WHO WE ARE: A MODELING COMPANY WORKING WITH CUTTING-EDGE ANALYTICAL TECHNIQUES MODELING SOLUTIONS: WHEN AND WHY TRADITIONAL MARKETING MODELS DO NOT WORK MODELS AUDITING: A NEW SERVICE FOR MARKETERS WHAT WE OFFER: TYPES OF MODELS WE BUILD AND PRINCIPLES WE FOLLOW
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Modeling Auditing

  • Just as a patient cannot check a doctor’s actions, the model’s consumer usually cannot check all details of the modeling. And like for the patient, the consequences of the bad model may not be felt for a while, because they are masked by many other factors (see reasons for that in MODELING SOLUTIONS and in Mandel, 2007). But eventually they definitely hit back. The pairs “modeler – client” and “doctor – patient” are different though: in medicine the patient is protected legally and financially by many bodies, from insurance to state regulation, while in business modeling the client is deprived of any protection at all. The only way to protect the business interests is to check the quality of the models.

  • AMModels offers the completely new service of AUDITING existing marketing models performed by other companies. We will provide you a professional second opinion. We are not interested in proving that your model is bad or good. Our goal is to estimate quantitatively how your model reflects reality.

  • Auditing marketing models is extremely important. As is usual in accounting auditing, it stimulates much more qualitative modeling work and reduces the risk of being misled in a complicated competitive environment. AMModels is able to do this thanks to its unique team of experts. If the models you use were made internally, the audit will help the modelers to improve the weak spots and develop fresh new ideas. If you used external suppliers, the audit will help you evaluate them and make a better choice of modeler in the future.

  • Model auditing works in several steps:
    • We formulate the main problems we are going to focus on through the auditing process. Usually they are the following:
      • How appropriate the methodology selected by the modeler is to the data used and model purposes formulated;
      • Within the selected methodology, how correctly the modeler used underlying assumptions;
      • In what sense the results obtained are relevant to the selected methodology and industry standards;
      • Whether the results reflect stable reliable regularities or are very unstable and/or random;
      • How business consequences derived from the model are coordinated with modeling results and their stability;
      • Whether it is possible to increase the model’s quality either by changing the methodology or by improving the process within the selected methodology.
    • The client describes to us any additional problems that need to be analyzed during the auditing process. Together with our proposals, it forms the scope of the auditing work.
    • The modeler provides us with the original data sets used (or some samples of them) with rules of variable transformations used for modeling.
    • When it is done, we analyze the whole process of modeling to answer all questions formulated by the client.
    • As a result, we provide the client with complete information, containing the following main parts:
      • Detailed list of correct things (approaches, methods, transformations, etc.), which, in our opinion, the modeler implemented in the process;
      • Detailed list of drawbacks, misspecifications, errors, etc., found in the model;
      • Detailed list of questionable and doubtful points in the modeling process, to be further discussed;
      • Alternative solutions, if needed, including analysis of possible consequences of wrongly used assumptions and other model weaknesses.
    • A discussion with the client (with possible participation of the modeler) about further steps: the model is good and does not require any additional actions, it may be improved using our recommendations at the next update, or it should be completely redone.

 

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