Diagnostics Management System
Any activities aimed at improving management begins with a diagnosis (or audit) management company. It is pertinent to explain the reasons and justification for the appropriateness of audit client:
1. Every enterprise is unique - possesses a unique combination of resources, technology, capital goods and personnel;
2. Leaders of the client sees the processes at the plant "zamylennym glance, everything for them habitually, and there is no doubt;
3. Consultants are independent experts and free from domestic aspects of labor relations;
4. Employees client may have focused on the diagnosis knowledge management system, search and rasshivke "bottlenecks", but could not join them in sequence and, in connection with the restriction of rights and responsibilities;
5. Consultants have as expertise on technology enterprises, subject area, and have experience challenges in different industries.
6. Employees serve the customer to 89% of administrative and managerial functions, and only 11% of functions - may contain actions for the development of the company. Accordingly, substantially below the cost of labor and time frames and - above.
7. On the other hand, workers are accustomed to perform certain tasks are not able to move quickly and painlessly to a condition where up to 90% of working hours must deal with development company, 10% - administration.
8. Consultants initially focus on development assistance to the company, and doing this to 90% of the total working time.
Thus, one can conclude about the possibility of improving project management system on its own client companies, but the hiring of consultants option is more rational.
Now we evaluate the meaning of the diagnostics company by the client and consultant:
1. by the client. Typically, customers often wonder: "well, why diagnostics, and so everything is clear, bardak and confusion - as to all. Let us immediately introduce a model of" how to "." Indeed, the client has no reason to pay a consultant for the fact that he was looking for, documented, analyzed the problem in the enterprise. Why so? Yes because the client is confident that absolutely knows exactly where the weaknesses, and whom you want to dismiss what to do? In fact, in 67% of cases, the customer does not suspect the true causes of the problems at their company…
2. of a consultant. Arguments put forward: "Let us first have audited management system, will find bottlenecks in the system, identify the factors and find the cause-effect relationships losses, identify and thoughtful way of their strategic and operational solutions." Understand the consultant should be - he could not proceed immediately to the reorganization of the enterprise management system (because not familiar with the system of governance and internal features). Those advisers who are ready to immediately implement improvements, at least, misleading client: the time to assess and diagnose them still lies…
Because the customer to do? Why diagnosis requires management system? How best to conduct audits, management systems: its own, fully holds consultant, or a joint project? How much time, and what internal resources would be diverted to diagnose management system? How audit conducted? Do not hurt the cause diversion of key personnel at various interviews and questionnaires? What to do with the report of consultants? How to check the real effectiveness of the recommendations of consultants? How much to pay a consultant?
All of the questions obviously worried about each client, and we will try to give them clear answers.
Why diagnosis requires management system?
Symptoms in the organization, pointing to the need for auditing management system following:
- most workers is unclear: according to what criteria they evaluate, and what do to next month receive salaries higher;
- the company continually appear incalculable loss;
- documents and records management company in the finance team is made exclusively for the owner, and the remaining service and the heads of it "have no idea."
- there is no information system (or there) but for some reason, always makes the necessary record, not less than night, and quickly take the correct management solution practically impossible.
- the number of unresolved issues on time - has grown, and the losses from this "ate" extra income;
- mission, values, guidelines, the company declared, but in the strategic objectives and measurable goals are not expressed;
- the company never (or very long) was certified personnel;
- there is a continuous enterprise "routine personnel", which explains natural selection, employee or disloyalty to the company;
- exist in the enterprise job descriptions (or a modified version of the outdated Internet) for sight or in case of audit;
- organizational structure is unknown, or known, but incomprehensible to most workers;
- working on the "paperless principle", when almost all know each other and perform assignments on the oral orders of their leader (or even SMS);
- the company was developing rapidly, but the fixed costs and business costs rising faster;
- distribution of power in the company shifted toward two or three people (usually owners);
- Company managers see the problem, trying to solve them, decide, but do not receive proper effect;
- All managers more time addressing current problems alien (personnel, administration and management, storage, etc.);
- managers represent about development strategy, because she is "in the head from the owner of the company;
- budgeting system is in the initial stage (simple budgets);
- motivation system built on a simple principle - "do no harm - has received", "harm - will be deprived of his prize, with the bonus of wages, usually less okladnoy, and ranges from 25% to 45%;
- assessment system and personnel departments of the company exists in the form of a five-scale evaluations director;
- Enterprise employees seem to be aware their duties, rights, but do not want or can not bear (to cope) with the responsibility entrusted to them;
- Average working hours of key managers has increased by more than 1 hour (or longer they are forced to stay after the official end of the working day);
- objectives of the company - amorphous, immeasurable, incomprehensible (like "start the course in the internal school management"; "hold validated production line for ...";" an analysis of inconsistencies products, develop corrective actions to the application of the method 6s ";" prepare and to meet the strategic council with the approval of strategic objectives ")
- the company often difficult to find the culprit in one way or another problem, the monitoring system is missing or is in a state of non-understandable (as if there is, on the facts and losses or thefts is produced - not);
- staffing company grows disproportionate growth in turnover ratio or the number of professionals among the workers is growing rapidly;
The presented list is far from full, but reflects up to 75% of typical symptoms of problems in the management of most medium-sized Russian companies.
The quest to meet the challenges of sheltering behind these symptoms, is the principal justification for the feasibility of a diagnostic management system
The purpose of diagnosing management system - reserves and identify ways to improve the management company.
Tasks diagnosis management system:
- identify the reserves reduction of fixed and variable costs;
- identify reserves improve company profitability;
- identify reserves increase productivity and equipment;
- identify bottlenecks constraints development company;
- identify causal relationships of the enterprise;
- develop institutional, technical, informational and technological proposals for implementing the goal.
How to better carry out diagnostics management system?
There are three versions of the survey the level of development of the company:
a) internal audit control system - on its own
b) external audit management system - by consultants
c) the combined audit management system - a joint working group of consultants and company employees
Each option has its positive and negative sides, varies on the value and risks of the project that we look at Table 1
Table 1
Thus, for a preliminary assessment of the situation in the management system to better conduct internal study. If your fears were confirmed, it should conduct an external audit by consultants, with the mandatory formation of a working group on your side. She then will be required for the examination of final report of consultants and forming the final sequence of implementation of recommendations.
How much time, and what internal resources will be diverted to the enterprise management system diagnostics?
Usually for businesses of up to 500 people diagnosed management system takes up to 1 month. If the number of enterprises from 500 to 1000 people. -- 2 months. And when the number of over 1000 people. -- Will require significant resources consulting. In this case, it is better to hold a combined audit or audit certain areas - for example, the logistics audit, or selective diagnosis processes on the principle of Pareto (20% processes that give 80% of problems).
Diagnostics performed on a particular program, which participate in drawing up the project manager from the client and consultant. They jointly determine the most convenient option diverting employees from work (for example, from the practice of the most successful distract staff, inviting them to one hour earlier in the morning than to stay after work at night. Workers are trying to quickly withdraw from work). If decomposed time of the diagnosis management system into four parts that are in the first and last part will be diverted more time top managers and heads of departments, and the second and third - junior management personnel, experts and workers.
How conducted diagnostics management system?
Consolidation sequence draft audit management system to be the next sequence:
1. A working group from the client and consultant, timing, reporting forms, frequency of meetings;
2. A familiarity with the leaders of the facility on the current situation, the level of problems and possible solutions of their business. Usually in the form of Review tours of the facilities (offices, shops, stores, outlets, holding enterprises);
3. A scheme business model and map business processes, the assumption is made on possible "bottlenecks";
4. A request secondary information (that is already processed information in the form of reports, instructions, orders, regulations, etc.);
5. In the absence of necessary information, harmonizes and collection of primary information (in the form of observations, measurements);
6. Analyzed and processed primary and secondary information to identify false or contradictory information;
7. A list of necessary clarifications on the business customer, the company owner to obtain permission (a leader with authority) to conduct additional surveys;
8. Diagnosed every business process (the main, support, developing): identifies particularly its implementation, critical moments, problems, tested solutions, etc.;
9. A procedure for identifying and obtaining the required information, (not) to reaffirm the facts, identifying hidden costs, unproductive loss of working time, nepodopoluchennoy profits, etc.;
10. Determined cause-effect connection, and being sought "primary problem";
11. It describes the business processes "as is" with explanations on emerging issues and their implications for governance;
12. A list of proposals to change the management system;
13. If there examination conducted the company's development strategy (maps, strategic objectives and work programme for its implementation);
14. Organised by the formation of a list of recommendations in the programme of work (if there is a strategy).
15. An analytical report on the work performed.
Thus, the end product management system is a diagnostic report describing the current state of the client's business, listing processes, "bottlenecks", a causal link, track changes or program implementation.
Do not hurt the cause diversion of key personnel at various interviews and questionnaires?
Employees of different companies could apply to divert to interviews and questionnaires: one showing great interest and are ready to cooperate, while others reluctantly agree, and still generally ignored or hindered. The existence of resistance on the part of a natural, and requires special procedures "defuse tensions": the aim is to assist consultants in the development of the company, rather than the pursuit of pogolovnym decline?
Usually, the average time of the interview does not exceed 1 hour. In doing so, consultants Bestlog in their practice do not use so-called profile, because of their inefficiency and labor fill customer (except, of assessing the level of satisfaction of the company staff).
A good habit among consultants is the original experience and understanding of the principles of the large and medium-sized enterprises, that the diagnosis had not experienced customer dissatisfaction from overly "corrosive" consultants, who usually come to the consulting company immediately after university.
On the contrary, the diversion of key (and action) is desirable for the benefit of employees of the company, because the conversation - this is a bilateral process of exchanging experiences, knowledge and skills, which, of course, charges of positive energy and provides understanding of why they act in one way or another…
What to do with the report of consultants?
Now go back perhaps to the ambiguity of the question: what to do with the report of consultants? Indeed, many managers of companies do not want panic to the use of consultants, because afraid to get a report in a book "War and Peace" LN Tolstoy in four volumes!
The report of consultants has at least two objectives:
first - give an idea of the owner company of what was happening and how to be improvements in the company;
second - give a detailed description of the problems and draw up a technical task to collect primary information to carry out the next phase.
Since the purpose of diagnosis may differ, the client must first determine the order in what form and what kind of record to obtain. Typically, a client wants to get a full picture, which can not be understood without getting acquainted with all sections of the report to understand the logic of consultants to conduct examination and correctness of their findings.
Consequently, when the consultant report client - they are changing places, and now appreciates the customer, whether or not to trust the findings of consultants or not. From the correct answer to this question depends the realization of solutions consultant and receive an honorarium, and failure…
With a record of consultants each customer comes in different ways, for someone, it becomes development plan every week and he checked with him, while others put it on the shelf (the effect of "trash"). In fact, everything depends on the initiative, desire, patience and ability of the client to change. Code of corporate conduct and professional ethics do not allow the consultant directly intervene and address the issues of enterprise. Otherwise, the consultant becomes a "hostage" situation, and in fact is already a client's employee, with all the ensuing consequences.
How to check the real effectiveness of the recommendations of consultants?
In order to verify the findings of consultants and effectiveness of their recommendations will require time, effort and financial investments.
Initial examination of the reliability of conclusions and recommendations of consultants client tell his employees. Recommended that a spot check the reliability of information from the report, as well as careful scrutiny of information that can bring significant customer cost savings or increased profitability.
In some cases, the customer will not be able to independently verify the accuracy of the data (such as technical expertise contracts for the supply of equipment in upgrading production). In such cases, should take care to assure advance of a consultant.
In a world of consulting circulated rumor that for the successful execution of the project need to attract well-known company with global name. In fact, the initiators of such a hearing is the largest company in Russia… In this hearing to believe almost 90% of clients, although in the U.S. (in the more developed markets advisory services) to 80% of all projects performed private consulting business consultants or small innovative consulting company .
Indeed, private companies have something to lose, and they are taking care of its reputation through quality execution of projects, on the other hand nothing prevents large companies deal with the reputation otkatnymi technology (using cheap labour and constantly pursuing "left on the popularity and PR modnosti their services") . On the other hand, small businesses can also come in bad faith, and not the promises…
Thus, the larger consulting business, the greater the one hand "apparent" level of advice, on the other hand - the level of overhead costs continually rising, falling and competence of consultants (the average "life consultants" large companies is up to 3 years).
Small businesses in the area of consulting more prone to innovate and offer customers an expanded list of results and guarantees for the average fee, with have the opportunity to work with experts and generate value.
How much to pay a consultant?
Payment for the services of consultants has five different forms:
1. Hourly and daily rates:
Individual counselling - the value of advice ranges from 100 to 200 USD per hour.
Afternoon advising the client, with the departure of its territory - from 500 to 1000 USD per day, without taking into account the cost of living.
2. The project with a fixed charge:
The fee for advisory services of this type, it is impossible to pinpoint without a negotiated with the client technical specifications for design work. Therefore, normal is to conduct a study meeting. Productivity entire organize such meetings by combining them with lunch or dinner in one of the local cafes or restaurants that company employees were unable to prevent conversation, and you shoot down or consultant with the important thoughts.
3. Advance fee:
There are two interpretations of the notion of a preliminary fee:
a) The preliminary partial payment of consultancy fees before the start of work under the contract;
b) is the annual amount advanced standing client, who wants the consultant was "at hand" at any time he desired.
The cost of an annual customer service, is determined individually.
4. The fee, depending on the results *
This fee received from the calculation ** certain percentage of money that the client was to receive as a result of efforts by the consultant (based on increasing revenues and increasing gross).
Note:
* Distributed to separate advisory services (for example, the introduction of a system of inventory management, optimization of trading stocks)
** Calculation formula is set, depending on the task, for example, 30% of the amount, which saves the client at the level of stocks TMTS in value terms for the first year and 20% of the money, which saves the client within two years.
In practice, the client can get a discount of up to 20% of the initial cost of services when book in their entirety, and up to 5% in the case of a separate phase of implementation.
5. Combination
a combination of different options remuneration consultant.
Thus, options and consultancy fees may vary in dozens of times (for example, the difference between the value of an integrated project management efficiency company Mckinsey and Bestlog reaches 30 times). In order to understand the minimum market value of the project on the management audit should be conducted on the calculation formula:
(S * N * K * R) * (1 + a) * b,
where
S - average rate of consultants for industry (700 USD per day for management consulting);
N - number of days, which plans to spend a consultant to the project (an average of 22-24 days);
K - delay factor (adopted rule 1,3);
R - the likelihood of successful completion of the project (from 1 + (from 0.1 to 2.0));
a - ratio of overhead costs (for example, in some companies reaches 70%);
b - the rate of inflation.
Thus, the cost of the project management system of diagnosis is at least 20 thousand USD, or 500 thousand rub.
Conclusion
The decision on the need for an audit management system takes the owner (manager) businesses independently. Hopefully, this article will help you make the right choice, capable of faster and better follow-up to undo bottlenecks management system, improve the productivity of an enterprise and prepare the company for growth and development.
Bubnov SA, Cand.Econ.Sci., Managing Partner Bestlog.
published in the journal "Company Management", May 2008