AIM – Activity Information Modeling
AIM – Activity Information Modeling captures the activity as the nucleus of organizational endeavor. It then structures other data attribute fields that are needed to analyze and solve the specific problems and goals of the client. Finally, it calculates activity time, cost and incidence metrics that all fields and data points inherit.
The AIM database is quantitative and supports a wide array of analyses, from the the most granular process activity operations level to global customer segments strategic level.
Activity Information Modeling Concepts & Principles
- Activity Information Modeling is based on the principle that the activity is the primary core element of all endeavors, like the nucleus of an atom.
- Understanding the activity, what occurs, what is achieved, why it occurs, who conducts it, its time, financial and incidence metrics, and other attributes, provides a new and powerful way to understand all facets of an organization, customers, products, processes and resource,(CP2R).
- All activities are quantitative and homogenous, thus inherently creating a natural array of datapoints to construct a quantitative data cube with time, financial, and incidence metrics.
- Every field and data point in the AIM data cube is related to an activity, and inherits its time, financial, and incidence metrics. This activity-based data is transformed to “information” – facts that convey knowledge. For instance, a simple product list will have time and financial metrics that identify the product with the highest cost, the lowest resource time, etc.
- The AIM Data cube depicts a cube with 24 facets, each facet containing more than 30 segments (rows). This picture makes it easier to imagine an AIM database cube.
- Variable bias risk, the statistical risk of creating a data variable list that favors an outcome, is eliminated with a reverse design process that starts with the clients’ new results goals. The AIM design process is part of the proprietary intellectual property that is in the Private Pages section.
- The descriptive attributes of an activity are extensive, technically they are infinite. Activity Information Modeling can provide a broad range of information about any thing, any existing situation, and any potential situation.
- AIModels are created with a +98% confidence factor, often higher. Traditional consulting data has at best, a +/- 70% confidence factor because 1) the sample sizes are very small 2) the data is qualitative 3) variable bias risk is very common because of cost constraints. AIModels are built with thousands of quantitative data records, each record having 20 or more data points.
- AIM data are collected with Orient Point’s “AIM Sampler”, a random sampling application that captures work data wherever and however employees are working. Data can be collected simultaneously from an unlimited number of people, in an unlimited number of locations, on multiple continents and in multiple languages. Until delivered to clients, the AIM databases reside on Orient Point’s servers which fully comply with all international jurisdiction regulations for highly protected personal information.
The AIM Data Cube
This cube structure depicts the data cube that Activity Information Modeling uses.
This example lists common data and metadata fields that are frequently used. Any data attribute field can be incorporated into an AIModel. We have never failed to be able to provide a client with unique information that they needed for their analyses and decision making.
CP2R is our acronym for Customers, Products, Processes, and Resources. This is the primary scope and focus of a typical AIM project with an operations unit, defined as units that produce and deliver products and services. This scope is far broader than traditional consultant’s scope.
Traditional consultants select a single area such as process and only work on that. They don’t assemble information about anything beyond the small area they’re focused on. This results in recommendations that are not feasible because of unaccounted impediments and constraints in other areas. This small scope also produces small tangible benefits.
AIM projects have also been conducted in staff functions such as Accounting, IT, HR, etc. with much success. The scope of a staff AIM project modifies our usual CPR scope.
Customer AIModels
Customer AIModels provide time and cost information about customers, customer segments, and customer activities.
The customer models are used to understand the customer segments, and often note those that have the lowest and highest ROI. It’s common for our clients to modify their target markets/customer segments, sometimes even eliminating a segment because they discover the low profits it produces.
Product AIModels
The product models are used to compare all products to find those that produce the highest and lowest margins.
The AIM product model information makes it easy to see a complete 360-degree view of the cost and resource capacity requirements for the entire product portfolio in one simple report.
Process AIModels
The process models provide information about lost productivity, poor quality and retention areas. These are generally quick, simple fixes that only require simple operation changes.
Chubb Specialty, the specialty lines division of Chubb Insurance in Simsbury, Connecticut, used their AIM process models to design a tri-track renewal process that produced a large, multi-year growth spurt, increased their productivity over 50%, and achieved record high customer retention rates.
Resource AIModels
The resource models explain how every minute of the entire organization’s resource capacity is consumed by customers, products, and processes. This information is used to improve job positions, organization design, and resource performance.
AIM Exhibits
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CP2R Exhibits displaying customers, products, processes and resources.
Performance Metrics & Ratios give managers a wide array of information about productivity, ROI, capacity consumption/requirements, cost ratios etc.
One of the most powerful aspects of AIM metrics and ratios is the comparative reports that show the best and worst performing departments, processes, job positions, such as the product with the highest productivity. They highlight those areas needing improvement and those that should be replicated.
Activity Information Modeling exhibits that demonstrate some of the capabilities.
Activity Information Models For Staff Functions
AIM is usually used for operations, the units that produce and deliver products and services to customers. After the AIModels are completed and the analyses are well underway, we let staff departments know about the AIModels that are available and we show them how to use them. In some cases, such as Accounting, they want the AIM product cost models to replace their current cost models.
While the staff use of AIModels is collateral utilization, it can achieve some very meaningful cost benefits while expanding the knowledge capabilities of these units.
Accounting & Finance use our cost models for their reporting and forecasting. They find the cost ratios and metrics especially useful for budgeting.
Human Resources use AIModels to document the scope of job positions, exactly what each job actually does, how they do it, and the skills and trainingthat are required.
Marketing uses the Product AIModels to create growth program scenarios and portfolio balancing that optimize product portfolio profitability. This is almost always a totally new capability for them that can have asignificant impact on company profits.
IT uses AIModels to understand how systems are used and by whom. They can also spot redundancies in their technology infrastructure. Finally, they can see the processes and activities that need greater automation and technology and what the ROI would be if they build them. Our first project with Citibank in 1999 found 7 separate systems that all handled the same transactions for groups of similar credit products. Citi Ops managers and IT managers immediately consolidated the 7 to 3 systems and reduced these to one system within 18 months. This small peripheral finding, unrelated to the project’s goals, produced annual IT savings over $250,000.
C-suite executives use AIModels to compare units’ and locations’ performance with metrics such as productivity and cost per 1K of revenue. Our succinct performance metrics helps them understand what actually drives growth and profits in their businesses.
Comparing Time & Motion Studies to Activity Information Modeling
Frederick W. Taylor invented Time and Motion methodology in 1881. He is considered the father of Scientific Management because he conducted process studies and created fact-based management information.
Time & Motion is a method that was invented to calculate a “standard” time that an activity or process
should take. It sets this standard as the expected time that employees should complete the activity or process. It uses stop watch timing to time activities. It is most effective in operations where the activities are always predictable, identical and the outcome is the same, such as manufacturing physical products. It can still be used today for operations with few activities.
T&M requires accurate volumes to calculate total times. This is available in manufacturing where the number of processes, completed operations, and products produced is known. It is not available in most service operations where processes vary depending on the condition and needs of customers. For instance: an insurance auto claim process might have 3 steps or 33 steps, depending on a large number of variables that can affect what a claims examiner has to do to settle it.
Activity information modeling creates information about the entire organization, customer product, process and resource information, referred to as CP2R. AIM models also proof with the General Ledger. AIM does not require volumes to calculate time and cost.
Random Sampling & AIM Comparison
Random sampling is a statistical method for collecting data. At random times it collects data, called a sample. Random sampling is only a data collection method. Traditional consultants also collect data with surveys and interviews, observations, and by obtaining transactional data from clients production and distribution systems.
AIM employs random sampling to collect data from employees as they work. AIM has a structure that makes the data highly valuable information that is easy to use. For instance, AIM process modes have Force 5 metadata that classifies every activity into one of five types. Citibank used its AIM Force 5 models to analyze how much time its branch personnel spent on management activities, relationship activities, knowledge activities and transactional activities.