Together with Jan Bonde, Nils developed the planning software, PMSIM, which he sold to Intentia in 1998 (who marketed the solution under the name Movex).  Today Intentia is owned by US- based Lawson, who sells the solution as Lawson APP (Advanced Production Planner) and Lawson MSP (Multi-site Planner). They are among the world’s most widely used and respected planning and simulation tools for complex production and supply chain planning.

Marstrand Innovation developed the technology for People Planner, and we talked to Nils about the growing trend in the professional services industries towards better resource and project planning.

Nils, your own career has followed an evolving path, from providing tools for production planning, to solutions for planning people, their time, projects and priorities. Could you explain what you see as some of the key characteristics of this evolution?

The early software solutions in the 1960s were made to support material requirements planning in production and the warehouse. In parallel, project planning tools were developed based on the  Program Evaluation and Review Technique (PERT) planning method, which is a network model (developed by the U.S. Navy)  that allows for randomness in activity completion time. The private sector increasingly employed PERT, which involves the following basic steps:
1.      Identify the specific activities and milestones
2.      Determine the proper sequence of the activities.
3.      Construct a network diagram
4.      Estimate the time required for each activity.
5.      Determine the critical path and adjust the timing of all activities to it.
6.      Update the PERT chart as the project progresses.

You find this method in all project planning tools, such as Microsoft Project (MSP). The method does not directly include resource capacity constraints.

In fact, our fundamental idea when we first started developing PMSIM in 1979 was to use PERT planning philosophy to optimize manufacturing planning; linking production processes (routings) and material requirements (BOM, bill of materials) into synchronized networks and adding resource planning for machines, equipment and people across the many thousands of orders and tasks you are typically dealing with in industrial manufacturing. In this way we could find the best balance between shortest possible lead time, best possible utilization of capacity bottlenecks and minimized stock levels of materials, manufactured, as well as purchased.

The other fundamental idea was to include all planning horizons in one system, from operational, to tactical, and then, strategic planning, to give full flexibility and avoid the difficulty of transferring data between separate systems.

Now, with people planning, we are taking essential elements and experiences from our many years with advanced production planning and applying them to what I call a “multi-project people planning solution” that facilitates operational, tactical and strategic planning.

Could you explain what you mean by these three levels of planning?
Operational planning involves using the resources you already have to reach your goal, a “make do with what we have” approach. The strategic approach is where you have time to acquire the needed resources. Tactical planning is a combination of the two, where you plan with the resources you have, but leave room for change, for perhaps hiring more resources through outsourcing, and so on.

Together with Jan Bonde, Nils developed the planning software, PMSIM, which he sold to Intentia in 1998 (who marketed the solution under the name Movex).  Today Intentia is owned by US- based Lawson, who sells the solution as Lawson APP (Advanced Production Planner) and Lawson MSP (Multi-site Planner). They are among the world’s most widely used and respected planning and simulation tools for complex production and supply chain planning.

Marstrand Innovation developed the technology for People Planner, and we talked to Nils about the growing trend in the professional services industries towards better resource and project planning.

What are some of the general trends you see in the professional services sector?

First of all, industrialization is coming to the services sector, with a focus on transparency, quality and productivity. You will see a transfer of experience and methods from manufacturing, such as the concepts from Lean, BPR, Six Sigma, and so on. We see a standardization of repetitive processes, the model perfected by Ford with the assembly line. This leads to investments in technology, human resources and IT solutions, including planning. These investments are best justified in big organizations, from which follows “economy of scale” strategies, with acquisitions and global thinking.

The most successful professional services organizations (PSOs) today are those which divide up projects into standard elements or components and combine the processes into work flows using Lean principles. The goal is to eliminate all waste including unnecessary transfer of responsibility securing the short leadtimes.

A good example of this is ISS, a huge Danish company that employs almost 400,000 people worldwide. (ISS provides facility services to both private and public offices, including cleaning, catering and building maintenance). When ISS makes an estimate for a new customer, they price everything separately – for example, how many bathrooms and offices there are, how many of their people will be needed to clean the company’s premises. They can give their customers a precise estimate and control projects better.
They employ a set of business processes across projects, which leads to more professionalism.  They can control projects better and meet the budgets and time estimates they give to their customers.

What are the current challenges to better project and people planning in PSOs?

Most companies still have a project by project planning culture, where people plan for their own projects, including resource allocation, in complete isolation. The most widely used planning tools currently in use are Microsoft Project, Excel, customized Excel spread sheets, and so on. These tools are generally not very good at taking a global view when you have many projects and activities competing for resources. This makes it very hard for the multi project company to prioritize the use of resources. The result is often firefighting, stress and temporarily idle resources and that decisions about change of capacity, e.g. training and hiring, are taken too late.

Another challenge is getting people to record information, such as hours spent on a project, both on time and accurately. You have to make this easy and quick for people. As processes are gradually becoming more standardized and predictable it is important to systematically compare the budget and plan with the actual recorded execution. This is valuable input for systematic improvement of productivity and profitability.

As well, when you mention “people planning” to folks, my guess is that a lot of people will balk at the idea; They will say, “You can’t plan me! I don’t want to be seen as just a production unit!” People don’t want it to seem as though they are treated as a component of a machine - they are unique with their individual skills and outlooks on life and, to some extent, unpredictable.

The challenge is to provide them with a consistent overview and clear information about assignments and performance expectations and give them the opportunity to react when demands are unrealistic. This is the way to avoid stress.

What do you see as some of the key elements a project and resource planning solution must have, so that people can use it effectively?

The solution needs to support a flexible, user-friendly dialog with the planner, where he can suggest priorities and immediately see the consequences and compare them with other options. In many ways resource planning is like laying a puzzle, achieving a balance. A people planner needs to assume in its set-up that the information entered into it will be more fluid than the precise production data you would find in a production planning tool. It needs to effectively support the interests of both the project manager and the resource manager, the typical organizational setup in project driven organizations.

Furthermore, the solution must be designed to make it easy and straight-forward for people to get to the relevant data. There should be plenty of drill-down options, but it has to be presented in a way so that you are directed to the important information. In a sense, the solution has to guide the user to where they must look for the important information – and where and how they should enter information. You might call it “project intelligence”. We plan in our future solutions to include the score card method, where the solution automatically analyzes a project and its resources and directly presents imbalances in the plan to the planner.

The tremendous number crunching, graphical representation and communication power of the PC is our big opportunity. This is the ideal tool for the planner who wants avoids the tedious work of calculation and manual placement of activities on planning boards, or maintaining data in complex spread sheets.

If you introduce a new planning tool, people are going to ask, “What’s in it for me?”How can management sell it to their people?

Essentially, resource planning is about giving all people in the firm an overview of their situation, so management can start with that point.  With project and resource planning, your firm gets a virtual neutral “blackboard”, which simply reflects the realities of the company’s situation. People can see things as they are, which in turn makes consequence calculation at the start and during a project more accurate.

Project and resource planning can provide a more balanced work schedule, and who doesn’t want that? It can help everyone handle the unexpected better. There will be more stability and calmness at work, and therefore, better decisions will be made. Ultimately, customer service and profit can improve, and that is a strong argument that I think will convince any employee.

Read the case story here.

]]> http://www.maconomy.com/NewsList/Mwire/Corporate/2007/kaffeknappen.aspx Tue, 02 Oct 2007 09:32:42 GMT Kaffeknappen is a Swedish firm that provides beverage solutions to companies and other organisations. Read their case story to find out how they use Maconomy to manage their multi-company and multi-currency needs, and streamline their sales and finance processes.

Click here to read the case story.

Read the case story here.

		Back in 1975, when Jan Holm Møller started to work in the Marketing Communication industry, the PC did not exist, nor did the term “IT department”. Jan spent a total of 14 years at Ogilvy Mather, including 5 years as managing director of the Danish subsidiary of Ogilvy Direct (now called Ogilvy One). He was CEO of McCann-Erickson Denmark for 10 years before he joined Maconomy in 2001.

Jan, you spent 26 years in the Marketing Communications industry, so by now you must know, what is it that makes a “winning” agency?
Creativity is still the core of an agency; clients will always demand creativity, but today it is not just about coming up with ideas, but also how to use new media successfully. Agencies have to combine new media with new ideas and the Web with event marketing.

This new level of creativity, it really requires holistic thinking and execution, not just a great idea on paper.

Agencies also need to provide strategic insight today to their clients but ultimately, they still win with creativity.

What are some of the key challenges agencies face today?
The Web is a definite challenge, and the general move towards digitalization. The Web is a new world and agencies need to adapt. For example, I see agencies that are trying to recruit young staff who have used the Web since they were teenagers.

Another challenge is that clients are increasingly asking for accountability and transparency – agencies have to show how they use the budget they are given. Clients want to achieve a measurable ROI. And agencies themselves are facing diminishing margins and therefore they need to optimise their operations to maintain their own ROI.

What are some of the significant changes you have seen occur in the industry over the years?
Well, when I started, there were no computers, so IT development is obviously a major change. An art director would draw an ad and order in copy lines, cut them out and paste them on the artwork. That piece of artwork was then delivered to a photographer who would photograph it and from the picture, create a printing template. Now, of course, this is all done on computers.

Proliferation of specialties is another change. When I started there were only ad agencies. Proliferation started due to outsourcing of media management to media management agencies. Media buying became a specialized trade with the expansion of television, film and radio. Then we saw the rise of direct marketing agencies, promotion marketing, graphical development and, in the 1990s, Web agencies started to appear. Now however you see more of these focus areas coming under one agency, and in recent years we have seen a lot of centralisation, with a few major holding companies, such as WPP and Publicis Group, owning many agencies.

As well, the real business growth is no longer in the U.S. and Western Europe. Enormous growth is occurring in Russia, India, China and South America, especially Brazil. This growth really goes hand-in-hand with the digital market. The Web market is enormously important – both the digital market and search engine marketing.

What kinds of changes and opportunities do you see for marketing communications agencies in the near future?
I think we will see a movement towards shared services centres for financial management – especially at larger networks, I think we will see a decentralization of certain functions and at the same time, individual expertise will emerge.

Agencies will have to become more operationally efficient and, for example, start using tools such as Lean*. It could be that the CFO will start to be more of a business advisor to the CEO. The industry could become more sophisticated and business-oriented.

But creativity will always be the driving force. New disciplines could appear – what will come after digitalization? Clients need agencies to be creative and therefore they will constantly have to move in new directions.

*Lean is a system pioneered by Toyota which almost any business or organisation can adapt for their particular set-up. Lean is a set of principles, practices and tools that ultimately create greater value for the customer by delivering a good or service with the minimum amount of waste and the maximum degree of quality.

		R. David Hofferberth is the Managing Director of Service Performance Insight (SPI Research), a research organisation dedicated to operational efficiency and effectiveness in services-driven organisations. The focus of SPI Research is on the use of software solutions to optimise the three main components of services-driven organisations, People, Process and Capital.
David has over 20 years of experience in the IT sector. He’s worked as an analyst and consultant at a leading firm, and as services product director at Oracle. In 1999 he coined the term Professional Services Automation (PSA), when he published what is widely considered to be the seminal report, Professional Services Automation: Increasing Efficiencies and Profitability in Professional Services Organisations, as an analyst with the Aberdeen Group in Boston.

What is your impression of Maconomy?
I focus on about 10 ERP providers who are market leaders in providing solutions to PSOs, and Maconomy is one of them. I have tracked the company for a number of years, and I think they are innovative, forward-looking within their scope, and an excellent global vendor that has a lot of potential to grow, for example, in the North American market.

What were your first impressions of People Planner?
I was impressed with its look and feel, innovation and user-friendly interface. For example, I like that you can group projects by different colours; it is a simple element, but it makes a difference in ease of use. You can look at the schedule and understand the information it presents. I just don’t see this from other vendors right now.

It is great that an ERP vendor can provide a focused and innovative solution such as People Planner that is fully integrated with the wider Maconomy offering. Small, best-of-breed vendors also create innovative solutions but they must often be integrated with other solutions.

People Planner sets itself apart because it includes resource planning along with project planning. This is its real strength. Most vendors are currently not strong in designing resource planning tools. It is not enough to just do project planning; without resource planning you won’t be able to see where constraints can pop up in a plan.

How can People Planner help PSOs meet the challenges in their markets today?
Maconomy is already strong in the Marketing Communications vertical, so People Planner could help them to manage their marketing and sales initiatives.

People Planner can also help PSOs build their ideal work force. It can help you pinpoint the skills you will need for a particular project, or set of projects. Any firm, large or small, that has satellite offices or subsidiaries is going to have to leverage the human capital they have and balance out skills and utilisation across their organisation. People Planner can help organisations analyze their people, skills, availability and competency. Overall, you want to optimise the services delivery lifecycle, or SDL: where projects are delivered faster, with great efficiency and with better people.

What are some of the elements that have to be in place for a firm to successfully use a solution such as People Planner?
There has to be executive commitment from the start. The CEO has to understand the value proposition and champion the solution. He or she has to provide information and justification to their staff for why they are implementing a capacity and resource planning (CRP) solution and provide an ongoing plan of action for its adoption and use.

A solution such as People Planner needs to be used globally; it is not enough if only two departments for offices use it.

As well, I would say that a CRP solution needs to be an integrated part of an overall ERP solution. The leaders of PSOs I talk to today want integration between their processes and across their product portfolio. You want one solution that encompasses Financials, CRM, HR, Invoicing, Planning and Analysis.

What are some of the general trends you see today in the market?
There is a lot more competition; a lot of mergers; more corporate governance, and high employee turnover and dissatisfaction, especially in the U.S., where people are often expected to work very long hours.

Executives now see that high employee turnover does not do their companies any good. They need to look more at how they sell, why they win sales, who are the best customers, and so on.

A great number of PSOs utilise external partners now as a matter of routine. This could be a positive trend, as it can allow a PSO to focus on their core competencies and outsource the rest.
Overall, it is a more complex world, and therefore, standardisation and structure are needed.
What role can IT play in this ever-more complex market?
I think IT is leading PSOs to process maturity. Ten years ago I saw PSOs that had a set of best practices in one office and another set in a different office. Or, different subsidiaries of one company would employ their own financial solutions, so that reconciliation was really difficult. I saw business managers plan for their businesses in spreadsheets – or even with pen and paper!

As I said earlier, I hear PSOs want more integration. Maconomy’s customers understand project management. People Planner can help them better sell themselves to their own clients and customers. For example, wouldn’t it be great if, at the start of a project, a firm could say to its client or customer exactly which resources will be assigned to the project? It would give the customer greater assurance that the project will be done on time and within budget. It gives them the information they need, and overall, it shows that the PSO are serious professionals.

Read more about the expertise David offers at www.spiresearch.com