Sourcing Shangri-La

Shared Services: In Search Of The Missing Benefits

There's an intriguing backdrop to Deloitte's 2013 Global Shared Services Survey report, just published. Why are so many business cases being missed in shared services? 

The survey confirms that things are progressing as expected. There's growth - in the breadth of services offered, and in the spread of locations - and more complexity and sophistication, with more multifunction SSCs, more hybrid delivery models and more stand-alone GBS organizations.  

This year, Deloitte is not publishing the main survey findings, listing only the questions asked of the 270+ respondents.  But one line in the executive summary hints at what is perhaps the most interesting story of all:

"A multifaceted approach to addressing the retained organization is required to realize the intended benefits." 

The word on the street is that few shared services programmes deliver their business case. They may do great things, they may employ very talented people, but often there seems to be a question mark over benefits realization. And although the 2013 Survey report doesn't comment on this directly, a (separate) Deloitte webinar last week seemed to confirm that there's no smoke without fire.

In Global HR Shared Services: Emerging Trends, Brett Walsh and colleagues from Deloitte shed light on Shared Services ‘optimisation’ challenges:

“Much has been said about the role of shared services in the transformation of the Human Resources function. Yet for many companies, the benefits expected from transformation are proving elusive.”

“Long after project go-live, when systems and delivery models are in place, organisations still struggle to release the full potential of their investment in HR Shared Services. In fact, many organisations report either failure or significant underperformance compared to their original business case.”

[It's true that their focus in this webinar was HR Shared Services. But most SSCs are now multi-functional, and Deloitte claims to have worked on 900 shared services projects. So it's a credible source.]

There’s no single solution. Every organization is different.  But I’m going to stake a claim that one of the root causes for the 'missing' benefits – maybe the root cause - is a laid-back approach to process management.  

It’s the attitude that defining process is simply an overhead and a non-value-add activity; that it's a temporary project requirement, to be consigned afterwards to a dusty folder on the intranet; that it doesn’t matter if process is in duplicated and overlapping fragments, in different tools and formats, unconnected with real work, and ‘governed’ only by email.

Without the rigour and support of a process management platform, effective collaboration among the stakeholders on the design and implementation of change is, at the very least, in jeopardy.  We see it mostly obviously, and dramatically, in the chasm that can appear between IT and the business, but it undermines effective collaboration between all the other stakeholders too.

As it happens, my colleague Angela Chamberlain and I are presenting a WTG webinar on this theme next week.  To hear more on how Nimbus provides a platform for process excellence that can underpin sustainable success in HR Transformation, please register here and join us. 

 

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21 Feb 2013    When Process Standardization Backfires

15 Nov 2012    Outsourcing's Secret Sauce

© Text Michael Gammage 2013

When Process Standardization Backfires

Current orthodoxy is that process standardization is a Good Thing.

People are committing enormous resources to programmes to deliver global processes supported by a common toolset. It's driving business transformation across every industry and region.

Process standardization is a fine idea.  But the heretical truth is that, as in everything, it's the ability to execute that counts.

A standardization program can unlock game-changing efficiency savings and service improvements. But pitfalls abound:

IT-led. IT systems are at the heart of most major programmes. Too often IT takes the wheel, leaving the business stakeholders in the back seat. And so a business transformation morphs into an IT project. 

Out-of-scope impacts are missed.  Costs ‘saved’ in one standardization project re-surface as incremental ‘work-around’ costs in other parts of the organization.

The voice of the customer is muted.  Standardization delivers efficiency savings but at the cost of the customer experience.

Process variants are concreted in. There is a one-time negotiation instead of a framework that enables variants to be continually re-optimized, reflecting developments in global best practices and changes in business units' requirements. 

The benefits aren't sustained. The change doesn't stick. Gartner termed it 'organizational snap-back'. McKinsey published an estimate that only 10% of cost reduction programmes showed sustained results three years later. 

It's time for a reality check.  I can't be the only one who's seeing projects with hidden costs and flaky benefits pedestalized because they are delivering 'standard global processes'? 

Without a platform for effective collaboration among the stakeholders, and a complete understanding of the big picture, there are very significant risks that the benefits of any standardization initiative will be illusory. And without a means to deploy process content in a way that ensures real adoption, the opportunity for ongoing collaborative innovation is missed.

 

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13 Dec 2012    The Universal Business Language: Process

19 Nov 2012    No Other Corporate Asset Is Wasted So Spectacularly

© Text Michael Gammage 2013

 

Process Resistance

I often wonder why it should be in any way difficult to sell our software. It ought to fly off the shelves.  The business case is slam dunk rock solid. Who doesn’t want a common language and a framework for effective collaboration in designing and managing change across the enterprise?  Who wouldn’t be more agile with a clear line of sight between operating model and operational reality? Who doesn’t need to deploy processes in a way that is intuitive and engaging for people doing real work – and nurtures their feedback and ideas for continuous improvement? Who doesn't need a single source of the truth?

Most often, there’s two kinds of resistance. Sometimes it’s just a failure of imagination. People who can’t imagine that things could be significantly better. A mindset that’s the opposite of visionary.

More often though, there is understanding of the potential – but a wilful decision not to embrace it. Resistance may be justified in some circumstances. But far too often it’s just an aversion to rigor, accountability and a long-term perspective.

I was in a GBS leadership team discussion recently at a prospective client, a Fortune 500 company. The HR Head heard the pitch, and the mixed responses from around the table, then summed it up perfectly for her colleagues:

“We may not like it necessarily - but this discipline is exactly what we need.”

Moving an entire GBS organization to a new way of working requires significant and sustained effort, and continuing executive sponsorship.

But without this new way of working, this GBS organization cannot safely deliver its ambitious growth targets.  It reconciles the tension between its twin objectives: to expand at pace, delivering substantial savings and sustained service innovations over the next five years, and to ensure compliance in a highly regulated environment.

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10 Jan 2013    Nimbus V9 And The ROI On Engagement

11 Dec 2012    Process Management and Google Maps

© Text Michael Gammage 2013

Nimbus V9 And The ROI On Engagement

In case you were away from the planet yesterday and missed the trumpet fanfares: TIBCO just announced the long-awaited V9 release of Nimbus.

Personally, I’m squeamish about hype. I can LOL at the inflated claims of others. But I recoil from it myself (no moral high grounding, just a personal quirk). Anyway, I have to admit that my first instinct was to wince on reading that V9 is a “revolutionary milestone in business process improvement”.  But, actually, on reflection, my marketing colleagues are about right.

In good teams, people are engaged. Each person feels able and empowered to contribute their ideas. Each one feels involved and confident that their input can make a difference. And, just in case you think this is getting all too luvvy, there’s an ROI here as well. Engaged people are happier. And happy teams are far more productive and creative. 

So everything points to the crucial value of engagement. But nurturing it is more difficult, by an order of magnitude, in a world where so many of us are now knowledge workers, often collaborating remotely with people we’ve never met, and across complex global organizational landscapes. How do you get engagement in today’s world?

You can see the search for this modern philosopher’s stone going on all around us. It’s been a major theme in the MixFix debates on re-imagining the enterprise.

One of the keys to engagement is simplicity. People can’t or won’t engage if they don’t understand.

Neil Taylor quoted a great example recently. After six months trying to improve “operational excellence”, only one of his client's teams had actually improved. It turned out that the team leader was holding weekly meetings that she called “Doing everyday things better”. She had made it simple – she turned corporate-speak into down-to-earth language - so her team got engaged.

Against this backdrop and these challenges, Nimbus V9 is a revolutionary milestone.

Nimbus UPN was designed from the outset to create process that is easy on the eye. Content to engage and support process users, not just the geeks. Nimbus already delivered that content as a personalized ‘intelligent operations manual’ to every desktop and mobile device. Nimbus V9 now provides a completely new user interface that is significantly more intuitive.

V9 makes it even easier for people to find the right information, in the right context, at the time that they need it - and delivered in the format that works best for them. Feedback, actions and change requests are simpler too. [And all without sacrificing, in any way, the governance and other capabilities that underpin Nimbus as an enterprise platform for process management and continuous improvement.]

Engagement matters more than ever – and simplicity is its essential foundation. V9 pushes us much further up the curve. It’s going to be fascinating to see how clients leverage this. Must stop now, need to go. Marketing colleague at the door, with a baseball bat?

 

© Text Michael Gammage 2013

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The Double Helix For Organizational DNA

Shooting the breeze with a molecular biologist over seasonal turkey, I was stunned to realize that the way in which our cells work together, to create healthy organisms like you and me, might provide us with a useful model of the way in which healthy organizations work.   

We have around 100 trillion cells in our bodies. Maybe 102 trillion, post festivities.

We have hundreds of types of cell but, gametes aside, every cell in our bodies contains our unique DNA. Set out along its double helix structure, and using just the four letter CAGT alphabet, our nuclear DNA is transcribed via RNA into the proteins which ultimately define and make us function.  Change any aspect of it and you change the person.    

The idea that business process represents an organization's DNA is not new.  But, by and large, it's been seen as just a vague analog, nothing more concrete.  Look more closely though and it gets interesting. In every cell, DNA is always written:

within the same format - the double helix structure. It's always there; we don't have cells with no double helix. And it's always complete; we don't have cells with fragments of partial helix structures. 

in the same language.  We don't have cells using different languages, or subsets of CAGT.  It's worth noting too that the CAGT language may be 'simple' but it's still capable of communicating to its 'audiences' exactly how to code for proteins - and whatever else they need to know.

So the analogy becomes more real. A process management platform is a double helix for the enterprise. It's complete and integrated and present in every cell of the organization.  And its language is capable of engaging and enabling every one of its audiences.

There are some fascinating twists though. 

Cells also contain mitochondria, the power plants that make possible life as we know it. Without energy from mitochondria, we would be blobs of jelly, unable to move.  Mitochondria are really, really powerful in the cellular world. Comparable in many ways to the role of IT in the enterprise. Most modern enterprises would collapse immediately without systems and automation. IT is to the enterprise what the mitochondrion is to the cell: the essential powerhouse.

It gets better. Mitochondria have their own distinct DNA (which we inherit only through our mothers, but that's another story). The point is that every cell has two sets of DNA - nuclear DNA and mitochondrial DNA (mtDNA).

The nuclear DNA is much larger and drives change but in many cases depends upon mtDNA input. Nuclear DNA, for instance, controls 99% of what it takes to make more mitochondria (and therefore extra energy) but the 1% of mtDNA input is essential.

So our cells work - and we live - because nuclear DNA (the business) and mtDNA (the IT powerhouse) always work in concert (and share a common language - CAGT).  Nature confirms what we see in the world of organizations: that sustainable improvement always depends upon effective collaboration, facilitated by a common language and within a defined framework (a governance framework, in the world of the enterprise).

One further parallel. As we have evolved, our mtDNA has shrunk significantly. Some mtDNA capabilities have migrated to become embedded within an ever-expanding nuclear DNA.  Which sounds rather like how the IT mindset has, in some ways and over the last two decades, migrated to become embedded within mainstream business thinking.  Not because IT is any less important. In fact, it's happened because IT is now so important.

PS apologies to molecular biologists. It's all far more complex in reality of course.  But, as others have noted, business process management now means so many things to so many people that it's exhausted. We need a fresh approach, and the life of the cell might just be a useful start point...    

© Text Michael Gammage 2013

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Process Management and Google Maps

Would you rely on Google Maps if you knew it was incomplete, in different formats, languages and UIs - and that much of it was out-of-date? I don't think so.

But ask the same question in an enterprise context and the answer would oftentimes be 'Yes'.  An extraordinary number of businesses rely upon enterprise process maps that are incomplete, in different formats, languages and UIs - and seriously out-of-date.

Google of course saw the potential in location-based services in a mobile world and continues to invest heavily. But as Google's Mr Maps, Brian McClendon, noted in an interview at the weekend, everything depends upon having a solid map base:

"You need to have the basic structure of the world so you can place the relevant information on top of it. If you don't have an accurate map, everything else is inaccurate".  

So Google provides MapMaker and other tools so that its users can get engaged: in providing feedback, even in real-time editing and extension of its coverage. That user engagement helps to drive high levels of accuracy in Google maps.

Imagine an enterprise process map by Google Maps: a visualization of how the peaks of the operating model link to the valleys of everyday operational reality. With this basic structure of the business accurately mapped, it becomes possible to do much more: 

• to orchestrate business transformation
• to underpin Lean Sigma and continuous improvement
• to connect risk and compliance management with business reality
• to ensure IT alignment and enable business-led systems implementations
• to support front-line people doing real work.

But to do this, an enterprise process map too has to be accurate. It is the base map of the enterprise - the foundation upon which everything else is built. So it has to be properly developed and managed. It has to be comprehensive and integrated, and within a robust governance framework. Critically, it has to be in the language of the business because engagement is the key to its sustainability.

Adopt the language of IT - swimlanes, BPMN symbols - and it's a fatal obstacle to engagement with process stakeholders and users. Engagement requires the language of the business - which is why the adoption of Universal Process Notation (UPN) by virtually every Nimbus client may seem arcane but actually it's very significant.

There's another significant parallel here: the importance of personalization. Users don't want Google Maps as a replacement atlas to browse on their smartphones. They want Google Maps to present them with content that is about their preferences, their location and their time of day.  

It's exactly the same with enterprise process maps.  Users want to be presented with content that is about their role, their KPIs and in their language - that helps them to do their job.  But how many organizations simply create an enterprise atlas and file it on the corporate intranet?

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Sustainable Improvement

I love this picture.  I saw this hearfelt and passionate plea in a kitchen area on the headquarters campus of a Fortune 100 company, a leader in its industry.

The COMPLETE AND TOTAL frustration, nay depair, of the author is evident. [And the scrawled response"or you will be sent to bed" just makes it more hilarious.]  

What's interesting, though, is that this is one of the most organised and diligent organisations I've ever worked with. And everyone I've ever met there is bright, switched on and seemingly hard-wired for collaboration. This is the last place you'd expect to see freeloaders and a societal breakdown.

I took another picture on that same campus that day.  I was knocked out by  an official corporate comms poster on a restroom wall.  [Don't worry - if I ever come to your workplace, I do know how to behave...] 

It was an outstanding poster on the theme of collaboration, and, in particular, on the value of simplicity in allowing everyone to get engaged and work more efficiently. I can't show the whole poster without revealing the organization (and probably infringing copyright) but here's part of it.

Even organizations such this - an organization that installs in its restrooms high quality artwork promoting process as an enabler for more effective collaboration - even such an organization can still fall apart when it comes to packing the dishwasher.

There's a lesson here. If process is to fulfil its potential as the language of the enterprise, then it absolutely has to be simple - capable of being understood by everyone. And if process management is to be the platform that enables effective collaboration across the enterprise, then it absolutely has to be robust but also intuitive and engaging. Otherwise it's about as sustainable as a kitchen rota. 

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19 Nov 2012    No Other Corporate Asset Is Wasted So Spectacularly

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No Corporate Asset Is Wasted So Spectacularly

Another week, another client struggling with process amnesia.

I'm looking at an RFP from a household name with "no process documentation available" with respect to its core financial system and the business processes it enables. Last week, I was involved with a global organisation that had thrown out a well-known SI after wasting (their word, not mine) a considerable sum trying to capture their core processes. Next week, I'm working with a client in the energy sector with a complex and ageing system in urgent need of upgrading, but with almost no understanding of how the system works or how it connects with their business processes (which seem to be largely anecdotal anyway). 

Many organizations - and we're talking big and global, oftentimes - are repeat offenders. They are ATMs for the Big 4. They spend millions on a 'process mapping binge' but the processes are never adopted, and the organizations have only the most feeble mechanisms to maintain them, and so, two years later, a new mapping project kicks off.   

It's true that we too generate waste of a kind. Clients adopting Nimbus generally migrate out of any other process format or tool.  They want a common language, and they want to use UPN to ensure engagement. So that's waste of a sort - one global client ditched man-years of process capture of its European finance operations by one of the Big 4 - but it pays off in adoption and sustainability.

Put to one side the missed opportunities from not taking process excellence more seriously - like avoiding IT project failures, or success in multisourcing, or integrated compliance, or sustainable improvement, for instance.

Just at the very simplest level of avoiding unnecessary costs: Is there any other corporate asset where waste on the scale that is considered normal in 'process management' would be tolerated?  

Things are changing but, really, how did 'process' get such a bad rap? It's the DNA of the organization, for goodness sake. How did we get to a situation where it's considered unremarkable that an organization cannot describe its business processes, or how they are supported by its systems?

There's a doctoral thesis for someone in all this. Not sure whether it's a tragedy or a comedy.

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Outsourcing's Secret Sauce

Deloitte's report Outsourcing, Today and Tomorrow, just published, attempts to define the secret sauce for outsourcing. The authors are engagingly frank:

"We wish we could wrap up this paper with a pithy summary of the secrets of effective outsourcing, boiled down into a neat list of easy-to-digest bullet points. Unfortunately, if such secrets exist, no one has yet discovered them."

But they go on to suggest 'one possible candidate' for outsourcing's secret sauce:

"The recognition that outsourcing, like other complex business practices, is a discrete business discipline requiring specialized skills that cannot easily be developed on the fly."

Which may be true - let's agree it's one of the essential spices - but it overlooks an essential ingredient, arguably the foundation for outsourcing's secret sauce: a platform for effective collaboration, which surely lies at the heart of successful outsourcing.

This platform provides a common language: end-to-end process, expressed in the language of the business, not IT-speak. It is comprehensive, not just IT-oriented. It provides integrated perspectives, not just a repository of process fragments. It is wrapped within a robust governance framework to enable process stakeholders - across the enterprise and including especially IT - to effectively manage change. And, crucially, it enables deployment to process users in a way that is personalised, intuitive and engaging.

The Deloitte report - which polled 100+ sourcing professionals earlier this year - provides ample evidence that this need for a common language, a framework for more effective collaboration, is real and growing:

Outsourcing is big - a $480bn industry this year - and set to expand. So too is offshoring.  But operational roles and responsibilities are often amazingly unclear. [There is far too much focus simply on contractual negotiations]

Cloud will vastly increase its complexity. [as will Social, Mobile and Big Data] 

Churn is increasing: half of clients have terminated contracts for convenience, sometimes to insource, most often to re-outsource. [Managing complex dynamic multisourced service delivery environments is becoming the norm]

Innovation and sustainable success in continuous improvement can't work without it. [Innovation and continuous improvement is the area where organizations report that they are least effective in working with service providers]. 

 

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ROI And The Value Of Time

There's few organizations willing to forgo an ROI calculation and instead back a hunch. So huge kudos to GE, whose investment in CoLab, its social media platform, did exactly that, as GE's Ron Utterbeck explained in the latest MIT Sloan Review :

"We haven’t tried to come up with an ROI. Haven’t wasted a moment’s notice even thinking about it."

But the GE team is absolutely on the ball, tracking every aspect of CoLab's uptake across GE - recognizing that adoption is where its true value lies:

"It’s not a system that people have to go to, but people still come back every single day. They come back because it makes their job easier, because they’re getting value out of it. Going and spending money on ROI would be, honestly, in my opinion, just a waste of money because your true value of this is people are coming back".

Most organisations of course don't have this kind of self-confidence and insist on seeing the ROI.  And that's where the difficulties start for projects - like social media - which deliver more effective collaboration.

I've been involved in ROI exercises with several clients where time savings have underpinned the business case.   We often use only the most conservative of assumptions, and constrain the benefits to what can be properly quantified.  But even these savings are often perceived to be flimsy. Faced with justifying it to the COO, stakeholders readily fall back to apologising that 'it's just time savings..'

Which is curious because, as any economist will tell you, the value of time underpins most transport infrastructure investment. It's time savings for users that have driven the development of roads and railways in many countries for at least the last thirty years. [I happen to know because I started life as a transport economist, calculating time savings for Asian highways, African railways and the Channel tunnel].

Maybe it's because the time savings are measured in seconds and minutes rather than days and weeks.  Saving a day is obviously valuable. But when it's the summation of five minute savings, people fall to wondering whether it won't be wasted. 

Whatever - we need to recognize that time matters, and that we should value it appropriately (as individuals, of course, we do it every day: paying for express lanes and priority, or for toll charges to use a shorter route, for instance).  Otherwise we are choking off initiatives with potentially very substantial ROI.  Even better, we need more GE-like chutzpah.

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Global Shared Services: Build It - But Make Sure That They Will Want To Come

It's interesting how rapidly the quality of the customer experience is racing up the strategic agenda for leaders of Shared Services Organizations (SSO) and Global Business Services (GBS) units.

Deloitte's Global Survey last year noted the need for any SSO to promote itself effectively - to overcome resistance, and to secure buy-in, by getting closer to its customers.

On the webinar with HfS yesterday, Ron Walker of KPMG went further, stressing brand development as one of the keys to GBS success:

"How you manage the GBS brand is critical. Any GBS has to sell itself, and to show quick wins." 

The perfect backdrop for my plug for an SSON-hosted webinar next month. Building on experience with a range of clients, I want to show how Nimbus Control provides a platform for SSO and GBS organizations to deliver continuous excellence - including an outstanding customer experience.

There's an interesting prelimary discussion, of course, about what we even mean by the 'customer experience' in this context. 

Deloitte has suggested a useful  distinction between the SSO's client - meaning the exec team buying the SSO's services - and the SSO's customer - meaning the day-to-day users of the SSO's services.  

Clearly 'an outstanding customer experience' has to deliver for both the SSO's clients and its service user customers...

[just fyi - in the typical shared services and outsourcing journey for most organizations, GBS units may be the final stage beyond an SSO, but for all practical purposes, I take SSO and GBS to be interchangeable terms in this context].

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Outsourcing: Death Throes and Birth Pangs

The existential crisis underway in the outsourcing industry makes for amusing reading. The industry has voted by a two-thirds majority to drop 'the O word', reports advisory group HfS, in an attempt to shed its apparently negative connotations. But there's no industry consensus on a new name - and 'outsourcing' features in many of the most popular suggested alternatives.

Phil Fersht, HfS founder and industry thought leader, doesn't mince his words:

"There is far too much “believe our own bullshit” going on and this industry needs to change how it is perceived before it can effectively “rebrand”." 

Phil maps out the four challenges he sees facing a stalled industry. But really they are all one - and summed up in his final challenge:

Challenge #4: How can buyers and providers really partner to foster innovations into business process outcomes?

I'm optimistic. Outsourcing service providers I know are investing heavily to up their game. They see the industry's current convulsions as death throes for a simpler world of labor arbitrage and automation.  And the birth pangs of a world where outsourcing will continue to prosper but in new ways.

If you ask me, two developments will define this new world:

All Work Is Process. The opening sentence to the first-ever APQC report on Business Process Management, published back when Adam was a lad - but it remains broadly true, and it is set to become much more widely accepted. So we'll drop, for example, the empty distinction between 'business process outsourcing' (which really means Finance and HR services) and the rest (such as IT, planning and analytics). All work will be seen as process. The process will always be owned by the enterprise but it may be delivered using in-house resources or be outsourced or, most often, through a hybrid of the two. 

Platforms for Process Excellence. If all work is process then every organization needs an enterprise process workbench. Outsourcing providers will adopt them to enable more collaborative engagements with their clients across the service delivery lifecycle.  Outsourcing buyers will adopt them to orchestrate the delivery of end-to-end processes, delivered through a constantly-adapting blend of in-house and bought-in resources - and to engage all the process stakeholders in continuous improvement.

Arguably, the most interesting challenges are now on the buy side: Developing Global Business Services organizations with the capability to continually re-optimize multiple, complex and dynamic sourcing equations [which include, crucially, keeping IT aligned] to deliver value and innovation for the enterprise. No surprise that GBS is the career choice for some of the brightest people I know.

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Translating An Operating Model Into Real Work

Bringing in a Big 4 firm to create a new target operating model (TOM) has become de rigeur. But how many operating models are ever put to work? Not many. Some are just displayed reverentially on a pedestal in the C-Suite.  Most are 'executed' - by an expensive army of consultants - but with very mixed results.

It’s a big issue. Social, mobile and cloud technologies are driving ever more rapid business model innovation and associated process change. But many organizations are locked into 'a tragic pattern' (as Brad Power has discussed on his HBR Blog): The CEO launches a new change program with great fanfare, only to shelve it a few years later with little to show for great expenditures of time and consulting fees. 

The capability to execute well must be one of the keys to breaking out of this cycle.

Why are so few grand plans well executed?  The swirling fog between the TOM vision and the operational realities, for a start. There is no line of sight between the TOM as a ppt deck and the real business.

The primary mechanism for translating strategy into reality – integrated, holistic perspectives and end-to-end processes – doesn’t exist. Instead there are a myriad process fragments, in multiple tools and formats, ‘managed’ in functional silos within a feeble governance framework. 

So the exec team has a TOM roadmap, steering wheel and dashboard – but only tenuous linkages to the engine, transmission and brakes.

A process management platform provides the multi-dimensional matrix within which an operating model can be executed - reliably, efficiently and, in compliance terms, safely.

It’s the ability to execute that really matters. It's what underlies sustainable improvement. In a complex and fast-moving world, that just can’t be done efficiently any more with ppt and email...

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The ROI on Process Visualization

Two more client examples since my post last week on the power of process visualization.  But first, some astounding data on the potential ROI of making collaboration more productive.

The MITSloan Management Review just re-published the winning essay of the 2012 Richard Beckhard Memorial Prize on The Collaborative Organization. It summarises a six-year research study covering all major industries. And it includes some astonishing data on the everyday collaboration inefficiencies that we've come to think of as normal. Two examples: 

"We were struck by the sheer volume of the collaborative demands on people's time: Many individuals spent 25 to 35 hours per week preparing for and engaging in collaborations with others."

"If the collaborative efficiency of only 20 of the less efficient project managers and organizational leaders improved from below-average to average, it would save the roughly 400 individuals who interacted regularly with them up to 1,500 hours per week."

Clearly, there is a huge latent ROI in making collaboration more productive. So how do you achieve it? 

Well, creating a simple common language, and a single source of truth, must surely be a critical enabler.  And the only serious candidate as the universal language for collaboration must be end-to-end process. But it has to be presented in way that is visual, intuitive and engaging.

This week's two client examples powerfully illustrate this:

In the first case, a wholesale distribution business, the client adopted Nimbus Control to remedy a failing ERP implementation.  Visualization of the end-to-end processes revealed more than a thousand specific business requirements. Even more dramatically, it exposed the fact that inventory management had been overlooked - the Supply Chain team thought the CRM team was handling it, and the CRM team thought the Procurement team had it in scope. 

In the other case, a business services provider, the client adopted Nimbus Control to breathe life into its Operating Framework, transforming it from a sleepy and neglected 200-page Word document into process content that is of equal rigor but visual, engaging and helpful. That visualization is creating a collaborative framework that can drive standardization, performance improvement and assured compliance across its European operations.

There's plenty of similar case studies - including the client with a failing ERP program where process visualization engaged even the CEO and the CIO.   

In today's complex and real-time world, there are enormous benefits in making collaboration more productive. And effective process visualization has to be central to achieving it.

Related Posts

20 Jun 2012    Process: The Emerging Global Business Language

28 Nov 2011    Cracking Complexity in Novartis

 

Enabling The Global-Local Enterprise

In Winning the $30 Trillion Decathlon, a McKinsey team sets out why emerging markets hold the key to the future for most large multinational firms - and ten essential disciplines for success.

The transformation of the global economy in our times compares, says McKinsey, with the impact of the Industrial Revolution in Britain from the mid 18th century:

"By many measures, the significance of [the Industrial Revolution] pales in comparison with the defining megatrend of our age: the advent of a new consuming class in emerging countries long relegated to the periphery of the global economy... The two leading emerging economies [China and India] are experiencing roughly ten times the economic acceleration of the Industrial Revolution, on 100 times the scale—resulting in an economic force that is over 1,000 times as big."

Underlying the ten essential disciplines for organizations that want to win in this new world, one theme stands out: the capability to be both global and local.

Being Local drives innovation and responsiveness.  McKinsey quotes, for instance, the case of South Korea's LG Electronics, which set up in India and realised that many Indians used their TVs to listen to music. So LG swapped out flat-panel displays for less costly conventional cathode tubes to introduce new models with better speakers at the right price point. LG went on to become market leaders. 

But being Global can deliver enormous benefits as well, in standardization and procurement, for example.

There's no right global-local mix.  It will vary by region, by product, by route to market, by market maturity - by a hundred and one factors.

So the real challenge is to blend Global and Local, and to be able to continually re-optimize the blend at every level.

Yet around 40% of global companies don't even have the most basic means to effectively manage these global-local trade-offs, according to McKinsey research published last year.

In a world forging a second Industrial Revolution, and so creating a $30tn opportunity, it's difficult to see how any multinational can optimise its global-local mix without a world-class business process management platform . It's surely the essential infrastructure, the collaborative framework, that best enables global-local optimization.  

Related Posts

20 Jun 2012    Process: The Emerging Global Business Language

10 Jul 2011    Managing The Downside of Global Processes