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You are here: Home / Archives for Consulting / Management Consulting

Business Process Consulting – Knowledge is Power

August 1, 2012 By Jason Palmer Leave a Comment

Knowlege is PowerBusiness Process Consulting is like going for an annual physical.  Even though everything may appear to be fine, you visit the Doctor to update your current condition.  The Doctor compares your current general physical condition by reviewing benchmarks such as blood pressure, weight, and heart health.  The Doctor then advises you to stay the course, or that perhaps you need to make some lifestyle changes.  The results of the more advanced tests may indicate a serious problem that needs immediate attention.  With this information you confidently leave the Doctor’s office with a plan of action.

A Business requires exactly the same form of annual review to make sure that the operations are running as efficiently as possible and that no serious problems exist.

A Business Process Review should encompass the entire company from the lowest level employee up through Senior Management.  This will reveal volumes of information so that any significant road blocks to employee productivity can be identified.

A perfect example of this is in action is the reality show called, “Undercover Boss.”  Each week the CEO of a well-known company goes undercover in a variety of jobs, from janitor to manager, throughout his or her company.  The CEO experiences firsthand, both the inherent good and in some cases, the extreme dysfunction in the company.  The experience is both enlightening and overwhelming.  The CEO walks away with a deep understanding of what is and is not working.  Most importantly, the CEO has the Knowledge and the Power to immediately effect change in the company and usually does.

In the majority of companies, going “undercover” is not an option.  The solution:  Engage in Business Process Consulting, preferably with an external Consultant who can be undercover in plain sight.  Staff people are generally more comfortable talking with an independent outside party than internal management.  The Consultant’s initial purpose is to listen, observe, document, and report.  Then, to discuss with Management possible changes in procedures, many of which may come directly from the Staff responsible for doing the specific tasks or from the expertise of the Consultant.

Business and Financial Reporting, an area usually of significant interest to Middle Management, is where Business Process Consulting really shines.  Many companies have disparate systems which make it difficult to pull together data for advanced reporting.  In one Business Process Consulting Engagement I recently completed, the Manager had to access five different systems to compile the data in to a Quarterly Board Meeting Report.  Only three of the five systems were able to produce the data in a format that could be used with a spreadsheet program. (i.e. Microsoft Excel.)  The other two could only produce printed paper reports which required the Manager to re-enter the data by hand in to the spreadsheet.

The Financial Systems were never combined or integrated after the creation of a new division and a merger.  The paper reports were from an outdated, unsupported, legacy system where only limited knowledge remained in how to generate reports.

Senior Management was completely unaware of the challenges faced by the Manager responsible for the Quarterly Board Report because he was able produce it as requested.  After Senior Management was made aware of the system incompatibilities and the incredible amount of time involved to create the report, they immediately addressed the problem. (I was engaged to find a short term solution – tools that allow disparate systems to “talk” to each other – and a long term solution – which was a completely new Financial Reporting System.)

Senior Management frequently complains that they do not have enough insight in to the metrics (i.e. Sales Data, Expenses, Return on Investment, Cost of Capital, Inventory Data, etc.) to manage the “Big Picture.”  Put simply, “Data is going in to the company but is not coming out in a useful format.”

In the normal course of business, thousands of transactions and interactions are generating massive amounts of data.  Companies may not have the Systems to properly analyze and manage the data to enable it to become useful information.

Business Process Consulting unlocks the body of knowledge trapped inside a Company by analyzing how the data is generated and reported.  Armed with this knowledge, Management then has the power to effect change to improve efficiency and productivity.

Filed Under: Management Consulting Tagged With: Business Process Consulting, Consulting, Consulting Services, Knowledge, Operational Review, Power

Identifying Consulting Services Revenue Opportunities

July 31, 2012 By Jason Palmer Leave a Comment

Businessman with Wheelbarrow Full of CashAlmost everyone offers Consulting Services as part of his or her job function without realizing it.

If you are in a Licensed Profession, such CPA, Attorney, or Hair Dresser, you advise your clients in multiple ways:  first by suggesting which services they may require and second by suggesting the best course of action.  For example, as a Hair Dresser, you might suggest that your client needs a change in hair style or perhaps a change of color.  (The Services you offer.)  Then you suggest the style that might work best based on facial features and a flattering color.  (How the Services will be implemented.)

Formalizing the mindset that we are already offering Consulting Services opens up the door for revenue generation opportunities with either existing clients or new clients.

The first step is to identify the types of additional Consulting Services that you want to offer based on your area of expertise or interest.  It is not necessary to be an absolute expert to properly advise your clients.  For example, Information Technology is a broad consulting area.  A CPA may not know the explicit technical details of how to install an Accounting Software package.  But the CPA will know the value and benefit of implementing an Accounting Software package with the right feature set matched to the clients’ business needs.  And, the CPA will know that the appropriate Technical expertise can be hired to perform the actual installation on the clients’ computer system.

The next step is to identify the opportunities where you can demonstrate the value of your Consulting Services.  Like Dorothy in the “Wizard of Oz”, we just need to look in our own backyard, in this case, our current client list.  Review your current skill set and some of the possible areas of Consulting, which may include Information Technology, Financial Systems, Inventory Control, Warehouse Management, Retail/Point of Sale, Manufacturing Processes, and General Business Process/Workflow.  Then review your current client list and see where there is overlap between your skill set and the possible areas of Consulting.

The most difficult aspect of expanding into a formalized Consulting Services relationship with an existing client is changing the client’s perception of your scope of services.  If you are a CPA preparing Financial Statements and Tax Returns, the client may only see you as their “Accountant.”  It is your job to educate the client and demonstrate that your skill set reaches beyond traditional Accounting by engaging them in a conversation about other Business Process challenges.

It amazes me the number of Clients that have researched and implemented new Financial Accounting and Reporting systems without involving their CPA.  I know this from personal experience because I am the Business Process Consultant brought in to analyze the problems with the current Accounting System, research alternative systems, and manage the implementation.  When I ask the Client, “Why are we not engaging your CPA in this process?”  The answer is inevitably, “The CPA just prepares our Financial Statements and Tax Returns and has no involvement in our Operations.”

The CPA, who definitely has an understanding of how Financial Systems work, could certainly have started a conversation with the Client about their operational issues and been the lead Business Process Consultant.

My favorite example of this problem is demonstrated by the millions of copies of the Quickbooks Accounting Software program that have been purchased and installed by Business owners without any discussion with their CPA.  How could the CPA have not suggested automating the Accounting Process?  Quickbooks even has a Pro Advisor Consulting program specifically designed to help CPA’s to engage their Small Business Clients and discuss the transition and implementation.  Simple Answer:  The CPA did not identify the opportunity and start the conversation.

The key point is that many of us have skills and knowledge that far exceed our specific job title.  Communicating this enhanced knowledge to our clients will enable us to maximize our revenue potential.

Filed Under: Management Consulting Tagged With: Business Process Consulting, Communication, Consulting, Consulting Services Revenue, Operational Review, Skill Set

Business Process Consulting – What is it?

July 30, 2012 By Jason Palmer Leave a Comment

Consulting ProcessBusiness Process Consulting reviews the current procedures for every aspect of how a Company operates and seeks opportunities for greater efficiency to improve the bottom line.

A process is a uniform series of steps that you can repeat to complete a given task.  In that sense, everything you do to  manage and operate your business is a process.

An example of a Business Process that most of us do every day is to physically open the office in the morning:  we approach the door, insert the key, turn the lock, open the door, turn off the alarm, and turn on the hall lights.  We might have a second process to prepare the work environment:  adjust the office temperature, put up a pot of coffee, turn on the copier and printers, turn on more office lights, put the phone system in day mode and check the general voice mail box.

This over simplification is to demonstrate that without realizing it, we are creatures of habit and perform the same processes on a regular basis to complete a set of tasks.

Problems arise when we do not follow a consistent set of procedures to provide a uniform result.  They can also arise when procedures are overly complex and have not been updated to take advantage of new technologies.

This is when you need Business Process Consulting

The need for a consistent Business Process becomes evident in the following scenario:  Two Salespeople at your company each take a phone order for some merchandise.

Salesperson “A” properly uses the “Phone Order Form” that has space for the Customer Name, Address, Account, Phone Number, Email Address, Date, Purchase Order Number, Quantity, Item, Description, Item Number, Unit Price, Total, Shipping Address, and Terms.  As Salesperson “A” has followed the Business Process for taking a phone order, all of the required information has been properly collected to assure accuracy in completion of the order from Entry in to your system through Shipping.

Salesperson “B” decides to use a blank sheet of paper and only gets the Customer Name, and the item, order quantity, and pricing information with the intent of looking up the rest later.

Since Salesperson “B” did not use a “Phone Order Form”, he has put the company and customer satisfaction at risk because necessary information is missing.  Furthermore, as a Salesperson, he probably will not follow through on “filling in the missing details.”  More than likely, he will leave it for the Order Entry department to locate the missing information.  In the worst case, someone else will have to contact the Customer to complete the order and it will be delayed.

This is an oversimplification demonstrating what happens when Staff does not follow a Business Processes already in place.

A change in technology could easily standardize the preferred way to take a phone order.  An Online Order Entry System would allow the Salesperson to find the customer account, verify the information mentioned above, and only enter the quantity and item details.  Updating the Business Process to take advantage of new technologies improves efficiency while  simultaneously reducing manual errors.

To demonstrate the practical value of Business Process Consulting, try this exercise.  Pick any procedure in your business:  (i.e. opening of the mail, applying payments to customer invoices,  or making the daily bank deposit.)  Ask the person doing the task, “Why do you do this particular task this particular way?”  You might be surprised to hear the following response, “This is the way I have always done it.”  (Or, sometimes, “This is how I was told to do it.”)

The real question you want to ask is, “Can you think of a better, more efficient way of doing the task?”  In the majority of interviews when I ask the above questions, I get a resounding, “Of course there is a better way!”  (But, nobody ever asked me for my opinion.)

You have just taken the first step to becoming your own “Business Process Consultant.”  By simply starting a discussion with your Staff members about how they perform the tasks that are part of their normal job function, you can immediately get ideas about possible changes that may increase efficiency which will improve productivity and therefore your bottom line.

The advantage of using professional Business Process Consultants is that they bring a more formalized, independent objective review to the Project.  Sometimes we cannot see the “Forest for the Trees.”  Outside consultants have seen many forests and many trees.

The key benefit is that while reviewing the Business Processes and interviewing Staff, the experienced Consultant will be able to listen, discuss, and document the current procedures and make suggestions about possible improvements within each department.  Finally, Staff people are generally more comfortable talking with an independent outside party vs. internal management.

Filed Under: Management Consulting Tagged With: Business Process Consulting, Consulting, Operational Review

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