Forecasting in background screening projects (private person activity forecasting)

At last the weather is comfortable and I'm ready to proceed with the series of previously announced articles.

I hope you remember that my last statement was "if only we could reconstruct business or personal strategy of the subject, then we would be able to predict subject's activity in the future".

We have several important data sources to analyze:
1. Subject's goals and targets
2. Subject's best practices
3. Subject's risks (excluding external environment)
4. Subject's timing

Let’s start from private person activity forecasting (in general it is simpler than company forecasting):

TIMING
When background screening project is over we have a lot of structured data about subject's future: when he will celebrate his birthdays, when his children will go to school, when he'll have to update his driver's license, when he will have to repay his debts, in what period of time he will resign etc.

Usually professional investigators and risk managers (at least in my area) pays this step of analysis little to none attention. In a scheme above I mentioned only main milestones, but it is reasonable to add Subject’s wife & parents birthdays, passport expiring dates etc.

SUBJECT’S RISKS
Dealing with background screening projects of Russian citizen in most cases I pay attention only to health risk, criminal risks (relations with criminal authorities), credit risks (unpaid or huge debts), family risks (divorce, fornication etc.) and corporate risks (if the Subject is a shareholder).

When these risks are identified, it is reasonable to proceed to

SUBJECT’S BEST PRACTICES
This section is the most difficult to analyze and even hard to explain for non-native English speaker. The aim of this section is to identify behavioral patterns of the Subject including (but not limited to): How long he used to stay at the same company (e.g. 2.5 years)? Does he study a lot after graduation (e.g. the Subject completed about 12 courses of business education, approximately 1 course a year)? Is he targeted on a long-termed partnership or makes money with unknown persons (e.g. for the last decade he was involved in 7 new partnerships but still makes business only with his close friends)? Was the subject ever claimed as a wife cheater?

In general I think that best practices can be divided into several sections:
1. Finance management practices (how the Subject deals with his personal or corporate finances)
2. Family & friends relations management practices (how he treats his relatives, friends, lovers etc.)
3. Corporate management practices (how the Subject manages his companies)
4. Personal development practices (how the Subject manages his personal skills, health, assets etc.)

It is reasonable to mention ones again that the aim is not to dig the data but to identify behavioral patterns of the Subject.
If we have enough raw data and preliminary analysis results are valid we can make the following type of the Subject’s best practices descriptions:
FINANCIES: When the Subject experience lack of personal finances he used to take a bank loan (he doesn’t ask his friends or business partners to help him and prefer to keep his problems to himself). He is said to be a bad debtor for personal loans but is strict in repaying corporate debts. If in 2011 he will have to get additional funds for his child application to the university he will have to ask foreign bank for a loan (Russian banks will refuse because he is listed as a bad debtor).
When all possible (taking into consideration project’s limits) best practices of the Subject are identified it is reasonable to proceed to the final part of the job – “Subject goals and targets”

SUBJECT'S GOALS AND TARGETS SECTION:

I think it is a good place to stop for today – I’ll be glad to see your comments and questions because the methodology I have started to present is a matter of discussion and I’m not sure that there are no better ways of the Subject’s behavior forecasting. That’s the way I do it.

The final statement I’d like to add is that even if it looks like the unified scheme for forecasting either Russian or the US private person behavior it is almost impossible to do this job unless the analyst understands the environment of the Subject.

Wish you a good day.

Couple of links to the brand new databases for background screening

It is still extremely hot in St. Petersburg and I have to convince that when the nature is playing against its’ rules it is pretty hard to write articles in non-native language. That’s why up until now I can’t finish my new article about forecasting.

Just to let you know that I’m still alive and try to keep my promises I’m glad to publish a couple of brand new links to officially opened for public databases applicable in several types of background screening projects in Russia.

FIRST – THE REGISTRY OF FEDERAL BAILIFFS SERVICE (IN BETA TEST MODE)
On its’ pages you’ll be able to check if the Subject-private person is wanted as defaulter; check if the legal body was claimed as a bankrupt.

Also there is a database of real estate arrested by the Federal Bailiffs Service and several registers useless in background screening projects
It is sad but the database is in Russian language only and it is not planned to translate its’ records into English.
I have to remind that the Registry is in test mode and some bugs are promised to be fixed in the nearest future.

SECOND - FEDERAL AGENCY FOR TOURISM, REGISTRY OF CERTIFIED TRAVEL TOURS OPERATORS
The search is simple and can give you the license number and expiry date of certified travel tours operators.

That’s all for today. I pray that the next few days the weather will change and I’ll be able to share some new ideas about complex tasks of background screening results analysis.
Thanks for your attention, hope these links will be also useful.

Background screening - forecasting (pilot article)

The weather is extremely hot these days in St. Petersburg. The sky reminds me of the Creedence Clearwater Revival with its’ famous “Have you ever seen the Rain?” I’m not sure I have seen it.

Nowadays every citizen of St. Petersburg pays additional attention to weather forecasting – Will the cold wind blow? Will it rains? Who’s responsible for these sunrays attacking us 24 hours a day? In this aggressive environment I’ve decided to write a short series of articles about some particular qualities of Russian business forecasting in the context of background screening and external investigations.


It is reasonable to say a few words about forecasting in general and how it is related with background screening.

In most cases the client (even if he asks for basic background check of private or legal body) needs some data to make a decision. In my practice about 70% of clients' decisions are to be made about future activity of the Subject, not the past. Will the Subject try to steal my money if I’ll hire him as a financial manager? Can I rely on my partner honesty? Will the Subject ever repay his debt????
If you’ll say that the client has to make the decision himself you’ll be absolutely right. Responsibility of the PI is limited to his/her reputation, contract value, license but the client has to accept all the risks including even personal safety risks (if we talk about joined ventures with organized crime).

On the other hand, particularly if we talk about international projects, I often see that the client tries to make the decision without deep understanding of local business practice of Russian companies; commonly used indicators of reliability fails to predict or even classify the Subject activity. It is absolutely clear when you deal with a global company whose unified risk-management standards make decision making procedures inflexible to local environment.

Several times I was forced to spend hours in negotiations with my clients and team members explaining why the Subject must be treated as reliable/unreliable company or private person. At last I made a decision to include sections “recommendations” & “subject forecasting” in applicable reports. This decision was made as “try before you implement” and many questions aroused at the very beginning:

1. How to forecast subjects’ behavior? If it is just your expertise why should the client trust you and treat your prediction as something valuable unless he has positive experience of cooperation?
2. How to develop simple and unified methodology of forecasting for subject behavior in unknown environment?
3. How to convince the client that he has to give you as much information as possible about his reasons of background screening (I often work with contractors and sometimes they prefer to give less data then needed for forecasting)?
4. How to stay profitable? Should we do forecasting as a complimentary research or ask for additional payment?


It is reasonable to mention that previously I was involved in a number of business strategy development projects and had experience of long-termed planning and prognostic analysis. This knowledge was extremely helpful when I started the process of formalizing forecast methodology for background screening of legal bodies.

I’ve decided that if I’d be able to reconstruct main strategic goals of the subject and collected data will match the way I assumed the company is trying to reach these goals my forecasting will be much more reliable than simple expertise. It was clear that usual methods like BSC strategy map won’t work in this exact case: too much work with insufficient data and unexpected results.


That’s all for today.
I will be glad to see your comments to this introduction of a series. Does this problem exist in your area? Do you think that forecasting is applicable in background screening projects?
I’ll try to post the next article of this series by the end of this week.

The link to the Superior Arbitrage Court of Russian Federation on-line broadcasting

Referring to my previous post, I’d like to post direct link to the on-line broadcasting section of the Superior Arbitrage Court of Russian Federation Internet site. http://arbitr.ru/po_test/
There you’ll also find the list of the nearest sessions of the Court.