What is Ad Hoc Analysis?

R. Kimball

Ad hoc analysis is the discipline of analyzing data on an as-needed or requested basis. This analysis is based upon a set of data available to the person doing the analysis. The resulting analysis is only as good as the data upon which it is based. Generally, this process is used to answer a specific business question.

An ad hoc analysis of data is done on an as-needed or requested basis.
An ad hoc analysis of data is done on an as-needed or requested basis.

The purpose of ad hoc analysis might be to fill in the blanks left by regular reporting. This form of analysis might also be used to determine if a company should make an investment or sell an asset. The data set used to complete the analysis depends upon the question the analysis is attempting to answer. Each time a form of this analysis is completed to answer a question, the process and data used may be different.

An ad hoc analysis is done on a requested or as-needed basis.
An ad hoc analysis is done on a requested or as-needed basis.

A business might be considering a purchase of new equipment. The company could ask one of its employees to complete some ad hoc analysis to determine if purchasing the new equipment would net the company any income in a specified period of time, based upon the company’s current contracts. The employee might run through a variety of variables based upon the information associated with the cost of purchasing the new equipment, the cost to maintain the new equipment, and the savings associated with using the new equipment.

Another company might be trying to decide if it should change its payment terms for all or a group of its clients. An employee or a consultant hired by the company may be asked to complete the necessary ad hoc analysis to determine if the company might change its payment terms. The person doing the analysis might review the current payment terms and how specific clients and clients overall make payments. After collecting the information, the reviewer might find that some clients pay within the payment terms, whereas other clients have difficulty meeting these terms. Depending upon the discrepancy between the current payment terms and the client’s payment patterns, the company might choose to implement a new set of payment terms.

The output of any set of ad hoc analysis may vary. Some analysts put together graphs or charts to show the results of the analysis in a graphical manner. Other people might develop a new report or other form of data summary. This type of analysis is completed for a given business question, so the form in which the results of the analysis are presented will generally be a response to the question.

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Discussion Comments

Markerrag

News reporters rely on this type of analysis from experts regularly. For example, a business reporter writing a report on the housing market might provide an economist with a set of statistics for a certain period and ask what factors are influencing sales, prices, etc.

That may be the only data the economist reviews before commenting on the housing market, so the resulting article will only be as good as the provided data.

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