BC: Improvement of Knowledge Sourcing and Provision
1. Context Deficits Goals Product Realization Calculation Conclusion
Content Business Case
1) Introduction
2) Environment Description
Knowledge Problems & Deficits
3) Identified Sourcing
& Provision Definition
4) Goal and Target
5) Product Description
Daniel Sigrist | Jonas Scheuring
6) Realization & Implementation
7) Calculations
Olten, 24th
of November 2012
Course 8) Conclusion
MSc BIS
Knowledge Management
Daniel Sigrist | Jonas Scheuring 2
2. Context Deficits Goals Product Realization Calculation Conclusion
Current Setting
Case: Delivery of knowledge about our products on the market
Responsible Department: Knowledge Analysis (KA)
Objectives:
Source knowledge from scientific, branch specific publications
KA analysis and enrichment of the knowledge
Provide knowledge in an adequate form to internal customers
Situation:
Quality?
Requirements
Time?
Performance is unpredictable
Daniel Sigrist | Jonas Scheuring 3
3. Context Deficits Goals Product Realization Calculation Conclusion
Environment Description
Organizational Chart:
Board of Directors
Quality
Accounting KA IT R&D Marketing Sales HR
Assurance
Green: Go/No go
Red: Project Execution
Blue: Stakeholder/user
Grey: Minor role
Daniel Sigrist | Jonas Scheuring 4
4. Context Deficits Goals Product Realization Calculation Conclusion
Identified Problems & Deficits
Observed Deficits: Identified Root Causes:
Dependency on ‘Black Boxes’ No transpareny in the process flow
Manual feeding of incoming
Inefficiency (20 man-days extra work)
information to the knowledge
Natural human error rates (est.: 4%)
repository
Failure sensitive stakeholder No clearly defined process flow across
interfaces (est. failure rate 7%) units
Verification or auditing is not possible No control key figures are applicable
Productivity cut due to non-goal- Est. ¼ of all assigned workers are not
oriented work efforts (Est. decr. 5%) informed about general process goals
Daniel Sigrist | Jonas Scheuring 5
5. Context Deficits Goals Product Realization Calculation Conclusion
Goal & Target Definition
Create Business Process Model to organize activities
Roll out Graphical Business Process Models to visualize the overall context
Steer the process flow by a business process engine
Saving the gained knowledge in a knowledge DB at every time
Tracking of defined key performance indicators
Connecting to the knowledge retrieval applications
Graphical Knowledge Sourcing & Provision Process Description
Sourcing Categorize Annotate Provide
Business Process Engine Knowledge
Database
Daniel Sigrist | Jonas Scheuring 6
6. Context Deficits Goals Product Realization Calculation Conclusion
Product Description
With Visual Paradigm’s Visual Architect as BPMN Modeler we
can reach most of the mentioned objectives.
Features of Interest:
BPMN Notation Modelling
Graphical Business Process Representation
Differentiation between manual and automatic tasks
XML-Interface to connect to a BPE
http://www.visual-paradigm.com/product/bpva/
Daniel Sigrist | Jonas Scheuring 7
7. Context Deficits Goals Product Realization Calculation Conclusion
Implementation Outline
Roles Skills Person
Project Owner Project Lead & Controlling KA Department Manager
Operative Manager Project Planning & Execution KA Department Employee
Subject Matter Expert Business Process Expert Consultant
(IT) Administrator Operating the required IT Internal IT partner
Subject Matter Expert Product specialist for final QM Product Managers
Daniel Sigrist | Jonas Scheuring 8
8. Context Deficits Goals Product Realization Calculation Conclusion
Cost & Benefit Calculation
Investment Costs CHF Benefits CHF Value
Monetary Resources (791 man- 553’700.- 200’000.- Production Cost-Reduction
days à 700,-) per year
Software and 9’000.- 150’000.- Efficiency Gain R&D &
licenses/year Marketing per year
Management & 140’000.- 50’000.- Efficiency Gain QA per year
Maintenance/year
Quantitative Increase IT hardware +5% load 2.5 Days Avg. R&D throughput time
usage reduction (now: 3 weeks)
Supply continuous +10% support -8% Reduction of efforts in
user support requests working time for KA
Qualitative Gain additional skills in Documented processes,
BPM additional knowledge
TCO (4 Years Period) 1’149’700.- 400’000.- Total benefit per year
ROI = 139% (assuming 1.6 Mio CHF Profits and 1.15 Mio CHF investment costs at a 4-Year Life -Cycle)
Break-Even reached in Y3/Q1 (after 2.2 years)
Daniel Sigrist | Jonas Scheuring 9
9. Context Deficits Goals Product Realization Calculation Conclusion
Recommendation
Realization highly recommended because of:
Time and cost savings
BE after 2 years
ROI is positive at 1.39 at a 4-Year usage
Low project risk
The project opens new opportunities in quality
assurance such as:
• Transparent communication
• Control and monitoring of sensitive
knowledge exchange
• Business process efficiency
Daniel Sigrist | Jonas Scheuring 10
Editor's Notes
The schematic drawing of the organizational structure shows, which departments are involved in a possible process improvement project. Such a project is clearly at the ownership of the Knowledge Analysis department, whereas the IT department, respectively it’s competencies would play a major role.Further departments as R&D, Marketing and QA are considered as the major customers whose needs must be satifsfied.
Lets have a closer look on wich shortfalls we could identify:We contract stakeholders with SLA’s that include delivery ammounts, but we are depending on their good-will to deliver complete and timely results. That is because there is no working process order for the stakeholders definedWe spend an estimated extra effort of more than 20 man-days per year in IT just because the sourced knowledge is feeded manually to the knowledge repository.Next, 7% of the deliveries from stakeholeders need to be reprocessed because of odd delivery or junk included. That is because there is no detailed procedure accross organizational units defined.If somebody ask for staistical values e.g. For verifications, there are well defined KPIs missing that could automatically be generatedSome assigned workers do side efforts where approximately 5% of that work will be dropped later on because there are not usefull for our customers. Here not the worker is to blame, but rather more the internal information distribution is to challange.
Derived from the shortfalls, we will face now an optimized approach how to improve on this deficits.If we implement business process management (including the creation of graphical process definitions and including a business process engine which orchestrates the process flow automatically, keeps track of the processes and can deliver according KPI’s) we can reach a major and necessary milestone in improving the overall business efficiency and effectiveness.My dear colleague will show you now in the next four minutes how such a solution coudl look like and what are the identified costs and benefits of the realization.
