Performance based digital transformation Jean Vieille Industrial systems
Performance based digital transformation Jean Vieille, Industrial systems control j. vieille@syntropicfactory. com Second 4 P Factory online Seminar Wednesday 16 th March 2016
Agenda �IT transformation �Enterprise control �Performance management �Use case J. Vieille - Performance based digital transformation - Second 4 P Factory online Seminar 2
Context �Hyper-connected World ◦ Increasing complexity, opportunities �Enterprises keep morphing to adapt to the changing environment �IT keeps progressing, pushing new technologies and hypes to support them �Industrial IT is aging, intricate ◦ Need to improve IT support to business, ◦ Need to leverage opportunities and technologies ◦ Without compromising operations, limiting risks J. Vieille - Performance based digital transformation - Second 4 P Factory online Seminar 3
Questions �How to handle IT transformation ? ◦ To serve business ◦ While leveraging technology �How to link IT improvement to enterprise bottom line ? ◦ Budget for IT operations ◦ Budget for projects ◦ Priorities J. Vieille - Performance based digital transformation - Second 4 P Factory online Seminar 4
IT at the heart of enterprise Energy Matter Product Y Information Energy Information Human, animal Human Meccanization Machine Human Automation Computer Pre-industry Machine Electro-mechanics Pneumatics Electronics Informatics Smart Industry Industrie 4. 0 Industrie du Futur Io. T Big. Data Mobility Networks J. Vieille - Performance based digital transformation - Second 4 P Factory online Seminar 5
IT transformation Challenges � J. Vieille - Performance based digital transformation - Second 4 P Factory online Seminar 6
Strategy, Goal Resource allocation Policy + Global transformation Planning Monitoring Industr ial System model Requiremen t manageme nt Performance Transformation activities Developme nt Deploymen t IT Transformation Technology - platform IT asset and configurations Business requirement s Technology awareness Local transformation (system recursion) Local realizations Corrective Maintenanc e Operations Supported by IT J. Vieille - Performance based digital transformation - Second 4 P Factory online Seminar Operations 7
Agenda �IT transformation �Enterprise control �Performance management �Use case J. Vieille - Performance based digital transformation - Second 4 P Factory online Seminar 8
Complexity Very complex Environment Complex Enterprise ? ? ? Goal Make money Suppliers, Customers, Contractors, Partners IRS , Regulations Natural, Social environment Market, Politics, Macroeconomics Employees, shareholders Bankers, Insurers HR, Marketing, R&D, Engineering, IT Sales, Sourcing Finance, Communication Planning, Production, Logistics J. Vieille - Performance based digital transformation - Second 4 P Factory online Seminar 9
Complexity control Amplifier C 1/C 2 C 2/C 3 C 2 Environment Operations C 3 Management C 1 C 2/C 1 C 3/C 2 Filter C 1 >> C 2 >> C 3 Law of Requisite Variety (W. R. Ashby) : Variety of the controlling system >= Variety of the controlled s Variety = number of possible states = f(complexity) en. wikipedia. org/wiki/Complexity en. wikipedia. org/wiki/Variety_(cybernetics) J. Vieille - Performance based digital transformation - Second 4 P Factory online Seminar 10
Take a Country J. Vieille - Performance based digital transformation - Second 4 P Factory online Seminar 11
How to control such a complex system? Performance management is one way for controlling behaviour beside: • Competition • Advertisement, Propaganda, Brainwashing • Threat, False flag • Concealment • Leaked secrets • Corruption • … Direct Behaviour control Organize control Influence Decide Enforce… Encourage Exite…. J. Vieille - Performance based digital transformation - Second 4 P Factory online Seminar 12
Increase complexity, collective intelligence Goal C 4 > C 3 > C 2 > C 1 Management C’ 2 C 2 Behaviour control C 2’ Direct control C 2 Deterministic Organize Decide Enforce C 3 + C 3’ Operations s C 5 > C 3 C 5 Minds Opportunistic Elevate Operations complexity Effective action Environment Influence Encourage Excite C 4 J. Vieille - Performance based digital transformation - Second 4 P Factory online Seminar 13
Enterprise control representation 5. Policy Recursio n 4. Transformation Environment Strategic directives Resource Allocation and arbitration Direct control HR, Engineering IT, Contracts, R&D Finances Organization Marketing Communication … Requirement Projects 3. Delivery & monitoring Sales Design Make Source Deliver 2. Coordination 1. Operations en. wikipedia. org/wiki/Viable_system_model J. Vieille - Performance based digital transformation - Second 4 P Factory online Seminar 14
Agenda �IT transformation �Enterprise control �Performance management �Use case J. Vieille - Performance based digital transformation - Second 4 P Factory online Seminar 15
Complex system control Behaviour control SS 0 Direct control SS 11 SS 12 SS 21 SS 22 J. Vieille - Performance based digital transformation - Second 4 P Factory online Seminar 16
Local aspects: Behaviour propagation in subsystems SS 0 KPIs Reaction Excitation SS 2 SS 1 Operations & coordination Fast loop Policy Excitation Delivery & monitoring Reaction Transformation Reach performance target with available means Transform itself to improve local performance Induce others’ transformation to improve local performance Slow loop Excitation Reaction KPIs SS 11 J. Vieille - Performance based digital transformation - Second 4 P Factory online Seminar 17
Global aspects: Overall Interactional Effectiveness OIE R * S * Q * OVA/OOE Social Responsibilit y Speed Quality (Working Capital Need) Focus all enterprise functions on a global indicator Seeking mission fulfilment Overall Value Added Overall Operating Expenses Enterprise Policy Transformation, Delivery & monitoring Coordination Deliver Operations Performance Innovation Sales Design R S Source Q Make OVA OOE Performance IT Delivery & monitoring Change requests Transformation Performance IT Transformation www. interaxys. fr J. Vieille - Performance based digital transformation - Second 4 P Factory online Seminar 18
Dynamic performance management Organizati onal Performan ce A/P Potentialit The reachable, desirable target (transformation investment) y Critical for long term survival C/P Latent Performan ce Long term strategic gap Conditions survival Feasible performance target Capability With the current resources A/C Operation al Performan ce Actuality Policy Transformation Delivery & monitoring Short term efficiency Ability to leverage available resources Current performance measure Coordination Operations en. wikipedia. org/wiki/Viable_system_model J. Vieille - Performance based digital transformation - Second 4 P Factory online Seminar 19
Example We produce an average of 600 products a week Our equipment has a full capacity of 20 products per hour We operate 8 hours a day, 5 days a week We have 2 equivalent machines that cannot be operated simultaneously Actuality 600 Capability 800 (20*8*5) Potentiality 6720 (20*24*7*2 Operational P. (A/C) 75% Latent P. (C/P) 9% 12% Organ. P. (A/P) J. Vieille - Performance based digital transformation - Second 4 P Factory online Seminar 20
IT budgeting �Many formulas for guesstimating IT ROI and functional / projects budgets ◦ IT in industry hardly delivers tangible value, difficult to prove after implementation �OIE focuses IT on critical requirements �Potentiality = backlog of critical requirements �Capability = selected priority requirements for given resources �C/P = IT Latency for serving strategic objective J. Vieille - Performance based digital transformation - Second 4 P Factory online Seminar 21
Conflict resolution �Conflicts -> uneasiness, discomfort, complaints �PM as a likely cause, ◦ Compromises effective contribution to fulfil enterprise objectives ◦ Due to failed assumptions about local performance relevance �Need for continuous monitoring of arising conflicts ◦ and KPIs’ relevance J. Vieille - Performance based digital transformation - Second 4 P Factory online Seminar 22
Agenda �IT transformation �Enterprise control �Performance management �Use case J. Vieille - Performance based digital transformation - Second 4 P Factory online Seminar 23
Context �R&D department of a large company (2000 researchers) �Deployment of ELN software �Issues ◦ Slow and costly delivery of complex experimentation templates ◦ Sensitive relationships Business / IT / Software provider ◦ Researchers goals (IP protection) conflicts with project goal (leveraging shared knowledge) �Example for a simplistic metrics showing the bottom-up chain of responsibilities and flawed assumptions J. Vieille - Performance based digital transformation - Second 4 P Factory online Seminar 24
Objective Group Policy Increase Overall Added Value Group transformation Boost Innovation Resource allocation R&D Policy & transformation Resource allocation R&D IT Policy & transformation Educated guess… Numerous, effective inventions Improve research productivity Improve experimentation productivity Resource allocation Contractor IT Delivery, coordination and operations Educated guess… Share knowledge Standardize experimentation Leverage Information technology Implement ELN Fast, cost effective ELN Deployment J. Vieille - Performance based digital transformation - Second 4 P Factory online Seminar 25
User coverage KPI and responsibilities Group Policy & transformation Directives to R&D budget R&D Policy & transformation Poor performance. Will this target actually help boosting innovation? Potentiali 2000 ty Directives to IT IT budget R&D IT Policy & transformation Latency 19% Potentiali 380 ty ELN delivery budget Latency R&D IT delivery & monitoring Capability 135 36% Numerous, effective inventions Organisati onal 4% Organisati onal 23% Fast, cost effective ELN Deployment Contractor operations (VSM recursion) Actuality 88 Operatio nal 65% J. Vieille - Performance based digital transformation - Second 4 P Factory online Seminar 26
Conflict resolution ELN full deployment justification Improve experimentatio n productivity Numerous, effective inventions Share knowledge Promote research sharing Enable creativity Protect individual IP Standardize experimentation Data rather process oriented Experimentation freedom Researchers requirements en. wikipedia. org/wiki/Evaporating_Cloud J. Vieille - Performance based digital transformation - Second 4 P Factory online Seminar 27
Conclusion �IT continuous transformation ◦ Support enterprise ongoing transformation ◦ Leverage new technologies �IT performance management is an essential component in this process ◦ To focus efforts on enterprise goal / objectives ◦ To set IT budgets �Better understanding through system approach ◦ Complexity management, Behaviour control ◦ Overall Interactional Effectiveness J. Vieille - Performance based digital transformation - Second 4 P Factory online Seminar 28
Questions? Q O O S V O R A E OIE Transformation Responsibility Performance Conflicts Behaviour J. Vieille - Performance based digital transformation - Second 4 P Factory online Seminar 29
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