THE WELCH COMPANY
440 Davis Court #1602
San Francisco, CA 94111-2496
415 781 5700


S U M M A R Y


DIARY: July 3, 1997 09:18 AM Thursday; Rod Welch

Researched calculating cost/benefit for Communication Metrics.

1...Summary/Objective
2...Knowledge Work Difficult to Calculate Cost/Benefit
3...Calculating Cost/Benefit for Executive, Level-of-Effort Positions
.....Submitted Cost Benefit Analysis to Dave at Intel
4...Cost/Benefit Research on Web for Value at Risk Analysis Methods
5...Planning Spreadsheet for Cost/Benefit Based Amount of Communication
6...Max Wideman Recommends Calculating Cost Savings of Comm Metrics


..............
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CONTACTS 
0201 - Wideman, R. Max                    604 736 7025
020101 - Mr. R. Max Wideman
0202 - Chips & Tech.                      408 434 0600
020201 - Mr. Morris E. Jones
020202 - Sr. Vice President =4283 Ext
0203 - Intel Corporation                  408 765 8080 fax or 800...
020301 - Mr. David S. Vannier; Director of Mobile Architecture =408 765 4608
020302 - Mobile & Handheld Products Group =408 765 5072 fax

SUBJECTS
Proposal, Contract & Support
Turner, San Francisco
Cost/Benefit of Better Communications
Market Fears Being First to Use New Methods
Communication Manager Fewer People More
Cost Benefit - Increase Usefulness, Reduce
Level of Effort, Calculate Cost Benefit
Overhead Managers are Unproductive
Risk Management, Contingency Analysis, Value at Risk

1111 -    ..
1112 - Summary/Objective
1113 -
111301 - Follow up ref SDS 14 0000, ref SDS 13 0000.
111302 -
111303 - To calculate the value added and "savings" of Communication Metrics I
111304 - did some research on the Web.  Found under Social Science, Management,
111305 - Risk Management, Contingency Analysis, a concept called:
111306 -
111307 -                      Value at Risk
111308 -
111309 - Also made some contacts with people who would think about this matter
111310 - with me.
111311 -
111312 -
111313 -  ..
111314 - Knowledge Work Difficult to Calculate Cost/Benefit
111315 - Calculating Cost/Benefit for Executive, Level-of-Effort Positions
111316 -
111317 - I sent to Morris via ref DIT 1 a copy of a letter I prepared on the
111318 - Web to explain ideas for calculating the value of a Communication
111319 - Manager, ref DIT 1 8865.  The letter to Morris follows up our
111320 - discussion where he indicated having hired a Project Manager and
111321 - making a calculation to justify it, ref SDS 6 0000.
111322 -
111323 -      [On 980509 sent a letter to Wayne at DNRC that used the method in
111324 -      the letter, ref DIT 1 8865, for calculating cost/benefit of using
111325 -      the Internet to deliver business intelligence. ref SDS 25 0775]
111326 -
111327 -
111328 -      ..
111329 -     Submitted Cost Benefit Analysis to Dave at Intel
111330 -
111331 -     Sent material, via internet, ref DIT 6 0000, to Dave Vannier at
111332 -     Intel to help him grasp added value of Communication Manager,
111333 -     following up my letter, ref DIP 2 0000, to Dave at ref SDS 8 0000.
111334 -
111335 - This letter at ref DIT 1 8865 applies the method discussed with Morris
111336 - of calculating the value of a Project Manager, accountant, or a VP of
111337 - a company, ref SDS 6 5992.
111338 -
111339 -
111340 -
111341 - Cost/Benefit Research on Web for Value at Risk Analysis Methods
111342 -
111343 - The letter was initially prepared for an exchange on the Web with
111344 - Chuck Horton, ref DIT 2 0000.  He sent the reply at ref DRT 1 0000.
111345 -
111346 - Chuck seems to be a financial analyst which uses contingency analysis
111347 - to support investment management in securities.
111348 -
111349 - Contacted on the Web a business consultant, John R. Schuyler, who has
111350 - a company, Schuyler & Associates, which seems to be part of a Web site
111351 - called MaxValue, ref DIT 3 0000.  He teaches decision analysis. John
111352 - said he has a problem class called "value of information," which he
111353 - feels may support making the calculation I want to prepare, per his
111354 - letter ref DRT 2 0000.
111355 -
111356 - I wrote back and asked John how we can get started to see if his
111357 - method will work form my application.  Asked if he would like to see
111358 - the Communication Metrics report.  John wrote back and said he is very
111359 - busy and so can only handle "light reading." ref DRT 4 0000.  I
111360 - extracted some of the Corps' report explaining the ideas on measuring
111361 - cognition and sent it via Internet, ref DIT 4 0000.
111362 -
111363 - Should hear from John on his ideas to measure the value added or
111364 - savings for Communication Metrics.
111365 -
111366 -
111367 -
111368 - Planning Spreadsheet for Cost/Benefit Based Amount of Communication
111369 -
111370 - Want to prepare a spreadsheet showing the risk of error and consequent
111371 - increase in cost and schedule, due to the growth in communications.
111372 -
111373 -     [On 970709 research for studies that on errors in communications
111374 -     as a function of the amount of information, ref SDS 17 0000]
111375 -
111376 -     [On 970707 found a paper showing correlation of information
111377 -     entropy with cost and schedule growth, ref SDS 16 0611.]
111378 -
111379 -     [On 970711 began spreadsheet to calculate errors in understanding
111380 -     as a function of communication events, ref SDS 18 0000.]
111381 -
111382 -
111383 -
111384 -
111385 -
1114 -

SUBJECTS
Overhead Managers are Unproductive
Risk Management, Contingency Analysis, Value at Risk
Innovation Slow Because Market Forces
Calculate Risk Management Exposure NPV

1807 -
180701 -  ..
180702 - Max Wideman Recommends Calculating Cost Savings of Comm Metrics
180703 -
180704 - Received reply from Max, ref DRT 3 0000, to my email, ref DIP 5 0000,
180705 - sent on 970701. ref SDS 14 0075
180706 -
180707 - Max suggests explaining cost savings of Communication Metrics, rather
180708 - than added value. ref DRT 3 8477
180709 -
180710 -      [On 970713 Max suggests Communication Metrics reduces rework....
180711 -      ref SDS 19 1817.]
180712 -
180713 -      [On 971001 prepared cost savings for Corps of Engineers based on
180714 -      reducing "rework." ref SDS 20 2496 and ref SDS 21 2464]
180715 -
180716 -      [On 971002 request for peer review on cost savings from reducing
180717 -      rework at ref SDS 22 4448.]
180718 -
180719 -      [On 971007 Max reviews calculation of cost savings based on
180720 -      reducing rework. ref SDS 23 3889]
180721 -
180722 -      [On 971205 HQUSACE wanted proof of cost savings. ref SDS 24 6165]
180723 -
180724 -      [On 981027 District Counsel issued a letter stating that with
180725 -      "certainty" Communication Metrics saved the government an
180726 -      additoinal $190K. ref SDS 26 7315]
180727 -
180728 -      [On 990224 Deputy District Commander said savings on Oakland do
180729 -      not count because anyone could have done it. ref SDS 27 4018]
180730 -
180731 - I submitted ref DIT 5 0000, to explain that "connections" improve
180732 - "understanding" rather than more information. ref DIT 5 9950
180733 -
180734 -      [On 970704 Max responded. ref SDS 15 9953]
180735 -
180736 - Also cited Tom Landauer's point on 950710 about slowness of innovation
180737 - due to market competition for what sells, ref SDS 1 2004, rather than
180738 - educating about what is useful, ref DIT 5 0649.  An example is the
180739 - discussion on 970620 with Steve Rule at Turner, ref SDS 9 4775.
180740 -
180741 -  ..
180742 -
180743 - This point is made to compliment Max on the Risk Management material
180744 - he prepared for the prior PMBOK, ref DIT 5 9536, per analysis on
180745 - 970701, ref SDS 14 6603.  The point on innovation relates to Morris'
180746 - recent visit to Cal Tech seminar. reviewed on 970526. ref SDS 3 3718
180747 -
180748 -     [On 970704 Max appreciates this point, ref SDS 15 0529.]
180749 -
180750 -
180751 -
Distribution. . . . See "CONTACTS"