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Egbert Roos
Buroos
  

That leads to an interesting question – how does the Dutch government know how many doctors the country will need? Until recently, they didn’t. The estimates used weren’t good enough to prevent impacts on quantity/supply of care as was evidenced by a decision in the ‘80’s to close two schools of dentistry. When the schools were closed, an abundance of dentists left many of them unemployed. Unfortunately, a number of years later, dentists were in short supply and one of the schools had to be reopened.

Until 1999 the government had limited involvement in the number of students enrolled in specialty education. Regular, unwanted fluctuations required the government to solve a calculation and estimation problem. Underlying political issues also required consideration. Certainly the government had an interest in properly sizing its investment in medical education. Physicians also had an interest in the number of new doctors that would be entering the market. Insurance companies had their own perspective on the issue as did medical school faculty and administrators. (When medical schools close or expand, their jobs are immediately impacted.) It was critical that those constituencies understood and had confidence in the process that calculated estimations.

In order to generate much more accurate estimates and add a neutral party perspective to the exercise, a small, government-funded organization was formed in 2000. It included participation from professional, educational, and insurance interests. That organization is charged with delivering the Dutch government a biannual report of the number of doctors that will be needed across specialty areas 10 and 15 years into the future. The estimate is based on complex calculations that consider population growth and demographics, trends in health issues, demand for types of care, physician work patterns, and differences between male and female physician work patterns.

The agency hired an institute for health services research to construct a spreadsheet that would execute the calculations needed to make their estimates. While the spreadsheet did what it was supposed to do, it had several disadvantages.

• It was difficult to understand the formulas behind the calculations and resulting estimates. Seeing and explaining the medical education system and physician population required hunting and clicking through spreadsheet cells.
• The spreadsheet was very hard to maintain. This was especially problematic since there was only one person who knew exactly how the spreadsheet worked.
• There were limited graphics or ability to visually display estimates and the data interactions that supported them.
• It took a very long time to recalculate. When new numbers, new variables, and new ideas needed to be included in calculations, it took weeks to report on those changes.

Enter Egbert Roos and iThink. Roos is the principal of Buroos, a Systems Thinking consultancy based in Goirle, The Netherlands. Roos was introduced to the organization and its doctor estimation problem. He was also introduced to the spreadsheet that was being used to calculate estimations. “I explained what modeling and simulation would bring to the process of calculating estimates,” says Roos. “They immediately understood how iThink would give them real insight into the numbers and interactions that were driving the estimates. They saw how fast, on-the-spot recalculation would be helpful when talking to the government, medical school faculty, doctors, or insurance companies because they could test “what if” scenarios during the discussion. And, they knew that the visual display of data would help them and all constituents with the ability to really understand why the estimates made sense.”

Roos initially developed an estimation model based on the organization’s spreadsheet. Later in the process, he built 36 models, one for each specialty. “iThink’s module capabilities made the job much easier,” explains Roos. “I was able to create a hierarchical model structure using three modules that looked at demand for care, the number of professionals, and the number of students and duration of the study that are used in each of the specialty area models. Each of the 36 top-level models for the specialty areas pointed to the same 3 modules. He also trained the organization how to use the model. The iThink models have successfully eliminated the spreadsheet’s disadvantages:

“The models have been very enlightening,” says Roos. “For the first time, everyone can see what’s happening between the present time and 15 years into the future – the date the estimate targets. Some people might argue that it doesn’t matter what happens between now and 15 years as long as the estimate is correct. That’s like saying it doesn’t really matter how an airplane touches the earth as long as it eventually does. There’s a big difference between a smooth landing and a crash.”

Roos points out that insight into the medical education system throughout the estimation period helps the government work toward the estimate. “The model does more than calculate an estimate,” says Roos. “It shows what measures can be taken to get to the desired result.”

The iThink models continue to work, calculating and estimating the number of doctors that will be needed in the Netherlands in 15 years. Already, they’ve been presented to the Dutch Ministry of Health, Welfare and Sport to support the most recent estimates and organization recommendations.

Egbert Roos has used iThink in many engagements. He’s a one-person shop who delivers incredible value with the models he creates, runs on behalf of clients, and in cases like this one, leaves behind for continued client use. “With iThink, I’m competitive with much larger firms because I offer a much more insightful methodology.” That’s good for Roos and his clients. It’s also good for people in the Netherlands who want a doctor to be available when they need one.

isee systems welcomes Buroos as a new consulting and training partner based in The Netherlands. Buroos' principal consultant, Egbert Roos, has over 15 years experience in consulting and in systems thinking and system dynamics modeling. With a background in engineering and economics, Egbert loves to be challenged by complex organizational issues (often with a quantitative angle). He has experience both in profit and non-profit organizations in the Netherlands as well as in neighboring western European countries. He has successfully completed numerous projects in local and national government and in various business sectors ranging from banking to high tech electronics to ICT in transportation and supply chains. (www.buroos.nl)

Dr. Oliver Grasl
transentis consulting
 

You could try one option and see how it goes. That’s a big risk; it could fail miserably. In the event that business did increase a bit, you’d never know if the second option, the one you didn’t try, would have worked even better.

Oliver Grasl, Managing Director of transentis, a management consulting agency based in Berlin, Germany, is helping clients create and test business plans that address questions just like this. In fact, one of his clients was the boutique consulting firm trying to find the best way to expand.

Rather than risking a bad guess, Grasl used iThink Systems Thinking software from isee systems to create a simple business model that tested both growth strategies. “Running a simulation made it obvious that, over time, selling larger teams would be more profitable than selling an increased number of smaller teams,” says Grasl. “The model and simulation also showed that achieving their goals would require further differentiation of service offerings. They followed that plan and the firm grew over 50% within two years.”

Every company, whether courting investors or not, has to answer the fundamental question “How do we make money?” Constant changes in markets, the economy, and the company itself require that question to be asked and answered over and over again. Business models that describe how a company will create value for its customers and other stakeholders are used as blueprints and are modified when conditions – decrease in demand, increased competition, etc. – necessitate new approaches.

“Business models have become especially important in the current economic crisis,” explains Grasl. “It’s getting more difficult to secure investment for new companies or new products. Investors need to fully understand and develop confidence in the business model being used. And they want to know that managers have a mechanism for making changes if things aren’t going according to plan.”

Grasl points out that while many companies use spreadsheets to create business models, that approach often falls short. “Spreadsheets don’t force you to be very explicit in your assumptions. You can ‘kid yourself’ into thinking something is true.” transentis uses iThink for business modeling because the resulting models and simulations:

“iThink models force executives to be very explicit in their assumptions, and simulations quickly point out flaws in assumptions so they can be corrected,” says Grasl. “Causal loop diagrams are great for working through high value logic. They raise important questions about policies and business drivers that management frequently can’t answer, and it’s important to know what questions need to be addressed. We can then create detailed simulation models and use iThink’s powerful interface to quickly set up a flight simulator that helps management teams work through those open issues.”

transentis’ own business model creates value for clients by providing working business models and an approach for re-evaluating decisions in changing business environments. “Most of our clients do change policies and the Key Performance Indicators (KPIs) they monitor after seeing and working with the models we build,” says Grasl. “We leave behind an extensible deliverable. Our business models keep providing value.

One transentis client continues to use their iThink model to train their business developers. “We created a “microworld” that allows business developers to test and then set optimal resource allocation policies,” says Grasl. “The microworld was originally developed to help the firm understand how their current resource allocation policies were impacting key business transactions which, in turn, impacted profit and growth. As conditions and variables change, the firm is using the same understood model to make good decisions.”

Models certainly give transentis clients tools that continue to add value to their business planning processes. Even more, modeling provides a forum for discussion and experimentation. “Many of our clients find the act of modeling to be even more beneficial than the recommendations derived from the model because the entire management team develops shared understanding of their business.”

Grasl sees business modeling with iThink as a way to grow transentis. “Years ago I read a book by Barry Richmond (founder of isee systems) and became very interested in his approach to modeling. I really liked his style. I learned more about Systems Thinking and iThink and eventually partnered with isee systems in Germany. iThink is such a great tool for business modeling. It’s helping to expand our client’s companies and our own.”

To learn more about transentis consulting, visit www.transentis.com

New Products & Software Releases

·  STELLA and iThink Version 9.1.4 ·  isee NetSim 1.1 ·  Tracing Connections: Voices of Systems Thinkers foreword by Jay W. Forrester

Online Training Materials

·  Understanding the Economic Crisis by Dr. Mark Paich ·  Dynamic Dashboards: Practical Tools for Improving Performance ·  Leveraging Systems Thinking for Adaptive Challenges

Recorded Webinars

·  Visualizing Math with STELLA by Diana Fisher and Karim Chichakly ·  Leveraging Social Networks to Communicate & Share Simulations by Jeremy Merritt and Michael Bean

isee systems blog — Making Connections

·  What are “Mental Models”? ·  Developing a Market Using the Bass Diffusion Model ·  Gulf Oil Leak: A Systems Thinking Perspective ·  And more...

Join us in Providence this October. Early registration ends July 15th.   Dates:  October 4-6, 2010 Place:  The Westin Providence Providence, Rhode Island Fee:  $595 thru July 15th $695 July 16th or later	Waterplace Park & Riverwalk, Providence
The isee User Conference is a great opportunity for iThink and STELLA users from business, education, research and consulting to share experiences, learn new skills, and connect with experts. The two and a half days will be filled with keynote addresses by Systems Thinking leaders Henk Akkermans, Diana Fisher, Steve Peterson, Matthias Ruth, and Peter Senge, iThink and STELLA application stories, field-specific round tables, hands-on workshops, poster sessions, and time for networking and open discussion.