Sourcing Shangri-La

The Socially Optimized Business - And Process

I love the positive energy and openness of the Dachis Group and the Social Business Council - their one page graphic summarising Attributes of a Socially Optimized Business can be downloaded here - so I don't want to be picky.  But there's a flaw in their manifesto - at least, as I understand it - that may seem nerdy but is, I think, actually quite crucial.

I've huge sympathy for the call for a Renaissance in business:

"After decades of mechanistic, dehumanizing, process-oriented management dogma, progressive organizations are waking up to the disturbing truth that they’ve squeezed all the creativity out of their business. When companies embrace organic, passionate, socially-savvy initiatives, they blossom. Who benefits? Everyone."

What worries me is the way we seem to be trashing 'process-orientation'. 

Agreed, process has for too long been articulated in the form of technical gobbledegook. And it's rarely exciting. 

But - if we express process simply and holistically, so that people across the socially optimized enterprise can understand it, then we have a universal language that can get everyone talking. 

And if we support it with an enabling process management platform, then we have:

connected the creativity with how work gets done.  So we ensure that social business is not an ivory tower, it's about engaging with everyone's ideas

the ideal framework for Lean, Six Sigma and other process improvement programs - and for sustainable continuous improvement

the governance framework that ensures collaboration will be effective, across all the functional silos and the increasingly virtual extended enterprise  (it also allows the Chief Risk Officer to sleep at night). 

Great ideas -please sign me up for the Renaissance. But let's see process as part of the solution and so make it practical.

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Re-inventing Work: The Feminine Balance

Friday Philosophy...

You don't have to be camped out in an Occupy protest to know that some of the biggest challenges facing humanity are in the world of business and employment. 

Hearteningly, it's not just people on the streets who are asking big questions.  In the FT, Luke Johnson, a very successful entrepreneur, even quotes Animal Farm in lamenting income inequalities. And on MIX this week, Gary Hamel, ranked by the WSJ as 'one of the world's most influential business thinkers' interviews Lynda Gratton, a professor at LBS, on restoring values to work - and references 'building spiritual capital', a term that would have earned him derision only a few year ago. 

It's time to re-invent work.  What it's for. Why we do it. How it helps achieve the prosperity of humankind in its fullest sense.

For me, one vital aspect of this transformation is the advancement of women. Indeed - full Op-Ed disclosure here - as a Baha'i, I believe women's full participation in society is one of the essential conditions for world peace. Women bring different, richer, and often more balanced, perspectives into play.  [if you're uncomfortable with this as wishy-washy thinking and you need the ROI - I am going to resist the temptation to say 'stuck in male mode' - then McKinsey has compelling studies on how women's participation is crucial to US economic growth]  

So why am I disappointed to read the advice to women in Four Ways That Women Stunt Their Careers on the HBR Blog? Women are advised to avoid modesty and make more efforts to ensure that 'they get the gold star next to their name'. They should also get used to talking over the top of other people: 'It's not easy to get a word in during meetings, especially when six other colleagues are all fighting for the floor'.

I'm sure the authors are well-meaning.  I even accept that they may be tactically right.  But it's depressing. We don't need women to behave more like men. We need women's participation because that will change work for the better.  Men often pay lip-service to ideals of teamwork and collaboration, but quickly default to highly competitive environments.  We want women fully involved because they don't boast so much, because they listen as much as they talk, because they are more inclined to collaborate.       

It's not that men don't have any of the strengths that we usually associate with women - intuition, empathy, compassion, thinking holistically and long-term.  But women's equal participation - as women - is the best chance of releasing, in all us, our feminine side.  That balance alone can transform our workday world. The bird of humanity will only soar when its wings are equally developed. 

It's ours to create a new world of work.  I see the full participation of women is an important  part of it. I've raved about Iain McGilchrist before. He's recently featured on TED and closes his talk with Einstein's remarks that: 'The intuitive mind is a sacred gift. The rational mind is a faithful servant'. 

As Iain McGilchrist observes, we've created a society which honors the servant but has forgotten the sacred gift.  This balance between the intuitive mind and the rational mind, between feminine and masculine perspectives, seems central to our wellbeing and true prosperity.  

PS you might think that IBM's appointment of Ginni Rometty as its next CEO demonstrates that this is old hat. My take is that it's another heartening development - but that we've a very long way to go yet.   But what do you think?

How Not To Implement Shared Services

A shared services center to deliver HR, finance, procurement, IT and other services for the UK's seven Research Councils. It seemed like a Good Idea when it was announced in 2006. 

Five years on, a review by the UK's National Audit Office (NAO) makes gloomy reading. Overspent £130m against a budget of £79m, and projected savings significantly less than expected. 

How did it happen? The NAO report highlights three fundamental flaws:

Lack of Clarity

"A key factor contributing to escalating costs was the early lack of clarity about how the service would operate. An outline design, known as a target operating model, was not agreed until August 2008, nearly a year after implementation had begun, but it was incomplete and lacked detail. Some elements of design were still ongoing during transition and system launch."

Confused Governance

"Early governance structures were complex. Reviews commissioned at various points during the project showed that responsibilities and accountabilities needed clarification."

Poor Management of Outsourcer

"A contract with Fujitsu to design and build the systems and ICT was "poorly managed".  It was eventually terminated at an additional cost of £13m."

Each of which could, of course, have been avoided, or at the very least mitigated, by the adoption of an appropriate process management platform.

No surprise that developing process maturity is an NAO theme - and runs through the NAO's recommendations in this case: to harmonise processes further, to strengthen end-to-end process management, and to embed continuous improvement.

Hear stories like this one, and other shockers in the Process Hall of Shame, and it's bewildering how organizations can still be in denial about the need for a process management platform at the heart of any shared services project.  As though it was a 'nice-to-have'.

Whereas actually it's the key to clarity at every level; to effective collaboration within a robust governance framework; to IT alignment; to drive process harmonization; to controlling a multisourced environment; to making life easier for the SSC workforce; and to enabling a culture of continuous improvement.

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To Be, Or Not To Be...That Is Not The Question.

A frantic call from a managing consultant at a Nimbus partner, asking for help on his way into a client meeting, reminds me of our own little Da Vinci code. Only we, the process cognoscenti, know what Shakespeare really meant. Hamlet's original soliloquy was not merely about the most noble course to follow. It directly addressed the more fundamental issues in process discovery:

'To-Be or As-Is, that is the question...'

My friend's client may be at the bottom of the process maturity curve but they have aspirations, and an urgency (hence my friend's assignment).  But, as is so often the case, they only want to focus on the future.  When your organization is largely dysfunctional and you have finally gathered the energy to act, it's natural to want to focus on the sunlit uplands of process maturity: 'Let's not waste time with the As-Is, let's just focus on the To-Be processes'.

It's fair to say that consultants themselves often disagree on how important it is to capture the As-Is processes.  But none that I know would ignore them.  You can't plan a journey without a startpoint. Transformation plans without an adequate understanding of the As-Is processes are very likely to fail.  So, at the very least, capturing the As-Is processes reduces transition risks. 

But paying attention to the As-Is processes helps in other important ways too. It can expose gaps, overlaps and inconsistencies that were overlooked because the organization's focus has been on heroic fire-fighting. It reveals connections and hidden dependencies. Often it throws up new ideas for the future state, and highlights issues that will be need to be addressed in the transition^*. It grounds the definition of the To-Be processes. Above all, it gets people collaborating across functional silos, using the language of end-to-end process.  

Process maturity is ultimately founded on an organization's cultural mindset.  Jumping straight to the To-Be processes is a quick-fix mindset.  We'll always need to execute quick fixes - but process maturity requires the organization to be able to operate in a more detached and analytical mode as well.

My friend's client of course doesn't see it this way (hence his call for help).  So he will take on 'the slings and arrows of outrageous fortune' and risk arguing that his client needs to do an elementary capture of the As-Is processes, just to reduce transition risk.  And be confident that the client will gradually come to realize that time invested in capture of the As-Is can be consulting budget very well spent.  

Which we all know is pretty much what Hamlet would have advised in the circumstances:

Thus conscience does make cowards of us all,
And thus the native hue of resolution
Is sicklied o'er with the pale cast of thought,
And enterprises of great pith and moment,
With this regard their currents turn awry,
And lose the name of action...

* Nimbus Control is the perfect tool for this because it has several ways to capture these ideas without disrupting the flow of the discovery workshop - and to easily analyse and report on them later. 

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Deloitte Shared Services Insights: Could Do Better

Accenture's report earlier this month did a good job in advancing the debate about shared services. By comparison, Deloitte's latest shared services insights disappoint. It's a commendable report - but it kind of misses the point.

Overlook the waffle and the sloppy thinking: Accenture's report does nail the essential truth - that a service management framework is vital for sustainable success:

There needs to be a “system around the system” that includes the people, discipline in procedures, communications, service expectations, performance measurement and key cross-functional processes, such as continuous improvement and client relationship management. It’s this broader shared services system around the system— which Accenture calls the service management framework—that sets shared services organizations that have achieved high performance apart from those with a sub-optimized centralized service delivery model. The service management framework is the keystone...

I've argued elsewhere that Accenture needs to go further and recognize that the service management framework for shared services, in its best developed and most valuable form, is the business process management platform at the heart of the enterprise. 

But, that qualification aside, the idea of the service management framework is a crucial advance and deserves to be adopted.   It provides the context by which we can understand that Deloitte's latest list of worthy insights - on the importance of change management, IT alignment, governance and enhanced controls - are in fact all inter-related.  And jointly soluble, once we frame this correctly. 

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Are You Siri-ous?

Check out Siri, the revolutionary new voice recognition feature on the iPhone 4S.  As Apple says: 'Siri understands what you say, knows what you mean, and even talks back'.

It's amazing. Omniscient and with attitiude. It even has a Transcript button - here's an extract, so you can see how it works: 

...

Me: Well, that's great news. I'd completely given up on my pension fund. I thought it would never recover.  So when can I retire?

Siri:  You'll need to continue working until 16 June 2043.

Me:  Sheeesh! So I need to stay employable for another 30 years... What am I going to do? 

Siri: Stick with process. Right now, we've discovered the theory of business DNA. We cracked the double helix, we know how the base pairs work on the chromosomes. And we've pretty much done with mapping of the complete business genome.

Me: So it's all over. I should re-train as a therapist?

Siri: No, idiot, this is just the start. Process will become the universal business language. Every CEO's iPad will have a business process architecture - integrated, complete and in the language of the business, not geek-speak. It will be the startpoint for M&A and business restructuring. 

Me: Not just executive bling? Not just a fad that will leave me jobless in my early seventies?

Siri: No, Bozo.  CIOs will see it as the startpoint for every systems project.  CFOs will demand the transparency that comes when risk and controls are embedded in end-to-end processes.  COOs will leverage it to orchestrate increasingly complex and multisourced operations. 

Me: OK, I get it. Business genetics.  The enterprise grid.

Siri: Much more because it's not just for execs and stakeholders focussed on performance management. It will connect with people doing real work.  It will simplify and help people be more productive.  And make it easy to get involved in continuous improvement.

Me: So where do I want to work? Who's going to win here? The BPM vendor that offers an integrated platform, a collaborative framework and deployment as an intelligent operations manual to every desktop and mobile device?

Siri: Doh! No - whoever integrates Siri first.

.... 

 

Placing A Big Bet On Global Shared Services

"The companies you work for are placing a big bet on your success. Your job is to scale fast...". Deborah Kops's presentation captured the moment at this week's Finance Summit.

Shared services is set for very rapid growth. There is a convergence around an SSOS model of shared services implementation: Stabilize - Standardize - Optimize - Source. It's a model that's driving the expansion of shared services into global business services operations, delivering not just the traditional Finance & HR services but others such as Procurement and Supply Chain - and doing all this in an increasingly multisourced mix.

Unsurprisingly, change management featured heavily, reinforcing the importance of a service management framework. One organization reported 28 change initiatives running concurrently in its P2P process alone in this FY.

The challenges are changing as shared services moves up several gears, and beyond the easy wins in automation and labor arbitrage:

Customer Satisfaction. The pre-conference survey showed service improvement was on a par with continuing cost reduction. Several SSOs are using KPIs based on the Net Promoter methodology to measure client satisfaction.

Continuous Improvement. There's an new focus on continuous improvement programs. CI was one of the delegates' top budget priorities for 2012. 

Talent Management. There's a lot more focus on people, morale, motivation, engagement and retention. 

No surprise that there was a lot of interest in Nimbus Control as a service management framework that can orchestrate complex change and enable continuous improvement.  It was in the challenges of ERP projects that the visualization of process, in the language of the business, seemed especially powerful. Stakeholders in most organizations simply don't have proper visibility of the current and future state, can't do easy gap and impact analyses, and have no governance framework, beyond email, for managing change.

My conference highlight, by the way: sharing a table with a global P2P owner spending $52bn this FY. Awesome.

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Continuous Improvement - Made Easy

Naturally, I would say that Emitra Nelson from Cameron stole the show on Day 1 of the Summit for Finance Leaders in Dallas today (you can hear her story on a SharedServicesLink webinar on 18 October - more details here).

But if I couldn't vote for Emitra, on the grounds that hers is a Nimbus success story, my choice for the most thought-provoking presentation would be Andrew Simpson, Head of Business Services in America for BP, whose case I summarised in a doodle in my notes as this:

 
(my maths is shaky, so I'm hoping this means what I was thinking!)

Andrew defined Continuous Improvement (let's call it CI) as 'operational excellence through process improvements' , or, more informally, as 'stopping business insanity'. He listed the 20 most common excuses he's heard about why CI can't be done, the funniest being the manager who claimed that it would be 'against corporate policy'.

He then proceeded to show exactly how he has implemented CI, and went on to make a totally convincing case that, in the long run, 'background' CI can be even more valuable than high-profile transformation programs.  And a CI culture, he argued, will also make any major transformation program more likely to succeed: people are engaged and energised by change, not simply resistant.  In shared services terms,  CI is 'the critical success factor for any SSO that wants to stay relevant'.  

What's really interesting is how few of the organizations represented in the audience have a serious CI program.  There's lip service but little commitment. How can that possibly be? At the end of the day, CI is pretty straightforward. 

Maybe the clue lies in a video Andrew used in his presentation to illustrate resistance to change (can't find it on YouTube, but it was like this).  The hamster keeps getting on the wheel, spinning faster and faster until it's out of control and finally gets flung out into the cage - then does it again, and again and again... 

Maybe the hamster enjoys the adrenalin rush - just like the business enjoys the thrill of firefighting.   And when, after a while, the hamster is punchdrunk with concussion and unable to think clearly, well that's like the business getting so used to living in firefighting mode that it too can no longer see clearly - and so resists the CI initiative that is ultimately its way forward.

Finally, a great endorsement for CI: people from BP's Business Services unit are sought out by the rest of the business.  It's career-enhancing because it has a carefully thought-through and well-executed CI program that encourages people to bring their brains to work. It breaks out, he noted, of the analysis paralysis of left brain thinking, the belief that life is a machine and we just need to understand how the cogs fit together to get it to work perfectly.  It recognizes the special and unique value that diverse perspectives, working intelligently together, can create.

There was a ton of other good stuff too of course.  More on that later in the week, I hope.

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The BPM Story Line: Tragedy or Comedy?

Reading The Seven Basic Plots on the plane to Dallas for the Finance Summit this week, I fell to wondering what the story line for Business Process Management (BPM) might be.

It's got elements of all the archetypal plots. There's definitely a Quest, including a thrilling escape from death (in Global360's acquisition - just kidding). No disrespect to  the ARIS community either, but there's also an obvious Overcoming The Monster story line.  And Nimbus might be the Rags to Riches plot.

But the real question - and it's one on which my own professional future depends to some extent - is whether it's a tragedy or a comedy.  Is this a tragic tale of darkness gradually overcoming the light?  Maybe - but I still prefer to see it as a comedy, a plot whose essence is confusion and dismay until, against seemingly impossible odds,  peace and order are restored, and all becomes well again with the world.

The hero in our case is the enterprise, and in particular the COO. Our heroine is the fair Process, who represents all that is sweet and light. She knows that the hero needs his team to be collaborating effectively to achieve anything.  And that a BPM platform using the language of end-to-end process is the key to long-term prosperity, to assured compliance, and to making the enterprise a great place to work.

The hero admires but continually overlooks our heroine, seduced by his inner demons: short-termism and 'I'll leave that to my successor'.  'Dark angels' whisper quick-fix solutions in the hero's ear: 'if we spend enough on the new ERP system, it will solve everything' and 'let's outsource it and make it someone else's problem'.

All the other elements of the Comedy plot are there. The hero's forbidding father figure, the CEO, casts a shadow across our drama. There is the donning of disguises and the swapping of identities (the Lean and Six Sigma crowd). There are men dressing up as women, and vice versa (BPMN masquerading as a language for business people). Even the Chief Risk Officer and his Compliance henchmen have a role. Everything they touch is petrified and can only be brought back to life by a transfusion of pure gold.

Morale slumps. Results are lacklustre. It's obvious to everyone except our blinded hero that there has to be a better way. But when will our hero have the moment of recognition upon which the story pivots? When will he see the fair Process for who she really is, and realize her goodness? 

Soon I hope, or we're heading for a tragic ending, more of a Romeo and Juliet tale. Those star-crossed lovers were of course torn asunder not by the hero's blindness but by their feuding families. Which has disturbing parallels because, in the case of our hero and the fair Process, casting IT as the Montagues, and Business as the Capulets, looks awfully plausible  ;-)   

[The Seven Basic Plots: Why We Tell Stories by Christopher Booker is awesome, by the way. Ten hours just flew by. Haha ]

Accenture: What's Holding Back Shared Services

Hats off to Accenture for bringing some reality and insights to the debate about what's holding back Shared Services. 

Everybody's doing shared services, everybody thinks it's strategic, yadda yadda yadda. The reality though is often disappointment and missed business cases.  Sustainable success in shared services is still the exception.

The Deloitte Shared Services survey, published in April, highlighted some lessons learned: the importance of governance, a collaborative framework, transparency and change management.   

Governance was also a theme running through the PwC/HfS report on Global Business Services, published in July: it has to be 'ongoing', 'well-integrated, consistent and rigorous' and not just another tool for vendor management.  

Those were useful contributions.  But Accenture's report this week Trends in Shared Services: Unlocking The Full Potential brings a new focus.  It spells out what the leaders are doing, and how they are succeeding. And process excellence is front and center.

Noting how one leader in shared services uses automation and metrics and process improvement specialists, it continues:  

"...while other elements are certainly in place - C-level support, comprehensive change management and a relentless focus on value - it is the organization's continued focus on process excellence that stands out ."

I share the report's enthusiasm that shared services will mature to become ubiquitous. And that we are witnessing the emergence of "a long-envisioned" model of integrated business services.  I agree too that 'managing multisourcing consistently' is a huge challenge for most organizations. And I'm delighted that Accenture highlights the vital need for a service management framework.   

But I have one quibble. Because even Accenture hasn't quite joined up the dots.

What is it, ultimately, that enables process excellence, that provides the collaborative framework for change management, that ensures transparency and IT alignment, that supports Lean and other continuous improvement programs, that provides the governance framework for the effective management of outsourcers, and that allows cloud and social media to be most effectively leveraged?  It's a business process management platform. 

It's not a panacea. It can seem a bit boring. It's an unspectacular answer when your SSC is 'in a complete mess'. But everything points to the business process management platform as the foundation for success in shared services.  It underpins process excellence. It's what enables the service management framework.  And it's the only way to optimize the management of process variants, which, the report notes, is the real problem in process standardization. 

What is the business process management platform that can do all this? I've defined it elsewhere as a platform that uses the universal language of end-to-end business process to enable four capabilities.  The only way I'd improve on that definition now, especially in the light of the Shared Services workshop in London last week, would be to re-iterate the importance of adoption.  If our brilliant process management models don't engage process stakeholders, and help real people to get real work done and to contribute to improving things , then we're missing the biggest trick of all.    

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Shared Services @ #IP11: Your Top Issues

 
I hesitate to use the word 'landslide' but attendees at the Shared Services workshop at IP11 last week voted decisively on their own Top 3 issues (after strongly endorsing the issues identified by the Deloitte and PwC surveys earlier this year):

(1) Managing process variants

(2) Retaining IP and strategic control where activities are outsourced

(3) Building a continuous improvement culture.

Haha - no real surprises here for regular readers! For others new to this blog, there is more on variants here, on retaining IP and control in outsourcing here, and on continuous improvement here.

Slides from the workshop are available from the conference website. Thanks to all who contributed!

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