Sourcing Shangri-La

Cracking Complexity in Novartis

In a video just released, Dr Anne Salètes, Head of Training and Continuous Improvement for Global Clinical Operations at Novartis, brings to life the challenges when precision and attention to detail become barriers to collaboration in complex global operations.

At the Nimbus IP11 conference in London in September, Dr Salètes' presentation told the story of how Novartis has adopted Nimbus Control as its platform for managing processes and Standard Operating Procedures (SOPs) in clinical development. Novartis is a leader in process-based SOPs: adopting end-to-end process as its business language, transforming content buried in libraries of Word documents into holistic business perspectives.

Dr Salètes' mainstage interview with Richard Parker on the morning of the conference has now been released as a video. In the course of that discussion, Dr Salètes talks about some of the benefits of a process-based SOP model.

She describes how patient safety and data validity are, of course, the paramount concerns. But in organizations as large and complex as Novartis, the precision and risk aversion that underpin that safety culture can become significant barriers to cross-silo collaboration.

She notes the value of visualization and simplicity of presentation: "Our people are extremely precise," she says, "but it is very difficult to find skilled people who are extremely precise and who can see the big picture. What we are bringing them is a better view of the big picture. "

By creating an end-to-end representation of Novartis' clinical operations processes: "We are bringing everyone to the same view. We are all challenging the same view. We can see how we can improve'".

But the benefits of a process-based approach are not just in performance improvement and Lean programs.

Novartis now has a common view of regulatory jurisdictions globally, which makes it easier to ensure compliance. Even more significantly perhaps, end-to-end perspectives also discourage silo-based approaches to compliance - the temptation to think: "This is my little area and that's where I have to be compliant", as Dr Salètes describes it. It enables each person and team to understand and play their part in end-to-end compliance.

It's a funny thing that when many people think of process, their first thought is of complexity. But Novartis is another example that process, when it's properly conceived, can be the key to cracking complexity and enabling effective collaboration.

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Future of BPM? We're In Mesopotamia 3000BC

Adam Deane has set off a discussion on his blog on BPM Visions Of The Future.

My own view is that we are witnessing a revolution in process thinking.  It's similar to the transformation that took place around 3000BC when humankind moved from hieroglyphs to phonetic writing.  It is that breakthrough which makes possible this blog - and poetry and tax returns.

That transformation - the adoption of phonetic writing - too was driven by business needs.  The emerging societies of that time needed governance. Writing was simply the most efficient way to record and report, to establish the bureaucracy upon which control depended.

It was also a global transformation.  Writing seems to have emerged independently in Egypt, China and Central America - but the best evidence we have today comes from Mesopotomia, simply because they used baked clay tablets, which have lasted far better than paper or bamboo. This tablet from Mesopotamia, from the British Museum collection, records the allocation of rations to workers (in the form of beer, an early local currency).

Process is undergoing a parallel transformation. Until recently, process has been about technical symbols, focussed on automation, and intended to be used only by a few.

In the future, process will surely be the universal business language. But it will be holistic, not just focussed on systems. It will be integrated, not just process fragments stored in a common repository. And it will be in the language of the business, so that everyone can understand it - and get involved in continuously improving it.

In short, process will become a polite term. Folks with MBAs won't feel embarrassed to use it. We'll no longer have two terms - process and value chain  -for the same thing.  And it will be inclusive, stimulating a richer and ongoing collaborative dialog: the CIO will sit down with the business user.

And the essential enterprise enabler for all this - the 21st century equivalent of the bureacracy perhaps - will be the process management platform:

... it will integrate process with documents, KPI metrics, risk and controls, quality and compliance,  training and task support.  

... it will provide the collaborative framework and governance that enables process stakeholders, and Lean and Six Sigma teams, to drive performance improvement.

... and it will deliver all this to the desktops and smartphones of people doing real work - in the form of Storyboards and a personalized intelligent operations manual. 

Which is why I count myself thankful to work in such an exciting area.  Phonetic writing gave rise to enormous creativity. You couldn't be reading that blockbuster on your Kindle without it.  As enterprises become more virtual, more outsourced, more socially responsible, more complex and with ever more global supply chains, we will need ever more creativity in the workplace.  And business process management will be a crucial enabler. 

This post inspired by A History Of The World In 100 Objects by Neil MacGregor. Highly recommended (an ideal Christmas present, if you can bear to let it go)

PS you don't have to wait! First editions of the process management platform of the future are available here ;-)

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Dude - Did You Ever Read This Back?

When HfS Research and PwC issued their rambling Global Business Services report in July, I assumed it was a one-off, rushed into print before the vacations.

But their joint report The Three Tenets of Global Business Services Execution - released yesterday but dated October - blows away that theory. 

It's not just verbose and boring. Much of it seems close to nonsense.  The opening sentence is typical: 

"While global sourcing has long been recognized as a complex activity, solutions have matured in a variety of categories that are frequently addressed as part of a Global Business Services strategy."

OK, I've only been working with clients in this space for a few years, but I have no idea what this means.

It seems a bit churlish to criticise a free report.  But other folks, equally well qualified to comment, are publishing reports for free that are simply much better written - Accenture's report last month, for instance.     

It's a pity because there's some good ideas buried under the wordage. But most of the thinking is confused, and, for my money, misses one crucial point: that process management - what Accenture terms the essential 'service management framework' - is central to success.

Disclosure - I spent six happy years at PwC's predecessors - at a time when text like this would have resulted in a court-martial ;-)

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Value Chain Or Process? The Costs Of Confusion

Here's a conundrum. Listening to Paul Harmon of BP Trends on Becoming A Process-Centric Organization yesterday, I fell to wondering...

How can it be that process maturity is good (which CEO wouldn't want flawless execution and a culture of continuous improvement?) - and yet, by whichever scale we choose, most organizations are pitifully low-scoring, and only a handful of the Fortune 2000 are at, say, CMMI Level 5?

One of the biggest barriers to higher levels of process literacy - and to wider C-Level engagement - must be confusion.  The false distinction between value chain and process perfectly illustrates this.

Let me make a claim which some will consider heretical.   Value chains (and value streams) are the same thing as end-to-end processes.  They have a different provenance, and vocabulary, but their purpose is identical: they provide a framework for collaboration on performance improvement.

I see nothing in Wikipedia's description of value chains that Nimbus clients are not already doing in their business process management programs.  Paul Harmon used the two terms interchangeably in his hour-long discussion - as indeed many others do.  

It's not just that we have two ways for describing the same thing.  If you call it eggplant and I call it aubergine, then it's confusing, and does nothing to help us collaborate in the kitchen, but as long as we are both aware that they are exactly the same thing, there's no harm done.

But we're well beyond simple confusion because all sorts of folks have created 'competing' methodologies and vocabularies. There are Value Chain and Value Stream frameworks and methodologies, with Lean and Six Sigma variants, that seem to be quite separate from everyday process improvement.  Whereas, to all intents and purposes, they are all doing the same thing.  

This confusion matters. It's a fruitless distinction in a world which is often already ridiculously complex. At the C-Level, it sounds like a cacophany of voices competing for mindshare.  Whereas the truth is that all of them are about building capability to manage the enterprise in a new dimension: end-to-end process, or value chain, or value stream - call it what you will.  

Tim Leach, Director of Competitive Excellence at Northrop Grumman, speaking at IP11, described the reality for many organizations when he said (of the situation at Northrop Grumman before adopting Nimbus Control) :

"How could it be that we have 7,000 people trained in Six Sigma and Lean yielding so little in terms of sustainable cost reductions and service improvement?"

If we want wider process literacy, and wider C-Level leadership in building process maturity, we have to fuse the existing disparate and apparently 'competing' approaches.  The start point must be to standardize our vocabulary.

I doubt that the UN or the US Supreme Court is going to take this up and make a definite pronouncement, so it's up to us.  Value chains have a proud heritage - but in reality they are about understanding and optimizing end-to-end processes.  Simplicity demands that we choose one or the other. 

No disrespect to Michael Porter, but I favor the wider adoption of process over value chain, and here's some reasons why.

End-to-end business process...

dovetails with compliance. Risks and controls, quality and compliance, can all be integrated within the business process management platform

can be integrated with real-time performance metrics, so process improvement opportunities can be more immediately identified

is the language of outsourcing and shared services, which are rapidly transforming the back-office of every organization

bridges the IT divide and enables business-led systems implementation

can be integrated with documents, systems and training - and delivered as a personalized intelligent operations manual to every desktop and mobile device.

Even better - there are already proven enterprise process management platforms, which provide a complete collaborative framework and governance to enable top-down process re-engineering as well as bottom-up continuous improvement - and they are becoming more widely adopted.

Process literacy is growing. The idea of process excellence is gaining currency.  Process maturity models such as CMMI are gaining ground, and even becoming mandatory in some public sector procurement. Let's go with process and get far wider engagement, at C-Level and across the enterprise, in performance improvement.  Let's embrace the Global Process Owner role now found in some visionary organizations - and expect that it will increasingly be recognized as a senior management leadership role. 

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The Process SOP Blues

It seems very odd at first. Why should Life Sciences organizations be so resistant to a change that is so self-evidently valuable? Why push back on something that makes things better, faster and cheaper? 

Standard Operating Procedures (SOP) are the basic building block of Life Sciences organizations. Almost always simply a library of lengthy documents, SOPs set out how the organization understands what it does; how it assures itself and its clients and its regulators that it is following Good Practice.

Even in the best managed Pharma organizations, the costs of compliance can be 16% of operating costs; more typically, they will be 20%+ and may even be towards 30% of operating costs.

So - if there was a better way of managing SOPs, how can there be such indifference? How could smart people be so unenthusiastic about a new way of working that would, say, make clinical trials safer while, at the same time, reducing their cost?

At the European SOP conference yesterday, the evidence from several speakers - none of them linked to Nimbus - was compelling: in many ways, some serious, SOPs don't work:

Susan Ollier from QED Clinical Services noted that SOPs may be missing, or contradictory, or out-of-date or uncontrolled. 

Steve Nicholas from PharmaAcademy presented supporting evidence from the UK's MHRA regulator. He went on to point out that the SOP document fails because is written to meet two mutually incompatible objectives. SOPs are supposed to be concise and easily understood (to support the process user), while at the same time being an exhaustive training document for a new starter with no experience. 

Gareth Turner from PAREXEL noted that 'a lot of what we do is actually quite simple. We've just created a way of making it extraordinarily complex. We need to get back to simplicity.' 

The answer, the future for SOPs that was served up in different ways by different speakers, is to adopt a process-based approach. 

Going beyond document-based SOPs to thinking in terms of end-to-end process can offer huge advantages. It's the kind that would grab any CEO's attention:  

Risk Management - it exposes the gaps and the overlaps that arise from silo-based SOPs. It also provides a comprehensive framework for managing outsourced activities. 

Productivity- it makes work easier. Storyboards deliver content, in an easily digestible format, through a personalized intelligent operations manual.  And it enables more extensive, and successful, automation.

Governance - it brings together Quality, the QMS and all compliance activities into an integrated management platform.  

Performance Improvement - it connects SOPs with KPI metrics.  It integrates Quality and compliance with Lean, Six Sigma and other performance improvement programs.

At the Nimbus Inspiring Performance 2011 conference, Novartis shared a brilliant example of an organization that is forging this future, leveraging Nimbus Control to create a smart, holistic perspective on its clinical trials programs.  

So WHY is the progress towards process-based SOPs so incredibly slow? It's a question I've never satisfactorily answered until yesterday when the penny dropped. I realised that people's resistance to a process perspective is not job-protection or an inability to think creatively.  It's because whenever they are shown process (and we saw many examples of this yesterday) it looks awful.

They know process as swimlanes, pools and numerous symbols (ie the language of BPMN). They see it as technical, in the IT domain, with no sense of design.  They see governance processes separate from operational processes. They see process as bottom-up fragments of understanding. So process for them is a loaded and negative term. Presented like this, who would want to use it? It's really no surprise that they push back and switch off.  

I wasn't the only one bored, I think. I found this rap on a scrap of paper as I left the conference:

 

 

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Toxic Processes: Social, Cloud, Agility - and Risk

There's a looming crisis that's being driven by the headlong rush into Cloud, Social  and Big Data in pursuit of the Agility agenda. Like the financial crisis, the signs are clearly evident well ahead of the crash.  And just like every actor in that sorry tale was acting rationally within the confines of their silo, so too this time everyone's busy.

At the heart of the financial crash was the accumulation, over many years, of  toxic assets purchased in vast quantities by over-leveraged banks. The risks were not clearly visible or understood.

On the smaller scale, many global enterprises are busy working on their own sub-prime crisis. They are relying on toxic processes. As a result, their risks are not clearly visible or understood.    

Organizations are rapidly building a future that is far more virtual, where an empowered workforce manages service delivery operations that are far more complex, fast-paced, and largely outsourced.

Cloud promises the frictionless enterprise.

Social promises employee engagement and the capability to turn on a sixpence.

Sourcing and supply chain innovation promises low costs and rapid response.

Within each program silo - Cloud, Social, Sourcing - it makes perfect sense. It's the agility that CEOs are looking for. But this new level of agility comes with new levels of risk. Two examples:

The complexity of existing supply chains  makes them vulnerable. Car production was halted in several factories around the world when the Japanese tsunami struck the remote Tohoku region: it turns out that the Renesas plant there produces 40% of the world's microcontrollers. Building resilient global supply chains will require even more complexity. The increasing adoption of outsourced services from multiple suppliers - the growing virtualization of the enterprise - will exacerbate this complexity, and therefore the vulnerability.  

In customer relationship management, IBM's Global CMO Study, out this week, shows CMOs living in a world of high complexity and unpredictable interdependencies. It calls out customer intimacy as a strategic goal for CMOs. But it's to be delivered as rapid response in a world of real-time social media by empowered employees - many of them working for outsourcing partners - dealing with empowered customers, and by complex, rapidly-changing, business rules applied to Big Data.  So much higher levels of complexity and therefore vulnerability.

It's easy to get carried away with the potential benefits in Cloud and Social (and Big Data). But the execution risks are correspondingly high - and largely overlooked. In complex, fast-paced and global organizations, increasing agility correlates with increasing risk. 

Business process management is unglamorous next to Cloud, Social, Big Data and Agility.  But a BPM platform is the essential foundation for success.  The first step in mitigating risk is transparency. (It's also the key to unlocking potential innovation as well, of course).   

Pause please while I step up to my soapbox again. The BPM platform that can leverage Cloud, Social, Big Data fully, while properly managing risk, must have three fundamentals:

Holistic perspective. This means visibility of the enterprise that is complete, integrated, rigorous and realtime.  Transparency here is like the capability to run a three-dimensional CT Scan for the enterprise at any time.

Effective collaboration. That means a common language, across the internal functional silos and the extended enterprise. The only plausible language is end-to-end process - but, and this is critical, in the language of the business, not IT-speak, to ensure shared understanding.  It also requires a governance framework that is robust but practical, otherwise collaborative innovation will stall, or undermine risk management.

Ubiquity. It must connect strategy directly with operational reality across the enterprise. There's a compliance gap if the enterprise process model is simply an abstract managed by IT or the Quality function. It has to support real people in getting real work done.  So it needs to be personalized, and deployed to desktops and mobile devices as easy-to-consume process content.  This ensures the real-world integrity of the process model. It also engages the workforce and so channels Social to where it's most productive: fostering continuous improvement within the process context.      

Some organizations recognize these risks - we are seeing new levels of interest in a BPM platform that can deliver this capability - but most don't yet. Some put their faith in complete and 'perfect' IT process models - but they focus only on what's automated, and are understood only by a handful of people. Most organizations rely on incomplete, duplicated and overlapping process fragments in a variety of tools and formats, and with no governance beyond email.  Either way, IT models or myriad fragments, these are toxic processes.

If we continue our current trajectory, Gartner's prediction earlier this year that ten global companies will be toppled within three years by basic process defects looks safe.

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