"Business Physics"

Dear reader, previously I elaborated on ideals to seek risk management professionals which is in essence to be an integral part of business value creation process and creating business value while taken risks are accounted and ideally balanced. Then asserted an ideal framework for optimizing business value during ever-changing market conditions and regulations. In this newsletter, would like to elaborate on the required technology to support such a framework.

What does required technology look like supporting this framework?

Core competence of Risk/technology team that would support such framework should have integrated portfolio of technology needed to research and develop business process transfer functions and the assumption distributions of the system’s building blocks.? This is the “Business Physics” technology that allows the Measure, Analyze and Improve of any business challenge companies face.? Teams that can enable such vision will be staffed to enable businesses in the midst of structural market changes [favorable or adverse] or in sever margin pressure, to find and develop new performance entitlements. Risk/Technology Organization composed of a diverse team with background and experience in areas as below, could partner with operating components, Marketing teams and Customers in strategic situations that will change the game for business. Later on I would like to specifically discuss AI technology on this paradigm as there are many misconceptions and missed opportunities for businesses in such pursuit.

How are assumptions used?

The defined business system is abstracted into mathematical representations of inputs, interrelationships and outputs.? A number of integrated technology domains such as Operation Research /Management science, System engineering, Industrial engineering, Econometrics, and Corporate Finance are utilized to develop these transfer functions. ?Key system level drivers of value and risk are quantified and specific areas for performance enhancement are uncovered along with the business case.?

With business lines, and their customers if needed, the integrated risk teams can uncover the ‘What’, ‘Why’ and ‘How’ to change business performance entitlement.? This takes the form of products, services and processes.

For new products and services, New Product Introduction is initiated and Risk Technology will augment the operating component team to accelerate the NPI and help retire its financial risks.

For processes, once improvements are found and justified, the proprietary intellectual property [“the special sauce”] can be codified into the operating systems that our businesses use for daily activity.

As I mention about “the special sauce”, I think it is time to give some pause and wish everyone a great upcoming holiday season and a happy new year with their loved ones. Hope to see you next year! If you will next time, we can continue to discuss how business solutions are formulated.

If you have any questions please contact Alper Eker at

Eker_alper@yahoo.com