ned to offer jargon-free financial planning for managers of small- and medium-size enterprises.
ColumbusEIS breaks down a business's broad, overall goals into measurable financial targets, as well as into more specific intermediate goals, which it then shows in what's called a
Dupont Pyramid
. Meanwhile, a
Money Flow Pyramid
monitors a business's day-to-day operations, and at the end of the year it calculates the profitability in a
Capital Pyramid
showing assets and liabilities.
Once you enter your business's financial data (e.g., profit/loss statements) into ColumbusEIS, it presents the numbers in each pyramid graphically. It also presents a possible route for you to take toward your business goals and compares the goals with your actual fin
ancial base. ColumbusEIS is available in eight European-language versions, including adaptations to local financial cultures. The visual models are the same for all versions.
Ferreting Out Strengths and Weaknesses
Another MBAWare program,
B-Plan's Business Planner 2.0
, helps a business raise capital or generate financial statements. In addition, it builds complete business plans. It considers not only financial planning but also product development and a company's operational infrastructure. It collects business information, such as the five-year performance history, business goals (e.g., sales targets, growth rate, profitability, and market share), market analysis (e.g., competition, segmentation, and market size), and the company's general strengths and weaknesses.
"Business planning is like a puzzle. To get the real picture of a business, it's necessary to collect all the bits and pieces and arrange them in the right way," says B-Plan's David Solomon. "Busi
ness Planner guides you step by step and allows you to think about each step."
The program's what-if engine provides a detailed analysis of how, for example, single items influence the success or failure of the entire business. B-Plan says that the next release of the German version of Business Planner will also support English in one multilingual version. By switching from one language to another, the program will then automatically change a business plan's format, including financial ratios, currency, and taxes. This capability is becoming more in demand as companies become multinational and conduct their business globally.
Lacking Expertise
Business-planning tools play an essential role for small businesses, because they offer an expertise that start-up entrepreneurs often don't have. According to Solomon, small companies often concentrate totally on financial issues and forget that their financial situation is influenced by the product and the market environment.
The E
uropean Community (EC) has launched several programs to develop planning tools for small businesses. The Comett project, for example, evaluates financial principles and simulation techniques that fit the needs of small businesses. Jitcons's Juhani Puhakka, who has been involved in the Comett project, says that such projects attempt to find a visual language that every business owner understands and that improves his or her ability to plan and control a business. In addition to technical and conceptual development, these projects attempt to force a cultural standardization of management approaches.
Dr. Paul Harting, an independent consultant in Erfurt, Germany, who advises small businesses, says that MBAWare offers him an efficient way to control the liquidity of his clients' businesses. He recommends such programs because they make use of a commonsense financial-planning language that does not require any accounting expertise. "Businesses that employ planning tools are in most cases more structured, and
therefore easier and quicker to understand," he explains.
The MBAWare concept originated in the U.S. In 1993, a group of software publishers decided to get together to form the Management Software Association. During the past two years, a growing number of these programs have arrived in Europe. Meanwhile, several European companies have started to sell software that fits into this category. But since Europeans are more conservative and skeptical than Americans about new technology concepts, businesses using MBAWare have not been particularly plentiful on this side of the Atlantic.
"Americans are much more willing to try and buy software, whereas in Europe inhibitions are very high," says C. Andreas Dalluege, managing director of IBK (Munich, Germany), a software consultancy. "This is especially true at the upper-management levels," he adds. Dr. Wolfgang Tripp, a former McKinsey and Roland-Berger consultant, echoes Dalluege's comments, saying that "managers in large enterprises are often reluctant
to accept the computer as a planning tool."
The EC's Esprit Program
Dalluege is a board member of the MBA-Tool-Box project in the EC's Esprit program. The project's goal is to implement by 1997 an international network of business schools and industrial competence centers that support business-planning tools. "MBAWare will form the basis for a distributed environment of management expertise on the Internet," he says.
Users of several MBAWare programs will then be able to download current case studies, along with sample data from the Internet. In addition, human consultants will be available on-line to assist. Thus, an MBAWare user who calls for assistance will already have structured his or her problem to an extent that a specialist can solve it within a much shorter time, saving the company money.
One possible software platform for this distributed management-expertise network is the
Vineyard visual-information manager
from Data Fellows (Espoo, Finl
and). A workgroup-based framework, Vineyard lets you manage contacts, projects, and any kind of documents within the context in which they were created.
Vineyard shows how information is interconnected. Visual links between objects enable you to see the structure within data. The program is based on object-oriented technology (e.g., inheritance), ensuring that all objects deal with a consistent set of information. Thus, changes to one object are inherited by all objects connected to it. For example, if the address of a customer in a Vineyard database has to be modified, the system automatically changes the appropriate address field for all the company's employees.
Vineyard lets you connect such dissimilar objects as people, companies, memos, graphs, documents, and projects through arbitrary relations, such as customer, author, attachment, reference, or owner. In this way, it serves as a map for sharing know-how and creating new ideas within a workgroup.
The program runs under Windows and can
be configured in a client/server architecture to allow remote users to link via a LAN, the Internet, or telephone dial-up lines. Support for other platforms, such as Windows NT, Windows 95, and OS/2, will be available during 1996, the company says.
To track information within such a web of workgroups, the system uses a SQL-like language. All the queries are handled by the Vineyard server, which maps the world of objects to the underlying relational database. Data Fellows also plans to introduce an Open Database Connectivity (ODBC) interface to enable access to legacy databases.
In sum, Vineyard supports a manager's toughest task: coping with a multitude of information sources and linking them together. As Dalluege puts it, "Vineyard offers the glue to tie disorganized data into a meaningful context."
Tracking Resources Over Time
Financial-planning tools and business-plan builders like Vineyard deal with static elements. They let you perform what-if analysis and create di
fferent business scenarios, but they don't track the flow of cash and other resources over time. "The analysis of stocks, money, and other assets over time is a problem that every manager faces," says Kim Warren of the London Business School. Some examples are movements in market share, production control, and the influence of a single project on overall cash flow.
One tool that analyzes such system dynamics is
Powersim from Powersim AS
(Bergen, Norway). The program is based on a formal method that was developed in the late 1950s by Jay W. Forrester of the Sloan School of Management at MIT (Cambridge, MA). A Powersim model consists of a set of interrelated graphical variables, which you can connect using a diagram editor. You then use the Powersim simulation language to develop the exact definition of the relationship you're analyzing.
However, it takes several hours to produce your first useful model. "The development of a business model is usually a three-stage process," ex
plains Eric Melse of Oasis Process Consulting (Nieuwegein, The Netherlands). "First of all, it's important that [members of] a team of managers share the same view of the world."
Powersim supports the first modeling stage, which is known as rough modeling, through
Causal-Loop Diagrams
, which offer heuristic models in which you do not have to distinguish between the different types of variables and connections. A Causal-Loop Diagram is then transformed into a flow diagram, using the graphical simulation language. This second stage is where the actual analysis of a process takes place and proposals for improvement show up. Finally, in the third modeling stage, you run several scenarios with different settings.
Creative Problem-Solving
Modern management approaches rely on not only analytical models but also the creative power of workgroups, especially for carrying out innovative work. Whether you're designing new products, developing inventive marketing campaigns, or defin
ing an outstanding user interface for a piece of software, creative problem-solving is important.
"Creativity always includes motivational and emotional aspects. But that's not an argument against computer support," explains Dr. Tapani Savolainen, director of CAC-Research (Espoo, Finland) and sometimes referred to as the father of computer-aided creativity (CAC). The result of his research is the
second-generation tool Idegen++
, which supports problem-solving through brainstorming, idea generation, and idea-evaluation modules.
Idegen++ assists users in organizing and constructively evaluating ideas. "It's the opposite approach to artificial intelligence," explains Savolainen, "because it's the best computer in the world that solves the problem -- the human brain."
WHERE TO FIND
B-Plan International
Herzelia, Israel
+ 972 9 562002
fax: + 972 9 574055
http://www.netvision.net.il/bplan
A Consultant in Your PC
