Articles by James A Robertson and Associates

Prd 011 Cost drivers in building taxonomies
Created by James on 6/23/2013 10:45:02 AM


The following are the drivers of cost in building taxonomies:

1.       Strategic executive top down approach

The strategic executive top down approach requires a very experienced executive level facilitator (and therefore expensive facilitator) for the upper levels of hierarchy development working closely with client executives and senior managers and guiding them to the optimum solution – cost cutting at this level compromises the long term strategic outcome of the investment – the right facilitator can add HUGE value for decades after they have completed their assignment.

2.       More complex and more abstract than it seems

While the final deliverable seems simple and obvious the process of getting there takes far more time than one would expect – it is only finished when all executives and managers can look at the product and say “yes, that is my business”.

3.       Facilitator must learn the business

During the first few iterations the facilitator is learning about the business at quite an intense and intimate level of detail with the result that the process is slower than one might expect.

4.       Client personnel must learn the approach

During these same interactions executives and managers are gaining a practical understanding of the application of taxonomies to their business and frequently are understanding taxonomies in depth for the first time.  This frequently causes their thinking to evolve drastically in the first few iterations with the result that two or three re-starts are quite common.

5.       Limitations on availability of senior client personnel

Because it is vital to get all the appropriate executives and managers in the room for specific sessions it is seldom possible to schedule sessions of more than 4 to 5 hours although full day sessions are generally more time efficient from a facilitator cost point of view – this can result in reduced facilitator efficiency and increased costs.

6.       Constraints on workshop frequency

For the same reason it is difficult to hold more than 2 or 3 sessions a week which is optimum from a technical progress perspective – this may necessitate shorter early morning or late afternoon or evening sessions in order to keep things moving forward within the constraints of executives and managers dairies – this can result in reduced facilitator efficiency and increased costs.

7.       Absence of key personnel generates rework

Trying to force progress by running sessions without all the appropriate people in the room frequently results in time consuming rework and frustration all round at subsequent sessions where the missing person or persons need to bring their component – slower is faster is frequently the harsh reality.

8.       Need for continuity and frequent sessions

In addition to the above it is vital that sessions progress at relatively closely spaced intervals – at least one and preferably two sessions a week.  Where there are gaps of several weeks both the business team and the facilitator lose the thread of the logic that is unfolding which results in wasted time as people get back up to speed and pick up the threads of previous sessions.  A gap of two or more weeks can result in as much as an hour or even more being lost at the start of a working session as people pick up the threads of the previous session.

This in turn can result in unintentional tangential thinking that requires loop backs and rework and further time loss and increased costs – intervals of no more than a week should be scheduled as far as possible and allowance made for increased costs where longer intervals are unavoidable.

9.       Understanding of hierarchies takes time

The logic of the hierarchy only becomes fully apparent when the hierarchy has been coded and the hierarchy can be collapsed using the codes.  Coding requires considerable behind the scenes cleaning of the hierarchy and can often result in a partial or complete recode being required.

This can give rise to considerable low visibility time and budget impact.  The longer the time intervals between working sessions, the more not all people are present in sessions, etc the more iterations of restructuring are required and therefore the more iterations of re-coding are required – the composite effect of these factors can drive considerable increases in cost for no visible benefit.

10.   All drive costs – tight management is essential

All the above factors drive costs.  Some are unavoidable while others can be curtailed in the event of close cooperation and time management by the client team and facilitator guided by the project manager.

The cost of a worst case scenario in terms of time efficiency can easily run to two or three times the cost of a best case well managed scenario.

Since so many of these cost factors are driven by client specific considerations it is only practical to work on a fixed fee basis where there is very strict time management on both sides which must include willingness by both parties to work overtime at any point where unexpected complexity is slowing progress

11.   Master data configuration

Once all the above taxonomy development stages are complete there is still considerable work required in terms of table specific configuration, particularly in the case of items such as product catalogues where potentially dozens or even hundreds of fields may need to be carefully populated for thousands of records.  The use of taxonomy based software to facilitate this process is strongly recommended.  The precision of the use of the ERP and related software will ride on the level of precision of the configuration down to the last product or material record.

12.   Reports, models, etc – the Analytical Suite

Having created highly structured intelligent data™ all we have done is laid the foundation.

It is then necessary to create a rich variety of reports and models in order to harvest the value that is now embedded in the data – this should be done first in the Data Warehouse under almost all circumstances.

In the Financial General Ledger domain we have recently specified and commenced development of the JAR&A Analytical Financial Suite™ which is a comprehensive range of reporting and analytical tools and models that can be rapidly connected to data built to our standards in order to deliver a rich yield of “touch of a button” management information tools and resources – refer separate literature.

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Table of Contents

Home

About Dr James A Robertson PrEng -- The Business Systems Doctor -- and Other Topics

Catalogue of Major Business Information System Failures

About the Engineering Approach

James Robertson's Value Add

Attributes of a HIGH VALUE solution

Recognizing Business System Failure

The Critical Human Foundation

Old Software IS Viable

From South Africa

Competencies of Dr James A Robertson PrEng

About Professor Malcolm McDonald

Table of Contents

About my relationship with the Almighty Creator, Yah the Eternally Self-Existing

Comments relating to the Business Systems Industry and other topics

Testimonials and other positive material regarding James Robertson

Reference Articles

List of Articles

Article Catalogue

Achieving High Value Business Information System outcomes

Executive Custody -- What is it and HOW do you get it?

The REAL Issues in Integrated Business Information System Success

Part 1: Introduction

Part 2 -- Mythology and Lack of Executive Custody

Part 3 – Strategic Alignment and Precision Configuration

Why your ERP is NOT delivering and HOW to FIX it

IT Project Management

Pulse Measurement

CEO Anthony Lee Comments on his experience of the Pulse Measurement

No Charge Guarantee on the Pulse Measurement Service

Examples of Pulse Measurement Outcomes

Critical questions regarding the Pulse Measurement™

The Pulse Measurement Workflow

The Critical Factors for Business System (ERP+) Investment Success in the Pulse Measurement

Indicative Pulse Measurement Durations

What is a JAR&A Pulse Measurement?

Survival of the fittest – why it makes sense to measure the pulse of your business

Examples of Pulse Measurement Outcomes over 24 years

Sample Pulse Measurement Reports

Strategy

Strategic Essence: The Missing Link in Business Information Systems

Strategic Essence: Overview

Strategic Essence: Part 1 -- Strategy Defined

Strategic Essence: Part 2 -- Differentiation

Strategic Essence: Part 3 -- The Essence IS Different

Strategic Essence: Part 4 -- The Essence should be the Point of Departure

Strategic Essence: Part 5 -- Discovering Strategic Essence

Strategy -- the Essence of the Business: What is it and how do you develop actionable strategic plans?

Simple Steps to Increase the Strategic Value of your ERP Investment

Free Strategic Snapshot Toolset and Manual

A strategy focused planning system beyond traditional budgeting

Tough IT and ERP Procurement and Contracting that Works

Robust Business Systems Procurement

Part 1 -- Introduction

Part 2 -- Bill of Services, Laboratory, Go-live Certificate, etc

Part 3 -- Executive Engagement, Bid Compliance, Adjudication and other matters

Procurement Documents

Guidance and Advisory Services

The Art of Project Leadership

Why Regular Communication with the CEO is Vital

The Business Simulation Laboratory

Precision Configuration and Strategic Business Information Architecture

Precision Configuration based on Strategic Engineered Precision Taxonomies

The JAR&A Cubic Business Model

Highly Structured Strategic Chart of Accounts -- a Vital Element of your Corporate Information Arsenal

The Product Catalogue -- an Essential Element of any Precision Configuration

Attributes -- answers to the questions you have NOT yet thought to ask

Case Studies of Notably Successful Projects with high value Precision Configuration

092 Doing things differently and better -- ASCO Case Study 2-- BPM Summit 2013

088 Strategic ERP Invesment -- ASCO Case Study -- Service Management Conference and Exhibition Africa

026 Information Architecture and Design of FIS for Rennies Group -- Financial Information Systems Conf

018 CRM Risk Control: Designing and Implementing an Integrated Risk Mgmt Sys -- Integrated Risk Mgmt Conf

011 V3 Consulting Eng: Benefits of MIS to Professional Practice -- SAICE 15th Ann Conf on Computers in Civil Eng

Strategically Enriching your Business Information Systems

Part 1 -- Introduction

Part 2 -- Principles of Data Engineering

Part 3 -- Steps in applying these recommendations

Simple Steps to increase the strategic information value yield from your Business Systems Investment

The Full JAR&A Taxonomy Manual

Part 1: Introduction, Problem Statement, Definitions and Examples

Part 2: Why Use JAR&A, Required Knowledge and Experience, Cubic Business Model and Chart of Accounts and Taxonomy Software

Part 3: How to do it, Case Studies and White Papers and other References

Example General Ledger Manual

Business Process -- Irrelevant, Distracting and Dangerous

The RIGHT Approach

Custom Strategic Software Design and Oversight of Construction

Standards for Custom Software Specification

What IS Software?

IT Effectiveness

Organizing Outlook

Critical Factors for I.T. Success

A Moral and Ethical Dilemma -- Systems that Fail

Case Studies examining Business Information System failures

The BBC Digital Media Initiative Debacle

The Bridgestone -- IBM Conflict

Speaking and Training

Showcase of Conference Presentations

Most Viewed Presentations

Briefings and Seminars

Why your ERP/BIS is NOT delivering and HOW to FIX it

ERP and IT Procurement that Delivers Results

The Critical Factors for IT and ERP Investment Success

Other Seminars

Conferences and Public Presentations

Conferences 80 to 99 -- 2009 to Present

Conferences 60 to 79 -- 2005 to 2009

Conferences 40 to 59 -- 1996 to 2005

Conferences 20 to 39 -- 1994 to 1996

Conferences 01 to 19 -- 1989 to 1994

On-Line Seminars (Webinars)

Webinar on Preparing and Presenting Webinars

Contacting James A Robertson and Associates Limited