Advanced Forecasting Getting Commoditized?

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.

“When we started in 2006”, said Joannès Vermorel, founder of, “the Total Cost of Ownership (TCO) of any advanced business forecasting solution was above $200.000 per year. Clearly, it’s 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.”

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 now deliver “forecasts as a service”. The historical data is uploaded (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, 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.

“By leveraging small correlations”, said Joannes Vermorel, “we 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.”

Those emerging companies that deliver “forecasts as a service” 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. 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 “forecasting as a service” solutions for SME starting at $20/month. Lokad is a software company based in Paris, France.

If you’d like more information about this topic or to schedule an interview with Joannes Vermorel, please e-mail at


Contact: Joannes Vermorel
LOKAD SAS, Paris, France

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Press Release Submitted On: May 22, 2008 at 1:37 pm
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