Archives For Financial Evaluation

Analytics Annuity

January 15, 2013 — Leave a comment

The beauty of analytical models is that they create an annuity value. ¬†Unlike many other back office activities of a firm, a powerful prediction model, built once, creates stream of cost reductions or revenue enhancements out of thin air, year after year with a bit of care and feeding. ¬†When determining funding priorities, your team’s expenses (people, tools, data) are part of a cash flow rather than a one-time expense. This may be a concept to share with finance but it is a relevant concept to gain agreement on within the organization.