What’s the second most effective optimization tool for shared services, after having a single ERP platform? End-to-end process visibility and ownership. That’s not me saying so – it’s research findings from Hackett, the benchmarking experts, presented this week at the SharedServicesLink.com conference in London.
Contributions from a wide range of organisations – including Barclays, SAP, Honeywell, Virgin Group, IKEA and HP – described a familiar roadmap and journey. From multiple systems towards single consolidated ERP platforms; from many variant processes towards global processes with managed variants; from fragmented governance and high compliance costs towards efficient governance.
The Hackett findings were reinforced throughout the conference. The pain caused by the lack of end-to-end process visibility and ownership was a recurrent theme.
I’m not going to embarrass individuals here, so no attribution, but here’s three genuine remarks, from sensible people in three major organisations:
- “We’ve got the system in – now we’re going to focus in the coming year on ‘how do we make the process work?’”.
- “There’s no point just asking IT: ‘what does the system do?’. The real question is:’What do we want it to do? That’s what should drive things’”.
- “We’re putting in the new system this year. So it will take a lot of time and effort to get ourselves back on track.”
I’m not talking down the efforts and achievements of some visionary leaders in this area. But it’s plain that, for most organizations, we are still a long way from business-led transformation, where the requirements of the business and its processes drive change, rather than old-school systems-led transformation.
On the first day of the 2010 World Cup, the analogy has to be from soccer. Imagine a football manager who focussed totally on the strength, fitness and technical skills of his squad. He ensured that they were the biggest, fastest and most agile players in the world. But would they win? Probably not. Strength, fitness and technical skills are absolutely vital, but success depends upon understanding the bigger picture of strategy and tactics, leadership and team morale.
In the same way, ERP platforms are critically important to shared services success. Getting to a single consolidated ERP platform is absolutely vital. But doing that well, and optimising performance once it is in place, requires an understanding of the bigger picture.
End-to-end process visibility and ownership is crucial in requirements definition, in driving standarization and enabling the management of variants. It’s the framework for cross-silo collaboration on the management of change. Wrapped within a governance framework, it’s the best way to integrate the ‘live’ business processes with business controls and compliance. It enables 360 degree visibility of the the roles and responsibilities where activities are outsourced. And it’s the only way to deliver the whole thing to the audience of end-users as a personalized ‘intelligent operations manual’.
Imho you can’t get elegantly and efficiently to a single ERP platform without end-to-end process visibility and ownership. And it’s indispensible for ongoing optimization.
PS nice story from the conference. The Caterpillar speaker was explaining why they hadn’t been able to get 100% compliance on their e-invoicing program from their suppliers in Europe. One of the suppliers to Caterpillar’s HQ offices in Geneva, Switzerland was deemed essential but was unwilling to comply because they have no computer access and no email address, and no intention of doing so: the yoga teacher.