Paris, France (PressExposure) May 26, 2008 -- Anticipating demand is a business cornerstone for most companies. In retail and manufacturing, supply chain optimization, which significantly relies on statistical forecasts, has been a major factor of cost reduction in the last decade. Yet, accurate forecasts are typically requiring top-notch data miners who happen to be both rare and expensive. According the KD Nuggets poll of 2006, North American data miners were getting $110,000 on average.
Yet, emerging technologies may dramatically change this situation.
âWhen we started in 2006â, said JoannÃ¨s Vermorel, founder of Lokad.com, âthe Total Cost of Ownership (TCO) of any advanced business forecasting solution was above $200.000 per year. Clearly, itâs not something that a SME can afford. Lokad was founded with the goal of delivering an even better forecasting technology for only a tiny percentage of usual costs.â
Indeed, the TCO bottleneck of statistical forecasting was the need to have an expert on hand to actually build the statistical models and perform the forecasts. But companies such as Lokad.com now deliver âforecasts as a serviceâ. The historical data is uploaded Lokad.com (the data being obfuscated first for security) and the forecasts are downloaded back. With the latest release of Lokad Safety Stock Calculator, the whole process does require more than a single click.
But the real technology shift consists not of simply outsourcing data miners into another company; it consists in leveraging the global web community in order to improve even further the forecast accuracy. For example, Lokad.com has a Web 2.0 approach to forecasting where every single forecasts leverage not only the sole historical dataset of the company requesting the forecast, but leverage also the datasets from all the companies being part of the Lokad community.
âBy leveraging small correlationsâ, said Joannes Vermorel, âwe are able to improve the forecast accuracy beyond what we call the offline barrier. When it comes to statistical forecasts for SME, one major issue of traditional approaches is that usually there is simply not enough data.â
Those emerging companies that deliver âforecasts as a serviceâ are quickly commoditizing technologies that were once reserved to large companies that could actually hire the few experts that the market had to offer. Considering this, the next decade is most probably going to bring significant changes in this market.
Lokad.com was founded in 2006 with the objective to deliver state-of-the-art statistical forecasts at a fraction of the usual costs associated to those technologies. Lokad provides âforecasting as a serviceâ solutions for SME starting at $20/month. Lokad is a software company based in Paris, France.
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