Forecasting Technology
Lokad relies on a set of ground-breaking technologies that enable both dramatic cost savings to our customers and strong forecast accuracy improvements. Our approach is quite different from what is usually provided by traditional data-mining software vendors. This page aims to give you an intuitive, non-technical, understanding of the Lokad technologies.
Offline forecast accuracy is strictly limited
Traditional forecasting systems are confronted with an intrinsic limitation: the forecast accuracy is strictly limited by the content of your historical databases. There is no magic in forecasting technologies: no matter how smart, elaborate or complex the forecasting methods, if information is missing from your historical data, then there will be an irreducible forecast error. We call this limitation the
off-line forecasting barrier.
Improving through global forecasting synergy
Lokad goes beyond the off-line forecasting barrier through a radically different approach called global forecasting synergy. Every forecast performed by Lokad takes all available data as input. In other words, for any given customer, the forecasting inputs are not restricted to the customer's data, but instead include all data originating from all Lokad customers.
It's not a very controversial position to state that no economical phenomenon is isolated from the rest of the economy. Well, this is exactly what the Lokad technologies are all about: the data of other Lokad customers are correlated to your data in highly complex and highly statistical ways. The average correlation is usually very small, almost insignificant, but by leveraging a very large amount of small correlations, Lokad is able to improve the forecast accuracy beyond the off-line barrier. Lokad is the only organization providing such a technology.
Wait a minute! My data is strictly confidential. Our global forecasting synergy technology keeps your data strictly confidential under a very strict Privacy Policy. It is true that the data you send to Lokad will be used to improve the forecast accuracy of the other customers, but this is a very indirect process. Your data will never be disclosed to any other Lokad customer. Furthermore, if you believe your data to be too sensitive to be entrusted to Lokad, then we suggest that you simply obfuscate your time-series data.
The more business partners, the more accuracy
The Lokad technology exploits even very small data correlations to improve your forecasts; however, the stronger the correlations the better the accuracy improvement. From a business viewpoint, the more business partners (partners, suppliers, customers, etc.) you have in Lokad, the greater the forecast accuracy you get. Therefore, we strongly encourage you to actually suggest Lokad to the companies that you think are related to yours.
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