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BPM Success Look Like You
- 1. BPM SatNav For Your Business Sean Lawlor
- 2. What Does BPM Success Look Like for You? Get all your targets aligned with the Corporate plan BPM – SatNav for your business
- 3. •Integral component •Butterfly effect •People Aspect Ride the Information Tsunami BPM – SatNav for your business
- 4. •Success Stories •UPS •American Airlines Pay Attention to the Little Things BPM – SatNav for your business
- 5. Case Study: Gilt Ireland BPM is a Holistic Process BPM – SatNav for your business
- 6. Gilt Ireland – The Challenge •Increased Group Complexity •Build and develop AP SSC •Intercompany •Drive International Growth •Creating International HQ "Accept the challenges so that you can feel the exhilaration of victory.“ George S. Patton BPM – SatNav for your business
- 7. Gilt Ireland: Establishing the FACTS •Focus on the process •Assess the constraints •Create the roadmap to success •Transfer the knowledge •Stakeholder Communication Set your people up for Success BPM – SatNav for your business
- 8. Gilt Ireland: Next Steps •Train •Document •Process and People BPM – Performing Processes and People BPM – SatNav for your business
- 9. Gilt Ireland: Delivering Success •Benchmarks •KPI’s •Communication •Hard Facts Leverage and Exploit Data Assets BPM – SatNav for your business
- 10. •So – What does this mean for you? Balance, Commitment, Engagement BPM – SatNav for your business
- 11. •Define Success •Establish the truth with facts •Engage the Stakeholders Balance, Commitment, Engagement BPM – SatNav for your business
Editor's Notes
- General Intro
- Performance has been defined as “doing today what will lead to measured value outcomes tomorrow (Lebes & Euske 2002), and is defined in terms of LT & ST goals, and single and double feedback loops.Different Businesses have different strategiesTargets aligned with strategic planIt aims to improve control over the business, in ways traditional accounting systems do not and cannot, through the use of various techniques like the Balanced Scorecard, Indicators (leading/lagging, financial/non-financial, etc). BPM is also about the people. You cannot divorce the technology with those who use it. Critical Data is often captured in the lower strata of companies, through order entry, general admin work, etc. Once in the system, it can be manipulated, interfaced, refreshed etc, but if it is defective, then it reduces the integrity of the overall package, reduces trust in the system, and spawns reliance on informal and offline info-gathering processes. GIGO
- Business performance measurement is an integral component to how businesses get to know things, and use this knowledge in a manner that helps them survive and thrive. Increased interest in performance measurement has also been driven through the growth and impact of Internet technology, which makes diffusion of performance measurement across the business or much simpler than in the past, and allows for real-time feedback on performance (e.g. are you trending on Twitter?)Apple MapsButterfly effect: “You may be familiar with the butterfly effect where something insignificant has a massive effect”Baseline: Need a benchmark to measure against – what gets measured gets managed. Measures must be realistic.Note – measurement drives behaviour – Service Desk & easy calls.ORG – defensiveness; COG – ingestion of infoLink accurate timely info to a strong sense of stewardship in decision makersEnhanced double-loop learning is CRITICAL for LT successEnsure the C-suite are fully aware of the importance of BI – no measurement, no management.Information Tsunami$600 – cost of disk drive that can store all the world’s music30 billion pieces of content shared on Facebook every month5 billion mobile phones in use in 2010 – 12% being Smartphones.
- UPS trucks in US don’t make left turns. -Think about that for a second. UPS has determined that left turns are EXPENSIVE. There’s more idling time (98 mn minutes saved last year) More accidents (Less visibility – blind spots)UPS manages its business carefully, and it know these things, so it had its routing software set up to eliminate left turns. You might think that’s a nice thing…but UPS thinks it’s good business. How good? UPS has about 90,000 trucks…and this change alone saves them ELEVEN THOUSAND TRUCKS. Technology employed in trucks and facilities saved driving over 90 million extra miles last year, and 9000 gallons of fuel (in 2011). Still delivering 15.8 MN packages daily – these savings are straight to the bottom line.That is not just nice..that is SMART.American Airlinesprints marketing messages on the napkins that it gives out to go under every drink it provides. [The latest: "Turn flights and everyday purchases into lifetime memories."]. That costs money, right? Sure it does: plain napkins are cheaper than napkins that are printed upon. So, if you’re a flight attendant, you’re told that you’re supposed to place the napkin on the tray SO THE MARKETING MESSAGE IS READABLE BY THE PASSENGERMatchbox:10% savings in return for 1% of the savings – cut strip off one side.For the want of a nail...
- Challenge:At Gilt, we were facing the following scenario: A new start-up in Ireland, tasked with becoming the international operations centre, creating a Shared Service centre in Limerick, while aggressively responding to the need for greater depth & breadth of financial management data. What did Success look like to the US: Oracle R12, implemented, and fully functional System of RecordIreland recognised as the International Operations CentreEstablished and functional SSC for APQuality, timely, accurate reportingFor us in Ireland though, we had a larger goal than mere Best-In-Class transaction processing. Yes – we were building the foundations for the SSC, but to us, using the perspective of BPM, we viewed AP as a holistic process, to be managed using KPI’s/SLA’s etc, and drive the SSC to be a leader in the business. The AP metrics link to the Finance metrics, then to the business metrics, all the while aligning to the Corporate strategy
- The Ireland operation increased the overall complexity of the Group, with the demands of local regulatory compliance, global and Head Office reporting, managing inter-company relationships, and driving international growth through research of European market. Oh –and did I mention we were completing an Oracle R12 implementation?
- Eddie O’Connor in MRP has a plaque behind his desk:“Don’t give me the good news, or the bad news – give me the facts. Facts are friendly”Lowest level -> replace with “First point of contact”, at source, coalfaceOur tasks were:Need to create a culture of innovation and ownershipBaseline was a transformation of existing AP and FP&A processesStructure the SSC in a sustainable, customer-facing modelWith the implementation of R12 and the rapid changes, we also wanted to ensure that the people did not feel alienated in some way – training was paramount, and getting them to engage with the process was critical.For the purposes of this presentation, I will focus on our efforts in the SSC. We looked at the existing processes in New York around AP, following the standard migration processes of work-shadowing, parallel running etc. There were issues around resistance, communications, and change management etc. which we also had to deal with, but are not part of this topic. It became immediately clear to us that AP was seen as the weakest link in the chain, a bottleneck holding back the business. Using the concept of Theory of Constraints, we found numerous BPM issues, for example: No effective training documentationVery low reputation with internal and external customers and stakeholdersNo transparency around staff performanceWeak/no controls around spend managementNo analytics on department performanceWe documented everything in the “As-Is” phase, as there was effectively no documentation in place, other than what people had taken down as notes when being trained in. There have been studies done showing that, in this type of knowledge transfer scenario, the absolute best you can hope for is that 80% of existing knowledge gets transferred to the newcomer. This represents a massive cost to any business, and positions people for failure.
- Having hired a core team in Ireland, we flew them over to sit with the in situ New York team, for a period of 4-6 weeks - to enable them to get trained on the legacy system, and to transfer knowledge.In the meantime, we analysed the initial documentation, and mapped out the “To Be” processes. This NY period was crucial in binding the core team together. Long hours, lot of stress and a real need to absorb as much as possible as quickly as possible but hey – they were in NY for 6 weeks and it couldn’t be all fun! We took city tours, the girls did a lot (!) of shopping, and a true sense of mission took over the team. Close proximity for such an extended period meant we burnt through the 4 stages of team building, and led to open and constructive ideas, innovation, and ownership. When the situation was challenging/tense, they knew there was deep support and trust behind them.SSC is all about process and people – and people performing!
- Reputation:The AP department had no defined communication strategy with its customers, and was working in reactive and defensive mode. There was somewhat of a siege mentality in the team when we arrived there, team morale was low, and attrition rate was high. For example, one person left within a month of our arrival, and purposely wiped out the master data on all her customers before she left. To put this scenario in context, the AP department was in the Fashion industry. Its internal stakeholders/customers were a by and large very young and inexperienced team (average age early 20’s, and predominantly in their first real job). They didn’t have the experience of dealing with suppliers who would call them to complain, in vintage NY style, about payments etc., and would immediately be onto the AP dept in “crisis” mode, to get their vendors sorted. In contacting AP, they would also cc everyone remotely connected to the issue, with the result that a lot of time and effort was consumed in managing email conversations/comments/inputs. Which is why Shared Services is all about the people ! We re-designed the AP communication strategy, both incoming and outgoing.For incoming, we set up a series of dedicated mailboxes, to satisfy the different types of customers (i.e. divisions), and given to AP team members as their area of control. We also set up dedicated mailboxes for distinct purposes e.g. vendor setups, Urgent Payment mails, etc.We specified to the various stakeholders what was needed in their communication (e.g. key words in subject line), promoted use of email over paper, etc.We wrote to all vendors, advising of the new email boxes, and communication strategy.We created Issue logs (using Google docs to allow for sharing), with a defined strategy around monitoring and reporting on the logs.We set up weekly calls with the senior people in the various departments, to discuss the logs, issues that were “burning”, As part of this, we also looked at staff performance. We stressed that everyone who contacted the department was to be treated as a customer, with the aim of first-time resolution of their query. We were able, using technology, to monitor response rates to queries, focussing on improving productivity while maintaining job satisfaction, etc. We made people responsible and accountable for their own performance (e.g. number of invoices processed first-time through, OTIFNE mantra, etc).The AP department produced no facts. It was completely unable to defend its corner, to show the type of job it was doing. There was no clear detail even around the number of invoices processed per month.Its critics were numerous and vocal, and given perception is reality AP came off really the poor relation in most conversations, which dealt in anecdote and opinion. Through the email boxes (above), we were relatively quickly able to gauge the volume of activity.Through the Issue logs, we were able to identify the number and type of issues, AP’s responsiveness, and drive process and other changes to prevent issue repetition. Each issue underwent a Root Cause analysis – what went wrong, why, etc. If a payment was made late, we would investigate to see why. The answers ranged from it being sent in with the payment date already having been missed (through sitting on someone’s desk), to missing data on the invoice preventing it from being processes, to AP error. Six Sigma/Kaizen SEE CHART: We were able to gather and report on hard data, facts that no-one could disagree with.[SLIDE with Scorecard]We were able to drive real performance improvements, both within AP and in the wider stakeholder community, to reduce the number and seriousness of the issues (we started with 45 “burning” issues in August 2010, and were down to 1 in Dec 2010). We showed where issues were coming from, time taken to resolve, what were still open as at reporting date. We also began delivering weekly Dashboard reports around payment performance. We established the truth with facts – metrics detsWe created these reports, mashing together the outputs from different systems to deliver interactive, timely insights into the Payment cycle. From a basic payments report, it developed into x city x payment type, and with Variance Analysis. By taking it to a much higher level, being more pro-active around stakeholder management, and providing transparent understandable hard data, relations improved, attrition dropped radically, and reputation was greatly enhanced. The ultimate proof of success was that our initial remit of 6 people to cover 1 business division (about 10% of the Group AP), was amended to hiring 22 people to cover all bar the US HQ and Japan AP (approx 85-90% of the total Group Accounts Payable being done from Limerick)
- SO WHAT DOES THIS MEAN FOR YOU? Key criteria around BPMAligning with overall business strategyKey stakeholder engagement and unwavering senior management commitment Done right, it will help with competing agendas within a company, viz. Balancing profit, growth and controlBalancing short term results against long-term capabilities Balancing performance expectations of different stakeholders
- SO WHAT DOES THIS MEAN FOR YOU? Key criteria around BPMAligning with overall business strategyKey stakeholder engagement and unwavering senior management commitment Done right, it will help with competing agendas within a company, viz. Balancing profit, growth and controlBalancing short term results against long-term capabilities Balancing performance expectations of different stakeholders