Sponsored feature: Avoiding a process crisis
- 13 February, 2014 08:30
This insight cropped up at a recent CIO roundtable as ICT executives from across sectors distilled process management from the sports team that continues to retain a winning streak and the stature of a world-class organisation.
“Taking the lead from our sporting culture, we know we are actually very good at developing and applying world beating processes,” says Ivan Seselj, CEO and founder of Promapp.
The discussion on ‘avoiding a process crisis’ was spurred by the raft of incidents in recent months that underscored how the lack of, or a breakdown in process management, can have massive fallouts to an organisation’s reputation and revenue.
“We seem to be experiencing these too often,” says Seselj, on the succession of incidents locally and offshore that can be traced to a breakdown in process management. “These are important questions for CIOs and indeed the rest of the executive team need to look at.”
Analyst firm Gartner tackles the significance of the task ahead, as it noted that organisations putting processes “front and centre consistently outperform those that don’t”.
“They're quicker to adapt to changing business conditions,” notes Gartner. “They're more responsive to their customers. And they're seizing opportunities that are lifting revenue and profitability to a whole new place.”
The ensuing discussion was a frank discourse on how organisations implement programs and allocate roles needed to drive “process excellence”. It also tackled the role of ICT leaders and their teams in these undertakings.
Around the table
Claudia Vidal, general manager, IB4T
Ivan Seselj, founder and CEO, Promapp
Mike Clarke, CIO, SkyCity Entertainment Group
James Burnett, manager, business analysis, Fidelity Life Assurance
Ian Parker, IT manager, Panasonic NZ
Wilson Alley, CIO, Delegat’s Wine Estate
Kevin Drinkwater, CIO, Mainfreight
Vaughan Robertson, group manager, technology services, Beca
Tyrone Paynor, CIO, Auckland Co-op Taxis
Chris Barendregt, business technology consultant and former CIO, Fonterra
Divina Paredes, editor, CIO New Zealand (moderator)
Under the radar
The panellists noted for CIOs, process mapping is logical for an organisation, but there are other factors why this may not be the case for their other executive colleagues.
For one, it involves investment that the other executives feel could be put somewhere. “I don’t think they see their returns,” notes Claudia Vidal of IB4T.In New Zealand, there is the double challenge of having process excellence falling below the radar of some executive teams. Majority of organisations accept process is critical, says Seselj, but they do not have a formal concept of process knowledge.
For certain organisations, the realities of economics and working with partners and customers across the globe are increasing focus on process. “Over 90 per cent of our turnover is offshore,” says Wilson Alley of Delegat’s Wine Estate. He says the organisation is now using a massive enterprise program on the Microsoft Platform to help bring further process improvement.
It's fundamentally a leadership issue right now in New Zealand.
Vaughan Robertson of Beca says the engineering consultancy has been doing consulting around Lean Six Sigma process re-engineering. “We are progressively ‘drinking our own champagne’ with regard to improving processes, improving the business.”
Ian Parker notes how Panasonic places very strong cultural and historical value to the company’s founding document. “From the day they join the company to the time they leave, there is a strong understanding of how the company founder brought the company into fruition, and what his values were. What the company has called values we are effectively calling processes.”
When new players enter the market, IT will work with them and train with them to make their transition into New Zealand as seamless as possible for the company being a wholesale supplier to them. “That all stems back to the founding documents,” says Parker.
Spotlight on business process management
Business process management (BPM) is constantly striving to improve the way organisations do things to provide value for customers. It’s much more than just technology – it is teams of people, motivated by committed leaders, working together to continuously find better ways of doing things. BPM treats business processes as a key knowledge asset of the organisation. This asset must be easy to use, own, manage, and improve by the business teams to increase the value organisations provide to customers.
First stop: Dissecting the ‘number 8 wire’ mentality
The discussion kicks off with a discourse on how the much-vaunted ‘she’ll be right mentality’ or ‘number 8 wire’ approach has impacted process management in New Zealand enterprises.
On the positive side, the ‘number 8 wire’ approach highlights an organisation’s ingenuity in making use of available resources to get things done. It also produced a raft of generalists whose broad skills are valued in corporations locally and offshore. They can do a lot more, whether in software development or systems engineering. As the panellists note, this is a direct consequence of the limited scope and number of projects in New Zealand, so people are used to doing a lot than their counterparts offshore.
On the flipside, this ‘ad hoc’ approach can backfire when the solutions implemented become intertwined and more complex, and require process management.“Yes, it would take you into the innovation, into the can-do for a while, but there's a point [where] you need that process to mature and be functional and think of the ramifications,” says Claudia Vidal of IB4T. “It is good as a starte,r but it's not good as you want to implement the process further. You need that structure, that understanding, and you need to know the implications of the inputs and the outputs.”
Critical steps, critical questions
Kevin Drinkwater of Mainfreight says process management is about documenting and making sure it is being disseminated. When Mainfreight had five branches and a team of 70 to 80 people, it was okay for them to get the manuals out and read through the processes.
But with 2000 team members in New Zealand and 5800 worldwide, this is not possible. “The further you get away from the epicentre of the people that know why, the more you have to prescribe [the] how and the more you have to document the process,” says Drinkwater.
Cascading the process may involve strategic approaches for a workforce, for instance, where literacy is an issue. Or, as in the case of New Zealand and Australia, the top-down approach to explaining processes may be met with questions from staff.
In some cultures or environments, the processes will not be questioned, but as the panellists note, this may not be the case in New Zealand and Australia. “Kiwis and Australians will ask, why do we do this?” notes Drinkwater.
The panellists agree this could be an advantage because as one of them puts it, “If we can’t answer the question why are we doing this and make it communicable to particularly the distributed workforce, then no one’s going to buy into it.”
A panellist queries, if process is documented and standardised, is it going to lose flexibility?“It is a matter of focusing on stuff that is going to be standard and does not add value,” says Chris Barendregt. “Focus on the area where it does not make any sense not to standardise, and let businesses have some degree of flexibility in revenue generating areas and how they integrate into the local market.”
A panellist recalls how at one time they set up a job setting system and everybody was asked about the processes and what they need to do before moving to the next process.
Everybody complied and when it was implemented, “what came up was a disaster” as staff says they cannot use it. When told that the input came from them, they replied the system does not follow what they do.
“We asked you what the process was and we did it,” says the CIO, who was involved in the process documentation. The workers replied, “You asked us what the company does, not what I do.”What the employees told about their process is not what they were actually doing but what management wanted to hear, says Tyrone Paynor of Auckland Co-op Taxis, on this particular incident cited by a co-panellist. “I think it became a disaster either because management wanted to hear something else from what they [the workers] were saying.
Seselj believes this situation exists in the majority of New Zealand organisations.
“It goes back to culture,” he says. “Just because it is written down does not mean that is what we are doing.”
Claudia Vidal says this problem can be approached this way: The team will not ask questions but will observe what people do and then ask the questions. “Because otherwise, people tell you what they want or what you want to hear rather than what they do.”
The usability imperative
Standardised processes may exist in both paper and electronic forms. But the panellists note it is one thing to have a process, and another for people to actually be able to use it.
“Discoverability” is important, because of the rise of a more tech savvy workforce that’s used to learning process from YouTube, Google, or smartphone apps, where there are no user manuals. “They will justifiably ignore reams of how-to guides,” says Vaughan Robertson of Beca.
Ian Parker notes the upside of using YouTube videos to share information from a process perspective. “I no longer have to worry about 4000 videos sitting on my network. Basically we take the video, send it up to YouTube, put a link on our social media site, put a link on our website.” Parker says. “It is a huge game changer.”
Wilson Alley of Delegat’s Wine Estate says one of the approaches they used is to incentivise the team to see the benefit of using the system, citing the company experience when it rolled out a global CRM.“Beyond the consultation and bringing new technology, we made sure that a lot of the things that are measured on are actually incorporated in the new system,” says Alley.
“So the shared dialogue, with global sales, went beyond just the significant investment in improved processes, integration, making the user experience better,” he says. “We ensured that the sales staff understood that the new CRM system was also now going to be the source of the data their performance would be evaluated on. For example, call rate was not going to be recorded in Excel or on a Post-it note, any more. If a call is not entered, populated, and closed in [the] global CRM, it doesn’t count towards the account manager’s call rate KPI.”
If the system is “democratic” it will be used by the team, says Kevin Drinkwater. "Our system publishes all the processes and anybody can suggest an improvement. A group is authorised to make a decision to accept the improvement, and it gets implemented. It is also a teaching opportunity."
Vaughan Robertson says the processes should not be gated. “Put warnings but allow them to override.”“Here is what you should do, but as much as possible we are not going to stop you carrying on with the process even if you do it wrong. But we are going to have it so that it’s flagged that you haven’t followed the process.”
“This way,” he says, “IT is not seen as the impediment to doing stuff, and the responsibility is sheeted back to the line of business.”
Enter the chief process ownerThe panellists agree there needs to be ‘ultimate ownership’ of the process function.
“It comes back to the CEO,” says Kevin Drinkwater, whose company has successfully deployed process management systems. “Don't blame the software. Any failed IT project, or let's say successful IT project, is ultimately the responsibility of the CEO.”
Seselj concurs, saying in the companies they work with, they recommend nominating the chief process owner, who is usually the CEO.
Any failed IT project, or let's say successful IT project, is ultimately the responsibility of the CEO.
The chief process owner is a “figurehead role” and will indicate the executive support for the process. “Whoever holds this role can send two meetings a year, or barring that sending two emails highlighting that process management should be done the right way,” says Seselj. “You have to tell people they are either on the bus or off it.”
“It's a leadership role to say this is our version; this is what we want to achieve,” he says. “Champions” in the business, including those in business technology, can do the underlying work.
“It is about being clear where flexibility lies and where it does not lie,” he says.
“If we take Team New Zealand and the All Blacks, they are among our highest performing examples of anything in New Zealand. Would they allow the ‘how we are doing it as opposed to how we should be doing it attitude?’ I think there is no way they would allow that.
“This discussion hopefully will make a difference because I think it's fundamentally a leadership issue right now in New Zealand,” Seselj concludes.
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