New Concept: MBSM (Management by Strategic Metrics)
Over the years, I developed a management technique called "Managing by Strategic Metrics (MBSM)". It is a management style that leverages traditional management techniques with the latest technology advances to provide managers and owners with up-to-the-minute dashboards and reports of strategic key point indicators (KPI's) to assist them in their management responsibilities. The core concept of MBSM is the strategic leveraging of data, on a daily basis, to effect process and profitability. In today's business, things move very fast. As Ideas and opportunities arise, business needs to be able to evaluate, develop, implement and manage strategic opportunities quickly to determine the profitability that is presented.
MBSM is all about digital data and work process. Many of you are familiar with the GIGO (Garbage In, Garbage Out) concept that defined process in the early stages of the computer industry. As business moved away from manual bookkeeping and towards automated bookkeeping we eliminated the double and triple posting of transactions through journals and spreadsheets to the general ledger. Managing the collection of that data shifted from the back end journals to "point of capture" . It was proven that if we collected, controlled, and audited the information flowing into the computers system, the output (reports, ageings, financial statements) accuracy was dependable.
That concept (GIGO) has spanned the time and proven to be the corner stone of much of the standard operating procedure we have today. MBSM expands the GIGO concept in two ways. Data collection and reporting.
Let's look at data collection. With the current tools of technology (Mobile devices, Internet, fast bandwidth) we can leverage those devices and move data collection to the farthest point of the process. Even when there is no internet around, cellular data is available just about everywhere, and some applications can collect data off-line and report it back once it gets a connection. This is the foundation of MBSM. The accurate collection of data is imperative to the accuracy of the daily reporting we seek in MBSM. For example, if we are asking our employees to report usage and production totals from the field/shop daily, and we have developed dashboards so that our superintendents and managers can monitor and manage based on that information, it better be accurate. Moreover, we must develop and implement the proper management techniques to insure consistency and compliance to the collection of the data. We surely don't want one or two folks not reporting which could make the information upstream inaccurate.
An example of data collection "gone south" was with a client who we spent hours and a considerable amount of money to create dashboards that the owners and managers could review daily that had certain KPI's and metrics about their business. Once we completed the project, we realized very quickly in testing that there was errors and inconsistency in the presentation of the data. Upon further review, we realized that we did not have the controls in place to insure that all the data was capture daily as we needed. Once we changed the process and implemented some technology to streamline the process in the field, the dashboard became useful and fulfilled their objective.
Another very important aspect of data collection is what I call "Entry-Point Validation". EPV gives the user access to data integrated with the ERP solution, without having to re-enter the information. Most of today's 3rd party mobile applications do NOT have this feature. The data used in the field is not validated. This leads to errors in seamless integration, which leads to incorrect data presented in reporting. An example of EPV is when a user is entering time in the field, as he moves through the form, fields like employee name, date, time, project, cost code, etc are seamlessly integrated with the ERP system so that as information changes or gets updated, it is reflected in the field application within minutes. Since this information is pulled from the ERP system, then the data is valid, so that when the transaction posts back to the payroll application, the information is correct and generally can be automatically updated which reduces time and increases the efficiency necessary for daily collection.
Now let's look at reporting. We touch a bit on it above, but a deeper dive is necessary to understand the full measure of management MBSM provides. Generally, in most companies collection is done weekly or monthly and normally tied to time capture or month end processes. I remember the "Friday" pack. Every Friday, we would collect, all the paperwork from the remote offices and sites, which included payroll time, and we spent the next few days getting that information entered into the backend systems. Once entered we could review reports with accuracy up to the last "Friday" pack. While this was ok, if a trend was developing that was going to make us less profitable, corrective reaction might have caused us to take a hit on the project.
MBSM is using those same metrics, but providing daily, accurate updates so that corrective reaction can be handled immediately. Moreover, it is building a management structure and leveraging technology in order to provide accurate data collection daily instead of weekly or monthly. And since the reporting is seen at every level, the collaboration of the "fix" gets everyone involved so that it is not dependent on one person. It is proven that the more "eyes" on an issue gets better results on its resolution.
And finally, with the latest advances in mobilized technology, these reports and dashboards can be available at any time, and at any place. Some applications can even monitor thresholds and proactively send out alerts with report reviews for issues arising from the data collection. And with tools like Microsoft's Power BI, dashboards and reports can be customized using the various data systems to build enterprise reporting.
MBSM promotes company-wide distribution of strategic information on a daily basis to all employees for the purpose of performance evaluation, meeting production goals and initiatives, and overall profitability participation of the company. Tomorrow's workforce is going to demand more information and participation into the profitability of their companies and MBSM will provide the management platform to see this through.
In conclusion, as you move through the book, you will be introduced to examples of the implementation of MBSM management and technology techniques and strategies.