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TreeAge Pro

TreeAge Software, Inc.

$100 – $500, depending on version

http://www.treeage.com/ 1-413-458-0104

How do you decide what to do? Often, decisions are made based on gut feel, rather than careful analysis, even if there is information available that could help you make a more rational decision. TreeAge Pro is a software tool that allows you to build decision trees to analyze a decision process and help recommend the best option based on expected results and probabilities.

While not perfect – the nature of probability is such that decisions are a gamble, and even if you take the winning end of a gamble you can still lose – it is nonetheless an excellent tool, and one that can help you make better decisions. We were introduced to TreeAge at IPCI 2007 by speaker Robert F. Copple, who uses it to value IP litigation.

We tried TreeAge to model implementation or non-implementation of an OPSEC program, which we showed in the October 2007 issue of ÆGIS. We started by figuring out what we know.

Working backwards, we know that the cost of the average loss in a manufacturing environment is $50 million. We also know that if we encounter one incident we more often than not encounter another two. This puts the theoretical potential loss of revenues at $150 million. Let us also assume a cost for a fully functional OPSEC program to be $1 million. This figure is high, but a nice round sum.

We also assume that a company that has implemented an OPSEC program has a much lower probability of being a victim, and that, if they are a victim, that there will more often than not be only one incident that slips through.

Finally we assume that a company has the choice to implement internal controls or not implement internal controls. Note that the likelihood of being a target is not affected by the presence or absence of an OPSEC program, but that the likelihood of becoming a victim decreases when there are adequate internal controls in place.

With this information in hand we opened the somewhat-intimidating 600- plus page user manual. Fortunately, for our simple model we only needed the first two chapters to figure out how to make the program run. Clearly the program contains quite sophisticated mathematical powers that we didn’t needwhat we were trying to do. But your planning people, who actually understand things like Markov Monte Carlo Microsimulation will not be disappointed in the least.

We were able to use TreeAge to plot our decision tree

 

 

 

 

 

 

 

Once we had this, we clicked on the rollback icon, and it calculated the costs

 

 

 

 

 

 

 

So what did our model reveal? That if you have $150 million in revenues at risk in an operating unit, your revenues will likely be $75,500,000 higher if you implement an OPSEC program than they would be if you chose not to implement an OPSEC program.

So what did our model reveal? That if you have $150 million in revenues at risk in an operating unit, your revenues will likely be $75,500,000 higher if you implement an OPSEC program than they would be if you chose not to implement an OPSEC program.

The nice thing about TreeAge is that if someone disagrees with your assumptions you merely plug in their numbers, click the rollback icon, and look at the new figures. You can, of course, also use sensitivity analysis to examine the effect of changing the assumptions.

While conceptually complex, TreeAge is simple to operate, and will allow you any degree of sophistication you are likely to be able to handle. Even if you are not an MBA or a mathematician, if you are responsible for making decision, TreeAge is an excellent tool to help you make them, and make them better.

We recommend TreeAge for your consideration.

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