Performance Optimisation in the Hospitality Industry

1. Performance Optimisation in the Hospitality Industry Benchmarking

2. What is Benchmarking • Benchmarking is an improvement process that is used to identify best practice within a peer group and facilitate it’s incorporation into your organisation.

3. Why best practice • Best practice refers to techniques, methods or processes that are more effective at delivering a desired outcome. • Incorporating best practice into your organization can lead to greater efficiency and effectiveness and a happier customer.

4. Benefits of Benchmarking • Benchmarking helps identify the gaps between the organisationthat is undertaking the benchmarking assessment and best practice. • Undertaking benchmarking can lead to improvements being incorporated into processes and systems delivering gains in efficiency and effectiveness • Benchmarking can help align improvement activity with strategic goals and objectives

5. The Benchmarking process • Benchmarking has a defined process • Identify the process that will be benchmarked – consider what metrics will be measured • Measure results in own organization • Identify a benchmarking partner (look for one with favourable results or to the metric being measured or known best practice) • Measure the process • Analyse the conditions that determine the favourable results • Determine an action plan to take your organisationto the favourable results • Review Benchmarking results and conduct regular reviews with your peer(s).

6. Problems with Benchmarking • Problems with benchmarking occur where • Data is not obtained for the process being measured – and analysis becomes subjective • No peer group/best practice identified (including data available) • The gap between current state and best practice is captured but nothing is done about it • Assumed best practice isn't best practice • Benchmarking happens as a one off event and not reviewed periodically

7. The importance of data • In order to measure the gap between the measuring organization and best practice quantifiable measures need to be taken • This requires data • Unless this method is followed results can be subjective and inaccurate • Follow on improvement activity can have negligible impact

8. Using your Peer-group • Benchmarking relies on a partner organization or “peers” which will be measured against. • Peers could be a different group in the same organisation(e.g two purchasing departments in a multinational organisation) or a completely separate company • The importance is measuring your performance against another “peer” with a different standard

9. Benchmarking doesn’t stop • Benchmarking should be viewed as a continuous improvement method • Regular reviews of performance should be taken especially if improvement activity is underway to transition to “best practice” • Regular reviews of the peer group should be taken to cater for any changes/improvement made

10. Performance Optimisation in the Hospitality Industry Business Process Re-engineering

11. Learning Objectives • Understand and be able to implement a BPR Strategy • Understand the main challenges in implementing a BPR Strategy

12. BPR & The Organisation

13. What is BPR? • Reengineering is the fundamental rethinking and redesign of business processes to achieve dramatic improvements in critical, contemporary measures of performance, such as cost, quality, service and speed. (Hammer & Champy, 1993)

14. BPR is Not? • Automation • Downsizing • Outsourcing

15. BPR Versus Process Simplification Process Simplification Incremental Change Process-Led Assume Attitudes & Behavours Management-Led Various Simultaneous Projects Process Reengineering Radical Transformation Vision-Led Change Attitudes & Behaviors Director-Led Limited Number of Initiatives (Source Coulson-Thomas, 1992)

16. BPR Versus Continuous Improvement Continuous Improvement Incremental Change People Focus Low Investment Improve Existing Work Unit Driven Process Reengineering Radical Transformation People & Technology Focus High Investment Rebuild Champion Driven

17. What is a Process? • A specific ordering of work activities across time and space, with a beginning, an end, and clearly identified inputs and outputs: a structure for action. (Davenport, 1993)

18. What is a Business Process? • A group of logically related tasks that use the firm's resources to provide customer-oriented results in support of the organisation's objectives

19. Why Reengineer? • Customers • Demanding • Sophistication • Changing Needs • Competition • Local • Global

20. Why Reengineer? • Change • Technology • Customer Preferences

21. Why Organisations Don’t Reengineer?

22. Why Organisations Don’t Reengineer? • Complacency • Political Resistance • New Developments • Fear of Unknown and Failure

23. Performance • BPR seeks improvements of • Cost • Quality • Service • Speed

24. Origins • Scientific Management. FW Taylor (1856-1915). • Frederick Herzberg - Job Enrichment • Deming et al - Total Quality Management and Kaizen • In Search of Excellence (Peters and Waterman) • Value-Added Analysis (Porter).

25. Key Characteristics • Systems Philosophy • Global Perspective on Business Processes • Radical Improvement • Integrated Change • People Centred • Focus on End-Customers • Process-Based

26. Systems Perspective Feedback Inputs Transformation Outputs Environment

27. Process Based • Added Value • BPR Initiatives must add-value over and above the existing process • Customer-Led • BPR Initiatives must meet the needs of the customer

28. Radical Improvement • Sustainable • Process improvements need to become firmly rooted within the organization • Stepped Approach • Process improvements will not happen over night they need to be gradually introduced • Also assists the acceptance by staff of the change

29. Integrated Change • Viable Solutions • Process improvements must be viable and practical • Balanced Improvements • Process improvements must be realistic

30. People-Centred • Business Understanding • Empowerment & Participation • Organizational Culture

31. Focus on End-Customers • Process improvements must relate to the needs of the organization and be relevant to the end-customers to which they are designed to serve

32. Implementing a BPR Strategy

33. Key Steps Select The Process & Appoint Process Team Understand The Current Process Develop & Communicate Vision Of Improved Process Identify Action Plan Execute Plan

34. Select the Process & Appoint Process Team • Two Crucial Tasks • Select The Process to be Reengineered • Appoint the Process Team to Lead the Reengineering Initiative

35. Select the Process • Review Business Strategy and Customer Requirements • Select Core Processes • Understand Customer Needs • Don’t Assume Anything

36. Select the Process • Select Correct Path for Change • Remember Assumptions can Hide Failures • Competition and Choice to Go Elsewhere • Ask - Questionnaires, Meetings, Focus Groups

37. Appoint the Process Team • Appoint BPR Champion • Identify Process Owners • Establish Executive Improvement Team • Provide Training to Executive Team

38. Core Skills Required • Capacity to view the organization as a whole • Ability to focus on end-customers • Ability to challenge fundamental assumptions • Courage to deliver and venture into unknown areas

39. Core Skills Required • Ability to assume individual and collective responsibility • Employ ‘Bridge Builders’

40. Use of Consultants • Used to generate internal capacity • Appropriate when a implementation is needed quickly • Ensure that adequate consultation is sought from staff so that the initiative is organization-led and not consultant-driven • Control should never be handed over to the consultant

41. Understand the Current Process • Develop a Process Overview • Clearly define the process • Mission • Scope • Boundaries • Set business and customer measurements • Understand customers expectations from the process (staff including process team)

42. Understand the Current Process • Clearly Identify Improvement Opportunities • Quality • Rework • Document the Process • Cost • Time • Value Data

43. Understand the Current Process • Carefully resolve any inconsistencies • Existing -- New Process • Ideal -- Realistic Process

44. Develop & Communicate Vision of Improved Process • Communicate with all employees so that they are aware of the vision of the future • Always provide information on the progress of the BPR initiative - good and bad. • Demonstrate assurance that the BPR initiative is both necessary and properly managed

45. Develop & Communicate Vision of Improved Process • Promote individual development by indicating options that are available • Indicate actions required and those responsible • Tackle any actions that need resolution • Direct communication to reinforce new patterns of desired behavior

46. Identify Action Plan • Develop an Improvement Plan • Appoint Process Owners • Simplify the Process to Reduce Process Time • Remove any Bureaucracy that may hinder implementation

47. Identify Action Plan • Remove no-value-added activities • Standardize Process and Automate Where Possible • Up-grade Equipment • Plan/schedule the changes

48. Identify Action Plan • Construct in-house metrics and targets • Introduce and firmly establish a feedback system • Audit, Audit, Audit

49. Execute Plan • Qualify/certify the process • Perform periodic qualification reviews • Define and eliminate process problems • Evaluate the change impact on the business and on customers • Benchmark the process • Provide advanced team training

50. Information Technology & BPR