Life became changing very fast. The business & technology development milestone events which one may had noticed 20 years ago took place in the rate of 2-3 per year ( in particular sectors). Now it is at least 1 event per each 3 months. Everything of scale which take place in the other part of the world now becomes known within hours and may impact our lives within weeks. There are growing tensions in accessing the natural resources, crops, food, water, energy, investing in prevention of global climate change. All these integrate into a highly dynamic, competitive and challenging business environment in each country of the world. Recent economic and financial crises demonstrated again that things can fall apart quickly. The only sure way to try to cope with instability and uncertainty is knowledge of actual business situation in detail, adaptive management in real-time, consideration of risks in advance and effective use of available own resources. In many cases SME entrepreneurs, as largest group of stakeholders, do not have detailed understanding of what is going on in their businesses and are not able compare it to business objectives easily. The programme addresses all these issues empowering the stakeholders with practical solutions and improved business culture.
business owners, entrepreneurs, seniour management and specialists supporting strategic, financial and production management, assistants to seniour management, business consultants, vocational training professionals
Simple set of tools for enterprise performance management, measurement and benchmarking by using of 110 Key Performance Indicators. The software package include 6 software items providing unique value contributing to Strategic. Financial and Production enterprise management as well as extensive training and reference materials.
Industrial modernization programme results include introduction of best practices and reference materials facilitating learning and knowledge capital development
Important component in the programme implementation is on-site coaching and training of entrepreneurs and enterprise specialists. The duration is up to 12 months. The picture is made in Lebanon in 2004 during implementation of UNIDO-ELCIM upgrading programme.
Final results are acknowledged by UNIDO certificates to Enterprise and its employees which took part in the Programme
Only these 2 reasons constitute 65% of cases ! Were it the issues: Bad products? No market demand? Lack of financial resources or investments? No innovations? NO !!! It were the major problems! Could one achieve good results having no sufficient knowledge? Result: trial & error management, lost development rate, competitiveness, high mortality of SMEs. It is especially tragic for national and regional economies when prospective, innovative enterprises crash while having good products, talented people, growing customer base, good potential in its market niche and clear growth potential. Reasons: lack of performance management, measurement and monitoring, capacity to prepare major decisions in detail, analyze optional outcomes, include risks and uncertainties into major decisions.
Sailing to unknown promised land ….
And SME can be in the other situation. If we cannot afford to spend money and time on special tolls helping to run business we do nothing. This strategy is least expansive but most dangerous
What is the reality? Almost none of the entrepreneur-captains has appropriate knowledge of Management business performance when entrepreneurs start their business sailing. They learn while sailing, by trial and errors. Even the most technologically advanced and innovative ship would not help the captain who is lack of navigation skills, effective planning and controlling of the route. When the ship modern, innovative and speedy - then level of losses and negative impacts is higher due to increased costs of modern complex technologies and various side effects. As a matter of fact that in 97-98% SMEs there is no sufficient relevant knowledge at start-up especially by young and female entrepreneurs. What about the navigation tools? A lot known as we speak about ICT solutions (Balanced Scorecard, Intangible Assets Monitor, etc) but most of them are NOT AFFORDABLE and too COMLEX to be introduced into existing practices and becoming routinely used. Purchase, general training, redesign of business processes considerably increase the total cost of ownership is above 25,000 Euro increasing quickly with the size of the company. Plus complex introductory period with unpredictable results.
Ideal path requires resources: financial, human, knowledge, etc. Not every business has it and can afford it specially SMES
This business intelligence and instruments are knowledge capital which drastically improves capacity of entrepreneurs to cope with business risks, uncertainties, globalization, financial turmoil's, all other challenges discussed. These are basic key components of becoming systematically competitive, sustainable in business and ensuring continuous improvement of quality and productivity.
In case of small & medium businesses simple, flexible, practical solutions shall be available to increase capacity to make right decisions regarding business navigation.
is an American country music singer, television host, actor, and businessman.
4 components of the programme The importance of on-site support components to develop best practices
is the major factor of successful business development meeting the demands of a competitive market, the opportunities and the threats by EU – Lebanon Association Agreement and that within the Arab world.
Key Competencies required for Change Leaders: Understanding, preparing, building skills, planning, learning from change results Managing the Change as process: why Change is difficult, identifying responses to Change, negative and positive ones, managing the responses and transition process, making a case and visions Building Capacity for Change Management: key skills, understanding resistance to Change, its overcoming, facilitating openness and understanding, creating the plan and its stages, Learning from Change by obtaining feedback and monitoring implementation, why it fails. Concepts, Tools, Techniques, including Balanced Scorecard, SWOT & PEST analysis, Porter’s 5 Forces of competitiveness, Productivity and Performance methods, business measurement and management Linkages between performance measurement systems and strategies, major business performance methods, UNIDO Pharos approach, its model of key performance indicators and simple enterprise benchmarking
Pharos enterprise benchmarking is a simple to use however very powerful software for benchmarking and monitoring of business results, simulation of business decisions
The complete system can be presented in the simplified way as information processing tool with 3 operational stages: data updating, calculation of particular set of indicators and presentation of the results. The last stage includes both options of presenting information on screen or in electronic reports.
The good ratio in on-site support is 1 consultant assists 0 enterprises. The consultant qualifications options are industrial engineering / productivity / quality. Working each day at on enterprise he/she visits each enterprise twice per month, or in each two weeks. For example 100 national consultants are required for a Programme for 1000 SMEs. These consultants shall be selected from 110-120 trained candidates to ensure the best ones and have options in making replacements / upgrades during the implementation. Pictures: 1. Reviewing enterprise results by the General Manager and national consultants after the Pharos installation at shoe production factory in Bogota, Colombia, March 2003, UNIDO Integrated Programme for Colombia, Component II – Quality and Productivity
The good ratio is 1 consultant in industrial engineering / productivity / quality is supporting 10 enterprises. Working each day at on enterprise he/she visits each enterprise twice per month, or in each two weeks. For example 100 national consultants are required for a Programme fot 1000 SMEs. The consultants shall be selected from 120 trained candidates as best ones.
Actual results of several companies benchmarking provides for revealing important industrial statistics for particular national sectors. It can be used for presenting and analysing the trends as well as policy monitoring and adjustments.
Production floor, Enterprise in India, 2000
the monetary results for small business (Colombian shoe factory sample). Note the difference between the increase of profits and costs of participation There are other positive results as well: improvement of business culture, competitiveness, productivity, quality and overall sustainability of business in times of change
Statistics on overall results
UNIDO Business Performance Software is developed and produced for UNIDO by GOLEM IMS GMBH as outsourcing development production and training organisation acting accordingly to Special Service Agreement between UNIDO and GOLEM from June 2000. GOLEM IMS GMBH is official UNIDO partner in development, distribution and implementation of capacity building programmes using UNIDO Pharos – Businiess Navigator software for enterprise performance management, measuring and benchmarking in developing countries. National support for the software is realized within the framework of Focal Points in countries established by GOLEM in collaboration with UNIDO.
Slide 1 - Improving enterprise performance by training and ...
Management of Sustainable Change : Capacity Building and Industrial Modernization Programmes Presentation Applying UNIDO methodology and Pharos enterprise benchmarking software for improving capacity for Trade, Exports, competitiveness and sustainable development
<ul><li>Do you feel the change? </li></ul><ul><li>The world is changing. </li></ul>
<ul><li>The one on his way to the top. </li></ul>
<ul><li>The one not only driving but also thinking which way to choose. </li></ul>
<ul><li>The one feeling that something is wrong </li></ul><ul><li>should try to improve it. </li></ul>
<ul><li>The one looking for new opportunities in business. </li></ul>
Who should attend: <ul><li>The business owners, entrepreneurs </li></ul><ul><li>Senior management and specialists supporting strategic, financial and production management </li></ul><ul><li>Assistants to senior management, </li></ul><ul><li>Business consultants </li></ul><ul><li>Vocational Training and Executive Education professionals </li></ul>
UNIDO Pharos software package had been applied to several industrial modernizations and capacity building programmes in several countries including Colombia, India, Egypt, Bahrain, Lebanon, Zambia, Uganda, Kenya, Indonesia, Russia, Slovakia, United Kingdom
<ul><li>Mistakes in making business decisions by management based on inadequate assumptions, information, </li></ul><ul><li>2. Financial mismanagement and ineffective use of own or borrowed financial resources </li></ul>65% Major reasons of SME mortality* *10,9 million enterprises, data SEBRAE, BRAZIL
Sailing to target destination Initial position Business Target (Promised Land) Ideal path
<ul><li>“ We cannot change the direction of the wind, but can adjust my sails to always reach my destination. ” </li></ul>
Objectives (1) <ul><li>Introducing best practices of systematic measuring of results, its maximizing, planning, eliminating inefficiencies </li></ul><ul><li>Implementing effective productivity & industrial engineering methods with simple and inexpensive personal performance management tools. </li></ul>
Objectives (2) <ul><li>Combining methodology, best practices and software for improving productivity, competitiveness, qua lit y for sustainable growth. </li></ul><ul><li>SMEs becoming more transparent and prepared for national and international investments , have improved capacity for trade and exports. </li></ul>
Objectives 3 <ul><li>Improving entrepreneurs capacity for managing investments, innovations, new technologies – “Management of Change”. </li></ul><ul><li>Facilitating business developments, managerial potential, implementation of ISO 9001. </li></ul>
Strategic Planning and Implementation Measuring and benchmarking strategic and financial results with UNIDO Pharos and FIT software Measuring and benchmarking manufacturing results with Produce Plus software Programme Modules On-site enterprise consulting and coaching 1 2 3 4
Module 1: Strategic Planning at Industrial SME <ul><li>Development strategies shall include </li></ul><ul><li>adapting to changing business environment </li></ul><ul><li>potential risks </li></ul><ul><li>maximizing competitiveness. </li></ul><ul><li>different attitude and approach of the enterprises, especially that of the owner and / or management </li></ul>
Module 1: Strategic Planning and Implementation <ul><li>Key competencies and skills of Change Leaders </li></ul><ul><li>Methodologies of Strategic Planning </li></ul><ul><li>How to develop and implement a strategic plan? (Measure and Planning based on realities, simulating the decision options) </li></ul>
Module 1: Implementing Strategic Plan <ul><li>Targets and Milestones </li></ul><ul><li>Timetable </li></ul><ul><li>Organigram </li></ul><ul><li>Organizational Culture </li></ul><ul><li>Monitoring and Benchmarking of Key Performance Indicators </li></ul><ul><li>Comparing assumptions vs. realities </li></ul>
Module 2: Improving Performance with ICT: Pharos Enterprise Benchmarking <ul><li>Integrated enterprise platform for unified measurement, monitoring and management of business performance, innovative, powerful yet easy to use </li></ul><ul><li>Introducing business intelligence concepts at each organizational level </li></ul><ul><li>Improving business culture of stakeholders for sustainable development </li></ul><ul><li>Simplicity in learning and self-training facilitating exchange of best practices, benchmarking and transfer of knowledge between stakeholder groups </li></ul><ul><li>Special focus to personnel of private and public enterprises </li></ul>
Module 2: Pharos Enterprise Benchmarking <ul><li>Methods and tools for easy setting and assessment of goals (organization, departments, individuals) </li></ul><ul><li>Comparisons between organizations as well as traceability of change using real-time benchmarks </li></ul><ul><li>Scalable support of organizations in their growth path from small to large (5 => 1000 employees) </li></ul><ul><li>Integrating features of Pharos-Business Navigator, FIT, Produce Plus and BEST </li></ul><ul><li>Transparency of business results for prospective investors and modernization programmes </li></ul><ul><li>Compliance to BASEL II (minimization of credit risks) </li></ul><ul><li>Customizable benchmarking indicators and reports </li></ul>
SME Level Application Pharos Package Enterprise Data Base Update Calculation of Indicators Business Profile Benchmarking Reports And Graphs
<ul><li>Developing best practices: problems and how to address them, Managerial dedication, Value of unmeasured, Staff attitude, training and stimulation: who is really interested in the measurement results? Making the measurement, management and benchmarking the component of a business culture, Expected results and realities in practice </li></ul>Module 2: Improving Performance: Business benchmarking & reporting
<ul><li>“ Where we are compared to others?” </li></ul><ul><li>Self-assessment and positioning of enterprise achievements against the others by industry, region, country; </li></ul><ul><li>obtaining the vision of our own progress and its relevance to overall industrial trends </li></ul>Module 2: Improving Performance: Business benchmarking & reporting
Module 3: Participants learn and practice: <ul><li>Introduction to Performance Measurement in manufacturing </li></ul><ul><li>Relation between lean manufacturing and production performance measurement, diagnostics and benchmarking, value added stream mapping </li></ul><ul><li>Application of Pharos to production performance management </li></ul>
Module 4: On-site enterprise consulting and coaching <ul><li>On-site implementation: developing knowledge capital, setting best continuous improvement practices (up to 12 months, consultant assisting and supporting each enterprise). </li></ul>
Module 4: On-site enterprise consulting and coaching <ul><li>Training and certification of national consulting and support teams </li></ul><ul><li>Benchmarking and certification of each participating enterprise </li></ul><ul><li>Final results evaluation, reporting, conference of stakeholders </li></ul>
The Programme Modules Integrate <ul><li>concepts, </li></ul><ul><li>methodology, </li></ul><ul><li>training and reference materials, </li></ul><ul><li>practical exercises, </li></ul><ul><li>lecturing, </li></ul><ul><li>action learning, </li></ul><ul><li>team work/group work, </li></ul><ul><li>case studies, simulations, </li></ul><ul><li>games and computer-based training </li></ul>
Expected Results (1) <ul><li>Best practices in business improvement </li></ul><ul><li>Improvement of Key Performance Indicators (KPI) up to 300%, including Gross Profits, Productivity (Added Value per Employee), etc. </li></ul><ul><li>Benchmarking & diagnostics reports for each enterprise </li></ul><ul><li>Benchmarking data for evaluation of sectoral performance </li></ul>
Expected Results (2) <ul><li>Documented results of the Programme implementation </li></ul><ul><li>Investment facilitation due to increased transparency of businesses </li></ul><ul><li>UNIDO Certificates of Achievements in Business Performance Excellence </li></ul><ul><li>Improved culture in Management of business, innovations, competitiveness, productivity, quality and sustainability </li></ul><ul><li>Installation of Pharos benchmarking software in participating enterprises </li></ul>
We really appreciate PHAROS - as a concept and as a Business Performance tool and the way of presentation of its output Indicators". S.D.Sardesai, General Manager
Return of Investment into Programme participation Case study: Shoe Factory (Bogota, Columbia 2002) <ul><li>Average annual sales, USD - $632 000 </li></ul><ul><li>Net Profit average % (leather & shoe production) - 5% </li></ul><ul><li>Increase of net profits, post programme </li></ul><ul><li>in % - 24% </li></ul><ul><li>Increase of net profits, post programme </li></ul><ul><ul><li>in USD - $7,584 </li></ul></ul><ul><li>Participation costs per annum < $2,500 </li></ul>
Expected Results of Capacity Building Programme “Management of Change”: <ul><li>Margen de Utilidad Operacional: + 53.7% </li></ul><ul><li>Incremento de Ventas: + 37.9% </li></ul><ul><li>Índice de Servicio al cliente: + 99.28% </li></ul><ul><li>Estructura de la Organización: + 26.09% </li></ul><ul><li>Gestión de Mercadeo: + 26.19% </li></ul><ul><li>Eficiencia en la Gestión de la Producción: 66.32% </li></ul><ul><li>Maneo del Recurso Humano: +34.71% </li></ul><ul><li>Administración Económico-Financiera: + 60.93% </li></ul><ul><li>Estrategia Empresarial: + 77.37% </li></ul>*Source: UNDO Integrated Programme for Colombia 2002-2004, Component II, Pharos
Conclusions: <ul><li>The National Entrepreneurship Capacity Building and Industrial Modernization Programmes provide unique answer </li></ul><ul><li>Management of Sustainable Change </li></ul><ul><li>Investments </li></ul><ul><li>Innovations </li></ul><ul><li>New technologies </li></ul>