Sourcing Shangri-La

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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BPM - The Foundation For Operational Excellence

Looking in on rehearsal presentations for Inspiring Performance 2011 next week, it's interesting to see how operational excellence is coming to the fore - and how BPM is central to it. 

Agreed, operational excellence sounds worthy but boring (though execs at UBS might be wishing that they'd paid it more attention).

Agreed too that, while it's a widely used term, there's only a loose consensus on what operational excellence actually means (even the Wikipedia entry includes an appeal for help).

But, however it's defined, or branded within the organization, it's an unqualified good.  Every COO wants it. What's less obvious to many organizations though is how operational excellence is directly linked with Business Process Management.

BPM in its IT incarnation - let's call it 'micro-BPM' - is focussed on automation.  But BPM in its wider sense - 'macro-BPM' - is about operational excellence.  And, in global organizations across every sector, a macro-BPM platform is emerging the essential foundation for operational excellence. 

Talking with clients and colleagues since our first attempt, back in January, to define how you do operational excellence in practice, we've converged on four closely-related capabilities: 

To achieve operational excellence, the enterprise needs the capability...

to understand the whole.  To maintain a complete, holistic and integrated model of the business - including what's automated and what's not, what's outsourced and what's in-house.

to flawlessly execute strategy as end-to-end operational processes. To maintain two-way line of sight between strategy and operating reality.

to continually re-optimize performance by integrating metrics and analytics with end-to-end operational processes and providing the framework for the entire enterprise to collaborate on continuous improvement.

to manage risks, controls, quality and compliance together, within one enterprise-wide and real-time governance framework.

Cue the enterprise-wide BPM platform: the essential enabler for all of these capabilities, and therefore for operational excellence. More on this, after the conference...

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Our Real-Time Interconnected Future

In The Interconnectedness Of Things, my colleague Rob Speck uses an M&A example to illustrate the value of end-to-end business process as the best framework for clarity in an increasingly complex world.

When we revisited our core value proposition recently, our clients' appetite for simplicity really became apparent.  It's what has led us to describe Nimbus Control as an 'integrated management platform' for the enterprise.  Even more boldly, as the enterprise platform for operational excellence.

Enterprise 2.0 needs its people to collaborate on improvement and innovation like never before, and at pace.

It needs collaboration across the silos within the enterprise, and often outside the enterprise, across a complex and dynamic web of activities delivered by outsourcing providers. Above all, it needs effective collaboration across the functional boundaries between operations, IT and compliance.

So simplicity has become crucial. But it's at many levels.

Visibility of end-to-end business processes, not just what's automated, graphically and in the language of the business - is just the start.  Many organizations have plausible end-to-end views.  Usually in Visio and on the wall of a proud process owner.  It's when they are integrated within an enterprise process framework that the benefits really start. Interconnectedness is the key.

But it has to be a multi-layered process framework, managing meta data at every level. It has to blend processes with metrics, systems, compliance, risks and controls. Again, interconnectedness is the key. (London Underground maps offer a parallel). 

And it has to be a real-time enterprise process platform. All this would be just an interesting snapshot without robust governance because everything is constantly changing.

But the hardest part of all is to win hearts and minds.  It has to be intuitive and appealing.  Like the Unix computer so beautifully sold and loved as the iPhone, this integrated management platform for the enterprise has to be seen as easy, authoritative and indispensable. As an intelligent operations manual built around me.

No-one is there yet - this is a journey (come meet some fellow travellers at Inspiring Performance 2011 later this month). But I'm optimistic.  It's beginning to become clear how Enterprise 2.0 fits together and how BPM will be its essential underpinning.

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 more on Cracking Complexity.

The Social Enterprise: Don't All Speak At Once

Larry Dignan at ZDNet nails it in describing the looming 'social sprawl' in A Few Caveats Ahead of Utopia, his take on Dreamforce 2011:

"Every software vendor has some social hook. Let’s say every IT buyer goes whole hog with the social stuff. Well guess what? Now you have HR social features. CRM social. Business execution social. It’s a social fest. Meanwhile, employees are still using Twitter and Facebook. If social sprawl isn’t an issue today, it will be tomorrow. This emerging issue can go two ways for Salesforce. IT buyers can see Salesforce as the great social enterprise consolidator. Or they can close their ears. At this point, it may just be a jump ball."

He's right about the emerging issue of social sprawl. But I think it has a different resolution. It's not a jump ball between Salesforce Chatter and an alternative of a cacophany of voices. There's a rapidly emerging alternative - a process-based paradigm. And the best example may be the convergence of Tibbr with Nimbus Control, which analysts seem to have underplayed in commentary on Tibco's acquisition of Nimbus Partners.

Diversity in our interactions online is natural, just like in the everyday physical world: as Tom Cortese has argued, focussed and niche social networks will always have a place. But the collaboration and dialog that is at at the core of the social enterprise needs structure if it is going to be purposeful.  Especially because, while we may kid ourselves otherwise, the evidence is that actually we're not very good at multi-tasking. 

So what's the context and framework most likely to encourage effective collaboration in the social enterprise? It has to be the processes of the business.  What else is the social enterprise seeking to continually improve and optimize?  Ergo a business process management platform sits at the heart of social enterprise.

After seeing his social baptism ceremony last week, I'm coming over all funny. So, to channel the extraordinary Marc Benioff for a moment: Beware The False BPM Platform!

Is there a single integrated process architecture for the enterprise, with clear line of sight between strategy and operations?  Is there visibility of end-to-end processes, not just what's automated, and across outsourced activities too - and all in the language of the business, not IT-speak? 

No? Then it's a false BPM platform!

Are real-time performance metrics, business controls, compliance and quality, integrated with the end-to-end processes to create the operating system for the enterprise? Does it ensure that Lean and Six Sigma projects are delivering sustainable benefits?  

No? Then it's a false BPM platform!

Does it help people get real work done? Is it deployed to every desktop and mobile device as a personalised intelligent operations manual? Is it easy for every person and process stakeholder - including especially the IT community - to collaborate every day on operational excellence?  

No - then it's a false BPM platform!

Here endeth the diatribe. ;-) 

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Solving The Riddle Of Sustainable Improvement

In a podcast following his HBR Blog How To Sustain Front Line Process Improvement Activities, Brad Power describes the riddle he's trying to solve.

For improvement to be sustainable, it has to be within the DNA of the organization.  It has to create a culture capable of surviving a change of CEO. 

After researching 50 case histories, and Toyota aside, Brad concludes that there are very few organizations with this kind of cultural depth:

 "How do we embed continuous improvement as an ongoing activity across the enterprise? That's the riddle we're trying to solve here."

Looking at leaders in continuous improvement, he identifies characteristics that they tend to have in common, components of an 'architecture for sustainable improvement in an organization':

Process visibility: the ability to 'see' end-to-end processes - singly and in the wider context, and in an intuitive way that everyone understands (esp outside of manufacturing, since most processes are not tangible)

Process ownership: accountability for improvement of end-to-end processes (across the extended enterprise, including activities outsourced or in shared services)

Strategic alignment: line of sight between strategy and front line operational improvement activities

Performance metrics:  KPIs embedded within processes to provide immediate feedback on performance, and the impact of improvement activities. 

When Brad and I have swapped perspectives on this before, I woffled a bit. I couldn't put my finger on what now seems totally clear, and reinforced by real world evidence: that the future lies in a culture of operational excellence that is enabled and sustained by an integrated process management platform at the heart of the business.

This integrated management platform has to use the universal language of end-to-end business process. It has to integrate process with real-time metrics, risks and controls, compliance and quality management - all within one governance framework. It has to be 'live' - deploying process to desktops and mobile devices as an intuitive and personalized operations manual.  And it has to provide the social collaboration framework that gets people working together effectively.  

No platform can solve the riddle completely. Talent management, executive leadership, behavioral incentives to break down political barriers to change - these will always be essential ingredients for sustainable excellence.  But an integrated process management platform is emerging as the essential enterprise infrastructure to underpin a culture of sustainable improvement.

Join us at Inspiring Performance 2011 in London later this month to hear case studies on these themes from Nimbus clients such as Novartis, Northern Trust, Marathon Oil, Northrop Grumman and Royal Bank of Canada.  It's one of the world's largest business performance improvement and process management events - and it's free.

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The Root Cause Of IT Failures

Next month's HBR has new evidence on the colossal cost of IT failures. It's the largest global study ever of IT change initiatives. And it's not optimistic:

"It will be no surprise if a large, established company fails in the coming years because of an out-of-control IT project. In fact, the data suggest that one or more will."

The study conclusions seem sensible - smaller projects, better risk assessment - but they don't get anywhere near the root cause.  

For a start, even if IT projects were smaller and risks were better managed, there is the bigger problem of 'projectification' - the challenge of managing multiple projects within organizations that are complex, fast-changing and increasingly virtual. 

The HBR report includes data on 'projectification':

61% of managers reported major conflicts between project and line organizations

34% of companies undertook projects that were not aligned with corporate strategy

32% of companies performed redundant work because of unharmonized projects.

All of which points to the underlying issue, the root cause of most IT failures: communication.  More specifically, the lack of a framework for effective collaboration that ensures joined-up thinking across the enterprise. 

This is absolutely not breaking news - Michael Krigsman and others have been hammering on about this for years. But it's still true.

The answer, as leaders such as Cameron have realized, has to be a collaborative framework, with a robust governance wrapper, that sits at the heart of the business. 

It has to use the universal language of end-to-end business process.  It has to be holistic, not just about what's automated.  It has to be integrated, combining process with analytics, risks and controls, documents, quality and compliance. It has to offer different stakeholder perspectives of one process reality, especially to align IT with the business. And it has to support people doing real work, and engage them in continuous improvement.

Implementing a platform of this kind  is not necessarily easy.  Conceptually it's neat and obvious. And yet implementation often meets resistance beyond the normal inertia.

Maybe that's because it's hard to shift a culture to embrace transparency and new levels of visibility and accountability.  But maybe there's an even deeper reason for clinging on to things as they are and rejecting the wider perspective. Projects - even big ones - are quite comfortable places to be. There's a seductive sense of certainty and control. 

We don't want to lose project control of course, but the future must surely lie in coordinating all projects within the wider enterprise perspective. It's the only way that major IT failures, that can cost $m as well as the end of many jobs, can be averted. And major business transformation failures, and major compliance failures, come to that.  

Why Your IT Project May Be Riskier Than You Think - Harvard Business Review, Sept 2011

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Analytics and BI: The Foundation For Success

Dion Hinchcliffe's post yesterday on Big Data mentions a Gartner report that I'd missed.

Between 70% and 80% of corporate business intelligence projects fail, according to Gartner. 

No, I haven't mis-typed that. It's an extraordinary statistic, from a generally reliable source with no obvious ax to grind. It's kind of what we all knew anyway - but hats off to Gartner for doing the research and coming out with it. 

The primary reason for this state of affairs, says Gartner, is 'poor communication between IT and the business':

"They have not sat down and created a common lingua franca for BI. How can you meet expectations when you have one side speaking Latin and the other speaking Greek?"

In the absence of a proper dialog, said Patrick Meehan, President of Gartner's CIO Research Group, IT departments make the mistake of looking at BI as an engineering problem that requires a specific package solution.  ['Never!' I hear you gasp]

It's further evidence that process is the key. Success in Analytics and BI, as in much else, starts with a collaborative framework that can enable a rich dialog between IT and the business.

And the best, the universal language for this dialog? It has to be end-to-end business process, presented simply and visually, and using everyday terms (ie no IT speak or symbology).  It's the antidote to a world that's becoming ridiculously complex.  

With a common language and a shared understanding of the big picture, how it all fits together and where accountability lies - then the KPI metrics almost define themselves. They simply highlight what matters most - and where Big Data might prove most valuable.

It's an ongoing program of course, never a one-off.  So the collaborative framework needs a governance wrapper.  It has to be connected with operational reality too. It must be enterprise SatNav for the users doing real work and driving continuous improvement. So it has to be part of a platform that integrates end-to-end processes with real-time metrics.

In short, it's just another aspect of the rapidly emerging BPM platform that is set to become the beating heart of the enterprise in the very near future.

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Why Management 2.0 Will Be Built Upon BPM

 
Hats off to McKinsey and the HBR for creating MIX, an open innovation project to accelerate the search for new management models.

Speaking last week on The MIX Management 2.0 Challenge, Gary Hamel, described by the WSJ as 'the world's most influential business thinker', echoed its call for the reinvention of management:

"We are at an ideological inflection point. For 100 years, we've had the ideology of control.  We need to think of control in new ways."

He called for new management models that draw upon the innovation of the Web: organizational hierarchies that grow from the bottom up; working in small autonomous teams wherever possible; and enabling 'communities of passion' to flourish around ideas and innovation.

He called also for the embrace of experimentation: 'cultivating an environment where people don't need extensive permission to run small-scale, low-risk experiments'.

It's not just theory. He cites an example of a business that has embraced Management 2.0 principles -  a company with $3bn revenue and a 50-year history - with a lattice organization and no hierarchy. Every employee decides what to work on, and their compensation is linked to a ranking by 20 peers based on their value added to the company. 

A brief aside - it seems to me that there's a dimension missing here: the social impact of work. We need to create work cultures that are less competitive and more collaborative; where trustworthiness and responsibility are deeply ingrained; where parenting and work are not in conflict; where creating quality jobs is a measure of success. In the jargon, we need Management 2.0 models that embrace far wider definitions of corporate social responsibility.

OK, I hear you say, so just what is the tenuous connection between all this heady stuff and business process management? 

Well, it seems to me that every aspect of Gary Hamel's vision speaks to the need for an enterprise-wide integrated management platform. 

Outsourcing Buyers vs Sellers: Swords Into Plowshares

It was billed as a debate where senior provider and senior buyer executives would 'lock horns to debate the burning issues of today’s outsourcing business'. 

But when HfS Research rustled up its invited audience (impressively close to 500 people, at the height of the holiday season) for its 'Live and Unfiltered' web debate, what stood out was the consensus around the table on the emerging challenges.  

The Buy Family execs - from Northern Trust, Kimberly Clark, Ascension Health and PNM Resources - pretty much lined up with the Sell Family execs - from Genpact, CSC, Accenture and Cognizant - to endorse highlights from the HfS joint study with the LSE:

Hybrid service delivery is the new normal: outsourcing and shared services are set to  increasingly dominate global services delivery - across all industries and regions.

It's not just back-office transformation any more. Shared services and outsourcing initiatives are growing into the middle office, and even into front office support (eg here).

It's way beyond cost reduction, which is taken for granted. It's a search for innovation and nimbleness in service delivery, the kind of flexibility needed to thrive in volatile and hyper-competitive markets.

The emerging challenge: How do you manage this intelligently?

In a world of hybrid service delivery models, where so much is delivered through a  tapestry of providers that is continually changing, how can buyers protect themselves and ensure compliance while at the same time driving innovation and continuous improvement?

It's way beyond contracts and SLAs in Word documents. It demands a governance framework that is way beyond Excel-over-email.  It's why leaders are zeroing in on a new operating system for the enterprise, written in the universal language: end-to-end business process.

This new OS for business sits on what is emerging as essential new infrastructure - an enterprise process management platform, which:

integrates business process with real-time analytics, risks and controls, systems and documents

provides everyone - process owner, stakeholder or user, whether in business or IT - with a personalized perspective of the one process reality

provides collaborative features within a governance framework that fosters innovation and continuous improvement.

It's interesting how the ability to collaborate effectively - in conditions where change is at an ever increasing pace and frequently turbulent - is emerging as a core capability on both sides of the fence. It's the common challenge for both Families, Buy and Sell.

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BPM: The Invisible Gorilla

Crowds aren't always right. Today's conventional wisdom about business process management is that is tedious, technical and matters only to IT.  I believe that mindset is about to be inverted.

There's a famous experiment where subjects were shown a short video clip of a basketball game. They were asked to count how many times one team took possession of the ball. When asked afterwards, most observers had not noticed that a figure in a gorilla suit walks into the middle of the court, turns to face the camera, beats his chest and dances a jig before strolling out of the picture.

What we pay attention to guides our expectations of what we are going to see. If it doesn't fit the template we are currently working with, then often we won't see it (consciously at least), no matter how bizarre.

So how do we ever learn anything new? That's where the brain's right hemisphere comes into play.  But before I go any further, let me acknowledge my inspiration here: A bo0k that took over my summer holiday, possibly one of the most interesting books that I've read in thirty years: The Master and His Emissary by Iain McGilchrist. 

The Analytics Bubble

Analytics is being sooo over-sold.  The HfS Research State of Outsourcing 2011 report this week was refreshing because it dared to question the emerging conventional wisdom.  

It's early in the hype cycle but there's a marketing steamroller behind analytics - from all the usual suspects.  It was a major theme in IBM's recent Global CIO and Global CFO studies.

So no surprise that the HfS survey - which is global and authoritative, in collaboration with the London School of Economics - has analytics as the #1 innovation expected by outsourcing buyers over the  next two years.   

Hat tip then to Brian Robinson, HfS Research Director, for injecting a dose of reality, pointing out that analytics is nothing new, and that businesses (and consumers) use analytics all day, every day. He distilled the value proposition for analytics down to this:

"Analytics help organizations by identifying and closing leaks across their value chain."

He went on to caution that analytics 'is not for the weak of heart' and 'does not guarantee improved business outcomes'.

Which, as value propositions go, is under-whelming, to say the least. It's just one of the things that end-to-end process management - properly executed - already delivers.   

Ah, the comfort of the bubble: the C-Level crush on Six Sigma, the CRM craze, the ERP-solves-everything fad. But my hunch is that the analytics bubble will burst early on. Because there's really no point to a metric unless it helps identify where a process isn't working.  

Process and metrics are like bread and butter, left and right, pancakes and maple syrup: they are inseparable and define each other.  Which is why the smart money is on process management platforms that can integrate end-to-end process with real-time metrics. Because the start point for high-value analytics is surely end-to-end operational process.

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No ROI in BPM? You're Kidding Me!

A question I hadn't heard for a long time: 'Where's the ROI?  You, Nimbus, are ultimately just a BPM presentation layer. You don't automate anything. Nice to have, but really - where's the value?'

It's rare nowadays because every week brings new evidence of the hard ROI delivered  - across every corner of the enterprise - by an holistic approach focussed on process adoption.

Which is a sharp contrast to what's happening elsewhere.  There's a breathtaking waste of time and resources being expended on 'BPM' projects that seem unconnected to business value.  

The confusion that lies at the heart of this waste is still widespread.  Even the BP Group on LinkedIn [6k+ BPM professionals] has a discussion running on 'If process is the means, what is the end?'   

The most egregious example though must be this discussion, also on LinkedIn, started last week:

"I have most of my processes modeled in ARIS? What's next? What is the value-add of modeling processes other than just for illustration purposes?"

Which would be laughable if it wasn't so common. How did we get to a situation where so many people are doing 'BPM' projects and delivering little or no value?

I see things rapidly changing for the better. There's a new vision emerging, a new recognition of the potential, and a new sense of engagement from the business. It's coalescing around the idea of process management as the platform that underpins operational excellence, compliance and risk management, and continuous improvement. Complete, integrated and dynamic, and in the language of end-to-end process, the BPM platform orchestrates every aspect of change to the corporate DNA. It enables the full potential for process automation.

BPM is moving from being the domain of the CIO, to become the concern of the COO (Lean and operational excellence across an increasingly virtual sourcing environment ) and the CFO (risk, controls and compliance) and the CEO (continuous improvement and M&A support). 

And in the course of this transition, BPM is moving from being obscure and nerdy [eg Adam Deane's amusing take on the IT process modeller] to being strategic and cool. 

This wider perspective is echoed by Gartner's David McCoy in a blog last week on the three essentials for process excellence: cross-silo thinking, metrics integrated with process, and end-to-end process visibility.

And it's reinforced in off-the-record comments in a discussion with a senior exec at a global investment bank last week that "probably 40% of our operations costs are wasteful - and can be eliminated without any major IT changes".   

See  it in this light and BPM has extraordinarily high value.

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Activity-Based Costing Makes A Comeback

After years of apparently ineluctable decline, suddenly it's ABC everywhere.  

Shared services organizations are becoming more interested in ABC as they move towards commercial business models. It was a recurrent theme at the SharedServicesLink.com Future Finance 2001 conference last week. 

ABC enables a shared services organization to understand its costs better, and so enables more sophisticated transaction-based pricing of its services. 

We've had ABC features in Nimbus Control for a decade. Nimbus clients such as Steria have presented on how they use ABC in the design and delivery of their F&A outsourcing services. 

But we're noticing a new level of interest in ABC, which has driven the recent product enhancements in this area.  The capability to draw data into ABC direct from transaction logging systems now provides FS clients, for instance, with a simple way to overlay their production statistics (trading volumes) in the context of the process.  Add in the cost-driven KPIs, and the risks and business controls, and everything is being presented, and managed, in one context: the end-to-end process.   

When you start seeing ABC used in these ways, you have to wonder why it was out of favor for so long. It's going to be another core capability for any BPM 2.0 enterprise process management platform. 

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BPM Revolution 2.0? Sign Me Up

Hats off to Janelle Hill, whose opening keynote at Gartner's BPM Summit in London today laid out a new understanding that re-frames BPM and opens the door to new levels of productivity and value.

She swept away confusion, challenged sacred cows, and positioned BPM to make a difference. It was Gartner at its very best.

You might think that a lady who has captained her local tennis club to the US National Finals for the past three years an unlikely revolutionary.

But when Janelle set out Gartner's vision for a BPM 'Revolution 2.0' she set the hall buzzing. She built on some recent Gartner themes but went further in setting out a new vision for BPM. 

BPM, Gartner-style, is no longer focussed on the 20% of the enterprise that is structured work and automating the routine. It's just as much about 80% that is the unstructured, dynamic, social operational reality. 

It's a management discipline that treats processes as enterprise assets contributing directly to performance improvement and agility. It's about a future of 'intelligent business operations'.

It recognises the value of holistic and multiple perspectives if change is to succeed and be sustainable.  And that many process improvement projects don't need to go near IT: 'Oftentimes, process improvement will be simply to stop doing stupid things'. 

It sees visibility of the end-to-end processes as the start point: 'Process is the key construct for how organizations work'.

It sees BI metrics and analytics as vital but secondary: 'See the process first - and then, with that understanding, measure and identify improvements'.  

It's rapidly becoming a C-Level concern, underscored by Gartner's dramatic prediction that 10 major companies will topple in the next three years due to process breakdowns.

Most interestingly perhaps, it's about an empowerment mindset: 'Take a chance on your workforce, trust the creativity of your people to deliver'.  But all of course within an appropriate governance framework.

Viva la revolución! Count me in. This broader conception of BPM is exactly what we need to bring together the disparate camps and enable effective collaboration across the functional and organizational silos. It's inclusive in every way. It's the key to unlocking value and relevance far beyond anything we've seen in the last decade.

Game, set and match to the lady from Connecticut.

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Supply Chain and BPM: Now It Gets Interesting

The virtual enterprise of the future is fast taking shape - and at its heart is a BPM platform. Says McKinsey. Well, as good as.

There's a growing convergence between Supply Chain and BPM thinking. What was once a distant acquaintance is blossoming. 

BPM went through a teenage phase when it was a bit obsessed by automation.  Older and wiser, BPM now focuses on enabling operational excellence and continuous improvement - and, as a consequence, is converging with mainstream Lean and Six Sigma.

BPM thinking now sees process as the language, and the BPM platform as the enabler, for the effective collaboration that underpins operational excellence and continuous improvement. 

Supply Chain had a teenage phase as well when it obsessed about logistics, and wanted to be separate - even changed its name to Value Chain at one stage. But Supply Chain too has matured and its new horizons make BPM look a lot more interesting than before.

McKinsey made the case last month in Building The Supply Chain of The Future that future supply chains will need to be more splintered, flexible and resilient - and that effective collaboration will be more important than ever:

“Making these kinds of moves isn’t easy, of course, since any alterations to a company’s supply chain have far-ranging implications throughout the organization. For starters, such changes require much more cooperation and information sharing across business units than many companies are accustomed to. Indeed, the organizational challenges are so significant that for many companies, a hands-on effort by the CEO and others across the C-suite is needed for success.” 

In a parallel article Is Your Top Team Undermining Your Supply Chain? McKinsey highlights the need for more effective collaboration and concludes:

"Poor collaboration and silo thinking have long thwarted the efforts of companies to get more from their supply chains. In a future characterized by rising complexity and uncertainty, solving this perennial problem will change from a valuable performance enhancer to a competitive necessity."

It's not just McKinsey of course seeing this uptick in the virtualization of the enterprise.  Phil Fersht, CEO of HfS and renowned sourcing industry commentator, speculated yesterday that one of the drivers for KPMG's acquisition of EquaTerra is that KPMG's clients are rapidly 'morphing into global outsourcing operating models'.

Starry-struck lovers have fallen out before so our Romeo and Juliet could yet call it off. But actually we all know this storyline. It's an inevitable union - and their offspring is the virtual enterprise of the future.  

The enterprise of the future will be capable of innovation at pace. It will likely have a slim core with very little in-house; sourcing and supply chains will be fused; process and analytics will be inseparable; the divide between IT and the business will be bridged. And at its heart will be a BPM platform. 

Holistic, intuitive, on every desktop, the real DNA of the business, the BPM platform will be the essential enabler for the effective collaboration which orchestrates change and underpins operational excellence - across the entire extended enterprise.

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