Simple Value Chain
SCIO Decision Intelligence Framework
A simple value chain for value delivery exists within asset-intensive organizations with an often overlooked element that drives collective capability.
Asset management is the coordinated activities of the organization to deliver value from its assets. We accept that our organization has people, business processes, and technology (as well as financial resources) at its disposal. What’s missing?
Every organization, whether a financial service company or another, has people, processes and technology. The unique feature of asset-intensive organizations is they must apply those elements through their assets to generate value.
The people, processes and technology (PPT) framework has existed for 60 years. A successful business capable of change must have all three elements working harmoniously. Have people with the right attitudes, behaviours and competencies in the right positions. Employ quality business processes to assign responsibility and expectations for what should be done and how to do it. Apply technology to support the organization’s ability to perform its functions efficiently and effectively. For industrial and infrastructure sectors, we add tangible or intangible assets with the potential to create value to the traditional PPT framework.
We deploy our vast and scarce resources to manage essential asset costs, performance and risk. Those allocations are choices and decisions on the organization’s activities, what to do and when (or not). In aggregate, the activities from decisions determine the organization’s performance to deliver financial and non-financial value from its assets.
In most organizations, decisions and decision-making are not a thing. Sure, we know intuitively that decisions exist and are necessary, yet they are elusive. Every activity we undertake is a result of some decision at some point. Yet we often cannot draw a line from the action to the decision.
We don’t often record the decision or how it was made. Who made it? When? With what knowledge? What options were considered? What problem was it solving? How do we know then that the best decisions were made at each opportunity? We don’t.
This inability to see the organization’s decisions and how they are made is a major source and root cause of value leakage. Why? Without quality decision-making, there’s inefficiency and ineffectiveness in the activities we undertake. Suboptimal decision-making means resources are not directed to the highest-value activities.
The key to improved value delivery is better quality decisions. Decisions and decision-making are the essential and overlooked element that binds everything in our simple asset management value chain. Without them, the organization cannot maximize value delivery.
An organization’s ability to deliver value is governed by the collective capabilities of its people, the quality of productive processes, and enabling technologies with quality decision-making to direct vast and scarce resources toward higher-value activities.
Decisions and decision-making must be a thing in organizations seeking operational excellence.
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