Properly Defining Enterprise-wide Entities: The Critical Step


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Properly Defining Enterprise-wide Entities: The Critical Step

  1. 1. Tom Valva Sr. Director, Internet & Infrastructure ADP, Inc. Retirement Services Analysis: The Critical Step
  2. 2. Analysis – The Critical Step <ul><li>Large BPM integration initiatives can be frighteningly complex </li></ul><ul><ul><li>technology is often the ‘easy’ part of the job </li></ul></ul><ul><ul><li>Organizational silos (silo-orgs) make integrative BPM initiatives particularly difficult </li></ul></ul><ul><li>Organizational ‘silos’ – why they exist; why they’re resilient, and why they cannot be ignored </li></ul><ul><ul><li>Silos often exist for good reason </li></ul></ul><ul><ul><li>Silos are usually not 100% independent </li></ul></ul><ul><ul><li>Integrative BPM initiatives often want to ‘break down’ silos, the better approach is to ‘drill-through’ </li></ul></ul><ul><li>Analysis and management techniques that can help </li></ul><ul><ul><li>Understanding silo-org’s current point in it’s lifecycle is critical </li></ul></ul><ul><ul><li>Finding the powerful actors and understanding power </li></ul></ul><ul><ul><li>A key negotiating technique that can make the difference </li></ul></ul>
  3. 3. Complexity and Opportunity <ul><li>Identifying organizational entities as complex is not enough </li></ul><ul><ul><li>We must understand the sources and nature of this complexity </li></ul></ul><ul><ul><li>As analysts, architects, and software engineers, we are called upon to engineer the illusion of simplicity in these complex environments </li></ul></ul><ul><ul><li>We must learn to marshal the proper techniques for dealing with silo-orgs </li></ul></ul><ul><li>Previously, limiting the scope of large BPM projects was a viable technique in complex environments </li></ul><ul><ul><li>Avoidance or scope limitation may not be a viable strategy in larger integration projects </li></ul></ul><ul><ul><li>Much of the ‘Low Hanging Fruit’ has been picked </li></ul></ul><ul><ul><li>Talk of “tearing down” silos premature and uninformed </li></ul></ul><ul><ul><li>Process Automation within silo-org may be ahead of, or far behind intra-organization BPM initiatives </li></ul></ul><ul><ul><li>Significant benefits can accrue when the analysis is more comprehensive </li></ul></ul><ul><ul><li>Simpler designs patterns can result that are more flexible than might otherwise be achieved </li></ul></ul>
  4. 4. Complexity and Opportunity <ul><li>Margin/Budget pressures </li></ul><ul><ul><li>Supra organization may push cost reduction initiatives to reduce redundancy </li></ul></ul><ul><ul><li>Reduction of redundant infrastructure </li></ul></ul><ul><ul><li>Centralization of staff services, Finance, HR, Procurement </li></ul></ul><ul><li>Operational efficiencies </li></ul><ul><ul><li>Service continuity requires single point of entry to CRMs with navigation to silos of expertise </li></ul></ul><ul><ul><li>Combined billing, reporting, compliance </li></ul></ul><ul><li>Strategic “bundled” products/services, and operational efficiencies demand integrated solutions </li></ul><ul><ul><li>Combining product/services “bundling” as a marketing strategy </li></ul></ul><ul><ul><li>Client portals, common information shares via pub/sub </li></ul></ul><ul><ul><li>Integrated security – single-sign-on, federation, role management </li></ul></ul>
  5. 5. Complexity and Opportunity <ul><li>Tremendous pressures occur when intra-silo integration is attempted </li></ul><ul><ul><li>Organizational infrastructure and routines are threatened, causing political turmoil </li></ul></ul><ul><ul><li>Architecture groups are often seen as elite outsiders, removed from “real” issues </li></ul></ul><ul><ul><li>Methodologies might be different; RUP versus Agile, Test Driven, None </li></ul></ul><ul><ul><li>Technological approaches differ (Java vs. .NET, Mainframe vs. Server) </li></ul></ul><ul><li>Analysis of silo-organizations cannot be done from afar </li></ul><ul><ul><li>Isolated Architecture groups with a corporate mandate often fly too high to see the details, and pick the easiest targets to ensure success </li></ul></ul><ul><ul><li>Avoiding or generalizing silo complexity leads to problems down the road </li></ul></ul><ul><ul><li>Solutions become too specific to the most significant silo (revenue, P/L) </li></ul></ul><ul><ul><li>Required flexibility is often sacrificed </li></ul></ul><ul><li>All organizations (and silo-organizations) have life-cycles </li></ul><ul><ul><li>Knowing where a silo-organization is in it’s life-cycle can be critically important </li></ul></ul><ul><ul><li>Organizations have different characteristics depending on their current life-cycle position </li></ul></ul><ul><ul><li>Life-cycle position can define culture, organizational power patterns, and level of bureaucracy </li></ul></ul>
  6. 6. Complexity and Opportunity <ul><li>Level of Funding Differs </li></ul><ul><ul><li>Supra-organizational integrative BPM initiatives might not be funded by the Supra-organization </li></ul></ul><ul><ul><li>Unfunded “mandates” conflict with financial planning in the silo </li></ul></ul><ul><ul><li>Best if funding is provided by supra organization </li></ul></ul><ul><li>Supra-Organization ability drive integration initiatives </li></ul><ul><ul><li>Silo-org “strength” and ability to resist can be significant </li></ul></ul><ul><ul><li>Standards compliance is not enough; too easily ignored </li></ul></ul><ul><ul><li>Tying BPM initiatives to “hard dollar” measures is best </li></ul></ul><ul><ul><li>C-Level executive sponsorship is often necessary </li></ul></ul><ul><li>Focusing on the largest silo skews perception </li></ul><ul><ul><li>Assuming the largest silo is the most complex, may be simply the most scalable and therefore the largest </li></ul></ul><ul><ul><li>Organizational routines may be much simpler in the “scaled” business </li></ul></ul><ul><li>Pressure to deliver can result in non-optimal results </li></ul><ul><ul><li>Too many assumptions </li></ul></ul><ul><ul><li>Simplistic design patterns </li></ul></ul><ul><ul><li>Insufficient flexibility </li></ul></ul>
  7. 7. Analyzing Organizational Silos <ul><li>What exactly is a silo-organization? </li></ul><ul><ul><li>An organizational silo is defined as a distinct entity, with independent characteristics operating within the larger supra-organization </li></ul></ul><ul><ul><li>Silo-orgs often have distinct operational routines and management </li></ul></ul><ul><ul><li>Silo-orgs have their own mission, and often are their own profit/loss and budget centers, they are often ‘divisions’ </li></ul></ul><ul><ul><li>Silo-orgs often have independent technical organizations and infrastructures, particularly where those infrastructures are critical to serving their specific market segment </li></ul></ul><ul><li>Why do silos exist? </li></ul><ul><ul><li>A silo organization may serve a specific market segment related or completely separate from other markets serviced by other silos </li></ul></ul><ul><ul><li>Same is true in non-profit and public sector, areas serviced may be distinct from one another, requiring different skills and routines </li></ul></ul><ul><ul><li>Regulatory coverage may force separation </li></ul></ul><ul><ul><li>Acquisitions & organic ‘related’ growth in private sector, administrative combinations in public entities can result in siloed organizations </li></ul></ul>
  8. 8. Complexity and Opportunity
  9. 9. Analyzing Organizational Silos <ul><li>The supra-organization may be a confederacy of silo-orgs </li></ul><ul><ul><li>Supra-organization might be operationally weak, and cannot exert enough control to sponsor major integrative initiatives </li></ul></ul><ul><ul><li>Supra-organization may struggle to gain compliance on initiatives because its seen as irrelevant by silo-orgs </li></ul></ul><ul><ul><li>“ Holding company” mentality: supra-organization is really a reporting entity, a “roll-up” </li></ul></ul><ul><li>Largest silo-org may “act” as the supra-organization </li></ul><ul><ul><li>The “bully effect”; One silo attempts to exert it’s control over others </li></ul></ul><ul><ul><li>Larger silo’s operational routines and systems may not fit the smaller silos </li></ul></ul><ul><ul><li>Larger silo-orgs will be less likely to agree to modifications their systems or change their routines </li></ul></ul><ul><ul><li>Lesser silos build resentment, mistrust, go into defensive posture </li></ul></ul>
  10. 10. Analyzing Organizational Silos <ul><li>Silo-orgs often do share some routines, technologies, and features </li></ul><ul><ul><li>Some computing infrastructure (email, networking, security) </li></ul></ul><ul><ul><li>Financial roll-up reporting </li></ul></ul><ul><ul><li>Billing may be fully or partially integrated </li></ul></ul><ul><ul><li>Executive participation in entity-wide committees </li></ul></ul><ul><li>However, silo-orgs often operate quite independently </li></ul><ul><ul><li>Related but separate market requires modified focus </li></ul></ul><ul><ul><li>Completely unrelated market </li></ul></ul><ul><ul><li>Related market but regulated distinctly </li></ul></ul><ul><ul><li>Custom systems and operational routines necessary to provide product/service </li></ul></ul><ul><ul><li>Client may be defined differently </li></ul></ul><ul><ul><li>Custom development methodologies, metrics </li></ul></ul>
  11. 11. Analyzing Organizational Silos <ul><li>Silo-orgs may service the same client </li></ul><ul><ul><li>Related products/services from the same enterprise, different silos </li></ul></ul><ul><ul><li>Service infrastructures are often not integrated, CRMs, CTI </li></ul></ul><ul><li>Client ownership can be a critical issue </li></ul><ul><ul><li>Does the supra-organization own the client? </li></ul></ul><ul><ul><li>Cost may be incurred to “globalize” client ownership </li></ul></ul><ul><ul><li>Not getting client ownership right confuses clients and highlights non-integration </li></ul></ul><ul><li>Significant value may be identified by “bundling” services </li></ul><ul><ul><li>Sum of products/services viewed as greater than components </li></ul></ul><ul><ul><li>Client retention increases, “stickiness” </li></ul></ul><ul><ul><li>Lifetime total client value increases </li></ul></ul><ul><ul><li>One-stop shopping often alluring to clients </li></ul></ul><ul><ul><li>Unified service model </li></ul></ul><ul><ul><li>Simplified billing and account management </li></ul></ul>
  12. 12. Analyzing Organizational Silos <ul><li>Silos can have distinct cultures </li></ul><ul><ul><li>Retention of previous organizational identity after acquisition </li></ul></ul><ul><ul><li>Geographic differences </li></ul></ul><ul><li>Technological culture </li></ul><ul><ul><li>Varying technologies, Java vs. .NET, Mainframe vs. server </li></ul></ul><ul><ul><li>Varying methodologies, RUP vs. Agile, Waterfall, None </li></ul></ul><ul><li>Operational culture </li></ul><ul><ul><li>Large custom approach versus “in-box” scaling </li></ul></ul><ul><ul><li>Relative financial strength and performance </li></ul></ul><ul><ul><li>Relative political strength </li></ul></ul>
  13. 13. Helpful Analysis Techniques <ul><li>Understanding organizational life-cycles </li></ul><ul><ul><li>Putting the organization “on the couch” </li></ul></ul><ul><ul><li>Where is the organization on the lifecycle curve? </li></ul></ul><ul><ul><li>How might our experience differ based on the lifecycle curve? </li></ul></ul><ul><li>Power dynamics </li></ul><ul><ul><li>Who has the power and why </li></ul></ul><ul><ul><li>Targeting the right people and processes </li></ul></ul><ul><ul><li>Working the informal organization </li></ul></ul><ul><li>Identifying interests versus positions </li></ul><ul><ul><li>Why organizational conflict is so common and what to do about it </li></ul></ul><ul><ul><li>Some key techniques </li></ul></ul>
  14. 14. Organizational Lifecycles <ul><li>Adize’s work on organizational lifecycles </li></ul><ul><ul><li>Ichak Adizes, Ph.D. – “ Managing Corporate Lifecycles ” </li></ul></ul><ul><ul><li>Every organization has a lifecycle </li></ul></ul><ul><ul><li>Where the organization is on it’s life-cycle curve defines it’s characteristics and behaviors </li></ul></ul><ul><li>The organizational lifecycle defined </li></ul><ul><ul><li>Stages of organizational life: </li></ul></ul><ul><ul><ul><li>Courtship – early conceptual stages </li></ul></ul></ul><ul><ul><ul><li>Infancy – organization launched </li></ul></ul></ul><ul><ul><ul><li>Go-go – early organizational success </li></ul></ul></ul><ul><ul><ul><li>Adolescence – first signs of trouble </li></ul></ul></ul><ul><ul><ul><li>Prime – well coordinated efforts </li></ul></ul></ul><ul><ul><ul><li>The Fall – complacency, rigidity, aristocracy, hubris </li></ul></ul></ul>
  15. 15. Organizational Lifecycles From “Managing Corporate Lifecycles”, Ichak Adizes, Ph.D © 1999 Prentiss Hall Inc.
  16. 16. Organizational Lifecycles <ul><li>Ascendant qualities in different stages, P,A,E,I </li></ul><ul><ul><li>Performance </li></ul></ul><ul><ul><li>Administration </li></ul></ul><ul><ul><li>Entrepreneurial </li></ul></ul><ul><ul><li>Integration </li></ul></ul><ul><li>Stages of organizational life – fatal events: </li></ul><ul><ul><li>Courtship – affair </li></ul></ul><ul><ul><li>Infancy, Go-Go – infant mortality </li></ul></ul><ul><ul><li>Adolescence – founders dilemma </li></ul></ul><ul><ul><li>Prime – divorce </li></ul></ul><ul><li>Problems at different lifecycle stages </li></ul><ul><ul><li>Normal versus Pathological problems </li></ul></ul><ul><ul><li>Pathological problems lead to “death spiral” </li></ul></ul><ul><ul><li>Solutions are often structural, and move the organization up the curve if successful </li></ul></ul>
  17. 17. Organizational Lifecycles <ul><li>BPM, integration initiatives at different lifecycle stages </li></ul><ul><ul><li>Adolescent and Prime organizations are most probable targets </li></ul></ul><ul><ul><li>Go-go organizations might be easiest to get a project buy-in, but continued focus could be an issue </li></ul></ul><ul><ul><li>Adolescent organizations are the most problematic, power shifts, people versus process issues, inadequate methodology and consistent project management are an issue </li></ul></ul><ul><ul><li>Prime organizations are best because the balance between PAEI is there by definition. </li></ul></ul><ul><ul><li>Primes have the right mix of process and execution, and management focus. </li></ul></ul><ul><li>Pick the right targets </li></ul><ul><ul><li>In prime organizations, the target is a process. Initiatives will be prioritized in an orderly fashion, and executed on in relation to their priority </li></ul></ul><ul><ul><li>In an adolescent organization, shifts could occur; sponsorship by a founder may be necessary, but a process may exist as well; cover the bases </li></ul></ul><ul><ul><li>In a Go-go or infant organization, sponsorship by a founder is necessary, process for prioritizing initiatives will not be mature, or will not be rigorously adhered to </li></ul></ul>
  18. 18. Power Dynamics <ul><li>Who has power, authority, responsibility </li></ul><ul><ul><li>Critical to understand who are the stakeholders and “movers” </li></ul></ul><ul><ul><li>What kind of power? Expert versus Legitimate power </li></ul></ul><ul><ul><li>Leaders often exercise legitimate power, but often are experts as well </li></ul></ul><ul><ul><li>Expert power derives from workable knowledge </li></ul></ul><ul><ul><li>Legitimate power derives from organizational office and position </li></ul></ul><ul><li>Organizations early in their lifecycles have tighter power structures </li></ul><ul><ul><li>Lines of communications are shorter, decisions are made quickly </li></ul></ul><ul><ul><li>Integration among power-holders is high </li></ul></ul><ul><ul><li>Power holders are often “founders” </li></ul></ul><ul><li>Organizations in prime often have more “legitimized” power structures </li></ul><ul><ul><li>Less individual influence </li></ul></ul><ul><ul><li>More emphasis on process </li></ul></ul><ul><li>Adolescent organizations shift between legitimized and expert power structures </li></ul><ul><ul><li>Requires more effort to achieve buy-in </li></ul></ul><ul><ul><li>Process may exist, but powerful individuals may disparage it </li></ul></ul>
  19. 19. Power Dynamics <ul><li>Informal organizations </li></ul><ul><ul><li>Learning to identify the “informal organization” can be a key to success </li></ul></ul><ul><ul><li>Usually consists of 2-5 powerful individuals who decide what gets done </li></ul></ul><ul><ul><li>This structure is usually operative in adolescent organizations, but may also be found in prime ones, though less frequently </li></ul></ul><ul><ul><li>Members are often the “founders” </li></ul></ul><ul><ul><li>Informal organizations often operate independently of defined processes and can sanction or stop initiatives </li></ul></ul>
  20. 20. Interests versus Positions <ul><li>Integrative initiatives will often run into initial resistance </li></ul><ul><ul><li>Arguing starts with statements of why integration won’t work </li></ul></ul><ul><ul><li>Unique nature of the silo-org is frequently stated as a reason to avoid integration </li></ul></ul><ul><ul><li>These are “positions” that are prepared and defended </li></ul></ul><ul><ul><li>Positions are a form of “offensive defense”, meant to frustrate and defer outsiders </li></ul></ul><ul><li>Focusing on common interests </li></ul><ul><ul><li>Bringing the conversation to a higher-plane is often necessary </li></ul></ul><ul><ul><li>Focus on client-value of integration </li></ul></ul><ul><ul><li>Overall supra-organization goals like stock price, which is not tied directly to silo-orgs, but is likely a benefit for them </li></ul></ul><ul><ul><li>Distributive versus collaborative negotiation techniques </li></ul></ul><ul><ul><ul><li>Long term relationships </li></ul></ul></ul><ul><ul><ul><li>Shared supra-goals </li></ul></ul></ul><ul><ul><ul><li>Assure silo-orgs existence </li></ul></ul></ul><ul><ul><ul><li>Affirm need to cooperate </li></ul></ul></ul>
  21. 21. Summary <ul><li>Integrative BPM initiatives will become more complex </li></ul><ul><li>Integrative solutions yield key advantages to organizations and their clients </li></ul><ul><li>Understanding the nature of silo-organizations is essential </li></ul><ul><li>Analyzing the organization’s position in their corporate life-cycle can assist in understanding organizational dynamics </li></ul><ul><li>Understanding power dynamics and positions versus interests help prepare architects, project managers for conflict arising from integration initiatives </li></ul><ul><li>Together, these techniques can form a powerful analytical heuristic for dealing with the “soft-side” of complex BPM initiatives </li></ul>
  22. 22. Thank You! <ul><li>Tom Valva </li></ul><ul><li>Sr. Director, Internet & Infrastructure </li></ul><ul><li>ADP, Inc. Retirement Services </li></ul><ul><li>Contact Information: </li></ul><ul><li>973-712-2450 </li></ul><ul><li>[email_address] </li></ul>