Not all change is necessarily an improvement. Through experience we have all developed a healthy skepticism when it comes to accepting change, even those changes that actually do lead to an improvement. To achieve improvement, however, change is absolutely necessary.

The questions we need to ask ourselves are:

1. What to change?
2. What to change to?
3. How to cause the change?

Business Resources

All businesses have only 5 resource bases at their disposal. These are:

It is the role of business management to;

1. plan,
2. assemble,
3. organise,
4. direct,
5. measure, and
6. control

these 5 resources bases. Is it possible to extract more value from these existing resources than has traditionally been achieved? The traditional approach is simply to trade one resource, say financial, for another resource, say physical, to increase capacity in one resource area. Whilst our resource base is limited, what limitations do we, ourselves, place on them? We operate businesses under a set of beliefs and rules. Could it be that those rules and beliefs limit the value we can extract from our resources?

And which of the business management actions is the most important? Is there one that reinforces our beliefs and rules and causes us to make decisions based upon the limitations we have set ourselves? There is a saying, "Tell me how you will measure me, and I will tell you how I will behave". The most powerful management action is action 5, MEASURE. Measurement reinforces our beliefs. But what if we measured the wrong thing or interpreted measurements in the wrong way? Could we convince ourselves that the sun orbits the earth?

If we can find a way to diminish a limitation, won't that bring us benefit? And if we deploy new technology and business processes that are bound by the same rules and limitations we already have, how can we extract real value from it? The new technology will simply accomodate those rules and be bound by them. In that case it is the rules themselves that impose the limitation and we cannot extract the full potential value of the new technology.

Necessary But Not Sufficient

Like Goldratt's book of the same name, it is not enough simply to introduce new tools into a business which remains confined by old rules and methods of doing business. A new technology will only bring benefits, when, and only when, it diminishes an existing limitation.

As an example, Goldratt gives the case of typing a letter. Before the computer age it would probably take some hours to get a letter typed, corrected, re-typed and sent and it would involve at least 2 people. That was quite normal and quite acceptable. Any performance measurement of the time would accomodate the limitations of the typewriter. Any improvement made to the business process which operates uder the same rules which assume the existence of the limitation cannot bring benefit. To bring benefit we must identify the limitation and work to diminish it. Otherwise any initiative we undertake in the business will still be bound by those rules and limitations. As a technological enabler, computers have brought the time down to prepare a letter to a task which one person can perform literally in minutes. The new technology overcomes the limitation of the typewriter and brings real benefit, otherwise it would be completely non value adding.

So, we can conclude that the way we measure performance is crucial to the way our business operates. Also, to bring real value, we must identify and overcome existing limitations. Spending a lot of money on new systems which continue to measure our business in the same way and operate under the rules and limitations we have set ourselves cannot, and will not, bring us any benefit. 

Business Processes

Understanding the types of business processes that occur within your business and the location of the information they use and produce may not be important for the ongoing status quo of your business but is an important step on the path to increased revenue and profit. Do your current business processes have any limitations in the way you manage and measure your business performance?

Control is instrumental to profitable growth. Without it you may just find your revenue increasing whilst your bottom line increases at a slower rate (or, heaven forbid, not increasing at all)! Our Business Process Innovation service provides you with enhanced ways of working. Where appropriate we leverage the latest developments in free, open source software as well as proprietary vendor solutions. We help you determine ways to work smarter to better plan, assemble, organise, direct and control your 5 business resources. Most importantly of all, we help you identify and overcome limitations so that you can gear your business for profitable growth and measure it in a meaningful way that impacts the bottom line.

In conjunction with our business partners we can show you proven methods of:

• reducing your overheads
• coordinating your workforce
• consolidating your business data
• reporting on your business performance in real time
• reducing the time it takes to perform business processes
• increasing quality and consistency of your business processes

TOC shows us that the real value proposition is in measuring things such as throughput, inventory dollar days and throughput dollar days. To innovate is not enough. We need to overcome our limitations and local optimisation approach to look at overall system optimisation. If that means local efficiencies actually go down then good.

We must never sacrifice overall system performance for localised performance. Especially when these local optima do not even impact the bottom line in a positive sense. High output from a non-constrained resource is detrimental to our business. In manufacturing, for instance, it will just result in excess in-process inventory and that's a bad thing because lead time goes up. Why are we measuring our performance based on local efficiencies and limiting overall system performance. These rules and limitations need to be overcome if any improvement initiative is to truly bring bottom line performance. This is probably the reason why so many business initiatives fail to improve performance. They are limited by the old rules.

Organisational Change

Any change needs effort to drive innovation throughout the organisation. This requires energy to move your business from its current operating state into a new operating state. And maybe from one set of beliefs to a new set of beliefs. That is not easy to achieve and is probably the single major obstacle holding you back.

Our Business Integration Service shifts your operational resources, especially your physical and human resources, into alignment with your new business processes. This guarantees your investment is exploited to the full.

The ultimate aim is to reduce your costs and increase your net profit given the same resource base. To achieve all of this you need a change agent that will facilitate the change process.

The strategic direction of the company dictates the business processes which will be required in the future. A company's vision of the future which is outside it's current 5 resource bases needs a clear strategy on how to acquire those resources as it is important for companies not to operate outside of their 5 resource bases (this poses significant risk to the wellbeing of the organisation). This future strategy needs to be taken into account when planning for change.

An integral part of coming up with new initiatives which positively impact the overall business is to come up with new ways of measuring performance. After all, it is well known that performance measures strongly influence behaviour. If you measure the wrong thing you may be driving your business in the wrong direction! Is the motivational force you apply to your people truly aligned with positive financial outcomes? You'd be surprised how often closer analysis shows that there is, in fact, a misalignment between what people are encouraged to do (and sometimes are punished for if they don't do it) and what is good for the overall business or system.

And so Business Process Innovation is not so much about changing the way businesses do their day to day activities as it is about modifying human behaviour to better align effort with reward. In the TOC world this means increasing Throughput and reducing Inventory. Even with no change in Operating Expense this means more profit.

Business Process Automation

Automation of business processes is a good way to increase consistency and overall quality by ensuring repeatability. Some things just have to happen in a business no matter how it is organised. Modern technology such as shop floor automation or computerised information management systems can provide better measurement and control of these operations.

When it comes to information management, Open Standards and Open Source software  can provide complete enterprise wide solutions with a lower TCO (total cost of ownership) than proprietary tools. This is because there are no up front exorbitant licence fees and there is no ongoing licence management to be done which can be very costly indeed for larger organisations. Often it is also possible to deploy a low cost implementation for a proof of concept exercise without having to make significant financial commitments. This dramatically reduces your risk profile.

Open Standards software is community developed and reviewed and can be more robust and reliable than proprietary software which is developed by a small, closed team to tight time and cost pressures. Also commercial backing is available for the larger applications, such as BI, ERP, CRM and so on. This is ideal in a busineses environment where corporate support is crucial.

Open source is a development method for software that harnesses the power of distributed peer review and transparency of process. The promise of open source is better quality, higher reliability, more flexibility, lower cost, and an end to predatory vendor lock-in.

The Open Source Initiative (OSI) is a non-profit corporation formed to educate about and advocate for the benefits of open source and to build bridges among different constituencies in the open-source community.

But what about the benefits for business? Well, you get:

1. Free software with no up front licence capital cost
2. Huge reduction in TCO by eliminating time consuming and costly ongoing licence management
3. Reliable software with large and supportive online forums
4. No need for escrow agreements as the source code is freely available to you
5. Modifiable and customisable platform should you require it
6. Corporate backing and support on selected enterprise level products for long term peace of mind
7. Regular functional and security updates

We can assist you with determining what to do to improve your business and then how to achieve those improvements. Our Business Integration Partners have a proven track record in delivering robust operational systems to help you manage your business more effectively.

In conjunction with our Business Integration Partners we can show you proven methods to drive business process innovation throughout your organisation and re-align your 5 business resources with your new, improved business processes. We aim to:

• Identify the best innovative solutions for your business.
• Manage and deploy new business process solutions to your business.
• Integrate new processes and tools throughout your business.
• Train your personnel in new ways of working. 
• Better utilise your workforce knowledge and capture it as an identifiable business asset.
• Reduce your Operating Expense
• Coordinate your workforce
• Consolidate your business data
• Report on your business performance in real time
• Reduce the time it takes to perform business processes
• Increase quality and consistency of your business processes

The ultimate aim is to increase your business Throughput for the same or lower Operating Expense and Investment. Usually we can identify "Quick Wins" that will deliver a measurable benefit to your business with a minimum investment of time and cost.

So let's get started now with the first step: What to change? Call us to see how we can help you focus your efforts on what really matters.