One of our clients recently asked us to help them with an interesting query:
“We’re looking for companies that use their internal IT as a competitive differentiator — attracting employees and enabling their success in a noticeably different way. This would focus on the non-IT staff, rather than IT staff.”
Since the end of the Internet bubble and Nicholas Carr’s Harvard Business Review article, “IT Doesn’t Matter,” 10 years ago, IT executives have worked very hard to increase IT’s business relevance. They put internal IT through several waves of consolidation, outsourcing, and reorganization aimed to make IT more efficient, reliable, and service-oriented. But how many of these actions also managed to make IT a differentiating, more attractive place to work?
I have seen different approaches for making IT a more attractive workplace, for non-IT staff in particular. While trying to escape the traditional IT cliché, these models have some similarities with the three archetypes of IT — and different value propositions:
Solid utilities extend their scope beyond IT services to support corporate processes. For example, Procter & Gamble’s GBS and Volkswagen’s Konzern IT use business analysts and positions to attract non-IT talent.
Trusted suppliers are providers of high-tech specialized business solutions, such as Bloomberg or FactSet in the finance sector, looking for specialized engineers motivated to find their competitive IT edge.
Last month I launched an online self-assessment and survey tool to help you — business process change agents and architects — determine the sustainability of your business process management (BPM) change effort. The source of inspiration for the assessment criteria I used is the conclusion of the Harvard Business School's Evergreen Project.
Evergreen analyzed the impact of 200 different management "best practices" on the performance of 160 business organizations over a time period of 10 years. The researchers studied broad areas such as strategy, innovation, and business processes, as well as specific practices, and concluded that organizations that truly produce superior results excel at four fundamental practices:
Devise and maintain a clearly stated, focused strategy.
Develop and maintain flawless operational execution.
Develop and maintain a performance-oriented culture.
Build and maintain a fast, flexible, flat organizational structure.
But there’s life in the old dog yet. As our 2010 survey of 141 business process professionals showed, only 21% of the executives driving business process improvements are CIOs or process professionals reporting to IT — meaning that despite good intentions, IT plays a limited role in business process initiatives.
Many experts see the deployment of business process centers of excellence (COEs) as a panacea to IT’s process orientation problem. Set up to provide business technology (BT) services across business units — such as enterprise resource planning (ERP), business process management (BPM), customer relationship management (CRM), and business intelligence (BI) — business process COEs play a crucial role in efficiently developing and broadcasting innovative process-oriented practices across the business units.
I am talking to you, business process change agents and architects, who drive business transformations and continuous improvement initiatives. Sometimes our conversation starts from methodologies and technologies like Lean, Six Sigma, ERP, CRM, or BPM, but it almost always ends up with questions about organizational design, governance, change planning, and execution.
I believe that each process change initiative should start with a readiness assessment of the target organization. With that in mind, Forrester has developed an online self-assessment and survey toolthat can help you get a feeling about where your organization stays with respect to four must-have process change capabilities: 1) strategy; 2) process execution; 3) structure; and 4) culture of performance. For Forrester, the primary objective of this survey is to get a better understanding of how companies drive business process change initiatives to success. Please take 10 minutes to get your maturity score.
Your responses will be kept strictly confidential and will only be examined in aggregate with the others who complete this survey. If you provide valid answers to all questions, you will receive the results summary. The survey should take no more than 10 minutes to complete.
If you have insights, comments, or questions relating to the survey, please add them in the comments to get additional perspective from the community.
Earlier this year I told you the story of a business executive who told us how critical is that business — not IT — drive process improvement initiatives. Here is another interesting case my colleague VP and Principal Analyst John Rymer and I have just witnessed.
It is the story of a business organization that developed an IT strategy based on three best practices:
The core business processes would be implemented on a single modern, flexible platform.
The platform would be service-oriented to ensure clear accountabilities and flexibility for future needs.
The platform development and operations would be outsourced to a shared services provider.
We reviewed the strategy 10 years after it was conceived to find out that it has not yet achieved its top strategic goal. More disturbing:
The development investment has been far greater than expected at the outset.
The annual cost of IT operations doubled versus the base line.
The reliability of the processes converted to the new environment went down.
As announced in April, SAP told us this week that it formally completed the acquisition of its longtime partner TechniData — a 500-employee company headquartered in Germany with a presence in both Asia and the United States. TechniData provides sustainability solutions in three areas: 1) health and safety; 2) product safety; and 3) environmental compliance — for example, process consulting, software services, information on regulatory content, and managed services for EU’s REACH regulation.
Forrester Senior Analyst Holger Kisker and I had the opportunity to talk recently with Jürgen Schwab, the former chairman and CEO of TechniData; Marty Etzel, SAP’s VP of Sustainability Solutions; and Dieter Hässlein, SAP’s VP of Solutions Management for Environmental Health & Safety (EH&S). They told us that SAP has created a sustainability consulting hub accommodating more than 100 consultants, including the former TechniData staff, to support SAP’s sustainability strategy. They also explained the reasons for the acquisition: 1) focusing on content as an integral part of SAP’s sustainability strategy; 2) expanding and refining SAP’s expertise and customer base both beyond the chemicals industry and geographically, as well, in particular in Asia; and 3) improving the capabilities of SAP’s current preconfigured sustainability-related solutions.
During this week’s Sapphire conference SAP co-CEOs Jim Hagemann Snabe and Bill McDermott repeatedly stated that their goal is to make SAP the market leader for on-device, on-premises, and on-demand enterprise solutions. This very bold statement raises two simple questions:
With what products and values does SAP want to be the leader? Does the company want to win the technical innovation race or the business optimization and intimacy race?
How does the leadership goal translate into meaningful operational commitments? Does SAP have the determination and resources required to win in all categories?
We don’t have clear answers to these questions, but the next couple of months will show whether and how this goal translates into organizational capabilities. Right now, we just need to wait with patience for the next change and live with the — hopefully incorrect — impression that SAP is pursuing three strategic tracks simultaneously: intimacy, innovation, and growth.
I strongly agree with Paul Hamerman, who recently observed that SAP's success as a company will be a function of how well it looks after the best interests of customers and how it links innovation to customer value — not growth.
On Thursday, May 13, 2010 SAP released its new sustainability report. The report achieved an A+ GRI rating versus the B+ for the previous 2008 one. It uses videos and interactive elements to tell a carefully orchestrated story about SAP’s sustainability performance and provide a baseline for continuous improvement. You will find a few new KPIs, such as business health, culture index and employee satisfaction, and also interesting data about carbon footprint reductions, energy consumption, financial performance, and customer satisfaction.
The SAP report is nicely orchestrated and illustrated. But at least as interesting as the performance data is the message about the company’s strong commitment to the sustainability concept. We defined business sustainability as an underlying approach to business strategy, which optimizes the firm’s business processes and resources. SAP uses the concept as a natural go-to-market strategy and an opportunity to repackage existing and new software offerings into a new and more consistent solutions framework. Known as the SAP Sustainability Library, this framework is an excellent source of insights, best practices, and case studies, including SAP’s own sustainability report.
SAP’s Sustainability Library is a basic tutorial for business process executives seeking to understand and get a grip on sustainability. Even if you are not an SAP customer, you should seize SAP’s breakthrough work as an opportunity to learn and extract new ideas, best practices, and solutions that have the potential to increase the profitability and long-term health of your organization.
As you may know from my previous blog post, on Thursday last week I delivered the Forrester Teleconference titled Increasing the Maturity of Your BPM Center of Excellence. This blog post summarizes the organizational practices discussed during the teleconference for those of you who could not attend:
Assess the enterprise's BT maturity level. Forrester has developed a business technology (BT) maturity self-assessment approach. I presented an example of how to use it in a recent blog post. Perform the assessment with key business stakeholders first -- the CEO, COO, CFO, BU leaders -- then go for IT. Visualize the existing business-IT alignment gap at your enterprise and develop an improvement plan focusing on organization, enabler processes, and behaviors.
Develop unified BT demand management function. BPM initiatives emerge when and where business stakeholders need them. The pervasiveness of technology services allows these change agents to roll out process improvements with or without support from the IT department. But you will need a place where everything comes together to ensure that investments are synchronized and beneficial at the enterprise level. This business demand function must establish also the enterprise's governance, monitoring and control framework, and provide strategic directions for BT.
I am including the text of a recent customer inquiry, which nicely summarizes a common challenge among IT executives:
“Within our current IT organization, we have a team whose function is to provide technical project business analyses, project management and quality assurance. The same team handles the project portfolio and capital project budgeting. Within the team are account managers, whose primary function is to act as the liaison between IT and business units. The account managers spend time with the business unit leaders to understand their technical needs and look for business processes that might be automated. That information is what is ultimately used to build the ongoing IT project portfolio.
We are looking at re-aligning the account management role into more of a "business technology service delivery" model. Does Forrester provide information that might assist our efforts to mold into a service delivery organization?”