In an environment where all corporate departments are squeezing costs and looking to increase efficiencies, we came up with a way to revolutionize one of the most time-intensive tasks for listed companies’ investor relations departments: the analyst consensus.
Developing a solution has been an iterative process, and we have learnt along the way that getting the right message across is the key to success.
Formerly an emerging markets fund manager turned investor relations adviser, I have worked with numerous companies for over a decade to help compile analyst consensus forecasts. We relied on email and Excel to get the job done in what was a time consuming and resource intensive task, and sometime in 2005, it struck me that there must be a better and more accurate way to carry out this process. After experimenting with other online and automated processes, I began to design an online platform where companies and analysts could monitor consensus estimates.
Working with a team of three analysts at Temple Bar Advisory, we refined the concept and commissioned a software development firm to build the application for us. The result was ACE (Analyst Consensus Estimates), an integrated system for gathering and reviewing analyst forecasts for companies.
Fully funded through our own activities and using principally internal resources, ACE was originally intended as an extended offer to our existing client base. However we decided that as a productivity application, ACE had scale and we began to market it more widely.
At first, we marketed ACE primarily as an efficiency tool. We presented listed companies with a system to streamline the manual and laborious task of consensus compilation into one simple, semi-automated online application. We focussed heavily on the savings and largely ignored the value-added benefits it unlocked. Feedback was mixed: companies liked the concept, but many decided that ultimately they were able to handle the process themselves. Some were even fearful that by automating the process it took the task out of their control. It became clear to us that the message we were getting out to the market was not working. We needed to go beyond efficiencies and look to add some real, tangible value to the process.
So we invested heavily in product development and in the meantime took some time out to review the feedback we had received. Our thinking focused on historical analysis potential. We knew that due to the vast amount of data it collects, ACE is also a huge data storage facility – data that could be of considerable value to numerous stakeholders.
We used this concept to incorporate sophisticated features into the system that would allow companies to analyse the historical data. Aside from producing polished reports, over time this information could be of incremental value: from a corporate perspective, it demonstrates whether their company messages are being communicated well and are understood by the market; or from a road show selection perspective, it shows which analysts deliver the most accurate forecasts.
In short, companies of all shapes and sizes can add real value to their analyst consensus process with ACE. We are now in the process of marketing this solution to the UK and Europe, and the initial responses have been very positive. We hope that our receptiveness to companies’ needs together with our knowledge and passion for the product will result in a successful outcome.