Worldwide Consulting
Defining Expectations
Delivering Satisfaction
By John Ranyard and Robert Fildes
In most types of organizations, operations research skills can be used to improve decision-making in significant ways, leading to reduction in costs, improved profits and a better understanding by decision-makers of the consequences of alternative actions. In some industries, however, OR skills are recognized as essential for competitive success. These include:
- transportation (e.g., yield management and crew rostering in airlines and, increasingly, in rail transport),
- hotels and leisure (yield management),
- financial services (e.g., the development and use of credit and risk scorecards for lending decisions),
- data-based marketing (e.g., data mining), and
- logistics (e.g., global optimization of manufacturing and the supply chain is becoming possible).
Sometimes the necessary OR skills have become institutionalized within the management structure such that not all of the staff engaged in the analytical work see themselves as belonging to the OR community. This is a major challenge for national OR societies.
Obtaining Projects
Operations research is a form of expertise that is not widely understood by many decision-makers, and so it is important to generate awareness among potential clients, not only of the capability of the OR expertise but also in its effectiveness. Capabilities include the skills used, such as OR techniques, statistical analysis, model building generally and perhaps alternative methodologies too. In other words, what unique skills does the consultant possess compared to the decision-maker's own staff? Secondly, how effective has the consultant been in undertaking projects for other clients with similar problems? The marketing of OR needs to address these issues.
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A key finding in our research, which covered 43 in-house OR groups, was that all groups, including the most successful ones, felt that the marketing of their services could be improved. In fact, poor marketing was given as a major reason for the closure of several groups. Marketing can take many forms, including the use of brochures and leaflets publicizing general and specific services, making formal presentations to potential clients, and holding informal meetings so as to understand the client's problems better.
Any marketing, however, should be sensitive to the culture of the client's organization. Thus, it helps to cultivate "OR Champions" in the client organization, i.e., those who understand and appreciate the value of OR and who might advise on the best manner of interacting with the organization's culture.
In geographically dispersed organizations, some in-house OR groups "outstation" staff from the central group in order to be close to the decision-makers and to facilitate an understanding of the local work culture, current issues and problems being faced.
In terms of a consultant's effectiveness, it is usually helpful — and sometimes essential — to seek endorsements from previous clients on the successes of OR when applied to the sort of problems similar to those of a potential client. A successful and validated track record can be a very helpful way of persuading a prospective client to commission a study.
Carrying Out Projects
Our research identified two major potential weaknesses in OR staff in carrying out projects: consultancy skills and project control. These weaknesses were acknowledged by both clients of OR and by managers of OR groups. Consultancy skills include the ability to:
- interact sensitively with client management at all levels,
- write effective reports and give effective presentations,
- gain a rapid understanding of the complexities of the client's problems and the prevailing organizational culture, and
- be aware of when short-term pragmatism dominates the value of longer-term detailed modeling.
Most OR managers recognized the importance of consultancy skills in selecting recruits and most groups provided some training in consultancy skills while acknowledging that more could be provided.
Project control involves the development of a plan to ensure that the project is completed within the timescale agreed with the client. For major projects, this would include milestones along the way at the agreed cost. Most OR groups in the survey had some form of project control but often this was informal, which could lead to difficulties when unexpected situations arose, such as key information not being made available on time. While external consultants were thought to be better at formal project control, many of the in-house OR managers in our survey stressed the importance of close and regular contact (informal and formal) with the client. Some aimed to deliver useful benefits as early as possible (and also under-promising and over-delivering) so as to help in developing good client relationships.
Implementing Solutions
In our research, all 43 OR managers rated "satisfied clients" as the most important factor influencing the ongoing success of an OR group. This is perhaps because implementation of the results of an OR study is often outside the control of the consultants involved. A satisfied client is one who is likely to request further projects, and all OR groups believe that it is cheaper and easier to generate repeat projects from an existing client than a project from a new client.
Implementation is, of course, vitally important to project success, and a few OR groups use formal problem structuring approaches that aim to improve the chances of effective implementation (such as Soft Systems Methodology, see Rosenhead [1988] for a description of the more popular ones). The use of such approaches can also help to identify everyone involved in the problem (some of whom may be remote from the main client) as well as aid the management of client expectations.
Worldwide Relevance
While our research has concentrated on internal OR groups in the U.K. only, we believe that some of the key results have relevance to worldwide OR consultancy. In terms of setting up international OR projects, it is important that both the capability (the unique OR skills) and effectiveness of the OR resource is understood by potential clients. It is imperative that the culture of the client organization — and, of course, that of the country in which it is based - is understood, so that any marketing or selling activity is sensitive to that culture. Thus, consultants should explore ways of understanding the culture, which might include developing partnerships with locally-based personnel and encouraging "OR Champions" in the organization concerned. Endorsements by clients will almost always be effective.
In terms of finishing international projects, involved staff members need to possess strong consultancy skills as well as competent OR technical skills, so that, again, they can interact sensitively with the organization's (and country's) culture. Project control (i.e., ensuring that the project activities are carried out at the agreed time and cost) is also important, and consultants should inform the client immediately if departures from the plan are likely to occur.
Ideally the OR staff should maintain close contact with the client, both formally and informally, to ensure that unpleasant surprises do not occur. (You are, of course, allowed pleasant surprises that "delight" the client!)
Finally, implementation of project recommendations is often outside the control of an OR consultant. Since implementation starts when the project starts, it can be helpful if all the stakeholders involved in the study problem can be identified early, as some may be remote from the direct client. Problem structuring approaches can often be helpful. Any actions that lead to client satisfaction, such as delivering useful benefits as early as possible, are likely to facilitate implementation.
References
- Ranyard, J.C., Fildes, R. and Crymble, W.R. (1995), "Report into the investigation into the Success and Survival of OR Groups," Lancaster University, Lancaster, U.K.
- Fildes, R. and Ranyard, J.C. (1997), "Success and survival of Operational Research Groups - a review," Journal of the Operational Research Society, Vol. 47: 336-360.
- Ranyard, J.C. and Fildes, R. and Crymble, W. (1997), "The death of an Operational Research Group," Journal of the Operational Research Society, Vol. 48: 361-372.
- Ranyard, J.C. and Fildes, R. (1998), "Winners and losers," Journal of the Operational Research Society, Vol. 48: 355-368.
- Fildes, R. and Ranyard, J.C. (1999), "The management of OR groups: results of a survey," Journal of the Operational Research Society, Vol. 50: 563-580.
- Fildes, R. and Ranyard, J.C. (2000), "Internal OR consulting: Effective practice in a changing environment," Interfaces, Vol. 30:5, 34-50.
- Rosenhead, J.V. (1988), "Rational Analysis for a Problematic World," Wiley, Chichester.
John Ranyard and Robert Fildes are professors at Lancaster University in Lancaster, U.K. Ranyard is a former manager of a large, successful in-house OR group in the United Kingdom.
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