Method of and system for modeling and analyzing business improvement programs

A computer system that estimates how one or more operational decisions of a business are likely to affect its value, the system comprising:

• means for capturing quantified information for the business,
• means for organizing at least a portion of the information into one or more elements of value and one or more real options;
• means for determining a contribution of one or more elements of value and one or more real options to a value of the business;
• means for modeling an effect of one or more business decisions on the value;
• and
• means for outputting the expected contribution of the one or more elements of value and one or more real options.

A data processing method for managing a business comprising:

• organizing value information into two or more elements of value and one or more real options;
• determining a contribution of each of two or more elements of value and each of one or more real options to a value of the business;
• and
• determining an effect of one or more business decisions on the value.

A data processing system for managing a business comprising:

• means for organizing value data into two or more elements of value and one or more real options;
• means for determining a value contribution of each of the elements of value and real options;
• means for modeling the effect of one or more operational decisions on the value contribution of at least one of the elements of value;
• and
• means for displaying the effect.

A business information system for a business, comprising:

• means for retrieving information concerning the three components of value;
• means for retrieving information concerning one or more elements of value;
• means for retrieving information concerning one or more real options;
• and
• means for deriving a business valuation estimate based on the information concerning the three components of value, one or more elements of value and one or more real options.

A business analysis method comprising:

• capturing data concerning a business;
• dividing the data by element of value and real option;
• and
• calculating the respective value contribution percentage for each element of value and each real option, with each contribution percentage estimating a proportionate effect of each element of value or real option on the value of the business.

A method of analyzing hypothetical operating decisions for a business, comprising:

• modeling an element of value of the business as a composite variable of one or more item variables and one or more item performance indicators;
• modeling or representing a business operating decision as a change in one or more of the item variables or item performance indicators;
• and
• evaluating the mathematical function based on the change in the one or more of the item variables or item performance indicators to determine a relative change in the element of value or to determine a projected value for the element of value and the business.

A method of estimating a value of a business, the method comprising:

• receiving information concerning the elements of value and real options;
• calculating one or more elements of value weighting factors based on information concerning past or current value of the business;
• valuing the real options using a Black Scholes algorithm;
• weighting the information concerning the elements of value based on the one or more elements of value weighting factors;
• and
• combining the weighted information concerning the elements of value with the real option valuation.

A financial measurement and reporting system comprising:

• means for identifying one or more elements of value for a business;
• means for identifying one or more real options of a business;
• means for determining a relative contribution of each of the one or more elements to a value of the business;
• means for determining a relative contribution of each of the one or more real options to a value of the business;
• and
• means for reporting the relative contribution of the one or more of the elements of value and one or more of the real options to the value of the business.