Prediction Markets Platform - Inkling Incorporated

Improve Forecasting of Performance Indicators

Raise awareness of key success metrics and understand what is really going on.

Decisions are made every day based on forecasts of business performance metrics. Shouldn't you make sure to include the input of those who might have something valuable to say about them?

More accurate forecasts means decreasing operating risk.

Easily involve a broad range of people in your organization, your business partners and/or your customers to provide input;
Gauge success of remedies to poor forecasts by seeing how "the market" reacts;
Pair market results with traditional data analysis to drive marketing spend, inventory level, and human resource decisions; and
Understand people's true opinions by avoiding the internal politics typical of any organization

Your CFO says the quarterly sales forecast is going to be significantly higher and suddenly several entities of your organization are swinging in to action. 3rd party suppliers are notified to be prepared for increased orders, inventory levels are increased, customer service representatives are added to accommodate the pending customer calls based on increased sales volume. But all of these actions have financial ramifications. Overtime pay, increasing product output, and greater storage capacity for increased inventories all have costs.

If the forecasts were correct, the moves pay off. You meet the demand. Your stock price goes up. You're a hero. But if they weren't, you may have excess inventory, unhappy suppliers, and layoffs, not to mention missed revenue growth potential. Uh oh, now you're the goat.

According to a Price Waterhouse Coopers "Barometer Survey" of 383 CEO's of privately held product and service companies identified in the media as the fastest growing U.S. businesses over the last five years, the most often used metrics companies tracked were:

On-time performance
Product reliability
Customer response time
Manufacturing lead time
Defects/returns
Revenue growth
Operating income
Yields
Headcount
Product/service line profitability

Today organizations have an ever-growing reliance on data to generate forecasts of these metrics. Enterprise Resource Planning (ERP) and the Business Intelligence software business is booming with good reason. More than ever before the ability to gather performance data about the business is providing new insights decision makers never had access to. Nevertheless, forecasts still regularly diverge from actuals and as we suggest above, poor or unrealistic forecasting can have real financial ramifications.

So where to turn?

What about the human element? CFO's and CEO's often rely on ad hoc communication across the organization to augment their forecasts. Now this intuition and experience inherent in the institutional knowledge of your organization that can't be captured in any amount of data analytics can be systematically captured in a prediction market.

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