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The economic value of an analytic project is weakly connected to the measure of fit of the algorithms used. A simplistic implementation can sometimes be more economical and provide higher value. In a larger organization more precise algorithms are likely more profitable. The decision should be based on the valuation of each potential solution in the business environment where it will operate. The value of implementations, algorithms, and data is not universal.

In the valuation of a Data Analytic project the most important element is the baseline usually determined from the cost of alternatives in Descriptive Analytics or simulations and historic data in Predictive Analytics.

An economically viable Data Analytic project needs to provide substantial value beyond the baseline. Once the project becomes profitable the Implementation Costs and cost of money dictate the profit rate. The valuation uncovers the change in revenues and costs including the risk thus allowing to optimize the structure for higher profits or lower risk.

In many cases for projects that fail to provide sustainable value start analyzing the change in Revenue and Cost, there could be enough uncovered value (including potential risk reduction) to save the project. Even severely bleeding projects may have a future value that once discovered could be reshaped to become a strategic game changer.

Contact us today for a free evaluation of your project.

Data Analytics Creates Value

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