Taylor Fry

 

Analytics

Portfolio & Resource Optimisation

Do you want to increase business volume, gain market share or increase profitability? Do you know which customers are generating your profits and which your losses? Do you know where you can increase your prices without losing profitable customers? Are you making the best use of your limited resources to address business challenges?

At Taylor Fry Analytics, we take the time to thoroughly understand your business and to work collaboratively with you to build a model that reflects the reality of your operations, your resources and your customer behaviour. Our customised, fit-for-purpose models provide real insight into your operations and allow you to make smart decisions that deliver optimal results, whatever your business objectives.

Solving your optimisation challenges has the potential to add great value to your business, and give you the edge over your competitors.

Portfolio optimisation = smart pricing

Portfolio optimisation gives you the insight to determine a pricing strategy that increases your business volumes without compromising your overall profits. For instance, if your objective is to increase your scale by increasing business volume, simply lowering your prices may be counterproductive as it can lead to a greatly reduced profit, or even a loss. You might also be reducing prices for some customers in your portfolio who are in fact happy to pay more. Portfolio optimisation ensures that you make smart pricing decisions.

Portfolio optimisation can be used in the following contexts:

  • general insurance pricing and price optimisation
  • multiple product optimisation and product bundling
  • channel optimisation.

Resource optimisation = maximum efficiency

Resource optimisation allows you to concentrate your resources in areas that will generate the best overall results for your business. For instance, you may be seeking to identify fraudulent transactions in a part of your business, but not have the resources to review all possible transactions. Resource optimisation can determine a strategy that allows you to target transactions that are most likely to be associated with fraud, thereby maximising the use of your resources.

How we optimise portfolios

Most portfolio optimisation problems can be considered as a specific example of the general framework in the figure below. Our optimisers are open source, custom-built solutions, which means that our solutions fit your business exactly.

Case study: portfolio optimisation at work

The graph below depicts a simplified example of how we optimise profit-volume through different optimisation strategies. For instance, if our client has a goal of maximising profit at a business volume of $1.2 million, our model delivers Strategy D, which is superior to both Strategies A and B, as it delivers a higher profit at the same level of business volume. In addition the model shows that Strategy D lies on the ‘efficient frontier’ – which means that it cannot be improved upon.

Conversely, if the goal is to maximise expected volume at a fixed profit expectation of $45 million, the model shows that Strategy C can increase volumes compared to Strategy A, without decreasing profits.

Case study: resource optimisation at work

Resource optimisation can also be used to achieve portfolio segmentation, with the aim of maximising results from limited resources. For example, we performed a fraud detection exercise that produced the gains chart presented below. The chart indicates that with proper targeting, we could detect 90% of targets (fraudsters) whilst utilising only 60% of resources (assessors). The remaining 40% of resources could be better utilised on other initiatives without significant deterioration in outcome.

How we make optimisation work for you

In the complex arena of portfolio and resource optimisation, Taylor Fry’s collaborative approach allows us to develop a deep understanding of your business and then build a customised model that reflects the reality of your objectives, operations, resources and customer behaviour. We structure our projects to include a trial on a part of your business, so that you have a ‘proof of concept’ and demonstrated results before investing further. We make sure that you understand how Taylor Fry’s solution works so that you’re able to implement the solution yourself. And with the appropriate technical skills available within your organisation, you can modify our solution to solve other business issues.

The science of optimisation is constantly evolving and we are continually improving our optimisation solutions through our research program, to ensure that our clients are always ahead of the curve.

CONTACT US TODAY

Richard Brookes

Richard.Brookes@taylorfry.com.au

(02) 9249 2911

Alan Greenfield

Alan.Greenfield@taylorfry.com.au

(02) 9249 2903