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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