18 November 2009

The New ERP - Part 9

The three things every executive needs to know

If you and your team have completed a Current Realty Tree (CRT), then you have taken the first valuable step in moving toward Extended Readiness for Profit -- the New ERP. You have begun the your revolt against traditional ERP and its Everything Replacement Project approach with all its foibles and pitfalls. And, you will notice, that you have not yet spent one thin dime on new technologies -- unless, of course, you went out to buy a copy of Microsoft Visio to neatly document your CRT.

The really good news is that, having created your CRT, you and your team have also taken a vital step toward understanding the "theory" that underlies how your organization -- your "system" -- presently works and does not work (when it doesn't). You likely also understand better how your system interacts with its environment -- that is, your supply chain and the economy in general.

Your Current Realty Tree is the new "framework" by which you will begin to evaluate all of your future actions for Extended Readiness for Profit.

Remember, there are three -- and only three -- things that every executive or manager must know in order to handle any situation and to bring improvement effectively to any organization:
  1. What needs to change

  2. What the change should look like

  3. How to effect the change
By looking at the "roots" of your Current Reality Tree, you and your management team now know exactly what needs to change. If you CRT is accurate and you have been honest with yourself in its development, then your CRT is the answer to number 1 above -- what needs to change.

Furthermore, if you've followed along in all the steps to this point, you have also determined which of the things that need to change will required some investment in technology in order to see significant improvement. More importantly, however, you have likely also uncovered one or more things (roots) that can be addressed immediately and at little or no cost, and these things can start bringing real improvement to your organization to beginning tomorrow. You are already on your way to achieving more of your goal -- to making more money tomorrow than you are today.

One or more of the things you have already discovered may require an investment of zero dollars and may be capable of delivering dramatic increases in Throughput or significant decreases in Inventory -- either of which can be a boon to cash flow and cash velocity.

There is real work involved, however. Looking at the roots of your CRT will tell you what needs to change, but it will still be up to your team to lay out effective means of achieving the change. And, while the CRT is a great starting place, you should likely consider applying more of the Thinking Processes to help you build a logical "road map" for change. Consider building a Transition Tree (TrT), which can really function as that "road map," even though all the ground must still be covered to get to your destination of achieving more of your goal.

[See prior posts for links to more information about the other Thinking Processes.]

[To be continued]

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