TOCAT introduction

What is TOCAT

TOCAT is a way of Theory of Constrainsimplementation into IT services business in OpsWay opinion. We believe that TOCAT processes and automation could dramatically increase your profitability through creation of local operational excellence which can double productivity of your employees.

Also, TOCAT reveals your constrains – not effective production employees or even production structures inside company.

The issues we’re solwing with TOCAT

For company:• Boost CashFlow of your company• Boost financial incomes of your company• Minimisation of production debts• Be faster than your competitors

For employees:• Clear vision of what you should do to earn more• Realtime feedback about your results• The reasons to work as a team and not as an individual• Be fast and effective

The main result of TOCAT

The VALUES are becoming synchronised for Client, Employee, Management of IT company.

Client wants to finish the project ASAPDeveloper really care to finish project ASAP

PM wants to finish project ASAP

TOCAT step 1: creation of teams

Your production have to be restructured to several teams with following rules:• One team – one manager• Not more then 10 persons

inside team• Manager earns bonus (5-15%)

from team first margin• Independent budgeting and

management

OpsWay 1OpsWay 2

OpsWay 3

Central Office

OpsWay 4

TOCAT step 2: personal bonuses

Let’s say your ideal Developer have to earn 5000 Units (U) gross and create of 130 billable hours per month. This means that your ideal developer have 38U hourly rate.

Let’s say that you need to have 50% of first margin. It means that inside this model your minimal rate to your customers will be 76U – good to know

Suppose you have junior developer with gross salary 2000 Units. Tell him that starting from today he can earn up to 5000 Units.

TOCAT step 2: personal bonuses

Your developer with 2000U gross and 21 working days in a month costs you 95U per day.

With internal rate of 38U he need to close just 2.5 billable hours per day to get its salary. If he will close more – this means he is closer to “ideal developer” and current salary is not relevant to his productivity.

Make a daily balance for each developer:Salary – XUnits/dayValues created – Y hours * 38UBonus balance: (Y hours * 38U - X) + Balance statement – this is the bonus he can earn today

TOCAT step 3: team bonus balance

Team balance – is a summary of personal balances of team members. Team balance – this is the maximum what Company can pay as bonuses now.

Confused? Better to see an example!

Play with Excel and see formulas here:

https://drive.google.com/file/d/0B1-99de0PTKXaWV6eVFiOERrWWc/view?usp=sharing

- 200.00

- 100.00

 0.00

 100.00

 200.00

 300.00

 400.00

1 2 3 4 5

Developer 1

Developer 2

Developer 3

Main rule

Task is done = accepted and paid by customer

TOCAT is already integrated in OpsWay

We made a video presentation to employees

We made TOCAT billing pilot using Zoho Creator

… integration with Redmine

And we’ve got first results after2 weeks

TOCAT showing lot of hidden issues

• We’ve found that around 10-15% of job were provided for free to clients and decisions were made by developers and not managers

• We’ve found some of employees can’t generate turnover even for 10% of their salary (this was hidden before thanks to their communication skills)

• We’ve seen that some of our teams have very poor workload even they’re profitable and the number of hours sold is bigger then number of hours team have

• We’ve found that using of Scrum is dramatically important for teams balances (iterations of acceptance and payments – only one way to keep balances positive)

…. and much more

Developers show understanding of goals!

“What I can do if my work is finished, but customer still didn’t accept my project?”

“Can I participate in interview of new developers, I don’t want to have negative balance due to wrong HR decisions”

“Why my balance is negative? What I did wrong?”

“I don’t want to have bigger salary - it will give negative impact to my balance”….This is a dream of manager – have such level understanding from production staff side!

Basic Workflow

Project Manager have to create an Order

Invoiced Budget – this is the budget sold to customer

Max Allocatable Budget – this is the budget allocated to team

(Invoiced Budget – Max Allocateble Budget)/Invoiced Budget = First Margin Rate

Create financing for tickets

You can provide finance using allocated budget of your team orders. TOCAT is integrated with Redmine for simple order creation and budget allocation.

Accept the ticket

After ticket is closed and confirmed by customer – Project Manager have to “accept” it in TOCAT and set resolver of this task.

Paid orders

Your bookkeeper have to set the order as paid after money received to your Bank account.

After this action for all accepted tickets linked to this order will be created following transactions:• Update of “resolver” balance• Update of team balance

Salary payments

TOCAT is integrated with shiftplanning.com. Each time approval in Shiftplanning creates salary transaction inside TOCAT. Each salary transaction creates:• Update of bonuses balance• Update of team balance

Commercial versionwe’re developing

Single Tenancy Basic Architecture

TOCAT Client DB TOC

AT

A

PI

UI for Service companies

Reporting DB

DA

SHB

OA

RD

Features

• Extensions for: Redmine, Jira OnDemand, Jira Server• Responsive User Interface for non-IT companies• Extended reports using Business Intelligence tools• Integration with QuickBooks• Basic TOCAT features• TOC analysis tools (constraints analyses, employees

comparing, teams comparing, KPIs analyses, sales buffers analysis)

• TOC forecasts (CashFlow forecasts, Workload forecasts based on team velocity)

• Management alerts based on pre-setted indicators

We know that you’re still having more questions then answers .

Write me to semor@opsway.com