As the company develops, the demands for achieving
continued growth will change. The start up company faces structural
challenges; the established company by contrast faces operational demands.
These operational demands can only be understood and managed by effective
monitoring, from which the company can learn and develop. One of the
contributions of Ibis to understanding the effective business plan is the
emphasis that the research has placed on effective monitoring; the ability
of the company to do, measure, and redirect resources.
Most companies only monitor their activities through a
very limited set of tools. This means that they will often fail to:
Maximise profit and other operational performance targets by failing
to fine tune the existing operation;
Provide high quality and reliable information both to internal and
external stakeholders;
Build effective and knowledgeable internal teams that understand how
each component of the business fits together which become more
knowledgeable over time;
Identify emergent strategic options early so that major
opportunities can be seized before the competition;
Understand the key problems that the company faces in managing
change;
Catch problems at an early stage when they are easy and relatively
simple to put right;
Match company performance against the norms prevailing in their
particular sector;
Create a framework which enables them to rapidly create a coherent
and achievable overall business plan from the bottom up rather than
the top down.
Ibis over the years has developed a detailed
understanding of the way in which improved monitoring can drive
profitability, enhanced customer loyalty and greater personnel
satisfaction and commitment.
There are three core features of an effective
monitoring system. It must have:
A coherent structure;
Use effective information gathering and dissemination techniques;
Have the right content.
Obviously, a detailed monitoring system makes demands
on the company, and only becomes practical at a certain stage in growth.
We tend to consider that when the company has reached the stage of 2
managers in each key function such as finance, production/ service
delivery, marketing, that the structured development of a full monitoring
system will become a realistic option. This is typically equivalent to a
turnover of 2 million euros, though this will vary from sector to sector.
No company or organisation can introduce a complete
monitoring system overnight. It requires a detailed project plan. Ibis
has developed a standard sequence of introducing structural, information
systems and content which works for the majority of organisations; but in
each case there need to be minor modifications to ensure that the
management team remain committed and interested to the project. As the
number of components that must be integrated is large the development of
the monitoring system becomes part of the growing monitoring system, and
is self-reinforcing.
The monitoring quiz
Like most quizzes, the answers that you get will be
qualitative – and will be greatly driven by your honesty in answering
the questions as accurately as possible. Remember that few of these
questions are relevant to most small organisations, where a more basic
monitoring and control system is still important, though less
comprehensive.
The grading scale that this quiz uses is also based on
a judgement of how far the organisation has proceeded with the monitoring
development.
The five options are:
A complete installed system is one which meets industry
best practice;
A partial system which functions, but does not meet
industry best practice;
A system which is being created with some of the
mechanisms/ systems but not they are not formalised;
A company thinking about system development - aware of
the problem but has only very limited systems in place at present;
A company which sees no need at all indicates that this
has no information on the topic and has no plans to integrate it into the
monitoring system.
Remember that this is designed for the medium sized
enterprise, so if you are an early stage company this is not for you.
Question
Strongly Agree
Agree
Neutral
Disagree
Strongly Disagree
Structured Elements
Has the company established clearly defined revenue streams from
existing business, expanding existing sales, new customers, new
products?
Has the company a clearly defined set of cost centres and how
budgets will be managed and controlled?
Has the company identified key performance indicators and critical
success factors for each operating division?
Are these key performance indicators linked with current
achievement, benchmarks and company target for each division?
Has the company a clear set of objectives which integrate over
time (balanced scorecard)?
Has the company introduced a set of standard operating procedures?
Has the company a corporate governance framework?
Has the company a standard monthly review process which
involves divisional presentations and project management approaches
to task completion?
Has the company an integrated quality circle and
certification system?
Information tools
Does the company have an employee suggestion scheme?
Does the company have an appraisal and exit interview scheme?
Does the company have a customer satisfaction scheme?
Does the company have an environmental monitoring (key
assumptions, competition) system?
Does the company have a market and product performance information
collection methodology eg CRM?
Does the company have an effective financial reporting system?
Does the company have an effective forecasting methodology?
Does the company have an effective project management system?
Does the company have an effective order processing system (inc
e-commerce)?
Does the company have an effective manufacturing/ service
production and quality management control system?
Does the company have an effective stock control system?
Does the company have an effective ERP system?
Content
Does the monitoring system include a review of cash flow by
revenue stream/ cost centre?
Does the monitoring system include a review of profit and loss?
Does the monitoring system include a review of the balance sheet?
Does the monitoring system include a review of ratio analysis?
Does the monitoring system include a review of key assumptions and
risk management issues?
Does the monitoring system include a review of key marketing and
sales factors (inc competitive analysis, portfolio analysis,
customer, product review, customer satisfaction)?
Does the monitoring system include an analysis of production
factors?
Does the monitoring system include an analysis of logistics
factors?
Does the monitoring system include an analysis of new product
development?
Does the monitoring system include an analysis of personnel
factors?
Does the monitoring system include an analysis of IT systems?
Does the monitoring system include a review of the contingency
plan?
Your total is:
Your score:
330 You know that you have cheated....
240 – 328 Your organisation is well on the way to becoming
knowledge centric, and with concentration on key missing elements will be able
to take continuing advantage of profitable opportunities in the market, while
engaging your key staff, and identifying and managing problems before they
become critical.
180 – 238 Your organisation has started to identify some of
the challenges involved in managing change and development. By improving
structure, systems and content you will be able to move the company towards
becoming knowledge centric.
120 – 178 Your organisation is missing many components
which will substantially improve operating performance. Establishing a project
plan to install these components will provide substantial returns on both time
and money.
66 – 118. Your organisation will find it practically
impossible to grow and develop without many of the vital monitoring components.
Review your monitoring policy as a matter of urgency.
19 March 2007 15:27:27
Ibis Associates
European office La Vieille Loge, La Milliere, 86700, Romagne,
Poitiers, France