Sourcing Shangri-La

How To Simplify Global Shared Services

Most multinationals are almost ridiculously complex. It's a barrier to innovation, compliance and sustainable improvement - and increasingly a C-Level issue. Simplification has been one of three strategic priorities at GSK, for instance, since 2008. 

So Deloitte's report on reducing complexity in global shared services organizations is well-timed. Unfortunately though it misses the point. 

Deloitte sets out survey results which illustrate the prize.  Tackling complexity effectively, says Deloitte, can reduce the costs of delivering Finance, HR and IT by up to 20%, even in already 'rationalised' global shared services organizations.  And yet only 30% of CFOs believe that their efforts in tackling complexity are successful.

The low-hanging fruit of labour arbitrage and automation were harvested long ago. 'Getting a grip on complexity is', in Deloitte's words, 'the next frontier in reducing costs [of Finance, HR, IT and other non-core support activities]'.

Which is great. But, alas, Deloitte's report on how to get a grip on complexity is - frankly - very complicated. It could do with a complexity reduction program of the sort that it proposes. It presents interesting ideas but doesn't join the dots. Its definitions of an operating model and a business model don't quite work. Its attempt to define four different types of complexity - portfolio, organizational, process and information infrastructure - don't hang together well. It's light on governance and controls. It recognises the significance of master data management but doesn't link it with process management. To its credit, the report clearly advises a focus on end-to-end process. But it dismisses 'process flow diagrams' in favour of an exotic visual value stream approach, the benefits of which would be incidental at best.

More fundamentally, it overlooks what must be the 72pt headline to the complexity-slayer story: the power of process visualisation. 

End-to-end perspectives, expressed in the language of the business, with design principles that make it intuitive and easy on the eye. All managed within a methodology that blends compliance rigour with support for people doing real work, and ensures IT alignment.  This is what drives engagement in sustainable improvement and therefore, ultimately, in business simplification.

And it's not just effective in untangling process spaghetti, or bringing coherence to process fragments.  I've seen it to be equally effective in enabling organisations to escape the deadweight of enormous SOP document libraries and migrate to a far more agile world where end-to-end process provides the overarching narrative, supported where necessary by far fewer, and far slimmer, SOP documents. 

A picture being worth a thousand words etc, we shouldn't be surprised that once people can see what's going on, they are far better equipped to identify unnecessary complexity and collaborate to safely 'make things as simple as possible but not simpler' (to paraphrase Einstein, who never wrote on shared services, as far as I know, but knew a bit about complexity..). 

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The End Of The Beginning

New job, new blog.  My new role - Principal Consultant in the Nimbus/TIBCO Life Sciences and CPG team - catapults me into an exciting new area, but with a focus that's slightly out of synch with this blog.

Your feedback suggests that this blog works partly because it has (more or less) been focussed on a single idea: that the essential underpinning for success in shared services, outsourcing and back-office transformation is...drum roll... the right business process management platform.

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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08 Nov 2011 The Process SOP Blues

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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