February 7, 2009

Analytics’ role in a frightening economy

I chatted yesterday with the general business side (as opposed to the trading operation) of a household-name brokerage firm, one that’s in no immediate financial peril. It seems their #1 analytic-technology priority right now is changing planning from an annual to a monthly cycle.* That’s a smart idea. While it’s especially important in their business, larger enterprises of all kinds should consider following suit.

*By the way, they seem to want use Applix technology, now owned by IBM/Cognos, to do it, more for the planning tools than for the cool in-memory OLAP engine itself. Your mileage may vary.

If you don’t go for fancy slice/dice tools, then do something else to make sure your drilldown or exploration are up to snuff. Just about every enterprise is going to be seeing some distressing numbers right now. But that doesn’t mean every part of every line of business is in equal trouble. Teasing that apart is important at times like this, or employment and investment could get strangled do to overreaction.

I have a small enough business that I can keep things like this in my head, without bothering to run precise three-significant-figures calculations. But I’ll tell you this — my revenue in analytics is sure healthier than my business in OLTP or custom publishing.

And don’t necessarily stop there. We’ve heard the horror stories of investment models failing in this unusual economy. Well, what about your own predictive analytic models? If you have formal models of buyer behavior, what makes you think the future will be like the past? Times have changed. No matter what your usual schedule is, you should be revalidating and perhaps strengthening your more important models now. If that overtaxes your infrastructure, and you can’t afford the capital investment to do something about that — well, appliances are pretty cheap, and some SaaS data warehousing offerings are (at least in the short term) even cheaper.


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