In this week's Economist there are two interesting articles. One is on the complexity of forecasting in the current economic environment and the second has to do with prediction markets and their uncertain future as a mechanism for forecasting inside the enterprise.
The topics are more finance-oriented than most of the frameworks and discussions that take place in this forum. They are relevant, however, because one of the recommendations that is put forward in the article on the challenges of forecasting is to incorporate scenarios into forecasts and budgets. This recommendation is attributed to Professor Hugh Courtney of the University of Maryland Smith School of Business (GO TERPS!).
Considering the experience and expertise CI professionals have in developing and testing valid scenarios as well as creating and tracking early warning systems (critical to knowing which scenario or hybrid scenario is more likely to come to fruition based on near real-time events) this leads me to a broader question about our profession: is the CFO and finance function an under-served customer of CI? This is a thought I have been working around in my head since Gary Maag and David Kalinowski's excellent session at the Frost & Sullivan MindXChange where they made the case that one of the reasons the CI practitioner is seen as disposable in down times is because the CFO does not see or cannot quantify or qualify the value delivered by CI.
On the question of prediction markets, I confess that I have no experience implementing such a market but do have a sense that markets would provide considerable insight for sales and product forecasts, profitability, etc. They could also be used to track or predict industry events, so there are potential applications both tactical and (near term) strategic. Is anybody in this forum operating (and willing to talk about their experience) in prediction markets?