Learn the difference between complex and complicated and find out how your business can address its level of 'complicated.'
I recently came across Hugh MacLeod's cartoon, "Strive for Complex, Not for Complicated," and enjoyed both the drawing and his commentary on it. My take on "complex" and "complicated" is similar to his:
- Complexity is an inherent part of any situation having two or more parts – the more parts, the higher the complexity. Complexity is unavoidable, because of a situation's nature.
- Complication is not inherent – it is introduced into a system, and makes things more difficult to use, explain, and understand. Complication is avoidable, because a simpler equivalent can be produced.
As I thought more on the difference between "complex" and "complicated," I recalled a comment a client's Finance Committee Chair, a retired internal auditor, shared with me about 20 years ago – "Todd, the world is always going to need people like you and me because we fix the problems caused by others."
Why Problem May Occur
Do problems result because a situation is complex, or because the "solution" is complicated? To me, the answer is the latter.
Here's a common example, an annual wellness visit with your doctor – let's assume labwork is necessary. How might she go about ordering labwork and communicating results? Consider two cases:
- Labwork is scheduled immediately following your appointment – in this case, she communicates the results to you several days later via recorded voice mail, phone call, or a followup visit.
- Labwork is scheduled a week before your appointment – this way, she is ready to discuss the results with you.
The relation among labwork, appointment with the doctor, communication of results, and coordinating all these parts – that's complex, because all those parts are required.
How might this example become complicated? When it's time to pay for the services!
- A simple health insurance policy would have only one payment feature – copay, coinsurance, or deductible.
- A complicated policy (the norm) has all three payment features – this introduces a fourth payment feature, "Maximum Annual Out of Pocket Cost," to cap a policyholder's payments.
A quick recap – health care services are inherently complex, while the financing mechanisms for these services are generally complicated.
Complications do not end there – each insurance company and each service provider have negotiated rates for services, leading to a complication peculiar to health care, the "Contractual Allowance." The allowance is the difference between the service's "list price" – say, $150 for an office visit, if someone lacks insurance – and its negotiated "wholesale price" of, say, $95, for an insured person.
All of these payment features, contractual terms, and other transaction elements have to be carried out by technology – computer systems of providers and insurers – exchanging information with each other.
Analyzing Complicated Problems
We have worked with several healthcare clients, helping them address complex situations and solve complicated problems. Our goal is to analyze the situation or problem comprehensively, spot and remove unnecessary complicating "fixes," address the remaining complex situation, and then deliver a simple, clever – and, frequently, an elegant – solution. Read more about THA's Essence.
So, the next time you are frustrated with the health care system, or even systems you use in your work, ask yourself ...
"Am I frustrated because the situation is complex, or because the so-called solution is complicated?"
Technology solutions need not be complicated, yet often they are, because people – who are inherently imperfect and thus the weakest link in the overall system – analyze situations, then design, develop, test, and support the process and technology comprising the solution.
That Finance Committee Chair was right – because the real source of complications is people, the world is always going to need folks like him, my associates, and me, and our specialized skills and experience.
"Everything should be made as simple as possible, but not simpler." – Albert Einstein
Todd L. Herman
Client Project Update:
I am pleased to provide you with an update on our client projects. Projects we have completed over this period are...
Improve Information on Job Material Transactions
Provide more reliable information to shop and project managers by researching and documenting this ERP (Enterprise Resource Planning) system's processing of job material transactions, and creating procedures and reports to work around a limitation of this system.
Analyze Data to Enhance Revenues
Analyze the address records of several municipalities against those of utility companies identifying additional franchise tax due, resulting in greater revenue for the municipality.
Extend Sophisticated New Reporting Systems to Other Products
Leverage a unique value-added offering - a sophisticated new reporting system benefiting both customers and the ultimate consumers - to our client's advantage in their highly competitive market, by quickly developing sophisticated reports tailored to other products.
Deploy Techniques to Research & Prevent Billing Errors
Add functionality to gather additional information and quickly resolve billing errors, and develop and deploy a new module to prevent common errors from occurring, helping our client accelerate cash flow and reduce time spent correcting errors.
Migrating to Office 365
Reduce hardware and operating system upgrades and costs, while improving the user experience. by selecting relevant Microsoft cloud-based software offerings, conducting pilot tests for migration on several machines and software configurations, and beginning to roll out this migration and developed automated management policies.
Data Warehouse Enhancements
Improve the information accuracy and user experience of this sophisticated data warehouse and executive dashboard, by incorporating additional visualization features and devising a new dashboard for projects being developed.
Route Analysis Using WiFi Data
Created a proof of concept application to demonstrate the feasibility of harvesting WiFi data and using it for route analysis, providing our client a tool to improve offerings to both their customers and the ultimate consumers.
Future projects we are planning include...
Controlling a Major Cost
Obtain better visibility of food usage and sales, and provide a solid foundation for future system enhancements, by completing the application design and overseeing the development of a new operations system, and beginning to test base functionality of this new system.
Analyze Problem Items for Root Causes
Resolve over ten thousand orders and billings stalled in their systems, totaling several million dollars, by analyzing stalled items and determining several broad patterns of issues, and then designing and implementing automated processes to enlist over 1,000 personnel in this large-scale cleanup.
Quickly Tailor Customer-Specific Reports
Improve customer loyalty and retention by providing rapid turnaround on specific requests from our client's customers, using the flexibility we designed into this system to quickly devise new reports, while maintaining improved communication and visualization of complex information.
System Options for Offshore Accounting Changes
Devise a cost-effective approach to handle new accounting requirements with minimal systems modifications, by outlining various options to revise this apparel company's offshore processing system.
Planning Technology Investments
Help this construction-related client make informed decisions for improving its systems infrastructure, by providing an objective analysis of opportunities to increase systems robustness in a staged and cost-effective manner.
Planning Next Steps for Executive Dashboard
Improve planning and manage enhancements to a complex and comprehensive data warehouse and executive dashboard, preparing scope documents for various dashboard enhancements and enabling end-user queries and reports against the data warehouse.
Improving Operations Management
Improve management of revenue, drivers, trucks, and trailers to increase this fast-growing transportation company's profitability, by inventorying the data available from its main systems, defining the types of questions this information could answer, and outlining options to answer key questions.
Completing Office 365 Migration
Simplify technology in use and streamline infrastructure management and upgrades, by completing the roll-out of Office 365 and Intune, troubleshooting issues, and decommissioning server and client software (for example, Microsoft Exchange and antivirus programs, respectively) no longer needed because of successful migration to Office 365 and Intune.