to develop strategic market reports and benchmarks
Accounting and consulting firm Deloitte has developed a new Artificial Intelligence (AI) based method that can produce strategic market analysis and benchmark reports in the blink of an eye. DeloitteSmartReports.com can browse hundreds of thousands of datasets rapidly, to tailor-make quality reports at a fraction of the cost of a human consultant.
The rise of technology is undeniably seen by many as a threat to employment, as intelligent machines and robots are able to take over a growing number of tasks from people. One of the areas where artificial intelligence (AI) can provide major value, is in the field of ground-breaking insights. Frontrunners in the field of Big Data are already actively using AI in practice today. Booking.com, for instance constantly analyses where its visitors are, and their behavioural preferences, so that a tailored product or service can be offered, while social media giant Facebook similarly leverages its users’ data to get a better insight into the minds of consumers.
At a more strategic level, multinationals from various industries use the power of Big Data – combined with analytics, process mining and AI – to gain strategic insights that can subsequently be leveraged to improve business operations. According to a recent survey by Gartner, the maturity of AI application at companies has jumped considerably, although it should be noted that the technology still is in its infancy.
Ewout Bolhuis, a Director at Deloitte in the Netherlands, recognises the trend from his own organisation. Deloitte is one of the largest consultancies in the Netherlands, with a large part of the consultancy work carried out by the firm today serving customers who are looking for support in their digital transformation efforts. Bolhuis: “Data and insights play a crucial role in this, since it is the lifeline of knowledge, and therefore provides the direction in which change should take place.”
DeloitteSmartReports.com
Yet, over the past few years, Bolhuis and the team at Deloitte Innovation – the practice of the consulting firm that enjoys the freedom to develop new innovative concepts to meet the future demands of customers – have noticed another trend. While companies are becoming better at generating their own insights, they are increasingly interested in sharing analysis with other market or industry parties. For those companies at the other end of the spectrum, those struggling to generate efficient insights –the majority of companies – there is a great need to obtain such capacities in an easy and cost-efficient manner.
“Our consulting practice is providing clients with market analysis, benchmark reports and strategic insights for decades,” said Bolhuis. What is new today, he added, is that it is technologically possible to fully automate this process. This gives rise to several customer benefits – reports become immediately available and, importantly, much more affordable.
Building on these insights, Deloitte in the Netherlands decided to develop the concept of AI-generated strategic reports, in a pioneering move within the firm’s global network of 150+ member firms. Bolhuis explained, “With DeloitteSmartReports.com, every stakeholder can at any time of the day access tailor-made benchmarking reports that provide insights into an industry or company.”
At this moment, DeloitteSmartReports.com can produce three types of reports: industry reports (a detailed analysis of a sector), company versus industry reports (benchmarking a company against a sector) and company versus peers reports (benchmarking a company against a selected number of companies, for example competition). The insights have been collected from more than 100,000 annual reports of more than 20,000 companies, and the database is supplemented on a daily basis with new annual reports to reflect the latest updates at companies.
In addition to being able to use the standard information from annual reports, DeloitteSmartReports.com also has a ‘smart engine’, which can find relevant qualitative information in reports, such as the risks, which can then be converted into fact-based analysis. With the help of natural language processing, the system can recognise and understand paragraphs, and so “create a more complete report.” The reports are generated through artificial intelligence, with the framework of the algorithm designed in such a manner that the team’s founders guarantee “high quality and accuracy” in their resulting documents.
The final report usually counts between 24 and 28 pages and is supported by state-of-the-art infographics, so managers can see in an instant how their company or industry is performing. So what type of information do the reports present? For instance, how revenue, profitability and costs in an industry have developed over the past five years and what the main drivers are. Or how a particular company compares versus its peers. Or what represent the top 20 risks for an enterprise.
New business model?
The global consulting market is estimated to be worth around €250 billion, and analysts have been talking for a number of years about the threat that automation will pose for the industry, particularly the more transactional activities. Deloitte is one of the leaders in the field when it comes to strategic advice, and, by making this part of consultancy work much cheaper and more readily available for its clients, it simultaneously risks cannablising on its own revenues. Bolhuis does not deny that this is the case, yet points at the firm’s longer-term vision of providing the best service and experience to clients, highlighting that Deloitte still sees it as an opportunity to gain in another area of the market.
“With DeloitteSmartReports.com we make one certain piece of strategic work better, faster, easier and cheaper,” Bolhuis contended, elaborating, “Normally it takes months and thousands of euros to produce such reports. However, thanks to AI we can provide a more affordable alternative to a wider client base, while maintaining the quality that those who work with Deloitte are accustomed to.” He added, “And because the product now is more affordable, Deloitte can offer the service to a much large client base.”
While the innovation was crafted by the Dutch arm, its application is by no means limited to the space between the country’s national borders. Bolhuis believes that DeloitteSmartReports.com is easily scalable: “we can provide the products to basically anyone, where he or she is based.” Indeed, the development is, according to insiders at the firm, closely being monitored within the international Deloitte organisation.
McKinsey Solutions
Companies that succeed in tapping into new consulting markets, such as digital or cybersecurity, or disrupting markets into new ones, are poised to be the winners of tomorrow. This is exactly what Deloitte is looking to achieve with DeloitteSmartReports.com, in a step that closely resembles the way in which McKinsey & Company is serving its clients with ‘continious insights’ through its McKinsey Solutions arm.
When McKinsey launched McKinsey Solutions, it was a grand departure from its core offering. While the consultancy firm has been successfully offering ‘human-capital based’ services for decades, its new unit launched in the middle of the crisis focuses on technology and analytics embedded at their client instead. Today, McKinsey Solutions has not only enabled McKinsey to protect its market position (additional revenue, remaining ‘top of mind’) but has more importantly helped the firm become the disrupter, not the disrupted. Today McKinsey Solutions has over 70 solutions across industries and functions.
While Bolhuis recognised that DeloitteSmartReports.com has similarities with McKinsey’s model, along with a number of other leading research and analyst firms, he undertook the pains to point out what makes Deloitte's service distinctive. “We have automated the entire process. The customer can order, pay and receive the report without the need for a human being,” he explained.
In addition, DeloitteSmartReports.com has a focused approach, focusing on only three types of strategic benchmarks. The idea behind this is simple according to the Director at Deloitte, “If you want to be successful on the web you can better be really good at one thing and learn how it works to strive for excellence.”
When asked about the future plans for the service, Bolhuis said that the first goal remains getting more customers to adopt the tool. DeloitteSmartReports.com has only been active for external customers since November 2017, but has already attracted a great deal of attention. In parallel, Deloitte's team of data scientists are busy expanding the functionality by also adding patent reports. “These reports are the perfect addition to our current range, because they allow companies to see in which areas their rivals are innovating in.”
With the innovation, Deloitte’s Dutch arm knows that it is sitting on a potential goldmine. Yet, despite the fact that AI’s rise into consulting is undisputed, and the firm’s (financial) muscle, successfully nestling a position in a market which still is in its infancy remains a major challenge for Bolhuis and his team. Only time will tell whether Deloitte's AI-written reports manage to secure a permanent place in the chain that has been fully dominated by human consultants, for the moment at least.
