Process improvement is a funny old thing when you look at it over an extended period of time. When the journey started the focus was about relieving some very explicit "pain" in the system and all thought, money and effort would have been addressed to that task. Over time that pain was dulled and was replaced by another "pain" further along the system. Again with time and money this second pain abated - only to be replaced by a third and a fourth etc etc.
As you travel around the continuous improvement mouse-wheel you never get to the end of the pain and of course in reality you probably never will. There is always something else that is the "next best pain" to salve.
The frustrating part for the pain doctors can be the lack of thanks from the patients. Very occasionally you come across people who have been there from the start and still vividly remember the excruciating pain that triggered the whole relationship in the first place - and they realise that the current pain is invariably far less than those of times gone by - and they know it will get eased - and they thank you with a smile and their patience and understanding around the challenges of today - and it is a pleasure.
Tuesday, November 21, 2006
Monday, November 20, 2006
The 80/20 improvement kicker
Another comment by one of the BPMG Sydney chapter attendees was very pertinent - he claimed in a recent process improvement project that 98% of the benefits came from only 2% of the improvements and all of them were human related process improvements. Now that is a huge ratio and if you were the sponsor looking back at that you would probably be frustrated at the return on investment (ROI) for the other 98% - that budget could have been spent on something else.
I am a big proponent of the 80/20 rule (officially known as the Pareto Principle). Just for the fun of it let's say that most projects have the same outcome, 80% benefit from 20% of the improvement. Turning that into value, 80% ROI comes from 20% investment - as opposed to the other side where only 20% ROI comes from a massive 80% investment.
So 80/20 gives you a 4 times payback whereas 20/80 gives you a measly 0.25 payback - I know which bank I would invest in.
The challenge of course is identifying in the project planning stage where that truly valuable 20% improvement goldmine actually is.
Do that and your project will soar with the eagles.
I am a big proponent of the 80/20 rule (officially known as the Pareto Principle). Just for the fun of it let's say that most projects have the same outcome, 80% benefit from 20% of the improvement. Turning that into value, 80% ROI comes from 20% investment - as opposed to the other side where only 20% ROI comes from a massive 80% investment.
So 80/20 gives you a 4 times payback whereas 20/80 gives you a measly 0.25 payback - I know which bank I would invest in.
The challenge of course is identifying in the project planning stage where that truly valuable 20% improvement goldmine actually is.
Do that and your project will soar with the eagles.
Thursday, November 16, 2006
BI is nothing without process focus
We hosted the BPMG Sydney Chapter meeting this evening and there was some spirited discussion on a range of topics - the one that tickled my fancy was a forceful statement from a Professor in academia.
" BI is nothing without process focus" - and it rings so true - in fact I have blogged it separately here. You can measure to your hearts content and configure dashboards and guages and graphs and "top 10's" until you are blue in the face but until you link the data source to process and the decision outcome from the metrics back to process they are all pretty meaningless.
If you are going to build a BI capability then it may be wise to consider the various levels of KPI applicabale in the business. There will be the strategic KPIs pointing to market share, territory volume sales etc, then there are the process group style KPIs such as inventory management etc, and then there are the individual task KPIs such as supplier invoices with POs declared, DIFOT ratios etc.
When looking at KPIs you need to know how they interrelate to each and what the actual value chain of the business is. Then as the metrics show signs of offending benchmarks you know where to go looking down the line for the problems - and those problems will always be process issues. You have to link performance and process together for both a healthy, wholistic view of the business and also to know how to react when things show signs of stress.
My B-Performance-M = B-Process-M hypothesis was reinforced.
" BI is nothing without process focus" - and it rings so true - in fact I have blogged it separately here. You can measure to your hearts content and configure dashboards and guages and graphs and "top 10's" until you are blue in the face but until you link the data source to process and the decision outcome from the metrics back to process they are all pretty meaningless.
If you are going to build a BI capability then it may be wise to consider the various levels of KPI applicabale in the business. There will be the strategic KPIs pointing to market share, territory volume sales etc, then there are the process group style KPIs such as inventory management etc, and then there are the individual task KPIs such as supplier invoices with POs declared, DIFOT ratios etc.
When looking at KPIs you need to know how they interrelate to each and what the actual value chain of the business is. Then as the metrics show signs of offending benchmarks you know where to go looking down the line for the problems - and those problems will always be process issues. You have to link performance and process together for both a healthy, wholistic view of the business and also to know how to react when things show signs of stress.
My B-Performance-M = B-Process-M hypothesis was reinforced.
Thursday, November 09, 2006
Talk about an NAO headache
I've covered New Account Opening here before and the other week I had a meeting with a client that has a monster NAO headache. They are a global organisation running a centralised implementation of SunSystems with 200+ separate operating entities in the enterprise.
Many of the businesses operate in common territories so the rationalisation and management of suppliers is a fiscally and administratively sensible strategy. Easier said than done of course because after you have decided to trade with a new supplier you have a monster job to update all the relevant businesses in the territory with a great potential for human error - oh, and did anyone mention SOX compliancy?
Workflow for SunSystems to the rescue - they "get it" and they got it and they are rolling it out for Christmas!
Browser delivered process automation for core operational tasks like this is a no-brainer. It covers all corners of the threat trinity - risk, cost and compliance. The install is quick, the uptake is quick, the wins are quick and the ROI is a pleasure.
Many of the businesses operate in common territories so the rationalisation and management of suppliers is a fiscally and administratively sensible strategy. Easier said than done of course because after you have decided to trade with a new supplier you have a monster job to update all the relevant businesses in the territory with a great potential for human error - oh, and did anyone mention SOX compliancy?
Workflow for SunSystems to the rescue - they "get it" and they got it and they are rolling it out for Christmas!
Browser delivered process automation for core operational tasks like this is a no-brainer. It covers all corners of the threat trinity - risk, cost and compliance. The install is quick, the uptake is quick, the wins are quick and the ROI is a pleasure.
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