Good thinking and reasoning pays off
Good reasons to introduce EIDOS now!
Four completely different reasons why companies decided to invest in Parmenides EIDOS.
EXPANDING OWN CAPABILITIES
Think or buy?
Spending less for external support
When a large multinational holding company decided to introduce scenario planning in order to make more sustainable decisions, they tried out various approaches – including external consulting. EIDOS was already being applied by a couple of business units and one of these was selected for demonstration purposes.
At the final presentation to the management, the EIDOS group received outstanding feedback and its work has since become the reference for future planning processes. The EIDOS methodology not only scored high in the area of scenario planning, it was also very convincing in its description of clear steps of how to prepare for them, including the implementation of an early warning system.
In another experiment, Parmenides EIDOS was also able to identify what is missing in existing strategy papers. “We reviewed the strategy paper from a renowned consultant that appeared to be very comprehensive but difficult to implement. We then found the blank spots by applying the EIDOS methodology,” one of our clients said.
DECISION MAKERS FELT AT EASE WITH EIDOS RESULTS
Despite its uncontested advantages, external consulting is often a means of organizing and orchestrating internal decision processes or of staffing temporary non-routine projects. Not only is this approach expensive, companies also lose control over central processes and the results often lack traction in the organization. After a short training and learning period, EIDOS users can control and organize many of these processes themselves. Various management tools are all just a click away. The business equation is simple: The investment in EIDOS is quickly outweighed by the savings on external support.
Another effect speaks in favor of investing in EIDOS: Every strategy, developed in-house or by an external consultant, has to be reviewed by the decision makers. Decision makers often rely on their gut feeling because it is difficult to evaluate the quality of the reasoning and underlying assumptions. Parmenides EIDOS provides an accessible framework for reviewing strategy work. In this way, it does not just boost the capacities of analysts and strategy developers, it also leverages the entrepreneurial competence of decision makers.
STATE-OF-THE-ART MANAGEMENT
Increased it and workplace efficiency
Replacing stand-alone tools with one integrated framework including all common management tools and techniques
The management of a large corporation was very reluctant to invest in yet another IT tool, as the company’s tool portfolio had already reached an unwieldy size and was hard to maintain.
When they realized that EIDOS could replace several disconnected but expensive tools with a single framework, they changed their mind. Introducing EIDOS would reduce the overall cost of software licenses and increase efficiency in the workplace. Less time would be wasted by having to search for the right tool or by reinventing application methods.
USERS REPORT THAT USING EIDOS IS FUN
Apart from Excel and PowerPoint, IT in the workplace is not necessarily standardized in large companies. One group of users sticks to the basic Office applications for all of their tasks. Some think exclusively in Excel and decide with PowerPoint. Often they apply common management tools and techniques inefficiently and in an eclectic way.
Another group of users employs a large toolbox. However, they mostly apply the reasoning steps required to make good decisions in tools which are not connected to each other. Mid-sized as well as large companies have reviewed their tool portfolio and have figured out that the use of Parmenides EIDOS would allow them to reduce the amount of stand-alone solutions. The EIDOS Suite includes common management tools and techniques and enables users to support a wide range of processes such as business model generation or design thinking. A secondary benefit is more difficult to quantify but equally important: EIDOS does not only increase workplace efficiency but also introduces a company-wide “lingua franca” for problem-solving.INCREASING STRATEGIC RESPONSIVENESS
Securing revenues at risk
The risk of losing a significant amount of money calls for the investment in a way to mitigate risk and thus secure revenues
When the patent on one of its bestselling drugs ran out, a pharmaceuticals company searched for innovative methods to develop a strategy for facing new competition. Other players were expected to enter the market with generics and try to capture a large portion of formerly protected revenues. Although it was clear that this change would come, it could not be predicted how competitors and customers would react.
Analysis with EIDOS helped the management to understand the driving factors that would influence the decision-making of potential buyers and competitors in the future. On this basis, they developed a strategy space and identified where there was room to maneuver. With the help of scenario thinking, they pinpointed critical developments that would indicate the need to choose a different strategy.
The tools for scenario-based strategizing made responsive strategies for risk reduction available at a price that was marginal compared to the revenues at stake.
INVESTMENT IN INCREASING THE RESPONSIVENESS AND AGILITY OF CORPORATE STRATEGY PAYS OFF QUICKLY
Making businesses resistant to imminent risk is a challenging task that recurs in all industries. It requires combining a vision of the future market environment with a range of feasible options for corporate behavior.
The Parmenides EIDOS Suite is unique in that it contains all of the tools that are required for this task. Since it contributes to reducing the potential downside for businesses, including it in standard strategy processes has paid off quickly – not only in the pharmaceuticals case reported here.
IMPROVING DECISION QUALITY
more targeted investments
The prioritization of annual investments at five production sites
Investing in production sites is often worth billions of dollars. The total amount depends on both external factors such as regulations or the degree of volatility of future demand, as well as on internal factors such as the availability of specialists with specific know-how or the organization of the project team. In addition, a series of unknown economic factors determines whether the investment will ultimately pay off.
In this particular company, investment decisions had traditionally been made mainly on the basis of highly detailed bottom-up planning and review process in combination with entrepreneurial intuition. In one important case, where choices about future investments into five different sites had to be made, this method failed to bring about clear-cut results. Too many assumptions seemed arbitrary and had untraceable implications in an overly complex quantitative model based on Excel and several specialized simulation tools.
Switching to a top-level structure with an EIDOS decision architecture, modelling a handful of wisely selected future scenarios and a comprehensive option space put the management back in the driver’s seat.
USING EIDOS PAID OFF SEVERAL TIMES OVER, USERS SAY
After the EIDOS analysis, the prioritization of annual investments in the five production sites turned out to be obvious and could easily be justified. Later on, it was necessary and useful to repeat the underlying reasoning processes several times and to adapt the investment levels over time.
In the long term, using EIDOS had another clear advantage: It had become possible to retrace previous decision processes and to re-use existing results while adapting the criteria and options to reflect new findings and developments. The first analysis was initiated before the economic crisis in 2008. The second analysis integrated a new opportunity that evolved during the financial crisis. In 2012 the analysis was repeated with a new focal point but comparable analysis steps.
