1. 1 Operations Research Consulting Solving complex business problems for fun and profit Harlan Crowder Principal Dieselbrain Partners harlan@dieselbrain.com

2. 2 Agenda  Consulting taxonomy  Decision support v. decision automation  OR consulting value proposition  Clients, engagements, and getting paid  Three of the Golden Rules of OR consulting

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4. 4 Consulting and services Strategic Solution Technical strategic consulting solution consulting transformational consulting technology consulting IT services and integration OR Consulting

5. 5 Decision support v. decision automation  Decision support  Giving managers and executives the insight and information to make hard business decisions  Ad hoc, what-if, investigative analysis  Incremental development  Solve the problem, and the problem changes  Relatively inexpensive to design and build  Decision automation  “Hard-coding” of a prescriptive model for some core business process; “Master Planning”  Runs periodically to determine well-defined business metrics  Static problem and solution statement  Usually expensive to design, implement and change

6. 6 The OR consulting value proposition  Quantitative framework – If you can’t measure it, you can’t manage it  Business process abstraction for decision making – optimization, simulation and statistical modeling  Confronting and taming complexity, uncertainty and chaos Too many choices, too little information “You’re not an expert in broadband hyperdrive infrastructures, so how can you help my company?”

7. 7 The OR consulting process for decision support compelling business questions “How do I reduce inventory?” “How much should I buy?” “When should I build a new production facility?” analytical model/framework Optimization Simulation Statistical analysis actionable business recommendations Recommendations that help managers and executives make decisions and answer the compelling business questions analytical solution Results of computational solution process; suitable for analysts, not managers critical success points – requires skill and imagination

8. 8 Models and prototypes for decision support 1.Insight  a wind tunnel for business – test it before you build it  uncovering non-obvious relationships; get surprised early  not just what and when, but also why 2.Collaboration*  building analytical business models is a team sport  operational prototypes are rallying points for discussion, experimentation, assumption-testing, and validation  a “concept document” means something different to everybody; a team can collectively get their mind around an operational model 3.Analysis  dealing with complexity, uncertainty and chaos  charts, graphs and numbers to help people make decisions *Serious Play: How the world’s best companies simulate to innovate, Michael Schrage, Harvard Business School Press (2000)

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10. 10 Evaluating clients  Who’s in charge, and who is paying the bills?  Does the client already know the answer before the right question is asked?  What’s the client’s main concern: the problem or the process?  Does the client want to be your partner or your boss?  If you think it’s too good to be true, it’s too good to be true. If you smell something rotten, something’s rotten. The client will be evaluating you, but you should also be evaluating the client

11. 11 Designing successful OR consulting engagements  Know the engagement scope  What will be included in the engagement?  More importantly, what will not??!!  “Scope Creep” produces failed engagements, unhappy clients and hungry consultants  Know what you know, and what you don’t know  Does this engagement use well-known technology and methodology? (And do I know how to do it?)  Or does it require inventing new ideas?  Don’t start consulting and adding value until you have a signed engagement agreement in place.

12. 12 The consulting engagement agreement  Why it is important  Sets everybody’s expectations in writing  Defines the engagement scope  Specifies the completion criteria (when can I go home?)  Elements  Key assumptions and dependencies  Consultant and client responsibilities  Deliverable materials – content, format, level of detail  Schedule – for both client and consultant  Fees  Change control procedure

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14. 14 Consulting fees  Time-and-materials  especially useful for “soft-scope” projects  good for beginners  delays and disruptions impact the client’s pocketbook  Fixed price  make sure the scope is rock-solid and you know how to execute the engagement  charge a premium over T&M  when (not if) things go wrong, you will take the hit

15. 15 Data: the really hard part of OR consulting  Most IT projects are concerned with the form of data; OR is about content:  accuracy  level of detail  completeness  Your opening position with the client: where practical, data is a client responsibility  Document in detail the data requirements:  form and content of project data  solution scenarios for testing and validating application prototypes If the client says, “Don’t worry, we have all the data,” then worry.

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17. 17 Three of the Golden Rules of OR consulting Rule #1: Your product is not computers, application software systems, user interfaces or database connections; Your product is reliable information that helps answer compelling business questions.

18. 18 Three of the Golden Rules (cont) Rule #2: Talk to the decision maker. Don’t talk only to his or her assistant, right-hand- man, trusted associate, surrogate, Number One business analyst, guru, etc. a)most decision makers don’t really know what they want; part of your job is to help them figure it out; b) if you only communicate second-hand, you’re screwed.

19. 19 Three of the Golden Rules (cont) Rule #3: The Fundamental Transaction – You tell, show or give something of value, and the client is so delighted they give you large checks and beg for more. Create infoaddicts.

20. DILBERT ® by Scott Adams

21. 21 Questions & Discussion

22. 22 The main thing is to keep the main thing the main thing. — Jim Barksdale