Business : Optimization

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Controversies

Optimization for Sales

If everything is optimized according to sales, to the point that technology development is seen only as a cost that should be bared only to get some market position related benefits, then the following 2 questions arise:

  • Question_1

Suppose You optimize technology development to 0 without losing anything on the sales side, then who should pay for technology development? The communists? The hobbyists?


  • Quiestion_2

Suppose You get Your business and money flows to such a good state that You can afford multiple castles and live a life of a French king, IN MIDDLE AGES. Would You be happier as that king, able to afford in whatever usable quantity anything the technology of the time can offer, or would You have a more enjoyable life, if You had mediocre income in 2014 France, with all 2014 technology "at your fingertips"?


If the communists ("the state") pays for research in stead of business, then the problem set that is being addressed with the research differs from the one that businesses have. Given that the communists get their money by robbing hard-working people, "the businesses", the businesses end up paying for the research anyway. Wouldn't it be better, if the communists were thrown out of the loop?


More Neutral Lines of Thought

  • Optimizing R&D support to 0 (zero) for old technology frees the R&D resources up for the development of new technology. That is one of the arguments that supports the claim that R&D work, which includes software development, should be done with high technical quality. Otherwise the R&D personnel are busy fixing the old in stead of developing something new and more advanced.


  • Often the automation of simple and primitive activities IS NOT SIMPLE. It often tends to be that the non-automated simple and primitive activities take up most of the time and money, which leads to the question that if action X is so "simple" and expensive, then why hasn't it been automated, heavily optimized?


Some Semi-random Sayings From Various Sources

Suuri kliente võib olla, aga väikeseid peab olema! (Translation: It's OK to have big clients, but having small clients is a must!) Maire Forsel, a former Strandberg&Co member from the Estonian Green Party.


Supposedly some Japanese executives have a saying that the reason, why the Japanese companies are so good at offering high quality products is that the companies have high quality clients. A counter example is the parties, who think that it's OK for software to be crappy, flawed, as long as its development is cheap, conducted in an _agile manner_.


Supposedly Henry Royce had a saying: "The quality is remembered long after the price is forgotten."


A citation from Richard Branson: A business is simply about creating something that makes life better for other people. If You can do that, You've got a business.


Limits

Firm Limits

The comfort of top executives, directors, leaders, kings, monarchs, is the single most important optimization parameter of every dictatorship. The monarchs get their income regardless of how shoddy the economic situation of their dictatorship is, till the whole dictatorship crushes, bankrupts. New products, more effective way of doing things, new tools effect business processes, which in turn disturbs their comfort. The only fine countermeasure is to avoid working for big corporations, avoid having anything to do with the directors and conduct business only with startups, individuals and small family businesses.


Measurements

  • An idea presented by Gilman Louie: competitors' parameters must be measured with as much detail as one's own parameters.
  • Number of users/customers, scale, is a precondition of any large scale revenue and users/customers are won one at a time by starting from one very narrowly defined market segment at a time.


Historic Facts

Soviet era Estonia

When mathematicians from the University of Tartu approached the officials of the Soviet-Estonian ministry that worked on the planning for the "Estonia region" of the planned economy of the Soviet Union and told the officials that they figured out, how to save a substantial amount of money by optimizing some of the logistics in Estonia, the answer from the officials was that if we, here, at the ministry, figure out, how to save money, then the Moscow will allocate us less money for the next 5 year period and the optimization will actually loose us money in stead of winning us money.


References