Simplicity is the ultimate sophistication
Excessive complexity is a source of vulnerability and cause of loss of profitability. It also limits governability. To counter its effects it must be managed, hence it must be measured. Managing the complexity of businesses and systems helps make them less fragile and more resilient.
Ontonix is the first company to have devised scientific means of measuring complexity and resilience of generic, even huge systems. Since 2005 we deliver the real-time Complexity Management Engine, OntoNet™.
OntoNet™ can be integrated into any IT infrastructure, ERP or SW system to monitor in real-time the complexity and resilience of:
- Supply networks (often erroneously referred to as supply chains)
- ICT systems, networks
- Stocks, portfolios, markets
- Critical infrastructures
- Systems of systems
- The Internet of Things
We identify the concentrations of complexity in a system or process and pinpoint those really critical to its resilience, governability and performance. In essence,
QCM - a new way to run a modern business
The added value:
- A real-time 'CAT-scan' of a business/system/process - this delivers totally new information
- Identification of hidden critical areas
- Measure (not score!) of resilience
- Early-warnings of increased exposure - this buys time
- All your KPIs synthesized into one. Objectively.
- A holistic picture of the situation
Managing complexity requires a metric. Complexity is defined as a function of the structure of information flow within a system and entropy, which measures disorder as well as information content. Formally, complexity is defined as follows:
C = f(N; S; E)
where N is the number of variables used to describe a system (e.g. the number of entries in a Balance Sheet or the number of aircraft in a portion of airspace), S reflects the structure of inter-dependencies between these variables, and E is entropy ('disorder'). Entropy is computed based on Shannon´s formulation and expresses in bits the amount of information. Based on our formulation, complexity measures the total amount of structured information in a system and its unit is the complexity bit or simply cbit.
Complexity is an attribute of every system
... man-made or natural. Complexity is not 'order on the edge of chaos'. It is a dimension of every physical system.
A key feature of our complexity metric is that it is bounded. The upper complexity bound, known as critical complexity, is of paramount importance. It measures the maximum level of complexity a given business, process or system is able to sustain. In proximity of critical complexity systems are fragile, dominated by disorder and are non-governable.
Efficient and resilient systems function far from their critical complexity
This brings us to the fundamental question:
How complex and resilient is Your business?
What is its critical complexity?
In order to obtain a measure of the complexity, critical complexity and resilience of your business, write to us.
Analysis of complexity of back-office processes of bank: identification of sources of hidden inefficiencies
Analysis of air-traffic complexity and fragility: measure of traffic complexity based on radar output, identification of critical flights
Complexity-based construction of high resilience stock portfolios: design of low-volatility portfolios that outperform markets
Write to us to obtain information about Quantitative Complexity Management.