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With ever-greater scrutiny on corporate and public sector organisations, decision makers can no longer afford to take a 'seat of the pants' approach. It is expected, and often required, that adequate analysis is performed to demonstrate that actions taken have been thoroughly evaluated and tested before committing stakeholders’ funds. |
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Specific benefits include: - The ability to consider multiple options, assessing the impact of changes on key drivers, thereby identifying the key risk factors. - The process of designing a model develops a clearer understanding of which variables are critical and their impact on likely outcomes. - Limiting the costs of evaluating ideas prior to approval, reducing or avoiding trial-and-error costs. - The scrutiny of logic and assumptions that accompany model design increases precision and enhances insight. |
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It is for these and many more reasons that almost every transaction or investment decision now rely heavily on some form of financial model or analysis. |