Getting Started: The Strategic Level

Transcription

1 Getting Started: The Strategic Level

2 Very Popular Scenario My boss just told me we need to benchmark! Where do I start? How do you structure a benchmarking program? Where should benchmarking report? How do you govern benchmarking? How do we ensure the entire organization benefits from our benchmarking activities? 2010 APQC. ALL RIGHTS RESERVED. 2

3 Focal Point for Benchmarking Activities Decentralized 3.3% Hybrid 21.3% 10.4% 9.3% 20.8% Centralized Full Time No Focal Point Part Time 35.0% Source: APQC; 2009 State of Benchmarking Study. N= APQC. ALL RIGHTS RESERVED. 3

4 Random Acts of Improvement Strategy, Goals and Objectives = Processes/Programs = Benchmarking Activities Organizational Performance Strategic Group Performance Individual Performance Operational Tactical 2010 APQC. ALL RIGHTS RESERVED. 4

5 Random Acts of Improvement Strategy, Goals and Objectives = Processes/Programs = Benchmarking Activities Organizational Performance Strategic Group Performance Individual Performance Operational Tactical 2010 APQC. ALL RIGHTS RESERVED. 5

6 Benchmarking Framework Culture Quest for Continuous Improvement Knowledge Sharing Teamwork / Collaboration Learning Open Minded Out of the Box Thinking Team Structure Competency Strategy Business Improvement Opportunity Desired Market Position Target Market Target Customer Critical Success Factors (CSF s) Benchmarking Business Goal Sourcing Approach Executive Commitment Process Classification Framework CORE Team Leader Data Collectors Analysts Writers Interviewers Out of the Box Thinkers STRATEGIC Executive Champion Process Sponsor Facilitator Customer Benchmarking Methodology Business Process Analysis Project Management Secondary Research Tools Benchmarking Code of Conduct Process Classification Framework Business Process Analysis Tools Scope Management Tools Project Management Software/Tools Databases / Other Data Sources Data Collection Software / Tools Data Analysis Software / Tools Report / Presentation Formats Process Partner Identification Primary Research Partner Interviewing Data Collection Project Management Skills Process Analysis Methods Research Methods Data Collection Techniques Data Analysis Methods Instrument / Tool Design Interviewing Skills Writing Skills Presentation Skills Implementation Skills Data Analysis Instrument Design Report Development Knowledge Transfer Results Best Practices Identified from Inside and/or Outside the Industry Reduced Cycle Time for Innovation Avoidance of Mistakes from Lessons Learned by Others Expanded Business/ Professional Network Delivery Support In-House Benchmarking Competency Center Third Party Benchmarking Company Executive Management Benchmarking Partners Implementation Support 2010 APQC. ALL RIGHTS RESERVED. 6

7 Focus of Today s Session Culture Quest for Continuous Improvement Knowledge Sharing Teamwork / Collaboration Learning Open Minded Out of the Box Thinking Team Structure Competency Strategy Business Improvement Opportunity Desired Market Position Target Market Target Customer Critical Success Factors (CSF s) Benchmarking Business Goal Sourcing Approach Executive Commitment Process Classification Framework CORE Team Leader Data Collectors Analysts Writers Interviewers Out of the Box Thinkers STRATEGIC Executive Champion Process Sponsor Facilitator Customer Benchmarking Methodology Business Process Analysis Project Management Secondary Research Tools Benchmarking Code of Conduct Process Classification Framework Business Process Analysis Tools Scope Management Tools Project Management Software/Tools Databases / Other Data Sources Data Collection Software / Tools Data Analysis Software / Tools Report / Presentation Formats Process Partner Identification Primary Research Partner Interviewing Data Collection Project Management Skills Process Analysis Methods Research Methods Data Collection Techniques Data Analysis Methods Instrument / Tool Design Interviewing Skills Writing Skills Presentation Skills Implementation Skills Data Analysis Instrument Design Report Development Knowledge Transfer Results Best Practices Identified from Inside and/or Outside the Industry Reduced Cycle Time for Innovation Avoidance of Mistakes from Lessons Learned by Others Expanded Business/ Professional Network Delivery Support In-House Benchmarking Competency Center Third Party Benchmarking Company Executive Management Benchmarking Partners Implementation Support 2010 APQC. ALL RIGHTS RESERVED. 7

8 Strategic Decisions You Have to Make 1. Who are your customers? 2. What are your organization s key business objectives and desired outcomes? 3. What are your Critical Success Factors (CSFs)? (What is the most direct thing you can measure that makes you successful?) 4. What are the core business processes impacting these CSFs? 5. How would you prioritize and select the processes that have the greatest impact on accomplishing your business objectives? (We all have limited resources). 6. What type of benchmarking activities are needed to improve your highest priority business processes? 2010 APQC. ALL RIGHTS RESERVED. 8

9 Who Are Your Customers? Internal External Stakeholders Stockholders 2010 APQC. ALL RIGHTS RESERVED. 9

10 Key Business Objectives Should be established at the top level of the organization. Should cascade downward. Enterprise level strategies Operating units objectives Department processes and programs Staff activities Are communicated throughout the organization. Should have accompanying outcome measures APQC. ALL RIGHTS RESERVED. 10

11 A Balanced Perspective 2010 APQC. ALL RIGHTS RESERVED. 11

12 Critical Success Factors Characteristics, conditions, or variables that have a direct influence on objectives Areas where satisfactory performance is essential in order for a business to succeed Examples: Product Quality Order Fulfillment Service Responsiveness Reliability 2010 APQC. ALL RIGHTS RESERVED. 12

13 The APQC Process Classification Framework 2010 APQC. ALL RIGHTS RESERVED. 13

14 Process Classification Framework (PCF) The PCF decomposes functions down to the activity level. PCF levels are: category, process group, process, and activity. Category: The highest level within the PCF, currently 12 major enterprise wide macro processes through which an organization delivers value to its customers and stakeholders. Process Groups: PCF items with one decimal numbering (e.g., 8.1) indicate a process group; a logical collection of processes that deliver a major output or outcome inside the macro enterprise process. Process: PCF items with two decimal numberings (e.g., 8.1.1) indicate processes; a collection of activities that deliver an output for a subsequent process in the process group. Together, they allow the process group to achieve its objective within the larger macroenterprise process category. Activity: Items with three decimals (e.g., and ) indicate activities APQC. ALL RIGHTS RESERVED. 14

15 Business Processes Define Subgroups 7. Manage Information Technology and Knowledge 7.1 Plan for information system management Understand information and knowledge needs of business and users Define and administer service levels Develop information management and knowledge management strategies Derive information system requirements from business strategies Define enterprise information system architectures Plan and forecast information technologies/methodologies Conduct research Manage IT offerings portfolio Establish enterprise data standards Establish information systems quality standards and controls Establish information systems enterprise security standards and controls 2010 APQC. ALL RIGHTS RESERVED. 15

16 Core Process Ranking 2010 APQC. ALL RIGHTS RESERVED. 16

17 APQC s Benchmarking Alignment Worksheet Organizational Outcomes (Strategies/Goals) Operational Outputs (Objectives/CSFs) Tactical Processes and Initiatives Process: Metric 1: Metric 2: Process: Metric 1: Metric 2: Process: Metric 1: Metric 2: Process: Metric 1: Metric 2: 2010 APQC. ALL RIGHTS RESERVED. 17

18 A Graphical View of Linkages Strategic Goals Objectives Drivers Processes Cost, Schedule & Technical Performance Accurate Estimate of Work Inventory Planning, Control Rqmts. Def., Stability, Flow Requirements Definition Financial Performance Growth Product Innovation Business Transformation Product Dev. Cost On Time Delivery Forecasting Cost/Quality/On Time SW Production & Test Cost Supplier Management Preliminary Design Detailed Design Management Performance Market Understand, Need Test, Verification, Validation Design Integration 2010 APQC. ALL RIGHTS RESERVED. 18

19 APQC s Benchmarking Alignment Worksheet: Product Innovation Example Organizational Outcomes (Strategies/Goals) Product Innovation Operational Outputs (Objectives/CSFs) Cost, Schedule & Technical Performance (Metric: Product Development Costs) Business Processes and Initiatives Process: Requirements Definition Metric: Total Cost of Requirements Gathering Phase Process: Preliminary Design Metric: Total Cost of Preliminary Design Phase Process: Detailed Design Metric: Total Cost of Detailed Design Phase Process: Design Integration Metric: Total Cost of Design Integration Phase 2010 APQC. ALL RIGHTS RESERVED. 19

20 Understanding Your Process 2010 APQC. ALL RIGHTS RESERVED. 20

21 Process Map Example 2010 APQC. ALL RIGHTS RESERVED. 21

22 APQC s Benchmarking Alignment Worksheet Organizational Outcomes (Strategies/Goals) Operational Outputs (Objectives/CSFs) Tactical Processes and Initiatives Process: Metric 1: Metric 1: Metric 2: Metric 2: Process: Metric 1: Metric 1: Metric 2: Metric 2: Process: Metric 1: Metric 1: Metric 2: Metric 2: Process: Metric 1: Metric 1: Metric 2: Metric 2: Scope of Benchmarking Activities Benchmarking Scope: Benchmarking Scope: Benchmarking Scope: Benchmarking Scope: 2010 APQC. ALL RIGHTS RESERVED. 22

23 APQC s Benchmarking Alignment Worksheet: Product Innovation Example Business Processes and Initiatives Scope of Benchmarking Activities Process: Requirements Definition Metric: Total Cost of Requirements Gathering Phase Process: Preliminary Design Metric: Total Cost of Preliminary Design Phase Process: Detailed Design Metric: Total Cost of Detailed Design Phase Process: Design Integration Metric: Total Cost of Design Integration Phase Technology enablement of requirements definition. Metric: Total IT costs for product innovation requirements gathering. Role of engineering in preliminary design phase. Metric: Total hours spent by engineering FTE during preliminary design phase APQC. ALL RIGHTS RESERVED. 23

24 Organizational Forecasting Example Organizational Outcomes (Strategies/Goals) Top Performing Working Capital Management Operational Outputs (Objectives/CSFs) Top Performing Financial Process Management Tactical Processes and Initiatives Process: Budgeting Metric 1: Cycle Time to Complete Annual Budget Process: Forecasting Metric 1: Cycle Time to Complete Monthly Financial Forecast Process: Market Evaluation Metric 1: Cycle Time to perform financial evaluation of changing market conditions and their impact on product mix 2010 APQC. ALL RIGHTS RESERVED. 24

25 Results of Benchmarking Exercise 120 Company A Median Top Cycle time to complete annual budget (days) Cycle time to complete financial forecast (days) Cycle time to perform financial evaluation of changing market conditions and their impact on product mix (days) 2010 APQC. ALL RIGHTS RESERVED. 25

26 Questions? Next Step: Lunch! 2010 APQC. ALL RIGHTS RESERVED. 26

27 Working Session Exercise Complete a Benchmarking Alignment Worksheet. We ll report out and discuss as a group 2010 APQC. ALL RIGHTS RESERVED. 27

28 Parking Lot Questions? 2010 APQC. ALL RIGHTS RESERVED. 28