Now and again you come across a tool that makes you think – “Wow this is useful – I wonder why no one else has done this before?”MVX Business Modeller from Metavizix is such a tool that allows business analysts / consultants to model the way an organisation generates value and provide management with a range of reports and analyses that allows them to challenge the way the business operates.
The Goal: Improving performance
Most, if not all organisations, constantly strive to improve performance. There are only three basic ways of doing this: reducing costs, improving income, or finding new ways to satisfy their customers. Out of these, cost reduction has been a dominant theme and is typically achieved by telling budget holders not to spend. But logically this can only go so far – at some point the impact on saving costs will be minimal. Also just cutting budgets could mean that some vital activities may become underfunded, which in turn will have an adverse affect on improving performance. But there might be a better way ….
Understanding how the business generates value
In my experience, although many businesses understand broadly the processes involved in generating value, few understand the costs involved in each activity. For example in manufacturing there will be processes involved in turning raw materials into finished goods; there are processes involved in developing market awareness and selling products/services to end users; there are processes involved in collecting and dealing with cash, stock, product development and a whole raft of other activities that together generate organisational value.
But to be competitive organisations must perform this ‘value chain’ in ways that are cost effective and, according to Michael Porter, that is different from competitors. This applies not only to profit focused organisations but also the ‘not-for-profit’ sector such as government departments, charities, hospitals and so on.
In the past this type of analysis required specialist tools, time and motion studies, as well as considerable expertise in developing models that would reflect the way the organisation operated. It wasn’t for the faint-hearted and could involve a lot of expense.
But the developers at Metavizix, people with considerable experience in this area, thought they could do better. They set out to develop a simple tool that could be used by business analysts, which would produce tangible results in days or weeks.
Introducing MVX Business Modeller
MVX Business Modeller is a stand-alone PC application that facilitates the building of a model of a business to provide managers with insights not readily available from their usual management reports, which typically reflect budget holder responsibilities, cost centres and/or a departmental structure.
MVX focuses on providing an understanding of the key business processes and where and how costs are incurred in the organisation.
Businesses generate outputs (products and services) in response to inputs (customer orders). The outputs of the business are produced by processes that consist of series of activities.
Activities consume resources in the form of people, goods (consumables) and assets.
Various drivers determine the volumes of activities and ratios between processes, outputs, activities and resources. These are the building blocks used to construct the MVX business model.
MVX Business Modeller facilitates the construction of a tree-type model of the business containing multiple levels of processes, each process containing the series of activities necessary to carry out the process and each activity containing the resources consumed/deployed in completing the activity.
Assumptions are made as to who gets involved in each activity – for example the percentage of their time – and resources that have been consumed and reported in the General ledger can also be loaded. From this, a number of reports can be viewed.
For example, data can be analysed and viewed in process lanes (each lane is a single process showing all the activities in that process), swim lanes (usually departments or cost centres (each lane is for a department and includes all activities “owned” by that department; activities from several processes may be present in the swim lane).
There are also a variety of tables/grids, standard reports and bespoke reports that can be built using the MVX query builder. This gives the user the ability to view how the organisation generates value from multiple perspectives, leading to many insights into how costs are incurred and how they could be managed in the future.
These insights then lead on to the development of strategies to improve performance but from a fact base rather than a ‘gut feel’ instinct that are often wrong.
To find out more
In the space of a blog it’s not possible to go through all the capabilities of the product but for those interested you can visit their website at www.metavizix.com and download a free evaluation copy to see for yourself.
I mentioned at the start that I wondered why no one had thought of this before. Of course they have and there are a number of products that help you to analyze processes. But they are typically complex enterprise systems that you can’t run on a standalone PC. As such they are out of reach for most organisations and certainly for individuals who want to ‘try out’ such a tool to see if it could help their organisation.
Here, Metavizix steps into the gap and provides a simple, low-cost solution that has the ability to transform the way a company operates.
By Michael Coveney, EPM Contributor, from: http://www.stw-consulting.co.uk/Articles/332912/STW_Consulting/The_CPM_Blog/Systems/Modelling_Business_Processes.aspx
Michael Coveney, who is based in the UK, has more than 35 years of experience in the financial analytic software industry, helping enterprises combine ‘best management practices’ with technology to improve the efficiency and effectiveness of their performance management processes.His energetic style and insightful views has led him to become a regular speaker at international events, a course leader with the Antwerp Management School, and the author of many articles and books including his latest ‘Strategy to the Max’ – a down to earth look at all you need to know in setting up systems that support the implementation of corporate strategy.