To stay competitive, today's executives must make critical
decisions on the fly, often with little time to gather the supporting
data that could help illuminate the best alternative.
"Lacking sufficient data, decisions may be based on personal
objectives and inclinations," says Robert Brown, partner at
Decision Strategies,
Inc. of Cumming, GA. "You can go by your gut feeling on
some issues, but for mission-critical decisions, there is no
substitute for quantitative methods and supporting data."
Unfortunately, using decision-support software to evaluate
data often conjures up the unpleasant task of spending long,
exhausting hours entering data into an Excel spreadsheet. If
even one critical variable is omitted, the spreadsheet is subject
to extensive modification. On the other hand, if the final spreadsheet
is jammed with endless rows of data and columns of numbers,
co-decision makers may be intimidated by so much information
that they disregard the utility of the entire effort.
Friendly Models, Clear Decisions
"That won't happen with AnalyticaŽ," says Brown. He routinely
demonstrates to his clients that this powerful, easy-to-use
modeling tool from Lumina Decision Systems can scale mountains
of data in hours instead of days, or even weeks. Brown produces
Analytica models that are easy to understand and navigate. To
the user, these models appear as a type of interactive flow
chart called an influence diagram.
"Influence diagrams will help you manage your decisions just
like a flight simulator helps pilots learn to fly. With a GUI
front-end, you can play "what if" games with the input fields
to your heart's content and see the immediate results of your
decisions."
Brown recently put Analytica to the test for one of his clients,
The Staubach Company, a prominent real estate development firm
with an office in Atlanta, GA. The firm's customer was struggling
with a lease versus buy decision and had to choose between a
number of commercial properties. Price, location, zoning restrictions,
return on investment and many other factors had to be considered.
Analytica's easy-to-understand models helped the customer see
the financial impact of the variables and make the most profitable
decision.
In a similar situation, The Staubach Company spent several
months putting together a large presentation of background data
and spreadsheets that filled two huge binders. Unfortunately,
this large amount of data would have overwhelmed the customer.
The developer called Brown and in only 20 hours he produced
an easy-to-understand Analytica model that showed the customer
how he could save $15 million by choosing one real estate financing
option over another.
Even more dramatic are the results of a project Brown conducted
for a northeastern telephony company that wanted to know the
capital costs and return on investment of delivering cable TV
service over its existing fiberoptic cable network. Using Analytica,
Brown built a complex predevelopment model that included 3,000
total variables and demonstrated the effects of a five-year
development roll out.
"It took me nine hours. When I demonstrated the Analytica model,
jaws dropped. The telephony engineers were literally tearing
out their hair because they said it took them 13 months to construct
a similar model in Excel. After the model was completed they
discovered that they had inadvertently forgotten to integrate
a sensitivity analysis. After all that work, they still weren't
sure their models would propagate relationships properly," Brown
notes with a smile.
Flexible, Easier to Use
"Without a doubt I have found Analytica to be the best tool
for modeling and statistical analysis. Excel is so rigid. Every
variable has to have a header, function, a logic table, and
more. If you need statistical analysis, you can use a plug-in
like Crystal Ball, but that makes Excel even more cumbersome,"
explains Brown. "In comparison, Analytica uses a natural approach.
It enables any level of user to follow the logic of a decision.
It's as easy as looking at a road map. Plus, all of the computational
data is transparent to the user, so it's much less intimidating."
Brown advises, "Executives who are hesitant about using decision
support systems should consider Analytica. Literally thousands
of scenarios can be simulated and analyzed simultaneously. Analytica
is like a multidimensional spreadsheet, only much friendlier."
Analytica models help Brown's clients analyze numerous scenarios
simultaneously to determine the probability of success or failure,
the possible range of expected outcomes, and the sensitivity
of sustained profit to key decisions in all areas. Even decisions
that use criteria that are not easily quantifiable, i.e., customer
satisfaction and loyalty, can be incorporated in Analytica.
Cross-Industry Applications Abound
In addition to building complex models of business, policy
and engineering systems, Brown is expanding his practice to
use Analytica models to help legal firms manage the risk of
various types of litigation and to enable the health care industry
to better evaluate hospital staffing requirements.
"With Analytica 2.0 and the new Analytica Decision Engine (ADE)
I can build what is akin to small, scalable, dynamic ERP systems
for fractions of the time and cost of such systems as BAAN,
SAP, Oracle, PeopleSoft, etc. These models can be served to
multiple, independent and simultaneous users over the Web without
compromising the security of the underlying logic," Brown says.
He observes that once clients see the effects of uncertainty
on payback and profit illustrated graphically as Analytica models,
they become much less intimidated by the data, and ultimately,
more profitable decision makers.
"The proof is in the profits," concludes Brown. "Analytica
does all the work and the decision makers take all the credit
for their keen insight."
About
Analytica 
