evaluating the impact of improvement projects
DESCRIPTION
These days, every cost is challenged and every investment now needs more levels of sign off. The ongoing investment in an operational excellence effort is not exempt from these pressures. Even for those businesses where the opex function delivers value every year (Avis - $70m dollars every year), everything is questioned. The challenges faced are as follows: Which projects do we focus on and how do we decide that? How do we know if project activities are actually contributing to improved business performance? Finally, how do we best track and report on improvements? To be successful then, the VP of Operational Excellence needs a way of capturing the real objectives and how these will be measured at all levels of the organization. He/she needs a co-ordinated plan with all activities linked to business performance triggers and a way of managing performance against clear KPI's. In the absence of a clear system for goal cascading, the following issues are likely to be encountered. Goals are likely to be incomplete. In addition some of them may well be contradictory. Some goals will be well supported by projects, others will have little focus on execution. A big step forward is to have clear leading indicators in place. Most organizations are still using lagging measures almost exclusively. This provides no time to make early adjustments when problems arrive. It's like driving by looking in the rear view mirror. This is one of the real benefits of a solution like i-nexus. A good strategy execution system will do a minimum of 3 things: 1) Develop execution capability throughout the organization through the transparency engendered. 2) Provide real ongoing focus on execution through the visibility of progress in real time 3) Develop ownership throughout the business through accountability The ROI of improvement projects is easy to determine with the right tracking. What is less easy (but more important) to do is to determine the impact that the projects have had on the actual implementation of strategy.TRANSCRIPT
Most managers are under pressure to define, measure, track and report actual performance gainsfor their improvement initiatives.
Evaluating the Business Impact of Improvement Projects
Evaluating the Business Impact of Improvement Projects
Paul Docherty - i-nexusGeoff Rinaldi – Tranzform Group
13 March, 2013
Issue #1
There is often not a clear understanding of thereal objectives
Problems
Solutions
“Success”?
Issue #2
Hard to know on a day-to-day basis if project activities are
improving performance
“Success”
Project view
≠Business view
Issue #3
Difficult to track and report on performance improvements
Budget cuts
≠Efficiencies
Three essential things for success.
A way of describing your real objectives and how success will be measured at all levels of your organisation.
A co-ordinated plan with all activities linked to business performance triggers
A way to manage performance of activities and projects continuously against the agreed measures.
Translate your high-level goalsinto actionable priorities thatare meaningful to individuals
Success essential #1
“We must improvecustomer satisfaction.”
DEPARTMENT HEAD
“We must reduce rework.”
OPERATIONAL MANAGER
“Customer complaints must be reduced.”
SERVICE EXECUTIVE
“I must input the right details first time.”
INDIVIDUAL CONTRIBUTOR
1.1 Capture the Goal Cascade
1.2 Set Targets For Improvement
Focus on the essential activities for achieving your desired
business results.
Success essential #2
“We must improve customer satisfaction.”
DEPARTMENT HEAD
“We must reduce rework.”
OPERATIONAL MANAGER
“We must reduce customer complaints.”
SERVICE EXECUTIVE
“We need new procedures.”
ACTIVITY
“We must develop a training program”
SKILLS PROJECT
“We need an input checking process.”
SERVICE PROJECT
2.1 Identify the Essential Activities
2.2 Plan/Task Out the Essential Activities
Create a reporting structure that gives visibility that your activities
and projects are actually providing the results you expect.
Success essential #3
BUSINESS GOAL
“I can see improvement in customer satisfaction.”
DEPARTMENT HEAD
“Customer complaints are reducing.”
SERVICE EXECUTIVE
“Rework is reducing.”
OPERATIONAL MANAGER
New procedures implemented.
ACTIVITY
Training program delivered.
SKILLS PROJECT
Input checking process completed.
SERVICE PROJECT
3.1 Track Progress Towards Goals
An email is received with an attached PDF report.
The attached top-level report provides executives with detail of individual
Business Unit Performance.
From the top-level report, the executive can access
each "Bowling Chart" (without needing to log-
in)
The executive can click drill into reports to see
metric detail, action plan progress or any
countermeasures
3.2 Generate Reporting That Focuses on Results Not Just Progress
Three essential things for success.
A way of describing your real objectives and how success will be measured at all levels of your organisation.
A co-ordinated plan with all activities linked to business performance triggers
A way to manage performance of activities and projects continuously against the agreed measures.
www.tranzformgroup.com
Follow-up....
www.i-nexus.com