Verax OTI - Mini Case Studies

International Chemicals

An international chemical company, after a significant acquisition and using OTI to identify hidden costs, found that ineffective processes, highly bureaucratic systems, poor middle management practices and a disconnect between strategic focus and day to day operations were all having a negative impact on business performance. Working on these key issues helped cut costs by over $100 million per annum around the world. Part of these greater efficiencies resulted in job losses and closure of some small sites where OTI showed putting the problem right would not be cost effective. The business is now more sustainable and poised for growth.

Utilities

Recently OTI was used by a household name company in the UK that had a shrinking customer-base. The OTI analysis pointed to the Customer Relationship Management system as the main culprit along with very ineffective (non existent) management at three levels of the organisation. When provided with this analysis the Chief Executive Office was surprised that this was the case, citing the fact that £20 million had already been spent on the installation of a new CRM system. However when this new system was discussed with call centre staff, they confirmed that it was worse than the original system it had replaced. It was less flexible, provided fewer ways of helping the customer and was more cumbersome to use. However, this had not been communicated and staff had not even been asked before. Following the OTI analysis the new system was considerably modified and a comprehensive management development programme was instigated resulting in a major turnaround for this company. Today, more customers are continuing to return to the tune of over 1 million per annum and the net inflow of customers is positive reversing the trend over the past five years. Other efficiencies and cost savings directly due to the use of OTI intelligence is saving over £1 million in costs.

Civil Engineering

A further example illustrating the effectiveness of the OTI system involves a civil engineering company. This organisation turned a loss making division into one making £2 million per annum profit in two years by using OTI information and recommendations.  Sales volumes were increased over the same period by over 70%. The analysis highlighted five issues that were impacting on business performance: a poorly communicated vision; lack of any clear goal setting; inconsistent leadership; little evidence of teams or team working; and inappropriate reward and recognition. The main reasons for losses identified by OTI were ineffective middle management, overly bureaucratic systems and processes and poor performance management. The company’s management team used the analysis to re-focus their priorities leading to enhanced profitability.

F.M.C.G.

Using the same system , an international FMCG (fast moving consumer goods) company’s supply chain was able to reduce costs by £3 million in year one and £5 million in year two and ongoingly. OTI identified the key issues. The analysis highlighted a need for change in senior leadership (providing clear direction and communication), the organisation structure and some inefficient systems and processes. The organisation set up a project team to deal with the issues and this team was responsible for implementing the required changes.

OTI within the company’s supply chain highlighted three areas where change seemed necessary:

• Strategy and Vision
• Leadership and Structures
• Communication

The project used a five point plan for managing change, focusing on

• A shared vision, where sharing helps achieve good buy-in
• A target culture, best expressed as a “new way of doing things around here”
• Good leadership, e.g., having a strong role model behaviour from relevant departmental heads
• Performance…achieving sustainable performance from team and individual effectiveness
• Communication and commitment, the success of which is based on the idea that people will only support what they help to create

Summary

Generally, these examples illustrate that by accessing good information, conducting an accurate diagnosis and acting positively on that information to produce high quality, appropriate solutions, the change process does not need to be so problematic. Information is key to the process and systems such as OTI provide excellent tools for implementation of change programmes.

OTI provides special intelligence to organisations not available from anywhere else.  Many other information systems are often purely descriptive e.g., Management Information Systems, customer satisfaction and staff surveys. They describe issues and outomes but give no insight into the causal factors. OTI not only describes the results and outcomes achieved by organisations but also uniquely analyses – using a variety of statistical techniques – the most probable causal factors to a sufficient level of precision that enables the simplification of the process to design the appropriate solutions. As Kepner and Tregoe asserted working on causes is generally more cost effective and longer lasting than working on effects.