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The Value of Consulting & Upcoming Webinar
When it comes to risk management, many analysts think in contingencies or in qualitative descriptive categories such as low, medium and high. There is no doubt these are essential elements of risk analysis, but one needs to realize risk management without some type of quantitative and stochastic methodologies can have dire financial consequences to an organization dealing in decisions with millions of dollars at risk (not just thousands of dollars like I experienced personally – more on that later). A classic example would be an oil company that estimates the cost of drilling a well for $3M. A project schedule has been created based upon historical data such as drilling similar wells in similar geological conditions and places a 10% contingency for risk. Halfway through the drilling of the well, the project is delayed due to drilling fluid difficulties. Then, the project runs into some unexpected environmental challenges which further delay the project. After all of the delays, the total cost of drilling the well almost doubles. Unfortunately this company didn’t have a proper project risk management plan in place that analyzed the risks during the project planning phase and then reassess the risks during the course of the project. A proper quantitative project schedule / project cost risk analysis study (done by our firm) could have saved this oil company millions of dollars.
My job at Vose Software is North American Sales Manager. This probably conjures up a picture of someone who keeps pestering you to buy our software. And while I would admit that is always our end goal, my approach to sales at Vose Software is strictly consultative in nature. We only want to sell you our software if it is the right tool for your risk analysis needs. If our software isn’t the best tool for your project, we will advise you as to which software to choose.
When you download a trial copy of ModelRisk, register for one of our training videos, or take away some of the information from our Web, we get to see the details you provide in our system. My first action is to contact you to see whether you’ve been able to successfully download what you needed, whether it installed properly, and to see whether you need some help.
Downloading a ModelRisk trial may be your first introduction to risk analysis. It can be a pretty steep learning curve, and very difficult to be able to assess what edition of our software will be most useful or if your problem requires a solution outside of the capabilities of our software. If it is helpful, I will set up an online demonstration of some of the tools built into ModelRisk which might be most applicable. We also offer many self-help resources including recorded webinars on our website.
At Vose Software, we are big on providing resources and learning opportunities to both our existing clients and those eager to learn more about risk analytics. Our next learning opportunity is a webinar on Advanced Time-Series Forecasting. We would encourage you to join the webinar by signing up via this link:
Now, I return to my personal experience of attempting to go it alone without the proper consultation. When I was a younger man and began making some real disposable income, I thought I would take a shot at increasing that income by investing in the stock market. How hard could it be, right? Well, let’s just say I lost a lot of money (to me) because I didn’t fully understand the fundamentals of things such as: return on investment capital, sales growth rate, earning per share growth rate, equity growth rate and free cash flow growth rate, etc. One painful memory that comes to mind was a certain Coal Mining Company that looked good to me (without fully understanding the risks of investing) but cost me thousands when they filed for bankruptcy (and I rode that pony all the way down till it crashed and burned because I kept believing they would recover; however, I didn’t realize there should always be an exit strategy). Since those days of costly mistakes, I have since hired a financial planner (consultant) who knows much more than I do about investments and the various strategies and risks involved. Now my portfolio has since made a decent recovery, but if I would have made the decision to hire a consultant earlier, I probably wouldn’t be in the position of having to peddle software and consulting for many more years instead of playing more golf.
There is risk in just about every aspect of our personal and corporate lives. Vose Software’s roots are in risk analysis consulting, i.e. helping people solve their problems – it’s our passion. When a client tells us about the risk issues they face, we figure if we can help and with the least cost option for doing so, it might not make a sale straight away, or make the biggest sale possible, but we do find that clients come back to us later, perhaps to audit their model (even when they are using our competitor’s software) or to ask additional questions and they speak well of us to their colleagues. Why not reach out to us today to discuss your spreadsheet modeling risk analysis project?
By setting up a meeting with one of our risk consultants, you are taking the first step in learning how to properly identify and mitigate risk within your project. Your investment in consulting time with an expert will always lead to better, and wiser, business decisions. Don’t be like that young investor who had to learn the hard way.
Tony Gurule
Vose Software
Email: tony@vosesoftware.com
Direct Line: (303) 768-8669 US
Skype: tmgurule
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