All client data is stored by a hosting provider that has completed a SAS70 audit. For IT governance, the SAS audits are based on the internationally accepted set of guidance materials from ISACA’s COBIT - designed to assist in the implementation of effective IT governance throughout an enterprise.

SAS 70 Overview

Service organizations, such as hosted data centers, insurance claims processors, and credit processing companies, provide outsourcing services that affect the operation of the contracting enterprise. The SAS 70 was developed by the American Institute of Certified Public Accountants (AICPA) as a simplification of a set of criteria for auditing standards originally defined in 1988.

Under SAS 70, auditor reports are classified as either Type I or Type II.
A Type I report describes the service organization’s description of controls at a specific point in time (e.g. June 30, 2003).  The auditor evaluates the efforts of a service organization to prevent accounting inconsistencies, errors, and misrepresentation, and the likelihood that those efforts will produce the desired future results.

A Type II report not only includes the service organization’s description of controls, but also includes detailed testing of the service organization’s controls over a minimum six month period (e.g. January 1, 2003 to June 30, 2003).

We also use Amazon’s S3 (Simple Storage Service) for the storage of documents (or any artifact such as pictures, Flash files, etc.).

We also require all job candidates read and sign the EMPLOYEE PROPRIETARY INFORMATION AGREEMENT as a condition of employment that explicitly requires the protection of Third Party Information. We also do background checks on potential employees.

You always have the option of deploying our simulations and associated hardware on your own internal networks. However, we often find that many clients are best served by a SaaS solution for their simulations.

SaaS allows Simudyne to:

1. Give you a customized solution without the attendant installation and deployment headaches.  Zero hardware and OS infrastructure required by you.
2. Put all of the documentation, graphics, explanations, model runs, etc into one searchable, indexed environment for users to access.
3. Simudyne’s platform has a way of handling peak computation loads that a stand-alone installation cannot.
4. For many companies, there are already precedents in place for SaaS – for example with the Six Sigma application I-Nexus.

If you were deploying just one specific model, the platform probably would not make sense. However, given that most clients are looking at a programme of multiple models, a central organized repository for all of the models and their information makes good economic and technical sense.

A tricky question to answer directly…So we will answer by example:

• UPS, route optimization (2003), $600MM annual cost savings

• Netflix, Cinematch algorithm: company offered $1MM to anyone who could improve its performance by 10%

• American Airlines, yield management: $1.2B in value over three years

• Deere & Company, inventory optimization: $1.2B in inventory cost savings between 2000 and 2005

• Procter & Gamble, OR in sourcing and distribution: $200MM in mid 1990’s

• BostonCoach, fleet optimization: 20% increase in asset utilization

• Harrah’s Entertainment, customer loyalty analytics, market share increase from 36 to 43% between 1998 and 2004

• Barclay’s Bank, data-driven customer management strategy, 25% increase in revenue per customer

• Capital One, credit card analysis, retention increase of 87%, cost of acquiring new account lowered by 83%

• Marriott, hotel system optimization, 8% increase in “revenue opportunity”

• Progressive Insurance, web analytics, market capitalization doubled in four years to $23B

• JCPenney, price optimization, 5% increase in gross margin, 10% increase in inventory turns, double-digit growth in operating profit over four years, 2001 to 2004

Source: Competing on Analytics, Thomas Copeland and Jeanne Harris, Harvard Business School Press, 2007