Stats

Sunday, November 20, 2011

Business Performance Model

Syed Suhail Ahmad Great analogy Lisa. Thank you.

iGraphix Guides

Title Description
Transforming transactions Implicitly transform transactions as they flow through a process.
Transforming transactions with attributes Use attributes to explicitly transform transactions as they flow through a process.
Routing transactions by attribute Route transactions depending on the value of a transaction attribute.
Transactions that renege or abandon Model transactions (e.g. calls) that abandon if they wait too long in a queue.
Batching transactions by time Make transactions wait until a specific time of day before being processed.
Simple branching and joining One method for branching transactions that are later joined back together.
More branching and joining Three methods for splitting transactions for parallel processing then joining the transactions later.
Controlling one flow with another Model process behavior using scenario attributes that control the process flow.
Stopping transaction flow When necessary, one flow can stop related transactions moving through another flow.
High priority transactions Model transactions that have priority over other transactions.

Modeling Resources

Title Description
Acquiring and releasing resources Acquire and hold a resource to perform multiple activities on a transaction.
Department dedicated resources After a transaction acquires a resource always use the same resource in the future.
Scheduled and unscheduled downtime Model resources that are periodically unavailable due to scheduled maintenance or random breakdowns.
Schedules and shifts Model separate pools of workers in the same department with different work schedules.
Resource contention Define separate process flows that contend for the same resource.
Part time resources Define and use resources that are only available for a portion of the day.

Analysis and Reporting

Title Description
Analyzing cycle and service time Report both cycle time (which includes inactive time) and service time (which excludes inactive time).
Eliminating warm-up time Gather simulation results after a startup and stabilization time period has elapsed.
Analyzing costs Report and analyze process and activity costs in order to maximize profits.
Measuring part of a flow Use monitors to focus analysis and reporting on a small portion of the process map.

Additional Tips

Title Description
Modeling hierarchy Create hierarchical process models where activities call subordinate processes.
Modeling activity capacity Model special activities that have limited capacity not related to worker availability.

Saturday, November 12, 2011

Business Performance Model in contrast to an Outcome Model

Best Case Goal and Target
A business performance model serves as the ideal state for any organization, you need this to lead your organization as the baseline against others in the industry. 

Actual Performance
An Outcome model gives us "the actual state" of the organization providing the basis for how the implementation of the management decision making process translates into operational execution.  

Does the organizations Business Performance Model, enable effective management decision making?

You have your 5 capabilities; application of the current strategy objectives would enable the outcome model.   

A company has just defined the next years strategy;
  • 3 strategic priorities for an organization
    • Workforce Development
      • Enable a diverse and inclusive work environment
      • Grow your employees through focused development
      • Enable connected business decisions
    • Social Responsibility
      • Retire legacy applications to reduce power consumption
      • Give back to your local community by growing your public sector presence 
      • Enable a resilient technology through enterprise architecture
    • Quality
      • Align Enterprise Business Data to ensure measureable quality outcomes
      • Enable effective measurements for the business management system
      • Improve the re-use of information to improve the quality of the information assets
A group of managers are asked to take a survey on their priorities for executing the strategy based on their decision making authority; 

1. What is your lowest priority in recruiting new talent? 
  • The lowest priorities based on the survey response
    • Diversity and Inclusion 
2. What is the most important requirement you have for a candidate? 
  • The ability to get along with other teammates and extended teams
3. Out of 10 total qualities you expect in a candidate, the lowest priority for you is?  
  • The ability for a candidate to influence others


How does this make my point?

Let's look at the last response, least important priority for any candidate.
  • Ouch-you want them to get along but not build relationships.  
  • Generally-getting along means constant consensus.
    • Diversity and inclusion indicates many things.
    • For the purpose of this point of view-assume a diverse way of addressing an issue.
    • Different skills sets that don't exist in the team would be like the point prior but unique too.
    • How do people in consensus driven organizations typically respond to another point of view? 
I believe this will be either a barrier to communication or an opportunity for your team to grow.

If the strategy was to align with the above listed 3 priorities?  Each of the three have a diversity component or way to extract and build your team.

Each of your resources could close or collectively meet the very first item on the performance plan.

Instead, your hoping that they get along in your area of responsibility.



Friday, November 11, 2011

Worst Case Scenario

Worst Case Scenario

When you have an annual planning exercise and you've kicked off the expectations.  Executives define the corporate strategy. 

The management must align their vision, strategy and execution plan in a way that measures against the Business Performance Model. 

In a worst case scenario, you have two different understandings of the purpose of the strategy.  Your people lack the same understanding of the expectations your trying to execute.  

Here's an example of a worst case scenario.

Managers priorities

-Different ways of viewing the world from a gender perspective.
    A women in Enterprise Architecture could the hardest thing you ever do. 
-Barriers to Communication-prevents any chance of success for the new employee. 
    -People who have different opinions and new points of view.
-The executives talk about the competitive advantage, in your organization the leaders have turned into a buzz word representing Big Data. 

Measure the Cost of Poor Quality

Cost of Poor Quality

  1. Adjustments made to revenue on a prior period
  2. Adjustments made manually through offline systems
  3. Daily adjustments in offline systems
  4. Many unused service items
  5. How many people report service contract issues?
  6. How much effort does it require to handle the issue?
  7. How many people have to be involved?

In the worst case scenario...
  1. You could have an entirely different process path
    1. 80% of this effort would be waste
    2. 80% of these transactions introduce errors on audit reports
  2. Your original transactions have defects that would be non-conformance defects
  3. Your 80% duplicates become the evidence of poor accounting practices
    1. Your accuracy on your financial statements becomes 20% accurate 
    2. Your risk becomes 80%
    3. Your operational cost become twice the norm making you less profitable.

12 month service contract financial practices

The rule on any service contract, when your customer wants the service free to win the deal.
 
How do you apply a rule to service on product or software?  
Generic rules around the percentage of service to product on an annual contract uses a 15-20% allocation of the total offer revenue. 
 
Create a set of service items with financial charge account codes to apply the appropriate business unit credit against the transactions created with the item in the offer. 
 
The item would trigger a percentage of the overall offer to a service account into the contract system, by marking the item template indicators.
 
Example;
Write to install base? Yes or No
Invoice item?  Yes or No
Eligible for renewal? Yes or No 
 
Transaction behaviors
  1. The item template would represent a single year with a quantity 1
    1. 1 year of coverage. 
    2. 12 generic objects make up the item composition 
    3. The template is a generic service item
    4. The programs will change based on the offer the item is sold in.
      1. The programs will not change the item, the systems managing the campaigns will assign an activity code to the offers in the transactions.
      2. Not forcing unique items in the systems
  2. The coverage begins after the customer downloads or registers the products.
    1. The service item becomes a placeholder on the install base, linked for activation on based on the download event.
The item itself and purpose of the item, to generate the same revenue behaviors on the item when sold in an offer. 

Generic re-usable items
Think of the service item as a container for adjustments before the financial processes begin. 
  1. This is only speaking to the service applied equally to a 12 month period.
    1. Typically hardware replacement-faster response increases the 15% by increments up to 19%. 
        1.  48 hour replacement
        2.  36 hour replacement
        3.    8 hour replacement next business day 
        4.    4 hour replacement  
 
Cost of Poor Quality Defects
  • Automatically ensure your company has met the key control criteria for each of the following;
    • Key controls around setup of item cost
    • Key controls around discount setup
    • Key controls around the accuracy of revenue according to revenue recognition rules.
    • Accuracy on the financial statements for 404 assurances
What would I prescribe? 
  • A really smart company allocates the service dollars in a manner that's totally transparent to the customer.
  • A really smart company doesn't penalize sales by deferring the payment of their commission. 
  • A really smart company includes this non-invoice type item in the offer, with an option to override the non-invoice to present the item on the invoice with the sell price.   
By including the item in the offer and making this accounting practice transparent to the customer and sales, your change impacts are lower and easier to influence buyin. 
 
Customer expectations
You have brought your organization closer to the voice of the customer and have become easire to do business with. 

Immediate Savings
  1. Remember this design has just saved you on the tax over payments for at least 15% of the tax you were paying.
    1. Consider the savings on taxable revenue removes 15% of the current payments
  2. Insurance expenses reduce your valuation of the product by 15% saving on the cost to insure the shipment.  
Assume you will take these factors through a Lean Six Sigma project to measure the return on this simple service solution for basic service contracts (re-active). 
 

5 Capabilities enabling your business management (performance) systems

How do master records an the outcomes of transactions "fact records" differ in terms of the companies performance?   

An organization has a set of procedures that a person in a position of authority has been directed by corporate policies to perform using pre-defined procedures to execute.
  • Certain inputs must be executed in a process activity based on pre-defined request criteria.  
    • The person isn't authorized to create a record without a requestor.
  • Once created by the authorized user, a transaction user must create a transaction record based on referencing the master record created by the authorized user. 
Typically the master record isn't going to be "on demand" capability. 
  • The three key impacts to your performance metrics in several directions "create, read or updates" to your master records. 
  • NEVER DELETE any of this vital information to your customer and supplier value streams.  The master records MUST be the lifeblood *(connected to the Transaction Capabilities) to your reference information stored in each record as a "Fact Record". 
  • A change in the master record, doesn't update the transactions that referenced the information earlier than the change to the master record. 
    • See the 7 waste radar for examples of the way this might look in a "worst case scenario" 

 
The management capabilities follows;
      1. Financial Management Capabilities
      2. Party Management Capabilities
      3. Offer Management Capabilities
An on demand request would be an exception in the transaction capabilities. 
Each of these capability categories make up the basis for your performance measurement systems. 
Each directly impacts quality and your organizations bottom line. 
Accuracy on your organizations ability to provide complete and valid transactions.  

 
The transaction capabilities include the following;
      1. An expense transaction capability
      2. A revenue transaction capability
This is where we get really confused, the requestor wants to update a master record, because someone in the workstream sees the master and isn't allowing the transaction to flow through the system. 

 
What could be causing this situation?
  • The person made adjustments outside the system
  • The person looking at a different view isn't recognizing the difference between the transaction at the time of the record being created
    • Grandfather rules should apply
    • People must understand the difference between reference captured in a record
IMPORTANT

 
The only update or create "a requestor" would have the authority to do perform would be to publish a request to the authorized user workstream.
    • Validation must be performed to meet the key control requirements in the 404 assurance performed by the CEO on each reporting period.