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Mapping investment options in strategic R&D

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Our client faced complex investment decisions due to the rapid evolution of software, electronics and materials – in stark contrast to their core products whose development and lifespan measured in decades. They were looking to improve the quality and efficiency of this high-value decision process that due to the trade-offs in timing, risk and investment was complex, slow and expensive.

To address this we deployed Carbon, our proprietary decision mapping technology designed to inform and adapt strategic decisions over time. Carbon enables decision makers to rapidly map out options, determine the optimal path based upon what is known today and recalibrate as real-world events unfold. We helped the client develop a business object framework, integrate with their internal data sources and provided training on the options methods used to their staff to embed the capability on an ongoing basis.

The visual drag-and-drop interface of Carbon made scenario development simple for the senior audience helping them evaluate and communicate the investment options open to them at various points in time. With these options underpinned by robust what if and temporal analytics the leadership had clear line of sight between the factors driving their investment decisions.

Carbon integrates external market assumptions and forecasts directly into these options plans. This gave an ‘early warning’ of change and its expected impact on the business – helping our client react faster to shifting market conditions.

By making scenario development more efficient Carbon helped the our client reduce their decision cycle time from 1 year to 12 weeks – giving significant cost savings and much greater flexibility in coping with market events.

By making the decision process highly visual and iterative Carbon enabled the client team to actually uncover new insight and identify different answers from the traditional models – resulting in a significant reduction of cost and risk exposure by using investment call options.

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