Sourcing Shangri-La

Future BPM - The Enterprise Platform

I’ve argued previously that sustainable success in complex global enterprises depends upon effective collaboration, and that process is the language that best enables it.  I’ve also argued that BPMN is out of the running as a universal business language, and proposed three questions we should ask in assessing alternatives.

The right language is vitally necessary but it’s not sufficient.  Traditionally, we say it needs to be supported by a tool.  I want to make the case here that the real value comes when it is supported a process management platform.

Tool, platform - what's the difference?

Here’s ten ways we can know an enterprise process management platform when we see one:

1. It is the single source of truth. It goes beyond defining what we do and how we do it. It defines as well roles, responsibilities and accountability.
2. It integrates processes with documents, systems, metrics and training to deliver content that is personalised, intuitive and valuable to every desktop and mobile device.
3. It makes it easy for users to feed back improvement ideas to process owners and stakeholders, to get engaged in continuous improvement.
4. It recognizes the need for variants and seamlessly manages them behind the scenes.  It allows global processes to be designed and managed in English (for instance) but displayed to the user in their chosen language.  It manages the ongoing optimization of the variants to a global process necessary to meet local requirements.
5. It is the framework for performance management. It integrates processes with metrics and analytics. It overlays processes with metadata, hidden to most users, with analytical features and reporting that allow process stakeholders and Op Ex and Lean Sigma teams to collaborate on change. It underpins every CxO dashboard.
6. It is the framework for change management. Recognizing that almost every proposed change has ripples, with implications for other groups across and outside of the enterprise, all business change is managed through it.
7. It bridges the IT:Business divide.  It engages business and IT in a rich ongoing dialogue. 
8. It is the enterprise QMS. It enables risks, controls and compliance to be embedded and managed within the end-to-end operational processes.
9. It provides all this within one unified governance framework that is robust enough to meet every compliance requirement yet also automated and intuitive enough to be easy to use. 
10. It is a chameleon. It can be stand-alone, or it can invisibly and intelligently integrate with other collaboration and social platforms, and any other systems, as required.

An enterprise BPM platform of this kind provides direct line of sight between strategy and reality. It links the operating model directly with the operational processes. It reduces the risk in every business transformation, from acquisition integration to major IT programmes. It embeds a culture of continuous innovation and sustainable improvement.  And the Chief Risk Officer sleeps easier at night.

The stakes are high. This is an enormously valuable prize.  There’s a race on to deliver it. Exciting times.

 

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© Text Michael Gammage 2013

 

 

BPM and The Language of Process

There’s a ferment of ideas about the meaning and future – even the very existence - of Business Process Management (BPM). 

Side-stepping those impassioned debates, I want to offer what seem to me to be some simple truths. 

Every successful organization – every sustainable success – is built upon effective collaboration.  That may sound fluffy. But we can see all around us the failed projects, the waste and the missed opportunities whose root cause is ineffective collaboration.  And its consequences will escalate in a future that is faster-paced, more loosely structured and multisourced, more intricately automated - and more regulated.

Effective collaboration requires many things – vision, teamwork, leadership and so on. But it’s also true that any rich and productive dialogue – any effective collaboration – depends upon a common language. Process is that common language.

It’s the language of process that best enables effective collaboration between all the stakeholders, across functional silos, cultures and organizational boundaries. 

But which process language? 

The vision of the BPM pioneers was that BPMN could be the universal process language. “Don’t bridge the business-IT divide. Obliterate it!” was the rallying cry. In the long run, it’s the right direction. Re-reading ‘The Third Wave’ ten years on, it’s visionary but still essentially sound.

But BPMN hasn’t worked out in practice. It’s a stretch too far for most business people. For the foreseeable future, there’s no single process language that can fully reconcile the vital need of the business for a common collaborative language with the equally vital IT need for the rigour required to build applications.

BPMN looks set to progress – it’s a valuable standard from the IT perspective - but it has to be a generation at least before it could hope to realize its vision and become the universal process language.

If not BPMN, then what?  It seems to me that are three sets of questions to ask in defining the process language that best enables effective collaboration:

Is it visual and intuitive? Does it fully harness the power of visualization? In a hundredth of a second, we can scan an image and understand what it would have taken a hundred words to communicate.

Does it support real work? Languages die out if they are not useful.  It has to be rich, engaging and valuable. It must enrich understanding at every level, from the operating model down to the factory line or call centre, from Finance to IT and Logistics.

Does it enable sustainable innovation? Is it easy for users to feed back improvement ideas to process owners? Is it easy for process owners and stakeholders to collaborate on the design and implementation of change?

Note that IT is not left out in the cold here. IT may use BPMN for systems development but a universal process language that delivers in these three ways has huge benefits to IT as well.  It’s the business engagement that every CIO craves and the perfect framework for requirements capture.

Effective collaboration matters, and it requires a rich common language. Process is that language. Its force multiplier is something I’ll have to pick up next time.

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© Text Michael Gammage 2013

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

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© 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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© Text Michael Gammage 2013

 

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

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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Cloud Without Risk: Pie In The Sky

We know that systems failures are surprisingly common, hugely wasteful and can bring a company to its knees. 

Best example last year must be Knight Capital, a market-maker responsible for 10% of US equity trading volumes. In just two hours of trading on the afternoon of 1st August, a 'software glitch' lost the firm $460m. The subsequent rescue package cost the owners 70% of their equity. 

Arguably though there's no such thing as an IT failure. If all work is ultimately process, then ultimately it's always a process failure.

At one level, Knight Capital went down because of a flawed implementation of a software upgrade. But it's probably more true to say that, somewhere along the line (and maybe we'll find out once the legal battles are done), there was a flawed process, or a good enough process that was poorly executed.

Probably both. And almost certainly - because this is the continual theme - the root cause was ineffective collaboration.  Vital stakeholders were missed out from the consultation. People thought that they had a common understanding of an end-to-end process and missed the gaps. There was no governance framework to ensure that people used the latest document. No-one realised that there were two different versions of the same process...    

So McKinsey is right when it warned last week of the new risks in the migration to cloud services, making it clear that this is not simply a technical IT challenge:

"IT organizations must now adopt a business-focused risk-management approach that engages business leaders in making trade-offs between the economic gains that cloud solutions promise and the risks they entail."

In cloud migrations, as in every other business transformation program, it's effective collaboration that underpins innovation and sustainable improvement - and ensures that risks are properly managed. 

It's extraordinary therefore that so many organizations flirt with disaster, blithely assuming that they don't need an enterprise-wide process management platform equipped to enable effective collaboration.  

They may say otherwise but in practice they rely on definitions of their business based on process fragments, in multiple formats and tools, often in arcane technical languages, of unclear provenance, scattered across multiple repositories, only tenuously linked with operational realities, and 'managed' with the flimsiest of governance.

Amazingly, Gartner's dramatic prediction, announced two years ago this month, that: "Between now and year-end 2014, overlooked but easily detectable business process defects will topple 10 Global 2000 companies" still looks a safe bet.

 

© Text Michael Gammage 2013

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The Universal Business Language: Process

When Noah Webster produced the first edition of his American Dictionary of the English Language in April 1828, he insisted that: “As an independent nation, our honor [sic] requires us to have a system of our own, in language as well as government.”  And so, by the fall of that year, as the view from the railroad caboose showed leaves in a blaze of color, American English had moved center stage…

Seriously though, Webster’s use of language to create a new ‘superior’ identity for his ‘tribe’ is an interesting example of how languages diverge. As evolutionary biologist Mark Pagel points out in a fascinating essay in New Scientist this week, linguistic diversity is rooted in the desire to assert the identity of a ‘tribe’, most often against a backdrop of conflict over territory and resources:  “There really has been a war of words going on”.

One of the many extraordinary phenomena of our time is the speed with which a truly global language is emerging.  The result, says Pagel, is “a mass extinction of languages to rival the great biological extinctions in Earth’s past”. 

One in six of us on the planet may speak Mandarin but humanity is rapidly converging upon English as its auxiliary language. Vastly more people learn English as a second language than any other. Global corporations may be headquartered in Germany, France, China or Spain but English is almost invariably their adopted global language.

But in the world of work, and especially in the world of global business, English only goes so far.  Work is increasingly complex. Most often, it requires collaboration between many people, in different regions and organizational units, with different motivations and with different roles and responsibilities – and all enabled and automated by IT systems. 

To even describe work in this context is challenging.  To collaborate effectively, to exploit new opportunities in an increasingly interconnected and cumulatively more complex world, demands a language above and beyond English.

In the same way that, through no plan or expressed intent, simply for the benefits it brings, English is becoming the world’s favourite auxiliary language, so too with process, which, by a similar evolutionary path, has emerged as the global business language essential for effective collaboration. Procure to Pay, Value Chains, Operating Models, Lean Manufacturing, Hire to Retire, Order to Cash, Supply Chains – these terms have emerged as part of the everyday vocabulary of process.

This new world calls for a new conception of process.  To be fit for use, it can no longer be the preserve of a corporate elite – in IT or Quality or the Six Sigma team - it has to be universal.  It needs to connect with people doing real work: to support them and to enable them to contribute to improving the way things are done. And so it has, above all, to be engaging: visual, intuitive and personalised.

No surprise then that a process management platform is coming to be seen as the beating heart of the 21st century enterprise, the essential infrastructure that enables effective collaboration on innovation and continuous improvement.

Noah Webster was a revolutionary and idealist so I think he would probably approve of the way global languages are bringing humanity closer. Either way, he must be tickled pink that a Brit is writing this in American English.

  

This post was first published on Successful Workplace

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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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10 Dec 2012    Sustainable Improvement

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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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Effective Collaboration and Outsourcing Success

One slide (below) from an HfS Research webinar yesterday highlighted how effective collaboration is at the heart of outsourcing success.  Coming from HfS - at the center of the industry, with no particular ax to grind - it's significant.

The market has moved beyond cost savings. Buyers are looking for outsourcers who can deliver innovation and continuous improvement:  "Most clients want to work in a collaborative relationship", said Phil Fersht, HfS Founder and CEO.  Yesterday's case study featuring Syngenta Business Services and Capgemini provided a superb example of effective collaboration in practice.

Effective collaboration demands the right people, the right structures and the right incentives. Providing the underpinning framework - rich, robust and intuituve - that enables this complex, dynamic and multi-layered collaboration is the strategic opportunity facing the process management platform vendors. 

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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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IT Success: Don't Let The SI Take The Wheel

Large IT projects frequently fail. One of the SIs (the usual suspects) is invariably involved. So are the SIs in some way the villains - or just unlucky to find themselves, so often, innocent bystanders at the scene of the crime?

Client organizations don’t do major systems projects every year.  SIs do them for a living. So it’s natural that clients look to leverage their SI’s expertise, a tendency reinforced by the SI's pitch that: ‘We’ve done it a hundred times. Just trust us…’.

It's understandable too that, once the SI has been selected, clients often sigh with relief and surrender to their comforting embrace. Willingly seduced, they allow their SI’s methodologies and tools to dictate almost every aspect of their program.

But the client and the SI have conflicting agendas, of course, in at least two vital areas:

Business Transformation vs IT Project. The SI is hired ultimately to deliver an IT project.  So the SI will always focus on the technology issues.  But all the evidence suggests that projects fail when they neglect business stakeholder engagement and lose sight of wider business perspectives.

Sustainability. The SI has a project focus, often strongly reinforced by contractual incentives.  The SI needs to get the system delivered so it can get paid and move on. Whereas the client has a longer term and more holistic perspective. The client is looking for sustainable improvement.  

Conflicting agendas can be worked out through ongoing dialog driven by the client, which retains responsibility for control of the SI relationship.

The trouble is that many client organizations don’t have a collaborative framework to enable this essential dialog in any productive way. So the SI takes the wheel and the focus shifts on to the IT aspects and the system go-live, significantly increasing the risk of project failure.

Straws in the wind suggest that things are changing. IT projects that I know of which have adopted Nimbus have also reduced the SI’s role.  By spending less, they seem to get more. The client avoids capture by the SI, and is able to drive the collaboration that underpins sustainable success. Essentially, the client gets to focus the SI on its core competences (and avoids the cost of man-years of consultants leading low-value process workshops in airport hotels).

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29 Oct 2012    IT Project Failure: How Did We End Up Here?

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