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  1. 1. RETURN-ON-INVESTMENT ROI JOM / 06.16.03 Prepared By Dr. J.O. Matous Presented By Dr. W.B. Sconyers In the Context of ISO 9000 INTERNATIONAL STANDARDS REQUIREMENTS AND GUIDANCE
  3. 3. ENTERPRISE ROI FOUNDATION IN ISO 9000 (Key Ingredient To Enterprise ROI) KEY INGREDIENTS TO ENTERPRISE ROI Quality Management Management Responsibility Resource Management Product Realization Measurement, Analysis & Improvement JOM / 06.16.03 FIVE BASIC TOPICS IN ISO 9000 All Requirements and Guidance Emphasize “ EFFECTIVENESS & EFFICIENCY”
  4. 4. RELATIONSHIP TO ENTERPRISE ROI RETURN-ON-INVESTMENT = k* (EFFECTIVENESS/EFFICIENCY) (Equivalent to Output/Input) JOM / 06.16.03 Return-On-Investment is a key measure of an Enterprise’s ability to operate in the business environment and market of its on choosing Efficiency (from a Return-On-Investment standpoint) is the ability of an Enterprise to produce a product or provide a service with minimum effort, expense, and waste Effectiveness (from a Return-In-Investment standpoint) is the ability of an Enterprise to product a product or provide a service meeting all customer requirements and demands of other interested parties
  5. 5. Quality Management JOM / 06.16.03 Create and implement Enterprise-wide Quality Management systems, processes and procedures that continually improve effectiveness and efficiency Effective and efficient systems and processes use fact-based customer. operations, and performance data to make Intelligent decisions Proactive commitment and ensuing actions to ensure both operation and control of the processes are effective and efficient Specific Quality Management Principles are are used by top management ensuring the Enterprise is managed in a Systematic and visible manner
  6. 6. Management Responsibility JOM / 06.16.03 Leadership, commitment and active involvement are essential for the development, execution and maintenance of effective and efficient Enterprise operation Responsibility to obtain real information on effectiveness and efficiency of the Enterprise is a conscious and visible obligation. Assurance that the Enterprise’s systems and processes operating as an effective and efficient network The ethical, effective and efficient compliance with current and prospective needs, expectations and requirements/demands of the customer Quality Policies are critical to achieve improvements in effectiveness and efficiency of the Enterprise’s performance
  7. 7. Resource Management JOM / 06.16.03 Effectiveness, efficiency and timely availability of resources related to the Enterprise's opportunities and constraints Just-in-time resources is the key attribute that effective and Efficient resource management brings to the Enterprise Empowered people provides the highest leverage towards achieving effectiveness and efficiency of Enterprise operation Intellectual capital of an Enterprise vested almost totally in people contributes the most toward a effectiveness, efficiency, and success of an Enterprise
  8. 8. Product Realization JOM / 06.16.03 Effective and efficient preparation, coordination, communication and facilitation of the Enterprise’s operating plan Effectiveness and efficiency of realization processes for Production and service of products add value to the Enterprise Improvement in customer relations/satisfaction , better use of resources and reduction in waste result from effectiveness And efficiency of Enterprise realization processes Effective and efficient planning for controlling and monitoring the activities that produce and/or provide the significant and critical parts of the Enterprise’s products/services
  9. 9. Measurement, Analysis & Improvement JOM / 06.16.03 Continuous awareness , examination and evaluation are Essential for the effectiveness and efficiency of Enterprise operation Fact-based decisions made possible by measurement and Analysis is the means to realize an effective and efficient Enterprise operation Measured data along with effective and efficient communication and listening to the customer is essential and mandatory to be an Agile Enterprise remaining profitable, competitive and sustain growth in created value Constant awareness of advances in technology, methodologies, testing techniques and other advances improve the effectiveness and efficiency of Enterprise processes, intellectual capital and operation/performance
  10. 10. KEY CONTRIBUTORS TO ENTERPRISE ROI . Intellectual Capital Realization Processes Agility Initiatives JOM / 06.16.03 Quality Management Systems and Processes Quality Policies and Objectives
  11. 11. Intellectual Capital Vested in the Enterprise’s most valuable asset (Empowered People) JOM / 06.16.03 Transfer and accumulation of information and knowledge Fact-based decision-making process about Intellectual Capital Insight, expertise, experience, education, profitability, competitiveness, and sustained ability to create value value Communication, Coordination and Cooperation
  12. 12. Quality Management Systems and Processes Systemic and visible leadership JOM / 06.16.03 Operational directives and disciplined execution Operation designed to implement and maintain continuous improvement in effectiveness and efficiency of Enterprise performance Needs, demands and expectations of the Enterprise’s customers and the interested parties are prime considerations
  13. 13. Realization Process Realization process is prime vehicle for running and creating Economic-Value-Added (EVA) to the Enterprise’s performance Customer’s perception of value received, relevance to overall strategic Enterprise direction (Quality Policies & Objectives,) and effectiveness, efficiency, viability, worth Returning more to the Enterprise than it consumes in resources and capital JOM / 06.16.03
  14. 14. Agility Initiatives Recognition of opportunities generated by new technology, changes in financial and/or monetary environments, regulation and legislature changes Initiation of immediate action to take advantage of the opportunity as soon as it is recognized Sense market and/or customer changes Quickly respond with conforming adjustments accommodating the resulting change in the needs/ demands and/or expectations of the customer and/ or interested parties JOM / 06.16.03
  15. 15. Quality Policies and Objectives Discipline employed with concrete direction and communication of the Enterprise’s purpose, policies, strategy, direction and management emphasis Fact-based evaluation of the environment, the customer and interested parties needs, requirements and expectations Decisions made on what is required to produce Overall Enterprise effectiveness and efficiency of operation and performance (Corollary to Quality Management fact-based added value) Improvement is a permanent objective JOM / 06.16.03
  16. 16. REVIEW Return-on Investment addressed implicitly in ISO 9000 International Standards Constant use of Effectiveness and Efficiency in ISO 9000 is the Conscious Evidence of the Importance of ROI in the operation of the Agile Enterprises Key Contributors to an Enterprise’s ROI Intellectual Capital Quality Management Systems & Processes Realization Processes Agile Initiatives Quality Policies and Objectives JOM / 06.16.03