Aleron Partners. Analytics Services. April 2013 EXPERTISE ENERGY EXECUTION

Transcription

1 Analytics Services April 2013 EXPERTISE ENERGY EXECUTION

2 Big data and analytics are now more accessible and necessary than ever 40 GB of sales data for a typical SMALL European Retailer Firms with good analytic capabilities are 5-6% more profitable 10,000 STEM graduates in the UK each year YouTube receives 24 hours of video EVERY MINUTE An average desktop makes 4 TRILLION calculations per second Over 52% of managers say they need to retrain in analytics 1,048,676 rows in Excel A typical UK supermarket chain collets 1.5 BILLION lines of data every MONTH 40% annual growth of yearly data production Marketing performance increase of 10-30% with data analytics Analytics can enable up to 10% improvement in net working capital 2 Source: The Economist, AMD, MGI, HBR, MIT LLP 2013

3 ... but building effective analytical models raises many challenges that are often overlooked Getting the right level of complexity How does one make sense of all the data that is out there without breaking the bank? Sometimes it s important to have the whole picture, but sometimes it s not necessary. What level of complexity is the right one? Dealing with difficult situations Building a relevant model Minimizing Risk What happens when you need to make an informed decision in less than 24 hours or when the levels of complexity requires extremely sophisticated mathematics? It s important to have the right people to deal with these situations Often times, key drivers or objectives are lost in the development process. How do you make sure that the model that is built is properly aligned with purpose of the model? One small error may sometimes have a disastrous impact for the organisation. How do you ensure zero tolerance of error in the model? 3 LLP 2013

4 Aleron provides hands on analytical expertise in a wide breadth of business situations Critical Situation Analytics Highly Complex Situations Integrated Data Solutions Timing 1 day to 2 weeks 2 to 4+ weeks 3 to 8+ weeks Situation I needed those numbers yesterday I have an extremely complex dynamic situation that I need to understand I want to have an easy-to-use analytics tool that will guide my day-to-day decision making Summary Provides rapid and immediate analytics and modelling support in the most time sensitive situations Uses highly sophisticated & advanced mathematics and statistical tools to solve the most difficult quantitative business problems Offers full scale integrated analytics solutions from predictive modelling to implementing automated databases and measurement tools Example Scenarios Due diligence, M&A, bid or market response, contract analysis, business development Dynamic market simulations, investment distribution analysis, system optimization Automated financial forecasting (e.g., cash flow), sales analysis, analytics tools, Big Data platforms Expertise Advanced modelling/excel Corporate finance Scenario analysis Due diligence Advanced economics, mathematics & statistics Leveraging tools from physics, statistical genetics, and other hard sciences Database & software development Platform integration Cash management and working capital optimisation 4 LLP 2013

5 accuracy We have developed an approach and a set of tools to ensure maximum benefit from analytics We determine the right level of complexity for the right situation and apply proprietary frameworks and methods to ensure accuracy and relevancy Situation X Situation Y Situation Z model complexity Finding the right level of complexity to build the model is challenging. For example, for Situation X, an accurate result can be determined simply, but a more complex model can result in extraneous errors. On the other hand, for Situation Z, an accurate result cannot be achieved until a fully complex model is built We have adopted a framework used in engineering* to determine accuracy tolerances of key drivers in order to decide on the right level of complexity before building any model We have built proprietary tools derived from years of experience and from the hard sciences and engineering to enforce our zero error tolerance policy in modelling To ensure relevancy and usability, we have developed critical checklists and frameworks to make sure we don t miss important components Although each situation is unique and we tailor our solutions to fit the client needs, we benchmark each solution against previously similar projects 5 * Error variance analysis in engineering is used for example to determine how accurate each component needs to be manufactured to support the structure LLP 2013

6 Our people have unparalleled analytical, financial and business skills gained in top tier organisations and universities Lewis Z. Liu Head of Analytics Lewis leads the analytics team in engagements and provides critical analytical expertise. Aleron experience includes working capital optimization (Sapphire), M&A due diligence, Big Data optimization, analytics infrastructure development. Prior Experience: Consultant at McKinsey & Company (London). Physicist at CERN (Geneva) Education: DPhil Candidate in Atomic & Laser Physics, Oxford. AM in Physics, Harvard. AB (Highest Honors) in Fine Arts & Physics, Harvard. Notes: Lead inventor of a new class of X-ray lasers (3 patents filed, 3 first author papers in top journals). Discovered new telecoms algorithm for faster signal processing in fibre optics. Speaks Chinese & English. Julian Asher Statistics Expert Julian is an expert in Big Data optimization and a world leading expert in specialized statistical processing. At Aleron, he has been working on working capital optimization and Big Data analytics. Prior Experience: Founder/CEO, Timeless Africa (luxury ecotourism firm). Consultant at Opera Solutions (Big Data Analytics firm). Postdoctoral Research Fellow, Imperial College London. Education: PhD in Neurogenetics, Oxford & Cambridge. MD Program, USCF Medical School. AB (magna )in Cultural & Film Studies, Harvard Notes: 3 published Nature papers in statistical genetics, board member of Teach with Africa charity. Speaks French & English. 6 Wolf Rittershofer Mathematics & Simulations Expert Wolf specializes in advanced mathematical modelling and simulations for complex dynamic systems such as financial and energy markets. He has created dozens of highly accurate and complex dynamic simulations in both the private sector and in physics research. Prior Experience: Strategy at Centrica (Windsor, UK). Physicist at Lawrence Berkeley National Lab (California) Education: DPhil in Plasma Physics, Oxford. Science Innovation Program at Oxford Said Business School, Diploma (MS) in Physics at Ludwig-Maximilians Munich Notes: Led several projects in international research facilities. Created new analytic magneto-hydro-dynamic models resulting in first author paper in a major physics journal. Speaks German & English Nimish Telang Analyst, Computing Specialist Nimish provides analytics engagement support and on the ground implementation expertise. Aleron experience includes analytics infrastructure implementation, M&A due diligence, and business development. Prior Experience: Summer Analyst at. Programming Internship, at Vocollect Inc. Analytics Intern at Oxford Indices Education: BA (Honors) in Mathematics, Oxford Notes: Knows Python, Java, R, Haskell, VBA, SQL, C++, MATLAB, Mathematica. Oxford UK Nuclear Energy Forum Vice Chair ( ). Undergraduate thesis on social network theory. LLP 2013

7 We believe in delivering the maximum value for our clients Clear visibility on the process, resources and time required Building analytics and business models should not be an obscure process. We share with our clients our approach and methodology, and provide a clear forecast of the time required (and associated cost) from our team of experts Affordable pricing with a boutique service We are a specialist boutique firm and as such, our limited overhead enables us to offer very competitive fees compared to traditional consulting firms We also provide an unrivalled customer service so that we can address your needs real time 7 Alignment with our clients values and success We always seek to align our compensation model to your business requirements and outcomes e.g., Success related - A portion of our fees will be correlated to the success of your clients Cost predictability - We determine a fixed price for an agreed scope and take the risk on the effort/time required LLP 2013

8 Our Services Critical Situation Analytics Overview OFFERING: Aleron s Critical Situation Analytics service provides rapid and immediate analytics and modelling support in the most time sensitive situations. Whether something needs to be turned around in a week or in twelve hours, Aleron s analytics team can provide powerful and timely solutions immediately. SITUATIONS: Due diligence Mergers & acquisitions Bid or market response Contract analysis Business development Case Example Over one weekend, we helped a sovereign wealth fund decide whether they should dispose or not of some of their telecom assets Understand situation The fund received several offers for a group of cell towers; needed to quickly decide divestment decision over the weekend. They lacked the analytic capability to turn around a complex scenario based operational and financial model in time. Review strategic options (1/2 day) We developed background assumptions for three different strategic options (one of which was to dispose of assets to a bidder). We worked with client and interviewed external experts to understand technological and geographic implications. Quickly built a complex scenario model (1 day) We built operational and financial model to simulate asset operations that included a large number of variables. We developed a complex scenario model for all 3 strategic options and all bids taking into account external and technological factors. Recommended action (1/2 day) Finally, we worked with our client to quickly identify the best course of action based on scenario modelling. 8 LLP 2013

9 Our Services Highly Complex Situations Overview OFFERING: Every member of our team has been trained not just in strategy and finance, but we also have a combined 40 years of experience in mathematics, statistics, physics and other hard sciences. Many of us are doctorates and world experts in the field. We can provide critical support for situations where an accurate answer is required for a highly complex problem that cannot be solved with a standard Excel business model SITUATIONS: Market simulations Investment distribution analysis Operational system optimization Hedging analysis Case Example We built a dynamic and user friendly predictive cash flow model based on advanced probability theory and statistics for a working capital optimization firm and one of its clients Expansive set of complex data Our client had a large set of data (over 40 GB) of invoices, account receivables and payables and highly seasonable variability Each client customer type had different payment behaviours Predictive modelling using statistics and probability By aggregating, analysing and testing the data, we built a dynamic model that predicted the payment behaviours based on customer type and seasonality Using probability curves, we were able to significantly improve the accuracy of cash flow prediction that helped the client better optimize its working capital User friendly interface The model ultimately needs to be used by the client, hence even the most advanced program is wasted without usability The user interface was tested many times with the client to ensure maximum ease of use Training of the model was provided to the client such that the tool has longevity 9 LLP 2013

10 Our Services Integrated Data Solutions Overview OFFERING: Aleron s Integrated Data Solutions service provides full scale integrated analytics solutions. From constructing automated KPI reporting to implementing database structures, this service aims to help businesses meet their day-to-day analytics requirements without the constant need of expensive consultants SITUATIONS: Management Information System (MIS) development Cash flow management Sales analysis Analytics tools Modelling platforms Case Example We have worked with the CFO of a medium-sized retail telecoms franchisee to build an MIS system and an analytic platform to provide them with daily forecasts Perform diagnostic We started by reviewing current the reporting process, infrastructure, forecasting tools, and contracts. We identified a number of issues in the financial control process (e.g., manual reporting of financials, no central data repository) and proposed solutions and options. Structure new processes and platform We designed a new infrastructure for an automated financial reporting and revenue forecasting. Build new platform & analyse revenue recovery We then build the proposed new database platform for central financial control using open source software sand integrated it into the company s systems. Our technology team developed client specific automation and forecasting tools and included an auditing process to recover unpaid revenue. This resulted in a 5% increase in incremental income. Skills development and transition As part of building the new MIS platform, we have trained their team in using and updating it on their own. We also developed their capability in modelling and analytics 10 LLP 2013

11 We are a boutique firm specialised in strategy implementation and operational excellence is a specialist professional services firm that works alongside its clients to implement the most valuable elements of their strategy. Our ambition is to provide a superior alternative to business consultants: a firm of implementation experts focused on achieving measurable results. We built our offerings to reflect the process of translating goals into actions and changes in the workings of an organisation. We provides services in three key focus areas all supported by analytics. Organisation & Talent Management Building the appropriate structure, governance and controls to create a transparent and agile organisation Strategy & Planning Converting strategic goals and ambitions into achievable and actionable plans; and communicating them to stakeholders Growth & Performance Improvement Improving organisations operational efficiency, financial performance and impact Analytics Provides critical analytics support for special situations, highly complex problems, or full-scale platform developments 11 LLP 2013

12 Contact Us To learn more contact: Lewis Liu, Head of Analytics +44 (0) Or visit our website at 12 LLP 2013