Let’s Talk Business Process First! – How to Calibrate Business Relationship Maturity through Business Process Culture
Use of information technology. Is it creating value? Is it improving business processes and capabilities? Or merely creating new wants? Is it important, or only urgent? What is it for? Every Business and IT engagement around business requirements revolves around these questions but managing it isn’t always easy.
First, let’s talk about IT organization’s critical role in the company’s business processes. One of the consequences of Business Process Management is a large majority of these programs are initiated in the IT organization. There are very good motives for this. One of the most common: the IT organization is responsible for providing the technology that enables business processes. Take for example, ERP (Enterprise Resource Planning) systems like SAP, Oracle, etc. This ERP solution is a suite of integrated applications that a company can use for many business processes. Most ERP systems incorporate best practices reflecting the vendor’s interpretation of the most effective way to perform each business process. Systems vary on how conveniently the customer can modify these practices. Talking about best practices, it is advisable not to over-customize because doing so will keep you from taking advantage of the expected improvements and innovations from the purchased ERP package.
How do you characterize the nature of your engagement with your business partners? Is it functional orientated? If it is, there is more tendency for having more solution-based discussion versus process- and value-based. Even worse, it could be possible that your internal customer is engaging you at the tail end of their decision cycle–when they have already determined what they want or need. There is lack of business-IT alignment and strategic partnership.
How do you then improve the level of your business relationship with the business? There are numerous paths towards that elusive business-IT strategic partnership. In this post, I will talk about Business Process Maturity as a path— so I would say – Let’s Talk Process First! This has worked for me in the past. One of the most effective ways to change the orientation and focus of business IT interactions is to start with business process. Calibrate your organization’s business process maturity and you will take along with it to a great degree IT-business relationship maturity. What you need are experienced business process managers with business relationship management competencies. Below I will walk you through these 3 stages of Business Process and Business Relationship maturity and describe what it means.
Business Process and Business Relationship Maturity
Level 1: Support
Business Process Maturity = Diverse and Business Relationship Maturity= Adhoc / Order Taker
When your organizational approach to business process is diverse, more often business-IT initiatives are managed with lack of integration. At this stage, most of the organization’s process knowledge is known only to a few individuals. For business process engagement facilitation, there is dependency on external consultancy. There is no standard process management discipline that leads to more functional orientation of IT requirements discussion. Consequently, IT as a provider organization is hardly seen as a strategic partner–at most, a service provider. In terms of business relationship maturity level, most of the time, IT is treated as an order taker. This type of business relationship is characterized by loudest in – first out tendency causing reactive course of actions. My advice is to embark on a business process maturity journey. Establish a discipline of managing business processes as the means for improving business performance outcomes and operational agility. Leverage use of technology to improve business processes.
Level 2: Improve
Business Process Maturity = Model Integration and IT-Business Relationship Maturity = Service Provider
You want to become an organization that designs processes first and then goes on to implement the technology enablers. Your organization wants to keep pace with technology and maintain a competitive advantage. Companies at this level adapt a consolidated method to design and implement business models using standard processes and tools. Process ownership ultimately improves as management breaks silos and approaches process and technology implementation equally. The common tendency is for companies to establish process governance and ownership. IT plays a key role in the process evolution of the company and starts to be seen as a service provider and some cases even a strategic partner.
Level 3: Innovate
Business Process Maturity = Process Culture and IT-Business Relationship Maturity = Strategic Partner
The final step to Process Culture Maturity occurs when innovation and change in business practices through process understanding are consistently promoted within the company. As executives passionately embrace process thinking, they are able to promote innovation more confidently when implementing new technologies. In many cases, companies with mature process culture has End-to-End orientation to process management and IT plays a key role as center of process excellence. IT starts to be regarded as trusted and strategic partner. Business–IT relationship is based on cooperation and mutual trust with shared goals to maximize value from business initiatives.
Technology will not automatically implement itself and run your organization’s processes the way you envision. IT has a unique opportunity to spearhead business process improvements in the company. Start by changing the orientation of your business interactions from functional to business process, from solutions to value. Do not shy away from this opportunity. Use business process management to create greater strategic value and by doing so advance business-IT relationship level to new heights.
Trust is the glue of life. It’s the most essential ingredient in effective communication. It’s the foundational principle that holds all relationships. ― Stephen R. Covey
I have been working in the field of Information Technology for 17 years. I remember that a decade ago, when I showed my business partners simple tricks, shortcuts, and cool functionalities in systems or devices – I was able to impress them. Those interactions were engagement starters for me that somehow lead to long-term relationships and multiple joint business-IT ventures. This approach will rarely work in today’s world, where our business partners, like us, are tech savvy users. On many occasions, business users are the ones approaching me about apps they are probing, about cloud-based solutions on trial they are analyzing or new devices and tools they have seen in conferences they just attended.
Technology is developing at a much faster pace. This exponential development makes technology easier to use and more accessible. We have gone from an era where only a few people have access to information and technology, to one where it is virtually in everything we do.
In business, this results in IT capabilities becoming more embedded into business capabilities. Organizations seeking competitive advantage need to learn how to harness that potential. Business leaders who want to compete in today’s market, and well into the future, have to lead their companies toward a true business and technology convergence. IT-business alignment is no longer adequate where business formulates strategies and IT aligns later. In today’s world, this is a reactive process. Business and IT need to work together to bring engagement upstream and convert solution based conversation into value and business based conversation. Business technology convergence is a journey that will take time and after a repetitive positive cycle of engagement between IT and business. The strategic speed of this convergence depends on three drivers: clarity, unity, and value creation. These are the components of the virtuous cycle of trust.
Senior managers in business and IT should spend time improving the clarity of their strategies, purpose, and operating model in order to achieve a shared direction. Clarity means being able to answer the question: “Where are we going and why?” We should be able to answer the following questions:
- Who does what, when? – Role Clarity
- How do we drive responsible, value creating behaviors around the use of products services? – Clarity of business outcomes
- How do we engage each other? – Clarity of rules of engagement
- How do we develop needed competencies – Clarity of talent development and continuous learning
- What is our operating model? – Clarity of the level of business integration and standardization
Strategic success is going be tough to achieve if leaders and work teams won’t cooperate for the greater good. You’re dreaming if you expect this cooperation to happen all by itself; patterns of conflict amongst people and organizations occur naturally but aren’t eliminated naturally. There must be a concerted effort to achieve unity. Unity means that once business and IT are clear on where they are headed, they agree wholeheartedly on the merits of that direction and the need to work together to move ahead. The emphasis should be on openness, alignment, and collaboration. If these are the main drivers of unity, leaders need to foster a culture where internal competition, mistrust and turf wars are discouraged. Organizations can achieve unity of effort through (1) shared common objectives and vision, (2) a coordination effort to ensure coherency and common measures of progress and (3) ability to change course if necessary.
Value creation is about business performance and results from a dynamic balance between business demand and IT supply. To succeed, IT organizations need to cultivate a culture of value management. Start by engaging your business partners in clarifying how you can contribute value. Being a good BRM means that you have an intimate knowledge of how your company creates value. How does you company make money? What does your company value? How does your company compete? The virtuous cycle of trust between business and IT spins faster when value is being realized and intended outcomes are met. The best way to measure value is combination of two metrics “time to value” and “value over time.”
For example, one belief that I try to dispel many times at work is that a comprehensive platform of services is a prerequisite for creating value. I don’t believe it is necessary to “go big” in order to achieve anything of value all the time. Sometimes, depending on the business initiative, it can be smarter to start small and act fast. On the other hand, you also have to look at sustainable value over time and have to balance both. Especially in large investments, value over a long period of time has to be expected.
In summary, I believe Business Relationship Management is the key lever of strategic speed for Information Technology organizations and the business. Business Relationship Managers are “the oil to the machine” that reduces organizational friction. Fast is not always about pace. It is about people and shared perspectives. When all areas or teams are working harmoniously, because rules and directions are clear, it is amazing how much potential value it can create. In faster and successful IT groups, the emphasis is on strategic partnership, flexibility, openness, innovation and continuous improvement as well as taking the time to reflect and learn. These are functions BRMs are expected to do in both the business and IT sides.
Don’t tell me I did not warn you. The only thing I can promise is that you’ll learn a thing or two from this one, so please read on.
I came across a predictive validity framework called the “Libby boxes”, popularized by Cornell Accounting Professor Robert Libby. This framework is used to examine the distinction between underlying constructs of strategic objectives and their proxy measures to illustrate causal models related to some objectives in an organization. Another definition of “strategy” is as a hypothesis about the cause and effect of your objectives. Predictive validity allows you to measure and analyze how well the execution of your objective (cause) predicts your desired performance (effect).
Simple Business-IT Strategy
Now, to illustrate the importance of a Business Relationship Management (BRM) function in an Information Technology (IT) organization, let’s start by picking a Business-IT strategy to dissect. Let’s call it “Strategy A”.
Strategy A: “Create business value through better use of technology.”
Let’s start it simple and take an approach to illustrate cause and effect depict Strategy A using the model. We are going to be taking a very logical approach. The strategy here is— you believe that if you use technology better, you create business value. Let’s assume that technology is comprised of infrastructure and applications that enable the business or enterprise.
Observe that Strategy A is too simple—or maybe exceedingly simple. Can we really say that if IT provides better technology, we create business value, in the form of profits or savings? Yes, no, maybe. How about this – it is because of better use of technology, we improve business processes of the company and therefore we create business value. In this predictive validity framework, the middle action is called, mediating variable. It stands between two variables and it is an effect of one variable and the cause to another. This brings us to iteration to our business-IT strategy. Let’s refer to this improved business-IT strategy as “Strategy B”.
Strategy B: “Create value by improving business processes through better use of technology”.
So how do you interpret this strategy? As an IT organization, your goal is to provide the business with the technology, infrastructure and applications to enable efficient business processes. This will result to business value creation through optimized cost, profitability and strategic advantage. Whew! Follow all that so far?
I think this business-IT strategy works. If you run this, you have a good chance of successful outcomes. But your aim is not to be just good. Your aim is to be great. Your goal is to differentiate your IT department and to support your enterprise to be the best performing company in its industry or to be the best performing company (period!).
The Missing Component to be great
So there is a missing component to your strategy, a moderating component—a component that will have a multiplying effect from certain causes and effects coming out from the collective work that you do. In this predictive validity framework, it is called the moderating variable. The moderating variable is a variable that determines how big an effect you get from a certain cause.
To illustrate, let’s say you want to improve your performance at playing basketball. By practicing basketball, doing drills and shooting, for sure it will improve your performance. This is a very simple causal model. You practice more and that, in effect, will improve your basketball performance. But think about this, is there a certain amount of practice that will allow you to be like Mike (Michael Jordan)? Most likely, no. Talent and perhaps physical capacities are the moderating variables here. Sure, practice will improve your performance, but if you have a lot of talent, a little bit of practice goes a long way and will make you much better. If you don’t have that much talent, you’ll have to practice a lot to get just a little better. Talent in this case is a moderating variable.
Now that you understand what a moderating variable is, let’s go back to our Business-IT strategy. Think about an organizational capability equivalent to talent that can potentially transition your IT organization from good to great—it is business relationship management (BRM).
BRM in this case is a moderating variable. The BRM capabilities moderate the effect of improvement of business processes on performance, making it bigger (high Business-IT alignment) or smaller (in cases where it is lacking). Improved business processes doesn’t cause BRM capabilities, it just moderates the effect. How? BRMs (1) facilitate Business-Provider convergence, (2) ensure that use of IT services drives value and (3) facilitate productive and connections and mobilize business-IT projects and programs.
For many years, IT organizations responsible for deploying technology systems to enable enterprise processes have had one goal in mind – namely, to assure business-IT alignment. Today, however, as IT capabilities become more and more embedded in business capabilities, and given the pace of technological change and the pervasive nature of IT, alignment is no longer sufficient. The goal today, therefore, is “convergence”. This has given momentum to the growing emergence of the Business Relationship Management (BRM) role, which, according to the Business Relationship Management Institute (BRMI), is about “stimulating, surfacing and shaping business demand for a provider’s products and services, ensuring that the potential business value from those products and services is captured, optimized and communicated.”
It is that time of the year when you typically conduct planning session with your teams. I just came from one that I facilitated a week ago. I would like to share the planning methodology that we used. This planning process that I am going to share with you is nothing new and nothing that I came up with. You can find a lot of planning methodologies out there, if you Google it.
It is important to understand the current situation and needs that your organization has in a particular point in time, and then use it to tailor your planning process.
It is important that your team understands the entire planning process—what it is that you are trying to accomplish and what are the expected deliverables. I usually allot an adequate portion of the planning meeting to explain the “tailored” planning methodology. At this particular instance, I started out by showing the team the atlas of the universe; then the solar system; and then a picture of our planet earth; then I showed the a picture that represents our company or the business enterprise that we belong to; and finally, a box with an arrow going upward. I told the team, “that box represents us.” I explained why.
Mission and Vision
The box represents us—our mission and vision as an organization (see diagram below). Our mission defines our purpose— what is in and what is out. It represents, in the broadest sense, who we are. The vision is where we want to be as a group in a period of time in the future. The arrow from where we are now (point a) to where we want to be (point b) represent the shortest path to achieving our vision.
Our group had the opportunity to define our vision in our planning session last year, so that was something that we carried on and will carry on in the next couple more years. It is an input to this year’s planning process.
It is important to know where you are at the multi-year planning cycle to best tailor your team’s planning process for that particular year.
Last year, the first year of our planning cycle, we did the following:
- Invited key stakeholders of the company to speak to us about the business strategy, their expectations and needs.
- Gathered customer feedback from different forums and channels.
- Analyzed operative and project results from previous years.
- Conducted a team discussion around organizational concerns.
- Identified and discussed our Strengths, Weaknesses, Opportunities and Threats as a team.
- Established our vision for the next 4 years- articulated in a vision statement.
- Define our objectives and goals for the first year.
All the things that we accomplished in our planning session last year were used as inputs. We also analyzed the relevancy of some of our foundational objectives.
After reviewing the inputs from last year, the next thing that we did as a group was to do the “look back”. We talked about the operative and project successes from the past year. It was important to identify lessons learned and to convey key messages that align to the overall company direction and strategy. We had the team present those success stories by relating their experiences and journey.
Balance Scorecard and Strategy Mapping
To articulate our P&IT strategy we decided to use the time tested Balanced Scorecard approach and complemented it with Strategy Mapping. The Balance Scorecard, created by Robert Kaplan and David Norton, is one of the most popular and comprehensive tools for defining strategy and reporting performance in executing that strategy. This approach forces you to classify key measures and objectives used in your organization according to the four main perspectives— customer, financial, business process/ internal services, learning and growth. The key questions that we answered were:
- Financial – To succeed financially, how should we appear to our stakeholders?
- To achieve our vision, how should we appear to our customers?
- To satisfy our stakeholders and customers, at what services must we excel and what projects must we deliver?
- To achieve our vision how will we sustain our ability to change and improve?
The next complementary step is the mapping and analysis of the foundational objectives identified in the Balance Scorecard using Strategy Mapping techniques. By mapping how different objectives relate to one another, leaders can clearly see how to accomplish the stated objectives and how each one relates to the other. Many of those relationships go in a natural path from learning and growth to internal processes, to customer, finally to financial. To illustrate this concept, please refer to the diagram below. The blue boxes represent the identified foundational objectives classified in all four Balance Scorecard concepts. Then by relating those objectives based on causal linkage you form a story—your story, your strategy. In this strategy, the story goes:
You believe that by improving team culture, it is going to improve service delivery. And by improving service delivery, you believe that you will have more satisfied customers. And finally with improved service delivery and improved customer satisfaction you optimize IT cost. How those objectives flow and link represents your strategy.
After we defined and agreed on a strategy and with it the foundational objectives, the next step is the most tedious and difficult step of the entire planning process. It is the actual definition of departmental, team, and individual objectives. When you get to the point when you start identifying what you need to do to accomplish the strategy, real work begins. The team needs to have a clear understanding of the strategy, the role of their department/team and their individual role in making it happen.
- The first step is to break foundational objectives into departmental objectives. You can do this using a breakout session.
- Teams within their departments identified next level objectives and initiatives that they are responsible for.
- It is important to identify not only the initiatives/actions but also the measure and target by which the performance of the action will be measured.
In this process the common SMART method comes in handy. Your objectives have to be Specific, Measurable, Attainable, Relevant and Timely.
Finally, you have your mission and vision; you have your strategy and a detailed game plan (objectives) on how to bring your goals to fruition. The next challenge is to make it happen. I believe that the planning process does not stop after the initial planning process, which to me is the annual planning meeting. It is an ongoing process throughout the year. I like to borrow a term PMI uses- “progressive elaboration”. As you go through the year, you monitor and control the execution of the plan, as well as the changes to it. As you progress through the year, you will gain more information, priorities might change, and business requirements might change– you progressively elaborate your plan aligned to the business and IT strategy.
I attended a manager’s training program this week that my company organized. To be honest, I thought I would not encounter many new things, as I have participated in similar programs in the past already. I was wrong. One of the modules centered on leadership. I learned about improving leadership skills and effectiveness by focusing on specific leadership aspects. What resonated to me personally were the personal, relational and inspirational aspects of leadership that I often overlook. It helped that one of our program facilitators who shared about leadership, a seasoned HR director leader himself, gave personal stories from his own experiences that allowed me to see leadership through those aspects and ponder my own realization.
“I do not like that man. I must get to know him better.” – Abraham Lincoln
“Leadership is personal”, our facilitator passionately said and repeated. He took his statement to heart when he shared a lot of personal accounts about himself in the office and at home (about family) to demonstrate the personal dimension of leadership. I thought it was brilliant and the only way to bring the message across with effectiveness. What I learned is that— leadership is personal. It starts and ends with people following you because you are credible and you gained their trust. I have worked with the same boss since 2004, when I was assigned to participate in a business integration project in Europe. It is kind of strange how I call my boss and how he calls me—“my friend”. Because of working together for so long, you gained that level of trust and relationship. I see him as my personal leader and probably one of the reasons why I have been working in the same company for about 15 years now. Personal Leadership is about developing and projecting your leadership capability; being real; and demonstrating dedication. He embodies that. Personal leadership is the best way to gain credibility, loyalty and trust. As a leader you gain trust by demonstrating concern and understanding.
Ralational and Inspirational Leadership
“The greatest glory in living lies not in never falling, but in rising every time we fall.” – Nelson Mandela
“Leadership is like a contact sport”, our HR Director facilitator asserted in one of our discussions. He gave a lot of references to professional and collegiate sports, as to how coaches, as leaders, motivate and inspire their players and teams to achieve the best. I learned that leadership aspiration is not always about winning that championship trophy at the end of a tournament. It is about the inspiration and the motivation to have given the best effort possible—to leave every sweat and blood on the court. Our instructor showed us a 10 year old video, where NBA coach Mo Cheeks, then coach of the Portland Trailblazer, gave Natalie Gilbert a little help singing the national anthem. There is an American awareness for great performances of the National Anthem at sporting events. But for sheer inspirational impact, it’s hard to top what happened on April 27, 2003. This is a story of leadership, an example of humility, compassion and humanity. A tale of how one man, who decided in a few seconds, to help a girl sing the national anthem and inspiring millions by doing so.
What Mo Cheeks did expressed sentiments in the kind of message about leadership sports like basketball conveys. I think leadership has less to do with authority, punishment, rewards, and more to do with credibility, trust, empathy and love. If you think about it, if you have a professional career spanning 15 years or more (like me), the leaders who have motivated and inspired you, are the ones who made the most personal connection with you. There is vast untapped potential within organizations and communities to collectively perform at a level substantially greater when they have the right leadership. How can I consistently bring the best in my people? The answer is having an engaged team. How can you have an engaged team? Start with personal leadership.
More and more companies rely on innovation as a central factor to successful business outcomes and the only reason to invest in its future. In today’s slow growth market, tougher global competition and commoditization, pursuing innovations more often is the only way to keep customers happy and their competitors at bay. One type of innovation that has been very instrumental to many businesses is through the use of technology – let’s call it technology innovation.
Others might think that technology innovation means always having the latest and greatest systems available in the market, or having the fastest computers and networks. This is a myopic view of technology innovation. Most large companies have now implemented a digitized platform using well-established ERP software, like SAP and Oracle. Further developments of those ERP platforms are available to those who have them as foundation systems. If those companies are in the same industry, there is a big chance that they will pursue the same business processes and best practices in order to offer similar product and services to the same group of customers. How do companies then differentiate?
The reality is that, it is no longer true that simply having the right digitized platform is a determinant of sustained success. It is how you use technology to transform your business capabilities in a fast and agile manner that gives companies competitive advantage. Success on these technology innovation initiatives relies on a person who has both technology and business knowledge to navigate and orchestrate shaping and execution of innovative technology and business ideas. Those individuals that fuel the cycle of technology innovations in the enterprise now have a name – Business Relationship Managers (BRMs). Companies’ focus on innovation has given momentum to the growing emergence of the BRM role and discipline. According to BRMI, Business Relationship Management (what BRMs do) is about “stimulating, surfacing and shaping business demand for a provider’s products and services, ensuring that the potential business value from those products and services is captured, optimized and communicated.”
Peter Lijnse, an IT management consultant, wrote the following in his blog entitled BRM is about innovation.
“IT Service Management people are often good at stating, ‘We need to talk to the business.’ But very few understand the business they work for.”
This is so true. One essential competency of a BRM is business IQ and that’s assuming the BRM is already a technology expert. Many BRMs tend to come from a supply organization, and therefore, they have IT background, but it is not always the case.
Innovation is relevant only when it creates value to the customer, hence the importance of customer insights as input to the innovation process. Another common misconception about innovation is that it means new things – new platform, new functionally, etc. Not all the time. Innovation can be about new business value, not necessarily new things. Hence, it is the important for BRMs to understand the business to which they provide services. BRMs are key facilitators of technology innovation and they fuel faster innovation cycles and better business outcomes.