Cognizant bets big on analytics

A car could today have an onboard telematics device that sends feeds to your insurer on your braking and acceleration habits, distance you travel, and the roads you frequently travel on. That would enable the insurer to build a pay-as-you-drive insurance policy - a higher premium for more and irresponsible driving. That, in turn, could potentially have a huge impact not just on the profitability of insurance companies, but also on people's driving habits.

The data collected from the onboard telematics device creates, what Cognizant calls, a personal Code Halo. Today, every click, swipe, 'like', buy, comment and search produces information that creates a unique virtual identity of any individual, company or device. Code Halo is the virtual digital information that surrounds any person, device and organization. And Cognizant has begun a major initiative to develop innovative commercial business solutions based on these Code Halos.

"A growing number of companies are beginning to make value out of Code Halos. They are seeking data and information from person, device and organization and creating a new business model that's redefining how commerce is done," said Paul Roehrig, assistant VP and co-director for the Future of Work initiative at Cognizant.

While many companies are working on big data analytics, Cognizant's idea is to build interfaces between, say, the data from a flight engine, the pilot's chatter, and the chatter of passengers at airports, and create a larger solution that enables airlines, airports and others to glean vital insights. Cognizant's new Future of Work division is a team of analysts who previously worked in industry research firms like Forrester and Gartner and who work with others in the organization to build larger business solutions.

Roehrig said there is a big shift in the business of technology with the digital economy expected to surpass the physical economy in value very soon. Cognizant surveyed 300 companies that achieved a total economic benefit of roughly $766 billion over the past year based on their use of business analytics. Among those that participated in its research, investment in business analytics yielded an average 8.4% increase in revenues and an average 8.1% improvement in cost reduction in the previous fiscal year.

Code Halo's foundation is SMAC (social, mobile, analytics, cloud), and the internet-of-things, or the internet-enabling of everyday devices and instruments, a trend that's beginning to take off. Social, mobile and internet-of-things produces vast quantities of personalized data, while cloud is the medium through which these become generally available.

Code Halo is a layer sitting above these volumes of data and weaves a business model around them. "Many companies — perhaps most — are missing the opportunity for significant economic benefit. If the companies we surveyed were to begin deploying best practices in analytics, we estimate they could create $853 billion of value within the next 12 months," Roehrig said.

SMAC will account for over $500 million of Cognizant's expected $8.8 billion revenue this year. It's one of the few companies that have started reporting their SMAC revenue separately, given the size of the business and its rapid growth. The Code Halo initiative is expected to accelerate this growth.