Experiences

KPI Based Business Transformation Practice

Essence of this is involved in As Is analysis. It is comprised of collecting, clustering and normalizing the enterprise KPIs. Clustering means, group the related KPIs & normalizing means recast them so that they can be compared against the standard set of them. Then they are bench marked against the best in class & the median. The difference between the best in class & the As Is, is the delta that represents the opportunity for improvement. This process starts with the enterprise's top level KPIs & goes all the way down to the operational areas of the organization that needs to be studied. For example this could be the Supply Chain, the Shop Floor or the Product Design areas of the company. Also the scope has to be predetermined with respect to which divisions of the company need to be studied.

The establishment of the delta i.e. delta = Best In Class KPI- As Is KPI can be as simple as a discussion of the stake holders with our participants or could be as deterministic as the work flow model based. The techniques of WFM perfected by Sam after years of experience deterministically establish the activity time and activity resource that is spent on a given function and what fraction of it can be taken out. What you take out is the improvement which becomes the basis of total improvement. Then the improvement can come by Cost Reduction or Value creation.

From delta estimation the next stage is to map on each item of improvement the enabling technology. This step is followed by Business Blue Printing.

BBP is essentially Program Planning, which includes enumeration of technologies, resources, time & cost estimations. However, this effort begins by mapping the enabling technology requirements on the solution maps. This activity if taken to 3rd level of the solution map it is capable of generating fit or gaps, provided the future requirements are developed in enough details. Requirements development is based on the organizational needs developed during the Opportunity Assessment phase and also the knowledge of the drivers and trends of the IT technology on part of the OA consultant. This ensures that the IT strategy envisioned is not going to be short lived. Once the client Solution Map is ready the rest is detailed program planning, involving the estimation of Time, Resources & finally the Cost.

Discussion on the pros & cons of this approach

The main feature of this approach is that it is fact based and is not arbitrary. Hence the managers & other participants who are to work hard to deliver the results can buy the directions & quantum of improvements much more easily than an arbitrary edict of the boss.

With the same token a hard nosed boss who wants to achieve the best needs to know what is the Best in Class today. Some may even want to beat that but they need to know what to beat and this activity ill tell them in spades where they are & what is the best. The rest is up to the boss to pick & drive the organization.

In this our role is to establish As Is & the best in Class and advise based on our experience that the goals that are set up are high but achievable. If there are theoretical impossibilities they are pointed out & saves the organization some wasted motions.