How to Weather a Potential Business Storm Using Data
Weather reports factor heavily into the big — and small — decisions we make on a daily basis. Forecasts can dictate your morning commute to work, afternoons mowing the lawn or tending to your garden, and outdoor evening dinner plans.
Rightfully so, weather factors into how we approach these subjects. On a larger scale, CFOs and other high-ranking business officials should keep weather forecasts in mind when directing an organization’s financial future.
Confronting weather risks head-on helps businesses avoid financial loss and fulfill their responsibilities to consumers. Most companies, however, lack the necessary detailed risk modeling to interpret how current, near-term, and long-range weather forecasts will specifically impact their organizations, depriving their own corporations use of a valuable resource to improve planning and operations, while also ensuring that they deliver on their brand promises.
The use of long-term forecasting technology or other advanced weather reporting tools can assist in making more informed professional choices.
In a study published on stormexchange.com, 86 percent of companies that used weather-hedging tools found them to be useful. The same study shows that 72 percent of those companies plan to incorporate those accessories into their businesses again in the next few years. Another 38 percent report that their companies needed protection from the unpredictability of the weather.
Business leaders can benefit from weather-related business decision guidance in both the immediate and far-reaching future. Precision forecasting coupled with specific business-risk impact modeling has the immediate impact to arm CFOs and other high-level executives with quick, long-range information that may have been unavailable through other sources. Furthermore, these reports let CFOs improve business continuity by better managing risk.
According to Forrester Research, weather is the leading agent of business disruptions. With extreme, worldwide weather events becoming more common, businesses shouldn’t just want to account for major weather shifts — they should need to.
Most companies don’t have severe weather response plans, while others have outdated strategies that aren’t reflective of their current needs. So how can business executives and CFOs incorporate weather forecasts into their decision-making processes? Here are three options:
Find long-term, reliable forecast information.
At StormGeo, clients are provided with specific, long-range information based on their particular needs.
Recently, we provided a large investor-owned utility client with such a forecast to identify this season’s temperature, precipitation, and thunderstorm risks. Similarly, we’ve identified winter storm risk areas for a banking client and conducted a rainfall outlook for a construction site.
Both were valuable for the companies’ workload planning purposes.
Hire a meteorologist.
Having a professional forecaster on call to provide your business with instant weather feedback is an incredibly valuable asset. I worked with a company last year that made use of such a resource.
That organization’s meteorologists wanted to investigate why its wind energy productions dropped off at certain times of the year. From exploring the right information, we were able to examine the deficits that had occurred and predict what to expect in the upcoming years.
The information helped the company alter its budgetary plans for losses and gains in 2016 and 2017.
Not only could this kind of technology put a CFO ahead of the competition, but it would also likely lead to safer, more efficient planning for any upcoming weather threats. Plus, more sources and an extra opinion will only make end users more confident in your brand.
Use the forecast to develop a forward-looking business model.
Developing tools in advance of major weather events can save companies a lot of money and time and can improve customer satisfaction.
When we work with insurance companies, we provide them with weather forecasts tailored specifically for their insured customers. This lets premium holders know ahead of time when a storm is coming, allowing them to take the necessary precautions. In turn, this aids in reducing claim costs for insurance companies.
Ultimately, being aware of the weather can only improve the operations of your business. Gaining an early edge on weather reports can give CFOs and business executives an edge on competitors, help avoid financial loss, and improve an organization’s relationship with its end users.