page 1 hans de soete opportunity analyzer. page 2 why opportunity analysis ? conclusions -...
TRANSCRIPT
Page 1
Hans De Soete
Opportunity Analyzer
Page 2
Why Opportunity Analysis ?
Conclusions - References
How it works: the GAP case
Page 3
Have you ever been in this situation?
We reduced lead-times with 20% !
We reduced setup with
30 % !
We increased service levels
to 98 % !
The project is perfectly on time and on budget !
SO WHAT ?
Page 4
I have a gut feeling of how to improve profitability, but how can I quantify this?
How do I identify the 5 most profitable improvement opportunities amongst the many proposed?
How can we create improvement initiatives in line with our company’s strategic objectives?
The CFO has nice budeting tools, but they can‘t target non-financial metrics such as lead times, delivery performance, costs per order line … ?
How do I know whether I am doing well or poorly compared to my peers? How can I benchmark against best practices?
How can I be sure that my IT efforts are focused on issues that really drive profitability?
How do I calculate the ROI on my IT projects?
Do you recognize these questions?
Page 9
Summing up: Why Opportunity Analysis ?
Which improvement opportunities are ‘high potentials’ in terms of ROI?
Analyse, Measure, Benchmark and Improve Processes.
Bridging the gap between strategic objectives and measurable process improvements
Doing the right things instead of just doing things right.
Maximize chances for success, minimize risks
Pursuing the perfect partnership
Page 10
Why Opportunity Analysis ?
Conclusions - References
How it works: the GAP case
Page 11
Largest UK independent hire company
– £60 million sales revenue
– 55 depots, HQ Glasgow
– 600 people employed
Strategy:
– Growth: reach a £ 100 million turnover by 2009 by growing number of depots to arround 70 and increase the revenue by depot.
– Maintain profitability
– Diferentiation: not the cheapest; their plants/services have a ’little bit extra’
Opportunity Analysis as part of the selection process for a new ERP solution.
– No direct compelling event for new system, but major challenge is to support targeted growth whilst limiting the increase in costs.
The GAP Group
Page 12
An Opportunity Analysis is Fast and Focused
• Explain OA concepts • Explain time schedule
• Build value base • Allocate costs
• Opportunities• KPIs• Best practices
• Auto-ranking• Benefit realization• Scenario choice
• Improvement themes• Clear project directives
1. Kick-off 3. Target 4. Plan 5. Decide2. Map
• OA champion • Scope?• Who participates?• OA business objectives?
Prepare
August 5 August 16-18 August 23-24 September 7 September 20
July 14
Page 14
Improvement Themes for Gap
Overview
Improved market share
Improved hire to receipt cycle
Improved purchase-to-pay cycle
Improved asset utilization
Gaps PDP starting point
Page 16
Improvement Themes for Gap
Overview
Improved market share
Improved hire to receipt cycle
Improved purchase-to-pay cycle
Improved asset utilization
Gaps PDP starting point
Return on Assets
Operating Net Margin
Working Capital Turnover
Page 17
Gaps PDP starting point
Working Capital TurnoverOperating Net Margin
Page 18
Product Dimension
Market Dimension
Page 20
Cost Components
Company Functions
Page 22
Cost allocation per process activity(Based on SCOR model from SCC)
ProcessActivities
Company Functions
Page 23
Page 25
Page 26
Chosen KPI
Selected Target area
Best practices to reach targets
5. Business process activity groups connected to the selected KPI
Starting points
KPI target values and estimated effect(‘per scenario’)
Page 31
Page 36
Page 37
Ranking all opportunities
Grouping opportunities into improvement themes
Appointing target owners
Page 38
Page 39
Working Capital TurnoverOperating Net Margin
Page 40
Working Capital TurnoverOperating Net Margin
Page 41
Improved purchase-to-payment
Improved hire-to-receipt
Time phased benefit realization plan
Increased selling time
Improved asset utilization
Page 44
Totals All Themes over 5 Years
Totals All Themes
-2.000.000
-1.000.000
0
1.000.000
2.000.000
3.000.000
4.000.000
5.000.000
1 2 3 4 5
Year
Operating Income Change
Working Capital Change
Cashflow Change
Page 45
Low effort
– Advanced price management x x
– Customer risk management x x
– Cross-rental management x x
– Assess supplier performance x
– Efficient RFQ management to drive the procurement x
– Warranty management with expiry reminders x
Medium effort
– Flexible & efficient user interface (at order entry) x x
– Enhanced sales performance reporting x x
– Up-selling, cross-selling, substitution x x
– Shared services centralized purchase management x
– EDI purchase order (invoice) transactions with suppliers x
– Workflow oriented payment authorization process x
– Service, maintenannce & rental equipment tracking x
High effort
– Simplified service order management incl service instructions x
Prio 1 Best Practices (for the Project)
Selling time Hire-to Purchase-to Asset -Pay -Receipt Utilization
Page 48
Why Opportunity Analysis ?
Conclusions - References
How it works: the GAP case
Page 49
Comments from GAP’s CFO:
– ”it has been a long time since we had so good internal discussions”
– ”If we would have done this when we did our previous software selection it would have been a much better project”
– ”the OA has established the basis for years ahead”
– ”it is amazing how fast you have been in understanding our business”
Next to pure financial justification OA can be an enormous help for internal communication, motivation, buy-in for projects:
– ’downward’: communication, involvement, motivation
Supporting the GAP company culture: ”this is not a ’HQ’ project but an ’operations’ project
– ’upward’: access to and support from top management
Credibility: ”their figures, their commitment”
We can go ’all the way’
– Strategy -> Targeted KPI’s -> Improvement Projects -> Best Practices -> Applications
– Continuity between pre-sales, opportunity analysis, and implementation project
– Differentiate us from both Management Consultants and Software Vendors
GAP: comments & conclusions
Page 51
Supply Chain Council about Opportunity Analyzer
“Opportunity Analyzer is the closest thing to my concept of a real ROI model - in the sense of an opportunity evaluation solution rather than a trivial ‘promising’ tool
There are some elements of Opportunity Analyzer that are unique
– It incorporates best practices into the application
– It correlates the associated financial impact in terms that are familiar to a business executive
– It does not only model the processes, but it connects them to the real underlying software applications
– As SCC European Director I am pleased to see that the SCOR metrics and best practices are embedded within
– It is a different – and more valuable - way to prove the value of an enterprise solution”
Enrico Camerinelli, Chief analyst and European director for the Supply Chain Council
Page 52
Messlücke
ARC Field Report, November 4, 2004, Simon Bragg
“The major benefit of Intentia's Opportunity Analyzer is that it increases the chances of business success in any upgrade or new implementation - in ARC's estimation from under 50% without the tool, to over 75% with the tool.”
“It enables managers to precisely quantify the project's objectives and scope, two well known critical success factors.
“What's more, if there are many areas which could be improved, then Opportunity Analyser identifies the best areas.
“Finally, management gets a clear picture of what processes will change, before the project starts.”
Page 54
Why Opportunity Analysis ?
Conclusions - References
How it works: the GAP case