River Logic Inc.


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July 6, 2015 Issue

The Most Powerful Name In Corporate News and Information


Prescriptive Analytics Software for Business Planning


Carlos Centurion



River Logic Inc.



Interview conducted by:

Lynn Fosse, Senior Editor, CEOCFO Magazine, Published – July 6, 2015


CEOCFO: Mr. Centurion, what is River Logic?

Mr. Centurion: River Logic brings to market prescriptive analytics software, also known as optimization which is a mathematical approach to find the best feasible path to maximize or minimize a stated objective given a set of constraints. Optimization provides incredible value to business planning, yet traditionally it has been difficult to implement due to the complexity of the math required. Our mission to democratize access to optimization software for business users across industries and levels of planning.


CEOCFO: Who tends to turn to you for services? Is there a particular type of company, industry or point in time when people might look to River Logic?

Mr. Centurion: Most business decisions involve a relative amount of complexity and trade-offs – business people and consulting firms that are enlightened about the limitations of heuristic-based and hypothesis driven approaches such as Excel where the user has to pre-guess the answer turn to River Logic as they know a significant amount of value is left on the table. From an industry point of view, manufacturing and logistics have been early adopters, but these days we find applications across the board including healthcare, financial services, government, utilities, etc.


CEOCFO: Would you walk us through a typical engagement? What might a company ask for and how would you work with them?

Mr. Centurion: An implementation would start by describing the kind of decision users need to make, including articulating the business context, key questions and defining the data requirements. Usually we can leverage their existing approaches such as an existing Excel sheet or business intelligence tool reports. We then work jointly to design an optimization model, load it with data and validate it against a representative time period. The third step is to run optimization and what-if scenarios to test the software and begin to find value for the client. These first three steps usually take 6-8 weeks. The final step is to implement the software into a business process, including setting up the required integration and user dashboards.


CEOCFO: When a company comes to you, do you often have to help them figure out what they really want as opposed to what they think that they want?

Mr. Centurion: Many operational problems are self-evident while tactical and strategic planning decisions may require some work to translate into software. Operational problems like logistics planning are typically well defined and all we might do with the client is minimal training and a few support calls to get them up and running. In comparison, sometimes the client wants to solve a broader problem. The value River Logic and our partners would bring here may start by defining the problem in a way that generates the most value for the client. Take supply planning for example, which typically answers the question of how to supply a given demand at the lowest possible cost using unit costs as inputs. In these cases we would typically help the client re-state the problem to properly include the demand and financial granularity such that the question becomes how to maximize profit. We bring significant value by helping clients define the problem in industries where adoption of optimization software is nascent, such as healthcare and government.


CEOCFO: What does your system look at that perhaps others may not? What do you add in the mix that could have a difference?

Mr. Centurion: We bring a new level of insights and a significantly for business user adoption. We help users generate new, previously unforeseen insights by bringing together financial and the operational optimization. Users can model an operational process and incorporate fixed and variable costs at each step, plus establish a full chart of accounts. The chart of accounts can be constrained to represent company policy or regulatory requirements, such as P&L targets, departmental budgets or working capital limitations imposed by bank covenants. Furthermore, users can represent ratios such as NPV or ROIC as targets or constraints into an optimization. As the software evaluates decisions, it dynamically understands how to treat fixed and variable costs as in some decisions all costs are variable (i.e. should I shut down a facility?) whereas in others there is a combination (i.e. which product mix should I emphasize?). A holistic optimization then helps managers obtain a great understanding of the best possible scenario for every set of assumptions, thus gaining agility to react to events and meet objectives while forecast accuracy improves significantly. From a usability perspective, our software is completely configurable and manages all of the equations automatically, which means that users write no code and an optimization model that took 9 to 18 months to build can now be completed in a few weeks.


CEOCFO: Are you able to take into account the effect on people in their work, or is that not measurable?

Mr. Centurion: We definitely take into account the effect on people and can even consider specific requirements associated with people as an input. The software supports use cases such as workforce planning, scheduling and training/skill mix optimization. As an input, it can consider unique requirements such as mandatory lunch breaks and maximum regular/over-time hours. From a customer perspective, users can configure service level requirements. As an example, in healthcare we recently modeled a hospital where quality of patient care was defined explicitly in the model by representing where patients are treated and how long they have to wait for treatment.


CEOCFO: Do you follow-up and know if most companies implement the changes that you are able to suggest?

Mr. Centurion: River Logic direct customers have access to our customer success team that follows up relentlessly. One of the benefits from applying optimization is that users can see the before and after, tracking down to which changes were implemented. Most customers report at least 4-5 times ROI but it can be much higher… there are many client case studies on www.riverlogic.com.


CEOCFO: How is the offering better today than it was a couple of years back?

Mr. Centurion: It comes down to usability, performance and accelerators. Usability of our software includes improvements to data connectivity, as well as enhanced capabilities to set up scenario configuration dashboards and visualize results. On performance, the software is about an order of magnitude larger and faster, to the point where we are now modeling very complex, near operational planning problems. Finally, we have developed a very strong library of use cases and model applications, many of them developed by a growing network of partner organizations. These accelerators facilitate understanding of how to apply optimization into various industries and speed up deployments. An example is a partner building a solution to help Accountable Care Organizations make better decisions, such as how to manage referrals, which providers to include and the impact of clinical decisions on operational and financial performance. Another partner is working on internal audit planning and compliance, so that banks can optimize their activities and resource mix to comply with regulations and avoid fines at the lowest possible combination of cost and risk. These partners facilitate the adoption and time to value for clients in their target spaces.


CEOCFO: What is your geographic reach today?

Mr. Centurion: River Logic has offices in the U.S., and resellers, agents and implementation partners in Europe, Africa, Latin America, Australia and South East Asia.


CEOCFO: What is next? If we talk a year from now, what might be different at River Logic?

Mr. Centurion: Our technology will be fully available in the cloud, with much stronger capabilities to support planning applications. These include stronger visualization, scenario management, collaboration, data blending and integration components. We are also working to help users translate the results of optimization runs into execution, and being able to track their initiatives. The market is also progressing as many analysts now recognize and have begun covering Prescriptive Analytics, which is creating significant awareness and interest. You should see River Logic’s presence growing, including a stronger direct capability but also acceleration of our partner channels.


CEOCFO: How do you stand out from the crowd and get the attention that you deserve?

Mr. Centurion: River Logic can deliver 2-5% of additional revenue translated into additional profit. We are the only vendor that can provide global profit optimization and the agility to maintain the application in a reasonable business timeframe as the client’s business changes. Think of the impact on shareholder value and the firm’s ability to make strategic moves in the market.


CEOCFO: What has surprised you as River Logics has grown and evolved?

Mr. Centurion: On the positive front, the value of optimization to business decision making far surpasses the value of any other type of software including descriptive and predictive analytics. Many of our customers and partners are realizing very strong success with the software. On the negative front, we had to do a lot of education to get business people to understand the value of the category. This is understandable with so much emphasis on business intelligence (BI) and pretty-looking visualization charts, but business executives must pay attention to the underlying math as it is equally if not more important to shareholder value.


CEOCFO: Put it all together for our readers. Why choose River Logic?

Mr. Centurion: Customers choose River Logic to improve performance, agility and predictability. Performance improvement includes 2% to 5% of revenue in additional profit or a similar order of impact for a non-profit, such as freeing up 2% to 5% of the budget. Agility includes reaching decisions in hours or days vs. weeks by making the impact of decisions and trade-offs explicit, and providing a summary of marginal improvement opportunities. Predictability means as much as 30% improvement in financial forecast accuracy, as the financial forecasts are created simultaneously with the business decisions taken.


“River Logic can deliver 2-5% of additional revenue translated into additional profit. We are the only vendor that can provide global profit optimization and the agility to maintain the application in a reasonable business timeframe as the client’s business changes.”
- Carlos Centurion


River Logic Inc.







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