Method of and system for modeling and analyzing business improvement programs

• US 6,321,205 B1
• Filed: 08/17/1998
• Issued: 11/20/2001
• Est. Priority Date: 10/03/1995
• Status: Expired due to Term

• Current Assignee: Jeffrey Eder
• Original Assignee: Value Mines Incorporated
• Inventors: Eder, Jeff
• Primary Examiner(s): Trammell, James P.
• Assistant Examiner(s): Retta, Yehdega
• Application Number:
  US09/135,983
• Time in Patent Office: 1,191 Days
• Field of Search: 705/1, 705/7, 705/36, 705/10, 395/670, 395/500
• US Class Current: 705/7.37
• CPC Class Codes: G06Q 10/06 Resources, workflows, human or project management; Enterprise or organisation planning; Enterprise or organisation modelling
• CPC Class Codes: G06Q 10/06375 Prediction of business process outcome or impact based on a proposed change
• CPC Class Codes: G06Q 20/102 Bill distribution or payments
• CPC Class Codes: G06Q 40/02 Banking, e.g. interest calculation or account maintenance credit or loans G06Q40/03

Abstract

An automated system (100) and method for evaluating the probable impact of user-specified or system generated changes in business value drivers on the other value drivers, the financial performance and the future value of a commercial enterprise. Value drivers are identified using search algorithms and induction algorithms that define the value drivers associated with each element of the enterprise. After identifying enterprise value drivers the system completes a detailed valuation of the firm using predictive models to determine the relative impact of each value driver on the overall valuation. The detailed valuation results are then used to define a financial simulation model such as a Markov Chain Monte Carlo model. The financial simulation model then analyzes the impact of user specified changes in value drivers on financial performance or generates a list of recommended changes to value drivers that achieve a user specified financial goal.

Claims

1. A data processing system for valuing contributions by one or more tangible or intangible elements of value to a value of a business enterprise, comprising:

(a) processing means for processing data;

(b) storage means for storing data;

(c) first means for obtaining data related to the value of the business enterprise, the business enterprise having one or more tangible or intangible elements of value contributing to the value of the business enterprise;

(d) second means for calculating, for each one of the tangible or intangible elements of value, value drivers that drive the value of the business enterprise, the value drivers to define a composite variable characterizing a performance of the tangible or intangible element of value of the business enterprise wherein transaction data, transaction ratios and transaction trends are combined to calculate the composite variable;

(e) third means for calculating the value of the business enterprise;

(f) fourth means for determining, for each one of the tangible or intangible elements of value, a percentage of the value of the business enterprise contributed by the tangible or intangible element of value;

(g) fifth means for calculating a value for each one of the tangible or intangible elements of value of the business enterprise based on the value of the business enterprise and the percentage of the value of the business enterprise contributed by the tangible or intangible element of value; and

(i) sixth means for user modification of, for each one of the tangible or intangible elements of value, selected one or ones of the value drivers that drive the value of the business enterprise.

2. A data processing system as claimed in claim 1, wherein said sixth means comprises:

(a) means for user modification of, for each one of the tangible or intangible elements of value, selected one or ones of the composite variable characterizing the performance of the tangible or intangible element of value of the business enterprise.

3. A data processing system as claimed in claim 1, wherein said sixth means comprises:

(a) means for user modification of the value of each one of the tangible or intangible elements of value of the business enterprise.

4. A data processing system as claimed in claim 1, wherein the value of the business enterprises includes a revenue component, an expense component and a capital component.

5. A data processing system as claimed in claim 4, wherein said third means comprises:

(a) means for calculating the revenue, expense and capital components of the value of the business enterprise.

6. A data processing system as claimed in claim 4, wherein said fourth means comprises:

(a) means for determining, for each one of the tangible or intangible elements of value, a percentage of the revenue component contributed by the tangible or intangible element of value, a percentage of the expense component contributed by the tangible or intangible element of value, and a percentage of the capital component contributed by the tangible or intangible element of value.

7. A data processing system as claimed in claim 6, wherein said fifth means comprises:

(a) means for calculating the value for each one of the tangible or intangible elements of value of the business enterprise based on the revenue, expense and capital components of the value of the business enterprise and the percentages of the revenue, expense and capital contributed by the tangible or intangible element of value.

8. A data processing system as claimed in claim 4, further comprising:

(i) means for sub-dividing the revenue, expense and capital components of the value of the business enterprise into sub-components to yield a more detailed analysis.

9. A data processing system as claimed in claim 4, wherein said third means further comprises:

(a) means for using output from a predictive model to determine the percentage of the revenue component contributed by the tangible or intangible element of value, the percentage of the expense component contributed by the tangible or intangible element of value, and the percentage of the capital component contributed by the tangible or intangible element of value.

10. A data processing system as claimed in claim 4, wherein said third means further comprises:

(a) means for using output from a neural network to determine the percentage of the revenue component contributed by the tangible or intangible element of value, the percentage of the expense component contributed by the tangible or intangible element of value, and the percentage of the capital component contributed by the tangible or intangible element of value.

11. A data processing system as claimed in claim 1, further comprising:

(i) means for direct valuing at least one of the tangible or intangible elements of value of the business enterprise.

12. A data processing system for valuing contributions by one or more tangible or intangible elements of value to a value of a business enterprise, comprising:

(a) processing means for processing data;

(b) storage means for storing data;

(c) first means for obtaining data related to the value of the business enterprise, the business enterprise having one or more tangible or intangible elements of value contributing to the value of the business enterprise;

(d) second means of calculating, for each one of the tangible or intangible elements of value, value drivers that drive the value of the business enterprise;

the value drivers to define a composite variable characterizing a performance of the tangible or intangible element of value of the business enterprise wherein transaction data, transaction ratios and transaction trends are combined to calculate the composite variable;

(e) third means for calculating the value of the business enterprise;

(f) fourth means for determining, for each one of the tangible or intangible elements of value, a percentage of the value of the business enterprise contributed by the tangible or intangible element of value;

(g) fifth means for calculating a value for each one of the tangible or intangible elements of value of the business enterprise base don the value of the business enterprise and the percentage of the value of the business enterprise contributed by the tangible or intangible element of value;

(h) sixth means for user entry of a goal value related to the business enterprise; and

(i) seventh means for calculating, for each one of the tangible or intangible elements of value, value drivers to realize said goal value based on associated composite variables characterizing the performance of the tangible or intangible elements of value of the business enterprise.

13. A data processing system as claimed in claim 12, wherein the value of the business enterprises includes a revenue component, an expense component and a capital component.

14. A data processing system as claimed in claim 13, wherein said third means comprises:

(a) means for calculating the revenue, expense and capital components of the value of the business enterprise.

15. A data processing system as claimed in claim 13, wherein said fourth means comprises:

(a) means for determining, for each one of the tangible or intangible elements of value, a percentage of the revenue component contributed by the tangible or intangible element of value, a percentage of the expense component contributed by the tangible or intangible element of value, and a percentage of the capital component contributed by the tangible or intangible element of value.

16. A data processing system as claimed in claim 15, wherein said fifth means comprises:

(a) means for calculating the value for each one of the tangible or intangible elements of value of the business enterprise based on the revenue, expense and capital components of the value of the business enterprise and the percentages of the revenue, expense and capital contributed by the tangible or intangible element of value.

17. A data processing system as claimed in claim 13, further comprising:

(j) means for sub-dividing the revenue, expense and capital components of the value of the business enterprise into sub-components to yield a more detailed analysis.

18. A data processing system as claimed in claim 13, wherein said third means further comprises:

(a) means for using output from a predictive model to determine the percentage of the revenue component contributed by the tangible or intangible element of value, the percentage of the expense component contributed by the tangible or intangible element of value, and the percentage of the capital component contributed by the tangible or intangible element of value.

19. A data processing system as claimed in claim 13, wherein said third means further comprises:

(a) means for using output from a neural network to determine the percentage of the revenue component contributed by the tangible or intangible element of value, the percentage of the expense component contributed by the tangible or intangible element of value, and the percentage of the capital component contributed by the tangible or intangible element of value.

20. A data processing system as claimed in claim 12, further comprising:

(j) means for direct valuing at least one of the tangible or intangible elements of value of the business enterprise.