ontonix complexity measurement and predictive analytics wp oct 2013

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WHITE PAPER CREATING BREAKTHROUGH ANALYTICAL APPLICATIONS

©ONTONIX Srl. October 31, 2013

Creating Breakthrough Analytical Applications for Strategic Governance

Updated October 31, 2013

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



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.



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 multi-

system 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.



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.



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?



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 real-

time 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.



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.



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:

www.ontonix.com/Articles.htm and ontonix.blogspot.com

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.

http://ontonix.blogspot.com/2013/08/a-different-look-at-

air-traffic.html

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

http://www.slideshare.net/alexanderkopriwa/it-banca-

populare-de-sondrio

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:

http://ontonix.blogspot.fr/2013/09/measuring-processes-in-

banks-using-ddd.html



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 market-

leading 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:

• 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



• 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



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: [email protected]

Cloud Services free sign-up here: http://www.ontonix.com/1-1.htm

See what QCM experts say. Join us on Linked-In: http://www.linkedin.com/company/ontonix

Follow us on Twitter: https://twitter.com/ComplexityMngmt

ontonix complexity measurement and predictive analytics wp oct 2013

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