The Value of Historical Data

A very fundamental question that needs to be posed about the enormous invesments being made in decision-support systems concerns the practical value of historical data. Do management believe that recent behaviour of customers, markets, products, risks and channels are necessary to inform decision making in the near future. The empirical evidence suggests that, overwhelmingly, they do believe this to be true as most organizations are committed to maintaining histories of customer behaviour for periods approaching five years, albeit with variations from industry to industry. We may assert a simple rule of thumb. The extent of historical data that is captured and maintained for analysis is directly proportionate to the accepted lifecycle of the product in its current form.