Solving Business Problems through Understanding of the Process of Modelling - Coursework Example

Introduction A model refers to a simplified presentation of how things really are. Modelling is a process of using models and process building. Models have various purposes where some are meant for single purpose while others involve professionals who assist organisations to arrive at a one-time decision. Given that there are various types of models as well as functions for modelling, there are also various types of modellers, which include professional modellers. Hence, people can become professional modellers by focusing and specialising in solving various problems such as marketing and stock-option valuation among others as well as particular tools such as simulation, econometrics an optimization among others. This article focuses on solving business problems through understanding of the process of modelling, applying spreadsheet engineering and generating and presenting insights in a businesslike problem. Developing practical understanding of modelling process in solving a problem in a business: I found the use of modelling process for solving a business problem interesting as well as informative. I realised that in order to solve the problem presented by a client, this process is best accomplished in a systematic way. In regard to this, I found various aspects of modelling activity as essential in modelling. First, I realised that it was important to try and have a good understanding of the statement of the problem according to the need of the client. I even became aware that the choice of the type of the model that I need to use, identification of sub problems as well as making choice on relationships and parameters was not an option but a must. However, this was not enough as the model needed to fit into the available data. The feasibility, correctness and acceptability of the model required evaluation. I also needed to work with the client with an aim of deriving value from the model and interpreting activity. In order to understand the entire process, I had to fully participate in addressing all the aspects with the help of my colleagues. At the begging of this process, I felt that I was too rigid in my attempt to find the solution to the problem because relied on the given information only in regard to this problem. At the time, I was thinking that if I would rely only on one approach to the problem while devoting much of my time in it, I would reach to a clearer solution. However, as we spoke with other members, we realised that the approach that we were taking may not help us to reach to the solution of the client’s problem. By looking back, we realised that we did not have clear ideas on what we were really doing. I think this is because we relied more on structured problem solving an idea that seemed like a short cut to the answer, as there was so much reliance of the numerical data available. I felt that we had identified the gap between the situation at hand and the desired situation. This is because we had stated the goals as well as the opportunities that we would face during the framing of the problem. I also felt that we were clear on what was supposed to be included in the model. This is because we had identified the critical decisions that we were supposed to include in our model as well as the factors, which had the biggest impact on the model and, combination of data to produce the results. I think through framing, we were in a condition of indentifying various problems as well as the opportunities that we could face. This was also the case in identification of the gap between the current situation and the expected situation. Furthermore, we were able to identify our stated goals as well as some of the unstated ones. I realised that we were in a hurry to populate the spreadsheet with relationships and data even before we had a clear of the structure of the model that we were trying to build. I think we were looking for a shortcut to the answer, which could really affect the generation of insights. Looking back, I think that there was no clear sense in regard to the overall structure and the purpose of the model that we were planning to build since we missed a point between diagramming and building the model. I was uncomfortable about the insights since lack of clear connection with the previous step of the process would affect the useful conclusions in regard to the problem given that the insights are discovered based on the exploration of the model. I think this is mostly attributed to over reliance of the information that was available since exploration of the model is more of analysis of the outcome measures. I realised that such outcomes may not be clear based on rigidity of information, the skill as well as patience to apply the model in exploration of the problem to unveil hidden gems. I think that the nature of the attitudes of my colleagues was essential because it had a great impact especially in analysing of data. We referred the available data mainly as the only information that we required in the process of modelling. I think we also took more data to ensure that the quality of the final product would have been improved as well as thinking that by obtaining the data, the process would have moved forward. However, this did not turn out to provide good results as I now think even the data that we regarded as the best could not be so relevant to our model. In addition, it was also important to build the structure of the model, and then use our data to refine this model. I also think that the model would also have been improved through better utilisation of the influence chart since it will guide us in identifying outputs and how they are arrived at from inputs as well as identifying any challenge during the early stage of solving the problem in our model. If I encounter such an event again, I would not rush to the solution to the problem but I would take more time to build models cautiously then test them. I would also not limit myself to the available information but I would be more prepared to use a variety of information in order to revise as well as improve this model to obtain the most favourable solution. I have realised that I need more knowledge in learning how to switch the aspects of modelling frequently until I get the desired solution. Employing spreadsheet-engineering skills to design, build and test a model of a business problem: I find spreadsheet as essential tools that ensure an effective model in business analysis. I realised that spreadsheet engineering will ensure that the model is build in an effective and efficient way. In doing so, I think the process will lead to with model that will ensure that there is a minimal waste and effort which results to insightful analysis of the problem at hand. In addition, such a model would be important for my client and me as it would help him to select as and implement effective solutions. I was aware that spreadsheet engineering involves designing, building, testing and analysing. I was also aware that if the spreadsheets are structured poorly, I would have a difficult time working with the spreadsheets and I was likely to encounter hidden errors. In addition, an insufficient model would cost me more money and time. However, during the design of the spreadsheets, I felt that it needed to have understandable physical and logical structure; I should eliminate introduction of flaws into the model during the execution of the design in order to prevent redesigning spreadsheets. In order to employ spreadsheet-engineering skills, I had to participate in every phase in order to discover insights and come up with an effective and efficient model. When we were applying spreadsheet-engineering skills with my colleagues, I felt that prevention of flaws or bugs in the spreadsheet was an easier task but on the contrary, I realised that I did not have clear ideas on how to prevent bugs, a process that resulted to redesigning of the spreadsheet. By working with my colleagues, there was development of different opinions in development of models a move that I felt that it played little in regard minimization of the time spent as well as cost, which took more time to yield results that were according to the requirements of the client. As a result, I felt that we spent more of our efforts in building and fixing models instead of improving decisions. However, I think now that as the better design of spreadsheet engineering leads to a better model, which makes the design easier to use, to understand, it guides us towards concentration of important issues and it becomes more reliable. I think that more focus on planning greatly contributed to a clearer process of designing, building and testing of the model of the business problem. I think that we were able to anticipate the ultimate uses of the model and we put more concentration on sketching which provided us with a rough indication of the flow of calculation as well as a physical layout for major elements of the model. I feel that use of plan enabled our structures effective. However, I realised that there was no advanced planning of the design, which led slowing down of the implementation speed. I was uncomfortable in regard to modularising as grouping and separating like and unlike items was not very successful especially in separation of data, detailed calculations and decision variables. At that time they way some of group members presented their views made it challenging especially in activities that required isolation. However, I realise that I did not have clear ideas during that time. This made it uncomfortable to isolate a module before building and testing it, to detect local mistakes before they cam part of the entire model and to place single parameters away from calculation into a single location. I think the design for use went well as it was clear in anticipation of the one to use the spreadsheet. This was made easier by working as a group in order to identify the type of questions that we required to ask. In addition to this, I think the design for communication was also successful as we were able to use visual cues in order to reinforce the logic of the model. Such cues included using blank spaces, using informative labels, as well as using colour, bold fonts and outlines as appropriate. Use of comments for describing the contents of the cell, and explanation for important formulas made the model easier to understand. However, I realise that we were not able to keep the spreadsheet simple. I think my colleagues contributed to this condition based on unbalanced delegation of duties. This led to complex spreadsheets. As a result, I think the complexity of the spreadsheets created more effort as well as time in building and it became more challenging to debug the spreadsheet. This may be the reason that made us to redesign the spreadsheet instead of prevent introduction of bugs into the model. I also feel that this condition was also caused by failure to keep our formulas short and situation that prevented decomposition of complex calculations into intermediate steps. If I encounter this kind of an event again, I would take time to make the spreadsheet as simple as possible in order to reduce the time and effort required to build and make it simple to debug. This will also make it possible to make thorough testing of the model before analysis. It is only those spreadsheets that are well designed, well tested and well built that will ensure effectiveness of the model when subjected to analysis. I have realised that I need more knowledge on how to prevent introduction of flaws into a model so that I can be aware of the origin of majority of bugs and take special care at the right time. This will prevent redesigning of the spreadsheet. Generating insights and presenting insights in a businesslike manner in a written report: I find generation and presentation of insights in a businesslike manner as very motivating and useful. Although the aim of the procedures for approaching ill-structured problem may not really lead to problem solution, I realised that it leads to insights. Thus, I think that generating insights in modelling process will usually make us gain understanding. This is because the results are translated and communicated from the model. I was also aware that in order to ensure that a variety of efforts from the modelling are be delivered, they require presentations. Thus, effective presentation is a crucial skill that I require as a modeller in order ensures a clear understanding of the problem. Together with my group members, we generated and presented insights in a businesslike manner. However, I realised that in order to do this, we needed to put into consideration the design of effective visual ways of presentation such as graphs and tables. I felt that insight involves just any kind of information developed from an ill-structured problem. Looking back, I realised that I lacked clear ideas at that time because the type of information varies. This is because one type of information may be more powerful than the other. While looking at this information with my colleague, I felt that I got a new understanding that an iterative process usually develops better critical insights. This begins at the model with raw numerical results and it ends visually with either a diagram or a graph. For instance, the first insight that a model generates may be a single numerical output. For example, from a model: By saving a certain percentage of your salary (e.g. 12%), you will have saved a certain amount (e.g. $800,000) when you will retire. However, I realised that from the same model I can also learn about additional insights. Such additional insights can be covered through explorations such as sensitivity. For instance, from the same model: By saving a certain range of the percentage of your salary (e.g. between 8 – 16%), you save a certain range of salary at the time of your retirement (e.g. $600,000 - $ 1,500,000). I think that the insight from a model can provide different levels of information. In such a case, understanding of the communication a graph can be used to include additional insights. I felt that decision makers require a clear understanding of the results of the model. This means that there is always a need to translate such information, which makes it not enough by just developing an excellent model to solve a problem in business. Such insights must also be expressed or presented in a managerial language. I think it is good that I was aware that I needed to organise insights in a presentation manner in order to ensure that the specific client get the required information. Thus, one of the most essential aspects of presentation is the content. Such presentations usually are usually based on relevance, quality as well as the integrity of the content. I think that if the words or images of the presentation of the insights are not well coordinated, there will be failure of the delivery of the information that the clients required from the model. I felt that I was not presenting insights but I was presenting the analytic process. I felt that what I was presenting was a recount of what I did to come to my insights rather that assisting the client to understand his problem. I think that I was also trying to do much as I felt that I presented a lot of information, which may make my client not to understand any of the information. I also felt that pictures that are well designed would present insights in a better way than words could do. I now think that with the help of my colleagues, I have realised that the presentation of insights involve the message that I need to convey after sifting every analytic work for insights. This message is well structured straightforward and linear. I now know that no matter how challenging and complex my analysis would be, the presentation of my message on the other hand must be easy to follow, simple as well as direct. Am comfortable that if I can limit the presentation of my insights into a few key points and I justify them, then my intended client will be able to understand the solution to the problem. In addition, using of visual aids such as graphs and tables would lead to better understanding of the presentation of my insights. If I would encounter such an event again, I would acknowledge that insight involves different levels of information where the first insight may consist of generation of a single numerical output. On the other hand, the same model can have information that is more powerful where I can learn more about additional insights. Additional insights can also be extended even to communication graphs. I would also present not my analytical process but my insights. I would also limit myself to lesser, but key information in order to ensure that the client absorbs more. In addition to words, I would consider using graphs, diagrams or pictures that are well structured since they would convey information in a better way. I have realised that I require more knowledge in classification of the kind of information in insights since I am now aware that information in generation and presentation of insights varies in the same model where one some may be more powerful than other. This is enhanced through additional insights. Conclusion The article generally involves the coverage of foundations of modelling for insights. In order to be an effective modeller, one has to do it. Four-stage process of modelling in approaching ill-structured problems include frame of the problem, diagram the program, building a model as well as generating insights. Spreadsheet engineering involves a set of principles and tools, which are designed to improve the effectiveness and efficiency of modelling. Finally, the results of the majority of modelling efforts are usually delivered in presentations. Read More