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More from Neil Beyersdorf - MSES | CLSSMBB | Prosci OCM
Business Excellence through Knowledge Management
- 1. Understanding and achieving BusinessExcellence through Knowledge Management Created and presented by Neil Beyersdorf
- 2. BUSINESS EXCELLENCE INITIATIVES RESULTS Reference– The Wall Street Journal - Where Process-Improvement Projects Go Wrong, Satya S. Chakravorty January 25, 2010 “Lean Six Sigma and other programs typically show early progress and then things return to the way they were. Recent studies suggest that nearly 60% of all corporate Six Sigma Initiatives fail to yield the desire results.” www.linkedin.com/in/neilbeyersdorf
- 3. BUSINESS EXCELLENCE COST OFPOOR QUALITY www.linkedin.com/in/neilbeyersdorfReference – Juran Institute, Inc. • Budget Overrun • Customer Returns • Customer Servicing • Inspection Visual Costs – Tangible/Easy to Measure Hidden Costs – Tangible/Hard to Measure • Complaint Handling • Compliance Failure • Customer Dissatisfaction • Customer Retention • Inventory • Employee Turnover • Field Service • Overtime • Work in Process • Expediting • Improvement/Quality Programs • Inaccurate Analysis • Inaccurate Reporting • Inaccurate Sales Pipeline • Inaccurate Win-Lost Rate • Late Delivery • Loss of Future Business • Loss of Potential Revenue • Lost Customer & Employee Loyalty • Overdue Receivables • Planning Delays • Pricing/Billing Errors • Process Control • Quality Audits • Recruitment/Onboarding • Reputational Damage • Revising Documentation • Staff Moral • Unused Capacity • Vendor Control • Project Delays • Recalls • Rejects • Rework • Scrap • Testing • Warranty • Waste As an organization gains a broader definition of poor quality….. the hidden portion of the iceberg becomes apparent.
- 4. BUSINESS EXCELLENCE COST PERDEFECT www.linkedin.com/in/neilbeyersdorfReference – Juran Institute, Inc. 6 5 4 3 2 1 Sigma Level 3.4 233 6,210 66,811 308,770 697,672 Defects per Million < 10% 10 – 15% 15 – 20% 20 – 30% 30 – 40% 40 – 50% Cost of Sales
- 5. BUSINESS EXCELLENCE RESPONSIBILITY FORQUALITY … is everyone’s responsibility.” – Dr. W. Edwards Deming www.linkedin.com/in/neilbeyersdorf
- 6. BUSINESS EXCELLENCE SPEED VSQUALITY “An organization’s journey to Business Excellence begins once it ceases to sacrifice quality for speed.” – Neil Beyersdorf www.linkedin.com/in/neilbeyersdorf
- 7. BUSINESS EXCELLENCE PILLARS ANDFOUNDATION eBusiness Excellencef Knowledge Management Organizational Change Management Business Management ITInfrastructure SystemsIntegration e Continuous Improvement Culture and Program f BusinessStrategy www.linkedin.com/in/neilbeyersdorf
- 8. BUSINESS EXCELLENCE FOUNDATION ANDPILLARS DEFINITIONS Continuous Improvement Culture and Program management of practiced strategy, tactics and methods to improve processes and products that is embraced and empowered throughout the organization where it is everyone’s responsible for the improvement of quality and business excellence. The standardized practice is usually lead and governed by a centralized management office, i.e. Knowledge Management Office (KMO), Project Management Offices (PMO)/ Center of Excellence (CoE), maintaining a portfolio of current and proposed projects improvement prioritized based on numerous key characteristics. Business Strategy long term plan of action designed to achieve a particular goal or set of goals or objectives. Strategy is management's game plan for strengthening the performance of the enterprise. It states how business should be conduct to achieve the desired goals. Organizational Change Management (OCM) framework for managing the effect of new business processes, changes in organizational structure or cultural changes within an enterprise. Simply put, OCM addresses the people side of change. Business Management level of process maturity of an organization where a systematic approach to making an organization's workflow more effective, more efficient and more capable of adapting to an ever-changing environment is practiced. Baseline process performance is measured and maintained, new hires are trained to a documented standard for their role and responsibly within business processes and to maintain and improve the performance of within business processes. IT Infrastructure Systems Integration process of creating a complex information system that may include designing or building a customized architecture or application, integrating it with new or existing hardware, packaged and custom software to enhance the organizational efficiency and effectiveness. Knowledge Management process/discipline that promotes an integrated approach to efficiently retrieving, identifying, capturing, evaluating, and sharing all of an enterprise's information, resources, and assets within an organization.www.linkedin.com/in/neilbeyersdorf
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- 10. Business Excellence Business Improvement Business Management Business Excellence Continuous Improvement “Managing a companyby means of the monthly report is like trying to drive a car by watching the yellow line in the rear-view mirror.” - Myron Tribus ForecastingReporting www.linkedin.com/in/neilbeyersdorf BUSINESS EXCELLENCE MATURITY MODEL
- 11. BUSINESS EXCELLENCE MATURITY MODELSTATES AND DEFINITIONS Business Improvement Business Management Business Excellence Continuous Improvement Business Excellence level of an organization’s achievement of efforts of transformation of the organization’s culture to maintain continuous improvement, in other words ingrained in the DNA of the organization's culture. Continuous Improvement systematic approach to making an organization's workflow more effective, more efficient and more capable of adapting to an ever-changing environment. Business Management collect data and to apply qualitative and quantitative analysis in order to identify any issues, risks, and areas of improvement related to the process. Multiple analytical tools are available to assign metrics to the process and evaluate performance. The Analyze phase enables the business to identify the benefit, significance, and cost of each activity and assess the impact of future changes. This provides a better understanding of the current state and allows business units to make informed decisions about which part(s) of the process warrant change. Business Improvement the current state of the process is determined and documented. Mapping the current processes is the best way to ensure a detailed understanding of how the work is being performed. Information is captured through the use of Process Interviews and observations, and then a graphic representation of the workflow is documented on Process Maps. Flow ensures that the organization understands their current processes prior to identifying solutions. By "flowing" out the process, teams will easily discover which activities and functions need to be created or modified in order to improve the process. www.linkedin.com/in/neilbeyersdorf
- 12. BUSINESS EXCELLENCE FOUNDATION MATURITYMODELS SUPPORTING BUSINESS EXCELLENCE eBusiness Excellencef Data Analytics/Science Process (Capability) Product DataandData Management Knowledge Management www.linkedin.com/in/neilbeyersdorf LeanSixSigma e Maturity Models f
- 13. BUSINESS EXCELLENCE KNOWLEDGE MANAGEMENTMODEL & COMPONENTS Reference – Jed Cawthorne, KM and Information Management and Collaboration Practitioner People Human Domain Process Organizational Learning Data Information Management Technology Communication Information Ownership /Responsibility Efficiency Benefits Reference – Jed Cawthorne, KM and Information Management and Collaboration Practitioner Knowledge Management Best Practices Behaviors Content Management Enterprise Search Relational Database Management Systems Content Management Staff Development Education & Training Innovation Strategy Policy & Procedure Records Management Flexible Frameworks Lessons Learned Process Development Decision Support Performance Management Learning Connecting Knowledge Sharing Synchronous & Asynchronous Collaboration Standard Operating Procedures www.linkedin.com/in/neilbeyersdorf
- 14. BUSINESS EXCELLENCE BUSINESS EXCELLENCEMATURITY MODEL AND KNOWLEDGE MANAGEMENT MATURITY LEVELS Reference – APQC’s (America Productivity and Quality Center) Levels of Knowledge Maturity Model Business Excellence Business Improvement Business Management Business Excellence Continuous Improvement Level 5 Innovate Level 4 Optimize Level 3 Standardize Level 2 Develop Level 1 Initiate Continuously Improving Practices Measured and Adaptive Common Processes and Approaches Localized and Repeatable Practices Growing Awareness Ad Hoc Knowledge Applied Knowledge Leverage Knowledge Dynamic Knowledge www.linkedin.com/in/neilbeyersdorf
- 15. BUSINESS EXCELLENCE BUSINESS EXCELLENCEMATURITY MODEL AND KNOWLEDGE MANAGEMENT MATURITY LEVELS Business Management Continuous Improvement Business Excellence Level Knowledge Management Maturity ResultLevel5 Innovate Growing awareness and ad hoc knowledge. Knowledge Management is a part of the enterprise excellence framework and is aligned with enterprise innovation efforts. Level4 Optimize Knowledge Management is aligned to the enterprise business framework e.g., vision, mission, strategies and competencies increased to meet demand. Knowledge assets are developed for competitive advantage. Level3 Standardize Vision/mission for Knowledge Management is linked to value creation in the business/domain. Knowledge Management strategy and Roadmap is documented. Knowledge is reused within a domain or business unit. Valuable domain or business unit knowledge is identified, captured, and standardized into common assets for reuse in other areas of the enterprise. Level2 Develop Value creation is acknowledged as a major business objective of Knowledge Management. Projects are underway in a domain or business unit to pilot or test Knowledge Management approaches that enable knowledge flow. Valuable domain knowledge is identified and documented. Level1 Initiate Awareness and interest in Knowledge Management is visible in parts of the organization. A business need for Knowledge Management has been identified. HighProductivity andHighQuality HighRiskand HighWaste Business Excellence Business Improvement Business Management Business Excellence Continuous Improvement Reference – APQC’s (America Productivity and Quality Center) Levels of Knowledge Maturity Model www.linkedin.com/in/neilbeyersdorf
- 16. BUSINESS EXCELLENCE BUSINESS EXCELLENCEMATURITY MODEL AND CAPABILITY MATURITY MODEL INTEGRATION (CMMI) LEVELS Business Management Continuous Improvement Business Excellence Level Process Maturity ResultLevel5 Optimizing Process performance is continually improved through both incremental and innovative improvements. Feedback is used to drive process enhancements and business growth. Best practices are shared with peers and industry. Process focus is on continually improving process performance through both incremental and innovative technological changes/improvements. Level4 Managedand Measured Managed and measured process metrics have been established. There are formal processes for managing variances. Quality and process performance is understood in statistical terms and is managed across the life of the process. Process capability is established, management can effectively control the AS-IS process by using process metrics. Management can identify ways to adjust and adapt the process to particular projects without measurable losses of quality or deviations from specifications. Level3 Defined Sets of standard processes have been established and improved over time, providing a predictable measure of consistency. Processes to meet specific needs are tailored from the set of standard processes according to the organization’s guidelines. Processes are sets of defined and documented standard processes established and subject to some degree of improvement over time. These standard processes are in place and used to establish consistency of process performance across the organization. Level2 Repeatable Processes are planned and executed in accordance with policy; employ skilled people having adequate resources to produce controlled outputs; involve relevant stakeholders; are monitored, controlled, and reviewed; and are evaluated for adherence to its process description. Some processes are repeatable, possibly with consistent results. Process discipline is unlikely to be rigorous, but where it exists it may help to ensure that existing processes are maintained during times of stress. Level1 Initial (Chaotic)and Performed Processes are performed ad hoc, primarily at the project level. There are no processes areas applied across business areas. Process discipline is primarily reactive; for example, for data quality, the emphasis is on data repair. Foundational improvements may exist, but improvements are not yet extended within the organization or maintained. Processes are (typically) undocumented and in a state of dynamic change, tending to be driven in an ad hoc, uncontrolled and reactive manner by users or events providing a chaotic or unstable environment for the processes. Business Excellence Business Improvement Business Management Business Excellence Continuous Improvement Reference - CMMI (Capability Maturity Model Integration) Institute HighProductivity andHighQuality HighRiskand HighWaste www.linkedin.com/in/neilbeyersdorf
- 17. BUSINESS EXCELLENCE PRODUCT MATURITY(LIFE CYCLE) MODEL www.linkedin.com/in/neilbeyersdorf Introduction Growth Maturity Decline Innovation/ Reinvention Sales Stage 1 Stage 2 Stage 3 Stage 5 Stage 4 Reference - Product Life Cycle Theory by Raymond Vernon
- 18. BUSINESS EXCELLENCE BUSINESS EXCELLENCEMATURITY MODEL AND PRODUCT MATURITY MODEL Business Excellence Level Product Maturity ResultStage5 Innovation/ Reinvention In a mature market, potentially entering the decline stage of the product life cycle, larger firms may be in a position to try and rethink the overall positioning of a product in order to try and broaden its market or to create new usage or opportunities for silence. In other words, instead of simply accepting that the product will decline in sales and profitability – think about whether there is an opportunity to “breathe new life” into the product. Stage4 Decline The market for a product will start to shrink, and this is what’s known as the decline stage. This shrinkage could be due to the market becoming saturated (i.e. all the customers who will buy the product have already purchased it), or because the consumers are switching to a different type of product. While this decline may be inevitable, it may still be possible for companies to make some profit by switching to less-expensive production methods and cheaper markets. Stage3 Maturity The product is established and the aim for the company is now to maintain the market share they have built up. This is probably the most competitive time for most products and businesses need to invest wisely in any marketing they undertake. They also need to consider any product modifications or improvements to the production process which might give them a competitive advantage. Stage2 Growth Typically characterized by a strong growth in sales and profits, and because the company can start to benefit from economies of scale in production, the profit margins, as well as the overall amount of profit, will increase. This makes it possible for businesses to invest more money in the promotional activity to maximize the potential of this growth stage. Stage1 Introduction The most expensive for a company launching a new product. The size of the market for the product is small, which means sales are low, although they will be increasing. On the other hand, the cost of things like research and development, consumer testing, and the marketing needed to launch the product can be very high, especially if it’s a competitive sector. www.linkedin.com/in/neilbeyersdorfReference - Product Life Cycle Theory by Raymond Vernon Business Excellence Business Improvement Business Management Business Excellence Continuous Improvement HighProductivity andHighQuality HighRiskand HighWaste
- 19. BUSINESS EXCELLENCE DATA MANAGEMENTMATURITY RELATIONSHIP STRUCTURE AND COMPONENTS Reference - Kingland Systems www.linkedin.com/in/neilbeyersdorf Data Management Strategy Data Quality Data Operations Platform & Architecture Data Governance Supporting Processes DataManagement Strategy Data Management Strategy Communications Data Management Function Business Case Program Funding Data Governance Governance Management Business Glossary Metadata Management DataQuality Data Quality Strategy Data Profiling Data Quality Assessment Data Cleansing Data Operations Data Requirements Definition Data Lifecycle Management Provider Management Platform& Architecture Architectural Approach Architectural Standards Data Management Platform Data Integration Historical Data, Retention and Archiving Supporting Processes Measurement and Analysis Process Management Process Quality Assurance Risk Management Configuration Management Components Implementation Oversight Collaboration Infrastructure Oversight Quality Requirements and Strategy Metadata Oversight Requirements Execution Business/IT Alignment Infrastructure Oversight Data Infrastructure Priorities Alignment Direction
- 20. BUSINESS EXCELLENCE BUSINESS EXCELLENCEMATURITY MODEL AND DATA MATURITY & DATA MANAGEMENT MATURITY Business Management Continuous Improvement Business Excellence Level Data Maturity Data Management Maturity Result Level5 Optimized Data is seen as critical for survival in a dynamic and competitive market Processes are regularly improved and optimized based on changing organizational goals – we are seen as leaders in data management Level4 Measured Data is treated as a source of competitive advantage Practices are managed and governed through quantitative measures of process performance Level3 Defined Data is treated at the organizational level as critical for successful mission performance Practices are aligned with strategic organizational goals and standardized across all areas Level2 Managed There is awareness of the importance of managing data as a critical infrastructure asset Activities are deliberate, documented and performed consistently at the Business unit Level1 Performed Data is managed as a requirement for the implementation of projects Activities are Informal, ad hoc., and dependent on heroic efforts and lots of cleansing Business Excellence Business Improvement Business Management Business Excellence Continuous Improvement Reference - Kingland Systems HighProductivity andHighQuality HighRiskand HighWaste www.linkedin.com/in/neilbeyersdorf
- 21. BUSINESS EXCELLENCE DATA ANALYTICS/SCIENCEMATURITY MODEL Reference – Else Kuipers - Continuous Improvement Supply Chain Process Management (CISCPM) www.linkedin.com/in/neilbeyersdorf Transactional Strategic Analytics Maturity Business Value AspirationalAdvanced Descriptive Inquisitive Predictive Prescriptive Pre-emptive What happened when? Why it happened then? What will happen when the process changes? What should be changed? What can be done/ changed more?
- 22. BUSINESS EXCELLENCE BUSINESS EXCELLENCEMATURITY MODEL AND DATA ANALYTICS/SCIENCE MATURITY MODEL Business Excellence Level Data Analytics/Science Maturity Result Level5 Pre-emptive Pre-emptive analytics is using to have ability to take preventive actions. Data simulated dynamically market conditions and customer behavior to predict future outcomes, semantic (graphic) understanding of customers social networks, online behavior, interactions, patterns of purchase, and evolution of opinions over time and interactions. Level4 Prescriptive With prescriptive analytics you try to see what the effect of future decisions will be in order to adjust the decisions before they are actually made. It provides advice based on the outcome of your predictive analytics. Data is analyzed in conjunction with probabilities and statistical techniques, from predictive modelling, machine learning, and data mining, to develop forecasting models to predict trends and behavior patterns. Level3 Predictive Predictive analytics provides an estimation regarding the likelihood of a future outcome in your supply chain process, also it can help to identify some risks or opportunities in the future. Predictive analytics can be done by using a technique like data mining and modelling. Factors, causes, and effects are identified. The root causes or variables that effect the outcome, this would potentially be the x in the y=f(x) equation. Hypothesis testing, normality, chi-square, correlation, regression, ANOVA, T-Test and Multi-Variable analysis and other statistical tools can be applied to the data. Level2 Inquisitive Inquisitive analytics is used to validate or to reject the different business hypotheses. Inquisitive analytics has to give an answer on the question : ‘Why did something happened at a certain moment in the past? Some examples of inquisitive analytics : •Statistical analysis •Factor analysis Level1 Descriptive Descriptive analytics helps your company to understand what happened in the past. The past can be from one minute ago to a few days, a few weeks, a few months or a couple of years back. Descriptive analytics helps to understand the relationship between customers, carriers, suppliers and products and the goal is to gain an understanding of which approach to take in the future. This type of analytics is an important source to determine what to do next. Descriptive analytics looks at data to describe the current situation in such a way that trends, patterns and exceptions become apparent. Business Excellence Business Improvement Business Management Business Excellence Continuous Improvement HighProductivity andHighQuality HighRiskand HighWaste www.linkedin.com/in/neilbeyersdorfReference – Else Kuipers - Continuous Improvement Supply Chain Process Management (CISCPM)
- 23. BUSINESS EXCELLENCE BUSINESS EXCELLENCEMATURITY MODEL AND LEAN SIX SIGMA MATURITY MODEL Reference - Six Sigma Maturity Model - Oracle’s Instantis Business Management Continuous Improvement Business Excellence Level Lean Six Sigma Maturity Result Level5 Culture Transformation Six Sigma has become part of the organizational DNA, the financial impact is now sustained, and Six Sigma culture is pervasive (even beyond the Six Sigma practitioners and company boundaries). Level4 Institutionalization Projects are yielding broad-based financial impacts throughout many parts of the company. Level3 Scaleand Replication Early success has led other parts of the organization to buy in to Six Sigma, meaning that a broader project launch is under way. Level2 EarlySuccess The initial projects are yielding results, and early successes are being achieved. Level1 Launch This is the starting point—when Six Sigma is launched, training is initiated, and projects are begun. Business Excellence Business Improvement Business Management Business Excellence Continuous Improvement HighProductivity andHighQuality HighRiskand HighWaste www.linkedin.com/in/neilbeyersdorf
- 24. BUSINESS EXCELLENCE LEAN SIXSIGMA MATURITY MODEL LEVEL DEFINITIONS Reference - Six Sigma Maturity Model - Oracle’s Instantis Launch This is the starting point—when Six Sigma is launched, training is initiated, and projects are begun. Early Success The initial projects are yielding results, and early successes are being achieved. Scale and Replication Early success has led other parts of the organization to buy in to Six Sigma, meaning that a broader project launch is under way. Institutionalization Projects are yielding broad-based financial impacts throughout many parts of the company. Culture Transformation Six Sigma has become part of the organizational DNA, the financial impact is now sustained, and Six Sigma culture is pervasive (even beyond the Six Sigma practitioners and company boundaries). www.linkedin.com/in/neilbeyersdorf
- 25. BUSINESS EXCELLENCE LEAN SIXSIGMA MATURITY MODEL LEVEL ELEMENTS Reference – Lean Six Sigma Maturity Model - Oracle’s Instantis Culture Change Beyond DMAIC Strategy Maturing Software Reporting Financial Impact Project Selection People Training Leadership Support DNA of Organization IT, Product Development Full Closed-Loop Strategy & Portfolio Multi-Year History General Ledger Formalized Evaluation Majority Internal, Specialty Ingrained Culture Transformation Level 5 DFSS & Lean Start Up Project Roll-up Portfolio Management Cross-org Comps Validation Idea Pipeline Repatriated Internal eLearning Expected Institutionalization Level 4 Maps & Goals Project Management Aggregate, Average Consistency, EP Copy Success Career Development External, Customer Across Organization Scale Replication Level 3 Excel, Stats Aggregate, Average Cost Reduction Low Hanging More Believers External Validated Early Success Level 2 Anecdotal Ad hoc Burning Platform Driven Few Champion, Executive 1 or 2 Visionaries Launch Level 1 www.linkedin.com/in/neilbeyersdorf
- 26. BUSINESS EXCELLENCE MATURITY MODELS Business ExcellenceLevel Knowledge Management (APQC) Process (CMMI) Product (PLC) Data/ Data Management (Kingland Systems) Data Analytics (CISCPM) Lean Six Sigma (Oracle’s Instantis) ResultLevel5 Innovate Optimizing Innovation/ Reinvention Optimized Pre-emptive Culture Transformation Level4 Optimize Managed and Measured Decline Measured Prescriptive Institutionalization Level3 Standardize Defined Maturity Defined Predictive Scale and Replication Level2 Develop Repeatable Growth Managed Inquisitive Early Success Level1 Initiate Initial (Chaotic) and Performed Introduction Performed Descriptive Launch Business Excellence Business Improvement Business Management Business Excellence Continuous Improvement HighProductivity andHighQuality HighRiskand HighWaste www.linkedin.com/in/neilbeyersdorf