When an organization begins to evaluate its operations, a key component is information. In today’s business world, information about finance, customer and, production performance are typically recorded and maintained in a computer program. These systems, referred to as a Management Information System (MIS), have made information readily available in the most minute detail. Vast amounts of money are spent installing them and whole departments have been defined and tasked with entering the data contained in its electronic brain. But what is it saying? This one fundamental question can make or break a system. When executive management selected the system, the idea was to have a system that would perform all the miraculous tasks that they envisioned. The data plan that is entered into the system asks the question of “what do you want to know”. Developing that plan takes many twists and turns during its creation.  However, the data plan that is developed may be more tactical (letting departments set themselves up) than strategic (keeping the whole process in mind). If this is the case, the entire management team will not use the system and it is considered useful in only certain areas. To prevent this, leadership needs to develop a system data plan that is strategic by nature and fulfills the entire company’s business goals.

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Developing a Tactical Data Plan

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Most companies begin a systems implementation by looking at the new computer system in work flow order and fully engage departments as they are needed. Before a company starts producing a product or service, an overall system for recording cost, purchases and financial activities is established. To this end, the Accounting department is the first company entity in the work flow and the first department engaged in an implementation. Their task is to develop the basic structure needed to report financial transactions and translate that into statements required by stakeholders, investors, suppliers and government agencies. By necessity, the data plan must support these critical financial requirements. Further, the department has a traditional role as the primary business information source which makes it the most informed area of the organization. As a result, the Accounting department is the first area engaged and winds up taking responsibility for the entire implementation. Because of their critical function and being first, their perspective tends to dominate the data plan. 

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After satisfying Accounting’s requirements, the Estimating department is normally engaged next. Estimating’s focus is developing project prices, maintaining a feel for the market pricing and presenting quotes to the customers. Most companies will produce far more estimates and quotes than jobs so the work load is a factor.  Functionally, the system needs to be able to turn quotes as quickly as possible and arrive at a price that the customer will accept. As a result, the department will add to the data plan based on the need for speed and price development.  This perspective influences how work centers, cost centers, operation codes and inventory items are developed. Unfortunately, this may translate into a data plan that, while austere in some areas, may not reflect the real manufacturing world in the plant.  Phantom cost centers, impossible work center speeds and excluded critical job functions tend to dominate how an estimate is created. As a result, the Estimating department’s contribution to the plan may include incomplete reporting mechanisms and non-existent cost centers.

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The next step in the work flow is the Job Management or Customer Service department. This area serves as the lynch pin between the customer and the organization. Here, the focus is on getting detailed instructions of customer requirements to the company so that it can produce the goods or services. The need for accurate information is critical as this department must respond to customers, sales, manufacturing and accounting with accurate information almost immediately. Over the years, job estimates have evolved from a purely pricing exercise to an important job planning function.  Account Managers routinely develop the job plan from an estimate and are limited to the structure that was used to create the estimate. As a result, the department is subordinate to the estimating department and will make very few changes to the data plan unless it assists in creating the estimate. Mostly, they learn to develop processes (work arounds) to overcome the deficiencies they encounter.  While the implementation takes input from customer service, a lot of work has gone into the system setup at this stage and it becomes impractical to make major changes.

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After adding job management requirements (or developing work around procedures), production departments are fully engaged just before deployment. Overall, Production represents the largest single data entry group within the organization and enters more information than any other area. Typically, they receive the least amount of training and attention during setup. (As a pressman, I was once shown how to report my time and operations to a new system with the rest of the department, in the middle of the pressroom for 15 minutes on a Friday afternoon. Go-live was on Monday morning.) Since they are engaged at the end of the implementation, the perception of the MIS being an “office” program is hard to avoid. Their work centers, cost centers and operations codes were setup at the estimating phase and are now written in stone. Further, there is a limit to the amount of time that an implementation team has and this is compressed at the deployment date. As go-live approaches, manufacturing departments’ needs and training normally get put into a “do later” category that may or may not be addressed later. As a result, production departments learn to accommodate the structure as it is presented to them, do not appreciate or understand the importance of the information, interacts little as they can and goes back to producing material.

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Results

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While there are variations to the above narrative and many details were left out, this is a description of a typical MIS deployment. Even with a representative deployment team, work tends to be distributed by departments which then work on their section in isolation.  The guidance from the executive management group is to put in the system and get it running and that is exactly what they do.

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Notice the tactical nature of the data plan that was developed. With each department creating its own information requirements based on their needs and passing along to the next, then the system tends to be disjointed and reactive by design. Executive management does not really get the information they thought they were going to receive. Eventually, the system’s performance settles into runt of only certain groups getting any value from the data and others developing outside systems to get what they need. Information is scattered, incomplete and not trusted. Even areas that were engaged early find that the data is of limited value. Tactically developed data plans start out with high expectations but wind up becoming merely adequate.

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Referring back to the quote from Stephen Covey, one can see that a system (data plan) designed by the system (departments) without clear guidance tends to lack direction and innovation. Management, with its tactical view point, will design a tactical data plan.  In order to infuse a strategic vision into the data plan, the company’s leadership needs to give direction and guidance so that a strategic data plan can be developed.

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Developing a Strategic Data Plan

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Setting up a strategic data plan involves more than just getting the software operational. From the beginning, leadership determines the direction and tone of the system. Taking methods developed by Continuous Improvement Programs and Motorola’s Six Sigma, the leadership team defines the system by identifying the Voice of the Customer (VOC) requirements followed by the Voice of the Business (VOB). The VOC requirements would focuses on the customer’s needs and the system’s support of the organization’s objectives of achieving superior service, responsiveness, and customer loyalty. The VOB requirements would list the business needs that the system will provide for financial results where cost versus benefits is an important leadership decision factor. This list forms the reason that the system is needed and how it will be used.

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From here, the leadership team determines the necessary key metrics needed to support the VOC/VOB statements. These are the critical areas of data that are absolutely required by the executive management. Metrics such as sales, bookings, production chargeability and on-time delivery may be considered critical by the leadership team. Critical financial reporting is considered along with customer activity and production reporting. Instead of focusing on one area, the data plan is viewed as one unified data set. After deployment, this metrics list can be used to develop a management dashboard to instantly inform executive management about the health of the company. With the key metric defined, the system has a structure and direction for the resulting data plan.

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With the VOC/VOB and metrics requirements listed, department managers can then identify what they will need to do to support the frame work.  By having critical points identified, managers are working in a unified manner toward a common set of goals. Departments will know what areas they need to concentrate on and identify what activities they will be performing to support the company and each other. With the guess work removed, departments are free to develop their own set of key metrics that they will need to manage their area of responsibility. Departments are lead to begin thinking about how they are going to use the data in their daily management activities and what benefits they will receive for their efforts. By involving all of the management team at this point, they become owners and stakeholders in how the system is designed instead of being spectators. Further, they become advocates and supporters for the system. In addition, how the information will interact between areas becomes obvious to management. Data duplication is eliminated and the value of cooperation and coordination is highlighted as a key component of the implementation. The resulting data plan is one that was designed by executive management and defined by the departments together instead of in workflow order. The data framework is coordinated, directed toward common goals, holistic by nature and strategic in its outlook.

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With the framework sketched out by, an implementation team can be formed using appropriate teaming concepts. The team is able to build a team charter that keeps the entire project focused instead of changing whenever a new department in encountered. Team members are selected from the entire organization utilizing their expertise Instead of relying on the resources from one over-worked department. Managers, who now have a vested interest and understand the desired outcome, support the project fully and become active participants instead of bystanders. Input, feedback and process accommodations are planned for by people who know the job instead of occurring on the fly wherever the project happens to be at that time. As the data plan evolves, the collective talents of the entire organization are reflected in how the system works and how it is used to fulfill the customer’s requirements.

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Results

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With a strategic data plan, the program is more responsive and flexible to fulfill the needs of the customer and business. There are many benefits to an organization which would include:

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·         A system that is setup around the company’s specific customers needs instead of the software’s generic designs.

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·         Executive management is able to eliminate “I think” from their decision making and replaces it with “I know”.

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·         Financial reporting that is timely, accurate and easy to maintain due to the involvement of the entire organization.

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·         The MIS seen as an easy-to-use tool with valuable and readily available information.

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·         The ability to manage by data instead of guess work because the entire management structure is information based around the same key metrics.

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·         Everyone in the company is working in the same direction, with the same information and for the same goal.

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·         A system that is responsive to changing conditions with enough subject matter experts that can quickly adapt the system.

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·         The ability to internally develop new systems specific to the company’s needs and objectives.

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·         Continuous training and improvement of the entire organization.

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·         Consistently accurate information in a steady stream.

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With any operating system, nothing ever remains the same. The same is true with a MIS program. Changes need to be made and adjustment performed to keep up with the moving target called business. Without the strategic vision of the executives, it is easy to have purchased the finest system and wind up with only adequate result. The true mark of a company’s leadership is to recognize this, take action to structure the direction and layout the guidelines that will lead the company toward the desired goals.

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