1242.2219

Information System Economics

The Concept of Balance

The Concept of Balance

The problem – multiple dimensions:

computer: processor

printer

disks

CDROM

modem

software

personnel

Why is it needed?

The Concept of Balance

Kiviat Charts

Origin and history

The Concept of Balance

Kiviat Charts - The Method

1. Choose factors to be measured

2. Define factors so that for half the optimum utilization is 1

and for half 0

3. Mark of the factors around the chart so that axes with an

optimum of 0 alternate with those with an optimum of 1.

4. Mark of the values on the factor axes

5. Join the marks to form a “star”

6. Evaluate the result

The Concept of Balance

A 0.8B 0.2C 0.8D 0.2E 0.8F 0.2G 0.8H 0.2

Kiviat charts - a perfectly balanced system

0

0.2

0.4

0.6

0.8

1A

B

C

D

E

F

G

H

Series1

The Concept of Balance

00.20.40.60.8

1A

B

C

D

E

F

G

H

Series1

A 0.9B 0.15C 0.85D 0.2E 0.9F 0.1G 0.8H 0.2

Kiviat charts - a well-balanced system

The Concept of Balance

A 0.4B 0.6C 0.5D 0.4E 0.7F 0.4G 0.6H 0.5

0

0.2

0.4

0.6

0.8

1A

B

C

D

E

F

G

H

Series1

Kiviat Charts – a poorly balanced system

The Concept of Balance

A 1B 0C 1D 0E 1F 0G 1H 0

0

0.2

0.4

0.6

0.8

1

A

B

C

D

E

F

G

H

Series1

Kiviat Charts – a perfectly balanced system

The Concept of Balance

Kiviat Charts – a different exampleComparing Internet diffusion in countries

Measures: pervasivenessgeographic dispersionsectoral absorptionconnectivity infrastructureorganizational infrastructuresophistication of use

Countries compared:FinlandJordanIsrael

Dimension Jordan Israel Finland

Pervasiveness 3 4 4

Geographic Dispersion 1 4 3

Sectoral Absorption 2 3 3

Connectivity Infrasructure 1 2 3

Organizational Infrastructure 2 4 4

Sophistication of Use 1 3 4

Internet Dimensions Compared

0

1

2

3

4Pervasiveness

GeographicDispersion

Sectoral Absorption

ConnectivityInfrasructure

OrganizationalInfrastructure

Sophistication of Use

Internet Dimensions Compared

Jordan Israel Finland

The problem with Kiviat Charts - how to develop a metric for multidimensional data?

The solution: express everything in terms of a common measure - cost.

There are then two dimensions - utilization and cost - which, when multiplied yield a cost/utilization factor for each system component.

The Cost/Utilization Method

1 2 3 4 6

0 20 40 60 80 100

100

80

60

40

20

0

Percent of Cost

Per

cent

age

Util

izat

ion

Illustrative Cost/Utilization Histograms

Totalcost

1 2 3 4 6

0 20 40 60 80 100

100

80

60

40

20

0

Percent of Cost

Per

cent

age

Util

izat

ion

Illustrative Cost/Utilization HistogramsGood balance - high utilization - bottleneck

Totalcost

1 2 3 4 6

0 20 40 60 80 100

100

80

60

40

20

0

Percent of Cost

Per

cent

age

Util

izat

ion

Illustrative Cost/Utilization HistogramsGood balance - high utilization - bottlenecks

1 2 3 4 6

0 20 40 60 80 100

100

80

60

40

20

0

Percent of Cost

Per

cent

age

Util

izat

ion

Illustrative Cost/Utilization HistogramsGood balance - low utilization

1 2 3 4 6

0 20 40 60 80 100

100

80

60

40

20

0

Percent of Cost

Per

cent

age

Util

izat

ion

Illustrative Cost/Utilization HistogramsPoor balance - low utilization

1 2 3 4 6

0 20 40 60 80 100

100

80

60

40

20

0

Percent of Cost

Per

cent

age

Util

izat

ion

Illustrative Cost/Utilization HistogramsGood balance - high utilization - bottleneck

The Concept of Balance

Cost/Utilization - The Method

1. Choose factors to be measured

2. Determine the cost of each factor as a percent of total

system cost

3. Determine the utilization of each factor

4. Prepare a chart showing the cost and utilization of each

factor

5. Compute the measure of cost/utilization, F

6. Compute the measure of balance, B

7. Evaluate the resulting chart and measures

The Concept of Balance

Cost/Utilization - The Measures

Cost/utilization:

where: ui = percent utilization of factor i

pi = cost contribution of factor i

Balance:

F = iu lpi

∑

( ) ii puFB *2

21 −−=

The Concept of Balance

Cost/Utilization - The Measures

F=(0.3*0.5)+(0.6*.3)+(0.5*0.2) = 0.43

F

0.5 0.3 0.2

0 0.5 1.0

0.5

1.0

The Concept of Balance

Cost/Utilization - The Measures

F

0.5 0.3 0.2

0 0.5 1.0

0.5

1.0 B =1−2 .3−.43( )2 *.5+ .6−.43( )

2 *.3+ .5−.43( )2 *.3( )

≈1−2* .136=.728

The Concept of Balance

Cost/Utilization - Interpretation

F

0.5 0.3 0.2

0 0.5 1.0

0.5

1.0

processor disk I/O

The Concept of Balance

Cost/Utilization - Interpretation

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1

Series1 Series2 Series3

processor

printer

F = .42B = .53

disk 2disk 1

I/Os

The Concept of Balance

Cost/Utilization - Interpretation

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1

Series1 Series2 Series3

hardware

S/Wdevelopment

telecom

F = .42B = .53

personnelS/Wmaintenance

Trace of Cost/Utilization Criteriau

pPeriod 1: F=0.460, B=0.912

u

Period 2: F=0.496, B=0.908p

u

pPeriod 3: F=0.535, B=0.934

u

pPeriod 4: F=0.578, B=0.890 Period 5: F=0.627, B=0.816 Period 4: F=0.683, B=0.720

u u

p p

Composite cost/utilization histogram for two real linked systems

CP

U I

Mem

ory

I

CP

U I

I

Mem

ory

II

Dis

ks

Tap

es

Pri

nter

Car

d re

ader

F=0.488B=0.580

The Concept of Balance

Conclusions

It is essential to maintain balance between system components in order to:

reduce costs

maintain smooth functioning with no bottlenecks

attain effectiveness AND efficiency