Steer through Black Swan events with Advanced Analytics and Quantified Assessments
by Sachin Rane, on Jul 22, 2022 5:03:10 PM
Estimated reading time: 3 minsKey takeaways from this blog
- Technology cannot predict Black Swan events. However, Advanced Analytics allows to take calculated steps and safely navigate through the turbulences.
- Advanced Analytics allows to make quantified assessments based on data. They are not predictions but data-driven prescriptions for collaborative decision-making.
- Advanced Analytics allows businesses to be ready with their plan As and plan Bs. It allows to build liquidity reserves and create credit risk covers to sail through uncertainties.
Unprecedented Black Swan events occur at intriguing frequencies throwing business operations in jeopardy. Market upheavals and force majeures require businesses to be wary and protect their finances, operations, and supply chains for long-term sustenance. Advanced Analytics enables businesses to perform data-driven risk management and make quick decisions to address business uncertainties proactively. It enables quantified assessments of the business operations and finances within the prevailing circumstances to steer through with confidence even during the Black Swan occurrences.
What is Advanced Analytics?
Advanced Analytics uses techniques, such as data mining, pattern matching, artificial intelligence/machine learning, forecasting, cluster analysis, neural networks, and visualization to examine business data autonomously and generate insights vis-à-vis prevailing market circumstances. This insights generation enables data-driven decision-making to deliver value during maritime as well as market turbulences.
Advanced Analytics solutions use existing data to generate forward-looking data-driven insights in prevalent conditions, predictive reports about future scenarios, and prescriptions or recommendations vis-à-vis multivariate business conditions. These solutions generate quantified assessments of situations and provide options within the available set of business as well as market conditions.
How does Advanced Analytics help tackle Black Swan events?
Advanced Analytics enables businesses to simulate scenarios using variable conditions and ensure data-driven risk management and risk mitigation. It allows them to proactively assess their business position and navigate through tough times with collaborative data-driven fast decision-making rather than gut feeling and biased personal assumptions.
Advanced Analytics enables businesses to take stock of their financial position, be ready with their Plan As and Plan Bs, and generate a liquidity buffer even before the Black Swan event materializes. Advanced Analytics solutions are also important during maritime when businesses can take stock of their cash flow and optimize operations, plan business expansions, forward and backward integrations, and mergers and acquisitions.
Types of Advanced Analytics solutions – Navigate through uncertainties
Advanced Analytics enables businesses to identify opportunities in diversities. These opportunities range from day-to-day monitoring of activities or reducing OpEx to optimizing the cashflows through an accurate analysis of P&L. It is all in real-time. Here are some of the important types of Advanced Analytics that are useful to businesses –
- Operational Analytics: It allows to optimize inventory management and ensures high transparency across all levels of stakeholder management, ensuring just-in-time production to eliminate the unnecessary drain on the warehousing costs. Operational Analytics helps to take stock of operational spend to eliminate malpractices, and monitor the heart-beat of heavy machinery for regular predictive maintenance rather than making costly repairs. It allows assessment of supplier risk score cards to have pari passu arrangement for alternate reliable supply chains, and improve the overall business agility.
- Financial Risk Analytics: It allows assessing the credit worthiness of prospective clients to limit the debtor days. It also enables businesses to assess the capability of different parties to fulfill contractual obligations, manage, and mitigate financial risk. It allows to assess different scenarios and protect the business from cash flow disruptions. It enables businesses to operationalize idle cash and optimize cash operations. Financial Risk Analytics also enables businesses to divert the excess cash flows to generate credit risk cover. It enables increasing process efficiencies to eliminate fraud.
- Customer Analytics: It allows to generate 360-degree analytics about customers and prospective customers to understand customer profiles and requirements. It enables conducting customer behavioral analysis vis-à-vis market trends to make informed decisions. It enables businesses to identify the customers with high CLTV, attract, and retain them. It enables customer segmentation exercises for targeted sales and marketing. It enables to design the right products and campaigns for acquiring the right customers. It allows to optimize customer acquisition operations as well as reduce customer churn.
Advanced Analytics enables businesses to assess situations based on available data and make quantified assessments during maritime as well as market turbulences. It enables businesses to make fast informed decisions, perform data-driven risk management, and navigate safely through uncertain times. No technology can predict the turbulences thrown by Black Swan events or market upheavals caused by force majeures. However, data-driven quantified assessments allow businesses to take calculated steps and steer the business through market disruptions.