From Reactive to Proactive: Making BI a critical resource in performance improvement - Presented by - The Business Intelligence Special Interest Group Technology Association of Georgia - Speaker - David N. Williams Principal, Williams Alliance International

© 2003, Williams Alliance International. All rights reserved.

FACTS: 92% of Senior Managers report critical or important need to improve performance management (The Economist, Price Waterhouse Coopers) Strategic change is cited as the greatest challenge of the 2000’s (Booze, et.al. research paper) Less than 35% of Senior Managers base decisions on internal corporate data (EDI research paper) Greater than 90% of all strategic change efforts fail (ASQ, DM Magazine, etc., etc.) From Reactive to Proactive:

What is BI? Show potential optimal intersections of sales, marketing, finance, and supply chain functions -or- Decision makers’ resource for managing change –How are we doing? –Do we need to change? –What needs to change? –How do we change it? –Did it work? –Did we hold onto the gain? From Reactive to Proactive:

Greater than 80% of all strategic change efforts fail. Why? –Loss of priority –Lack of buy-in –Loss of focus –The organization chart –Failure to manage results –Exhausted resources –Bad changes From Reactive to Proactive:

Operationalizing and managing change through the org’ chart is ineffective: From Reactive to Proactive:

Managing performance and change through the strategic processes: From Reactive to Proactive:

Strategic processes Create/deliver vital products and services Critical to competitive position Directly link to bottom line High impact on customer satisfaction How customers “see” the organization Always cross-functional Core and support processes From Reactive to Proactive:

Exercise: Objective: Identify six to ten strategic processes in your organization or a client Organization Total time: 20 minutes Steps: 1.Identify the organization 2.Identify the key products and/or services 3.List the six to ten processes that meet the criteria (there can be as few as four, not usually more than ten) 4.Share your results with those at your table 5.Share your results with the rest of the group.

Notes: Organization: Key products/services: Strategic processes:

From Reactive to Proactive: Strategic processes are usually disjointed and unrecognized

Strategic processes are real: Begin End Key outputs Capable Consistent, predictable, and predictive (should be) From Reactive to Proactive:

They are measurable: Cost Operations: how much, how often, how long, how efficient? Quality –do key outputs conform to requirements? –how much variation? –is the process capable?

Trailing: –Financial –Market –Customer satisfaction –Audits Driving by the rear view mirror From Reactive to Proactive: They allow forward looking metrics: Forward looking –Operations –Suppliers / input –Process capabilities Knowing the outcomes

Internal: –Process –Costs –Risk –Operations From Reactive to Proactive: They add internal metrics to the equation: External –Customer satisfaction –Market –Competition – Profits

Process management metrics: Cost, quality, operations Do strategic process key outputs conform to requirements? Average and variation, over history. Is the process capable of delivering key outputs to requirements? Do the pieces add up to the whole? What is the impact of suppliers, functional groups, manufacturing sites, on the process and outputs? Links to external data From Reactive to Proactive:

Cost of Poor Quality: The sum of all costs that would disappear if there were no process or quality problems –Internal failure costs (scrap, rework, downtime, yield, etc.) –External failure costs (Complaints, returns, allowances, etc.) –Appraisal costs (inspection/test) ≈35% of operating costs in an unimproved operation

From Reactive to Proactive: Gathering metrics up-stream $$$ Q #s Op #s

From Reactive to Proactive: Change management: –Do we need to change? Strategic directions Competition/market Customer satisfaction Costs Process –What is the objective? –How do we get buy-in? –Which strategic process(es) will have greatest impact? –How big is the change (in measurable terms) –Are we there yet?

From Reactive to Proactive: Change analysis : –Where and what about the process needs to change? –Is the process capable? If the process isn’t capable, no amount of debugging or problem solving will make it so. The process must be redesigned. –Flexible, creative data creation and consumption History Experiments

From Reactive to Proactive: Process Capability: Is the process capable of creating and/or delivering products and services to customer requirements?

Leadership Management Detailed Design and Test Ownership © Williams Alliance International, 2001 ® Campaign and Campaigning are registered trademarks of Williams Alliance International From Reactive to Proactive:

Generic strategic processes Manufacturing –Order fulfillment –Business resource management –Design of new product –Customer life-cycle service –Service call –Employee development –Strategic planning –Financial planning –Material management

From Reactive to Proactive: Speaker: David N. Williams Principle and Executive Consultant Williams Alliance International

From Reactive to Proactive: References: Strategic process management Williams, David N., Mining the Middle Ground: Developing Mid-level Management for Strategic Change,, Boca Raton, St.Lucie Press, 2001 Measurement and process capability assessment Montgomery, Douglas C., Introduction to Statistical Quality Control. 4th ed New York: John Wiley & Sons, Inc Wheeler, D.J., and R.W. Lyday, Evaluating the Measurement Process 2nd ed., SPC Press, Snedecor, George W., William G. Cochran, Statistical Methods, 8th ed., Iowa State University Press, Cost of Poor Quality Godfrey, A. Blanton and Juran, J. M Juran's Quality Handbook, Fifth Edition, New York: McGraw-Hill, 1999 Process Analysis Brassard, Michael, and Diane Ritter, The Memory Jogger II, Qoal/QPC, 1994 Imai, Masaaki, Kaizen: The Key to Japan’s Competitive Success, New York: McGraw-Hill, 1986

From Reactive to Proactive: Notes:

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