THE PROBLEM EXAMPLE CASE CORE TECHNOLOGY MARKET RESEARCH STRATEGY TEAM SUMMARY

ORGANISATIONAL COMPLEXITY

REDUCTION@ INTERSECTION OF CONSULTING AND LARGE SCALE DATA

ANALYSIS

August 28, 2012

THE PROBLEM EXAMPLE CASE CORE TECHNOLOGY MARKET RESEARCH STRATEGY TEAM SUMMARY

PROBLEM

I complicated processes not aligned with structures can killproductivity

I estimated complexity cost per employee: 20 − 40% (cf.market research)

I how to efficiently measure, align and manage complexity inorganizations?

Starting Point: organisation is a networked ’complex adaptivesystem’

THE PROBLEM EXAMPLE CASE CORE TECHNOLOGY MARKET RESEARCH STRATEGY TEAM SUMMARY

SOLUTION: COMPLEXITY REDUCTION

I CORE assembles a customized set of algorithms analyzecommunication data

I align organization structures and processes with needsI reduce mismatch, stress, inefficienciesI manage and reduce complexity in modern organizations

I by analyzing communication processes, we suggestadaptions and help to align structure and processes

THE PROBLEM EXAMPLE CASE CORE TECHNOLOGY MARKET RESEARCH STRATEGY TEAM SUMMARY

EXAMPLE CASEI Setting : You want to find out why your productivity

decreasesI You know that

I departments tasks are communication intensiveI workload has increasedI some customers & employees have changedI customers’ requirements have shifted repeatedly.

I Internal Project Team : Little succes due toI Lack of timeI People have not dared to speak up you only find out

what you already knewI these are not the actual problems

I Weak Signals : You know that your colleagues talk aboutquitting after one key member has left to a competitor,another one has switched internally and your bosses havestarted to question your departments performance.

You are getting nervous! VERY NERVOUS!

THE PROBLEM EXAMPLE CASE CORE TECHNOLOGY MARKET RESEARCH STRATEGY TEAM SUMMARY

EXAMPLE CASE: SOLUTION

I Silver Lining:I You hear about CORE, the solution to analyze

organisational complexityI You decide to implement a testcase in your department.I Email data is anonymized and exported to analyze

communication patternsI Approval of the worker’s council, which is concerned about

privacy, but also health issues of your departmentsmembers is reached.

THE PROBLEM EXAMPLE CASE CORE TECHNOLOGY MARKET RESEARCH STRATEGY TEAM SUMMARY

EXAMPLE CASE: SOLUTION

I Analysis: The analysis shows thatI internal and external email communication increase after

customer employees have changed.I much higher communication load on customer facing team

members.I other members of the team are communicating a lot with

each other in circles.I Action: You cut away on internal processes that produce

unnecessary communication and move freed workforce tohelp customer facing employees.

I Results: Team mood and productivity rise, newlydeveloping unnecessary processes are identified early onand cost stay in check in the coming months.

THE PROBLEM EXAMPLE CASE CORE TECHNOLOGY MARKET RESEARCH STRATEGY TEAM SUMMARY

EXAMPLE CASE: RESULT – COMMUNICATION

NETWORK

Figure : Anonymized analysis of ENRON example dataset – subset ofall emails

THE PROBLEM EXAMPLE CASE CORE TECHNOLOGY MARKET RESEARCH STRATEGY TEAM SUMMARY

CORE TECHNOLOGY

I CORE Technology computes complexity indicators basedon

I person-person communication networkI information originated in-and outside organisations

I Indicators show organisations how to optimize tzeirprocesses

I align process and structuresI reduce complexityI improve performance in terms of speed, flexibility ,

integraion and innovation

THE PROBLEM EXAMPLE CASE CORE TECHNOLOGY MARKET RESEARCH STRATEGY TEAM SUMMARY

CORE TECHNOLOGY AND PROCESS

THE PROBLEM EXAMPLE CASE CORE TECHNOLOGY MARKET RESEARCH STRATEGY TEAM SUMMARY

MARKET RESEARCH

I our survey results indicate yearly complexity cost of20 − 40% of total employee cost

I estimated total market size for Europe: 2 bn Euro p.a.I target group: more than 43.000 medium sized enterprises

in EU with 250+ employees, estimated useful minimumsize: 100+ employees

I Gartner’s Analytic Applications and PerformanceManagement category: 1.4 bn USD revenue, 8 − 15%CAGR

THE PROBLEM EXAMPLE CASE CORE TECHNOLOGY MARKET RESEARCH STRATEGY TEAM SUMMARY

COMPETITION AND UNIQUE CHARACTERISTIC

I competition:I fragmented academic and small consultantsI large person-hour focused consulting companiesI data analytics software providersI business performance software providers

I no integrated, semi-automated, data analytics, domainknow-how based approach

This is where CORE steps in.

THE PROBLEM EXAMPLE CASE CORE TECHNOLOGY MARKET RESEARCH STRATEGY TEAM SUMMARY

STRATEGY

I Incremental approach in design / prototype phase:feedback from market

I start with SaaS based email analysis for medium sizedcompanies in

I local marketsI build teamI form partnerships with consultants and academia as

multiplicators and sales channelI Scale up and Long term perspective:

I increasingly larger enterprisesI extend to ERP data based analysis of processesI extend to IT complexity reduction

THE PROBLEM EXAMPLE CASE CORE TECHNOLOGY MARKET RESEARCH STRATEGY TEAM SUMMARY

MILESTONES / INVESTMENT

I Investment characteristics incremental learning: assumesbootstrapping at beginning, angel / VC investments later

I further development required: 6 months, after that ongoingdevelopment

I first sales: year 1I building sales: year 2I positive cash flow in year 3I profitable in year 4I sales of 2.5 Mio e in year 5

I Investment, staged: 1.5 Mio e for development, initialgrowth phase

I core software development teamI build up of

I sales team and customer baseI partnerships / channel sales

THE PROBLEM EXAMPLE CASE CORE TECHNOLOGY MARKET RESEARCH STRATEGY TEAM SUMMARY

SOFTWARE DEVELOPMENT

I Status:I protoype analysis and visualization

I based on 423mb, 300k emails ENRON data set, standard SNA algorithms

I next: alignment with orga structureI Software Development Approach:

I internal core R&D team to develop and prototypeI outsourced high performance implementationI SaaS platform, integration software, data extraction

software (low value code) outsourced to cost efficientsupplier

I deploy platform in cloud & grow along revenuesI use open source tools to reduce capital expenditureI personal data issues managed per country, current

prototype is based on strict European regulations

THE PROBLEM EXAMPLE CASE CORE TECHNOLOGY MARKET RESEARCH STRATEGY TEAM SUMMARY

CURRENT CORE TEAM

I mainly European multidisciplinary team with experience innetwork theory, social networking, corporate organisationand enterprise needs

I met on Venture Lab based on passion for algorithmic dataanalytics solution to complexity problem

I Carl Henning Reschke, Consultant & Innovator (GER)I Sven Stodtmann, Ph.D. Student (GER)I Francesco Collova, Innovator, Global Architecture Expert

(IT)I Roger Sen, Enterprise Application Expert (ESP)

I Mentor: Benson Yeung, IT architecture and systemsintegrator (USA)

I Input from informal advisors from VL and RL

THE PROBLEM EXAMPLE CASE CORE TECHNOLOGY MARKET RESEARCH STRATEGY TEAM SUMMARY

SUMMARY

I complicated, interrelated processes not aligned withstructures and incentives kill productivity

I estimated cost of complexity 20 − 40%I estimated market size Europe alone: 2 bn e p.a.I cloud based data analytics for organizational alignment

and complexity reductionI achieved prototype analysis of example ENRON email

data setI incremental development, initially organic growth strategy

followed by expansion

THE PROBLEM EXAMPLE CASE CORE TECHNOLOGY MARKET RESEARCH STRATEGY TEAM SUMMARY

CONTACT & LINKS

I Team http://www.venture-lab.org/teams/5693

I Web http://www.coredux.appspot.com

I Youtube http://www.youtu.be/bQBTuG0g3AU

I Survey http://www.surveymonkey.com/s/QDLYVNT