Market and Investment

Planning Ahead for Compliance: An Analytics Road-map for Sales & Marketing The best plan for harnessing analytics powerful predictive and explanatory capabilities in sales & marketing is a three-pronged approach:

Have a strategy. Before anything can be executed you need to have underlying goals, and identify the scope of the task. First, how does your compliance duty fit in with the companys over-all plan? What data is required? What systems is it in? With which other functional units will you need to coordinate? What is the basic approach for executing an analytics solution: in-house or out-source? What tools would we need? Who can help? Thinking through these issues first before burning many person-hours, or spending large sums on consultants or software improves your chances of executing a real success. Define the financial outputs of the group, to include things such as: forecasts, sales plans, market opportunities, campaign forecasts and budgets, marketing program budgets, etc. and then tie analytic processes to the production of each of these outputs. Analytics is so important to the production of these financial outputs because it provides a traceable process linking disparate data and for rendering heretofore assumed or grossly estimated data in more scientific and transparent ways. Analytic techniques that could be used in producing these outputs more scientifically could include:

1. Output vs. performance measurements 2. Financial to non-financial comparisons 3. Regression analysis 4. Predictive modeling 5. Trend analysis 6. Types of analyses: inter-period analysis, industry comparisons, budget comparisons, economic analysis 7. Measurement techniques: ratios, percentages, physical quantities, monetary amounts

Tie planning, budgeting, and other financial analyses to the COSO risk management model and identify priorities for implementing an analytic solution. The Information and Communication element of the framework reads like a requirements statement for an analytics solution. The pre-curser requirements of successful analytic solutions (data warehousing, ETL tools, data hygiene, etc.) facilitate information and communication. Also, analytics is how to assess current data for a real-time view of risks inherent in a process, function or unit. Finally, the ability to leverage historical data and identify trends, correlate results, forecast performance, and provide early warning signals concerning potential risk-related events is possible only through analytic processes. Conclusion Since the effective date of 404 is not until June 15, 2004, there is still time to prepare a compliance infrastructure that includes powerful analytic capabilities. Its not all about compliance, however. Firming up sales & marketing forecasts with sophisticated analytics is smart business. Through analytics you will learn an enormous about your customers and markets and competitors and you will be able to optimize your efforts. Developing an analytics-based compliance infrastructure is no simple or small task. For the many companies operating under diverse data silos, management fiefdoms and incomplete communication loops, the preparation tasks are daunting. Intel believes that the Sarbanes-Oxley compliance costs estimated by the SEC (an extra five resource-hours per month) are off by an order of a by at least a factor of 100, if not a greater order of magnitude . To bring down these costs, the ultimate role of analytics will be to bring repeatable, scalable, and reliable data-analytic processes to the compliance process. (End of 5 Part Series)

Disclaimer

The information and opinions expressed on this paper are not intended to be a comprehensive description, nor to provide legal advice, and should not be treated as a substitute for specific advice concerning individual situations. While the author and Upper Quadrant has made every attempt to ensure that the information contained in this document is accurate, neither the author nor Upper Quadrant is responsible for any errors or omissions, or for the results obtained from the use of this information.