Newsletter 107

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Number 107

Welcome to the December 2011 issue of Precision Matters - the Precision Design Technology (PDT) Newsletter.

Events That Change The World

After the mildest and most noteworthy autumn of recent years, we have now plunged into seriously autumnal weather here in Berkshire. Last night my weather station recorded the lowest temperature overnight since the middle of March and we had our first visible ground frost of the winter. By ten o’clock in the morning, most of the evidence has melted and is helping to water the relatively dry ground in the garden.

Looking at the rainfall record for this year and apart from August, the notoriously wet summer month, June delivered more rain than January, while April, March and October were vying for the bottom spot. Of the eleven months of this year there has been nearly an inch less rain than last year.

Is this year more “evidence” of global warming? Can a one off event – the lower rainfall this year compared with last – be considered conclusive proof? I think not at this stage; I don’t have the body of evidence of previous years with which to compare my own data. I need to let the process continue to some form of conclusion before I can be in a position to draw conclusions and judge.

Here we see two events – last night’s sub-zero temperature and this year’s low rainfall total – from only one of which we are able to draw accurate conclusions.

Events play an important part in businesses too.

Those of you who have read Newsletter 105, will recognise the Event as one of the four pillars of my form of business analysis. For those of you who may have deleted that critical missive (shame on you!), or perhaps have only recently joined the Newsletter subscription list, you can access the Newsletter Archive here.

You will notice an important feature of the events described in the opening paragraphs: namely that an event is a transitory thing. The low temperature last night was -2.1 degrees Centigrade and occurred at 06:30 GMT. Half an hour later, the temperature had recovered by one tenth of a degree, so the event had passed.

Business events are no different. They occur – a customer places an order, an accounting period ends, an interest rate is changed – and then they are gone, passed, history.

What is more permanent is the effect these events have upon the business. When a customer places an order (and I assume here that you fulfil the order), the stock situation changes, the despatch process ensures the customer receives the order promptly, the company accounting process ensures the books show the turnover contribution and the accounts will show a change in profit for the period. All this activity, created by a single event – the placing of an order.

It is important for every business to know and understand the impact on the business of each and every event from the outside world.

Not all events are benign. If the bank decides to raise the interest rate it charges you on your business loan, what is the full effect of this change on your business? [If you don’t know the likely effects for a range of possible interest rate changes, you should take steps to find out!] I’m not wishing to be a prophet of doom, but one possible outcome of such a rate change is that the business is no longer viable – similar, but in diminished size, to the Greek national debt. Sadly, unlike Greece, most small and medium businesses don’t have a European Central Bank or a “disaster fund” to bail them out.

Businesses should be aware of the events, both good and bad, that can affect them and have processes in place to handle them. A clear view of exactly what activities occur in the business in response to external events is your starting point. Then you can see clearly those events that are handled and perhaps more importantly, those that are not.

Want to reproduce this article?

Yes you can, so long as you accredit it to Robin Oldman, Precision Design Technology Ltd. and attach the following biography to the article at the bottom:

Precision Design Technology, (PDT), the IT systems experts, provides world-class consultancy and solutions for IT information systems to help its customers develop affordable, high integrity software for business. Normally high-integrity software is prohibitively expensive - PDT provides a solution at a price business can afford.

EUR ING Robin Oldman, COO at PDT, writes and blogs on behalf of the company. Robin also manages the development of the user interface for the SPECIFY4IT tool-set that bridges the gap between the client user and the system supplier. The SPECIFY4IT tool-set is capable of delivering high-integrity business software faster and more cheaply than conventional development methods.