Tag Archive: systems pragmatist

Systems Pragmatist: Connecting Processes, Systems, Company Objectives

September 16th, 2014
connecting systems, processes and company objectives

To achieve significant progress on new organizational processes or systems tackle the fundamental to do list first: understand your current processes to figure out where the opportunities for improvement and systems leverage lie.

When applying my Systems Pragmatist viewpoint to analyzing manufacturing processes and systems, I revisit the fundamentals as they are essential to delivering bottom line business results. Those clients who want to skip over the “hard work” of defining and improving processes and leveraging systems are destined to failure whereas those who take the time to ensure that these bedrock concepts are in place thrive.

Undoubtedly, I find the key to success to be in connection points. Is your process documented? It’s amazing how often clients should start here.  By understanding your current process, opportunities for improvement jump out!  Do your processes connect with your system?  Are your employees trained on how to optimize system processes?  How should you handle mistakes in your system? Are there ways to further leverage your system to achieve results? Do you have the right system for your critical business requirements? Perhaps you better take a step back – what are your critical system requirements? If you are upgrading or implementing, have you thought through your critical path tasks? Which are vital to the core functions of your organization? Have you thought through your connection points with your employees, customers, suppliers, related systems, etc.? Do your employees have expertise in project management? And the list goes on….

My best clients understand the value and importance of tying your processes and systems to your objectives. For example, Sales & Operations Planning (S&OP/SIOP) is a system-wide process that ties the entire organization together, and to a great extent, even customers, suppliers and other partners, on one plan. Of course, no S&OP program is successful unless this plan contains the “right” content (the priority end-to-end supply chain topics such as demand forecasting and capacity planning), the “right” people (starting with the executive team and expanding from there), and the “right” systems (inclusive of ERP, business intelligence/reporting, e-commerce, etc.).  When these all come together, results follow. For example, in one client we increased service levels from around 60% to the high 90%’s while improving margins by 10%.

Don’t undervalue your processes and miss vast opportunities. Instead, force yourself and your executive team to pay attention to what might seem mundane yet will propel your company to success.

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What is a Systems Pragmatist?  

Rapid Assessments for Success

 



The IT – Business Partnership

January 21st, 2014
Successful companies forge partnerships with their IT departments to create an ERP system that provides data to make good decisions and provide their customers with an exceptional experience.

Successful companies forge partnerships with their IT departments to create an ERP system that provides data to make good decisions and provide their customers with an exceptional experience.

Is IT viewed as a partner to your supply chain or manufacturing business? Or a necessary evil? Or something in-between? Successful companies go down the path of partner. After all, critical business processes (which drive profitable growth) are connected with systems – you cannot succeed with one and fail with the other. Thus, you must think about strengthening the link.

Larger companies have folks termed business analysts who understand business and help translate business needs into technical specs and systems analysts who come from the technical side and think through how to translate technology into business results. However, the vast majority of companies are considered small to mid-size businesses and might not have these positions. There’s no reason to despair…. I often times find people who are capable of performing this role for your critical business requirements. The key is to look for them. I’ve worked with a few of the BEST, and I guarantee that although often undervalued, these folks had a direct correlation to tangible business results.

Even if you have these folks identified, it might not matter if you don’t view IT as a strategic partner. You better! Your ERP system can make or break your ability to succeed (as witnessed by the resounding failures of some new system implementations we’ve all heard about in the news or from our network… and the dramatic negative customer consequences to follow).

No company can run without financials – at least not for long. Financial reporting is tied to your ERP system. I’ve seen really impressive manual systems; however, even in the best case I’ve ever seen (which also happens to be the only case I couldn’t recommend low-hanging fruit because their manual network was so extensive), the reason I was talking with this client is because they had to upgrade and better leverage the system to support growth plans and service requirements. It is no longer acceptable to not know order status at all times!

Do you consider your IT or ERP experts as strategic partners?

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What is a Systems Pragmatist?

August 27th, 2013
A Systems Pragmatist thinks about and incorporates design every step of the way, and stays several steps ahead of the process.

Systems Pragmatists incorporate design every step of the way, and stay several steps ahead of the process.

Would you select curtains to spice up a house with a rickety foundation? I certainly hope not! Instead, you would resolve your foundation issues before even thinking about nice-to-have’s. So why do we spend countless hours picking out curtains and discussing color choices in businesses when our foundation isn’t stable?

Based on my 20+ years of experience as both a former operations executive and as a global business consultant, I find that more than 50% of my clients prioritize curtains over the rickety foundation – at least for a while. The excitement of implementing the latest lean program or ERP system outweighs blocking and tackling in terms of excitement, career interest etc.; however, it fails miserably. On the other hand, those companies who thrive ensure they design and implement solid processes and systems before even discussing programs that will build upon the base.

Since business processes and systems can become quite complex and cost millions of dollars, it is critical to simplify the design to what’s essential to your organization and focus on the core processes and related functionality that will support your business strategy and deliver bottom line results. This is where the Systems Pragmatist skill set comes into play – in essence, it cuts through the complexity to rapidly define, design and deliver the critical processes and system functionality required to elevate business performance.

Although we could discuss countless tips and techniques for designing and improving business processes and systems, there are a few core essential tenets: 1) Understand your objective. 2) Think design. 3) Execute & integrate with the culture.

1. Understand your objective: One of the worst mistakes my clients make is when they jump to solutions (process improvements, implementing the latest programs and selecting new technologies) before they understand the objective. As cool as the latest e-commerce functionality or S&OP results, it will become a complete waste of time and money if not aligned with the company’s direction and objection.

I have found a differentiation in my clients who leverage processes and systems to a competitive advantage vs. the rest – they think about design in every element of the process. Are you thinking 4 steps ahead in the process? How will it affect your ERP system results? Have you built in flexibility? Agility? Speed? Certainly, in the new normal business environment, those who have access to critical data for rapid decision-making, who accelerate products to market and who deliver faster than the competition will win the business. Have you thought about how to design these capabilities into your processes and systems upfront?

3. Execute and integrate with culture: Last but not least, the best design in the world is useless if it’s un-implementable! Software firms use the terminology of “build” and “run” to mean design a model or process trial and then roll out and utilize effectively. These can be good reminders to make sure you’ve dotted your i’s and crossed your t’s and that your process and system functionality work as expected.

An essential element of this phase is to integrate the business process improvements and system enhancements with the culture. Is it an after-thought or do folks think about it similarly to shipping orders (meaning it is part of their routine)? Embed the processes into the daily, weekly, and monthly routines. Consider potential roadblocks and bottlenecks upfront. Ask employees and supply chain partners for input and feedback. Test them out. Think through changes to related areas such as performance management systems.

I’d be surprised if you haven’t heard a horror story associated with a system implementation. There are countless reasons for them: Not enough training. The system didn’t do what we needed it to do. It wasn’t set up to work for the way we do business. We didn’t have enough time. It wasn’t tested thoroughly. And the list goes on. For example, I’m often times brought in by clients to help resolve system snafus that typically result in horrendous customer service issues and down-the-line negative profit impacts. 80% of time, the client feels as though the lack of training is the issue. Although it is always part of the issue, I find that it is 20% of the issue; whereas, design and integration with the daily routine is the 80/20.

Designing and implementing business process improvements and leveraging system functionality to drive business results can require an investment of time and resources. However, you’ll be left in the dust in your broken down Yugo if you don’t prioritize this critical priority. Why not get ahead of the competition by not only creating a solid foundation but also designing it as a strategic advantage to deliver a significant return on investment?

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How to Defy the Odds with Culture Change

July 25th, 2013
change management map

Execution must be a core component of your organization’s culture

Between 70-80%+ of culture change programs, such as mergers and acquisitions, fail to produce the results originally expected. Yet, there are still many private equity firms and companies aggressively searching to merge and/or acquire a business – and certainly companies embark on major change initiatives, such as ERP implementations and reorganization plans every day. Why is the success rate so low? And, why can’t 70-80%+ of the merger/acquisition leadership teams find a way to be part of the 20%?

I’ve had first-hand experience working with companies in various stages of mergers and acquisitions and other significant change projects, and the answers are incredibly simple yet hard to execute. First, most mergers/acquisitions do not fail in the strategy. The synergies might be compelling, the opportunities vast; however, the key lies in poor execution. So, how do we stand out in the crowd as part of the 20%?

People and execution

One of the key issues is that people tend to become numbers – have you heard one of the following, “We can save X labor dollars,” “after consolidating Y function . . . ,” “we need to implement Z program to offset our 10% attrition – whether customers and/or employees”? Stop! Instead, value people, as they will be the ones who determine whether you’ll be one of the 20%.

First, make sure you:

1. Listen – to your employees, your customers, your suppliers, etc.

2. Involve them in the process – clarify the vision/end state and ask for involvement in defining the path to achieve the vision, encourage debate on the various alternatives and their benefits/costs to achieve a goal, ask for feedback and ideas, value their concerns and input and encourage brainstorming of solutions.

3. Communicate frequently, and consistently – do what you say you’ll do – this does not require that you have all the answers or that you communicate items you are unable to communicate yet it even works with bad news. People will value your communication if they know it is genuine, if they can count on you to consistently keep them updated, to answer their questions and if they know you value them and will treat them fairly and respectfully. And, I found that doing what you say you’ll do is much more challenging than it sounds, but it is #1 to success. The bottom line is that people are your #1 asset. Instead of focusing on equipment, labor and materials, first focus on people.

Next, execution is key. Execution must be a core component of your organization’s culture. What does that mean? The best definition I’ve seen of culture is from Alan Weiss – “Culture is simply that set of beliefs that governs behavior.” Thinking in terms of that definition, execution must be valued in your organization. Or, another way to say this is that the discipline of how your organization gets things done is more important than the “form” (who reports to who, how it looks, etc.). Of course, this takes us back to #1 – people. In addition, as Larry Bossidy and Ram Charan say in Execution, “People think of execution as the tactical side of the business. That’s the first big mistake. Tactics are central to execution, but execution is not tactics. Execution is fundamental to strategy and has to shape it. No worthwhile strategy can be planned without taking into account the organization’s ability to execute it.”

I’ve found there to be several key ingredients in successful execution – people, leadership, clear communication of the vision/end state, communication of the why’s and how’s (For example: Why are we following this path? How will this help us in the marketplace?), communication/integration to each person’s goals (including how they make a difference), tools/training required, follow-up, feedback . . . and repeat.

If the majority of your focus is on people and execution, you’ll likely be one of the 20%.