An Overview on RapidBusinessModeling

by Hans-Gerlach Woudboer

RapidBusinessModeling is a management consultancy firm with the mission to improve profitability. RapidBusinessModeling achieves this by building a multidimensional enterprise model, reflecting all important dimensions in the revenue and cost side. Our state-of-the-art technology solutions are: RBMModeler PerformanceManagementSuite, PricingSuite. This combined with our management consultancy know how provides you with an unprecedented basket of opportunities.

Brief process description: we are starting via a RapidProtoTyping detailed Business Model an Enterprise approach building a multidimensional enterprise business model- in close cooperation with the enterprise organization-on the basis of advanced activity based costing principles. [Ratebase Activity Based Costing, Time Driven Activity Based Costing, Consumption-based Activity Based Costing, Parametric Activity Based Costing]. Decomposing the accumulated general ledger data via cause and effect driver tables down to workplace cost, further assigning it to the activities within all departments and processes to their products and services provided to the customers in a truly multi-dimensional manner. Typically we are applying a hybrid process with Time Driven Activity Based Costing for the repeating activities in the organization.

Building a multi-dimensional enterprise model should be a staged approach.

Stage one of the RapidBusinessModeling approach starts during the workshop, together with the management team-we are building a business model completely based on various parameters like numbers of people, numbers of products, numbers of activities, numbers of customers or customer groups combined with approximate data of costs and revenues off the top of the management team.

The management team will immediately see the performance of the pilot business model measured by a WhaleCurve, just generated off the top.

Further enhancement on key drivers, just off the top of the management, will generate a good first 80/20 pilot business model. It will include WhaleCurve’s for customers and products , the Potentializer based on the gap analysis of the pilot model. Major aspects of this approach are management involvement, training and gaining insides.

The management learning’s and discussion from the first workshop will be fundamental for the continuation and focus on the next phase and steps of the project.

Stage two will follow the management outline and focus and will use advanced cause and effect drivers by utilizing existing operational data. Activity interviews are carried out and enhanced by value added analysis. A multi-dimensional activity cost , including departments, lines, processes, people, across the enterprise will be the first eyes opener depicting a value stream analysis. This shows where and who spends or is wasting your money and provides a first idea on how and where you could improve your overall process.

This enterprise activity-line-process cost will be further assigned -by using fact based drivers- to interim and final products, as well as to the customers or sales channels all processed using a truly multi-dimensional method.

A model of that detail of course could be further enhanced with additional details and effort, but because of our maxim to be approximately right versus precisely wrong, we are rather start analyzing the enterprise model at that stage via our dynamic WhaleCurve and potentializer technology. Our potentializer technology is also the first and best validation tool available. Once data based bugs are found and eliminated we start with Stage three which is first harvesting.

Needless to say that this process has to be steered by the management team and led by the business model owner all supported by RapidBusinessModeling’s team.

Measuring the overall enterprise performance of the modeled period via a so-called WhaleCurve depicts immediately the full customer and product profitability at a glance. It’s like a fingerprint of your organization for the period analyzed.

RapidBusinessModeling’s proprietary Potentializer technology applied to the multi-dimensional enterprise model generates rapidly the improvement potentials for the cost and pricing side which are most beneficial.

Re-engineering of processes including their activities and products based on the gap analysis and potentials depicted by the potentializer will be the crucial part of the various changes necessary to improve the overall enterprise performance, measured again by a WhaleCurve of the future. Redesigning aspects can be supported by our operational research, global search capabilities RapidBusinessModeling is offering as part of our technology portfolio.

A multidimensional business model is typically run as a point model, this is: each result has a value. Our capability of being able to introduce variables for each controllable parameters means the model result is a mathematical expression carried out throughout the whole business model. Based on this, an optimized processes can be designed subject to given constraints e.g. capacities and the like with an objective functions like maximizing for profit. RapidBusinessModeling utilizes a world-class nonlinear optimization process.

Any uncertainties, which are typical for such redesigns, can be understood by Monte Carlo analysis runs. This way the impact of future decisions on the basis of the new model will be understood prior to acting.

The benefit on a conservative basis is about 3% to 6% of revenue increase. The Potentializer will reveal many low-hanging fruits in both costing and revenue, which will be skimmed first. Change management principles must be used and applied in order to gain serious overall profit improvements.

A fully committed management approach will enable the enterprise to control the overall change process in accordance to their strategies and visions and should be able to capture a substantial profitability improvement within 3 to 6 months.