MLD-601 Tool Kit

Fall 2011

Fagan Draft 2011

Took Kit

• “Who & What” Value Estimator • Value Estimator• Zone of Tolerance• Quality Categories• Deming’s 14 Quality Principles• Quality Readiness Test• Moments of Truth Success factors• 4Ps• 5 Whys• Mapping Value-added• Mapping Basics• Mapping Cards• Mapping with Facts• Business Process Reengineering• Performance Indicators• Public Sector Reengineering Challenges• Production Systems

• Making Change Stick • People Power Strategies• Workflow Options Matrix• Capacity Management Strategies• Waiting Truths• Capacity Analysis and Utilization• Bottleneck Analysis• Long-term Capacity Factors• Classification of Peaks• Peak Management Strategies• Peak Demand Prioritization• Inventory Processing Strategies• Logistics Cycle Components• Supply Chain Performance Indicators• Disaster to Chaos Red Flags• Rapid Response Supply Chain• Systems Thinking Feedback Loops

Fagan Draft 2011

Took Kit (con’t)• Up/Down/Up Performance Measurement Design• Fagan’s 8 Rights of Measurement• The 7 Deadly Sins• Statistical Process Control Chart• Pros, Cons, and Cautions of SPC• Forward Looking Performance Pyramid• Forward Looking Performance Measurement Criteria• Johnsen’s Performance Model• IT’s Role in Process Innovation• IT’s Impacts on Process• IT Benefits• E-Business Core Capabilities• Technology Reach Success Factors• Technology Adoption Rate• Business Plan Framework• System Dynamics Framework• 5 C’s of Successful Scaling• Pilot Strategy

Fagan Draft 2011

MLD-601 Tool Kit

Topic: Value Creation Through Operations (Class #1)Tool: “Who & What” Value FrameworkDescription: Identifying who received value from public services and the nature of the benefits.Example: TSA

References: Creating Public Value: Strategic Management in Government, Moore, Mark, (Cambridge: Harvard University Press 1995), Chapter 2

Fagan Draft 2011

MLD-601 Tool Kit

Topic: Value Creation Through Operations (Class #1)Tool: Value EstimatorDescription: Estimating the value created through the delivery of cost-effective, quality public services.Example:

References: The Accenture Public Sector Value Model, http://www.issa.int/pdf/cracow04/2Annex-Younger.pdf Value of Improved Public Services: An Application of the Choice Experiment Method to Estimate the Value of Improved Wastewater Treatment Infrastructure in India, Birol and Das, 2010, http://www.mse.ac.in/pub/working%20paper%2051.pdf

Value of Air Passenger Safety – Annual Costs Avoided

Cost Categories• Loss of life• Loss of property• Loss of economic activity

• Direct• Indirect

• Emotional costs

Estimation Options• Bottoms-up calculation

• Component based estimation• Willingness to pay modeling

• Benchmarking • Bounding

Fagan Draft 2011

MLD-601 Tool Kit

Topic: Quality Service Delivery (Class #2)Tool: Zone of ToleranceDescription: Understanding the relationship between desired service and adequate service based on exceptions, process and outcomes.Example:

References: Service Operations Management, Christine Hope and Alan Muhlemann

Expectations Process Outcome

> adequate performance

< adequate performance

= adequate performance

Source: Drawn from Johnson, 1995, pp. 46-61

Fagan Draft 2011

MLD-601 Tool Kit

Topic: Quality Service Delivery (Class #2)Tool: Quality CategoriesDescription: Looking at quality through different lens to focus the organization on the most important aspect for its stakeholders.Example:

References: Service Operations Management, Christine Hope and Alan Muhlemann

Category Concept

Transcendent Innate excellence

Manufacturing-based Conform to specs

User-based Fit for purpose

Product-based More is better

Value-based Cost - benefit

Fagan Draft 2011

MLD-601 Tool Kit Topic: Quality Service Delivery (Class #2)Tool: Deming’s 14 Quality PrinciplesDescription: Providing a set of principles that underlie Total Quality Management.Example:

References: Total Quality Management in Humans Service Organizations, Lawrence Martin

1. Create consistency of purpose toward improvement2. Awaken to the challenges of the new economy3. Cease dependency on inspection4. Stop rewarding business on the basis of price5. Consistency improve the system6. Institute training on the job7. Institute leadership8. Drive out fear9. Break down barriers between departments10. Eliminate slogans and targets toward zero-defects and productivity11. Eliminate quotes12. Eliminate barriers to pride of workmanship13. Institute a vigorous program of education and self improvement14. Put everyone in the company on the job of accomplishing this transformation

Fagan Draft 2011

MLD-601 Tool Kit Topic: Quality Service Delivery (Class #2)Tool: Quality Readiness TestDescription: Determining if your organization is ready for total quality management.Example:

References: Total Quality Management in Humans Service Organizations, Lawrence Martin

1. We continue to tinker even when things are going well2. Our entire organization and stakeholders actively participate in improvements3. We value cooperation rather than competition4. We gather the facts on perceived problems before we make changes5. Our training is on-going6. We communicate up, down and sideways7. Managers serve as consultants to the organization8. Teamwork is more highly valued than individual contribution9. Our suppliers are partners

Fagan Draft 2011

MLD-601 Tool Kit Topic: Moments of Truth and Understanding Failure (Class #3)Tool: Moment of Truth Success FactorsDescription: Focusing the organization of the critical factors that determine the customer's experience. Example:

References: At America’s Service, Karl Albrecht

1. Do the basics flawlessly, always2. Understand that quality drives profits/success3. Know your customers/stakeholders4. Incorporate moments of truth into your operations5. Have a “what ever it takes” attitude6. Recover skillfully when errors do occur7. Internal service quality leads to external service quality8. Management is an enabler9. Employees are valued along with customers10. Always looking to improve performance

Fagan Draft 2011

MLD-601 Tool Kit Topic: Moments of Truth and Understanding Failure (Class #3)Tool: 4Ps Description: Exploring the root cause of failure using a structured assessment of people, policy, process and plant.Example:

References: Total Quality Management in Humans Service Organizations, Lawrence Martin

PeoplePolicy

Process Plant

• Passionate leaders• Field presence• Connection with employees• Local empowerment and voice• Clear accountability

• Field driven rule design• In-house training• Confront bad actions• Psychology of actions• Keep it fresh

• Safety is a core value • Rules compliance, period• Clear consistent response to violations• No safety – pay linkage

• Eliminate “condition” uses• Automate risks (e.g. pin-puller)• Continual health monitoring• Preventive maintenance

Fagan Draft 2011

MLD-601 Tool Kit Topic: Moments of Truth and Understanding Failure (Class #3)Tool: 5 WhysDescription: Exploring the cause of failure by asking why enough times to get to the true root issue.Example:

References: Root Cause Analysis Using Five Whys, NHS, Institute for innovation and Improvement, http://www.institute.nhs.uk/quality_and_service_improvement_tools/quality_and_service_improvement_tools/identifying_problems_-_root_cause_analysis_using5_whys.html

“The patient's diagnosis of skin cancer was considerably delayed. Why? The excision biopsy report was not seen by the surgeon. Why? The report was filed in the patient's notes without being seen by the surgeon. Why? It was the receptionist job to do the filing. Why? The junior doctors were busy with other tasks. Why?   The root cause - that the doctors' other tasks were seen as more important than filing. The system has now  been changed. A copy of all biopsy reports is now sent to the consultant surgeon responsible for the patient and no reports are filed unless they have been signed by a doctor.”

Fagan Draft 2011

MLD-601 Tool Kit Topic: Process Mapping: The Starting Point for Quality (Class #4)Tool: Mapping Value-addedDescription: Facilitating quality service delivery through structured analysis.Example:

References: Better Faster: Streamlining Recruitment in the APS, Australian Public Service Commission, Australian Government, 2007, http://www.apsc.gov.au/publications07/betterfaster.pdf

1. Explore why things are done as they are2. Identify and represent breakdowns and inefficiencies in information flows or activities3. Identify the bottleneck4. Highlight unproductive utilization of resources5. Reengineer processes for greater quality

Fagan Draft 2011

MLD-601 Tool Kit Topic: Process Mapping: The Starting Point for Quality (Class #4)Tool: Mapping BasicsDescription: Guiding the comprehensive mapping of processes.Example:

References: Total Quality Management in Humans Service Organizations, Lawrence Martin

1. Identify all steps2. Order by time sequence3. Label with simple descriptors4. Lay out the process from top to bottom on left to right5. Use standard symbols6. Link all tasks7. Decisions are binary – yes or no

Beginning and End

Tasks

Decisions

Work Flows

Fagan Draft 2011

MLD-601 Tool Kit Topic: Process Mapping: The Starting Point for Quality (Class #4)Tool: Mapping CardsDescription: Simplifying the creation of process maps and the evaluation reengineering opportunities. Example:

References: Better Faster: Streamlining Recruitment in the APS – Card Set, Australian Public Service Commission, Australian Government, 2007, http://www.apsc.gov.au/publications07/betterfastercardset.pdf

Fagan Draft 2011

MLD-601 Tool Kit

Topic: Process Impact on Quality (Class #5)Tool: Maps with FactsDescription: Incorporating data into process maps to more comprehensively understand outcomes.Example:

References: Client Project, City of Boston Moving Permit Process

0

500

1000

1500

2000

2500

3000

3500

4000

4500

# Pe

rmits

Permits Issued

Street Occ

Moving

Total

Fagan Draft 2011

MLD-601 Tool Kit

Topic: Quality via Process reengineering (Class #6)Tool: Business Process ReengineeringDescription: Analyzing and redesigning and implementing new process to enhance service quality delivery.Example:

References: Business Process Reengineering in the Public Sector: The Case of the Housing Development Board in Singapore, Thong, Yap and Seah, 2000.

Process Steps1. Understand business vision2. Map process and identify gaps3. Redesign process and pilot effectiveness4. Implement change5. Monitor performance and refine

Best Practices1. Simple, clear vision2. Full time, co-located team3. Doers and new eyes4. Steering committee oversight5. Under way today is done6. Streamline to the vision7. Understand the human impacts8. Align incentives9. Measure, monitor, refine…

Fagan Draft 2011

MLD-601 Tool Kit

Topic: Quality via Process reengineering (Class #6)Tool: Performance IndicatorsDescription: Establishing clear measures of process performance. Example:

References: Business Process Reengineering in the Public Sector: The Case of the Housing Development Board in Singapore, Thong, Yap and Seah, 2000.

Singapore Housing Reengineering Performance Measures

Customer Service - Waiting time - Unanswered callsLease and Tenant Services - Processing time - Applications pending

Financial Services - Processing time - Manual adjustments - Prepaid vouchersGeneral and Administered - File retrieval time - Daily volume

Fagan Draft 2011

MLD-601 Tool Kit

Topic: Quality via Process Reengineering (Class #6)Tool: Public Sector Reengineering ChallengesDescription: Understanding he unique reengineering challenges faced by public sector.Example:

References: Business Process Reengineering in the Public Sector: The Case of the Housing Development Board in Singapore, Thong, Yap and Seah, 2000.

Public Organization Challenges vis-à-vis the Private Sector

Issue Implication Less market exposure Less incentive for redesignMore procedural constraints Fewer degrees of freedomBroad array of stakeholders Harder to satisfy allUse of governmental power Monetary and sovereignty costsLess autonomy Longer sell cycleCyclical leadership changes Resell of not implemented, inertia“Employment for life” Need creative incentives

Fagan Draft 2011

MLD-601 Tool Kit

Topic: Quality via Employee Engagement (Class #7)Tool: Production SystemDescription: Establishing the philosophy and processes that support quality service delivery.Example:

References: The ‘Learning Bureaucracy’: New United Motor Manufacturing, Inc, Paul Adler, 1993, (Sourced to M. Hogan, Stanford University, 1987).

The NUMMI Production SystemObjectives• Reduce cost by eliminating waste• Assure product quality• Worksites able to change quickly• Respect, mutual trust, and support of team members

Concepts• Through removal of waste• Just-in-time production• Quality assurance • Full utilization of worker capabilities

Techniques• • Production leveling• Kaizen• Visual control• Team concept• Standardized work

Fagan Draft 2011

MLD-601 Tool Kit

Topic: Quality via Employee Engagement (Class #7)Tool: Making Change StickDescription: Implementing a program that lastsExample: Leading Change

•Demonstrate urgency•Establish a coalition of the powerful•Link the change to the overall vision•Empower the organization and individual for change•Focus on short-term wins to build momentum•Scale up the changes•Institutionalize the new model

References: Leading Change, John Kotter, Harvard Business Review, 2006.

Fagan Draft 2011

MLD-601 Tool Kit

Topic: Quality via Employee Engagement (Class #7)Tool: People Power StrategiesDescription: Creating value and advantage through people. Example:

References: Competitive Advantage Through People, Unleashing the Power of the Workforce, Jeffrey Pfeffer, HBS Press, 1994, pp. 27-65

.

16 People Power Strategies

1.Employment security2.Selectivity in recruiting3.High wages4.Incentive pay5.Employee ownership6.Information sharing7.Participation and empowerment8.Teams and job redesign

9. Training and skills development10. Cross utilization and training11. Symbolic egalitarianism12. Wage compression13. Promotion from within14. Long-term perspective15. Measurement of practices16. Overarching philosophy

Fagan Draft 2011

MLD-601 Tool Kit Topic: Organizing Work Flows (Class #8)Tool: Workflow Options MatrixDescription: Providing alternative approaches for processing inventory.Example:

References: Production and Operations Management, Martin Starr, 2004, p. 165

Workflow OptionsOption Variety Volume

Customized Extensive Individual

Job Shop Moderate Moderate

Assembly Shop Limited High

Continuous Flow Very limited Very high

Flexible System Wide range Wide range

Fagan Draft 2011

MLD-601 Tool Kit Topic: Work Processing Strategies (Class #9)Tool: Capacity Management StrategiesDescription: Determining the “right” approach for setting capacity.Example:

References: Service Operations Management, Hope and Muhlemann, 1997, p.265

Capacity Management StrategiesLevel Demand-based

Focus Process efficiency Customer satisfaction

Outcomes Cost effective Happy customers but but

queues and angry customers flexibility at a cost

Actions Schedule demand Change processes firstHold some excess capacity then technology then

infrastructure

Fagan Draft 2011

MLD-601 Tool Kit Topic: Work Processing Strategies (Class #9)Tool: Waiting TruthsDescription: Waiting’s impacts on customer service.Example:

References: The Psychology of Waiting Lines, HBS 9-684-064, rev. 1984

Principles of Waiting

1.Unoccupied time feels longer than occupied time2.Pre-process waits feel longer than in-process waits3.Anxiety makes waits feel longer 4.Uncertain waits are longer than know, finite waits5.Unexplained waits are longer than explained waits6.Unfair waits are longer than equitable waits7.The more valuable the service, the longer I will wait8.Solo waiting seems longer than group waiting

Fagan Draft 2011

MLD-601 Tool Kit

Topic: Capacity Utilization (Class #9)Tool: Capacity and Utilization CalculatorDescription: Calculating the capability of a system to generate outputs and the degree to which this capacity is utilized.Example:

References: Victoria Station Teaching Notes, Fagan

Fagan Draft 2011

MLD-601 Tool Kit

Topic: Capacity Utilization (Class #9)Tool: Bottleneck IdentifierDescription: Determining the binding constraint in a process.Example:

References: Victoria Station Teaching Notes, Fagan

62%

“No Worries”

Fagan Draft 2011

MLD-601 Tool Kit

Topic: Capacity Utilization (Class #9)Tool: Long-term Capacity Management FactorsDescription: Determining the binding constraint in a process.Example:

References: Service Operations Management, Hope and Muhlemann

Factors Examples

Markets growth, competitive environment

Competitors markets, offerings

Economy growth rates, interest rates

Social Employment, green

Political taxation, international relations

Technical new technology

Fagan Draft 2011

MLD-601 Tool Kit Topic: Managing Demand Peaks (Class #10)Tool: Classification of PeaksDescription: Waiting’s impacts on customer service.Example:

References: Peak Management, Ronen, Coman, Schragenheim, Int. J. Prod., 2001, p. 3187

Classification of Peaks

Peak Occurrence

Expected Unexpected

Firm’s Prepared Classical Rapid responseCondition

Unprepared Unexpected Opportunity orChristmas Crisis mgt.

Fagan Draft 2011

MLD-601 Tool Kit

Topic: Managing Demand Peaks (Class #10)Tool: Peak Management StrategiesDescription: Providing a set of approaches to mitigate demand peaks.Example:

References: CSX and the Fall Peak, Fagan, 2005

Fagan Draft 2011

MLD-601 Tool Kit Topic: Managing Demand Peaks (Class #10)Tool: Peak Demand PrioritizationDescription: Prioritizing demand during the peak to maximize long-term value.Example:

References: CSX and the Fall Peak, Fagan, 2005

Fagan Draft 2011

MLD-601 Tool Kit

Topic: Efficient Service Delivery (Class #12)Tool: Logistics ComponentsDescription: Effectively including the physical aspects of service delivery. Example:

References: Humanitarian Aid Logistics: Supply Chain Management in High Gear, L.N. Van Wassenhove, The Journal of the Operational Research Society, Vol. 57, No. 5, May 2006, pp. 475-489

Requirementsplanning

Requirementsplanning

ProcurementProcurement

TransportationWarehousing

Inventory

TransportationWarehousing

Inventory

DeliveryAdministration

DeliveryAdministration

Fagan Draft 2011

MLD-601 Tool Kit

Topic: Efficient Service Delivery (Class #12)Tool: Disaster to Chaos Red FlagsDescription: Understanding the factors that can lead to chaos after a disaster.Example:

References: Humanitarian Aid Logistics: Supply Chain Management in High Gear, L.N. Van Wassenhove, The Journal of the Operational Research Society, Vol. 57, No. 5, May 2006, pp. 475-489

DisasterDisaster ChaosChaos

Unusual eventUnusual event

Media attentionMedia attention

Excessive fundsExcessive funds

Lost infrastructureLost infrastructure

No processesNo processes

Fagan Draft 2011

MLD-601 Tool Kit

Topic: Efficient Service Delivery (Class #13)Tool: Rapid Response Supply Chain Success FactorsDescription: Focusing on the right issues and relationships in responding to crises. Example:

References: Humanitarian Aid Logistics: Supply Chain Management in High Gear, L.N. Van Wassenhove, The Journal of the Operational Research Society, Vol. 57, No. 5, May 2006, pp. 475-489

AgilityAgility

AdaptabilityAdaptability

AlignmentAlignment

Rapid, ResponsiveEfficient, Flexible

Rapid, ResponsiveEfficient, Flexible

AlliancesDynamicAlliancesDynamic

Different interestsRisk/resource sharing

Different interestsRisk/resource sharing

Fagan Draft 2011

MLD-601 Tool Kit

Topic: Efficient Service Delivery (Class #13)Tool: Systems Thinking Feedback LoopsDescription: Providing a structured approach for examining complex operations and understanding the inter-relationship of processes.Example:

References: Business Dynamics, Systems Thinking and Modeling for a Complex World, John Sterman, McGraw-Hill, 2000, pp. 3-39

NewProducts

Profits

Sales

+

++

Accuracy ofDemandForecasting

InventoryLevels

-

-

-

RB

MLD-601 Tool Kit

Topic: Performance Measurement (Class #14)Tool: 2011 MLD-601’s Up/Down/Up Performance Measurement DesignDescription: Designing a measurement system that aligns process participant input with agency strategyExample:

Fagan Draft 2011

Individualwork

measures

Individualwork

measures

Subprocesswork

measures

Subprocesswork

measures

Processwork

measures

Processwork

measures

Agency measures of

success

Agency measures of

success

Agency strategyAgency strategy

Agency mission Agency mission

Individualwork

measures

Individualwork

measures

Subprocesswork

measures

Subprocesswork

measures

Processwork

measures

Processwork

measures

Today Tomorrow

MLD-601 Tool Kit

Topic: Performance Measurement (Class #14)Tool: Fagan’s 8 Rights of MeasurementDescription: Checklist for designing a performance measurement systemExample:

Right Focus: Customer oriented; actionable on what mattersRight Level: Simple but drillable (think onion)Right Linkage: Process orientationRight People: Value in knowing; accountable for actionRight Collection: Automatic, fast, accurate, accessible, embedded in the processRight Incentives: Align with core values and strategy; rewards short and long termRight Culture: Continuous improvement philosophyRight Measures: Control and improvement; end-to-end business focus, balanced, hard to game, facilitates decisions and actions

Fagan Draft 2011

MLD-601 Tool Kit

Topic: Performance Measurement (Class #14)Tool: The 7 Deadly SinsDescription: Potholes to avoid when designing a performance measurement systemExample:

Vanity – make us look goodProvincial – org. boundariesNarcissism - Internal not customer focusLazy – no homeworkPettiness – no big pictureInanity – fail to consider human reactionFrivolity – lack of seriousness

References: The 7 Deadly Sins of Performance Measurement and How to Avoid Them, Michael Hammer, MIT Sloan Management Review, 2007, Vol. 48 NO 3, pp. 19-28

Fagan Draft 2011

MLD-601 Tool Kit

Topic: Statistical Process Control (Class #15)Tool: Statistical Process Control ChartDescription: Understanding Random versus Systemic PerformanceExample:

Fagan Draft 2011

Food Shipments from China Rejected(2 stdev)

January 2009 – September 2011

MLD-601 Tool Kit

Topic: Statistical Process Control (Class #15)Tool: Pros, Cons, and Cautions of SPCDescription: Understanding the strengths and weaknesses of statistical process control chartsExample:

Pros Cons Cautions -Simple - Unclear rules - Refine UB/LB-Data driven - Too simplistic - Screen for gaps-Visual - False security-Initiative - Reactive-Eliminates noise - 1st order concern only

Reference: Constructing and Using Process Control Charts, HBS 9-686-118, Rev. January 6, 1998

Fagan Draft 2011

MLD-601 Tool Kit

Topic: Forward Looking Performance Management (Class #16)Tool: Forward Looking Performance Pyramid FrameworkDescription: Defining how outcomes are generated based on foundational metricsExample:

Fagan Draft 2011

1

30

300

3,000

30,000

Safety Pyramid

Fatality

Disabled

Injury

Minor accident

Unsafe act

MLD-601 Tool Kit

Topic: Forward Looking Performance Management (Class #16)Tool: Forward Looking Performance Measurement CriteriaDescription: Examples of how proactive measures can focus attention. Example:

Fagan Draft 2011

Visibility Priorities

Consistent Achievement

Inconsistent Achievement

Consistent Non Achievement

Down Trend Neutral Trend

Up Trend

Achieve Target

Trend of Results

Priority 2Priority 1

Priority 3

Priority 4

Variability Assessment

Source: CSX Commercial (prepared for Gooden, 11 April 2008)

Definition of Yo-Y o Performance

•Refers to significant variability in results for specific terminal (up, down or both)

•Based on 10-15% standard deviation above and below the mean for defined four-week period (highlighted in blue) and >15% standard deviation (highlighted in red)

•Statistical process control charts

Vector Assessment

Source: CSX Commercial (prepared for Gooden, 11 April 2008)

Consistent Achievement of Target

Inconsistent Achievement of Target

Consistent Non Achievement of Target

Down Trend

Neutral Trend

Up Trend

Moderate Positive

Shift

Moderate Positive Shift

Moderate Negative Shift

Major Positive Shift

Major Negative Shift

Major Positive Shift

Major Negative

Shift

Moderate Negative

Shift

MLD-601 Tool Kit

Topic: Forward Looking Performance Management (Class #16)Tool: Johnsen’s Performance Model Description: Structuring a public sector performance modelExample:

References: What does 25 years of experience tell us about the state of performance measurement in public policy and management?, Johnsen, Public Money and Management, Vol. 25. No. 1, pp. 9-17, 2005

Fagan Draft 2011

Stakeholders

Policies and Objectives

Inputs Process Outcomes

Efficiency

Effectiveness and Equity

MLD-601 Tool Kit

Topic: Technology for Quality and Efficiency (Class #17)Tool: IT’s Role in Process InnovationDescription: Considering the multiple roles of technology in process reengineering.Example:

References: Process Innovation, Reengineering Work through Information Technology, Thomas Davenport, HBS Press, 1993, pp. 37-70

Fagan Draft 2011

IT as Enabler Process Reengineering IT as Implementer

Opportunities

Constraints

Gaps Non-TechSolutions

- Hardware- Decision Support

MLD-601 Tool Kit

Topic: Technology for Quality and Efficiency (Class #17)Tool: IT Impacts on ProcessDescription: Providing a wide view of the impacts of IT on process innovation.Example:

References: Process Innovation, Reengineering Work through Information Technology, Thomas Davenport, HBS Press, 1993, pp. 37-70

AutomationAutomation

InformationInformation

SequencingSequencing

TrackingTracking

AnalysisAnalysis

Distance LinkageDistance Linkage

IntegrationIntegration

DisintermediationDisintermediation

Fagan Draft 2011

MLD-601 Tool Kit Topic: Technology for Quality and Efficiency (Class #17)Tool: IT BenefitsDescription: Considering the broad range of hard and soft benefits.Example:

References: Introducing Technology at Transport for London: Oyster’s Multiple Pearls (A), Fagan and Stuart

Fagan Draft 2011

MLD-601 Tool Kit Topic: Technology for Quality and Efficiency (Class #17)Tool: E-Business Core CapabilitiesDescription: Enumerating the core requirements for successful E-Business implementation.Example:

References: Core capabilities for practitioners in achieving e-business innovation, Lin and Hsia, Computers in Human Behavior, 27 (2011) pp. 1884-1891

Domains Core CapabilitiesTechnology Infrastructure and architecture

Technology-business alignmentIT sourcing and security

Management Customer focus and agilityReinvention mindsetCapacity to change

Collaboration PartnershipsCo-productionGain sharing

Fagan Draft 2011

MLD-601 Tool Kit Topic: Technology to Expand Reach (Class #18)Tool: Technology Reach Success FactorsDescription: Enhancing the probability of successful technology implementationExample:

References: Designing mobile transfer serivces: Lessons from M-PESA, Mas and Morawczynski, MIT Innovations Journal, Spring 2009.

M-PESA Success Factors1.Leverage brand and simple message2.Easy to use3.Management of retail agents4.Scalable distribution system5.Assurance of product (cash)6.Easy registration7.Registration incentives for agents8.Simple pricing9.In and out of network transfers10.No minimum balance11.Tie onto other cash outlets12.Balance growth of customers and agents

MLD-601 Tool Kit Topic: Technology to Expand Reach (Class #18)Tool: Technology Adaption RatesDescription: Increasing speed of technology adoption.Example:

References: earlywarning.blogspot .com

MLD-601 Tool Kit Topic: Technology to Expand Reach (Class #18)Tool: Business Plan FrameworkDescription: Evaluating and prioritizing technology optionsExample:

References: Outline for a Business Plan, Ernest & Young, 1997.

Business Plan OutlinePurpose/Mission (Gap you are filling)Market Assessment - Industry Overview - Customer Needs and Segments - Products/Services - Target Market - Competitive LandscapeStrategyOperations/Service DeliveryMarketing and SalesCapitalization and Financials

MLD-601 Tool Kit Topic: Systems Thinking in Designing Operations (Class #19)Tool: System Dynamics FrameworkDescription: Utilizing a systems approach to understanding and modeling process interrelationships and impacts.Example:

References: Business Dynamics: Systems Thinking and Modeling for a Complex World, Sterman, John, (New York: Irwin McGraw-Hill, 2000

The “+” indicates that “B” goes in the same direction as “A” As "A" goes up, "B" goes up

As "A" goes down, "B" goes downA

A

A

B

B

B

The “-” indicates that “B” moves inversely to “A”

As "A" goes up, "B" goes downAs "A" goes down, "B" goes up

The “| |” indicates there is a delay between the time “A” changes and “B” reacts

Some time after "A" goes up, "B" will go down, orSome time after "A" goes down, "B" will go up

+

-

“Causal loops”

MLD-601 Tool Kit Topic: Building Organizational Capacity (Class #20)Tool: The Capacity BuilderDescription: Planning for capability buildingExample: Capacity Building Framework

Leading Indicators

- New mission-Adjacent space-Scaling-Long-term-Added complexity

Leading Indicators

- New mission-Adjacent space-Scaling-Long-term-Added complexity

Prioritization

-Size and scale-Degree of difficulty-Timing

Prioritization

-Size and scale-Degree of difficulty-Timing

Strategies

-Needs-Challenges-Strategies

Strategies

-Needs-Challenges-Strategies

Hard

Easy

Small Large

Day 90

MLD-601 Tool Kit

Topic: Going to Scale (Class #21)Tool: The 5Cs of Successful ScalingDescription: Planning for effective scaling-upExample: The 5Cs for Scaling

Cost – Cost effective strategy

Commitment – Internal and external

Capacity – Funds, sources, expertise

Community – Buy-in

Culture - Become part of the daily routine

MLD-601 Tool Kit

Topic: Going to Scale (Class #21)Tool: Pilot StrategyDescription: Deciding on how to pilot a programExample:

#1“Easy”

#2Expand the

“Easy”

#3“Hard”

It’s doable It’s saleable It’s sustainable