TRAINING DOCUMENT

The Consulting Process

Hypothesis Driven Approach

This document is confidential and is intended solely for the use and
information of the client to whom it is addressed.
 The Booz Allen consulting process is an approach to solving
problems with clients
 Structured

 Iterative

 Hypothesis-driven

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 This chapter outlines a seven step hypothesis driven analytical
approach
Hypothesis Driven Analytical Approach

1 2 7
Summarise findings
Develop initial Generate/refine
and develop
understanding hypotheses
recommendations

6 Determine 3
Analyse data information and
Iterate analysis needs to
throughout the test the hypotheses
project

5 4
Develop more
Collect data
detailed workplan

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 Unlike traditional analytic approaches, this approach is based on
inductive rather than deductive reasoning

Hypothesis Approach: Synthetic Approach:

Inductive Logic Deductive Logic
 Develop hypotheses on the major issues  Determine all the potentially useful information
relevant to the problem
 Use the hypotheses to focus data collection
and analyses — test the hypotheses  Collect all the facts and data, then analyse it to
look for patterns
 Reformulate hypotheses and start again if
shown to be wrong  Draw conclusions only when all the required
information is available — otherwise do not
 Test the sensitivity of the findings to determine draw conclusions that carry the risk of error
the need for more information/analyses in
order to draw conclusions

 Draw conclusions based upon the best

available information and sound business
judgement

Key Question Key Question

Do we have enough insight about the answer Have we looked at all the data, so the answer
to make an appropriate business decision? will be exactly right?

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 This simple example illustrates the hypothesis driven approach

Initial Hypothesis Proposed Data Conclusion Recommendation

Situation Analyses

Jimmy has Take 38.5°C Jimmy has Treat for

Fever
measles temperature temperature measles measles

Bed rest
Medication
Fluids
Check Susan had See again
Red Spots exposure to measles two next week
measles weeks ago

Jimmy
Jimmy is six played with
Susan

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 The first step is to develop an initial understanding

1 2 Summarise findings 7
 Could be in terms of
Develop initial Generate/refine
hypotheses
and develop productivity, cost, cycle
understanding recommendations time, quality etc.

 E.g. outputs, industry

trends, historical
6 Determine 3 performances
Analyse data information and
Iterate analysis needs to
throughout the test the hypotheses
project

5 4
Develop more
Collect data detailed workplan

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 Developing an initial understanding involves taking a “snapshot”
of the current situation through an understanding of key issues,
process maps and performance indicators
 Builds a picture of key operational issues relevant to the organisation/business unit and the
industry

 Provides evidence of how a process really works rather than how it is supposed to work

 Identifies relevant financial or operational performance indicators

 Provides baseline data to measure against

 Provides baseline data for estimating performance improvement potential and priority areas to
be analysed

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 Hypotheses are then generated

1 2 Summarise findings 7
 Develop hypotheses, often
Develop initial Generate/refine
hypotheses
and develop through brainstorming
understanding recommendations
 Pose key questions — the
answers needed to accept
or reject hypotheses
6 Determine 3
Analyse data information and  Ideas for improvement e.g.
Iterate analysis needs to
throughout the test the hypotheses cost, productivity
project

5 4
Develop more
Collect data detailed workplan

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 Hypotheses are developed to help formulate tentative conclusions
on problems or opportunities
 A hypothesis is nothing more than a statement of belief based on current understanding

 Hypotheses help to prioritise and focus the team’s efforts

 Hypotheses drive data requirements and appropriate analyses to be performed

 Hypotheses provide a mechanism for capturing team ideas while keeping team activities
focused and moving forward

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 Hypotheses are refined and retested as the project progresses
 The hypothesis is the first step, not the answer

 Initial hypotheses are confirmed or reformulated with evidence from data analysis

 More detailed hypotheses are developed throughout the process by the team

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 Development of hypotheses is a team effort and is best done jointly
by the full team through brainstorming

 Ensures an open flow of ideas

 Stresses spontaneity

 Avoids preconceived solutions

 Attempts to conduct "root cause analysis"

However

 Should have an agenda

 Must be documented

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 The third step is to determine information and analysis needs

1 2 Summarise findings 7
Develop initial Generate/refine  Identify data requirements
and develop
understanding hypotheses
recommendations (needed to answer key
questions)

 Determine sources and

6 Determine 3 methods
Analyse data information and
Iterate analysis needs to
throughout the test the hypotheses  E.g. descriptive,
project decomposition,
comparative, causalities

5 4
Develop more
Collect data detailed workplan

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 The analysis and data requirements are driven by the hypotheses

Analytical Approach

Hypotheses/ Determines Analysis Needs/ Defines Data

Opportunities Appropriate Questions Necessary

 Where is the opportunity?  How can the question be  What information is

answered? necessary to answer the
 What is the right answer? question?
 What are the appropriate
 What changes can be analyses?  Who should be interviewed?
made?
 How can the hypotheses be
verified?

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 It is always necessary to review analyses and data requirements to
make sure they will provide a solid conclusion
 Do the analyses address the hypothesis ?

 Do the analyses, taken together, prove, disprove or modify the hypothesis ?

 Could different conclusions be drawn from the same set of analyses ?

 Can reliable data be obtained to support each analysis ?

 Do all of the hypotheses and supporting analyses suggest possible recommendations and lead
to definitive action steps ?

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 Problem - solving exercise
Problem — Solving Exercise

Situation

 An operating company (no profit or loss, simply an expense centre) has an excellent record of reliably, safely
liquefying natural gas for export

 Production at its primary supply field has begun a gradual decline

 Costs per unit of production are rising several times faster than inflation

 The number of employees has decreased every year for the past several years

Issue Hypotheses Analysis Source

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 Once information and analysis needs are determined it is
necessary to develop a workplan

1 2 Summarise findings 7
Develop initial Generate/refine  Determine data
and develop
understanding hypotheses
recommendations requirements

 Identify activities, sub-

activities, and individual
6 Determine 3 tasks
Analyse data information and
Iterate analysis needs to
throughout the test the hypotheses  Assign responsibilities to
project team members

 Create schedules

5 4
Develop more
Collect data detailed workplan

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 The project workplan is a Gantt chart of all project tasks
 Project deliverable, milestones and associated tasks are hierarchically structured, therefore,
the workplan provides information at varying levels of detail
– Work involved
– Resources required/duration
– Progress to date
– Next steps

 Each activity will result in tangible deliverable that can be verified

 Start and finish dates are assigned for each task at the lowest level, so degree of completion
can be graphically displayed

 Tasks at one level of detail can be rolled up to provide a view of the workplan at successively
higher levels

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 The level of detail in the project workplan determines much of the
subsequent data collection efforts
 Too high a level does not provide enough information and results in non-compliance by
contributors because of perceived lack of merit

 Too low a level of detail provides too much information - too much time is required to report
status

 As a general rule, each task should result in a tangible deliverable

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 Once a workplan is in place the required data are collected

1 2 Summarise findings 7
Develop initial Generate/refine  Prepare data packages and
and develop
understanding hypotheses
recommendations interview guides

 Conduct interviews and

surveys and launch data
6 Determine 3 requests
Analyse data information and
Iterate analysis needs to
throughout the test the hypotheses  Link data to hypotheses
project

5 4
Develop more
Collect data detailed workplan

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 To support or disprove hypotheses, we gather data and conduct
rigorous analysis
 Never “collect all the data first, then I’ll pull it together”

 There is never a shortage of data available

 Link data to hypotheses - know what question the data will answer

 Draw ( illustratively) the end-product

 Identify long lead time data requests

 Know the right sources - always cross-check and conduct “sanity”checks early on

 Begin collating data early on

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 A number of data collection methods are used

 Surveys

 Interviews

 Focus groups

 Time ladders

 Data search
– Documents (e.g.
financial records)
– Computer queries
 Observation

More detail in appendix

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 Data is then analysed to test hypotheses

1 2 Summarise findings 7
Develop initial Generate/refine  Examine findings, always
and develop
understanding hypotheses
recommendations ask “so what?”

 Reach conclusions

6 Determine 3  Test and verify against

Analyse data information and
Iterate analysis needs to original issues, proving and
throughout the test the hypotheses disproving hypotheses/
project conclusions

5 4
Develop more
Collect data detailed workplan

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 The Pareto Principle should be used to work effectively through the
data analysis
 Pareto’s Rule, developed by an Italian political-economist-statistician in the 1920s, states that:

20% of the work produces 80% of the result

 An effective project style is to seek early conclusions and test them quickly
– Look for trends in the analysis
– Prepare quick, conceptual exhibits of emerging findings
– Review the findings with team members for early “sanity checks”

 A hypothesis can be declared “verified” if the supporting analyses are convincing and the major points of
contention have been addressed
– No confirmation can be “air-tight”, so do not needlessly expend team resources
– Keep in mind the mission of achieving step-level change, not conducting analyses
– The key to successful analysis is knowing when to make it complex

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 Mt. Fuji exercise

Analysis Exercise

The Problem How to Solve It Lessons Learned

 We want to flatten Mt. Fuji

 We’ll do it by hauling the mountain

away in dump trucks

 We have enough equipment and

manpower to remove 10 dump truck
loads every 15 minutes, 24 hrs/day,
7 days/week

 If we need the trucks for more than

five years, it is better to buy, but if
we only need them for less, it is
better to lease. Should we buy or
lease the trucks?

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 The final step is to summarise findings and develop
recommendations

1 2 7
Develop initial Summ. findings
understanding Generate/refine and develop
hypotheses • Create logical flow
and issues recommendations
to communicate
conclusion
addressing the
6 3 issues
Determine
Analyse data information and
Iterate analysis needs • Test feasibility and
throughout the realism (achieve
project desired changes?)

5 4
Develop
Collect data
workplan

15-80912SYAG

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 After a lot of analysis you will find an “answer” - the next step is to
develop the context and scope of your analysis into a reasonable
conclusion about the business
 Analysis gives you facts, not conclusions

 Sit back and think

– What are the crucial relationship ?
– How does this fit into the big picture ?
– Is this consistent with the hypothesis ?
– How does this relate to the competitors ?
– What does this suggest about other parts of the company ?

 Question other team members about the implications

 Brainstorm with team members about the significance of the findings

 Make some quick enquiries and calculations to confirm the reasonableness of all the conclusions

 Always try to think of the other right answer

– Business problems seldom have only one answer
– Look at it from the Managing Director’s and Chairman’s perspectives

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 Based on these conclusions, recommendations are developed

BUILD THE RECOMMENDATIONS TEST THE RECOMMENDATIONS AGAINST

OFF THE CONCLUSIONS KEY CRITERIA

• For each conclusion, list the alternative • Action — Do they specify changes and
recommendations that will resolve the problem describe results and/or benefits?
or realise the opportunity
• Logic — Do they resolve the problems and/or
realise the opportunities described by the
• For each alternative, describe the results and conclusions?
benefits that would be achieved if that action
were implemented • Scope — Do they cover all the committed
issues and outputs?

• Look for ways to enhance each alternative • Feasibility — Do they consider our
conditions, barriers, and resources?

• Evaluate the alternatives for each conclusion • Creativity — Do they evolve from imaginative
against possible constraints such as time, alternatives?
budget, feasibility and select the optimum
alternative for each conclusion

15-80913SYAG

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 Recommendations needs to address all relevant aspects of the
business or operation and define a complete view

A
SCENARIO
B
S
C D
£ ¥
International Implications
Baseline and Alternative Scenarios that Key Discrepancies and
Recommendation Supports Implementation Issues

Process and Technology/Automation

Information Flows Requirements

Recommendation Products, Features, Outsiders,

etc. Supported by
Key Metrics Recommendation
and Targets
Organisation and Preliminary Laboratory Pilot
Job Design and Rollout Schedule

Human Resource Cost

Initiatives Estimates
N
NPV =  values
(1+rate) i
i=1

242-1311SI-24239JO

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 Collating these recommendations into a report requires careful
preparation and adherence to some key guidelines
 Properly positioned and introduced

 Logically presented

 Geared to the level of understanding of the audience

 Written to provide a clear understanding of the issues and recommendations

 Well documented with appropriate sourcing

 Written in a style appropriate for the occasion

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 Communicating ideas and recommendations is a critical
component of every project
 Getting the ideas across is as important as getting the right answer

 Each project should have an explicit communication strategy

 Careful preparation and anticipation of communications difficulties are common to all successful
communication strategies

 Each person has a responsibility for communications, consistent with their role on the assignment

 The report is a not a chronological summary of all the work done, but a focused argument leading to an
actionable recommendation

 Research and analyses not essential to this focused argument have no place in the body of the report

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 Graphic presentation can be very powerful
 “One picture paints a thousand words”

 Exhibits improve retention of key findings

 Visuals only support the major findings, you must still state it

HINTS:
• The title should be brief and to the point
• Each exhibit should communicate only one message
•
• Effective visuals show relationships, not quantities
• Keep numerical exhibits simple, the fewer numbers the better
•
Make sure all the columns and rows add up
(Don’t take this lightly, the team’s integrity and your reputation are at stake!)

15-80917SYAG

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 In summary, the approach is a means, not an end
 Be issue and hypothesis driven - do not collect the data first, then pull it together

 Do not be a slave to the workplan if new findings emerge - developing step level change is a goal, not
creating a workplan

 Work as a team, but divide and conquer by performing tasks in parallel

 Plan an aggressive schedule - but allow for extra learning time in the beginning

 Assign one leader per task who is responsible for completion of deliverables

 Maintain awareness of the critical path

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 Appendix

 Data collection methods

 Types of analyses

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 Appendix

 Data collection methods

 Types of analyses

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 When collecting quantitative data, the data request should be well
structured and specific

Data Collection Tips

 Observe operations when possible to sample the environment, capture feelings and relationships
and test observations

 Be as specific and structured as possible — think through what data you want, the specific
analysis you will do, and avoid data “dumps”

 Test the matrix before launching it to make sure you’re getting the data you need

 Check on it or collect the forms daily to allow time for any necessary adjustments

 Get approval from the appropriate managers before asking their people to spend significant time
on data collection

 Try to get the information from more than one source — it improves the probability of delivery and
provides a cross-check

 Ensure adequate lead times for completion of the data request

 Leave the door open for further requests

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 The Consulting Process

The most effective data requests are often packaged as easy-to-

complete matrices
Functional Worksheet
(Activities By Function) EX A
MPL
E
Function: _________________________________ Dept/section : _________________________________

Other Major Key Customer Length of

FTEs Description Issues/
Activity Resources Interfaces Processes Activity (Per
Required of Activity Opportunities
Required (Handoffs) Supported Transaction)

Description of the Activity Includes: Data Requests

Co-ordination Required Routine/Unique Level of Automation

Skills Workload Characteristics Complexity
– Trend
– Peak/Valley
– Drivers

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 Another key method of collecting data is through an effective
interviewing programme

Interviewing Dos and Don'ts

 Come prepared (background information and interview guide)

 Actively listen to what the interviewee has to say

 Think like the interviewee—put yourself in his or her place

 Keep it simple

 Take notes, no matter how simple

 Keep your word

 Be clear and specific—articulate words and maintain eye contact

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 Effective interviews consists of three major phases

Preparation

 Purpose of the interview

 Interview guide
Interview

 Open

 Body
Post-Interview
 Close
 Write-up

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 The first step is to understand why you want to conduct the
interview
 Establish purpose :”Why do I want to talk with the interviewee?”

 Set parameters “What end results do I need?”

 Obtain background information on interviewee ( needs, biases, experience base)

 Develop “cover story” to give to interviewee

 Why should interviewee talk to me ?

 Understand perspective of interviewee

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 A comprehensive interview guide is required
Develop Content Prepare Housekeeping Use Appropriate
Details Language
Introduction
Closing remarks Telephone numbers
Design questions to get key Name of interviewee Use positive, non-threatening
products Department phrasing
Understand your purpose, link Reports/papers to get
questions to objectives Make sure questions are
Know which questions are natural for you
most important
Put critical, non-controversial Eliminate jargon
items first Interview Guide
Organise into a logical flow

Be Prepared
Request Review
Anticipate responses for open
(and closed) questions Ask team members or team
Identify probes to cover all Include Supporting leader to review guide
interest areas Material
Plan responses for Organisation charts to guide Revise interview guide as
controversial issues discussion needed
Plan opportunities to validate Data requests
data acquired earlier Process flow diagrams

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 Open the interview to set the expectations of the interviewee and
establish rapport
 Exchange introductions

 Explain objectives: “What do I want?””Why do I want it?”

 Make interviewee feel comfortable

 Encourage full responses

 Set structure of interview

 Recognise interviewee’s expertise to study

 Ask if they mind your taking notes

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 During the interview, use open, closed, leading and confirming
questions as appropriate
 Open-ended questions
– Provide general perspectives
– Can serve as a basis for subsequent questions because they allow respondents discretion in deciding how much to say
– E.g.”If you could design the ideal organisation, what would it look like ?”

 Closed questions
– Elicit specific facts
– Provide content-oriented information, but may miss nuances essential to interpreting facts
– Use close-ended questions to define data, especially when the interviewee is reluctant to be specific
– E.g.”Is large between 50 and 100?”

 Leading questions
– Have an “embedded” answer which prevents unbiased response
– Can flush out interviewee biases, but their indiscriminate use disguises rather than illuminates bias
– E.g. “Would you say your biggest problem is untrained staff?”

 Confirming questions
– Confirm your understanding, correct misunderstanding
– Let interviewee know you are listening to him/he, e.g. “If I understand you?” “Then you feel that?”
– Summarise main points, ask what has been left out
– Point out any inconsistencies, e.g. “I understood the percentage to be X and then I heard Y. Which is accurate?”
– Verbalise what the interviewee may have insinuated

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 Start with open questions and finish with closed questions
 Start with open end questions

 Tighten up answers
– Specific examples
– Pictures and diagrams
– Polite persuasiveness
– What if questions

 Close and control with paraphrases and close end questions

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 Probe to uncover details or keep discussion focused on the most
profitable topics
 Probe depth of interviewee’s knowledge

 Ask for specific opinions in controversial areas

 Be alert to incomplete or non specific answers

 Distinguish useful targets from meaningless diversions

 Avoid leading questions, use close ended questions sparingly

 Probe for specifics : numbers, units of measure, examples, relative frequencies

 Use extensions, “in what ways?”, “Anything else?”

 Sketch the information

– If organisational structure is being discussed, draw boxes
– If the topic is manufacturing, try diagramming the process flow

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 The key to effective questioning is the ability to listen well
 Ask ambiguous open-ended questions, then listen

 Listening for what is spoken and unspoken, commenting only as appropriate

 Listening actively for meaning and emotion, not just quantitative information (differentiate content
from delivery)

 Avoiding evaluate listening — prejudging prevents understanding another person’s perspective

 Being aware of eye contact and non-verbal signals — watching for withdrawal and aggression

 Never interrupt the interviewee

 Use pregnant pauses to allow the interviewee to start a subject

 Consider putting pencil aside if controversial issues arise

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 Structure the note taking to enable comprehensive information
collection
 Segment the paper (content/answers, promises/leads, follow up questions, gaps, etc.)

 Know the ways information may come to you ahead of time

 Fill in what you know ahead of time

 Use graphics for yourself and for the interviewee during the interview

 Take too many notes rather than too few (but use quotes/exact wording only when the words are significant)

 Indicate areas for further probing/questions to be asked later in the interview (after rapport is firmly established or
when you need to regain momentum)

 Develop standard (and distinct) abbreviations for common words/terms — a logical system of shorthand for you

 Do not hesitate to ask interviewee to wait (this also gives them the feeling that what they are saying is important)

 Fill in notes straight after the interview

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 Close the interview properly to ensure your understanding of key
issues and to keep the contact live
 Paraphrase and summarise major issues

 Check accuracy and consistency of key issues

 Enable interviewees to articulate concerns

 Review constructed tables, charts, etc. to ensure comprehensiveness

 Follow up on materials promised to you during the course of the interview

 Identify additional data sources and contacts

 Keep door open for further contact

 Thank interviewee

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 Maximise interview results by summarising effectively
 Qualify the interview
– Identify name and title of interviewee
– Date the interview; note the interviewer
– Give background information on the interviewee

 Write up your notes immediately after the interview

– Separate facts from impressions
– Add commentary to explain
– Quote where flavour is important and meaning is critical
– Note your feelings and attitudes

 Organise the data

– Highlight important facts
– Note areas which require additional information
– Make list of “nuggets”

 Analyse the data

– Determine meaning of data in terms of project objectives
– Synthesise facts into findings against key questions
– Test accuracy by tying to document evidence or qualified sources
– Apply problem solving techniques to the data

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 In summary, be aware of common barriers to a successful
interview
Failure to understand the purpose Not listening enough
Not talking from interviewees perspective Not probing enough
Having a poor introduction Not staying on probe questions
Asking leading questions Not summarising enough
Not taking sufficient notes Not closing interview
Getting off track Ineffective interview reports

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 Using focus groups is another way of carrying out interviews
 Focus groups are facilitated sessions designed to discuss and document specific processes, problems, etc.

 Attendees represent all participants in the process

 Significant value is provided by the interactive nature of the discussion

 Results are frequently surprising

 For example:
– Attendees discover others are performing identical work
– Number of department/staff devoted to a process exceeds expectations
– Lack of communication across departments is discovered

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 The time ladder analysis aims to establish a baseline and identify
improvement opportunities in a business process
 Time ladder analysis establishes baselines for the business processes that need to be re-designed
– Identifies the total amount of time spent on the overall processes
– Identifies the amount of time spent in each distinct activity in the processes
– Indicates the level of staff involved in each step
– Measures the amount of resources allocated to serve specified customer segments
– Facilitates calculation of base lines in terms of total time and total cost by process and by customer
segment

 Time ladder analysis helps identify the processes that have the greatest potential redesign benefit
– Highlights processes and steps that absorbs substantial amount of staff time
– Facilitates the identification and prioritisation of improvement opportunities
– Focuses understanding on the dimension of change required
– Enables the level of improvement achieved in the re-design to be accurately measured

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 Each staff member involved in the business process needs to
accurately record their daily activities in a time sheet
Name : Department : Division:
Section: Level: Date:
Disbursement Repayment Disbursement and
Support Support Repayment Accounting
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313-923SI-18022AL

A B C D E F G H I J

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 The Consulting Process

The output is a detailed understanding of the process components

EXA
MPL
Breakdown of Back Office Support Activity E

100% 100%

Disbursement Support
– Assess funds required
– Disburse funds 33%
42%

Repayment Support
– Invoice customers
– Identify customer repayment 30%
– Process repayment 23%

Disbursement and
Repayment Accounting
– Compile flow of funds report
– Reconcile flow of funds 35%
37%
– Adjust data
– Execute data transfer

Business Unit A Business Unit B

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 Appendix

 Data collection methods

 Types of analyses

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 There are four types of analysis

Analytic Relativities

Type of Descriptive Decompositions Comparative Causalities

Analysis

 Data tables
  Pie charts  Bars/”marching bars  X/Y diagrams
Time series
 Bar charts  “Bubble” graphs  Regressions
 Organisation charts  Concentration curves  Harvey balls  Scale curves
Examples  Flow charts  
Frequency diagrams Fishbone diagrams

 Provide a "State of the  Pinpoint areas on which to  Compare area of focus with  Explain the differences and
Nation” focus other data points interdependencies

Where Used

Diagnostic Actionable
Analysis Analysis

Filename/RPS Number 55
 Data table is best used to summarise large sources of data

Survey Question: What Three Most Valued Activities Does Your Salesperson Provide?
Times Times Times Times
Sales Activity Ranked Ranked Ranked Ranked
First Second Third Fourth
Problem resolution 22 7 11 95

Communicating programmes 14 9 18 87

Merchandise set-up/ promotions 10 12 17 76

Price exceptions 7 10 13 57

Sales training 15 5 3 56

Review product information 7 14 8 51

Order taking 8 11 5 45

Business counselling 6 8 9 44

Taking inventory/making 1 3 5 16
stocking recommendations

Pick up and delivery 2 0 2 10

Other 1 2 0 5

Filename/RPS Number 56
 Time series is used to capture fluctuations and trends over a
period of time

Sales Department Claims Processing Unit Productivity

500
Average Claims Closed per Month

400

300 30%-35%
Annual Growth

200

100

0
1982 1983 1984 1985 1986
Year

Filename/RPS Number 57
 Flow charting allows one to trace a work process across lines of
responsibility and identify “de-bottlenecking” opportunities

Means To Identify

 Unnecessary steps, tasks

 Bottlenecks

 Automation opportunities

 Opportunities to tighten decision protocols

 Skews in mix of items being processed

Be Sure To

 Capture volumes passing through each step

 Understand decision rules determining where volume flows

 Identify unit times per task and total time per task

 Completely document each step to capture information used/decision protocols in place

Filename/RPS Number 58
 In process flow charting, there are a number of standard symbols,
each with a particular meaning and information requirement

Sample Process Flow Diagram Legend

Icon
Step #
Manual workstep Data input

Decision point Paper file

System generated Cross reference to

report another process

Form Delay Department

Filename/RPS Number 59
 The Consulting Process

Process flow charts should depict steps and departments involved

Example Process Flow: Process for Handling Spoilage in Grocery Wholesale

Have retailer
throw product
away

Yes

Denied Retailer
Approved
or denied Trust-
worthy?
? Approved

Yes
Customer
Write up service No
customer Send
researches
Customer Customer Take down service order to Recent damaged Items Yes, Write
information on Produce or Other contact shipment? goods to spoiled? full out credit
Service Call spoiled item other? report for ensure reclamation form
recent credit
spoiled centre
items shipment
• Customer number
• Item code
• Description of damage Send contact Approved
form to product form returned No, call No, call
Produce customer
manager for to customer retailer
approval service

Conference Tell retailer Manual form

Merchandising in produce Denied, of reason sent to I.S.
department call for denial of
Approved by customer credit
product manager
or one week
passes without
hearing?
IS Enter
Credit

Revise
Accounting
statement

Filename/RPS Number 60
 Pie chart is a snapshot decomposition of an entity or situation

Role of Corporate – The Fundamental Functions

"What we do for the

businesses for
"What we must to
economic reasons"
do be in the
Central business"
Expertise
13%
Corporate
"What we do for the Requirements
businesses for control Business 27%
Support "What we do to
reasons" prepare for the
14%
future"

Corporate
Services Strategy
Monitoring Development
15%
14% 5%
"What we do to Community
maintain corporate" Involvement
12%
:To make sure we
do what we said
we'd do"
"What we do for the
community"

All Corporate Positions And Costs

Filename/RPS Number 61
 Bar chart represents a method of comparing data and highlighting
segments which are worth noting
CUSTOMER SEGMENT COSTS VERSUS REVENUE
RANKED BY PROFITABILITY

$M

1 2 3 4 5 6 7
Segment

Costs Revenue

313-923SI-80907FR

Filename/RPS Number 62
 Frequency distribution is a method which summarises the
concentration and spread of elements in predetermined divisions

DISTRIBUTION OF ACCOUNTS BY LIMIT RANGE

700
34%
600 32%

500
# of
Accounts 400
('000)

300
12%
300
7% 7%
6%
100
2%
0.3%
0
0-500 500- 1- 2- 3- 4- 5- 10,000+
1,000 2,000 3,000 4,000 5,000 10,000
Limit
313-923SI-80908FR

Filename/RPS Number 63
 Harvey balls are useful for prioritising qualitative data
PRELIMINARY EVALUATION OF OPERATING MODELS

I II III
CRITERIA BUSINESS CUSTOMER MARKET
UNIT SEGMENT MANAGEMENT
"Integration" Strategy

Segment Tailored Responsiveness

Leverages Capabilities/Strengths

Clear Accountability

Cost Efficient

Relationship Building

Top Down Direction/Control

Builds On "Expert" Capabilities

Minimises Disruption

Advantaged Neutral Disadvantaged

313-923SI-80909FR

Filename/RPS Number 64
 Simple regression analysis helps highlight the existence and
strength of the relationship between two or more variables

SCALE EFFICIENCIES IN COMBINING INVENTORY AUDITS

Slope = 0.85
R 2 = 78
Audit
Hours Per
Million
Dollars of
Inventory

District Manager
Average
Company Rep
(Proposed)

Finance Rep
Average

Inventory Audit Responsibility Per Field Representative

(Millions of Dollars — Log Scale)
Finance Representative District Managers

Source: District Manager and Finance Representative Surveys; BA&H Analysis

313-923SI-80910FR

Filename/RPS Number 65
 A scale curve helps identify the existence of efficiencies resulting
from scale within a business system
DISTRICT SALES OFFICE ECONOMICS

8
• Carins

7 • Darwin

• •
Canberra
6 Hobart

5 • Brisbane
• Adelaide Perth
Office Cost/
Revenue Generated
4 •
3
• Melbourne
2
• Sydney
1

0
0 100 200 300 400
Annual District Office Sales
($M)
313-923SI-80911FR

Filename/RPS Number 66