Sourcing Shangri-La

Why Process Improvement Projects Fail

Interesting times. There’s an emerging consensus that Lean, Six Sigma and other process improvement programs are failing, and a myriad explanations why. And yet - I just saw a(nother) Nimbus client video on a remarkable success in sustainable process excellence.

There’s no shortage of doomsayers. In a PEX Network podcast just released, Nigel Clements, who will keynote at the Process Excellence conference in London in April, estimates that up to 70% of process improvement projects fail. In an article in the Wall Street Journal, Professor Sakya Chakravorty estimated that 60% of Six Sigma projects fail. And the PEX Network poll launched last week on ‘the biggest barriers to continuous improvement’ has already attracted 500 voters.

But why? That’s where the divergences start. There may be common agreement on the symptoms, but there are many different diagnoses of the underlying condition.

Nigel Clements, for instance, points to Deming’s 'five deadly diseases' as the root causes: lack of constancy of purpose; emphasis on the short term; compensation that distorts incentives; over-mobility of management; and only using visible figures.

Professor Chakravorty suggests the need for Six Sigma ‘experts’ to be retained on projects for longer; for smaller project teams; and for tying in performance appraisals to adoption of change.

Both though agree on what must be the single over-arching truth here: that success in continuous improvement (CI) is about creating an enterprise-wide culture of engagement and collaboration. And that it is impossible without leadership from the top.

Even Nimbus Control is not, dare I say it, an essential for success in sustainable process excellence. It hugely increases the chances of success in setting up and maintaining any CI program. But, ultimately, it is simply an enabler. Without executive vision and commitment, nothing sustainable can succeed.

The client case study I just saw is on the launch of a global CI program in a Fortune 100 organization. It brings new levels of creativity in how it leverages Nimbus Control. There’s huge attention to graphic design as one of the keys to users engagement. It has real-time metrics that look beyond process performance to cover as well process adherence and popularity. It also extends the standard RACI model in a way that brings a new clarity and productivity in compliance. And subtly, and throughout, it reinforces this organization’s values.

What made it possible? Executive energy plus the adoption of Nimbus Control as the process platform, and UPN as the process language. But it was also the Nimbus methodology: the creativity inherent in live workshops in the discovery phase, facilitated by an experienced Nimbus consultant, to map out new ways of working.

It’s confidential right now – for obvious competitive reasons – but hopefully might make it into the public domain in due course. It’s a sparkling glimpse of the future in a world of CI gloom and angst. And exactly the kind of story that can fire up C-Level imagination and commitment.

Hello Checklists, Goodbye Process?

My little world wobbled as I read Atul Gawande’s bestseller The Checklist Manifesto.

It seemed to challenge head-on my conviction that process matters most because it provides the language that enables effective collaboration amidst complexity.

It’s superbly well written (Dr Gawande is an eminent surgeon but he’s also a staff writer on the New Yorker). It was ravishingly reviewed in the FT, the NY Times and The Economist, whose reviewer described it as ‘a meditation on the growing complexity of the world, and how to cope with it’.

The book sets out the evidence on the value of the humble checklist in saving lives (and much else – injuries, time and costs) in even the most highly complex activities – in the operating theater, on skyscraper construction sites, and on the flight deck. It is utterly compelling.

Why do checklists work? Firstly, because ‘they get people talking’, suggests Dr Gawande. They break down hierarchical barriers and encourage the teamwork that can ensure the best possible outcomes – in surgical teams, among construction engineers, even in due diligence teams working for private equity investors.

Checklists also encourage discipline. They recognize that, in a fast-paced world, we can all too easily forget the obvious. Kitchens in top restaurants use them. Checklists can ‘force reflection’ says Dr Gawande, even in complex and dire situations like the loss of an aircraft engine.

As I read the book, I feared I was hearing the distant rumble of a paradigm shift. It seemed entirely plausible that my approach had been turned upside down, that process had been a wasteful diversion – and that checklists were the new process.

The truth though seems to be more subtle and interesting. Checklists and process may overlap but they are essential, and complementary, in enabling us to deal with our enormously complex world.

Both enable collaboration and ensure compliance. 'Checklists are not comprehensive how-to guides', says Dr Gawande, 'they are quick and simple tools to buttress the skills of expert professionals'. Sometimes a checklist could be easily substituted by an end-to-end process and a Storyboard. In other circumstances, only one of them will work. What’s appropriate will depend entirely upon the context.

Context is one of the exciting themes of the book. The best checklists work because their creators are painstaking in understanding the context in which they will be used. They care about the tiniest details because they know that it matters in effective communication. Those who have advocated ‘publishing’ business processes that are static, generic and described in technical gobbledeegook might want to read and ponder these sections.

It’s also, in an odd way, heartening to read of the widespread resistance to checklists, despite clear evidence of their value. Organizations and individuals, across all industries, often applaud the idea of checklists - but have some reason why they are ‘special’ and should be exempt. They have to be won over – even if they subsequently emerge as the strongest champions of the idea. Inviting us to re-think how we define heroism, Dr Gawande reflects on this inertia:

"…We don’t like checklists. They can be painstaking. They’re not much fun. But I don’t think the issue here is mere laziness. There’s something deeper, more visceral going on when people walk away not only from saving lives but from making money. It somehow feels beneath us to use a checklist, an embarrassment. It runs counter to deeply held beliefs about how the truly great among us – those we aspire to be – handle situations of high stakes and complexity. The truly great are daring. They improvise. They do not have protocol and checklists. Maybe our idea of heroism needs updating." [p.173]

Replace ‘checklist’ with ‘process’ and it’s the journey of most organizations towards process thinking, and towards a recognition of the process platform as an essential enabler for sustainable operational excellence.

Related Posts

10 Nov 2011 Value Chain or Process? The Costs of Confusion

20 Sep 2011 BPM: The Foundation For Operational Excellence

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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17 Nov 2011 Future of BPM: We're in Mesopotamia 3000BC

08 Nov 2011 The Process SOP Blues

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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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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02 Nov 2011    Toxic Processes: Social, Cloud, Agility - and Risk

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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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The Socially Optimized Business - And Process

I love the positive energy and openness of the Dachis Group and the Social Business Council - their one page graphic summarising Attributes of a Socially Optimized Business can be downloaded here - so I don't want to be picky.  But there's a flaw in their manifesto - at least, as I understand it - that may seem nerdy but is, I think, actually quite crucial.

I've huge sympathy for the call for a Renaissance in business:

"After decades of mechanistic, dehumanizing, process-oriented management dogma, progressive organizations are waking up to the disturbing truth that they’ve squeezed all the creativity out of their business. When companies embrace organic, passionate, socially-savvy initiatives, they blossom. Who benefits? Everyone."

What worries me is the way we seem to be trashing 'process-orientation'. 

Agreed, process has for too long been articulated in the form of technical gobbledegook. And it's rarely exciting. 

But - if we express process simply and holistically, so that people across the socially optimized enterprise can understand it, then we have a universal language that can get everyone talking. 

And if we support it with an enabling process management platform, then we have:

connected the creativity with how work gets done.  So we ensure that social business is not an ivory tower, it's about engaging with everyone's ideas

the ideal framework for Lean, Six Sigma and other process improvement programs - and for sustainable continuous improvement

the governance framework that ensures collaboration will be effective, across all the functional silos and the increasingly virtual extended enterprise  (it also allows the Chief Risk Officer to sleep at night). 

Great ideas -please sign me up for the Renaissance. But let's see process as part of the solution and so make it practical.

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To Be, Or Not To Be...That Is Not The Question.

A frantic call from a managing consultant at a Nimbus partner, asking for help on his way into a client meeting, reminds me of our own little Da Vinci code. Only we, the process cognoscenti, know what Shakespeare really meant. Hamlet's original soliloquy was not merely about the most noble course to follow. It directly addressed the more fundamental issues in process discovery:

'To-Be or As-Is, that is the question...'

My friend's client may be at the bottom of the process maturity curve but they have aspirations, and an urgency (hence my friend's assignment).  But, as is so often the case, they only want to focus on the future.  When your organization is largely dysfunctional and you have finally gathered the energy to act, it's natural to want to focus on the sunlit uplands of process maturity: 'Let's not waste time with the As-Is, let's just focus on the To-Be processes'.

It's fair to say that consultants themselves often disagree on how important it is to capture the As-Is processes.  But none that I know would ignore them.  You can't plan a journey without a startpoint. Transformation plans without an adequate understanding of the As-Is processes are very likely to fail.  So, at the very least, capturing the As-Is processes reduces transition risks. 

But paying attention to the As-Is processes helps in other important ways too. It can expose gaps, overlaps and inconsistencies that were overlooked because the organization's focus has been on heroic fire-fighting. It reveals connections and hidden dependencies. Often it throws up new ideas for the future state, and highlights issues that will be need to be addressed in the transition^*. It grounds the definition of the To-Be processes. Above all, it gets people collaborating across functional silos, using the language of end-to-end process.  

Process maturity is ultimately founded on an organization's cultural mindset.  Jumping straight to the To-Be processes is a quick-fix mindset.  We'll always need to execute quick fixes - but process maturity requires the organization to be able to operate in a more detached and analytical mode as well.

My friend's client of course doesn't see it this way (hence his call for help).  So he will take on 'the slings and arrows of outrageous fortune' and risk arguing that his client needs to do an elementary capture of the As-Is processes, just to reduce transition risk.  And be confident that the client will gradually come to realize that time invested in capture of the As-Is can be consulting budget very well spent.  

Which we all know is pretty much what Hamlet would have advised in the circumstances:

Thus conscience does make cowards of us all,
And thus the native hue of resolution
Is sicklied o'er with the pale cast of thought,
And enterprises of great pith and moment,
With this regard their currents turn awry,
And lose the name of action...

* Nimbus Control is the perfect tool for this because it has several ways to capture these ideas without disrupting the flow of the discovery workshop - and to easily analyse and report on them later. 

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Deloitte Shared Services Insights: Could Do Better

Accenture's report earlier this month did a good job in advancing the debate about shared services. By comparison, Deloitte's latest shared services insights disappoint. It's a commendable report - but it kind of misses the point.

Overlook the waffle and the sloppy thinking: Accenture's report does nail the essential truth - that a service management framework is vital for sustainable success:

There needs to be a “system around the system” that includes the people, discipline in procedures, communications, service expectations, performance measurement and key cross-functional processes, such as continuous improvement and client relationship management. It’s this broader shared services system around the system— which Accenture calls the service management framework—that sets shared services organizations that have achieved high performance apart from those with a sub-optimized centralized service delivery model. The service management framework is the keystone...

I've argued elsewhere that Accenture needs to go further and recognize that the service management framework for shared services, in its best developed and most valuable form, is the business process management platform at the heart of the enterprise. 

But, that qualification aside, the idea of the service management framework is a crucial advance and deserves to be adopted.   It provides the context by which we can understand that Deloitte's latest list of worthy insights - on the importance of change management, IT alignment, governance and enhanced controls - are in fact all inter-related.  And jointly soluble, once we frame this correctly. 

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Placing A Big Bet On Global Shared Services

"The companies you work for are placing a big bet on your success. Your job is to scale fast...". Deborah Kops's presentation captured the moment at this week's Finance Summit.

Shared services is set for very rapid growth. There is a convergence around an SSOS model of shared services implementation: Stabilize - Standardize - Optimize - Source. It's a model that's driving the expansion of shared services into global business services operations, delivering not just the traditional Finance & HR services but others such as Procurement and Supply Chain - and doing all this in an increasingly multisourced mix.

Unsurprisingly, change management featured heavily, reinforcing the importance of a service management framework. One organization reported 28 change initiatives running concurrently in its P2P process alone in this FY.

The challenges are changing as shared services moves up several gears, and beyond the easy wins in automation and labor arbitrage:

Customer Satisfaction. The pre-conference survey showed service improvement was on a par with continuing cost reduction. Several SSOs are using KPIs based on the Net Promoter methodology to measure client satisfaction.

Continuous Improvement. There's an new focus on continuous improvement programs. CI was one of the delegates' top budget priorities for 2012. 

Talent Management. There's a lot more focus on people, morale, motivation, engagement and retention. 

No surprise that there was a lot of interest in Nimbus Control as a service management framework that can orchestrate complex change and enable continuous improvement.  It was in the challenges of ERP projects that the visualization of process, in the language of the business, seemed especially powerful. Stakeholders in most organizations simply don't have proper visibility of the current and future state, can't do easy gap and impact analyses, and have no governance framework, beyond email, for managing change.

My conference highlight, by the way: sharing a table with a global P2P owner spending $52bn this FY. Awesome.

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Continuous Improvement - Made Easy

Naturally, I would say that Emitra Nelson from Cameron stole the show on Day 1 of the Summit for Finance Leaders in Dallas today (you can hear her story on a SharedServicesLink webinar on 18 October - more details here).

But if I couldn't vote for Emitra, on the grounds that hers is a Nimbus success story, my choice for the most thought-provoking presentation would be Andrew Simpson, Head of Business Services in America for BP, whose case I summarised in a doodle in my notes as this:

 
(my maths is shaky, so I'm hoping this means what I was thinking!)

Andrew defined Continuous Improvement (let's call it CI) as 'operational excellence through process improvements' , or, more informally, as 'stopping business insanity'. He listed the 20 most common excuses he's heard about why CI can't be done, the funniest being the manager who claimed that it would be 'against corporate policy'.

He then proceeded to show exactly how he has implemented CI, and went on to make a totally convincing case that, in the long run, 'background' CI can be even more valuable than high-profile transformation programs.  And a CI culture, he argued, will also make any major transformation program more likely to succeed: people are engaged and energised by change, not simply resistant.  In shared services terms,  CI is 'the critical success factor for any SSO that wants to stay relevant'.  

What's really interesting is how few of the organizations represented in the audience have a serious CI program.  There's lip service but little commitment. How can that possibly be? At the end of the day, CI is pretty straightforward. 

Maybe the clue lies in a video Andrew used in his presentation to illustrate resistance to change (can't find it on YouTube, but it was like this).  The hamster keeps getting on the wheel, spinning faster and faster until it's out of control and finally gets flung out into the cage - then does it again, and again and again... 

Maybe the hamster enjoys the adrenalin rush - just like the business enjoys the thrill of firefighting.   And when, after a while, the hamster is punchdrunk with concussion and unable to think clearly, well that's like the business getting so used to living in firefighting mode that it too can no longer see clearly - and so resists the CI initiative that is ultimately its way forward.

Finally, a great endorsement for CI: people from BP's Business Services unit are sought out by the rest of the business.  It's career-enhancing because it has a carefully thought-through and well-executed CI program that encourages people to bring their brains to work. It breaks out, he noted, of the analysis paralysis of left brain thinking, the belief that life is a machine and we just need to understand how the cogs fit together to get it to work perfectly.  It recognizes the special and unique value that diverse perspectives, working intelligently together, can create.

There was a ton of other good stuff too of course.  More on that later in the week, I hope.

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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.    

Related Posts

03 Oct 2011    Shared Services at IP11: Your Top Issues

19 May 2011    Service Integration and Process: In Six Minutes

  

Shared Services @ #IP11: Your Top Issues

 
I hesitate to use the word 'landslide' but attendees at the Shared Services workshop at IP11 last week voted decisively on their own Top 3 issues (after strongly endorsing the issues identified by the Deloitte and PwC surveys earlier this year):

(1) Managing process variants

(2) Retaining IP and strategic control where activities are outsourced

(3) Building a continuous improvement culture.

Haha - no real surprises here for regular readers! For others new to this blog, there is more on variants here, on retaining IP and control in outsourcing here, and on continuous improvement here.

Slides from the workshop are available from the conference website. Thanks to all who contributed!

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Optimize 15,000 Business Controls? No Problem.

This is kind of obvious - I'm sure you knew it already - but it had escaped me until I sat in on two client case studies at IP11 this week: Managing variants in global business controls is essentially the same problem as managing variants to global processes.  Except that it's arguably more complex and business critical.

McKinsey has noted that most organizations don't manage global processes well. Many are in denial that there is a problem. They define process variants as an IT issue and talk of 'vanilla' system implementations as solutions. And if variants are addressed, it's in a one-off Inquisition, as though things would stand still thereafter.

The truth is that every global process requires local variants of some sort. But global processes continually evolve, and local circumstances continually change. So what's really needed is the capability to continually re-optimize the mix of global process and local variants. And, of course, to continually re-deploy these changes to the workforce in a way that ensures adoption. 

McKinsey noted that many multinationals don't have the collaborative (and governance) framework in place to pull this off. They suffer a 'globalization penalty'.

It's the same problem for global business controls, except more complex.

Rene Nibbelke from BAE Systems highlighted in his IP11 keynote the value of visualization in enabling a Finance team to transform and deliver 280 processes with 230 business controls. But an investment bank, in a workshop case study, showed 15,000 business controls embedded in its processes in Nimbus Control.  Many were local variants. The bank's problem was to continually re-optimize the mix of global controls and local variants.

As an integrated management platform, Nimbus Control delivers the capability to continually re-optimize the global/local mix for processes and business controls.

It's not just analytical either - it supports real world operations, where some business controls require daily reporting and attestation.  And it can do this at pace. 

In one case study - another investment bank - the client created a single source of truth: an integrated process map, covering its activities in 28 functional areas and across 3 regions of the world, complete with 10,000 business controls embedded in the operational processes - in just six months.

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27 Sep 2011    After Nimbus IP11, The Sky's The Limit

10 Jul 2011    Managing The Downside of Global Processes

 

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