Selection and planning problems pose significant difficulties for decision makers. While it may be easy to identify the direct material and labor costs associated with programs, quantifying the (often intangible) benefits, competitive advantages, and opportunity costs presents a difficult problem.
Executives forced to justify programs and projects on the basis of avoided costs and direct costs often find that traditional ROI calculations fail to provide the financial justification to move forward. If executives do move forward on the basis of intuition and traditional planning methods, they may possess limited understanding of the risk factors that can cause budget, schedule, and requirements failures.
These situations result in many valuable initiatives being adopted that should be abandoned (or vice versa), never ending cycles of analysis and rework, and lingering doubts about the value of newly proposed or ongoing efforts.
Our services are designed especially for executives in large to mid-sized companies facing tough decision problems who want to gain greater clarity in the moment of decision. We stand behind you to "count the cards," to help you understand the odds you face at the business table.
Read more to learn about the science behind how we help you.Blind Me With Science
Incite! takes a different approach to risk management than is usually associated with common practices. Risk management to us is really decision management - supported by decision analysis. Of the several key insights that decision analysis delivers, value of information and value of control are two of the most powerful.
The value of information (VOI) tells us the most we should budget to acquire more precise information in order to make a clear decision. For this reason, some people refer to it as the value of clairvoyance. It is essentially the value of obtaining better information, not just more (typically useless) information.
The value of control (VOC) tells us the most we should spend in order to get a desired outcome by controlling what was otherwise a critical uncertainty. It is the cost to turn critical uncertainties (which expose us to risk or regret) into decisions under our control. For this reason, some refer to it as the value of wizardry.
The following vignettes describe how clients benefited directly from such analysis.Show Me the Evidence
|A major petroleum exploration & production company wanted to reduce the capital cost of an ERP system rollout in order to justify the net economic value, which was originally judged to be $0 (yeah!) on a spend of $100M (oh yeah!). Critical uncertainty analysis showed that the areas targeted for capital cost reduction would actually destroy the value of the system further. VOC analysis showed that spending additional capital in those same areas could provide an additional $300M of opportunity value.|
|A product development company believed they needed to control the cost of R&D on all projects as a means to improve the value of the company through improvements in capital efficiency. For a new product under consideration, VOI analysis revealed that practically all the effort for improving the contribution to value should be placed in understanding some essential market parameters (e.g., actual market size, potential market penetration, and time on max penetration). In other words, instead of spending resources on an immediately tangible, but ineffective, area of control, VOI analysis showed what the maximum budget should be for understanding the target market better and how much that better understanding was worth. Spending resources to reduce R&D was like looking for a lost quarter under the street lamp, although ten dollars had been lost over in the dark bushes.|
|The leadership of a new technology company estimated they needed ~$500K of start-up capital. Our decision analysis showed that this level of capitalization bought about a 30% chance of success, while ~$2.5M bought about a 90% chance of success. The company underestimated their required capital by ~5X! Furthermore, VOC analysis showed...
If you face any situation like these in which the amount of capital you need is uncertain, what the ROI will be for deploying it, and the possibility that your objectives are not aligned to create success...Contact Us Today
Incite! Decision Technologies provided us a very valuable and quantifiable data point that enabled us to determine the value of a financial guarantee offered in the transaction of a large multi-tenant real estate business exposed to multiple operational risks. Incite helped us make sense of and further simplified the complexities of the deal which gave us confidence in the pricing we offered and in the subsequent negotiations. The savings over our initial estimate were sizeable. Thank you!
Rob Brown led a two-day training on Monte Carlo simulation using Analytica for a group of scientists (most with Ph.D. degrees) at the University of North Carolina, Chapel Hill. In the beginning, the class participants were skeptical about the software, but by the end of the class, they had become enthusiastic fans not only of the software but also of Rob's teaching. He continued to work with UNC's scientists in a technical advisory role and provided value for our research project far beyond the cost of his consultancy. We could not have been able to complete our project without his guidance.
Rob's one-day seminar on decision-making was extremely informative, and I gained a much greater understanding of the tools available for probabilistic analysis. In my role as an operations manager, I frequently have to analyze a variety of alternatives to solve problems or support new products. These methods for weighing alternatives and assigning them quantitative values gives me the tools to make not just a good choice, but the best possible choice. Rob is also an excellent teacher who keeps the audience interested and on target.
I've always been impressed with Rob's work. He's extremely capable when it comes to decision analysis. Rob is an outstanding programmer as well. His attention to detail, hard work, and willingness to put in the time it takes to get the job done right is truly appreciated. This type of effort keeps me coming back.
Rob Brown quickly grasped the technical details of a model-building challenge related to an ecological policy analysis and developed successful, forward-looking solutions. He communicated clearly how and why his approach worked.
Rob Brown started work on our project by providing a training class in Analytica. His role grew quickly when we realized his ability to innovate and devise solutions to modeling our development needs would add tremendously to our productivity in developing a model of the life cycle cost for a very long term and complex program.
Having worked with Rob Brown of Incite Decision Technologies on multiple occasions for at least six years, I can authoritatively say that he is a brilliant advisor who can think linearly or laterally as the situation requires. Through his experience working with major corporations and consultancies, Rob has perfected a systematic, strategic and proven method for guiding executives from darkness to light on key decisions when uncertainty seems great and the money at stake, greater still. Among the initiatives Rob helped Creative Growth Group address was our approach to using technology as a tool to scale our business. Through process, patience and persistent, genuine support, Rob helped our firm choose a path that best fit our circumstances.
Robert is one of those rare intellectuals with a 'beautiful mind.' I continue to be amazed at his ability to develop a model that provides professionals with the core information needed to make decisions that are based on logic, facts, and intuition. Further, Robert's amiable demeanor affords him breadth making it possible for him to communicate to people at all levels of the corporate food chain. Whether you are the CEO of a Fortune 100 company or a solo-entrepreneur, you can go to bed at night with ease knowing that Robert has provided you with a novel approach to making a decision that is creative and sound.
Rob is truly an expert in modeling complex environments in order to help people make better decisions. He is a great listener, technical expert, and superb trainer/instructor/mentor.
I'm hooked. Risk and Decision Analysis is a permanent part of my life from now on. I left [our meeting] just imagining how I could strengthen our operational and strategic planning with Incite and Analytica.
We spent a fair amount of time in class talking about how to think like a modeler, emphasizing that Analytica helps users think like modelers.
We covered a lot of ground in a short amount of time. Rob described concepts clearly with easy to understand terms while simultaneously conveying the versatility of Analytica.
We were considering opening a US subsidiary to our financial services business. Incite helped us frame the question properly and avoid common traps such as padded assumptions and "most likely" outcomes. The difficulties of quantifying unknowns and putting a value on the opportunity was largely resolved by Incite’s straightforward analysis that provided precious clarity. This scientific approach gave us a clear edge to increase shareholder value.