Tools and Models

Many companies today have a definite need to retain outside consulting assistance for their business  in  order  to  increase  sales  and profits. Every company has a pressing need for from your competitors to gain competitive advantages.

What is a management tool and what is its purpose?

A management tool is a model - that is a simplified image of reality. According  to  Wikipedia "scientific modelling is a simplification of relevant  aspects of a  situation in the real world for its systematic study". Hence, models normally limit  the number of aspects included, in order to reduce complexity.

The important terms that indicate the purpose of management tools are:
 

• to improve the problem solving or decision making process
• providing thought structures, action steps, and representation formats
• to facilitate analytical or creative thinking

Tools and models provide a framework to structure this  information, to distinguish between relevant and  irrelevant  information, to realign information so that  new  interdependencies and  connections  become  visible, and  they provide  formats  to  present  information and conclusions. Thus, they  facilitate  thinking. They  do  not, however, do  our  thinking for us. They help to come up with conclusions or strategies, but they do not produce them.

Why Tools and Models are Important?

Management tools can help to better understand particular aspects of an organization or its environment. A management  model  involves choices at the most  fundamental level about how the company will be run. Those choices then shape the specific practices and behaviors in the company.

Management  models  are  effective  only  if  their  users  are  able  to  realize  each models specific limitations, i.e. its assumptions, simplifications, neglected  aspects  and  its  historic context.

Which Framework to Use?

There is no one best management model, and there is no old set of principles that needs to be  replaced  by  a  new  set. Rather, there  are choices  to  be  made, and the appropriate choice depends on a host of circumstantial and competitive factors.

The companies that generate competitive  advantage out of their  management  model  are those that make conscious and distinctive choices about what principles to follow.

What they can do and what they cannot do

Management models and tools – as the SWOT or the 7s-Model – are  used  controversially. Some  people  applicate them as important tools for  analyzing  businesses and developing strategies. Others call  them  “buzzwords”, used  by  consultants  to  boost their profile. The truth about the value of management models probably lies somewhere in between. So what should you take into consideration when using models?


One Size Does Not Fit All

Here are some frameworks that consultants and business analysts use, and that you might
consider adding to your own set of tools.
 

• Benchmarking
• Balanced Scorecard
• Porter's Five Forces
• The GE-McKinsey Nine-Box Matrix
• The BCG Growth-Share Matrix
• The PEST Analysis
• The SWOT Model
• The 7S Model
• Vision, Mission, Values Statements
• Core Competencies
• Reengineering
• Strategic Alliances
• Growth Strategies
• Customer Segmentation
• Customer Satisfaction
• Outsourcing
• Change Management
• Strategic Planning

Solver Corporate can help you select which management models best fit your problem
solution.

Recommendations for using management models and tools
 

• Never base your decisions just on one single model.
• Never trust a model blindly, only because it proved worthwhile in the past.
• Be careful with models that are in fashion.
• Never rely on a model just because everybody else does it.
• Make sure all users have the  same  understanding of the model, its applications and limitations.
• To summarize it: Carefully select a  set  of  models  that  complement each other and  that fit your business, your industry, your objectives, and your teams working style.

Key Performance Indicators (KPI’s)

Key Performance Indicators (KPI’s) are  one  of  the  most  common tools of performance in business.  They  are  used  to  measure and monitor the most influential business elements that are critical  for the success of your business.

Identifying and implementing KPI’s will help focus and break down the core activities of your business, and  monitor  their  progress  over  a number of periods.  KPI’s are also useful in highlighting potential problems, and identifying opportunities.

Solver Corporate  can  help  you to identify  and  measure  the  important factors in your business.

Benchmarking

Benchmarking lets you compare your performance against  other similar businesses in your industry.  This  will  show  you whether your performance is stronger or weaker than that of your competitors, and will  give you a clear picture of where you can increase your financial performance.

Benchmarking will:
 

• Compare your business profits with others in the same industry
• Identify where you can reduce costs and improve efficiencies
• Forecast the impact of any changes and see how to prepare for growth.
•  

Regular Reviews

At Solver Corporate, we will work with you to benchmark your business, assess the financial health of your business and develop a range of Key Performance  Indicators (KPI’s)  critical to your business. This  will  also  help  with tax planning for your business in order to reduce
tax payments to a minimum.

Then with regular reviews, the KPI’s are used to  monitor the performance of your business. Rather than waiting until it is too late, regularly reviewing your KPI’s will provide you with the necessary information you need to keep your business on track.

Analytical Tools

Solver Corporate  uses  some  tools  and  frameworks throughout the corporate finance, business performance, and transactions processes  to  achieve  optimal results. Tools used to  identify  key  strategic  issues  include  customer  research,  competitive  benchmarking,
technology evolution mapping, market segmentation, and scenario analysis.

To help shorten working cycles, Solver Corporate uses some of the latest analytic tools and technology  to  speed  up  and  support the consulting process. We use analytic techniques including financial and equation modeling and build predictive modeling simulators. We use
Monte Carlo simulation and neural networks to validate  which among several strategies will be  the  most  effective  in the market place so they can measure individual or business unit performance instantly and continuously.

Contact  Solver  Corporate to help your company  confidentially explore Management Tools and Models Solutions.