Posted by George Huhn on Fri, Apr 09, 2010 @ 09:32 AM
"It’s like we said on the iPad: if you see a stylus, they blew it. In multitasking, if you see a task manager, they blew it. Users shouldn’t have to ever, ever, EVER think about that stuff."
I love that quote. Why?
Because it shows why Apple is uncompromising in trying to bring their customers the best user experience that they possibly can. It is exactly the reason that they don't launch mediocre products, in spite of media critics who think, for example, that Apple should have launched a net book or are impatient for features that other phones have, but that are poorly executed. They won't do something the way everybody else does it when they believe that they can find a better way.
We try to take the same approach in developing business software applications. For the most part, our customers are not programmers; they're not operations experts; and they're not mathematicians. But they are really smart business managers who want to use business analytics to solve important high-value problems quickly. They want to think about getting to the solution – not how to write equations or how to integrate applications or how to program a spreadsheet.
For example, when we design a
form we have certain criteria that must be met, such as:
- Minimize redundant data entry by using form objects such as drop-down menus
- Enable and disable controls based on the users selection
- Avoid the need to display "Error" screens – if we come to a point where a user might get an "Error" screen, then we try to see how they got there and how we can prevent it.
- Make sure a full description of each form's functions is one click away.
What are the best uses of your company's dollars and resources? Optsee
® can tell you. Optsee
® is a project portfolio management and budgeting optimization tool unlike any that you've ever seen.
Click here to find out more.
Posted by George Huhn on Thu, Apr 08, 2010 @ 10:42 AM
Not quite, although that was the promise in the title of an
article in the March 2010 "Wired" magazine about a recently invented algorithm called "Compressed Sensing" or CS. That isn't to say CS isn't a really cool algorithm for certain applications - it is and you should know about what it can do – but it can't make something out of nothing.
To understand the concept behind CS, think of a digital image. Different kinds of compression technologies (jpg, gif, png, etc.) are used to shrink the size of these images so they use less memory to store and process. Basically, these technologies work by using clever ways to reduce redundant or repetitive data points to a much smaller number of data points. For example, a large area of a single color can be saved without saving each data point since the color is identical. But even though compression can reduce an image size significantly, the compressed file still holds all of the essential information to display the image in its original detail and resolution.
Therefore, a digital image that is compressed to, say, 10% of its original size has essentially discarded 90% of its original data as unnecessary. So if 90% of the data that was originally collected by the image sensors is unnecessary, why collect it in the first place? Why not just collect the essential 10%?
The idea behind CS is that you can collect digital image data using far fewer physical sensors than would normally be used and then use the CS algorithm to reconstruct the digital image as if you had used a conventional number of sensors. So you lose the computationally expensive overhead of collecting all the data, analyzing it, and then discarding most of it. Instead, you only need to collect a small amount of it, and then use CS to reconstruct the rest. And CS can do a remarkable job of reconstructing an image from very little data.
The CS algorithm isn't just applicable to digital images. It can be used on all kinds of digital data processing from music to interstellar radio waves to scrambled radio communications.
CS works based on a concept called "sparsity," which describes the density of data. Conceptually, a floor that has a few balls spread out over it would be considered sparse whereas a floor covered with many balls of different colors all touching each other would not. It turns out that reconstructing an image using CS means finding the sparsest image that can be constructed from the dataset.
However, there is one key point that needs to be stressed: CS cannot reconstruct data that isn't there - you can't make something out of nothing. In other words, if you take a digital image using far fewer sensors than normal and there is a critical detail that is missed entirely by the sensors, it cannot be recovered using CS. Unlike CS, conventional image compression works well because it looks at all the detail first and throws away the data it doesn't need.
Nevertheless, the promise for CS is exciting, particularly in areas where full data collection can be difficult or impossible because of volume of data or physical constraints. These can be sampled using far fewer sensors than otherwise might be required and then reconstructed using CS to obtain a resolution that is adequate for extracting information. One of the major challenges in applying CS is determining the minimum number of sensors required to sample a given data set.
I have been thinking about how CS technology might be applied to business, process development, and manufacturing data. Can you think of any potential applications in your business?
Post script: The original title in Wired magazine was "F_ll _n T_e Bl__ks: A revolutionary algorithm can make something out of nothing." The on-line version's title was changed to "Fill in the Blanks: Using Math to Turn Lo-Res Datasets Into Hi-Res Samples." Much better.
What are the best uses of your company's dollars and resources? Optsee
® can tell you. Optsee
® is a project portfolio management and budgeting optimization tool unlike any that you've ever seen.
Click here to find out more.
Posted by George Huhn on Mon, Feb 22, 2010 @ 05:25 AM
"Does it make the decision for me?"
That's a question that somebody asked me again last week, and it is a question that I hear often from people when I tell them about our software. Underneath this question there is an unspoken worry that using a decision analysis tool will somehow override their often very good subjective decision-making ability and authority. I answer it by explaining that it is something like the difference between digging a basement for a house with a hand shovel or a using back-hoe: you still get to choose where and how the basement is dug (the most important subjective decision), but the back-hoe will give you a much faster and better result.
In other words, a good decision analysis tool will enhance and support your subjective judgment by giving you a wider and more focused view of your alternatives.
Decision analysts like to say that they help people make "more objective decisions." This is true if the methodology is sound. (By the way, that is a big "if." Lousy methodology can make things worse.) But in complex and unique business decisions, objective analysis doesn't mean that you can just feed in some numbers and out pops the perfect answer. Instead, a good decision analysis tool will move the subjective analysis to a higher and more strategic level of the decision-making process while leaving the objective number-crunching to the application.
In project portfolio analysis, even using sophisticated tools like Optsee®, there is still a lot of subjectivity that enters into the analysis. For example, there's project risk assessment, budget estimates, and NPV valuations, just to name a few. Then there's assigning weights to the criteria so the project ranking reflects your company's strategy. Finally, there is trying different budget and optimization strategies to select a portfolio that brings you the highest value based on your project set, budget and resource constraints, and business goals.
How is this more or less subjective than doing it manually?
Using spreadsheets or labor-intensive "one model at a time" analyses bog you down in a very low tactical level of subjectively trying to find an optimal portfolio, one project at a time, from billions of possible portfolios. And when you're doing it as a team, this process can quickly become tedious and non-strategic as discussions focus on arguing over the subjective criteria of including or excluding individual projects while losing sight of the big picture.
In other words, when you're at the bottom of a basement digging with a shovel, it is hard to see what the whole thing looks like from the top.
With a portfolio and budgeting analysis tool like Optsee®, you move way up the strategic scale, from picking projects to build a portfolio to picking an optimized portfolio from a few already-optimized alternatives. The "objective" parts – ranking the projects based on value and optimizing against different combinations of business constraints – has already been done for you. So you get to focus your time, energy, and judgment on the most important strategic question – how you can allocate you company's resources to get the highest return from your portfolio.
Like using a back-hoe instead of a hand shovel to dig a basement, using software that moves you up from just making tactical decisions to making more strategic decisions makes sense. But are there places in your company where you're still digging basements with shovels?
What are the best uses of your company's dollars and resources? Optsee
® can tell you. Optsee
® is a project portfolio management and budgeting optimization tool unlike any that you've ever seen.
Click here to find out more.
Posted by George Huhn on Mon, Jan 04, 2010 @ 02:08 PM
If you don't know the values and costs of not executing your projects then you're probably not maximizing the value of your project portfolio and you may be working on the wrong projects.
When project portfolio managers meet to decide which projects that their businesses are going to execute and which they are going to reject, they often have a summary business case for each project that includes the business value and attributes. Business attributes can include selection criteria such as
net present value (NPV),
return on investment (ROI), costs, resource requirements, and risks.
Thus, when the managers select a project to execute, the value and associated costs of the project are added to the total portfolio value and costs, respectively. When they reject a project, usually the identical "if-executed" values and costs are subtracted from the total portfolio because there is no separate evaluation of the value and costs of not executing the project. Therefore, the value of a rejected project is essentially set to zero by default and the total portfolio loses value.
When they reject a project in this way, any intrinsic positive or negative values and costs derived from not executing the project are not factored-in to the final portfolio. And when these values and costs are not factored-in, the total portfolio value and cost can be dramatically over- or under- estimated.
There are many ways a project can add or subtract value from a portfolio. Even projects that have negative individual ROIs can add value, such as a project that adds revenue to a product line because of its strategic fit. Analogously, there are many ways that not executing a project can add or subtract value from a portfolio. For example, positive value can come from increased revenue streams if the rejected project would have cannibalized revenues from other products; and negative value can come from a loss of revenue from a product line that could have been enhanced by the executing the project. Costs that can be incurred from not executing a project might include costs associated with contract terminations, closing facilities, and reassigning resources.
So, perhaps counter-intuitively, you can see that rejecting (not executing) a particular project may actually add more real value to a project portfolio than selecting another project!
How can you ensure that you're capturing the value and costs of not executing a project?
For each potential project in your portfolio, you could create an associated "Not" project that includes the overall value for not executing the project calculated using the identical attribute categories (rewards, costs, risk, etc.). Then, before
optimizing the portfolio against constraints, you could set up a mandatory dependency between these two projects such that either the actual project is selected
or its corresponding "Not" project is selected. In this way, either the value and costs of executing the project OR the value and costs of not executing the project are included in the portfolio totals.
Of course, if the value and costs of not executing a project are truly "0" and do not impact the total portfolio value and costs, then you don't need to create an associated "Not" project.
In our
project portfolio management tool Optsee®, you can perform rigorous
project portfolio optimizations against multiple constraints (such as limited money and resources) while maintaining four different types of project dependency relationships, including an "Or" relationship. When you select the "Or" dependency relationship between two projects, either one project or the other (but not both) are included in the optimized portfolio. This way it is easy to set up and accurately analyze the real value and costs of your portfolios under different constraint combinations because you're factoring-in the values and attributes of both selected and rejected projects.
Do you currently assign values and costs to not executing projects in your project portfolios? What other suggestions do you have for capturing these values?
What are the best uses of your company's dollars and resources? Optsee
® can tell you. Optsee
® is a project portfolio management and budgeting optimization tool unlike any that you've ever seen.
Click here to find out more.
Posted by George Huhn on Thu, Nov 19, 2009 @ 12:35 PM
Quantitative financial analysts ("Quants") who design trading algorithms or optimize them to work just a few milliseconds or even microseconds faster are in high-demand these days. Successful trading algorithms often work by taking advantage of millisecond market inefficiencies that aren't widely recognized by other traders. This advantage is lost once other traders discover and begin to trade on the same inefficiencies.
Since the profitable lifespan of proprietary trading algorithms keeps getting shorter, optimizing an algorithm to execute faster is one way to extend its lifespan. So the competition for hiring really good quants that can discover, develop, and optimize new trading algorithms is fierce.
Your business probably doesn't require microsecond decision-making, but the speed and quality with which your business can execute is going continue to become increasingly important. World-wide competition is speeding up innovation, shortening product development times, and reducing product lifecycles.
While many companies are using IT to improve business processes, most of them are just scratching the surface when it comes to using meaningful business analytics to speed up those processes.
When everybody in an industry is using the same IT and business processes, nobody has an advantage. The advantage will come to those who can discover, develop, and optimize business processes beyond what everybody else is doing. That might mean just looking at the little things that everybody else overlooks (or doesn’t think is important) and speeding them up by a few days or even just a few hours. Just as saving a few microseconds is important to a quant, saving those few days or hours could mean the difference between leading in your business or just being one of the pack.
Look around. What's limiting the speed of your business?
What are the best uses of your company's dollars and resources? Optsee
® can tell you. Optsee
® is a project portfolio management and budgeting optimization tool unlike any that you've ever seen.
Click here to find out more.
Posted by George Huhn on Tue, Nov 17, 2009 @ 12:36 PM
I’ve also been toying for the last several years with the idea of developing a turn-key module for senior undergraduates or graduate business students in project portfolio management and/or decision analysis using Optsee®. It would be similar to an assignment I had at Wharton in an R&D Management class taught by Professor Earnest Gilmont, except that we didn't use any software or decision analysis tools.
Each student would get a copy of Optsee® that is pre-loaded with an unoptimized portfolio of projects with pre-assigned attributes (such as rewards, costs, resources, risks, etc.) and sets of constraints created for a hypothetical company. The students would form teams, and each team would be assigned to take their set of projects and develop an optimized portfolio that was targeted for different strategic goals. For example:
- one team would develop a portfolio designed to make the company attractive for being acquired
- one team would develop a portfolio designed for implementing an outsourcing strategy
- one team would develop a portfolio to maximize short-term gain
- one team would develop a portfolio to maximize long-term sustainability
Each team would then put together a presentation and/or a paper presenting their portfolio and how they came to agree on it. This would require the team to agree on what attributes to use, the shapes of the attribute curves, the attribute weights, and what constraints they would need to apply.
I think that this could all be put into a nice educational package that would give students an excellent understanding of developing strategic project portfolios based on business goals through their own experiences and by seeing the different portfolios developed by their classmates. It would also give them a fundamental understanding and appreciation of multi-criteria or multiattribute decision analysis, prioritization using Monte Carlo simulations, and optimization against multiple constraints.
So I am curious. How did you learn about Project Portfolio Management? And if you're a professor, how do you teach it?
What are the best uses of your company's dollars and resources? Optsee
® can tell you. Optsee
® is a project portfolio management and budgeting optimization tool unlike any that you've ever seen.
Click here to find out more.
Posted by George Huhn on Wed, Nov 11, 2009 @ 11:14 AM
We all want one of these buttons, right? Wouldn't it be nice to pry the "Help" button off your keyboard and put one of these in its place? When I want a problem solved, I don't want to look through dozens of menu items and forms, navigate through features I'll never use, and search through websites and PDF files.
I just want my problem solved. And so do your customers.
Two years ago, while everybody else was developing more and more feature-rich (and complicated) video cameras, a company called PureDigital released the point-and-shoot equivalent of a video camera called the Flip Ultra. It was small, inexpensive, simple to operate, and had only essential functionality. And it sold like crazy.
The problem it solved? How to get videos on the web easily and quickly without having to read a novel-sized instruction manual. Today, the Flip Ultra products are the best selling video cameras in the U.S.
Feature-creep and the resultant complexity are big challenges to many technology products. So instead of trying to improve your company's products and services by adding new features, what if you optimized them by removing some features and combining others?
What if your products and services could have only one button: the "Solve My Problem" button? What would it do? And since one button usually isn't realistic, what are the minimum numbers of "Solve My Problem" buttons that you need to solve your customers' problems in a delightful and surprisingly simple way? What if you prioritized your most important and fundamental customer benefits and then offered a product that delivered only those features and nothing else?
In designing our project portfolio management tools, we try to answer those questions every day. For example, we've reduced the effort of prioritizing your portfolio using Monte Carlo simulations to a couple of mouse clicks. If you can answer those questions while nobody else in your industry is even asking them, you may discover a whole new market out there waiting for you.
What are the best uses of your company's dollars and resources? Optsee
® can tell you. Optsee
® is a project portfolio management and budgeting optimization tool unlike any that you've ever seen.
Click here to find out more.
Posted by George Huhn on Mon, Nov 09, 2009 @ 12:44 PM
Brendan Coveney, President of 4D Inc., once remarked that the business of the future will consist of a person, a dog, and a computer. The purpose of the computer will be to run the business and the purpose of the dog will be to keep the person away from the computer.
Fortunately, we’re not there – yet. But we are at a point where we could be using our computers to optimize our businesses much more effectively. Many businesses are still in the "steam shovel" era of business optimization, using only spreadsheets to track and improve business performance. Certainly, this is far better than doing it by hand but not nearly as powerful as the modern tools that they could be using.
“But what's wrong with spreadsheets?” you might ask. Nothing. Spreadsheets are great but they still require a tremendous amount of manual labor to prepare, maintain, and audit. Fall down in any one of those tasks and the value of the spreadsheet and the data quickly deteriorates. And so do the business functions depending on it.
Instead of spreadsheets, what if you were using applications that were already set up to prepare, maintain, and audit your data as well as perform complex analyses of your data in just a few mouse clicks?
So now you can move beyond spreadsheets into applications that do much of the left brain quantitative drudge work for us so we can direct our thinking to creatively extracting more valuable concepts, ideas, and wisdom from our numbers and data. And we can do that by using algorithms.
But before you say, “I don’t want to have to learn algorithms to do my business analyses,” let me assure you that you won’t have to. The idea is to have applications designed and built for you that let you focus on running your business, not on building applications or customizing spreadsheets.
For example, there’s a clever little “artificial intelligence” algorithm for finding the shortest distance between multiple points called “the ant algorithm.” The ant algorithm is based on the way an ant colony learns the shortest distance from the anthill to a food source. Now you don’t even need to know the name of this algorithm or where it originated; all you need to know is that it can help you find an optimum solution when applied to a particular business problem. An elegant and well-designed application will do this type of work for you without you needing to learn how to program or write spreadsheet macros.
In this blog, I’ll be writing about the intersection of business, science, design, and technology as a place where we can use well-designed technology to do far more than just crunch numbers and make pretty graphics. We'll explore other best practices and innovations that business are using to optimize their processes, products, and markets like we do with our own project portfolio management tool, Optsee®.
What are the best uses of your company's dollars and resources? Optsee
® can tell you. Optsee
® is a project portfolio management and budgeting optimization tool unlike any that you've ever seen.
Click here to find out more.