Sourcing Shangri-La

The Patchwork Enterprise

The enterprise of the future looks something like patchwork.  In a good sense.  Patchwork quilts can be beautiful, blending diversity into a coherent whole - and uniquely distinctive. Often it’s collaboration by a group of quilters that creates them. And they’re not just great art. They keep you warm. They deliver.

Outsourcing is becoming ever more pervasive as globalization drives further specialization. In the villages of our forebears, people came to specialize in baking bread, or working with leather, or shodding plowhorses. In our global village too, it doesn't make sense to do in-house what someone else can do better or cheaper.

Outsourcing was once focussed on ‘non-core’ activities. Now everything – from R&D through manufacturing and supply chain to customer experience analytics – can be outsourced, and increasingly is.

In this patchwork future, successful enterprises will mirror the best quilting groups: a clear vision, creative collaboration and the means to make decisions. In other words, a well-defined operating model and a framework for effective collaboration that brings everyone's creativity into its execution. 

Patchwork has another, negative, connotation of course: ‘a hodge podge’. 

I worked with a multinational client once, leveraging Nimbus to bring multiple HR outsourcing contracts into one coherent whole. That end-to-end perspective exposed the multiple gaps between the expectations of the service providers and the retained organization. Non trivial gaps too.  One was an immediate threat to the entire expatriate payroll. 

That's the hodge podge kind of patchwork enterprise, and it has a very limited future. No-one’s going to want to work with, or buy from, a patchwork enterprise where the patterns and colors don’t match, and you can see the stitching - even worse, the gaps.

Some organizations are trying to stitch their multisourced reality together, buying in 'managed governance services' and the like from the Big 4.  But ultimately it demands holistic thinking, discipline and a platform to support it. Much like quilting.

 

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© Text Michael Gammage 2013

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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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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Toxic Processes: Social, Cloud, Agility - and Risk

There's a looming crisis that's being driven by the headlong rush into Cloud, Social  and Big Data in pursuit of the Agility agenda. Like the financial crisis, the signs are clearly evident well ahead of the crash.  And just like every actor in that sorry tale was acting rationally within the confines of their silo, so too this time everyone's busy.

At the heart of the financial crash was the accumulation, over many years, of  toxic assets purchased in vast quantities by over-leveraged banks. The risks were not clearly visible or understood.

On the smaller scale, many global enterprises are busy working on their own sub-prime crisis. They are relying on toxic processes. As a result, their risks are not clearly visible or understood.    

Organizations are rapidly building a future that is far more virtual, where an empowered workforce manages service delivery operations that are far more complex, fast-paced, and largely outsourced.

Cloud promises the frictionless enterprise.

Social promises employee engagement and the capability to turn on a sixpence.

Sourcing and supply chain innovation promises low costs and rapid response.

Within each program silo - Cloud, Social, Sourcing - it makes perfect sense. It's the agility that CEOs are looking for. But this new level of agility comes with new levels of risk. Two examples:

The complexity of existing supply chains  makes them vulnerable. Car production was halted in several factories around the world when the Japanese tsunami struck the remote Tohoku region: it turns out that the Renesas plant there produces 40% of the world's microcontrollers. Building resilient global supply chains will require even more complexity. The increasing adoption of outsourced services from multiple suppliers - the growing virtualization of the enterprise - will exacerbate this complexity, and therefore the vulnerability.  

In customer relationship management, IBM's Global CMO Study, out this week, shows CMOs living in a world of high complexity and unpredictable interdependencies. It calls out customer intimacy as a strategic goal for CMOs. But it's to be delivered as rapid response in a world of real-time social media by empowered employees - many of them working for outsourcing partners - dealing with empowered customers, and by complex, rapidly-changing, business rules applied to Big Data.  So much higher levels of complexity and therefore vulnerability.

It's easy to get carried away with the potential benefits in Cloud and Social (and Big Data). But the execution risks are correspondingly high - and largely overlooked. In complex, fast-paced and global organizations, increasing agility correlates with increasing risk. 

Business process management is unglamorous next to Cloud, Social, Big Data and Agility.  But a BPM platform is the essential foundation for success.  The first step in mitigating risk is transparency. (It's also the key to unlocking potential innovation as well, of course).   

Pause please while I step up to my soapbox again. The BPM platform that can leverage Cloud, Social, Big Data fully, while properly managing risk, must have three fundamentals:

Holistic perspective. This means visibility of the enterprise that is complete, integrated, rigorous and realtime.  Transparency here is like the capability to run a three-dimensional CT Scan for the enterprise at any time.

Effective collaboration. That means a common language, across the internal functional silos and the extended enterprise. The only plausible language is end-to-end process - but, and this is critical, in the language of the business, not IT-speak, to ensure shared understanding.  It also requires a governance framework that is robust but practical, otherwise collaborative innovation will stall, or undermine risk management.

Ubiquity. It must connect strategy directly with operational reality across the enterprise. There's a compliance gap if the enterprise process model is simply an abstract managed by IT or the Quality function. It has to support real people in getting real work done.  So it needs to be personalized, and deployed to desktops and mobile devices as easy-to-consume process content.  This ensures the real-world integrity of the process model. It also engages the workforce and so channels Social to where it's most productive: fostering continuous improvement within the process context.      

Some organizations recognize these risks - we are seeing new levels of interest in a BPM platform that can deliver this capability - but most don't yet. Some put their faith in complete and 'perfect' IT process models - but they focus only on what's automated, and are understood only by a handful of people. Most organizations rely on incomplete, duplicated and overlapping process fragments in a variety of tools and formats, and with no governance beyond email.  Either way, IT models or myriad fragments, these are toxic processes.

If we continue our current trajectory, Gartner's prediction earlier this year that ten global companies will be toppled within three years by basic process defects looks safe.

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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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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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After Nimbus IP11, The Sky's The Limit

 
It seemed entirely appropriate that an extraordinary first day’s program at Nimbus IP11 closed out this evening with a stunning set from the amazing a cappella vocal group Naturally 7.

It was a day of superlatives. I lost count of the number of people, whom I’d never met before, saying, in the breaks: ’This is amazing!’. 

As one delegate put it, the Nimbus plane took off some time ago, lifted high by client enthusiasm.  And the video message from TIBCO founder and CEO, Vivek Ranadivé, who was keynoting at TUCON in Las Vegas today, confirmed that Nimbus now has an extra large powered-by-TIBCO jet engine strapped under each wing.

As ever, it was Nimbus customers who fizzed with energy. And, as usual, their candor was remarkable: this was real knowledge-sharing among pioneers in an approach to enterprise business process management that will one day be business-as-usual.

My own highlights from the stage, picked out from a packed program, would be...

Tim Leach from Northrop Grumman, on the challenge of bringing together the insights of 23k people (many of them actually rocket scientists, he laughingly pointed out) and aligning them in the cause of continuous improvement. If Northrop Grumman can assemble all the parts for the most advanced aerospace equipment, and keep them aligned so the plane can fly, then why is it such a challenge to get people aligned and flying in formation?  How could it be that having 7k people trained in Six Sigma and Lean was yielding so little in terms of sustainable cost reductions and service improvement? The answer: bring their work together into a single process repository, within a single process architecture, and connect that with how people get real work done. “Our failure”, he said,”was that we tried to build it ourselves. After 18 months we found Nimbus, and that was an immediate 85% of the solution.”

Richard Miller from Marathon Oil, manager of a platform in the Norwegian sector of the North Sea that cost $3bn to build, costs $160m to operate every year – and that pumps $1.6m of oil and gas per day, when everything is working properly. After a Nimbus Control implementation that has successfully enabled a major in-sourcing exercise, and a re-implementation of SAP: "The thing I notice", he said,"is that things are becoming much more predictable. Not just in planning work and the delivery of materials, but right across the business."   

Darren Anderson, Principal Solution Architect for Sony, based in Tokyo, steering Sony's global SAP program (which is his 32nd major SAP implementation), and striving to ensure that process is at its heart. "We had this realization - I knew this but could never vocalize it - that end-to-end process is what we have to focus on." That realization had enabled Sony's European business to reduce the timeline for delivery of an SAP program from two years to just one. "The critical success factor was Nimbus: working around one process. I want the business to be thinking about how to improve the process, not have to think about changes to SAP. Nimbus Control has the potential to accelerate our global program, and to help us win in the marketplace by being One Sony."  

Gregory Reynolds, Head of the BPM Center of Excellence at Nestlé, described as a 'no-brainer' the final decision, after an exhaustive evaluation, to adopt Nimbus Control as Nestlé's global BPM platform. "There's almost unlimited potential", he said,"because continuous improvement is baked into our culture." 

Anne Salétes from Novartis on how Nimbus Control is enabling process improvement in the most challenging regulatory environment by providing end-to-end visibility. "We are all talking about - and challenging - the same perspective on our clinical operations processes. Our people working in clinical trials are, naturally, very precise.  What we are doing is helping them to see the big picture as well. So we can see how we can improve - and show our regulators that we are efficient and managing the risks." 

The funniest moment, for me at least: Richard Parker, co-Founder of Nimbus, talking about the company's evolution within the SAP landscape, and noting that: "We're not just going around helping the victims of SAP implementations any more."  (Images of ambulance-chasing to get to the scene of an implementation and help to restore the vitals of the enterprise fast...)

But I can't neglect to mention the Guide Dogs video, which was hugely inspiring. I happened to meet a delegate from the conference on the train on the way home (as I wrote this - she recognised my conference badge!) - and it was the Guide Dogs, and Naturally 7, that she wanted to talk about.    

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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.

PwC and HfS on Global Business Services Success

Seven out of ten for PwC and HfS on their report: The Evolution of Global Business Services.

Credit where it's due: The report highlights governance as crucial, in a way that's not been done before.  And it's helpful too in setting out models and objectives for global business services. But it's silent on what is rapidly emerging as a fundamental for success.

Governance is a theme running through the report, and it's a mature understanding:

Governance has to be 'ongoing', not project or deal-related. Governance is not about another tool for the vendor management team.

Governance has to be 'well-integrated, consistent and rigorous' and process-oriented, capable of orchestrating change across complex service delivery environments with multiple and diverse stakeholders.

What's missing from the report is the learning that's emerging on how you do this. 

That learning, in a nutshell, is this: the tools which got us this far aren't sufficient to deliver this new world. 

Global business services initiatives are often bogged down, even paralysed, by the tools they are using. The result in many cases: 'a complete mess'.

Everything indicates, as I've noted before, that successful global services organizations will increasingly depend upon an integrated management platform that:

- provides line-of-sight between a target operating model and operational realities

- enables effective collaboration, especially between IT and the business, right across the  complex service delivery and supply chain of the extended exterprise

- embeds governance, compliance and controls within the operational processes

- delivers at the front line and engages the organization in continuous improvement.

This is not about the triumph of the process nerds.  It's about enabling the enterprise to manage effectively in an additional dimension: end-to-end process.   

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Sustainable Improvement In Shared Services Performance: Here's How

My colleague Rob Speck tells a story on his excellent new Process Maximus blog that perfectly illustrates the performance deficit in shared services, and how to address it. 

It's a deficit that has been largely hidden until recently. Shared services is wildly popular, and growing across all industries and regions. In Deloitte's 2010 Global Shared Services Survey, 89% of organizations declared shared services to be 'strategic'.

But scratch the surface and it's not hard to find business cases that have failed to deliver, sometimes spectacularly. According to the Deloitte survey, 78% of organizations reported ‘no significant positive impact’ on process efficiency or quality. 

In practice, promised efficiency gains have proven difficult to deliver, and sustainable improvement has been even more elusive.

Rob's story illustrates the prevailing condition of many shared services organizations.  His client was the shared services division of a Fortune 100 company, providing Finance and HR services. The SSC's processes were 'managed' and 'governed' in Word and Visio and peoples' heads. Process ownership was fragmented and unclear. KPI metrics were disconnected from their business processes.  Onboarding new clients to the SSC was challenging. The confusion and complexity demanded a culture of heroics.  It was, the client said, in a moment of despair: 'A complete mess'. 

OK perhaps this is slightly harsh, but it was, in many ways, a fairly typical SSC. 

Rob's case study shows how that SSC deployed Nimbus Control to significantly up the pace of its journey towards operational excellence.  At the heart of its success is an integrated management platform that provides visibility and enables effective collaboration, across a complex hybrid delivery landscape, on the continuous improvement of its end-to-end processes.

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08 Aug 2011    Outsourcing Buyers and Sellers: Swords Into Plowshares

20 Jun 2011    Building A Robust Global Services Organization

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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20 Jun 2011    Building A Robust Global Services Organization

19 May 2011    Service Integration and Process - In Six Minutes

 

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. 

Attaining Touchless P2P

My first time at the Attaining Touchless Purchase-to-Pay conference in London this week - now in its fifth year. 

Great hands-on (touchless - geddit?) presentations from Vodafone, BG, Diageo, Pearson and others.  But the star of the show for me was Ericsson. After almost a decade of relentless transformation, it has migrated from 100+ national P2P processes into a global P2P process delivered off a single instance of SAP. Along the way, it has shed one third of its FTEs, reduced F&A costs to 0.2% of opex - and is approaching 'touchless' in many areas. 

As ever, it was the shared learning that was most valuable.   The Ericsson presentation highlighted four lessons that recurred in other presentations across the two days:

1. Automation has to follow after process standardization and optimization [encouraging that process standardization was a top priority in the pre-conference delegate survey]

2. Never under-estimate the value of collaboration and investment in change management; never make the mistake of thinking 'this is an IT project'

3. There has to be one process - integrated across the enterprise and down to the task level - and a shared understanding by all the stakeholders

4. Governance is breakfast, lunch and dinner - especially with respective to policing process variants. [Ericsson's ongoing program on 'deviation reduction' must frighten the life out of those who would dare argue for special treatment]

Ericsson is also among the leaders in fusing AP and Procurement, having just moved its global Supply Chain into Finance.  Vodafone too has a single integrated global operating model across Finance, Supply Chain and HR.

But most organizations are yet to make real progress here. It was a major theme of the conference. As Susie West, CEO of SharedServicesLink, put it in her keynote: "Automation alone won't achieve much without standard processes and alignment. If there's one take-away from this event, it's this: how are you going to get alignment? "

Collaboration, standardization, alignment, variant management, compliance...  I would love to say that Ericsson leveraged Nimbus Control as a process management platform to deliver its success. But, alas, I have to report that they built an in-house toolset (which looked uncannily familiar!).  

For those who admire Ericsson's pioneering spirit but would prefer to adopt a proven platform for process management and performance improvement: please come and check us out at Inspiring Performance 2011 in London in September.

PS haha - just heard that an Ericsson speaker won a prize in the end-of-conference raffle, donated by one of the conference sponsors: Nimbus! Dear Reader, are you going to believe me when I claim that this is not a stitch up? 

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23 May 2011    IBM Global CFO Study 2010: Finance Transformation

20 June 2011    Building A Robust Global Business Services Organization

Building A Robust Global Services Organization

Rick Lucas and Drew Wright at Everest Group sounded an alarm last week about the challenges in building a robust global services management organization.

Highlighting the increasing complexity of global services delivery, they make the point that today's world demands different expertise and new capabilities. Relying upon the skillsets that have worked for the last twenty years could be, they warn, 'catastrophic'.  

It's not just new leadership that we need. As I've argued elsewhere, the complexity and pace of managing global services - the challenge of service integration - demand a similar revolution in process thinking.

The tools and methods that we've used for process management for twenty years won't deliver in today's world either.  They are too technical, fragmentary, ungoverned and disconnected from real business operations. 

Successful global services organizations will rely on process management platforms that can:

- provide line-of-sight between a target operating model and operational realities

- enable effective collaboration, especially between IT and the business

- wrap governance, compliance and controls around the operational processes

- deliver at the front line and engage the organization in continuous improvement.

Everest makes the case for recruiting the right talent 'to execute with excellence and deliver the next generation of value from global services'. But even the best talent can't deliver sustainable excellence without a joined-up view of the business.

Optimizing service delivery across supply chains that are global, cross-business and cross-service providers, demands transparency, shared understanding and clear accountability. Cue the enterprise process management platform, the crucial enabler.

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