How to REALLY optimize business processes

outcomes

For anyone who has worked with Six Sigma or Lean to drive waste out of business processes, that first year or two of full commitment is exciting and often results in large type savings.

 

 

 

 

mindset

Following that it takes a different mindset.  Kate Tayler captures that well with her article about Panera Bread.

 

 

The simple line that ‘what they found was that there wasn’t one thing that needed to change, but instead “hundreds of little things” to adjust.’ tells it short and sweet.  changes

Continuous improvement will occur not with big changes, but many many little ones.  Be prepared to experiment, fail and experiment some more.  That failing more too.fail

These Six Sigma experiments are greatly improved with current and emerging analytics, AI, IoT and the speed to market of cloud services.

A lot of fun too.

 

 

 

Cannot find or afford a data scientist – yes you can.

Mr. Vashishta’s is perfectly correct in his article for Fast Company “What If The Data Science “Skills Gap” Is Just A Hiring Hot Mess?”.

Specifically his formula, Platforms + Business Problems = Required Skills could unlock a pool of candidates.puzzle key

Hire that graduate out of university with mad math skills mad mathand they will crunch and crunch, build data sets, dashboards and what insights will be drawn.  Not much.

But like Vin states find a candidate solved the business problem on the same or a similar platform before?  You likely have a person like that if not in IT, then see who is solving business problems with data in accounting or marketing.  Customer Service is another hot area for those data technology savvy folks.

Ask those candidates whether internal who know your business and processes best or outside candidates from similar industries and ask them as Mr. Vashishta would to tell you the problems, their platforms, and their data.

dataoceanYour need deeper analytics to stay competitive to find new markets, strengthen customer retention and identify new opportunities. The heavy math you can rent, but the experience and knowledge of what questions to ask and provide the measure of confidence in the accuracy/quality of existing data.

You have to look past the hyped job description of the role you need and what candidates current titles are now to what their skills fully are capable of doing to uncover the talents that are already there or nearby.hidden talents.jpg

Aaargh – stop selling me technology

That constant barrage of sales calls, emails and even that occasional snail mail or Fedex package all wanting to talk about a growing set of technologies.  Whether it be the latest software package, servers, flash, converged, cognitive analytics and on and on and on.

finance-tech

Consider the above a list of just most of the accounting technologies out there.  Multiple this by 1,000 fold for all vendors who want you as a customer.  multiple

Now multiple that by the number of companies who are focused on calling directly into your accounting, operations, marketing and other department selling them services.

How do deal with this onslaught of activity is truly incomparable to any other function in the business.  business-function           Here is a process that helps me.

No, not the one where I never ever answer my work phone.

Categorize all activities, projects and strategies around simplify, business process optimize, customer satisfaction and compliance.

  • Simplify – removing complexity from your technology delivery whether it be infrastructure, applications, access… simplify
  • Business process optimizing – focusing on profit.  Removing costs aka waste from business processes optimize
  • Customer satisfaction – my way of saying generate revenue – new net or more per customercustomer_satisfaction-650x300

 

 

 

 

  • Compliance – the one you never have a choice to do or not to do and while you wish it was otherwise always becomes the top priority whether it be PCI, HIPPA, Sarbanes or othercompliance

Not just the IT projects, but I gather input from the finance, marketing and other functions and put them in the above categories.

Finance is easy – almost all Compliance or Business Optimization.  They they are attracted to Simplify.

Marketing yes Customer Satisfaction is their sweet spot, but again Simplify can work especially if it decreases time to delivery new services to Marketing.

Over all this pushes the complexity of cloud/public/private/hybrid, analytics, mobility, security, converged, hyperconverged, SaaS, PaaS, IaaS and so on off the table and focuses your attention, the functional areas and evidentially your key suppliers on talking about business outcomes.

open-for-business

 

 

The Teeter Totter of Business Decision Management

A teeter totter is a plank balanced on a fulcrum.  Business decisions are very similar with the options management decide upon like –

RISK TEETER

opportunity teeter

There are more categories depending on the magnitude of the impact to your business.  But you get the gist.

One of the most important factors that most any decision  in business impacts is

efficiency teeter

 

 

 

– If you decide to go after market share

– you increase your sales and marketing spend

– you add staff

– you add products / services

– you acquire another company

– replace your ERP or other major software

for example…

You tend to do more than one of these together and they all impact efficiency and your effectiveness.

The critical part of all the above (and other components you are working in) is to ensure success focus on effectiveness in achieving your objective over any inefficiencies your business/staff will experience.

Laggards on your staff will passive aggressively put up speed bumps (hopefully not roadblocks) with claims of making things more efficient by slowing down a change, hedging on the depth of a resource requirement allocation and/or swamping out non-priority activities that they are more comfortable performing than the top priority actions that will directly impact the attainment of the objective.

Therefore, executive managers must pay special attention when making major changes that their measures are effectiveness focused.  Examples from expanding from the above are –

– If you decide to go after market share > effectiveness > focus on the overall budget, the attainment of market share and competitive response vs lie item budgets

– you increase your sales and marketing spend  > effectiveness > obviously it is gaining targeted or better market share and revenues

– you add staff > effectiveness > how quickly can you gain effective work from the new hires

– you add products / services > effectiveness > increase top line revenues, adding new customers, larger share of existing customers spend

– you acquire another company > effectiveness > increase top line revenue and market share

– replace your ERP or other major software > effectiveness > higher quality data collection and standard processes followed for data collection/processing

My old coach would say keep your eye on the ball which is what effectiveness is in the end.  Yes, you could have a more compact swing, better hip turn to use your legs more and quieter hands to improve your hitting the ball.  But, first and foremost, KEEP YOUR EYE ON THE BALL!

 

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Rule #2 – There is always more money, there is never more time.

 

The phrase ‘time is money’ holds evermore true in the global economy where time zones have been removed as constraints to commerce. Even in our global depressed economy there is not fair balance between time and money.

Regardless, of your time management techniques, methodologies or process discipline you cannot –

  • Create

  • Save

  • Make

  • Manage

  • or Control

TIME.

Anyone who professes to, is comparable to someone saying they can change the past or make a pitcher throw a strike in the instead of walking that first batter in the bottom of the ninth. Sorry, a distraction there regarding the current playoffs. However, you can create, save, make, manage and control MONEY. You can use what money you have now to make more. You can use save the money you have now to use later. But, most importantly, you can use money to have an activity take less time by getting the right expertise, quantity of staff or tools. So, to restart – there is NEVER more time, but there is ALWAYS more money. Yes, even now.

This statement about money and time, I have used during my career to help guide me on decisions. Whether the decision regarded hiring, firing, budget allocations or what client to work for or not. It is part of my value system. If you do utilize this value statement as I have, you must accept the following explanation of the statement.

What is money? In business, money is the item we use to exchange for our goods or services. Money can be cash, receivables (billed, not paid), a credit line, an asset, a loan or an investment. The business invests all of the previous lists of money in people, facilities, equipment, raw materials, services to vendor and taxes, of course. These investments are planned, analyzed, considered, debated, refined, measured and tracked to grow a business. At times, the investments may be to forestall a competitive advance or meet a government or industry compliance requirement.

Even if the investment decision is to meet a compliance requirement, it is still made and the money spent to help the business grow, as begrudgingly as the money is spent on this compliance, it does so to allow it to continue to grow. The balance between the money spent and the growth achieved is the challenge every business struggles to be on the positive side. Tracking, measuring, forecasting, budgeting, banking, reporting and so on all about money. Upwards of 80% of a businesses reports are configured to report currency. How much money did we spend, get back in return (ROI) and/or what advantage did the money deliver.

Now what is time? Regardless of business or non-business, time is only the now or later. Today or tomorrow, this week or next, this year or 10 years from now are other ways to say it. But, they all mean now or later. We could get into Einstein’s theories on time, but for me there is right now or later. Time can be measured and tracked. The amount of time can be planned, analyzed, considered, debated, and refined. Some investment of time is always needed when there is an investment in money.

However, this where the large difference in money and time, time and money comes to light.

You have up to 80% of reporting in a business regarding money, that leaves only 20% for time, but in truth time reporting is 5% or less. The other 15% is made up of reports on material, people or facility quantities. So with all this attention, prioritization and focus on money, does business consider time as a major component of their decision making?

Most do not consider time as a major component, more as an afterthought. To use my value statement of ‘There is always more money, never more time’, a business must make time more than an afterthought.

More money can be made, found, borrowed, heck even stolen

Legal Disclaimer – I do not recommend, condone or suggest that stealing is acceptable, ethical or something you should do – so no blaming me for getting caught

, but time cannot be made, found, borrowed or stolen. The phase ‘make more time’ is false. An allocation or assignment of more future (later) time is possible. But, a there is no way to make or give more time. This is the important basis to use this statement as part of your value system in making decisions.

The final point here is that spending the correct amount of money, on the correct material or service at the correct point in time can reduce the amount of later time a business uses to attain some growth. A project the business decides to spend money on and to hire expert consultants to perform part of the project, reducing the ‘later’ time the project will take to deliver the return on the money investment or a business decides to spend more with a local supplier to ensure ‘later’ time deliveries have a higher likelihood of on time delivery. The important part here is to create metrics and reporting that validate that the ‘later’ time was saved based on what you value time as, thus back to money. Time is worth money and money is worth time – a business needs to consider both equally.

What do I want to say – that spending money is almost always worth it if you can reduce future ‘later’ time.

What do I want to people to do – start considering time more when they make decisions, especially on where to spend money. How much ‘later’ time will this money save if I spend it now versus spending it when ‘later’ comes.

Especially, when you consider a proposal and decide to cut a component of the proposal to make the proposal fit into a money constraint. Take the time to consider what that reduction means when the future comes around and you may need to spend that small amount of money you cut anyway. Yes, you may not have had to spend any more money, but I would put a dollar of my money over a minute of my time that decision cost you twice as much time.

Time is just as easy to track as money.

Ask yourself how much of your decision making data includes time oriented information.

Project Management – Complex or Simple – how to be both…

Let’s implement project management, and the crowd goes wild. What that is not the response you have experienced at your organization. Well, why is that? Like eating more vegetables, fish and drinking more water has a wealth of evidence that it is will provide a benefit to your health. A good, standard project management process will clearly benefit an organization’s top and bottom lines.

I wrote last week about aggressively killing failing projects to improve project success. This spurred a discussion with a colleague of mine about why organizations continue to resist project management. Other processes are resisted, like all change. However, project management seems to have a place of it’s own. Is it because it often comes out of the IT function? Us IT folks, like engineers, like the way end-users have to clearly define their needs before starting that a project management process requires. Thus, other function areas see it as a IT and not a corporate process.

Perhaps it is because other functions do not have as many cross-function activities (aka projects) as IT. Yet, I suspect another issue is at play here.

Go through a Project Management Institute certification training program and the details of the processes covered are deeply complex and very very comprehensive. Add to this a project management software that is just so intuitive with work breakdown structures, resource allocation sheets, Pert and Gantt charts. From a non-IT or non-engineering perspective this level of complexity and comprehensiveness is tautological and protractive.

Other processes that are introduced in a business use the baby step method of initially simple and intuitive, then as staff develop expertise, more complexity and comprehensiveness is added to expand the effectiveness of the process. A purchasing process starts off with a simple request form, than adds multiple quotes, perhaps a multi-vendor electronic catalog, tracking to budget lines and in the end could be like Amazon with recommendations of what others have purchased when they requested similar items.

However, a project process often starts off as highly complex and comprehensive. An immediate reaction would be, whoa, if it is this complex now, what is the process going to be like when we get good at it. Resistance is instinctive. Along with aggressive killing of failing projects, a strong communication that as staff and management get ‘good at’ project management, the process does the reverse of most other processes do.

The process relies less on complexity of intense detail scoping, project planning, cost estimates, change control and parametric analysis, along with the comprehensive recording of activities at the lowest task level. The process relies more on a staff’s expertise and intuitiveness.

If acquiring new businesses is a rarity, the complexity and detailed comprehensiveness of a formal project management methodology reduces the risk and improves the success of an activity that staff is inexperienced in performing. Now for an activity done often, say new product release, once the project process is introduced, commit to the full complexity and comprehensiveness for the next 2-3 product releases. Than leverage the experience and intuitiveness of the project teams success and failures to reduce the risk.

In short, project management process reduces risk. For new or rarely done activities, stick with complex and comprehensive. The same project process can be simple and intuitive for activities an organization has a wealth of experience performing.

Combine aggressive killing of projects with an equally aggressive approach to make the process simple and intuitive for greater project success.

Attain Business Process Improvement without a new ERP

When considering a return on investment for the major purchase of a new ERP system, the top ROI item is always the best in class processes that your organization will be able to adopt with the new ERP and the productivity improvements that will generate increased profitability. With the current economic conditions many companies are putting their ERP projects on hold. Extending the life of their current ERP, CRM and other bolted on solutions. While putting the new ERP on hold allows the company to save the capital investment dollars, it does not provide the high return that improved business processes deliver not just to your bottom line, but to top line revenue growth an improved customer relation process will deliver.

What if you could attain a large part of the process improvement, with your existing ERP. Consider with current Web 2.0 and Business Process Management technologies you can map your current business processes, compare them to industry best practices and integrate with you existing ERP solution. Leveraging both innovative new technologies and your fully depreciated existing technologies. This effort still requires capital investment, but the investment can be at a much smaller initial investment and deliver immediate return within 1 to 3 months versus 12 to 24 months in a full ERP implementation.

To gain productivity improvements that will deliver to your bottom line, business process transformation is key. To protect your top line revenue through improved customer processes that link you closer to your customers you need to transform your processes to differentiate yourself from your competitors. Re-evaluate successfully attaining your ERP project goals and objectives through an exploration of transforming your business processes while still keeping your existing ERP.