Controlled Steps to Excellence
Posted by Louis D'hondt on 06/09/2018
Profit margins of 1% or operating at break-even are no exception in today's transport sector. Lowering these margins to offer lower rates is no longer an option. Change is needed and transport businesses are forced to explore new approaches for long term profitability. These improvements can range from low-hanging-fruit to reorganizations of entire businesses. When it comes to the latter, the need for change is evident but coming up with the right plan of attack is tricky. How to minimize the risks? How to get everyone aligned? How to quickly reap the benefits?
For many reasons, sometimes less obvious ones, we fancy the step-by-step approach, starting small. Let's highlight some of them.
A clear scope is vital for reaching your target within time. Defining a clear scope for a small pilot project is no rocket science but it can be a real challenge for the bigger ones. The way a business operates goes beyond that neatly documented structure. It's a combination of commonly accepted rules, processes and human habits. It has evolved over time, resulting in a delicately balanced process. The impact of each modification better be known.
You need a clear view on the full picture in order to define the optimal scope. In transport optimization projects the picture isn't always complete as it is a mixture of logical calculations in an integrated environment with an operational outcome. Hence the progressive insights gathered during the development of pilot projects are invaluable. Real life experience with the impact of changes on operational outcomes is critical for mitigating the risks. These insights are pieces of a puzzle that must be complete in order to define a good scope.
What should the scope of the pilot project be? If possible, work vertically and limit the scope horizontally.
- Vertically: you want to get results, you want to test the entire flow as much as possible. That way, unforeseen struggles along the way will turn up.
- Limiting the horizontal scope means involving a select part of the business. A select set of employees, a select location, a single business unit...
⇒ A step-by-step approach enables a fitting scope at all time.
Features that demand a great effort but create little added value should be questioned. The 80/20 rule applies. 80% of the added value is created with 20% of the effort. There are plenty of cases in which the remaining 80% of the effort is spent on customized features, solely to minimize the change that will be felt. Remember: the only human being crying for change is a baby with a wet diaper.
By selecting the right set of testers (motivated people who are open for change), the need for the above mentioned customized features can be challenged. Are they absolutely necessary or can they be ignored by simply getting rid of some outdated habits?
Questioning the purpose of each request will save you a lot of time and money. Questioning ones preference is easier done in a small team with the right players.
⇒ A step-by-step approach ensures optimal allocation of resources, optimal investment.
Using a step by step approach simplifies change management for multiple reasons.
- If change feels like walking off a cliff blindfolded, then people will reject it. Taking small steps reduces uncertainty and if the process is demonstrated by others that reduction is even bigger.
- Loss of control. When change is implemented by someone else, people will feel like they're losing control and will start to defend their territory. By carefully involving the ones who are directly impacted and giving them ownership and accountability, these obstacles can be overcome.
- When introducing seasoned professionals with technological innovations for the first time, you're pulling them out of their comfort zone. Do I have the necessary skills? Again, a step-by-step approach - including training - alleviates these doubts.
⇒ A step-by-step approach simplifies change management.
Value for Money
Especially when it involves considerable budgets, decision makers tend to need proof. The proof of the pudding is in the eating.
In the case of transport optimization, not only does the improved quality of the plan need to be validated (proof of concept - POC) but the practical use too.
- Does the software really reduce the cost of transport as much as claimed? This is were a POC comes into play. It's often the first in a sequence of steps.
- Will these promising results actually be put into practice? Pilot projects put the theory from POC's into practice.
⇒ A step-by-step approach gets the decision makers on board.
To conclude: SCALABILITY
This is one of the great strengths of SAAS (Software As A Service). When it's developed, implemented, tuned and tested for a limited part of the business, the step towards a full roll-out is not that big anymore. Technological requirements have been met, business rules have been respected, the system has been tuned and insights have been captured.
Of course, the plan of attack must be well thought out but we have history on our side.
Rome wasn't built in a day.