Effectively managing organizational strategy & risk during a downturn

In today’s global market, there are areas that have downturns other have upturns. It is during these chaos periods that companies have realized that standard solutions will not solve issues that have risen out of the macro economic situation.

This is because there are two types of issues at hand, i.e. strategic issues, as well as operational issues. Most operational issues can be addressed with standard task-oriented management approaches, but organizations need to address strategic issues and to focus on the big picture to effectively managing organizational strategy & risk during these times, especially, in a downturn.

Elements, such as inflation, business cycles and risks should be evaluated to allow the management to take concrete steps to steer their business to success. In most cases, these steps will revolve around the following seven approaches:

1. Focus on the core competencies of the business
2. Remain close to your customers
3. Timely & Reliable Management Information
4. Identify and Manage risks
5. Re-visit and refocus your strategy:
6. Manage Costs
7. Identify & retain talent

Let's discuss some of these seven approaches.

1. Focus on the core competencies of the business: This is easier said than done, as in most large organisations, the reporting system and information flow, does not easily allow the management to identify those areas of the business which are of the most value, and those which are marginal contributors. QPR ScoreCard allows management to clearly define the strategic drivers for the organisation and identify the underlying processes which drive these strategic objectives. QPR ProcessGuide allows organizations to clearly define core processes which drive the core value of the business. By linking performance indicators to these processes from QPR Scorecard, at all relevant levels, it becomes easy for the management to focus on those process areas which realize the most value and monitor these processes closely to ensure delivery of strategic goals and objectives.

2. Remain close to your customers:

Ensuring that customers remain satisfied, will ensure loyalty during hard times, especially in a downturn, as customers will be channeling funds into those partnerships which provide the most value. Ensuring that customers continually see the value provided by the organization will lock in future revenue streams. QPR ScoreCard allows the creation of strategic themes. As an example, the Customer Value proposition theme, extracts the Value proposition drivers from the strategy map, and co-relates this with outcome objectives to clearly show cause and effect impact of the organization's strategy. This allows the management to periodically diagnose their strategy execution, and ensure that key business drivers such as product image, customer satisfaction, etc. are closely monitored to ensure that the organization is close to its customers. QPR also provides seamless drilldown functionality to get to the root cause of non-performance. Drilldown can be by multi- dimensions, and can be viewed along with action plans put by mid-tier managers to improve performance of critical elements. QPR ProcessGuide allows clear and accurate documentation of all customer facing processes (and other organizational processes) to enable organizational members to effectively interact with customers in a manner which provides them the highest value, while also meeting organizational requirements.

3. Timely & Reliable Management Information:

It is at times like these, that it is crucial for a CEO to know what is happening on the ground. Ensuring a system which enables transparent internal communication on matters of operations and strategy will ensure that the management is well-informed and can take appropriate and timely decisions. The QPR portal provides a complete overview of operations and strategy execution ("What’s New" View). Sections displayed include performing indicators, non-performing indicators, actions being taken by the management team, as well action plans which are due, their deadline, and the responsible person for executing the same. To ensure that only reliable information is acted upon, QPR ScoreCard provides the option to visually mark information which has been validated and approved by the data steward. Other information is also displayed, but can be marked as non-validated. There are also certain critical elements which the management would like to track very closely. Under normal circumstances, the management is dependent on receiving updates on these key elements from middle & lower management, and often, when these elements perform poorly, there is reluctance and delay in providing these figures to the management. With QPR ScoreCard, the management can set up exception alerts for any measure, objective or initiative and choose to be alerted via email when performance goes bad. This puts the control back into the hands of the management. They can take immediate decisions and actions to correct performance. It is also possible to view a summary of all alerts on a single screen and get a reminder of the last date the alert was triggered.

4. Identify and Manage risks:

This is the time to document and address risks across the organization as well as external to the organization. Having a system to document,and control risks will ensure that timely preventive and corrective action can be initiated to mitigate risk in some cases, and eliminate risk in other cases. The following are the usual challenges associated with risk management in organizations:

1. Risk and compliance are managed reactively
2. Risk and compliance are managed in functional silos
3. Lack of a systematic approach for the whole organization
4. Multiple regulations are overlapping, causing duplicate work · Regulations and business operations change constantly · Risks are viewed as threats, not as opportunities · Reacting in an isolated way to each and every risk and regulation is inefficient and is becoming a huge cost driver · Management cannot obtain a clear view of risks, compliance and the status of internal control and this hampers decision making, leading to lack of solutions to the problem. The QPR Risk Management solution, which is created for each organization using QPR ScoreCard & QPR ProcessGuide, provides a comprehensive framework for risk identification, assessment, control & reporting as under:

   Risk Identification

   Step 1, Model Processes into the desired level of details. This is done using QPR ProcessGuide. QPR ProcessGuide provides an easy-to-use tool to quickly document and detail all processes. It allows the management to involve its entire organization and business partners with an easy-to-use environment, that provides an easy to understand modelling notation, and serves as the central hub for process documentation, related specifications, policies, agreements, document templates etc. QPR ProcessGuide provides all users with the powerful capabilities of a professional process modelling, analysis, and communication tool in an easy-to-use package you would expect from a process drawing tool. Step 2: Identify risks & controls in your processes Once the processes are detailed, it becomes easy to document risks against each process. It then becomes possible to also identify existing controls which are available to mitigate these risks.

   Risk Assessment & Reporting

   Step 3: Perform risk assessment via QPR Portal Risks can be then assessed based on the probable impact and the probable likelihood on different variant of scales as desired by the organization. For example, the scale could be from 1 to 6, or using status options from high-to-low. Step 4: Risks ranked automatically, highest to lowest Once the risk assessment is made by the respective managers of the organizations, the risks will be automatically ranked by QPR, based on the severity of the risk and the likelihood of the occurrence of the risk. The management can then detail the control activities to be undertaken, using the action plan functionality of the QPR Portal. Step 5: Risk Dashboard Risk assessment & reporting is made easy on QPR ScoreCard, with highly configurable Risk Dashboards as shown alongside. This makes risks visible to the management and enables them to focus on exceptional risks very quickly and take control actions appropriately. Step 6: Remember relation to Strategic Objectives & KPI's It is critical to understand the impact which the identified high impact & probability risks have to the Strategic Objectives & KPI’s. QPR ScoreCard allows mapping these risks to the respective Strategic Objectives & KPI’s to give a further, much needed dimension to risk reporting, enabling the management to focus on those risks which impact critical Strategic Objectives & KPI’s. Step 7: Risk reporting, drill-down & consolidate It is also critical for management to be able to drill-down risks from the corporate level, through the hierarchy of departments in the same manner as drilling down financial and other reporting numbers. This allows the management to view corporate risks by dimensions such as line of business and then location, as an example. a: Risk view in more detail QPR ScoreCard allows the ability to drill down to each risk and view the historical progression of the risk profile, to enable the management to assess the effectiveness of risk mitigation activities. Step 8: Dashboard for critical risks QPR ScoreCard allows critical risks to be reported separately from general risks and supports creation of dashboards and drill-downs for these risks. a: Risk reporting, amount of critical risks Available statistical reports on the number of risks by risk categories further enhances the management’s ability to focus on critical risks within the defined risk categories. This can be graphically represented by numbers for easy identification. Step 9: Risk reporting, analyze critical risks in detail QPR ScoreCard allows extensive risk reporting and analysis at all levels. Ø Control Activities Step 10: Create control activities to identified risks Control activities can be added using the QPR Portal against risks identified, by the respective managers. Control activities and then monitored alongside the risks. Finally the management will be able to monitor these control activities through the QPR Portal with status of each control activity and deadlines against the same. 5. Revisit and redraw your strategy: Strategy which has been initiated with a completely different economic backdrop in mind quickly becomes inapplicable and even dangerous under adverse macro-economic situations. A previously applicable competitive advantage may need to be re-invented to ensure the organization remains competitive. QPR Scorecard allows the management to track strategic objectives within highly configurable strategy maps and define the strategic relationships between the objectives. The co-relation function clearly defines the cause and effect linkage and allows the management to diagnose their strategy while it is being deployed. Based on the co-relation generated based on the actual data, the management can take more informed decisions to effectively impact strategy deployment. Strategy can then be quickly refocused and re-deployed as required. 6. Manage Costs: Managing costs does not mean across the board cost reductions. Business structures and business processes need to be closely examined, to ensure the organisation can support customers in the most cost effective way. Non-value adding processes need to be rationalized, and resources freed up from these processes can be redeployed usefully elsewhere. QPR ScoreCard can be used to build a robust budgeting system to ensure that costs are received from bottom-up, and once collated by the system, the management can validate the proposed costs to ensure that only value adding costs are approved. Moreover, on an ongoing basis though-out the year, QPR ScoreCard can be used by the management to track actual costs against budgeted costs, and ensure that costs are closely controlled at all time. 7. Identify & Retain talent: A critical step in survival is to identify talent across the business which cannot be lost. Having a robust & transparent performance management system in place will greatly support quick identification of critical talent, and allow the management to reward them suitably to ensure their retention. QPR ScoreCard supports this objective by supporting creation of personal scorecards which can reflect not only KPI’s, but also competencies to present a complete view of the individual’s performance. Moreover, QPR ScoreCard allows the management to quickly structure and deploy a transparent performance management system by allowing cascade of scorecards, KPI’s, and strategy from the corporate level, through department levels right down to personal scorecards. And finally, personal scorecards can also link the total individual performance directly to compensation and make this available transparently to the managers and the individual. Conclusion Responding to activities in today’s global market requires dynamic, proactive, responding management to business conditions. Especially in a downturn of economic times, management needs to closely monitor strategy, performance, costs, and risks. Using QPR ScoreCard & QPR ProcessGuide effectively equips the organization with a single window solution to effectively plan, monitor and improve its performance.

Using an Integrated Management System (IMS) to Drive Business Success

Businesses traditionally evolve over a period of time, and introduce different back end, or transaction processing systems at different stages of its evolution, depending on its needs. So they may have a suite of, for e.g. ERP, CRM, Core Banking, and other applications critical to running its day to day transactions. On top of these applications, organizations usually evolve into the use of BI or Corporate Performance Applications. Inevitably this has lead to duplication of effort in maintaining the same information in multiple systems, unnecessary cost, a lack of information transparency and inability to timely provide managers with quality information to base their decisions on. Ensuring success in achieving organizational goals on a sustainable basis, requires firm control over managing your strategy and operations. It is critical to create a single integrated system, to report from these multiple applications and provide the management unified information on which to base critical decisions. These decisions will need input from one or more of the following management frameworks running within the organization.

What is an Integrated Management System?

   * Strategy Management System - describes the mid-to-long term plan of action of the organization

   * Business Process Management - describes the actions being executed and documents how the organization does things

   * Business Performance Management - monitors how well the organization is doing things.

   * Quality Management - ensures the organization delivers value to its customers.

   * Risk & Compliance Management - ensures that the organization has identified possible risks, and is prepared for them. Deploying an IMS allows organizations to migrate towards a management system that treats strategy, performance, risk, compliance, process, and quality as interdependent enablers of achieving organizational goals, allowing them to be managed in a unified, systematic way to optimize results.

Key benefits that accrue from running an IMS are as follows:

   * Integrate all components of managing your organization into one coherent system, executed cross-functionally and in a systematic way

   * Align all management practices with your strategy

   * Improve processes from a holistic viewpoint that includes besides performance also risk, compliance and quality mandates

   * Improve decision making by providing managers with shorter reporting cycles and a single point of access to all information, structured in a systematic and uniform way

   * Reduce the cost of audits and compliance by providing a uniform approach to manage compliance with a multitude of regulations and standards, rather than managing each regulation in an isolated way

   * Involve your employees in the collaborative execution of strategy, performance, risk, quality and compliance management.

Reporting Phase

1. Creating "Responsibility Matrices" is also very simple on the process maps. Within a QPR process map, the responsible designation ("doer") is defined by the organizational unit band which moves horizontally across the processes. For each sub-process and main process (and activity if relevant), QPR allows us to select the designation of the process owner or accountable person for the process. This is graphically defined by the designation of the process owner on the process box itself. The RACI can also be graphically generated in the classical grid format as shown under using custom attributes available in QPR:

2. It is also possible to add Job Descriptions and Competencies for each position on the Organization Hierarchy. Within QPR, custom attribute fields are created within the process model. The required custom attribute field can then be assigned to the organizational units and filled up as required. Having the job description linked to be organizational unit allows easy verification of whether the tasks being performed by the position described is adequately reflected in the job description in terms of dimensions accountabilities and skill sets. In the screenshot below, we can see that on the left side we have the organizational chart with the reporting hierarchy, and for the selected job position on the right side we have the different fields of the job description.

3. Generating risk / control hierarchies. Once the process repositories are built, it is easy to generate custom reports using QPR such as the risk / control hierarchies shown below, as well as links to risk measurements and control tests. E.g. Risk / Control Hierarchies and monitoring

Benefits of using QPR as a tool in Process Consulting

Multiple benefits accrue from using QPR as a tool in Process Consulting.

    * Creation of a Process Repository with best practice processes by industry
    * Creation of base process templates for new assignments
    * Transparency and accountability during the process implementation due to logging and online publishing
    * Delivery of process documents on Microsoft Word (auto created from QPR ProcessGuide)
    * Optional delivery of the QPR ProcessGuide Model itself, to enable the customer to carry forward the process initiative
    * Create comprehensive business process models showing high level and details illustrating the most current status of your operations
    * Standardize work practices by designing uniform guidelines e.g. for quality systems
    * Re-engineer and improve the business processes to ensure optimized flow of materials, resources and information
    * Quickly review resource (human or system) utilization per organization and find the detailed information about a resource or activity
    * Simulate processes to identify potential bottlenecks, optimize resource utilization and validate improvements
    * Analyze processes, illustrate and benchmark results with the highly visual and easy-to-understand graphs and reports of QPR ProcessGuide

Conclusion

The traditional methods of consulting are being quickly replaced by tool based consulting which will enable consulting firms to deliver better results in a shorter time, which translates to more project profitability for the consulting firms, and better resource utilization for in-house process consulting teams. QPR products are leading the way in providing these benefits. For additional information on QPR Tools, please browse to www.eai.com To send a comment or contact the author, please email This email address is being protected from spambots. You need JavaScript enabled to view it.

Concrete Benefits in Using QPR during Process Consulting Assignments

With the use of QPR during Process Consulting Assignments, the entire focus shifts to delivering the process models and recommending benefits, and removes the overhead of managing the process repository and associated attributes of the process such as job descriptions and responsibility matrices.

The following is an example of deploying a process consulting assignment using QPR and associated benefits.

Setup Phase

1. The first step will involve creating a template on QPR ProcessGuide which contains the relevant process framework for the assignment. This will consist of the following:
   1. Existing Organizational Hierarchy (these will be displayed as swim lanes on the process map)
   2. Process Hierarchy
   3. Standard Modeling Notation to be used in the assignment

             Benefits:

• This template may be used for other similar consulting assignments as QPR ProcessGuide allows new models to be used based on existing templates/models.
• QPR ProcessGuide security options, ensures that Team Members will work within this process framework and this will lead to a uniform delivery. For e.g., as the hierarchy is already defined, Team Members will find the reporting structure easily available. There will not be inaccuracies due to misspellings or abbreviations (e.g. Mktg. Manager instead of Marketing Manager).
• Enforcing a standard modeling notation ensures that even new team members will be able to quickly understand the modeling framework.

2. This template is then used as a base model to which all process model models to be built are linked as child models.
3. 1. Setting user rights for process modeling - QPR ProcessGuide can be used to plan a rapid deployment. Using the advanced user rights, different team members can be:
   2.  
      1. Assigned the rights to modify or view different main processes and sub process structures.
      2. Sensitive processes can be protected with rights being assigned to selected team members and other members having no access.
   Deployment Phase

   Benefits:-

   •  
     •  
     • Sensitive information is protected through user rights, although with appropriate permissions, this can be viewed along with the entire model.
     • Team members can work on their allotted sections, and if provided view access to others work, will be able to get a “big picture” view of the processes very quickly. This will lead to better documentation of the processes and process alignment.
4. Executing the assignment - At the team level the following would be the steps taken on QPR ProcessGuide to complete the assignment.

5.  

   Execution is usually very quick as the time is spent on creating process structures and QPR ProcessGuide generates other associated information which would otherwise need to be created.

   a) The Process diagrams are first created by placing the responsible “organisation elements” onto the process map. b) Sub Processes and activities are then arranged based on inputs from the Process Owner.
   c) Existing documentation and procedures can be attached to the process maps creating a front end repository. d) Processes can be version controlled based on revisions and discussions with the customer.

   
   

   
   

   e) Full audit trail logging at the process model level and the individual sub process level enable accountability for changes made to the process model. f) Process Models can be “checked out” for use offline from the server, enabling full process modelling capabilities while at the customer’s site. Once the team members are back in office, the process model will be “checked in” to the server and changes made will be replicated. g) Team leaders and Project Managers get to view the latest available process model on the server with all associated linked documents and other details. h) Model versions can be created to manage changes and archiving easily.
   i) Attaching document templates. It is relevant to attach all document templates to a process step, or even add policy documents to main or sub processes. This is done using the Information Items functionality, which ensures that the process repository is enriched with the correct and latest versions of the documents, which may be linked from existing document repositories such as Microsoft Sharepoint. These can then be listed as a hierarchy.
   j) Identifying and documenting risks. It is also possible to layer different attributes on the process map, such as risks and control points to make the process maps multi-dimensional as shown below.