Management analysis and decision support often work best when a decision can be based on the quantitative comparison of alternatives. Managers have learned that the most effective quantitative management analysis and decision support methods involve a balanced examination of the

A structured and formalized quantitative management analysis and decision support methodology is the preferred approach to management analysis and decision support because it applies an objective, comprehensive and proven effective method to the collection, analysis and application of the study subject.

Business Functions: For this reason, structured and formalized quantitative management analysis and decision support methodologies have been developed with an emphasis on a variety of business functions within an organization. These areas include finances, production effectiveness, customer service, HRM and employee evaluations and resource efficiency. In most cases, these operations are referred to as process. A method that incorporates a total view of the business is called Business Process Management.

Business Operations: In addition, specialized analysis has been developed for various aspects of business operations and support activities. These include profitability, cost-effectiveness, efficiency, reliability, quality, core competency, management dedication, ,resource utilization and technology utilization.

Organizational Structure: Finally, there are structured and formalized quantitative management analysis and decision support methodologies that examine the abstract aspects of the organizational structure such as work, data, process and document flow, time-series analysis and cost-benefits studies. A method that incorporates a total view of the organization is called Organizational Change Management (OCM).

Human Decision Factor: What the above methods do not do is actually make the decision itself. That is left to the managers. Unfortunately, therein lies a flaw in the objectivity of the decision process. All humans have inate logic flows in our thinking that can counter the objectivity of the best analysis. See my report here. These methods also do not take into consideration the political, emotional and personal agendas of decision makers - however, there are methods to identify, minimize and address resistance to change for a variety of fears.

Costs: There are costs to these decisions. One cost is the time and effort it takes to derive the data needed to perform the analysis necessary. The other is the objectivity of the process that might return results that the manager or management does not want to see. Some of these methods are quick and simple - others are complex and expensive. Most of them have an increasingly reduced costs as they become more institutionalized into the management process until, for some, they become routine with little or not added cost to the process.

Summary: The methodologies that perform the analysis of these business areas and functions all have one thing in common. They attempt to identify and quantify - either explicitly or relatively - those elements that are critical to making a management decision. What is very important is to realize that there are techniques to quanitify even the most obscure aspects of management. The art and science of decision analysis has evolved and developed to the point that managers can obtain quantitative or relative data on all aspects of nearly every decision they will ever be faced with. This allows for a much lower risk decision to be made.

has evolved that takes into consideration this balanced examination of the processes, technology and culture. That method is called Business Process Reengineering (BPR). The application of BPR concepts to management decisions is called Business Process Management (BPM).

BPR takes time, skill and effort to be done correctly, however, very effective and useful improvement analysis and decisions support information can be derived from a number of alternative methods or by using selected aspects of a more complete BPR approach. The choice of what improvement analysis method to apply depends on the nature of the motivation for the change, the degree of change necessary and the level of acceptable risk in the change management process. BPR, when done properly, is credited with being the least risky and most effective at overall change management. Let's examine the generic BPR approach and methodology.

One of the powerful strengths of BPR as a quantitative management analysis and decision support method is the ability to create computer models of the existing business processes (called the “As-Is” model). When building the As-Is model, it is not uncommon to discover old or redundant processes that no longer serve a useful purpose.

Using specially designed software to create these models allows for dynamic simulations of the business. This usually involves changing modeled values for resources, flow rates, processing sequences and constraints and examining the projected results.

Process or activity analysis is usually the entry point for organizational change and improvement analysis because it is often the most visible and easily recognized area needing improvement. Once a need for improvement is identified, the process models allow for “what-if” scenarios to be analyzed until an ideal new process is defined that addresses the required changes. With this new environment (called the “To-Be” model) as a goal, the technological infrastructure and the organizational culture are examined to insure they will be able to support the future operating environment.

The most common performance metric in most organizations is dollars. Managers view any need for change and any response to that need in terms of it's costs. Business has developed a perspective that labor, productivity, efficiency, growth and market competitiveness is measured in dollars. Activity Based Costing (ABC) is a cost analysis and financial modeling technique that builds upon the process models by adding cost, duration and frequency of the direct and indirect resources to the simulations.

Using this method, costs are calculated on the process or activity level rather than the organizational unit or office level. The surprise in ABC analysis is often a higher than expected overhead to activities that utilize resources from multiple sources. ABC combined with the To-Be models, supports cost justifications, budget planning and cost-benefits trade-off decisions.

The infrastructure that supports an organization may be as simple as hand tools or typewriters, however, for the most part, today's business activities center around information systems utilizing computers, software and telecommunications technology. The problems of improper selection and sizing of the information technology (IT) can be expensive in both cost and lost productivity for undersized systems and waste for oversized or overpowered systems. These problems have become so frequent and widespread that the word Rightsizing was coined to describe the correction of these mistakes.

The selection of the right support technology can be examined with a quantitative management analysis and decision support methodology that is just as effective as the process and cost analysis. The method is keyed to the output products or services of the process models and is adapted to include considerations for cost-effective transitions into To-Be environments and projected technology insertions. Because it is based on dynamic models, this method provides a flexible and adaptable technological infrastructure design tool that can optimize process support and cost-benefit decisions.

When combined with process analysis and ABC, the technological infrastructure analysis method can point to optimum use of and transition from legacy systems and into new technologies without waste due to oversizing or undersizing.

Although many analyst, including Michael Hammer, the father of BPR, agree that an improperly prepared organizational culture has doomed more BPR projects than all other reasons combined, it remains the least analyzed and potentially the most important aspect of any organizational improvement effort.

Analysts that specialize in process or technology improvement consulting are often unaware that there are several organizational behavior models, cultural diagnosis techniques and change management methods. Some of these social evaluation techniques are suited to quantitative analysis and provide explicit pointers to issues and solutions correlated to the improvement changes developed out of the process and technology modeling examination.

When baselined to the present environment As-Is models and contrasted with the improved To-Be models, organizational change management can significantly optimize the human resource aspects of the process and technology improvements.

Any quantitative management analysis and decision support effort, whether it is based on BPR or not, must include a balanced examination that examines and utilizes organizational change management techniques as an integrated part of any improvement activity.

The organizational improvement analysis ultimately will end with a plan for what needs to be changes, when and how. The plan should have an expected cost and an expected result by which to measure the results. When all this is decided and ready, it is time to implement the changes. Although strictly not a part of BPR or any other quantitative management analysis or decision support methodology, the management of the changes must be performed so as to retain all the benefits of the analysis while not creating any new problems. This requires an efficient administration and monitoring of the implementation as well as careful cost and resource management.

Applying the BPR analysis methods to the management of BPR improvements results in a simple yet effective method that provides total control and insight into the project while providing very early indicators of any problems in cost, schedule, level of effort. If you can see these early warnings of problems, you can take corrective actions and stay on track of the planned implementation. This technique is called Automated Project Management and Analysis. It has four parts: (1) Requirements Traceability Database, (2) Compliance Matrix, (3) Automated Document and Reporting System and (4) Virtual Management. Combined, they form a powerful yet easily managed and maintained project administration and management method.

The operating environment around any organization is not static. The environment is changing constantly and the organization must be responsive. To do so, it must not only be aware of it environment but it must be agile enough to be responsive to it in order for its operations to remain effective and efficient. In order to do this, it is essential that the As-Is process models and the technological infrastructure design models be maintained and kept current. As the organization changes, the models should be updated so that they are always reflective of the current environment.

As the need for change arises, the above described steps can be started using the validated As-Is model. Such analysis can be used to examine the cost-effectiveness of making changes, justify budgets and capital investments and to provide a benchmark for performance measures and comparisons. This feedback loop of constant review for potential improvements is called Continuous Process Improvement (CPI) and is an integral part of a properly executed BPR effort.

What has been described above is a series of tools that the manager can use to reduce the risk of making trial-and-error decisions that affect the health of the organization. These techniques can be adjusted and modified to suit virtually every business, organization, operation and process as well as every budget, schedule and user requirement.

On the following pages are a number of charts and diagrams that illustrate various aspects of management analysis, decision support and risk reduction. Two specific applications of these methods are in the analysis that is needed to properly manage a downsizing action and the analysis that is needed to properly manage a decision related to the selection of changes to the technology infrastructure of the organization. Each of these has an additional text explanation.