The Competing on Analytics: The New Science of Winning by Thomas Davenport and Jeanne Harris describes how companies are using analytical tools to help set strategy and develop better products and services. The combination of exploitation and exploration of analytic measures can provide insights that are not usually available with descriptive work. The authors do a good job of telling the analytic tale of success for many companies bu there is limited specifics of how statistics are used differently than what has been applied by the "whiz kids" of the 1950's and 60's. We have more data than ever before which is different, from a decade ago, but how the analytics are applied to this data is not clear.
Given my focus on money management, I was surprised to see that no companies have been mentioned. I will say that the use of analytics to help tailor products to investment customers is an area which has not been fully developed. Money managers, especially hedge funds, will often have just one product. No matter what the problem there is only one investment solution and you have to pay a premium fee. This does not make sense. If you pay a premium, there should be a higher degree of specialization and customization. One of the problems is that clients will not often provide useful information to money managers. For example, what is the level of risk aversion of a client? Money managers generally have little information. on their clients. There are questionnaires for retail investors but the process of obtaining useful information for institutional clients is still in its infancy.
Tools for money management will be essential for the further refinement of investment products.
Given my focus on money management, I was surprised to see that no companies have been mentioned. I will say that the use of analytics to help tailor products to investment customers is an area which has not been fully developed. Money managers, especially hedge funds, will often have just one product. No matter what the problem there is only one investment solution and you have to pay a premium fee. This does not make sense. If you pay a premium, there should be a higher degree of specialization and customization. One of the problems is that clients will not often provide useful information to money managers. For example, what is the level of risk aversion of a client? Money managers generally have little information. on their clients. There are questionnaires for retail investors but the process of obtaining useful information for institutional clients is still in its infancy.
Tools for money management will be essential for the further refinement of investment products.
No comments:
Post a Comment