How Not To Implement Shared Services

NAOA shared services centre to deliver HR, finance, procurement, IT and other services for the UK’s seven Research Councils. It seemed like a Good Idea when it was announced in 2006.

Five years on, a review by the UK’s National Audit Office (NAO) makes gloomy reading. Overspent £130m against a budget of £79m, and projected savings significantly less than expected.

How did it happen? The NAO report highlights three fundamental flaws:

Lack of Clarity

“A key factor contributing to escalating costs was the early lack of clarity about how the service would operate. An outline design, known as a target operating model, was not agreed until August 2008, nearly a year after implementation had begun, but it was incomplete and lacked detail. Some elements of design were still ongoing during transition and system launch.”

Confused Governance

“Early governance structures were complex. Reviews commissioned at various points during the project showed that responsibilities and accountabilities needed clarification.”

Poor Management of Outsourcer

“A contract with Fujitsu to design and build the systems and ICT was “poorly managed”. It was eventually terminated at an additional cost of £13m.”

Each of which could, of course, have been avoided, or at the very least mitigated, by the adoption of an appropriate process management platform.

No surprise that developing process maturity is an NAO theme – and runs through the NAO’s recommendations in this case: to harmonise processes further, to strengthen end-to-end process management, and to embed continuous improvement.

Hear stories like this and it’s bewildering how organizations can still be in denial about the need for a process management platform at the heart of any shared services project. As though it was a ‘nice-to-have’.

Whereas actually it’s the key to clarity at every level; to effective collaboration within a robust governance framework; to IT alignment; to drive process harmonization; to controlling a multisourced environment; to making life easier for the SSC workforce; and to enabling a culture of continuous improvement.

© Text Michael Gammage 2013

To-Be Or Not To-Be

hamletA frantic call from a managing consultant at a Nimbus partner, asking for help on his way into a client meeting, reminds me of our own little Da Vinci code.

Only we, the process cognoscenti, know what Shakespeare really meant. Hamlet’s original soliloquy was not merely about the most noble course to follow. It directly addressed the more fundamental issues in process discovery:

‘To-Be or As-Is, that is the question…’

My friend’s client may be at the bottom of the process maturity curve but they have aspirations, and an urgency (hence my friend’s assignment). But, as is so often the case, they only want to focus on the future. When your organization is largely dysfunctional and you have finally gathered the energy to act, it’s natural to want to focus on the sunlit uplands of process maturity: ‘Let’s not waste time with the As-Is, let’s just focus on the To-Be processes’.

It’s fair to say that consultants themselves often disagree on how important it is to capture the As-Is processes. But none that I know would ignore them. You can’t plan a journey without a startpoint. Transformation plans without an adequate understanding of the As-Is processes are very likely to fail. So, at the very least, capturing the As-Is processes reduces transition risks.

But paying attention to the As-Is processes helps in other important ways too. It can expose gaps, overlaps and inconsistencies that were overlooked because the organization’s focus has been on heroic fire-fighting. It reveals connections and hidden dependencies. Often it throws up new ideas for the future state, and highlights issues that will be need to be addressed in the transition. It grounds the definition of the To-Be processes. Above all, it gets people collaborating across functional silos, using the language of end-to-end process.

Process maturity is ultimately founded on an organization’s cultural mindset. Jumping straight to the To-Be processes is a quick-fix mindset. We’ll always need to execute quick fixes – but process maturity requires the organization to be able to operate in a more detached and analytical mode as well.

My friend’s client of course doesn’t see it this way (hence his call for help). So he will take on ‘the slings and arrows of outrageous fortune’ and risk arguing that his client needs to do an elementary capture of the As-Is processes, just to reduce transition risk. And be confident that the client will gradually come to realize that time invested in capture of the As-Is can be consulting budget very well spent.

Which we all know is pretty much what Hamlet would have advised in the circumstances:

Thus conscience doth make cowards of us all,
And thus the native hue of resolution
Is sicklied o’er with the pale cast of thought,
And enterprises of great pith and moment,
With this regard their currents turn awry,
And lose the name of action…

The BPM Story: Tragedy Or Comedy?

seven basic plotsReading The Seven Basic Plots on the plane to Dallas for the Finance Summit this week, I fell to wondering what the story line for Business Process Management (BPM) might be.

It’s got elements of all the archetypal plots. There’s definitely a Quest, including a thrilling escape from death (in Global360’s acquisition – just kidding). No disrespect to the ARIS community either, but there’s also an obvious Overcoming The Monster story line. And Nimbus might be the Rags to Riches plot.

But the real question – and it’s one on which my own professional future depends to some extent – is whether it’s a tragedy or a comedy. Is this a tragic tale of darkness gradually overcoming the light? Maybe – but I still prefer to see it as a comedy, a plot whose essence is confusion and dismay until, against seemingly impossible odds, peace and order are restored, and all becomes well again with the world.

The hero in our case is the enterprise, and in particular the COO. Our heroine is the fair Process, who represents all that is sweet and light. She knows that the hero needs his team to be collaborating effectively to achieve anything. And that a BPM platform using the language of end-to-end process is the key to long-term prosperity, to assured compliance, and to making the enterprise a great place to work.

The hero admires but continually overlooks our heroine, seduced by his inner demons: short-termism and ‘I’ll leave that to my successor’. ‘Dark angels’ whisper quick-fix solutions in the hero’s ear: ‘if we spend enough on the new ERP system, it will solve everything’ and ‘let’s outsource it and make it someone else’s problem’.

All the other elements of the Comedy plot are there. The hero’s forbidding father figure, the CEO, casts a shadow across our drama. There is the donning of disguises and the swapping of identities (the Lean and Six Sigma crowd). There are men dressing up as women, and vice versa (BPMN masquerading as a language for business people). Even the Chief Risk Officer and his Compliance henchmen have a role. Everything they touch is petrified and can only be brought back to life by a transfusion of pure gold.

Morale slumps. Results are lacklustre. It’s obvious to everyone except our blinded hero that there has to be a better way. But when will our hero have the moment of recognition upon which the story pivots? When will he see the fair Process for who she really is, and realize her goodness?

Soon I hope, or we’re heading for a tragic ending, more of a Romeo and Juliet tale. Those star-crossed lovers were of course torn asunder not by the hero’s blindness but by their feuding families. Which has disturbing parallels because, in the case of our hero and the fair Process, casting IT as the Montagues, and Business as the Capulets, looks awfully plausible.

© Text Michael Gammage 2013