Reviews

Every wondered if your business is any good?

Organisations need to achieve on-going, sustainable improvement in operations and performance to remain competitive and efficient. To achieve this organisations need to understand the performance of their processes, units, branches, products or services.

To understand performance you need to know:

The process, team, branch, unit, product or service
Its activity costs
Its profitability and cost efficiency
Its cost and quality performance
But how do you do this?

We have developed a framework to help organisations analyse and improve their businesses. The framework has being developed as a “quick start” toolkit with elements adapted to suit an organisation’s specific needs. The framework includes:

Estimating activity costs, which can be extended to include profitability analysis
Assessing cost and quality performance. This includes measuring the cost and quality performance, how to rate performance against both internal and external factors, action planning and the development of key performance indicators

Templates (in MS Word or MS Excel formats) for the above: Activity / Profitability Analysis; Cost / Quality Process Performance Assessment

Activity / Profitability Analysis
Undertaking an activity cost and profitability analysis is important when analysing and improving an activity:

It breaks an activity down into its components
Highlights the cost and profit of activities
Focuses attention on what is driving the cost and profit
Puts a factual basis behind perception
Demonstrates the consequence to people of their actions / inaction
Does not have to be time consuming
Can be started at a high level then drilled down on areas requiring more attention
Is relatively simple to do

You do not need complex timesheets diligently completed by people for weeks. We have developed a simple approach to activity cost / profitability analysis which can be easily implemented with your personnel trained on its application to enable them to continue this exercise on an ongoing basis.

Performance Assessment Framework
Have you ever asked these questions about your business?

How good are we?
How good can we get?

Both questions are asking about performance.

But we think the questions should be:

How good are we given our particular circumstances?”
How good can we get taking into account our particular circumstances?

Now the emphasis is not just on the process, team, branch, unit, product or service, but also on understanding the environment it operates within. This is critical to ensuring a practical process is designed, one that can achieve sustainable improvements in performance. Because your goal should be to be as good as you can be, not someone else.

We think this is so important we have developed a Performance Assessment Framework to enable organisations to review the performance of their business.

With the Review Package we apply the framework and train your people on its application so they can continue to use it.

What is the Performance Assessment Framework?

The Performance Assessment Framework is a methodology with accompanying tools that will help you understand what is impacting you and why it is the why it is. The framework hones in on how a process operates within an organisation, the organisations attitude to cost and quality, and what factors are impacting the process.

The framework classifies organisations in four ways:

Premium – For some organisations what they do is about quality, the price is what it is. Sports cars and high-end fashion are examples, the rich will pay for them but they expect top quality in both product and support services. Government organisations could (should?) fall within this category where cost, though a factor, is not as important as the services they are providing. Hospitals, fire service, police, roads should be areas where quality should be more important than cost (within reason of course). Premium organisations need quality processes, in all areas.
Discount – If customers view what the organisation provides as a commodity then it probably competes on price. It will still want good systems and processes, but economic ones that do not increase the price. This is the supermarket zone where the quality needs to be acceptable but the price is more important.
Bargain – A bargain organisation wants low cost with high quality, to the extent that is possible. A “premium” or “discount” organisation probably wants to be here but needs to balance the impact that getting it wrong could have. We know you cannot always compete on price, in the end someone will price lower, and people cannot always afford to ignore price and just go for quality. A “bargain” organisation wants the best of both worlds. A Korean car manufacturer is probably in this category now that the quality of its cars is such that customers feel its price represents a bargain.
Expensive – Usually nobody wants to be this type of organisation, a high price with the customer perception that they did not get good value, but some make money from it. Anyone who has paid for a ticket to a rugby game for a certain Auckland team may consider the ticket price for the quality of the rugby puts this team into this category.

The organisation classifications use two key parameters

Cost performance - this relates to cost, ie: how much does each transaction or process driver cost. This is essentially a function of how much volume one person can process. The lower the cost and higher the volume per person the better
Quality performance - this relates to how good something is. Do people understand it and adhere to its requirements? Is it streamlined with a quick turnaround time, are errors and rework kept to a minimum?

These classifications can be presented as a matrix:

The goal of the framework is to identify if the organisation and its processes are aligned within this matrix. An organisation should have processes aligned with the type of organisation it is, or which help it become the type of organisation it aspires to be. Like a tug-of-war, if they are heading in opposite directions you will not get very far.

The framework can be used for assessing the performance of:

Processes
Teams
Branches
Business Units
Products or services

It is simple to use, adaptable, and your personnel will be trained on its application.

The framework helps you analyse the result to enable you to understand:

What is happening
Identify why it is happening
Isolate what needs to be focused on
Put aside what can not easily be be fixed

By understanding why the process is the way it is and what is influencing it you can make a realistic assessment of:

To what extent it can be improved
What can be done to improve it

The framework is designed to be flexible and adaptable. It is implemented through a mix of 1-1 and group sessions. Depending on the complexity of the organisation, team, unit or process it is applied to it can take as little as 2 weeks to implement.

Review Package includes

Reviewing the cost and quality performance using BP Consulting’s proprietary Performance Assessment Framework, including

Completing an activity and / or profitability analysis
Measuring the cost and quality performance
Rating the performance against both internal and external factors
Providing a benchmark for effectiveness
Assessing it potential for improvement
Identifying issues
Recommending solutions for the identified issues
Proposing a timeline / plan for the implementation of improvements
Licensing of the organisation for the on-going application of the Performance Assessment Framework
1/2 training session on the application of the Framework for up to 10 people
Site visits for up to 3 locations (depending on their physical location)

Indicative Pricing

For an average medium to large size organisation a review package for a single process is:

Reviews in New Zealand NZ$19,000

Plus GST. Plus expenses if we agree they are applicable. Price is in NZ dollars. NZ residents subject to 15% GST. GST No: 93-071-506

Reviews in Australia A$19,000

Plus GST. Plus expenses if we agree they are applicable. Price is in Australian dollars. Australia residents subject to 10% GST. ABN No: 97-977-823-940

For reviews outside of New Zealand or Australia please contact us to discuss your requirements

The pricing above is indicative only and could decrease or increase depending on the size, complexity, number of processes and locations for the site visits.

Benefits from a review

The benefits to you from a review are:

An independent assessment of the cost or profitability of the process, team, branch, unit, product or service
Measurement of the cost and quality performance
Rating of performance against both internal and external factors
Identification of issues
Recommended solutions for the identified issues
A practical / realistic assessment of the improvement potential
A timeline & plan for the implementation of improvements
Licensing for you to continue the application of BP Consulting's Performance Assessment Framework to the area under review and other areas within your organisation
Training of up to 10 people on the application of the Framework

Provisional timeframe

The average review takes 10 - 15 days of consulting effort:

¼ Develop pre-review questionnaire
½ day Review prep & analysis questionnaire
3-5 days Site visits to nominated locations
3-5 days Analysis of information / data gathered
2-3 days Development of report / recommendations
1 day Presentation of draft report / recommendations
½ day Finalisation of report / recommendations
½ day Framework training session

Note: the elapsed time may be 3 - 4 weeks depending on the availability of information / data

Outline of approach

The recommended approach for a review is:

Completion of a pre-review questionnaire by client
Site visit to clients nominated locations
1 on 1 interviews with clients key personnel during site visits
Review of data / reports for the process
Application of BP Consulting's Performance Assessment Framework to the process
Development of the report
Finalisation of the report followed by the Framework training session

Note: Site visits for up to 3 locations are included in the standard package depending on their physical location

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