The expectations on the use of data to drive business insights have sky-rocketed and whole new job categories have boomed as a result. But still companies are failing in their attempts to become data driven.
A recent Harvard Business Review article found that 72 percent of companies report that they have been unable to forge a data culture, and 69 percent say that they have not created a data- driven organization. In addition, 53 percent say they are not yet treating data as a business asset.”
The attendees at our recent webcast highlighted the issue in real time response. In answer to the question “How Effective is your Data in Measuring Process Performance?” 47% stated that they had limited effectiveness. This is just in measuring performance, the equivalent of the speedometer in a car.
When asked “how effective is your data in enabling process improvement?”, over 75% claimed limited effectiveness!
With the great leaps of progress in applications and services to run our business, there has been an similar leap in the volume of generated data that should help us manage our business processes better. But the situation is nuanced and the answer isn’t that straightforward.
We have experts in business process operations, continuous improvement, business excellence, and leadership aligning global processes across the organisation. We have data specialists in architecture, business intelligence, analytics, process mining, data science and machine learning. But still the “data driven business process” remains elusive.
So, why the struggle?
It is becoming apparent that the real challenge in creating a data driven culture and enabling genuinely data driven business processes, is not a technical one. It is a human behavioral challenge focused on communication, collaboration, understanding and alignment. That is not to say that technical challenges are trivial. They are most certainly not.
Fortunately, our interest in how to think about solving this seemingly intractable problem was spiked by multi-function Global Business Services Leader, Steve Fox. With over 20 years as a Controller and leading Shared Services and GBS, Steve has learned a thing or two about global business processes and the data insights needed to manage, optimise and transform them.
Steve shared 7 steps to enable data driven business processes. You can see the webcast and Steve’s case study here
The data challenge isn’t going away anytime soon despite the plethora of new techniques and technologies. In some respects, it gets harder. But there are emerging frameworks that business, technology and data leaders should all embrace to stimulate better collaboration, understanding and alignment. The goal is that data, based on common understanding, can be the platform and catalyst for the most effective automation and the much heralded digital transformation itself.
Data is the key.
Thanks for reading….
We were delighted to be sent numerous engaging questions from those who attended the session. We thought the answers might be of interest to the wider audience, so we have collated the ones with common themes with greatest relevance below:
1. You make some interesting points. How do you recommend we get alignment on KPIs across functions?
• Aligning views and expectations of performance is a key issue in making global processes work. The workshop we described is a good start, but you can start addressing this by getting key stakeholders together and asking (individually to start with, eventually collectively) “what does good look like” in the end to end process. What outcomes do we want? From there we can start to look at sub-processes and functional views and challenge any measures that don’t contribute to this. It is not an overnight process, and sometimes getting the data insights Steve described is a great way to start that debate!
2. Who should be involved in your seven-step framework?
• You want functional leaders that represent the end to end process and are stakeholders. So for P2P for example, that may be Procurement, Finance, a BU Buyer representative, Shared Services, A/P, Continuous Improvement, IT, someone that understands the data sources . . .
3. Do you advise/help companies on the behavioral/human side as well as the technical side of this?
• Absolutely. We have learned that progress towards global process excellence and a data driven culture requires us to be focused on these issues as much as the technical and process ones.
4. We have multiple, complex data sources and systems for the same process around the world. How does your approach deal with this or is it only for simple processes?
• We address this in the “universe” assessment in Step 2 and in volumetrics in Step 5. There is a need to assess the data from the various sources have common meaning and decide whether to aggregate all data from the start or to start with one data source and extend. But it is a key topic addressed in this approach. We work with companies who have dozens of ERP instances as well as ancillary systems, so we understand the challenge.
5. Have you rolled out Parent Child relationships in Vendor Master?
• Parent child relationships structures vary by ERP, but we have a model for that that helps ensure the data is more insightful around vendor relationships.
6. How do you ‘institutionalise’ new habits with staff?
• Whether you subscribe to the 30 day or 3-month transition period for new habits to form, there is some science to this and (sadly for some of us), some self-discipline required. It all starts with educating your staff on the goals behind the new habits. Being transparent and detailed with this education is key to obtaining the “buy-in” necessary to be successful. Once the education has taken place, the critical piece is being disciplined with monitoring of the new habit. As an example, when implementing a new KPI, it is important to review the performance routinely (daily in many cases), ask questions about outlier measurements, and tie this new KPI to an objective at the process, function, or company level. If you do these two relatively straight-forward things then you can reasonably be assured of understanding/”buy-in” and accountability on a go forward basis.
7. How did the business react to the dashboard – did they feel shared ownership of improving performance?
• The productivity metrics were very much viewed as owned by the functional leader and more of a report-out than an area needing partnership. However, the defect and compliance metrics drove great discussions regarding accountability and ownership resulting in collaborative problem-solving. This is where true process improvement occurred. Over time, the monthly stakeholder meetings became purely focused on defects, compliance, and progress made in those areas.
8. The KPI’s you have, are they across the Process Universe? Did you assess each part of your Universe with a Risk Assessment?
• The KPIs in the case study were specific to that process “universe” and “performance” and “risk” elements should be considered. We tend to separate the presentation of KPIs and risks, but in truth they are more closely aligned than most of us believe.
9. Broader question. Most data is internal. The next level is to bring in external data to support decision making. How do we drive data uniformity globally to enable this and make it more meaningful.
• Data consistency/uniformity is as much of a problem internally as it is on external data, so in both cases we need to have serious business conversations about what the data means. We can’t afford to make assumptions unless they are explicit.
10. How have you improved your relationship with vendors – do they share the same values … could you move to Blockchain to move from a managed to an optimised process.
• Interesting question. Blockchain is an example of a distributed ledger. There are both advantages and disadvantages to a distributed ledger (despite the hype of recent years). The issue again is broader than technical integration of data but behavioral and human. So, maybe some distributed ledger data on provenance of raw materials could be a useful input to the vendor scorecards we saw, but they aren’t the whole picture.
11. With changes in process have you set aside enough time to ensure all your employees are getting the right training?
• Very good point. We are changing habits, changing process behavior and driving improvements. We need to bring everyone along, in the cross functional tams in our business and in the customers and suppliers. Smart education beats time consuming education, but it is a challenge with all process change.