Process Excellence – KnowledgePath Consulting, Inc.

Achieve the value of an agile business

October 29, 2018October 29, 2018
by David Warford

The value of agility in business is clear, but to achieve this, you must take the right approach.

An agile business is able to anticipate market shifts and make operational changes quickly. It can create opportunities, change where appropriate, and deliver value to its customer faster. It’s a company that shares data through enterprise-wide systems integration. A major component of the agile business is modernized technology. This provides data visibility and analysis, which develops sharp reflexes and yields smart decisions across every functional area of the organization.

The people factor in an agile business

While technology plays a significant role, the systems you use are simply tools for building an agile company. They are not what drives agility. The drivers are your people and processes. Even the best technology can’t overcome a weak team and poor processes. A nail gun is faster than a hammer, but merely using it doesn’t make you a master carpenter.

Yes, this is a 180-degree change in thinking from just a few years ago when technology was the very foundation of business operations. At that time software was notoriously inflexible, which wasn’t a problem for standard processes. But every business has proprietary processes that traditional software solutions do not handle well, leaving them with few options.

When such business processes fall into the category of “must keep” a company faces the following choices:

Change the processes to fit the functionality of their current software
Customize their software so they can keep the processes as is
Execute the processes outside of their core systems

None of these options are optimal, yet until recently, companies have been forced to pick what they deem to be the lesser of the evils.

Process and agility

This requirement to make do with a less than optimal technology environment is no longer the case. Companies can now employ process-driven technology, an environment where technology is fit to the processes, rather than the opposite. This one advancement is giving companies the ability to establish and sustain competitive advantage.

The key to an agile business

The speed at which a company can change its processes to take advantage of shifts in the market is a measure of its agility. Companies that make the 180-degree turn, shifting theirs to a well-rounded environment maximizing people, processes, and technology, will not only be in a position to optimize processes today but will assure that they are agile enough to continue to drive the most value from them regardless of how or when the market shifts in the future. Today’s ERP software is ready. You need to ensure your people and process are ready as well.

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Business Transformation

Are requirements enough?

February 26, 2018October 19, 2018
by David Warford

The value of process mapping before an ERP purchase

In rare situations, a company can successfully choose an Enterprise Resource Planning (ERP) system on technical requirements alone. However, for most companies, the decision to incorporate a new ERP into an organization should be a piece of a larger plan that includes process mapping – it shoudn’t be the lone goal.

In a previous post, we referred to companies who, unintentionally, “bought the demo”, where several features of a new ERP resonated with an organization’s current processes, but the new system did not solve many existing problems.

When an organization decides that their ERP system is no longer keeping up with the company’s ability to execute its goals, this becomes an opportunity to take a full-scale look at the business. Think of it as the difference between taking your car in for an oil change and going in for a tune-up. An oil change is a maintenance activity to make sure everything can run smoothly, similar to authorizing a software update for your current ERP. With a tune-up – which occurs far less frequently – more systems are checked for operating efficiency.

An ERP implementation isn’t solely about making sure information flows through your organization properly. It’s also about making sure that production flows efficiently and positioning the company to work from a place of agility – which translates to a place of strength.

Take the time to do it right

Take the time to map your current processes. What are the steps that you have to take from start to finish for order entry through order fulfillment; from product conception to marketable item; from prospect to customer? How does information flow through those processes, and how do your employees interact with it?

Discuss the pain points that come from those processes with your workforce. KnowledgePath consultants have witnessed many a-ha moments with our clients during such discussions. Often, many of the “normal” tasks employees perform are the result of work-around solutions to your current ERP. They’re not trying to take five steps to perform a simple task – their current tool has boxed them into spending fifteen minutes to do what feels like should only take five.

The benefits of this exercise – while time-consuming – offer a large return on investment toward understanding the inner workings of your organization. Regarding the primary objective of securing your next ERP, you will begin developing a thorough list of product requirements you need to see from ERP vendors, which increases the chances of you choosing the best system for your needs the first time.

Identify important gaps

You can identify the information gaps in your current system. “I would like to do Process A, but without Information B that seems impossible.” In the real world, that can sound more like, “When I need to drop a rush order into production, I would like to be able to rearrange the schedule with as little impact to other deadlines as possible. Currently, I use my best guess based on experience, but a scenario analysis tool would make the decisions go faster with fewer errors.”

Mapping your processes is also an opportunity to help minimize issues associated with change management. A new system will be simultaneously exciting and stressful. If you’ve involved your front-line employees in the process of identifying your needs, then you have given them a voice in the process and a greater sense of buy-in.

Finally, if this exercise seems logical but the thought of going through a digital transformation is intimidating, then consider this: what I have described above is a big part of a successful digital transformation. Digital transformation is simply moving away from unnecessary manual and paper-based processes. Mapping out what you do now will allow you to step into a better, faster, and more agile method of doing business, and that will make you more competitive into the future.

Business Transformation

Change Management a.k.a. Risk Management

March 27, 2017October 19, 2018
by Bill Lewis

Who needs Change Management when you have shiny new technology or streamlined processes to solve your business woes? New, more advanced ERP systems promise streamlined workflows, decreased manual workloads, increased efficiencies… the list goes on and on and on. Process Excellence promises many of the same results. Then why do well planned and carefully executed projects so often fail?

While there are many reasons and risk points that occur throughout a project, there is one that must always be addressed for a project to experience success: Change Management. The workforce must undertake a fundamental shift from an old way of working to a new one. We often hear the words “sustainable,” “enduring,” or “lasting” when an organization makes a strategic decision to invest in a technological or process advancement. The harsh reality here is that you are at risk: at risk of a minimally less ROI, or potentially total failure, due to the most impactful asset you have becoming “unreliable.” That asset being the people, even the person, assigned to enact the change.

Without Change Management, or better said, Change Leadership, the new technology will never be used to its best capabilities, if at all. Processes will revert to old habits, and the company will have wasted time, money, and resources on something that was designed to save those very things.

To accomplish this shift effectively, organizations need to take a systematic, ideally incremental, and intentional approach.

Reduce Risk

Making the shift from working with a cumbersome, frustrating system to a newer, efficient one isn’t an easy task. A large part of this is that while real change may be observed at the level of the organization once it is in place, the real change happens at the level and pace of the individual. Simply stated, “change is not at the pace of the leader, it is at the pace and will of the individual enacting the change.”

When the individual is communicated with and educated, the likelihood of buy-in with that individual increases. They then can make the choice to be “on-board” and even advocate to others. Add in a well-structured Change Management plan, and your chances of real change go up even higher.

On the other hand, without this plan in place, risk of a failed project increases quickly. Not only will the workforce resist changing to a new way of working, but there are many other hidden risk points. Morale will go down. Engagement will dilute. Efficiency and productivity will decrease as individuals spend more time commiserating with each other. Absenteeism and turnover will increase. All of these issues are a hidden cost to a failed project. All of which can be reduced or even eliminated with the right Change Management program in place.

To help you reduce this risk, we will be publishing a series of posts with points designed to help you get on track with a successful Change – or Risk – Management program. To ensure you don’t miss any of these posts, feel free to sign up here to receive a quick notification when they’re published.

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Continuous Improvement

Business Process Excellence – Where to Start?

March 20, 2017October 19, 2018
by David Warford

So your organization has decided to embark on a journey towards Process Excellence. Perhaps you are contemplating a new ERP or other enterprise software solution. Or maybe you are trying to position yourself for a merger. Or maybe your business processes are a mess and you simply need to end the insanity. In either case, congratulations on making the decision to embark on a process improvement path. It will lead you into the enviable business environment of continuous improvement. Now what?

It is easy to be overwhelmed by the sheer amount of work required to bring about the changes you need. Should you start with your order to cash processes or focus on operations? Do you need to close your financials sooner in the month or do you focus on supply chain? Are your customers getting the service they need? Are you closing sales efficiently? Deciding on where to start may be the most difficult decision of all on your process improvement journey.

Here are four considerations when answering the question, “Where to start?”:

1 Identify the primary reason for the journey

What is the business reason that you need a process improvement program in place? Are you cash constrained? If you need to increase profits will you focus on cost improvement, increased revenues, or better mix? Do you need faster speed to market? Are you plagued with equipment downtime, poor scheduling practices, or ineffective project management? Do you simply need to document your processes in preparation for ERP?

Understanding the primary drivers give you clarity on the areas for immediate focus. For example, one client I worked with intentionally downplayed workplace organization, which is widely considered foundational to any continuous improvement initiative, because their primary pain point was equipment reliability. So they focused on total productive maintenance first. Once their equipment reliability sustainably improved, they were able to shift focus back to the basics of workplace organization. Addressing your key pain points with your process excellence initiative maximizes your chances of making real gains for your business.

2 The name of the game: sustained, incremental improvements

Process excellence practitioners understand that the quickest way to process transformation is to sustain smaller incremental gains rather than a ‘big bang’ approach. But this philosophy is counter-intuitive to most people, especially those who are project-focused or who demand results quickly. Align your efforts on smaller – yet meaningful – improvements that can be implemented quickly, but which build upon each other to achieve the desired future state of your critical processes identified in step 1. The key here is to ensure that each gain is sustainable and is cemented in the organization’s culture. It may seem slower to implement, but your organization is more likely to achieve the gains more quickly, adjust better to a new way of thinking, and, most importantly, sustain the improvement gains achieved.

3 Don’t underestimate the organizational change effort required

Your organization didn’t wake up and decide one day to build sloppy, ineffective processes. Processes evolved over time by people trying to do the right thing. Your business process improvement initiative can easily be viewed by your team as criticisms of their abilities and dedication to your organization. It is important to build the organizational change mechanisms into your initiative to ensure that your early adopters understand and can help lead the changes you wish to see. Understanding where your culture is today coupled with comprehensive communications and a training program focused on ‘learning by doing’ are foundational to organizational change programs. Organizational change management (OCM) is a specialized skill. More often than not, it is worth the investment to work with an outside company to help you craft your OCM strategy.

4 Remember that Rome wasn’t built in a day

Business process improvement journeys are more than increasing flow; they change your organization’s culture. And organization culture change can take years – and a lot of work – to achieve. Quick, sustained, meaningful wins and a strong OCM strategy will help maintain the motivation but cannot compensate for flagging support from the organization’s leadership. Make sure your senior leadership is fully committed to making this change and has full understanding that this is not the ‘program du jour’ but a key strategy to your organization’s success. Beware of future initiatives which threaten to take away focus from your process improvement journey.

Embracing process excellence does not need to be a daunting endeavor. Focus your efforts on a few key areas, make incremental and sustained improvements to these areas, manage change, and maintain dedication to continuous improvement, and you will maximize your chances of a successful business process transformation.

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Business Transformation

Kicking off a culture of Process Improvement

February 27, 2017October 19, 2018
by David Warford

Process improvement programs can be intimidating to start. Long term solutions rarely mean a quick fix. It can help to provide a tangible event to show how these improvements can make everyday work better. Rapid development of internal expertise can help accomplish this overarching goal. Most important, it helps to build the necessary, critical mass to push a process or a continuous improvement culture throughout the organization. While it is not the best fit for every organization, it has often proven very effective and is worth consideration.

This rapid development is also called the I Do – We Do – You Do Approach. In a nutshell, here is how it works: It traditionally starts with multiple weeks of training at the beginning of the project work and typically takes four to six months for completion. The principle behind this approach is the truism “learn by doing.” The approach begins with either traditional classroom training (taking one or more weeks) or a brief strategy overview (taking perhaps ½ day) to define current state, improvement objective, project scope, etc. As implied by the name, three phases follow this kickoff:

Phase I: “I do”

Here, the expert Process Improvement practitioner (from either inside or outside the company) serves the primary role in leading a team, while those in training are primarily observers. The practitioner takes the lead role in facilitation and guides the counterpart’s team through all the project’s steps, from inception to successful implementation. The counterpart acts primarily as a “shadow.” They observe, learn, and become knowledgeable and more comfortable with process improvement tools.

Phase II: “We do”

In this phase the roles are reversed from Phase I. The Process Improvement practitioner becomes the shadow while the counterpart is now thrust into the lead role. Though in the shadow the practitioner is actively working to ensure the project’s success by meeting with the new team leader one-on-one, anticipating problems, and helping work through barriers. Part of the practitioner’s role at this point is to ensure that the counterpart is viewed in the lead role at all times, whether it be facilitating discussions, problem solving, assigning team roles, etc. The practitioner watches for unplanned occurrences and any barriers to the project’s success that the new lead might not be thoroughly prepared to address.

Phase III: “You do”

This phase is a replication of Phase II except the practitioner is no longer acting as a shadow and may not even be onsite. The new team leader is flying solo, so to speak, and is now prepared to lead a new project and deploy the necessary process / continuous improvement tools.

At the conclusion of this rapid development approach, the nearly trained team leader has significant real-world experience in the specific environment of the workplace and will have gained a deeper understanding of cost reduction opportunities and other potential improvements. It is a positive first step toward a cultural shift to continuous improvement, and it provides the organization with real, practical benefits along the way.

Category: Process Excellence

Achieve the value of an agile business

The people factor in an agile business

Process and agility

The key to an agile business

Are requirements enough?

The value of process mapping before an ERP purchase

Take the time to do it right

Identify important gaps

Change Management a.k.a. Risk Management

Reduce Risk

Business Process Excellence – Where to Start?

1 Identify the primary reason for the journey

2 The name of the game: sustained, incremental improvements

3 Don’t underestimate the organizational change effort required

4 Remember that Rome wasn’t built in a day

Kicking off a culture of Process Improvement

Phase I: “I do”

Phase II: “We do”

Phase III: “You do”