Last August 13, I published an article entitled “Accelerating Process Culture” which talked about the four different levels of process culture maturity in a company. There are two underlying criteria used to qualify the different levels of process culture maturity– level executive management involvement and level of business process integration.
When executives exhibit a strong commitment to the process and technology evolution of the company, they always bring everyone on board. Executive management has the authority to push company-wide change as well as fund processes and IT initiatives. They are responsible for aligning the company’s structure to the business integration strategy; therefore, they enable the organization to advance to a higher process culture maturity. Let’s revisit the four levels of process culture maturity:
- Level 1: Individual heroes – dependence on individuals or a few company experts
- Level 2: Diverse Approach – initiatives per department but lacking in integration
- Level 3: Model Integration – business and IT align and model integration is achieved
- Level 4: Process Culture – executive passionately participates in process initiatives
This time, let’s examine closely the highest level of process maturity—The Process Culture. The final step of process culture maturity is when the organization achieves a high level of model integration by leveraging the consistent involvement of executive management as sponsors and facilitators of change.
There are three factors that determine the right approach towards process culture maturity. Let’s call it the “SIB factors”. S stands for senior management involvement, I for innovation and B for business model integration.
Senior managers and managers alike are the critical success factors in your organization’s process culture journey. They lead the way in building process culture and defining the operating model. Innovation in information technology is also a key component. Successful companies nowadays rely on an integrated set of electronic business processes, tools, information, and technologies. With proper support and funding, an IT organization should be able to provide the right platform and technology in which to build the foundation.
The next thing that the company needs to do is to make sure that they select the right business process model from among the many tested disciplines and existing operating models. The underlying logic here is that a company’s business model is limited by the environment. In other words, it depends on several factors, such as the industry it operates, the products and services it sells, its size and geographical diversity. Using all these factors, you determine the level of business process standardization and the level of integration of the company’s different businesses — with profitability and competitiveness requirements in mind. Shared services, outsourcing, diversification, standardization, model replication are some of the most prevalent business models multinational companies have implemented.
The real question is: how close are you and your company to getting to the highest level of process culture? This is a guide on how to assess the level of process culture maturity of an organization. Again, the examples are outlined using the “SIB factors”. Observe the following points and evaluate how your company is doing right now.
Senior management involvement
- Top executives participate in the IT and Processes evolution committee.
- Requires thoroughly analyzed business cases and encourages measurement of acquired benefits.
- Pushes for post-implementation audit to evaluate project output and acquire lessons learned.
- Encourages collaboration across business lines and functional teams.
- Funds IT and Process initiatives and actively support training in the use of IT.
- Exhibits a strong sense of innovation, feelings of shared interest to continue to improve and be ahead of competitors
- Holds regular management briefings on the impact of new technology developments and process innovations in the industry.
- Establishes a consolidated IT operation that manages a standard IT platform to sustain day-to-day support functions to business areas.
- Encourages use of IT in the business. Users possess a feeling of empowerment and confidence in the effectiveness and reliability of the processes and systems.
- Strives to leverage new technology, platform and methodology with sufficient effort in research and development in the area of processes and IT.
- Defines a clear vision of model integration and process standardization.
- Uses a best-in-class enterprise resource planning software to run an integrated set of business processes
- Promotes implementation of end-to-end processes to ensure the efficient flow of activities and effective allocation of decision rights and accountabilities.
- Captures business information in one area and shares it to another business area. Possesses the willingness to share and use information to measure and improve key performance.
- Maximizes reuse of business processes and platform across different business lines.
Achieving a high level of process culture maturity presents a host of challenges to an organization. The SIB factors provide a structured framework where initiatives can be drawn and strategies derived. This will propel your company forward through its process culture maturity journey. Achieving the highest level of process culture maturity requires strong executive sponsorship and IT leadership in order to support the company through a change process. When achieved, the company is in a good position to leverage IT for profitable growth and gain competitive advantage in a global market that knows no boundaries. This leap begins with you and your company’s senior managers.
- Shared Services is the outsourcing of essential business functions to a centralized support organization.
- Most successful Shared Services run its organization as a business, providing efficient and effective services at competitive prices to its internal customers.
- Shared Services relies on an integrated set of electronic business processes, applications, information and technologies usually anchored in a major piece of purchased enterprise resource planning software.
- Shared Services implementation requires significant executive management sponsorship.
- The most common essential business support functions outsourced to Shared Services are Human Resources, IT, Finance, Procurement, Office Services and Legal.
- Shared Services focuses on value improvement more than cost reduction and on deliverables more than activities. Shared Services values customer service and alignment.
- Shared Services uses Service Level Agreements (SLA) to establish an accord with internal customers. SLA quantifies the target quantity, quality, and cost of services in a period of time.
- Shared Services makes use of benchmarking and measurement of strategic, tactical and operative Key Performance Indicators to drive incremental performance improvement.
- Shared Services locations can be on-shore, near-shore or off-shore although near-shore and off-shore are more associated to outsourcing.
- The value of Shared Services for an organization grows over time – from short-term to medium-term benefits of cost reduction and reengineering for productivity enhancement, to long-term continuous improvement and integrated strategic service delivery.
The number of IT professionals expecting to see budget and head-count cuts grew significantly as more large-business decision-makers turn to cost-cutting measures in 2009 due to the failing economy. This has resulted to project postponements and headcount reduction. IT managers worldwide are scrambling for resources necessary for day-to-day operations and support without distressing IT service delivery. The good news is that IT managers don’t have to look further for help. The answer lies within the boundaries of the same organization it serves – resources are there and it could be plentiful.
During an IT project cycle, users and resource persons from the business are invited to participate. They are integrated into the project to work with the core IT and Process team. They assist in the design and validation of business processes. They conduct integral testing and facilitate training of end users. In larger initiatives, they ensure that business operation requirements are well represented.
I refer to this group as the Business Competence Team or BCT. Organizations call them in different ways: Process Teams, Power users, and Evolution Teams. BCT is composed of employees who have superior knowledge of the company’s processes and tools but do not necessarily report directly to the IT core organization. They are users from operations with extensive knowledge of applications and thus have certain privileged access to systems.
The BCT is IT’s extended network. They represent the business during project implementation and when they go back to operations, it is the other way around. At this point, they embody IT within the business operation they serve. Their knowledge of the business model and more advanced know-how of the application differentiate them from their peers. They are IT’s partners within the organization.
The challenge for IT managers is to take advantage of this extended network and tap into a readily available resource pool and fill in the void left by headcount reduction. It is cost effective and a perfect win-win situation for IT and the business. These are just some of the functions that BCT can perform:
- Support – Serve as resource persons of end users in operations and as active participants in the IT support network
- Enabler – Assure continuous system and process evolution by participating in process forums and evolution network meetings
- Trainer – Reinforce the standards of best practices and better use of application capabilities. Also responsible for continuously training end-users during system upgrades.
It is important that a program is established to enable the BCT team. This initiative should have a clear set of goals, expectations and rules. IT management should initiate this program and rally top management support. The strategic intent is to relentlessly pursue involvement of BCT members so they can participate in the evolution process as well as onsite assistance to peers. Naturally there are important factors to consider in establishing a Business Competence Team Program. I will discuss more about this in my upcoming article.
It seems like distant past when big companies rely on individual heroes to facilitate process initiatives. They are long-service employees who became the experts of how things and processes work in the company. They are always consulted because of their inherent authority– business owners and managers listen to them. Think about them as company elders and gurus whom we seek advice from when things go wrong and consulted whenever changes are planned.
When a company relies and is solely dependent on its individual heroes for change and process enhancement, it is on its 1st level of process culture maturity.
The second stage of process culture maturity is the Diverse Approach. This is when the company starts to utilize standard methods and best practices to drive process design and innovation. Oftentimes at this stage, different areas in the organization implore varying approaches and therefore, less synergy is achieved. Standard operating procedures (SOP) start to shape in each department and documentation becomes an integral part of process implementation. In many cases, at this point, IT and business approaches tend to clash and technology becomes the focus of project implementation.
Companies move up to the Model Integration stage when it builds more synergies throughout the organization. Very successful multinational companies such as P&G, CEMEX, and ING DIRECT take advantage of Model Integration by consolidating functions and developing its shared services. P&G, for example, has established Global Business Services (GBS) — a shared service organization that provides the company a platform for continuous global growth while maintaining values of innovation, service, customer responsiveness and business efficiency. Companies at this level adapt a consolidated method to design and implement business models using standard processes and tools. The project team discipline ultimately improves as management breaks silos and approaches process and technology implementation equally. The common tendency is for companies to establish global standards and to consolidate both IT infrastructure and human resources, thereby reducing cost of operations.
The final step to Process Culture Maturity occurs when innovation and change in business practices through process understanding are consistently promoted within the company. When executives passionately embrace process thinking, they are able to promote innovation more confidently when implementing new technologies.
Many organizations have gone a long way from the days when company individual heroes were the sole initiators of change and process innovation. Yet it’s difficult to predict what comes next — as technology evolves, industries consolidate, and Web 2.0 quickly becoming the new platform.
No two process implementation initiatives are the same. It varies in scope, objectives and limitations because of budget, time, resources, and complexities. Although process initiative projects may vary, there are four key elements which assure good results. These four critical items are: (1) Process Definition, (2) Process and Activity Roles, (3) Available Tools and (4) Training.
Plain and simple reality- these elements are inseparably linked. The absence of one element will hugely affect the result of the process initiative. On the contrary, if the factors all are well attended to, you can expect excellent results.
Many process initiatives fail because:
• Processes are not well designed and documented. People in operations were not involved in the design process.
• Processes are well defined but roles are not clearly assigned in the organization as to who is responsible and / or accountable for a certain process.
• In some instances, limitations in the tool or lack thereof make the organization resort to workaround and this is time-consuming and costly.
• All systems go but people are not well trained, resulting to inconsistency in process execution
To give a more tangible example, let’s say that you are implementing a logistics dispatch system. You have selected the platform and made sure that it is customized based on the needs of the operation. During the process design, different levels of the organization were involved and consulted. You came up with a clear and concise documentation of the processes and roles that will perform the activities. Roles are defined, assigned to personnel in the organization and was clearly communicated. System procedures and policies are in place.
Then you and your team decided to forego the well planned training program that you have scheduled to speed up the rollout of the initiative and reduce travel costs for people who will need to come from different dispatch locations. You are comfortable with the training manuals and the quick guides. Communication is already done and the operational support structure is in place.
Your decision to forego one key process initiative element will result to the following possible outcomes:
• Dispatch process will be executed inconsistently depending on the user’s personal understanding of the manuals and materials.
• You can be flooded with manual errors due to the user’s unfamiliarity of the system. This results to spending more time in correcting and stabilizing these errors.
• You risk affecting customer service delivery because of probable incidents like wrong orders and delayed deliveries
The project team in the example above seemed to have done everything correctly. However, they made one crucial and costly mistake. User training, as with the other elements, is equally important. Neglecting one of the key elements could result in project failure.
This does not mean to say, that the project team must focus solely on these four key elements. These cannot substitute existing important process and project implementation methodologies and practices. These key elements are only intended to complement whatever process implementation methodology you follow.