|
The guiding principles behind the Sterna Business Positioning System™ stem from the field of System Dynamics, which deals with the management of complex feedback systems. Feedback refers to the situation of X affecting Y and Y in turn affecting X. One cannot study the link between X and Y and, independently, the link between Y and X and predict how the system will behave. Only the study of the whole system as a feedback system will lead to correct results.
Information feedback-control loops are abundant in businesses. In supply chain organizations, for example, a marketing campaign may yield an unexpected surge in sales, leading to manufacturing and distribution decisions that are based on factors such as existing inventory levels and machine capacity; orders are filled, inventories adjusted, and competition may react by lowering prices, leading to new decisions. The regenerative process is continuous, and new results lead to new decisions which keep the system in continuous motion.
Sterna Business Positioning System (Sterna “BPS”) is a software platform that enables managers to control the organization system and to maximize profits. It helps managers to understand when corrective action is needed, and how it impacts the company’s financial goals. Operational action taken in one area of the business is immediately and automatically translated (via mathematical models) to financial impact and exposed to the interconnected business communities within the organization, driving those communities to appropriate action. As a consequence, financial and operational alignment is reached in every aspect of the business, enabling the entire organization to be driven as a whole, and to respond to threats and opportunities as they occur.
Sterna BPS is based on three System Dynamics factors – Business Dependencies (structure), Time Latencies, and Amplification – the combination of which influences the likelihood of an organization to meet its goals.
Business Dependencies – Business Dependencies define how every business community within the organization impacts and is impacted by other business communities. Utilizing mathematical constraints (that form a constraint propagation network), Sterna BPS defines and manages a Business Dependency Network (BDN) that reflects the business interdependencies within the organization. When action is taken in one business community of the organization, its financial impact is immediately propagated in the BDN and exposed to interdependent business communities, to ensure that the entire organization is centrally aligned at all times.
Time Latencies – There have always been delays in capturing and delivering information (“Data Latency”), in the time it takes to analyze the information (“Analysis Latency”), and in the time it takes to make a decision and take action (“Action Latency”). Sterna BPS minimizes each of the three time latencies, as described below, thereby minimizing lost value.
Data Latency is minimized by capturing raw data at the source systems, without having to pre-aggregate the data or stage it in intermediate stores for analysis purposes. Instead, data is stored in memory and instantly made available for complex mathematical analysis.
Analysis Latency is minimized by presenting actionable information in an extraordinarily intuitive interface, in which the business manager is able to perform strategic, tactical and predictive analysis in a single screen; all mathematical calculations are performed instantaneously.
Finally, Action Latency is minimized because every operational activity is translated by Sterna BPS automatically, and in real time, into potential monetary gains or losses, presented to the user graphically in the form of Sterna BPS Money Surfaces™; the manager uses the Money Surface™ to understand where action needs to be taken, what form it should take, and what its monetary impact would be.
Amplification – amplification occurs when an action is more forceful than might be implied by the inputs feeding its decision. With Sterna BPS, the Money Surface™ indicates clearly he magnitude of amplification, whether positive or negative; financial impact of every operational activity in one business community is immediately made visible to all dependant business communities. The Money Surface™ drives managers to action in correcting amplification effects almost immediately, minimizing undesired business results.
A Business Positioning System must support the following capabilities:
 |
Real time data integration from a multitude of data sources |
|
|
In-memory data storage |
|
|
Time series and predictive analytics |
|
|
Business dependency management. |
|
|
Real time data propagation of changes in the data sources |
|
Simulation |
|
Rapid time-to-value — implementation in days |
|
Agility — ability to easily reconfigure the Business Positioning System to reflect the organization system and processes at all times |
|
