ORMS_Vanguard Software Review

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					Article prepared as it is scheduled to run in the ORMS Today, June 2007 issue.




                                                    SOFTWAREREVIEW




                                                         Vanguard System
                                                          Powerful, flexible, scaleable decision-support platform
                                                          instantly converts business models into fully functional
                                                          Web applications for enterprise-level deployment.

                                                             By Michael Kubica




                                                                                   D         URING THE PAST 10 YEARS there has been a growing inter-
                                                                                               est in quantitative decision support for business. Com-
                                                                                               mensurate with this interest, there has been a prolifera-
                                                                                               tion of business modeling tools, each with unique
                                                                                      advantages and disadvantages, depending on the business prob-
                                                                                      lem being addressed. At Healthcare Econometrics, a division of
                                                                                      Applied Quantitative Sciences, we help our clients make
                                                                                      informed decisions under conditions of uncertainty and com-
                                                                                      plexity. The diversity of model requirements within our client
  P R O D U C T                         I N F O R M A T I O N                         base (scope, scale, complexity, accessibility, etc.) has fueled our
                                                                                      persistent survey and acquisition of what we consider best-in-
                                                                                      class modeling tools. Recently, we tested (and have since adopt-
                                                                                      ed) Vanguard System.
                                                                                          Vanguard System provides an extremely powerful, flexible,
                                                                                      scaleable and extensible decision-support platform for any proj-
 Vanguard System is available from Vanguard Software                                  ect scale or scope. The real value with Vanguard System is realized,
  Address: 1100 Crescent Green, Cary NC 27518                                         however, within the context enterprise-level decision support.
  Phone: 919-859-4101                                                                     Business modeling occurs in almost every functional area of
  Fax: 919-851-9457                                                                   an organization. Many times, the model from one function pro-
  E-mail: sales@vanguardsw.com                                                        vides inputs to one or more other functional models. In this
  URL: www.vanguardsw.com                                                             type of environment, it is typical for there to be version discon-
                                                                                      tinuities between functional model updates (at best) and in the
 Pricing                                                                              worst cases multiple models relying on different sources for
  Professional version: $895/yr + optional Add-ins (single user);                     (presumably) the same information. Vanguard System tran-
  $5,950/yr + Add-ins (10-user pilot system)                                          scends these issues by establishing a secure, collaborative, com-
  Academic version: $447.50 perpetual (single user). Donations are available          ponent-modeling environment where all models using inputs
  for multi-user systems.                                                             from another model are instantaneously updated when the
  Student version: $447.50 perpetual.                                                 component is updated.
                                                                                          Another significant advantage of Vanguard System is the
 System requirements                                                                  ability to instantly publish a model as a Web-based application.
  Vanguard Server: Windows 2000 or later (Windows 2003 Server recommended             Vanguard System makes decision-support models widely
  for large user groups)                                                              accessible to the people who need them: decision-makers. They
  Vanguard Studio client: Windows 2000, XP or Vista                                   can be made available anytime, from any Web browser, with an
  Web-based users: Any Web browser                                                    easy-to-use and understand interface. The days of having to

                                                                               OR/MS TODAY                                                     J une 2007
                              SOFTWAREREVIEW




“wait for the modeler to re-run the model with alternative              places virtual super-computing capabilities behind
assumptions” may be over.                                               large complex simulation models.
   Vanguard System is the flagship product of Vanguard Soft-          • Optimization: The optimization module provides two
ware Corporation (1-919-859-4101, www.vanguardsw.com).                  tools: Solver and Goal Seek. Solver uses traditional
This review describes some of the main features, benefits and           linear and integer programming techniques and allows
limitations of the current version of Vanguard System (version          you to state constraints in plain English form (a real
5.0.15).                                                                benefit when working with complex, multi-constraint
   Vanguard System is comprised of two core components:                 problems). Goal Seek uses non-linear unconstrained
• Vanguard Studio: a graphical modeling environment                     optimization techniques. The optimization module
   that may be used to construct quantitative decision-                 supports an unlimited number of variables and
   support tools ranging from simple, single-event                      constraints.
   decisions to enterprise decision-support systems.                  • Application development: The Web Development
   Single- and multi-user licensing is available.                       Add-in allows you to rapidly create sophisticated Web
• Vanguard Server: Once a model is constructed using                    applications based on your model. You can use
   Vanguard Studio, it is published to Vanguard Server,                 Vanguard’s Dscript language to read and write data
   which functions as a library server (a secure                        files, or interface directly with other enterprise
   environment to store and access models), an                          applications via DDE, OLE, ODBC and Web Services
   application server (making all models available as a                 (using the Web Services Add-ins).
   fully functional Web-based application) and a
   licensing server (allowing licenses to be shared                      At the heart of Vanguard System is DScript, an object-ori-
   between multiple users within a networked                          ented programming language. DScript is an extension of the
   environment). Vanguard Server has many valuable                    JavaScript programming language, and follows the same syn-
   features, including multi-user support, Secure Socket              tax. Using DScript you may program your own Add-ins and
   Layer encryption (SSL), failover and load balancing.               functions, and save them as libraries for future use. Leveraging
                                                                      this capability can dramatically increase modeling efficiency,
Overview of Vanguard System                                           reduce the likelihood of errors and provide consistency of
    VANGUARD STUDIO is a powerful quantitative modeling envi-         methodology between modelers. If you have prior experience
ronment, providing an array of tools for mathematical, statis-        with JavaScript, you will easily begin programming in DScript,
tical and artificial intelligence applications. The capabilities of   since it follows the same syntax. If you are not an experienced
Vanguard Studio may be optionally extended into multiple              JavaScript programmer, the syntax is easily understood if you
specialty domains, via Add-in modules, including:                     elect, and Vanguard System tools and menus are more than
• Forecasting: Given an historical data set, this Add-in              adequate to meet most user requirements.
    assists in selecting and implementing the appropriate
    algorithm from among several options, including                   Building a Model
    moving averages, exponential smoothing, regression                    IN THE SECTIONS THAT FOLLOW, we will demonstrate the use
    and even more advanced methods such as Fourier                    of Vanguard System with the Monte Carlo Add-in and an Add-
    spectral-analysis. A forecasting wizard is available to           in we created using DScript, which facilitates the construction
    simplify the process of importing data and executing              of market simulation models. We will create a simple model
    the analysis.                                                     forecasting revenue from a fictitious novel medical technology
• Decision tree analysis: This Add-in constructs and                  (code named “Project Elephant”) to treat a fictitious disease
    solves decision trees, and provides outputs such as risk          (Lapsus Memori). For this model, we assume one market seg-
    analysis and value of information.                                ment and two products: an implantable microchip that stimu-
• Monte Carlo simulation: This Add-in allows you to                   lates memory structures in the brain and a surgical kit to
    define inputs as probability distributions and simulate           facilitate implantation.
    the output based on the uncertainty defined in the                    Vanguard Studio opens to a blank modeling page, which
    inputs. By defining all input uncertainties according to          has a tool bar, document window and status bar. Models are
    their statistical probabilities, outputs may be analyzed          instantiated as documents, consisting of one or more sheets.
    statistically with a more rich understanding of the               Sheets are organized as tabs, similar to common spreadsheet
    likelihood of achieving different values of a measure of          applications, and include one or more tree sheets (to display
    interest. This Add-in provides sophisticated tools for            the actual model diagram), text sheets (to provide information
    establishing correlations between variables and                   about and/or documentation of the model) data table sheets
    performing a variety of sensitivity analyses. Vanguard            (to store data), graph/table sheets and report sheets (to pro-
    System offers another Add-in, Grid Computing, to                  duce exquisite reports that include text, tables, graphs, etc.).
    allow you to use multiple processors across any                   You can open, edit and run multiple model documents within
    number of networked computers or servers. This                    a single instance of Vanguard Studio (Figure 1).

J une 2007                                                    OR/MS TODAY
                                                                          nents may also be represented in differing units of time (years,
                                                                          quarters, months, days, etc.), and Vanguard System automati-
                                                                          cally scales them to be consistent with one another in the par-
                                                                          ent model. Anyone who has ever tried to consolidate multiple
                                                                          models in an application that allows only one time base and/or
                                                                          a single unit of time can appreciate how incredibly valuable
                                                                          this feature is.
                                                                              With a few mouse clicks, this “parent model” is published to
                                                                          Vanguard Server. Next, we will create a component for the seg-
                                                                          ment within which Project Elephant will be adopted, and link
                                                                          to that component from the parent model. We begin by open-
                                                                          ing another model document, and constructing the Segment
                                                                          model by defining the mathematical relationships between
                                                                          variables (Figure 3).



Figure 1

         You begin programming your model by typing in the for-
     mula bar. Vanguard Studio automatically begins building a
     graphical representation of the mathematical model as a hier-
     archical tree diagram. The tree diagram uses nodes and
     branches to represent the relationships between variables cre-
     ated in the formulas you type. First, we will create a parent
     model, which will have links to, and use data from, several
     component models. Since our task is to forecast revenue from
     products used to treat Lapsus Memori, we begin with a simple
     model: Revenue = Segment Size * Technological Adoption *
     Market Share * Price (Figure 2).
         Like many business problems, this one involves calculating
     values as a function of time. Because this is a dynamic model,       Figure 3
     we must establish a time base for the time series being calcu-
     lated. Vanguard System’s treatment of time is one of its most            Note the arrows indicating links to another page on some
     powerful features. First, date values are internally translated in   nodes. In order to keep the workspace organized and the
     Vanguard System into unique serial numbers. Second, you can          model structure transparent, Vanguard Studio automatical-
     have any number of time bases within the same model. For             ly extends the workspace into additional screens with navi-
     example, one component may have a starting date of July 1,           gation links when the model becomes too large to view on a
     2000, while another has a starting date of Jan. 1, 1995. Compo-      single screen. Simply click on the link to see the additional
                                                                          nodes. Likewise, when a node is referenced by several other
                                                                          nodes, Vanguard Studio displays a pointer with the name of
                                                                          the referenced node. This eliminates the “spaghetti” of mul-
                                                                          tiple crossing lines in the influence diagram without sacri-
                                                                          ficing transparency.
                                                                              Because several variables represent unknown futures
                                                                          (such as growth rates of the population and prevalence of
                                                                          Lapsus Memori within the population), these variables
                                                                          are represented as probability distributions. To define a
                                                                          node as probabilistic, you may type a distribution func-
                                                                          tion directly into the formula bar, or use the menu to
                                                                          select the distribution you wish to use. The menu system
                                                                          provides a graphical interface for selecting the probabili-
                                                                          ty distribution you wish to use.
                                                                              By convention, I externalize distribution parameters so
Figure 2
                                                                          they may be represented as assumptions and documented.

                                                                  OR/MS TODAY                                                  J une 2007
                                   SOFTWAREREVIEW




                                                                             Next, we publish this component to Vanguard Server,
                                                                          return to our “parent model” and link to the segment model as
                                                                          a component object. This task is easily accomplished using the
                                                                          right-click menu over the node that will contain the compo-
                                                                          nent link and selecting the component from an explorer-style
                                                                          dialog box. Once the component model is inserted, you may
                                                                          view the inputs and outputs of the component from within the
                                                                          parent model (Figure 8).




Figure 4


     Vanguard System makes it easy to document the model at any
     level of granularity. To demonstrate, I declare the input
     nodes. By declaring nodes as inputs, the shape of the node           Figure 8
     changes to an “arrow” and input data entry fields are placed
     in the upper left corner of the model. Likewise, by declaring            You may modify inputs from the component directly from
     nodes as outputs, output fields are placed in the upper left         this screen, without corrupting the default assumption values
     corner as well (Figure 4).                                           in the original component model. Herein lies one of the most
         I place a comment over the input nodes, with an instruc-         powerful features of Vanguard System. A component is essen-
     tion as to what information the node should contain. Fol-            tially a replica of the model it represents. By un-checking the
     lowing the instruction, I insert “##MORE##,” which separates         “Single Instance” box, we can insert this component multiple
     the instruction from the documentation. As will be shown             times within a single model, each of which can contain unique
     later, when the model is accessed via Web browser, the               assumptions. Any time the structure of the original component
     instruction will display next to each input field, with a “More”     model is modified, each component replica is likewise modi-
     link, which expands to include assumption documentation.             fied. This object-oriented architecture provides for extremely
                                   In Vanguard Studio, comments           efficient modeling and dramatically decreases the likelihood of
                                   will now be visible when you           coding errors. By declaring the component model as a parent
                                   move your mouse over the input         class, the inserted component inherits the features and attrib-
                                   node (Figure 5).                       utes from the original component model and allows infinite
                                       We will now define a correla-      flexibility to extend beyond the inherited structure for the
                                   tion between the initial and termi-    component (Figure 9).
                                   nal prevalence compound annual
                                   growth rate (CAGR). Vanguard
Figure 5
                                   System makes it a simple task to
                                   establish correlations between vari-
                                   ables. Simply select the menu item
                                   to reveal a dialog box requesting
                                   which variables you wish to corre-
                                   late. Then you can click on the
                                   nodes to be included in the corre-
                                   lation matrix, and the dialog box is
Figure 6
                                   automatically populated (Figure
                                   6).
                                       When you click “OK,” a correla-    Figure 9
                                   tion sheet is inserted into the
                                   model document, and you can              Next, we define the Tech Adoption, Market Share and Price
                                   define the strength of the relation-   components following the same steps as we did for the seg-
Figure 7
                                   ships in the matrix (Figure 7).        ment component. For price, we expand the model to accom-

     J une 2007                                                   OR/MS TODAY
modate our two products. We do this by expanding the tree to
include revenue from each product, which is then aggregated
into a total revenue value (Figure 10).




                                                                     Figure 12

                                                                     dynamic reports, which are automatically updated whenever
                                                                     an input value is changed. We can create a number of output
                                                                     reports in either tabular or graphical format. Our completed
Figure 10
                                                                     model structure looks like Figure 13.
   The model structure for price in this example is identical for
both products; there are simply different assumptions. We
assume a base price, with compound annual growth rate
(CAGR) on average sales price (ASP) that lasts for some peri-
od of time, and then potentially transitions to a different
growth rate for another interval of time. The initial CAGR,
probability of a transition, terminal CAGR and years to transi-
tion are all represented as uncertainties with probability distri-
butions. The initial CAGR and terminal CAGR values are
correlated (Figure 11).



                                                                     Figure 13


                                                                         We publish the model to Vanguard Server, and the
                                                                     model is accessible to any authorized user with a Web
                                                                     browser. Users access the model via a wiki-style knowl-
                                                                     edge portal (Figure 14).
                                                                         Each time a model is saved (published), a new
                                                                     date/time/user-stamped instance is created in Vanguard Serv-
                                                                     er. This way the history of modifications is always accessible,




Figure 11


    Because of the object-oriented nature of Vanguard System,
we only have to create this model once. We simply instantiate
it twice in our parent model and allow for multiple instances
with unique values. To do this we follow the same method of
inserting a component that we did before. This time, however,
we uncheck the “Single Instance” box to allow for multiple
unique instances (Figure 12).
    Next we simply update the values in the pricing compo-
nents to reflect the assumptions for the current model.
    With a few simple clicks of the mouse, we are able to create     Figure 14

                                                             OR/MS TODAY                                                 J une 2007
                                 SOFTWAREREVIEW




                                                                     in the original model. This is an extremely valuable fea-
                                                                     ture when there may be multiple decision-makers using
                                                                     the model for different purposes. Any number of unique
                                                                     user scenarios may be run without corrupting the “offi-
                                                                     cial” model assumptions.
                                                                         While models may be very interesting in and of themselves
                                                                     to the modeler, for most end users, models are a means to an
                                                                     end: gaining insight into a problem. Therefore, effective mod-
                                                                     els must communicate answers and insights well in order to be
                                                                     useful. Vanguard System does an excellent job of integrating
                                                                     powerful reporting and graphical representation into the mod-
                                                                     eling environment, so that users may easily access, query,
                                                                     understand and operationalize the decision support for which
                                                                     models are intended. Reports are automatically updated when-
                                                                     ever the user modifies an input. Figure 17 is a report from our
                                                                     sample model.



Figure 15


     and you can roll back to a prior version at any time. From a
     Web browser, our model looks very similar to the way it does
     in Vanguard Studio, except the user cannot modify structure.
     To drill down into the model, simply click on a component and
     that component model opens (Figure 15).
        By clicking on the Segment component, the assump-
     tions page for that component opens. The Web-based
     interface is elegant and easy to navigate. By clicking on
     the “More...” link, detailed documentation is revealed
     (Figure 16).
                                                                     Figure 17


                                                                     Integration with Microsoft Excel
                                                                         A SIGNIFICANT INFLUENCE on the adoption of even the
                                                                     most powerful stand-alone decision-support applications is
                                                                     how well it is able to interface with existing enterprise appli-
                                                                     cations; and let’s face it, Microsoft Excel is one of the most
                                                                     ubiquitous software tools for business modeling in use today.
                                                                     Vanguard allows users to leverage existing Excel models as a
                                                                     fully integrated component within the Vanguard model. This
                                                                     feature is extremely valuable to organizations seeking to
                                                                     increase their quantitative modeling capabilities without
                                                                     being required to abandon existing, corporately sanctioned
                                                                     models constructed in Excel.

                                                                     Summary
                                                                        I HAVE BEEN BUILDING models professionally for more than a
Figure 16
                                                                     decade. I discovered Vanguard System in 2006 while searching
                                                                     for a modeling environment that provided:
        The user may modify input values and save them as            • excellent interactivity with Excel but which overcomes
     scenarios. You can save as many scenarios as you wish,             the limitations imposed by spreadsheet models;
     and they are associated with your specific login. Values        • the modeling efficiency afforded by multidimensional
     saved from the Web browser do not modify assumptions               models;

     J une 2007                                              OR/MS TODAY
                                                                               V E N D O R                  C O M M E N T S
• the ability to maintain a historical database of                     Editor’s note: It is the policy of OR/MS Today to allow developers of reviewed
  assumptions and structure as the model evolves to
                                                                            software an opportunity to clarify and/or comment on the review article.
  meet organizational needs; and
• the ability to provide access to a wide user-base via the                 Following are comments by Rob Suggs, CEO of Vanguard Software.
  Web, without sacrificing security and master model
  integrity.
                                                                            The Vanguard System was released in the fourth
    Vanguard System delivers on all of these requirements              quarter of 2006. We combined the analytic capabilities of
and much more. The ease with which a model is convert-
ed into a fully functional Web application makes models                our DecisionPro and DecisionScript product lines with
instantly deployable to where they are needed most: in the             years of additional research into how people work together
hands of decision-makers. Models and output reports are                to make business decisions. Our goal was to focus not only
available any time, from any Web browser, with an easy-
to-use and understand interface. The days of having to                 on the analytic side of how practitioners of O.R. perform
“wait for the modeler to re-run the model with alternative             their work, but to also focus on how they communicate
assumptions” may be over.
                                                                       their results and promote their skills throughout an
    Sources inside Vanguard Software say exciting new features
are on the way, including improved graphical capabilities and          organization. The result is the first enterprise-scale
multiple-language support. The multiple language support               application for collaborative modeling and simulation. It is
functionality sounds particularly interesting. It will allow you
                                                                       a Web-based system that facilitates open, transparent
to document comments in different languages, and the user
may select which to view via a drop-down box. Any organiza-            collaboration between all stake-holders involved in a
tion that works in a global environment will appreciate this           business modeling effort.
flexibility. You will even be able to create your own language
categories for special documentation purposes. For example,                 There are a number of very significant technical hurdles
you may want to place technical notes and end user notes in a          to overcome in making this type of a system work.
particular set of nodes.                                               Contributors might be spread around the world; they might
    Vanguard System makes even complex models simple to
navigate, understand and use. The team at Healthcare Econo-            build models using different time frames, different
metrics has been using Vanguard System for three months                currencies and even different modeling platforms (such as
now. We have implemented several complex global market
                                                                       spreadsheets). The Vanguard System automatically
simulation models. Our clients have embraced the graphical
user interface in the Web-based models and (unlike the                 handles all complexities associated with making these
response to similar models created in other environments) are          parts work together as a single model.
visibly excited about using them.
                                                                            We have taken the concept of a collaborative modeling
    While we have not encountered any show-stoppers, we have
suggested some opportunities for improvement. Some of our              environment one step further by allowing users to share
models are larger than one screen. In the Web browser, you are         their computing power. Vanguard is the first commercial
not able to scroll to portions of the diagram that are out of
view. Another opportunity would be to provide a comment                product to support Grid-based Monte Carlo simulation. The
summary sheet that lists a table of input nodes and associated         Vanguard Server can use spare CPU cycles on individuals’
documentation from comments. The development team at
                                                                       desktop computers to perform large simulations. Runs
Vanguard Software is both accessible and responsive. Sugges-
tions I made in January for “nice to have” features have shown         that take 24 hours in a spreadsheet can be performed in
up in the latest release in February. The customer service pro-        about two minutes using a workgroup-sized grid (10
vided by the Vanguard Software team is outstanding as well.
                                                                       computers). This puts supercomputing power in the hands
    There are a lot of excellent modeling applications available
today. Vanguard System brought to market a truly remarkable            of users without a supercomputing budget.
product, which is arguably best in class.                                   We have recently introduced the Vanguard Academic
   Michael Kubica (mkubica@hei-us.com) is senior scientist,
   econometric modeling, for Healthcare Econometrics (www.hei-
                                                                       Partnership program. Over the past few months Vanguard
   us.com), a division of Applied Quantitative Sciences, Inc.          has donated about $1 million worth of software and
   Healthcare Econometrics provides decision support and risk
   analysis applications for some of the largest medical device,       services to universities worldwide. Please contact us if you
   pharmaceutical and biotechnology companies in the world.            would like to learn more about this program.

                                                              OR/MS TODAY                                                            J une 2007
                            Vanguard Software
Address: 1100 Crescent Green, Cary NC 27518 • Phone: 919-859-4101 • Fax: 919-851-9457
                E-mail: sales@vanguardsw.com • URL: www.vanguardsw.com

				
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