Sourcing Shangri-La

BPMN 2.0 and the Scissor Sisters

Just before BPMN 2.0 and the Scissor Sisters set on Saturday night, a quick apology to followers of this blog who were among the 180,000 revellers at the Glastonbury Festival this weekend. 

It must have been bitterly disappointing to find that the new Shangri-La area at the Festival is in fact nothing to do with this blog, but instead an area dedicated to drum and bass enthusiasts.  A shameless attempt to ride on the back of this blog's success. Needless to say, this blog's lawyers are already on the stopping train down to Somerset. Michael Eavis watch out.

On to more serious things. I seem to be developing a reputation as a BPMN skeptic. Which is a surprising position for me because I'm all in favour of collaboration and I understand the value of standardisation.

But I was uncomfortable with excitement among some of the Twitterati on Friday about the OMG Architecture Board's approval which, subject to some minor formalities, means that BPMN 2.0 is now a formal standard.  

I was quietly despairing that the Big Vendor marketing machines will now kick in, with huge claims for BPMN 2.0 as a complete global BPM solution.  Group-think will then make BPMN 2.0 compliance mandatory in many organizations.

I was reflecting what a pity this would be, what a waste of time.  It may take several years for the realisation to grow that BPMN 2.0 cannot do this.

Then I heard the intro to the Scissor Sisters set, which was inspired by Glastonbury Tor [a place where, legend has it, Jesus once walked - the inspiration for William Blake's poem]. 

It was a heart-felt and moving appeal to the crowd to 'be together in the moment, and for eternity'.  It made me reflect how much people long for unity and solidarity, and to be part of something bigger and purposeful. 

And - sad but true - my thoughts turned back to BPMN 2.0 and I found myself feeling more kindly towards its zealots. The truth is that many BPMN 2.0 enthusiasts simply want to contribute, to lend their support to something progressive - and there's nothing wrong with that.

My own view remains though that BPMN 2.0 is great but not in itself sufficient as a platform for sustainable process excellence.  Organizations need two equally important views of their reality. The left-brain IT and EA view and the right-brain Business Operations view - synchronized through a corpus callosum.

In that context, BPMN 2.0 is an improved language for the left brain. And that's great so long as we never confuse it with the whole organizational mind, which requires the right-brain view as well if it is to reach its full potential.

So, in the spirit of the legendary Stevie Wonder, who did a brilliant and joyous finale to close Glastonbury this year - Big Love to BPMN 2.0.  I'm a lovin' skeptic. 

Great Analytics? Start With The Process

I have a pair of chunky cord trousers in sunset gold that I'm very fond of. They were trendy when NBC aired the first edition of Friends. Until this last winter, it seemed my wife was going to be proven right: they would never be wearable again. But then, suddenly, thick cords were back and I was, for a moment, near the edge of the fashion curve.

It's a bit like that with Analytics, which was hot ten years ago then somehow disappeared from view. But it's back with a vengeance. These days, Analytics and BI are de rigeur.

What was the #1 business priority cited by 138 senior outsourcing buyers in a serious market survey published this month? Analytics.

So it's disturbing that a lot of people continue to look in the wrong place for the answers about Analytics. 

They significantly under-estimate the importance of process. They think of Analytics and process as being different worlds;  whereas actually they are intimately connected:

• How could I ever know if a process is working without smart metrics?
• What's the point of a metric if it doesn't measure performance of some aspect of a process, and provide me with intelligence about how to improve it?

Accenture's marketing push this week Getting Serious About Analytics does recognise that high performance is built upon process 'discipline'.  But Accenture's analysis of the five most common challenges in Analytics barely mentions process.

I've pasted below my comments in sunset gold on the five most common challenges identified by Accenture:

1. Focus on the wrong metrics, or too many metrics. Too often, firms fail to map metrics against the key drivers of their business.
Agreed.  But how do we know which metrics matter, and which ones are useful leading indicators, not just rear views? Surely only by looking at the end-to-end process...

2. Over-reliance on technology. Companies frequently build a data warehouse and then neglect to put analytical tools in the hands of the right people.
Agreed. The stakeholders must define the metrics that matter from the process, after which it's a selection of the appropriate BI/Analytics platform.  

3. Inability to select the right data. Managers are presented with too much data of multiple types. Without a proven process for selecting the right data, identifying important patterns is virtually impossible.
Agreed.  But you don't need 'a process for selecting the right data'.  You need to start with a view of the end-to-end operational business process, then define the right metrics by asking questions like: 'How would we know if we were being successful? What would be the indicator that warns us if we are going off track?' 

4. One-off, point solutions. Analytical solutions must be connected to business processes or their influence will remain limited.
Agreed. 100%

5. Cultural resistance.Many managers—particularly those who came of age 30 to 40 years ago—continue to rely on intuition and judgment. While valuable, these qualities remain limited until combined with the rigor of fact-based analysis. 

Ouch! I'm one of those who "came of age 30 to 40 years ago".  Not wholly convinced myself that it's just us oldies who are leading the cultural resistance to fact-based analysis.  But hey, there I go, relying on intuition again ;-) 

Outsourcing: The Three Pillars of Continuous Excellence

Across every sector, outsourcing continues to grow. Not just peripheral activities either, but core processes as well. Effective management of the outsourced environment is becoming an absolutely critical capability for any enterprise.

The basics are largely in place, although there is some way to go. Tony Rawlinson, Managing Director at Equaterra wrote recently that - even in financial services, where regulatory oversight on outsourcing management has been far more intrusive than elsewhere - many firms judge their own governance capabilities as being 'weak'. He continues:

"In part this is due to ineffective governance design and accountabilities, but mainly it is attributable to inadequate processes, tools and capabilities which allow part of the value of outsourcing deals to leak away."

He's right. Too often,the processes, tools and capabilities required are under-estimated so that even basic governance is inadequate and inefficient.

Anyway, even if an organization has the basics in place, that's surely just the start.  It's vital to retain the ability to migrate outsourced services back in-house if necessary: but, let's face it, that's an unlikely scenario. 

The business-as-usual reality is that there will be continual incremental change.  Activities will expand or contract in response to business requirements. Activities will be shifted offshore and between different facilities. The footprint of activities delivered by service providers will shrink or grow according to their performance. Outsourcing providers may have contractual obligations to propose innovation within their own domain. And there will be ongoing systems upgrades and other IT-driven change.

But, beyond and in addition to all of that, the organization will want to drive continual improvement. It will want to orchestrate continuous excellence across every aspect of its operations.

My experience with clients suggests that there are three essential pillars required to support continuous excellence across the outsourced environment:

One Shared Truth: shared visibility of the end-to-end business processes, within an integrated model of the enterprise.

Stakeholder Adoption: a shared rich what-if analytical framework where stakeholders evaluate potential improvements, within a robust but practical governance framework where ownership and accountability are clear.

Synchronicity: the theoretical view of the business must always be in step with the operational reality. The best way to achieve this is to publish the theoretical view as a personalised 'intelligent operations manual'.  This provides end users with valuable task support for their day-to-day role, reinforces process as the language of the enterprise, and fosters universal participation in performance improvement. 

I hesitate to appear dogmatic, and you might want to label them differently, but I don't see how any organization could be successful in delivering sustained continuous improvement across an outsourced environment without these three essential foundations...   

The Leap From BPM to Continuous Excellence

Every organization on the planet wants the capability to deliver sustained continuous improvement [or 'continuous excellence' as Nestle has neatly defined it].

There is a delusion around that 'BPM' will deliver this. The truth is that it's a very significant leap from 'BPM' to Continuous Excellence. 

Just for a start - there is hopeless confusion about what 'BPM' even means. There has been a stream of newsletters, blogs and forum discussions recently about re-defining BPM. Is it a discipline, a way of thinking?  Or is 'BPM' workflow or automation, a systems project? Both it seems, and more. 

But this confusion about what 'BPM' even means is only the beginning. Jim Sinur at Gartner set off an interesting discussion with a post on his blog about 'Elastic BPM'. 

This is where a BPM project delivers "a cost cutting and even innovative process that works for a while before the organization snaps back to traditional behavior." 

Jim's post illustrates how many BPM programs are poorly conceived or failing to deliver. His research for the Gartner 2010 Magic Quadrant suggests that 'snap-back' is common:

"many organizations save money, time and optimize resources, but they find themselves having to double back in order to make sure the people involved with the processes stick with them and don’t fall back to the old habits or try work around alternatives. Sometimes this is because the process needs to get better, but often it is just resistance to change."

The comments on Jim's post endorse his findings, and offer the usual diagnoses and remedies. They boil down to this: that the business is not effectively engaged with process so there is no framework for effective collaboration between IT and the business. 

As a result, business requirements are missed, IT usually takes the lead and the business feels like change is being imposed. So snap-back happens once the project is closed, and the project 'benefits' begin to get eroded through work-arounds. Resistance continues and the forces of 'revertia', to quote Gartner's Diane Morello, take over.

So the crunch question - the question from any C-level perspective - must surely be: How does an organization move from having a BPM strategy and a BPM project portfolio [which must be the case right now for 90%+ of organizations] to having the capability to deliver sustained continuous improvement [which must be the case for barely 5% of organizations]?

The answer: it's a huge leap because it's about culture and organizational maturity. You can't run an RFI and buy it. There are no 'continuous excellence' vendors you can simply pay to install it.  It's about developing a culture of engagement with process and performance improvement across the enterprise. It's about long-term and joined-up thinking, where everyone is playing a part in continuous innovation. 

Which leads me to a claim here that I've made before: Sustained continuous improvement has to be underpinned by an enterprise-wide collaborative framework, which provides:

- integrated and end-to-end views of its business processes

- a governance wrapper that ensures ownership and accountability

- personalised views to support end users and enable them to get involved in change

- features to facilitate the management of change.

This is not just the next step for BPM. 'Revertia' is a lament commonly heard from the Lean and Six Sigma communities as well. They intervene, do a 'great' improvement project and leave. But over time the business tends to snap-back to its former ways.

A continuous excellence culture underpinned by a collaborative framework of this kind embeds incremental improvements in the new DNA of the business.  It becomes the new 'way that we do things'. It reduces revertia and minimises snap-back. 

From the COO perspective, it becomes"how we bank the ROI", in the memorable phrase of a client presenting at a Nimbus conference last year.

Shared Services Optimization, ERP and the World Cup

What's the second most effective optimization tool for shared services, after having a single ERP platform? End-to-end process visibility and ownership. That's not me saying so - it's research findings from Hackett, the benchmarking experts, presented this week at the SharedServicesLink.com conference in London.

Contributions from a wide range of organisations - including Barclays, SAP, Honeywell, Virgin Group, IKEA and HP - described a familiar roadmap and journey. From multiple systems towards single consolidated ERP platforms; from many variant processes towards global processes with managed variants; from fragmented governance and high compliance costs towards efficient governance.  

The Hackett findings were reinforced throughout the conference. The pain caused by the lack of end-to-end process visibility and ownership was a recurrent theme. 

I'm not going to embarrass individuals here, so no attribution, but here's three genuine remarks, from sensible people in three major organisations: 

• "We've got the system in - now we're going to focus in the coming year on 'how do we make the process work?'".

• "There's no point just asking IT: 'what does the system do?'. The real question is:'What do we want it to do? That's what should drive things'".

• "We're putting in the new system this year. So it will take a lot of time and effort to get ourselves back on track."

I'm not talking down the efforts and achievements of some visionary leaders in this area.  But it's plain that, for most organizations, we are still a long way from business-led transformation, where the requirements of the business and its processes drive change, rather than old-school systems-led transformation.

On the first day of the 2010 World Cup, the analogy has to be from soccer. Imagine a football manager who focussed totally on the strength, fitness and technical skills of his squad. He ensured that they were the biggest, fastest and most agile players in the world. But would they win?  Probably not. Strength, fitness and technical skills are absolutely vital, but success depends upon understanding the bigger picture of strategy and tactics, leadership and team morale.

In the same way, ERP platforms are critically important to shared services success.  Getting to a single consolidated ERP platform is absolutely vital. But doing that well, and optimising performance once it is in place, requires an understanding of the bigger picture.

End-to-end process visibility and ownership is crucial in requirements definition, in driving standarization and enabling the management of variants.  It's the framework for cross-silo collaboration on the management of change. Wrapped within a governance framework, it's the best way to integrate the 'live' business processes with business controls and compliance. It enables 360 degree visibility of the the roles and responsibilities where activities are outsourced.  And it's the only way to deliver the whole thing to the audience of end-users as a personalized 'intelligent operations manual'.

Imho you can't get elegantly and efficiently to a single ERP platform without end-to-end process visibility and ownership.  And it's indispensible for ongoing optimization. 

PS nice story from the conference. The Caterpillar speaker was explaining why they hadn't been able to get 100% compliance on their e-invoicing program from their suppliers in Europe.  One of the suppliers to Caterpillar's HQ offices in Geneva, Switzerland was deemed essential but was unwilling to comply because they have no computer access and no email address, and no intention of doing so: the yoga teacher. 

Nimbus Case Study: BBC Finance Shared Services - 'Easy on the Eye'

Yesterday's webinar on the BBC's Finance Transformation, hosted by SharedServicesLink.com, was great for all the right reasons - but especially memorable because it brought us a new definition of great process.

Owain Jones from the BBC talked in depth about 'How2', the BBC Finance implementation of Nimbus Control.

For BBC Finance, How2 is a process management platform that is enabling:

• huge efficiencies through process standardization and tighter variant management
• further efficiencies through self-help in user training and task support
• more sophisticated management of the outsourcing mix
• a business-led approach to its SAP upgrades
• the drive for CMMI Level 3 certification and a culture of continuous improvement.

All cracking stuff - but what really stood out was when Owain mentioned the challenges of working with creative people. He talked about the importance of the graphical user interface they designed into How2 from the start. How a graphical interface had led to "lightbulb moments" in process workshops when people realized that their common process was actually five processes.

And then Owain went to say that the design team had been determined to create "process that was easy on the eye".

Call me small-minded, I loved it.  'Process that is easy on the eye' - that has got to be the new gold standard for anyone who cares about the adoption of processes by end users.  I tip my hat to the man from the Beeb.

This case study demonstrates again that, in shared services as elsewhere, being able to see the end-to-end process is absolutely crucial. It was one of the key points in McKinsey's analysis of How To Make Cost Cuts Stick. 

And worrying about look-and-feel may seem a bit OTT at first, something of a diversion from the real work. But actually the evidence is stacking up that the end user interface is one of the keys to successful deployment and real culture change. 

To access a recording of the complete webinar on the SharedServicesLink.com website, click here and scroll down to the Webinars section.