b ooz a llen & h amilton management consulting better business through better decision making

BOOZ ALLEN & HAMILTON

Management Consulting

Better Business Through Better

Decision Making

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Management Consulting 1 2 3 4

Introduction Overview of Booz Allen & Hamilton

Reengineering Methodology

Deliverables

Presentation Outline

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Why you’re here

What we’re going to accomplish today

IntroductionIntroduction

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Deliverables


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Pricing & Fee Structuring

• Contract Price Negotiations

• Cost Realism / Should Cost Realism

Business Decision Analysis

• Business Case Analysis

• Cost/Benefit Analysis

• Cost/Performance Trade

• Feasibility Studies

• Business Process Reengineering

• Lease/Purchase Trade-offs

• Return on Investment

Cost Estimating & Modeling

• Cost Risk Analysis

• Independent Cost Estimates

• Life Cycle Cost Estimates

Economic Analysis

• Infrastructure Assessments

• Outsourcing / Privatization

Performance Measurement

• Activity Based Costing

• Earned Value Management

• Outcomes-based Performance Measurement / Benefits Capture

BA&H Business Solutions Overview of BA&H

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Deliverables


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Reengineering Methodology Overview

StartAnalyze

Issues and Drivers

Diagnoseand Plan

Design and‘Blueprint’

Implement

AdjustEfforts

DepartmentalReview


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Methodology - Divisional Input

StartAnalyze

Issues and Drivers

Diagnoseand Plan

AdjustEfforts

DepartmentalReview

•Participate in team meetings •Baseline current processes (“as-is” analysis) •Reengineer processes (“to-be” analysis) •Identify service productivity measures •Recommend the Most Efficient Organization (MEO)


Implement


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… it is a picture of a business process or system sufficiently detailed to facilitate meaningful improvements

Process: A series of interrelated activities which convert inputs into results; processes consume resources and require standards for repeatable performance; processes respond to control systems which direct quality, rate and cost

What is a Process Map?Reengineering Methodology

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Grocery Shopping Process

Plan NextWeek’s Menu

Inventory PantryCabinets andRefrigerator

GenerateShopping

List

Buy Fruitsand

Vegetables

EnterGrocery

Store

Buy Meatand DairyProducts

Update Shopping

List

Check Outwith Cashier

and GroceriesBagged

Restock PantryCabinets andRefrigerator

Repeat this step as necessary

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Total - $8,912/Labor - $1,912/Overhead - $1,500/Other - $5,500

Output - Stocked pantry, cabinets, and refrigerator

Frequency - 60 in FY 98 (once per week plus eight trips for holidays)

Mandate - Biological Requirement - must feed children

Quality Measures - # trips with 100% complete list, # weeks able to complete menu without a return trip, $ saved per week with coupons

Time - Normal trips average 2 hours; Special holiday trips average 3 hours; Return trips average 1.1 hours


Buy Bread and Miscellaneous

Snacks

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Gather data for measuring improvements

Identify barriers/potential problems at interfaces

Identify causes of bottlenecks

4 Identify points to fix/develop action plans

Uses of Process MapsReengineering Methodology

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Identify a specific start and stop for the process

List all activities that occur between those two points

Copy all activities on sticky notes4

Arrange activities in sequential order

Steps in Process Mapping

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Identify decision points and alternate paths6

Identify the process owner


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Check for completeness and accuracy

Define your process

Look for “invisible” processes10

Steps in Process Mapping

Understand your process


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Map the “as-is” process not the “to-be” or “should-be”

Need consensus from stakeholders

Don’t expect one session to be enough

4 Check all shifts and locations for any anomalies

CaveatsReengineering Methodology

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StartAnalyze

Issues and Drivers

Diagnoseand Plan

Implement

AdjustEfforts

DepartmentalReview

•Participate in team meetings •Baseline current processes (“as-is” analysis)•Reengineer processes (“to-be” analysis)•Identify service productivity measures•Recommend the Most Efficient Organization (MEO)



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Goal: To do the right things right!

Process Improvement

“There is nothing so useless as doing efficiently that which should not be done at all.”

Peter F. Drucker


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Grocery Shopping Process



GenerateShopping

List

Buy Fruitsand

Vegetables

EnterGrocery

Store


Update Shopping

List


and GroceriesBagged



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Snacks

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Grocery Shopping Process - Detailed


DetermineApproval

Requirements

InventoryRefrigerator

Repeat this stepas necessary

InventoryCabinets


InventoryPantry

Compare Inventoryto Menu

Requirements

Plan Which Stores to Visit

and in What Order

EnterStore

BuyFruits

Buy Vegetables

BuyMeats

Buy DairyProducts

BuyIce Cream

Buy Breadand Chips

BuyCandy

Enter CheckOut Line

Cashier Rings Up

Bill BagGroceries

PayBill

LoadCar

UpdateShopping

ListRestock Cabinets

Restock Pantry

Restock Refrigerator

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Identify potential bottlenecks, barriers, and breakdowns

Analysis of wait time

Inspection possibilities4

Process Improvement

Cycle time analysis

Assessment of customer expectations/requirements5


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1 At each process step (activity) answer the following questions:

• What is going wrong?

Bottlenecks, Barriers, and Breakdowns

• What could go wrong?

• How does this activity affect subsequent activities?

• How is this activity affected by previous activities?

2 Use this analysis to develop an extensive list of possible reengineering candidates


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Which activities take the longest to complete?

Is staffing adequate?

Is training adequate?4

Cycle Time Analysis

Why?

Can the activity be simplified, combined with another activity, or eliminated?

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Where do delays occur?

Is capacity sufficient for peak demand?

Should it be? (cost effectiveness)4

Analysis of Wait Time (Queues)

Why?

Can you develop contingency plans or resources to satisfy peak demand?

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Where are problems discovered?

Would a formal inspection early in the process be helpful?

Can problems be prevented?4

Inspection Possibilities

Where do they actually occur?


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What are our customers needs?

Does the customer think they are being met?

What is most important to our customers?4

Customer Expectations/Requirements

Are they being met?

What is least important to our customers?4


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StartAnalyze

Issues and Drivers

Diagnoseand Plan

Implement

AdjustEfforts

DepartmentalReview

•Participate in team meetings •Baseline current processes (“as-is” analysis)•Reengineer processes (“to-be” analysis)•Identify service productivity measures•Recommend the Most Efficient Organization (MEO)



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Gain Insights and make judgements about effectiveness and efficiencies

Measure Progress Toward Meeting Strategic Goals and Objectives

Drive Continuous Improvements in the Organization

Translate Strategy into Action

Support Resource Allocation Decisions

Support Process Reengineering Decisions

Why Measure Service Productivity?

7 Support Annual Performance Planning


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StrategicPlan

Establish andUpdate SPMs

Customer’s InputService

ProductivityReporting

Evaluateand Use

Information

EstablishAccountability

MeasureService

Productivity

ImproveProcesses

Service Productivity Feedback Loop

The Service Productivity (SP) Process Model

Analyze and Review Data

Stakeholder’s InputManagement PrioritiesManagement Decisions


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StrategicPlan



Evaluateand Use

Information


MeasurePerformance

ImproveProcesses

Performance Feedback Loop



Establish and Update SP Measures

•“If a task can be performed, it can be measured.” Edwin Booz

•Measure the right thing

•Choose a measure that is central to the process

•Define targets, minimums, or maximums for each measure



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StrategicPlan



Evaluateand Use

Information


MeasurePerformance

ImproveProcesses

Performance Feedback Loop



Establish and Update PMs

•Common measures•financial performance•customer satisfaction•internal business operations•employee satisfaction•community and stakeholder satisfaction•time performance•quality measures•efficiency measures•quantitative measures

•Avoid data overload



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StrategicPlan


Customer’s Input

Evaluateand Use

Information

MeasurePerformance

ImproveProcesses

Service Productivity Feedback Loop



ServiceProductivityReporting

Establish Accountability

•“What gets measured, gets done.” Common Sense•Foster ‘buy-in” from employees and managers by establishing ownership•Formalize ownership of measures•Establish responsibilities for data collection, reporting, and analysis•Establish a contract:

•manager provides a supportive environment•employee provides results

•Empower employees with the authority to make decisions and solve problems related to the results for which they are accountable



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Collect data for “as is” service productivity not “should be” service productivity

Service productivity measures should be accepted by, and meaningful to, the customer

Service productivity measures should be simple, understandable, and logical

Service productivity measures should be unambiguously defined

Service productivity measures should allow for economical data collection

Establish realistic service productivity goals to avoid “de-motivation”

Keys to Success

7 Good service productivity measures drive appropriate action


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StartAnalyze

Issues and Drivers

Diagnoseand Plan

Implement

AdjustEfforts

DepartmentalReview

•Participate in team meetings •Baseline current processes (“as-is” analysis)•Reengineer processes (“to-be” analysis)•Identify service productivity measures •Recommend the Most Efficient Organization (MEO)



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Methodology - Departmental Review

StartAnalyze

Issues and Drivers

Diagnoseand Plan

Implement

AdjustEfforts


•Participate in team meetings •Compile divisional inputs•Review of reengineered processes •Finalize service productivity measures •Finalize departmental MEO •Develop the final report •Deliver the final report

DepartmentalReview


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StartAnalyze

Issues and Drivers

Diagnoseand Plan

ImplementDepartmentalReview


•Possible modification of input to account for departmental perspective

•Detailed instructions from departmental review group

•Short notice/quick response items

AdjustEfforts


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Project Schedule

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Kick Off Brief

Independent Divisional Research

Divisional MEOs

Departmental Review of Reengineered Processes

Finalize Service Productivity Measures and Standards

7 Deliver Final Report

Finalize Departmental MEO


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Deliverables


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Team Membership Current Organizational Chart

Summary of Reengineered Processes

Process Maps (Baseline)

Process Maps (Reengineered)

Service Productivity Measures Identification

Most Efficient Organization Recommendation

Division Deliverables

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Deliverables

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Team Leader - Mary Smith

Administrative Support - Tom Jones

Financial Support - Joe Sanchez

Field Operations/Customer Interface - Patty Wilson

Member #5 - Functional Expertise

Member #6 - Functional Expertise

Team Membership

7 Member #7 - Functional Expertise

Deliverables

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Total Authorized Positions = 43 Actual Positions Filled = 40 Total Vacancies = 3

FieldOperations

(8/8)

Custom erService

(5/5)

Plan/Check(10/12)

(2 Vacancies)

Inspections(7/8)

(1 Vacancy)

Em ergencyServices

(5/5)

Adm inistrativeSupport

(4/4)

Division Chief(1/1)

Current Organizational ChartDeliverables

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Grading Plan/Check Process - Cost (Total/Labor/Overhead/Other)

Residential Plan/Check Process - Cost (Total/Labor/Overhead/Other)

Grading Inspections Process - Cost (Total/Labor/Overhead/Other)

Electrical, Plumbing, and Mechanical Inspection Process - Cost (Total/Labor/Overhead/Other)

Commercial Inspection Process - Cost (Total/Labor/Overhead/Other)

Summary of Reengineered Processes

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Residential Inspection Process - Cost (Total/Labor/Overhead/Other)

Commercial Plan/Check Process - Cost (Total/Labor/Overhead/Other)

Deliverables

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GenerateShopping

List

Buy Fruitsand

Vegetables

EnterGrocery

Store


Update Shopping

List


and GroceriesBagged



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Snacks

High Level Process Map (Baseline)Grocery Shopping

Process

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DetermineApproval

Requirements

InventoryRefrigerator


InventoryCabinets


InventoryPantry

Compare Inventoryto Menu

Requirements

Plan Which Stores to Visit

and in What Order

EnterStore

BuyFruits

Buy Vegetables

BuyMeats

Buy DairyProducts

BuyIce Cream

Buy Breadand Chips

BuyCandy

Enter CheckOut Line

Cashier Rings Up

Bill BagGroceries

PayBill

LoadCar

UpdateShopping

ListRestock Cabinets

Restock Pantry

Restock Refrigerator

Detailed Process Map (Baseline)Grocery Shopping

Process

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Detailed Process Map (Reengineered)


Grocery ShoppingProcess

Deliverables

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High Level Process Map (Reengineered )

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Original Cost (Total/Labor/Overhead/Other)

Output (Product or Service)

Output Frequency (Per Year)

Mandate (Policy/Regs/Convention)

New Service Productivity Measures

Estimated Time Required to Produce Output


Grocery ShoppingProcess

Deliverables

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Financial - Cost per Shopping Trip; $ Saved per Trip

Quality - Percent of Shopping Trips Completed Correctly the First Time

Time - Time to Complete a Shopping Trip; Time to Generate a Shopping List; Time in Each Store

Customer/Stakeholder/Community Satisfaction - Are Your Children Happy with the Product Selection; Are the Meals Complete and Satisfying

Employee Satisfaction - Percentage of Employees Who Feel They Have Adequate Training to Properly Perform Their Job

Error Rate/Percent Rework - Number of Return Visits for Items on the List; Number of Return Visits for Items not on the List

Sample Service Productivity Measures

7 Efficiency - $ Spent/Time Shopping (Aggregate and for Each Store)

8 Other

Deliverables

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Total Suggested Personnel = 40

Sample Most Efficient Organization

FieldOperations

Custom erService

Plan/Check Inspections Em ergencyServices

Adm inistrativeSupport

Division Chief

*Note - Ensure suggestedclassifications are included with this generic organization

Deliverables

BOOZ ALLEN & HAMILTON

Management Consulting

b ooz a llen & h amilton management consulting better business through better decision making

Documents

introduction slide

analysis reengineer

business solutions overview

better decision making

methodology divisional

grocery shopping process

process map

plan design