Performance based digital transformation
Jean Vieille, Industrial systems control
[email protected]
Second 4P Factory online Seminar
Wednesday 16th March 2016
Agenda
IT transformation
 Enterprise control
 Performance management
 Use case

J. Vieille - Performance based digital transformation - Second 4P Factory online Seminar
2
Context

Hyper-connected World
◦ Increasing complexity, opportunities
Enterprises keep morphing to adapt to the changing
environment
 IT keeps progressing, pushing new technologies and

hypes to support them

Industrial IT is aging, intricate
◦ Need to improve IT support to business,
◦ Need to leverage opportunities and technologies
◦ Without compromising operations, limiting risks
J. Vieille - Performance based digital transformation - Second 4P Factory online Seminar
3
Questions

How to handle IT transformation ?
◦ To serve business
◦ While leveraging technology

How to link IT improvement to enterprise
bottom line ?
◦ Budget for IT operations
◦ Budget for projects
◦ Priorities
J. Vieille - Performance based digital transformation - Second 4P Factory online Seminar
4
IT at the heart of enterprise
Energy
Matter
Y
Product
Information
Energy
Information
Pre-industry
Human, animal
Human
Meccanization
Machine
Human
Automation
Machine
Computer
Electro-mechanics
Pneumatics Electronics
Informatics
Smart Industry
Industrie 4.0
Industrie du
Futur
IoT
BigData
Mobility
Networks
J. Vieille - Performance based digital transformation - Second 4P Factory online Seminar
5
IT transformation Challenges

Requirement management
◦ Business Values, Priorities; Leverage new technologies

IT planning
◦ Large projects, continuous incremental delivery

Deal with heterogeneity
◦ Legacy ∪ new technologies, partial migration, interoperability, MDM,

Promote standardization or leverage local initiatives
◦ IT efficiency or creative diversity

Up to date representation of
◦ Industrial system, IT asset

IT delivery performance management
◦ Link IT operations to enterprise success
◦ Set priorities, budgets
J. Vieille - Performance based digital transformation - Second 4P Factory online Seminar
6
Strategy, Goal
Resource allocation
Policy
+ Global transformation
Planning
Monitoring
Performance
Transformation activities
Requirement
management
Development
Deployment
IT Transformation
Technology - platform
Industrial
System
model
IT asset and configurations
Business
requirements
Local transformation (system recursion)
Local
realizations
Corrective
Maintenance
Operations
Supported by IT
Operations
Technology awareness
J. Vieille - Performance based digital transformation - Second 4P Factory online Seminar
7
Agenda
IT transformation
 Enterprise control
 Performance management
 Use case

J. Vieille - Performance based digital transformation - Second 4P Factory online Seminar
8
Complexity
Very
complex
Environment
Complex
Enterprise
???
Make
money
Suppliers, Customers, Contractors, Partners
IRS , Regulations
Natural, Social environment
Market, Politics, Macroeconomics
Employees, shareholders
Bankers, Insurers
HR, Marketing,
R&D, Engineering, IT
Sales, Sourcing
Finance, Communication
Planning, Production, Logistics
J. Vieille - Performance based digital transformation - Second 4P Factory online Seminar
9
Complexity control
Amplifier
C1/C2
C2/C3
C2
Environment
Operations
C3
Management
C1
C2/C1
C3/C2
Filter
C1 >> C2 >> C3
Law of Requisite Variety (W.R. Ashby) :
Variety of the controlling system >= Variety of the controlled system
Variety = number of possible states = f(complexity)
en.wikipedia.org/wiki/Complexity
en.wikipedia.org/wiki/Variety_(cybernetics)
J. Vieille - Performance based digital transformation - Second 4P Factory online Seminar
10
Take a Country
J. Vieille - Performance based digital transformation - Second 4P Factory online Seminar
11
How to control such a complex system?
Performance management is one
way for controlling behaviour
beside:
• Competition
• Advertisement, Propaganda,
Brainwashing
• Threat, False flag
• Concealment
• Leaked secrets
• Corruption
• …
Direct
Behaviour
control
Organize
control
Influence
Decide
Enforce…
Encourage
Exite….
J. Vieille - Performance based digital transformation - Second 4P Factory online Seminar
12
Increase complexity, collective intelligence
C4 > C3 > C2 > C1
C1
Management
C’2  C2
Direct
control
Deterministic
Behaviour
control C2’
C2
Organize
Decide
Enforce
Influence
Encourage
Excite
C3 + C3’
Operations
C5 > C3
Opportunistic
Elevate Operations complexity
Effective action
Environment
C5
Minds
C4
J. Vieille - Performance based digital transformation - Second 4P Factory online Seminar
13
Enterprise control representation
5.Policy
Recursion
4.Transformation
Environment
Strategic directives
Resource Allocation
and arbitration
Behaviour control
∈ 𝑃𝑒𝑟𝑓𝑜𝑟𝑚𝑎𝑛𝑐𝑒
𝑚𝑎𝑛𝑎𝑔𝑒𝑚𝑒𝑛𝑡
Direct
control
HR, Engineering
IT, Contracts, R&D
Finances
Organization
Marketing
Communication
…
Requirement
Projects
3.Delivery
& monitoring
Sales
Design
Make
Source
Deliver
2.Coordination
1.Operations
en.wikipedia.org/wiki/Viable_system_model
J. Vieille - Performance based digital transformation - Second 4P Factory online Seminar
14
Agenda
IT transformation
 Enterprise control
 Performance management
 Use case

J. Vieille - Performance based digital transformation - Second 4P Factory online Seminar
15
Complex system control
Behaviour
control
SS0
Direct
control
SS1
SS11
SS12
SS2
SS21
SS22
J. Vieille - Performance based digital transformation - Second 4P Factory online Seminar
16
Local aspects: Behaviour propagation in sub-systems
SS0
KPIs
Excitation
Reaction
SS2
SS1
Operations
& coordination
Fast loop
Policy
Delivery &
monitoring
Reach performance target
with available means
Excitation
Transform itself
to improve local
performance
Reaction
Transformation
Induce others’ transformation
to improve local performance
Slow loop
Excitation
Reaction
KPIs
SS11
J. Vieille - Performance based digital transformation - Second 4P Factory online Seminar
17
Global aspects: Overall Interactional Effectiveness
OIE
R * S * Q * OVA/OOE
Social
Responsibility
Speed
(Working Capital Need)
Focus all enterprise functions on a global indicator
Seeking mission fulfilment
Overall Value
Added
Quality
Overall Operating
Expenses
Enterprise
Policy
Transformation,
Delivery & monitoring
Coordination
Operations
Performance
Innovation
Sales
Design
R
S
Source
Q
Make
OVA
OOE
Deliver
Performance
IT Delivery
& monitoring
Change requests
Transformation
Performance
IT Transformation
www.interaxys.fr
J. Vieille - Performance based digital transformation - Second 4P Factory online Seminar
18
Dynamic performance management
Organizational
Performance
Potentiality
A/P
The reachable, desirable target
(transformation investment)
Critical for long term survival
Policy
Transformation
C/P
Long term strategic gap
Conditions survival
Latent
Performance
Capability
Feasible performance target
With the current resources
Delivery & monitoring
A/C
Operational
Performance
Actuality
Short term efficiency
Ability to leverage available resources
Current performance measure
Coordination
Operations
en.wikipedia.org/wiki/Viable_system_model
J. Vieille - Performance based digital transformation - Second 4P Factory online Seminar
19
Example
We produce an average of
600 products a week
Our equipment has a full
capacity of 20 products per
hour
We operate 8 hours a day, 5
days a week
We have 2 equivalent
machines that cannot be
operated simultaneously
Actuality
600
Capability
800 (20*8*5)
Potentiality
6720 (20*24*7*2
Operational P. (A/C)
75%
Latent P. (C/P)
12%
Organ. P. (A/P)
9%
J. Vieille - Performance based digital transformation - Second 4P Factory online Seminar
20
IT budgeting

Many formulas for guesstimating IT ROI and
functional / projects budgets
◦ IT in industry hardly delivers tangible value, difficult
to prove after implementation
OIE focuses IT on critical requirements
 Potentiality = backlog of critical requirements
 Capability = selected priority requirements for
given resources
 C/P = IT Latency for serving strategic objective

◦ Informed financial arbitration
J. Vieille - Performance based digital transformation - Second 4P Factory online Seminar
21
Conflict resolution
Conflicts -> uneasiness, discomfort, complaints
 PM as a likely cause,

◦ Compromises effective contribution to fulfil
enterprise objectives
◦ Due to failed assumptions about local performance
relevance

Need for continuous monitoring of arising
conflicts
◦ and KPIs’ relevance
J. Vieille - Performance based digital transformation - Second 4P Factory online Seminar
22
Agenda
IT transformation
 Enterprise control
 Performance management
 Use case

J. Vieille - Performance based digital transformation - Second 4P Factory online Seminar
23
Context



R&D department of a large company (2000 researchers)
Deployment of ELN software
Issues
◦ Slow and costly delivery of complex experimentation
templates
◦ Sensitive relationships Business / IT / Software provider
◦ Researchers goals (IP protection) conflicts with project goal
(leveraging shared knowledge)

Example for a simplistic metrics showing the bottom-up
chain of responsibilities and flawed assumptions
J. Vieille - Performance based digital transformation - Second 4P Factory online Seminar
24
Objective
Group Policy
Increase
Overall Added Value
Group transformation
Boost Innovation
Resource
allocation
R&D Policy
& transformation
Resource
allocation
R&D IT Policy
& transformation
Educated
guess…
Numerous, effective
inventions
Improve research
productivity
Improve
experimentation
productivity
Resource
allocation
Contractor IT Delivery,
coordination and operations
Educated
guess…
Share knowledge
Standardize
experimentation
Leverage Information
technology
Implement ELN
Fast, cost effective
ELN Deployment
J. Vieille - Performance based digital transformation - Second 4P Factory online Seminar
25
User coverage KPI and responsibilities
Group Policy & transformation
Directives to R&D
R&D budget
R&D Policy & transformation
Poor performance.
Will this target actually help
boosting innovation?
Potentiality
2000
Latency
Directives to IT
IT budget
R&D IT Policy & transformation
Organisational
4%
19%
Potentiality
380
ELN delivery budget
R&D IT delivery & monitoring
Numerous, effective
inventions
Latency
Capability
135
Organisational
36%
23%
Fast, cost effective
ELN Deployment
Contractor operations
(VSM recursion)
Operational
Actuality
88
65%
J. Vieille - Performance based digital transformation - Second 4P Factory online Seminar
26
Conflict resolution
ELN full deployment justification
Improve
experimentation
productivity
Numerous,
effective
inventions
Promote
research
sharing
Enable creativity
Standardize
experimentation
Share knowledge
Data rather
process
oriented
Protect individual IP
Experimentation
freedom
Researchers requirements
en.wikipedia.org/wiki/Evaporating_Cloud
J. Vieille - Performance based digital transformation - Second 4P Factory online Seminar
27
Conclusion

IT continuous transformation
◦ Support enterprise ongoing transformation
◦ Leverage new technologies

IT performance management is an essential
component in this process
◦ To focus efforts on enterprise goal / objectives
◦ To set IT budgets

Better understanding through system approach
◦ Complexity management, Behaviour control
◦ Overall Interactional Effectiveness
◦ Responsibility, Conflict resolution
J. Vieille - Performance based digital transformation - Second 4P Factory online Seminar
28
Questions?
Q O O
S V O
R A E
OIE
Transformation
Responsibility
Performance
Conflicts
Behaviour
J. Vieille - Performance based digital transformation - Second 4P Factory online Seminar
29