Whether you are assessing a critical investment decision, prioritizing the entire portfolio or tracking the performance of existing policies or investments, Hubbard Decision Research (HDR) can provide a powerful service. And if you want to eventually learn to do this yourself, HDR has a structured certification program to get you qualified.
Analysis of individual investments and decisions that have significant risks and intangibles:
Your biggest decisions deserve a thorough risk/return analysis before committing to significant resources. Even if you are not a current user of AIE, HDR will come to your firm, conduct our analysis of your proposed investment, and deliver our assessment of the economic viability of the investment along with detailed recommendations. This type of “stand alone” analysis is recommended for investment or policy decisions that affect over a million dollars of resources. It is a quantitative analysis of risks with specific risk mitigation recommendations. This does not require the implementation of the full AIE method within the firm. The scope of this analysis varies with the size and risk of the investment being analyzed. Contact us for more details.
Implementation of the AIE method:
Our ultimate goal is to make your firm independently capable of conducting AIE analysis on your entire portfolio of big decisions whether those decisions are about information technology, product development, major policies, or evaluating risks. This is a complete change to the way your firm makes decisions in that portfolio. A full implementation involves training your analysts, analyzing your portfolio, redesigning the approval process, and conducting a pilot project so that your staff has hands-on experience with the tools and methods. Depending on your needs, it may involve a complete, quantitative Enterprise Risk Management model. The method and tools will be licensed on an annual basis and follow-up consulting is available. An implementation is typically done for each business unit that has independent responsibility for its own budget (in some firms this may be one or several units). Contact us for more details.
Portfolio Analysis Process Outsourcing:
Some companies find that the main constraint in implementing advanced methods like AIE are the time requirements and training of internal resources. In response to this, HDR will develop customized agreements to outsource your firm’s investment analysis. Of course, the decision making still lies with you but the detailed analysis and development of deliverables is performed by HDR. In concert with your budget-cycle requirements, we will develop assessments of all proposed investments in scope and recommend priorities for those investments that meet your standards. Some clients would actually prefer outsourcing this process just because of the objectivity made possible by the use of outside auditors. This approach fully integrates the solutions mentioned in investment analysis and implementation above. Contact us if you are interested in hearing more about outsourcing AIE analysis.
The AIE approach to developing your performance metrics is to measure what matters most. We begin by modeling the decisions that these metrics should inform. We can then use the powerful tools of AIE to compute the value of information on every uncertain variable. We can then identify and design specific measurement methods that, themselves, have a measurable business value.
Quantitative Risk Management:
While quantitative risk assessment is central to all of the solutions provided by AIE, many organizations need to have a separate function just for this. Unfortunately, the most popular risk assessment methods are proven to be ineffective – providing merely a perception of value while actually making decisions and forecasts worse. HDR will set up a comprehensive risk assessment and risk management solution that has measurably effective methods at its core. Not just a “risk score”, or “risk map”, the quantitative approach of AIE will measure the risks statistically. This level of risk analysis is proven to be more effective and will generate what all risk managers really want to know – What haven’t I thought of, yet?
Ongoing QA of Analysis:
Even clients that have implemented AIE often request an independent check of the validity of their analysis. HDR is always available to assist even if your firm conducts most of its AIE analysis internally.
Whether you are assessing a critical investment decision, prioritizing the entire portfolio or tracking the performance of existing systems, HDR can provide a powerful service. And if you want to eventually learn to do this yourself, HDR has a structured certification program to get you qualified.
A level 1 analyst is qualified to assist on risk/return analysis project and AIE implementation projects. The level 1 analyst can build decision models, run Monte Carlo simulations, compute information values, and execute empirical studies. They understand various financial analysis techniques and sampling methodologies. A level 1 analyst works under the supervision of a level 2 analyst. Certification requires completion of level 1 training, a score of 85% on the Level 1 Written Exam covering the AIE process and financial and statistical methods, and completion of the Level 1 Practical Experience Checklist.
A level 2 analyst is qualified to manage a risk/return analysis project and supervise level 1 analysts in risk/return analysis projects. They may provide supervised assistance on AIE implementation projects. The level 2 analyst has more advanced skills in financial, management science and statistical methods. Certification requires completion of all level 1 requirements, completion of level 2 training, a score of 85% on the Level 2 Written Exam covering the AIE process and financial and statistical methods, and completion of the Level 2 Practical Experience Checklist.
A level 3 analyst is qualified to manage any type of AIE project, including risk/return analysis projects and AIE implementation projects. They have the background to run advanced and special case types of AIE analysis. They are authorized to approve items for level 1 and 2 practical experience checklists and they are qualified to conduct level 1 and 2 training. They are authorized to be auditors of AIE deliverables. Certification requires completion of all level 1 and 2 requirements, a score of 85% on the Level 3 Written Exam and completion of the the Level 3 Practical Experience Checklist.
A level 4 is qualified to be a member of the AIE Certification Board where training, experience and certification standards for all levels are determined. Level 4 certification requires special appointment by the AIE Certification Board. The AIE Certification Board will consider such accomplishments as innovative work, publications, experience in all types of AIE projects, and recommendations from clients. Level 4′s are expected to be developing new techniques and contributions to the AIE body of knowledge.
Contact us to find out more about our consulting services.
In addition to our comprehensive consulting services, you can now conveniently purchase other supporting products – like webinars and publications - online via our new shopping cart.