adi's Weblog

Brainstorming

usernameadi — Mon, 14 Jul 2008 10:28:29 +0000

The Brainstorming (Brainstorm) method is a semi-structured creative group activity, used most often in ad-hoc business meetings to come up with new ideas for innovation or improvement. Members of the group are encouraged to put forward ideas about a problem and how it may be solved, in order to generate as many ideas as possible, even if they are not always usable alternatives. The idea behind it is that a group of people can achieve a higher (synergy) level of creativity than the sum of the participants separately.

Three major rules for a successful brainstorm session are:

1. participants should be encouraged to come up with a much ideas as possible, however wild they are (there are no bad ideas),

2. no judgment should be passed on any idea until the end of the session (whether negative or positive), and

3. participants should be encouraged to build on each others ideas, creating unlikely combinations and taking each one in unexpected directions.

Some additional tips for a successful brainstorm session are:

- use an experienced (external?) facilitator

- identify a precise topic to be discussed

- no more than 8-10 people in one session, if there are more participants split up the brainstorm and report back to each other afterwards

- make somebody write everything down

- evaluate the ideas in 2 steps: A. define the criteria B. score the results on the criteria

- at the end of the brainstorming session, discuss the steps needed to implement the ideas. If this is complicated, do another brainstorming session on how to implement the ideas.

Although brainstorms are used frequently worldwide for over 70 years, the effectiveness of them for generating new ideas is debatable. Brainstorms are most effective to generate a lot of ideas in a short timeframe. Group processes are also effective for evaluating existing ideas. However (bright) individuals are said to be better at creating original and higher-quality ideas.

Benchmarking

usernameadi — Mon, 14 Jul 2008 10:25:10 +0000

Benchmarking is a systematic comparison of organizational processes and performance to create new standards or to improve processes. Benchmarking models are used to determining how well a business unit, division, organization or corporation is performing compared with other similar organizations. A Benchmark is often used for improving communication, professionalizing the organization / processes or for budgetary reasons. Traditionally, performance measures have been compared with previous measures from the same organization at different times. Although this can be a good indication of the rate of improvement within the organization, it could be that although the organization is improving, the competition is improving faster.

There are four types of benchmarking methods:

1. internal (benchmark within a corporation, for example between business units)

2. competitive (benchmark performance or processes with competitors)

3. functional (benchmark similar processes within an industry)

4. generic (comparing operations between unrelated industries)

Typically, benchmarking models involves the following steps:

- scope definition

- choose benchmark partner(s)

- determine measurement methods, units, indicators and data collection method

- data collection

- analysis of the discrepancies

- present the results and discuss implications / improvement areas and goals

- make improvement plans or new procedures

- monitor progress and plan ongoing benchmark.

Outsourcing

usernameadi — Mon, 14 Jul 2008 10:23:50 +0000

Outsourcing is a strategic management model transferring business processes to another company. The concept is to have the management and/or day-to-day execution of one or more business functions performed by a third party service provider, who is insourcing those same processes. Outsourcing occurs when a company uses an outside firm to provide a necessary business function that might otherwise be done in-house. Its aim is mostly to make an organization more competitive by staying focused on its core competencies.

It is different from subcontracting because the function is provided on an ongoing basis, rather than for a specific project. It can be provided on or off premises, in the same country or in a separate country (Offshoring).

In its most advanced form, outsourcing makes it possible to build a large, entirely virtual company with only a single employee: the entrepreneur.

Potential Benefits of Outsourcing:

Renewed focus on core business.

Mitigation of risks by reliance on an expert.

Improved customer satisfaction through improved processes not previously part of the enterprise’s culture or experience.

Ability to reward workers with career opportunities in a specialty company.

Project enhancement.

Service improvements.

Skills upgrade.

Skills retention.

Skills access.

Technology infusion.

Cost accounting and overall visibility of accounting and performance in a business process.

Cost reduction.

Management of volatility in costs through financial engineering.

Asset conversion.

Avoidance of capital investment.

BPR

usernameadi — Mon, 14 Jul 2008 10:18:59 +0000

The Business Process Reengineering method (BPR) is defined by Hammer and Champy as ‘the fundamental reconsideration and radical redesign of organizational processes, in order to achieve drastic improvement of current performance in cost, service and speed’. Value creation for the customer is the leading factor for BPR and information technology often plays an important enabling role.

Davenport (1992) prescribes a five-step approach to the Business Process Reengineering model:
1. Develop the business vision and process objectives: The BPR method is driven by a business vision which implies specific business objectives such as cost reduction, time reduction, output quality improvement.

2. Identify the business processes to be redesigned: most firms use the ‘High- Impact’ approach which focuses on the most important processes or those that conflict most with the business vision. Lesser number of firms use the ‘Exhaustive approach’ that attempts to identify all the processes within an organization and then prioritize them in order of redesign urgency.

3. Understand and measure the existing processes: for avoiding the repeating of old mistakes and for providing a baseline for future improvements.

4. Identify IT levers: awareness of IT capabilities can and should influence BPR.

5. Design and build a prototype of the new process: the actual design should not be viewed as the end of the BPR process. Rather, it should be viewed as a prototype, with successive iterations. The metaphor of prototype aligns the Business Process Reengineering approach with quick delivery of results, and the involvement and satisfaction of customers.

As a 6th step of the BPR method some mention to adapt the organizational structure and governance model towards the newly designed primary process.

When should BPR be used?

Although it is difficult to give generic advice on this, some factors that can be considered are:

- is the competition outperforming the company by factors?

- are there many conflicts in the organization?

- is there an extremely high frequency of meetings?

- excessive use of non-structured communication? (memos, emails, etc)

- is a more continuous approach of incremental improvements not possible?