Month: January 2015

Making Medicine Count: The DecisionTools Suite Bolsters Efficacy of Humanitarian Programs

Linksbridge_CaseStudyGetting life-saving drugs to under-served people in developing countries is a driving goal for many non-profit organizations. However, well-intentioned efforts like these can fall short of their desired impact due to poor understanding of market uncertainty and risks associated with pharmaceutical manufacturing.

Linskbridge, SPC, a consulting firm that advises international development organizations in determining what efforts have the highest impact along with the best value for money spent, recently used @RISK, RISKOptimizer, and PrecisionTree to help determine the best method of introducing a life-saving medicine in developing countries. The process requires analytical forecasting of both demand and supply of the drug, as well as a detailed market analysis. With the aid of Palisade’s DecisionTools Suite software, the consultancy has been able to offer clients sound advice on which ventures have both humanitarian impact and fiscal soundness.

Khatuna Giorgadze, an associate with Linksbridge SPC, was able to take complex data from multiple sources and translate it into clear and comprehensive information. For example, she used @RISK to create a demand forecasting model, which included both static inputs like population data from United Nations Population Division, country census data, and World Health Organization coverage data, as well as probability distributions for highly uncertain inputs that represent a range of possible values.  Thus she was better able to predict the demand for a drug or medical treatment in developing countries. She was also able to forecast supply.  This step “is even more uncertain than demand,” Giorgadze says, “so we use @RISK to a great extent to assess manufacturing risks and supplier’s plans in the market.” With supply and demand established, Giorgadze then used @RISK, RISKOptimizer, and PrecisionTree to do a thorough market analysis. She then investigated different investment options for the company, determining the potential benefits and risks of each.

All this information was then presented to clients looking to make sound and cost-effective investment and policy decisions to meet public health objectives. Palisade’s products helped make this process all the more efficient and effective. “Palisade’s DecisionTools Suite is a very important component to our work,” says Giorgadze. “Since 2011, it has enabled us to do the required market and investment analysis and make decisions. It’s easy to use, and its compatibility with Excel makes it all the more appealing. We’re very happy with how this software has enhanced our work.”

Read the complete case study here.

Want To Launch A New Drug? @RISK Can Help

Captum_CaseStudyFor biotechnology or pharmaceutical firms, development presents a significantly risky prospect. Development times are usually prolonged by step-wise clinical trials, and there is only  a 20% chance that a new drug beginning clinical trials will ever reach the market. Nevertheless, the potential return can reach billions of dollars. For startup companies, it is crucial that they approach these products carefully and with a full understanding of the risks and opportunities they may face when developing new products.

Captum Capital Limited, a life sciences and health care industry consulting company, specializes in the valuation of early stage companies, and apply quantitative risk analysis to assist in life science technology valuation.“Captum has developed a number of @RISK models to value technology projects, in several different ways,” says Dr. Michael Brand, Director of Captum Capital. They use @RISK to model the development of a new product from concept through to market, and the different stages involved in that trajectory. “There are success and failure probabilities at each stage, and uncertainties in timing and costs,” says Brand.

An example of how he uses @RISK software   is ‘Rejuven8,’ a dummy technology he uses for a teaching example in Captum’s MasterClass series, a one-day professional training course that provides an introduction to technology company valuation. This example requires conventional income and expense cash flows of a normal profit and loss statement, and incorporates the addition of risk probabilities associated with milestones in the development process.

After running the @RISK simulation, the graph outputs tell the user the mean rNPV—“but more importantly,” says Brand, “it gives you the 90% confidence range for the value. It also displays Tornado graphs which give some insight to which variable are influencing that rNVP.”

Brand uses @RISK and the DecisionTools Suite for all his class demonstrations as well as his consulting work with Captum.

Overall, the main reason for Captum’s use of Palisade products is summed up simply: “Ease of use is the most obvious benefit,” says Brand. “You don’t need to be an expert to convert a spreadsheet model to one including risks and probabilities. Some of our more advanced models for Real Option valuation are more difficult for the novice to understand conceptually, but the setting up of the @RISK model is relatively straightforward.”

Read the full case study here.

Free, Live Webcast by Palisade Client This Wednesday! “Biomass Power: Unearthing the next opportunity…”.

Tune in THIS WEDNESDAY, January 21st, 2015, 10:00 AM – 11:00 AM EST

Who: Long-time @RISK user Dr. William Strauss

What: This presentation will discuss forecasting global growth, policy shifts and the knock on effect for stakeholders from forest to furnace. Longtime user and client  Dr William Strauss, President and Founder of FutureMetrics, and Brodie Govan, Broker at PVM will give their expert views on biomass developments worldwide and how these can be capitalized upon. They’ll talk specifically about converting power stations to use wood pellets, using @RISK simulations.

Where: Register free of charge here.

Want more information?  Check out the case study that features Dr. Strauss’ work here.

 About the presenter:

William Strauss is the President and founder of FutureMetrics. He brings more than thirty years of strategic planning, project management, data analysis, and modeling experience into the company’s stock of knowledge capital. Bill’s professional history includes executive positions as director, president, and senior vice president, as well as positions as senior analyst and field coordinator. He has an MBA (specializing in Finance) and a PhD (Economics).

 

Palisade Client Discusses Project Success in Economia

Previously,  Visual Reporting,  the Denmark-based business analytical reporting consultancy, used @RISK to help the Danish Government comply with Danish legislation requiring all Government related IT business cases that exceed €1.33m to be risk-assessed.

Laurits Søgaard Nielsen, CEO at Visual Reporting, believes Monte Carlo Simulation (MCS) used within @RISK was  integral to the solution that Visual Reporting  implemented for the Danish Government, and he discussed that success in the January 2015 issue of economia, which covers technical accountancy content,  business, economics, management and finance.  In the piece, Why do IT projects fail?Nielsen gives his insight:

“The main reason large IT projects fail is that they grow in complexity, and humans are very poor at handling complex tasks,” says Laurits Søgaard Nielsen, CEO of Virtual Reporting. “But often the creation of a business case does not follow best practice and can be severely affected by managers wanting to influence the process of project approval. ‘I want this project to happen’ often outweighs the poor business case.”

With Palisade’s risk and decision analysis tools, complex tasks and projects can be handled with confidence.

Read the original case study here.

Palisade’s PrecisionTree Software Helps Form New AACE International Recommended Practice

Palisade’s PrecisionTree software was featured prominently in Cost Engineering Magazine’s July/August 2014 issue.  The article “Use Decision Trees to Make Important Project Decisions,” by long-time Palisade software user Dr. David T. Hulett, describes how decision trees can help decision makers choose between multiple options and take account of cost and rewards of different options.

decision tree 1

The article “forms the foundation of a new AACE International Recommended Practice,” and examines two different approaches to making a decision: maximize expected monetary value, which is a hallmark of a risk-neutral organization, or, maximize expected utility, which is the appropriate measure of merit for a risk-averse or even a risk-seeking organization. Both approaches benefit from the use of decision trees, as well as optimization and Monte Carlo simulation, to better select and represent alternative outcomes.

decision tree 2

For anyone interested in incorporating decision trees into their decision making, consider checking out Palisade’s PrecisionTree software; it allows you to visually map out, organize, and analyze decisions using decision trees, right in Microsoft Excel.

 

Palisade Unveils BigPicture, Brand-New Software Product

BigPicture - Mind Mapping and Data Exploration for Excel
Mind mapping, diagramming, data maps, and org charts – right in Excel

FOLLOW BIGPICTURE:
BigPicture BlogBigPicture on TwitterBigPicture on FacebookBigPicture on LinkedIn

Palisade is pleased to introduce BigPicture, the diagramming and data mapping software add-in for Microsoft Excel. With BigPicture, you can create mind maps to organize thoughts and ideas, or create dynamic data maps from any type of spreadsheet data. You can even create automatic organizational charts from your personnel data. BigPicture is now available for download in beta!

For 30 years, Palisade software tools have been helping decision-makers gain powerful insights in their spreadsheets; now, BigPicture adds a new, visual diagramming platform to your decision-making toolbox.

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BigPicture  lets you:

  • Brainstorm complex problems using mind mapping techniques
  • Present and explore data sets with eye-catching topical maps
  • Work in Excel and easily share maps with others
  • Clarify decision processes
  • Automatically generate organizational charts from source personnel data
  • Link any map to underlying data sets for live updating

While the applications are limitless, BigPicture will be particularly useful for tasks such as strategic planning, org chart creation, and data mapping, giving professionals an easy-to-use tool to better plan out decisions and display dense data with the click of a button.

BigPicture Data Map

A data map built with BigPicture, illustrating the connections between complex data points with clear, detailed visuals.

BigPicture Strategic Planning

A BigPicture strategic map, with nodes expanded to show the different factors and possibilities of certain choices.

BigPicture Org Chart

A BigPicture flexible org chart, illustrating the structure of the organization along with detailed info on all the employees.

Download the BigPicture Beta Now!

The BigPicture Beta is available now for download, free of charge. Download it today, and begin exloring.

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Staying Fit, Saving Energy: @RISK, RISKOptimizer, Helps World’s Biggest Gym Save on Electricity

Fitness First Case StudyFitness First has over 1.2 million members, making it is the largest gym, health and fitness club group in the world—it also has a hefty electricity bill that needs managing.

They turned to Knowledge Global, an Australian company that specializes in advising clients on reducing energy use costs.

Knowledge Global has been delivering verifiable and accurate financial return on investment on energy efficiency programs via their data analytics tool called NRG Insight. The product is fundamentally an independent billing engine that uses daily smart meter updates to provide automated bill validation, accruals, budgeting, forecasting, market analysis and procurement aids.

Knowledge Global has been able to further enhance this product by using it with @RISK, which optimizes expenditure of new capital in energy efficiency programs. Inputs (such as energy cost, usage, and weather) can be modeled with appropriate distributions. The internal rate of return (i.e. NPV) on a portfolio of efficiency projects across a number of gyms is then modeled using RISKOptimizer, providing more confidence in future projects which are then validated by NRG Insight.

“Fitness First and our other clients are provided with more confidence in the expected returns of energy efficiency strategies which makes capital sign off easier,” says Ross Sharman, Managing Director of Knowledge Global. He adds, “@RISK’s strong statistical capability has made NRG Insight much smarter.”

Read the full case study here.