Developing a Practical Understanding of the Process of Modelling in Solving a Business Problem - Coursework Example

Reflective Essay Developing a practical understanding of the process of modelling in solving a business problem Introduction It is not always given that we understand what we learn or that we make sense of our learning experiences. Reflecting through the concept of developing a practical understanding of the process of modelling aids me in further probing the concept to realize how well I can use it in solving a business problem. What does developing a practical understanding mean? I realise that one can be involved with so much theory about something, but never be able to do the very thing that he/she knows so much about. Developing a practical understanding could simply mean understanding through ‘doing’. For me developing this practical understanding in the process of modelling has been an incremental process. By this I mean starting from small and direct problems like how I would invest some extra cash, to more complex and ill-structured problems. I have been able to develop a practical understanding by ‘practically understanding’ every process in modelling. Lectures and instructions have provided the direction into this process. A drive to know more and to learn from other sources has been an important addition to this process. Being able to learn from others has also helped me develop this understanding as well as working with peers on this process. The Process of Modelling The first step is to understand that a model represents reality. This breaks the complex to the simple. I have discovered that having a practical understanding of the process of modelling in solving a business problem is achievable through experience. A book or even this course may teach the basics of modelling, but real expertise lies in having a girth and a depth of experience. No wonder this course has had its emphasis on the practical understanding rather than just a theoretical one. Nevertheless, it is hard to learn everything through experience; experience is built on certain knowledge. My learning process has illustrated to me that a combination of both theoretical structured study coupled with experience, result in effectiveness in developing a practical understanding. I have learnt that developing practical skills entails a keen following of instruction through the process of developing practical skills. For instance the process of modelling involves several tools, I sit back and ask myself, can I be able to use these tools, do I know how to determine the most appropriate one is different situations, are these tools practically useful or are they just theory. In several instances, asking whether these tools are practical as it is said has driven me to apply them in different problems and have proved them to be useful. I thought there was one way of dealing with business problems and hence a linear way of developing practical understanding in modelling. However, now I know that problems are either well or ill structured. This demonstrates the fact that the kind of problem determines it’s kind of response. Basically, well-structured problems can be solved easily and therefore the process of dealing with the process is problem-solving and may not involve modelling. However, the ill structured problems, as I have learnt, are not straight forward, this means that they need to be explored in order to develop insights in ways to solve them, the process of modelling. My area of concern has been the ill-structured business problems since my interest is modelling. Modelling is intriguing in that it does not only try to solve the problem but it actually looks for the real problem in a problem. Having a business situation and trying to think through it to identify the real problem, then going further to develop insights in solving the already identified problem using different tools and finally presenting the answers in an understandable and actionable way has been an stimulating process for me. Developing a practical understanding in the process of modelling in solving a business problem is not possible if one is not actively involved in solving business problems. I say this because if for instance I have been exposed to one type of problem, I will only know how to solve that problem. On the other hand if I have had exposure in different kinds of problems and I have been practically involved in the process of solving them, then I will be gain an understanding of solving such a problem in the future. I have learnt that having different kinds of problems increases my understanding in the process of modelling because the experiences are varied yet very important. This way I have been able to build for myself a repertoire of experiences and I continue to enhance the understandings I have gained. One of the essentials that I have learnt is to frame the problem. Actually, the difference between novices and experts in this field is on how well they can identify the problem and decide the ones that are suitable for modelling and those that are not. Different situations have different problems, being able to frame problems in each situation has improved my understanding. The process of modelling comprises of four major steps and uses different tools. The stages involve framing the problem, diagramming it, building a model and finally generating insights. The tools include spreadsheet engineering, influence diagrams, parameterization, sensitivity analysis, strategy analysis and iterative modelling. Hence to develop practical understanding in the process means to have a glimpse of each of the steps as well as the tools used. I thought that knowing what needed to be done was enough to help me solve any business problem, but I have learnt that the process involves being practically involved in asking many questions through the process. One important aspect in solving business problems through modelling is to be able to identify the real problem. Having case problems has taught me how to practically involve the skills I have learnt in the course through the modelling process in each case. I realize that now I have acquired creative aspects in modelling especially in the processes of framing the problem and generating insights. Conclusion Business problems are bound to appear from every day operations and complexities of a business. Some may be well structured such that solving them is a straight-forward exercise while others are ill-structured and complex and solving them involves modelling for insights on how to solve them. Solving the ill-structured problems will require developing a practical understanding of the process of modelling in solving the business problems. There is a difference in knowing what to do and how to do it. Developing a practical understanding of the process of modelling translates one from a learner to a modeller. Employing spreadsheet engineering skills to design, build and test a model of a business problem Introduction Looking back reflectively allows one to stand back and develop a better perspective. Those involved in learning studies recommend repetition as a way of enhancing understanding. Enhancing and polishing my spreadsheet engineering skill have taken this path. Going through what I have already learnt in a reflection allows me to more comprehensively understand concepts as well as appreciate my learning experience and realize areas that need more work. Almost all businesses rely on spreadsheets every day for their work. However there is a widespread assumption that spreadsheet models are free of errors or that having the skills to use it is any easy thing. A spreadsheet is not the model, but a tool to build effective and efficient models. Therefore apt skills in spreadsheet engineering would help a modeller to design a model, build and test it. Spreadsheet engineering helps build models effectively and efficiently. This ensures a model that has insightful analysis of the problem, completed with minimum effort and waste. This will result in insights that can be acted upon to solve a business problem. Spreadsheet Engineering Skills I have learnt that spreadsheet engineering has the phases of designing, building, testing and analysing a model of a business problem. Models are designed and not allowed to grow organically. This means that the structure of the design should be clearly defined and should also be understandable. The design and structure determines how the overall model will be. I have learnt that virtually all the models that are designed contain bugs. Therefore I have appreciated the fact that it is healthy to be sceptical even with my own models. One key to having successful models is to test them before using them to analyse a business problem. Testing can either be done through add-in softwares or other inbuilt methods. Models are not only tested to identify errors, some models may not have errors. Nonetheless, they must be tested to give the assurance that the errors are not actually there. I had thought that spreadsheets are easy to use but I have since learnt that this is one of the serious tools for analytical work. Through the processes of designing, building, testing and analysing a model, spreadsheet skills ensures that the mode created and used for analysis purposes will help solve the business problem adequately. After having framed the problem and diagrammed it, the next phase is to build the model using spreadsheets. I have learnt that just opening a spreadsheet and inputting data is not enough. It is important to design a spreadsheet that can be easily understood in terms of its logical and physical structure and it should also have a clearly defined module. Anyone looking at the model should be able to know which are the inputs, assumptions and relationships. This is not a skill that is learnt overnight, it is a careful process that ensures right insights are developed. Through exercise I have learnt that a sound design allow you to build and effective spreadsheet. This is basically mechanical in nature. Although I have had instances where I redesign a spreadsheet, I feel that trial and error is more cumbersome. I would rather take my time and be careful in executing the design than repeating the process. People repeat the process because may be they are not careful enough and in the process they introduce bugs. Bugs can occur, and that is why we have a testing stage. However, practice and experience teaches one the areas where most bugs appear and therefore one is able to avoid those areas or be keener while trending there. Notwithstanding, even after being keen and careful in the process of building, a model has to be tested. This is the point you learn to develop a healthy scepticism that there could the presence of bugs in your own work. I have learnt that it is dangerous to analyse models before thoroughly testing them. Spreadsheet engineering skills are can be learnt and they are important in solving business problems whether the problems are simple or ill-structured and complicated. Lack of the skill could mar the process of modelling. For instance, one can frame the problem well, diagram it and have a picture of what he wants to do. But in the process of building the model, bugs are introduced. If the faulty model is analysed, the insights generated will not solve the problem involved. Therefore, one should seek to develop aptness in all the phases of spreadsheet engineering. In my experience with several business problems, I am right to say that spreadsheets are one of the modelling tools that has helped me develop a structure, explore and understand the problem you are faced with. In addition, it helps you express your ideas. Having a knowledge and working on it is helps you develop the precision to use this important tool to modelling and hence solving business problems. Continual learning and application of this knowledge practically puts a distinction between armatures and professionals. Conclusion One interesting truths that I have learnt to appreciate is that, as much as I may have spreadsheet engineering skills the skill in itself cannot solve a business problem. It is a skill among the many others involved. It is important to make proportionate the practical knowledge of the other skills in modelling with the spreadsheet engineering skills. Still, one of the skills that mark novice modellers from experts is spreadsheet engineering which helps modellers through the processes of designing, building and testing a model. Having these skills ensures effective models are designed, built and tested ready for analysis to generate insights. Generating insights and presenting insights in a businesslike manner in a written report Introduction Just like in a relay race, all the runners contribute to winning the race, if one of the runners does something wrong, then the outcome of the overall race is affected. In the same way, all the processes in modelling are important and if one goes wrong, it could affect the outcome of the overall race. If insights are to be generated, then we must follow through the process from framing the problem to analysing models and generating insights. Generating and Presenting Insights in a Businesslike Manner Modelling results in generating insights. This is the last stage of a four-stage process of modelling. First, the problem is framed, diagrammed and a model is built out of it in order to generate the insights. This process involves the application of the tools of modelling at different points. The process of generating insights starts from framing the problem. It is usually the case that, ill-structured problems are vague and one wonders what the real problem is and what kind of a solution it would demand. Through trials in different kinds of problems, I have learnt that if a problem is not framed well, then the modeller runs the risk of solving too many problems. Setting boundaries is one of the ways that allows some kind of specificity. For example setting a time for reducing costs and increasing the profit margin, you could also set a figure or figures that have to be attained. This process helps in uncovering as much information as possible on the problem. This is where apart from deciding what you know about the problem, you also set the boundaries and come up with some initial assumptions. This kind information is largely qualitative in nature, therefore the second phase of diagramming the problem make the information more quantitative. I have learnt that many people, especially students and novices in modelling start populating the data in a spreadsheet before they have developed a glimpse of how the problem looks like. This takes them in cycle after cycle of rework which in turn affects the insight generating process. The recommendation is to diagram the problem that has already been framed to allow you to get meaningful presentation of the model that you intend to use. The stage that follows is to build a spreadsheet model. Although this may have seemed as an easy process when I first heard about it, however, without careful planning and execution, people still build models full of errors. Therefore, I have put it upon myself to develop apt spreadsheet engineering skills in order to become a better modeller. Generating insights is the final phase of the modelling process. This is the phase where the modeller provides conclusions and recommendations to the client in ways that he can understand. Therefore, generating insights involves translating the technical as well as the numerical results of the modelling process and presenting them in a businesslike manner in a written report. Basically, insight is information that can be used in the development of an ill-structured problem. Through practical application of what I have learnt, I have discovered that insights are generated through engaging in an iterative process. These insights are then presented in a diagram or a telling graph. I thought there was a specific way to generate insights, but interestingly I realised that there is no recipe for generating them yet most of the people recognise them when they see them. Ill-structured problems require insights in the process of solving them. This calls for a deliberate process in which the modeller explores the behaviour and implications of the model. Models are not readily interpreted by people, therefore it is important the insights be expressed in words and graphs. This requires one to have skills in communicating with numbers and formulas as well as the in graphs and words. After insights are generated, they have to be presented to a specific audience. It is important to note that the audience may not be able to understand the model and the insights generated from them. Therefore, I have discovered that presentation skills are very important to a modeller. The presentation style may not be as important as the content being presented. After all, it is what is in the model that solves the business problem and not the style the insights are presented in. This notwithstanding, you cannot rule out the importance of visual support in your presentation. The reality of modelling is that it is done by analysts, professional modellers or consultants. This means that the problem has to be communicated back to the business owner in ways that he can understand and take action. Therefore, instead of a modeller his analytic process, he should be careful to present the insights themselves. Some businesses may prefer a written report while others prefer the report and a presentation of the process. Either way, a report has to be written. Interestingly, I have realised that modellers find it hard to break down this figures-ridden information in writing. The most important thing is to help the people having the business problem solve that problem. Since they are not the ones that carried out the analytic process, and they have not immersed themselves in the process of generating process, this could be very hard. I have realised that writing the report in a simple, accurate and understandable manner brings out the difference. In real life, people enjoy stories, so in the report I would prefer telling my client a story of what the problem is, why it is the real problem and how it can be dealt with. Conclusion A careful process will ensure that good insights are generated. I have learnt that generating good insights is very satisfying. However, if they cannot be communicated in an understandable way to the client they may not have solved the business problem in question. Therefore, being able to present the insights in an understandable, easy-to-follow and actionable way ensures that the process was worthwhile all the way. Read More