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Ontonix Complexity Measurement and Predictive Analytics WP Oct 2013


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Breakthrough analytics for your business. Ontonix model-free and patented technology is used for advanced BI, Risk and Business Governance Management. Discover the big picture from all structured business process and discover the hidden fragility an what your options are to fix it.

Do not measure the wrong KPI - we automatically discover the native and intrinsic key performance indicators for you.

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Ontonix Complexity Measurement and Predictive Analytics WP Oct 2013

  2. 2. Creating Breakthrough Analytical Applications for Strategic Governance A breakthrough analytical application changes with success the way that users perform their work. It is not just about automating processes and using data intelligently: it must provide innovation and change user behavior, often radically. Such breakthrough technology can have a profound and dramatic impact on how to change the way enterprise governance is performed especially in uncertain times where parsimony and risk must be balanced with a rapid response capability to safeguard human made systems against unexpected events such as market turmoil, financial stress, fraud or technical faults. Alexander KOPRIWA Quote from the White House: “There are known known’s; there are things we know that we know. There are known unknown’s; that is to say, there are things that we now know we don't know. But there are also unknown unknowns – there are things we do not know we don’t know.” February 12, 2002: Press Conference by Donald Rumsfeld – Former US Secretary of Defense “All organizations in disarray are companies ignoring their intrinsic added value capabilities” Dr. Ing. Jacek Marzyck Updated October 31, 2013
  3. 3. Creating Breakthrough Analytical Applications for Strategic Governance EXECUTIVE INTRODUCTION If your data contains the answer, ONTONIX will discover all significant elements needed to resolve your strategic objectives. Should your data not contain the answers, then this clearly indicates that your business process model must be revised – regardless of the subject matter expertise at hand. ONTONIX has patented a model free analytical technology to manage the biggest threat for our economy and your existence: the rapid growth of complexity. Complexity is quickly increasing in all spheres of social life and business and represents a fearful source of fragility, risk, and inefficiency. Complex systems and organizations are less robust, less efficient and more costly. Reducing complexity helps to ensure better bottom line results when the economy is shrinking and uncertain. Our purpose is to aid stake-holders in their strategic decision making and to understand all interactions fast. Understanding how to reduce complexity costs helps to drive your competitive advantage. The result is a healthier and less fragile operation. To manage complexity objective measurement is required – this is our patented expertise. Many organizations which have been subject to excessive complexity (risk) failed despite implementation of classical risk management technologies. Lehman Brothers, Enron are good examples, Dexia and other banks/electronic trading systems have experienced costly failures due to excessive and uncontrolled proliferation of hyper-complexity which is a major risk today. ONTONIX offers a technology to monitor and manage such complexity risks by measuring it objectively so it can be managed correctly. Updated October 31, 2013
  4. 4. Creating Breakthrough Analytical Applications for Strategic Governance This White Paper exposes and discusses the concept and characteristics needed for cost effective breakthrough analytical application in more detail. Furthermore, we also intend to cover the underlying elements required (R&D and testing) as well as, all other functions needed to embrace a model-free quantitative complexity management (QCM) based decisions systems as provided by ONTONIX. HOW TO GET STARTED Breakthrough applications must deliver real value fast. Time to result is reduced to weeks instead of months, quarters or even years. Breakthrough decision governance management tools must change the way organizations function by delivering six key considerations: 1. Quickly automate the discovery of data elements which are relevant, without impacting existing software or IT infrastructures. 2. Monitor (rate) the observed system (process) by delivering: “very good, good, medium, moderate or poor”. Offer one single multisystem indicator. 3. Accelerate decision making; using objective facts – not “gut feeling”. Human intuition is highly error prone when data velocity and the number parameters grow. 4. Improve decision accuracy: model all consequences of decisions to make (and train) on best (and worst) case protection scenarios should the “unthinkable” happen. 5. Increasingly, un-controllable external parameters influence business operations. Your strategic understandings of these are vitally important. 6. Prohibit laborious development of complex mathematical models using expert resources on a recurring basis. Updated October 31, 2013
  5. 5. Creating Breakthrough Analytical Applications for Strategic Governance ANALYTICS PROTOTYPING AND RAPID DEPLOYMENT Today’s Big Data and massively parallel real-time e-business processes, with traditional DW and BI concepts too slow for effectively intercepting risk at its earliest point of origin without delays, is a challenging issue for application analysts / developers. Companies and nations experience more and bigger losses caused by unknown unknown’s (c.f. D. Rumsfeld), new vulnerabilities are constantly discovered and exploited. New business processes and “creative hacker strategies” facilitate rouge attacks made possible by systemic fragilities. Dynamic business processes and technical hyper- complexity must be monitored permanently. Classical technical monitoring is insufficient; a new holistic analytical rating / monitoring paradigm is required. Some big organizations (banks, insurance companies, Telco’s and others) experience every 10 to 20 minutes an attempted digital intrusion, therefore they must apply smart and active intelligence to protect their business (physical, digital and logical processes). This can include intelligent video intrusion surveillance systems, monitoring of IT application environments and checking of unusual business patterns. The combination of complex business process and multi layered IT environments are true challenges for all managers. Modern business applications are now more demanding than ever. They deserve the most capable QCM technology to separate data, from logic and user dashboard interface. New possibilities offered by ONTONIX advanced model free analytics can produce pertinent results on both small and Big Data sets. Minimum data is 10 parameters and 12 periods. A period is any time interval which is relevant to the observed systems criticality. Updated October 31, 2013
  6. 6. Creating Breakthrough Analytical Applications for Strategic Governance A good rating and monitoring mechanism must be highly scalable, fast and easy to deploy. Capable to retrofit all environments and use cases, ONTONIX single model-free analytics engine allows fast and cost effective deployment into all applications. Parallel checking of technical and business process is a new emerging market need which ONTONIX successfully addresses for achieving overall governance. DATA METHODOLOGY: LET YOUR DATA DO THE “WALK &TALK” When model-free-data analytics is applied, users only need to discover (and retain) pertinent data and which patterns to look out for. Even if you only have a single platform and data source, it is likely that you want to combine data from both internal and external sources to perform your most pertinent analysis possible. Some sources can be free statistics from Euro Stat, the UN, Bloomberg’s, commercial sources can be Dun & Bradstreet, Kompass or even, firms such as Experian. To gain benefit from analytical insights, you can do the following: Define your key objectives and risk/fragilities, some examples: • IT (production, project, data integrity) • Financial (P&L, Cash flow, Fixed Assets, CRM, SCM…) • Portfolio (stock market, volatility…) • Markets • Currency • Nonperforming loans (NPL) • Real estate market • Competitive • Churn analysis • Restructuring (M&A, MBO, LBO) • Change management strategy, is the change (fix) predictable or not? Updated October 31, 2013
  7. 7. Creating Breakthrough Analytical Applications for Strategic Governance DATA METHODOLOGY: DATA DISCOVERY PHASE Start with a data discovery phase, ONTONIX automatically discovers and displays all correlations / interaction patterns found. Depending on the data, some preprocessing may be required. Missing data is not an issue. We work with your Expert Users to shortlist input data. Very big data, such as the world economic risks, a Banks complete client portfolios can also be processed. This process is simple; however, implementing highly critical system processes such as IT production fragility or Air Traffic Control risk, power plants / process industries may require a more extensive implementation project with multiple realtime data “sensors” and pre-processing preparation. ONTONIX unique advantages are its native business structure performance parameters - a.k.a. Key Performance Indicators (KPI). The KPI are produced automatically (no subject matter expert required). KPI’s are sorted by relevance (importance) inside the observed system of parameters. Strategic management can now quickly address the “low hanging fruit” first, for yielding ROI gains. Many popular traditional and classical analytical tools require coding, script building or using languages (or procedures) such as “R”, “Python” or other Open Source products. This requires (recurring) manpower, rarely free of charge (nor fast). Licensed software products tend to be more stable, some vendors offer prepackaged “analytical PnP modules” - referred to as best practice or “shrink wrapped” analytical applications. When junior data analysts implement such “turn-key” analytics and not fully understand a complex mathematical model, then this can be extremely dangerous. ONTONIX model free analytics allow you to quickly expand, embrace and protect existing and new business domains. All activities are subject to constant change and threatened by excessive complexity (risks) and influenced by internal and external parameters. Updated October 31, 2013
  8. 8. Creating Breakthrough Analytical Applications for Strategic Governance DRIVING STRATEGIC DECISION MAKING AND REDUCING UNCERTAINTY Disruptive breakthrough analytical applications must know how to automate analytical results. This is achieved by a computerized scanning process performed as follows: • • • • • First discern pertinent data, Next assemble and process your data Third consult results via ONTONIX interactive dashboard Fourth discuss analytical findings, take decisions how to address the issues. Finally, define execution and change strategy. You now can help your business to be more agile, more resilient to unexpected events (a.k.a. Black Swans). Organizations using ONTONIX, meet objectives faster, for some clients this has resulted in major cost and business cycle reductions of analytical processes (up to 50% faster). Users can void (or limit) many set-up costs for analytical data governance, by exploiting existing Data Warehouse (DW) investments. SAP BW interface available (option). ONTONIX can exploit any existing DW or Data Mart (DM) investments already used. OUR CLIENT ENGAGEMENT STEPS A typical process ONTONIX expects to follow when getting involved with your organization: 1. Planning stage – during the project research and planning stage we need access to client resources to address the scope and areas to be addressed 2. Pilot stage - after the initial discovery stage is completed, we process the data and discern where and how complexity strikes and how to predict required change and associated risks. Updated October 31, 2013
  9. 9. Creating Breakthrough Analytical Applications for Strategic Governance 3. Delivery and handover - after forensic detective data analytics work is completed, we issue recommendations on how to address the discovered complexity best (by simplifying) and suggest possibilities how to improve the observed system as a whole and its parts. CLIENT SNAPSHOTS OF BREAKTHROUGH ANALYTICAL EXAMPLES More information can be found on our website and blog: and Case Study 1: Measuring Air Traffic Complexity: Estimation of ATC Workload through continuous measurement of air traffic complexity using real-time data from radar system. Case Study 2: Top European Bank, the client focus was to understand all IT Production & application constraints through the measurement of complexity and robustness of the whole environment Case Study 3: Competitive Benchmarking Analysis of our banking customer’s ability to compete as compared to its market opponents and to understand the bank’s ability to maintain their business model, to better understand barriers to profitability and to improve our client’s competitive market position. Case Study 4: A top European Bank measures complexity in their workflow management process and which is used to monitor criticality of many processes such as "Credit Management" process and its various phases. See: Updated October 31, 2013
  10. 10. Creating Breakthrough Analytical Applications for Strategic Governance PRODUCT AND SERVICE PORTFOLIO Our ONTONIX solutions do not impact existing IT structures and there is no need to abandon or modify existing systems. Customers can directly benefit by implementing model-free agile analytics by selecting ONTONIX services. Users can immediately take advantage of cloud services, a cost effective option only incurring operational expenditures. 1 - ONTONIX CLOUD PRODUCTS: Our flexible Cloud usage model, improves productivity, facilitates enterprise-wide collaboration and, perhaps most important, reduces software licensing costs without compromising quality. • • • Rate a Business – Predefined data templates for many use cases and can also accommodate your specific requirements Assetdyne – A London based partnership for stock market and share portfolio volatility rating service Design for Resilience – empowers engineers to design the best, least expensive and most robust products Optional Custom Cloud services can be set-up when needed by our clients. External Value Added providers already have integrated ONTONIX Cloud services to their portfolio offerings. Business partners such as Altair Engineering's HyperWorks offering, a computer-aided engineering (CAE) software platform that allows businesses to create marketleading products more efficiently and more cost effectively. 2 - ONTONIX ENTERPRISE SOFTWARE PRODUCTS: Our Quantitative Complexity Management (QCM) technology is delivered as a Customized Enterprise Solution which is powered by OntoNet™, our QCM Engine making it possible for multiple users to simultaneously process any kind of data to manage operations. We help design and produce the below information for single or multiple analytical portfolios: • • • • Updated October 31, 2013 Complexity rating and business/process resilience measure Current and critical complexity of a business, a department, a process Interactive Business Structure and Complexity Map Indication of sources of fragility and inefficiency
  11. 11. Creating Breakthrough Analytical Applications for Strategic Governance • • • • Indications on how to make business/process simpler Evolution of business/process fragility Intrinsic business KPIs Early-warnings of increasing business vulnerability The analysis can be automated and executed periodically to produce personalized reports. 3 - WE ALSO, IN ADDITION, PROVIDE: • • Advisory consulting services either directly or through our worldwide partners network Custom R&D Development on special projects SUBSIDIARIES: ONTOMED The medical profession needs simple, yet powerful tools to help practitioners make the best possible diagnosis and facilitate patient monitoring. ONTOMED crosses the boundary of subjective judgments’, medical doctors and researchers get rigorous, scientific and quantified measures on f. ex. trauma intensity, patient’s stability in real-time, real-time alerts, as well as, how successful a certain treatment or surgery actually was. This helps guide medical professionals to better patient care by selecting best treatments using factual decision making. ABOUT ONTONIX: Established in 2005 in the USA, ONTONIX is headquartered in Como, Italy, and develops the World’s first system which allows measuring and managing complexity - the main enemy of modern businesses. Our award winning technology and exclusive services help our clients view strategy, business risk management and economic intelligence from a radically new and innovative perspective. As ONTONIX analytics are intuitive and model free, the solution is suited to be used by normal business people who are not statistical or mathematical geniuses… Hence CEO’s, CFO’s, CRO’s and Operational staff can make better informed decisions faster. This benefit is also available to expert populations such as structural Engineers and Healthcare professionals. Conclusion: In this WP we have discussed the requirements for breakthrough analytical applications, of course not every application requires every element of these requirements Updated October 31, 2013
  12. 12. Creating Breakthrough Analytical Applications for Strategic Governance however as we have stated access to relevant data is needed, to deliver the key-elements necessary for informed decision making and not to waste valuable time and resources. Disclaimer: ONTONIX does not claim that a single analytical product can cover all known problems, especially when business strategy does not adhere to ethical, unlawful actions or excessive risk taking due to unrealistic targets. However, we help both large and small organizations reduce uncertainty; hence decision makers can make informed “best decisions” as early as possible without imposing heavy weight IT deployments. Further information on this White Paper is available from: Cloud Services free sign-up here: See what QCM experts say. Join us on Linked-In: Follow us on Twitter: Updated October 31, 2013