News & Views

December 14, 2011 from Industry Week – “…The very successful companies, the leaders in their industries, generally have senior executives and management teams that understand it’s not people screwing things up, it’s the processes that are not up to the challenge of today’s business complexity, and it’s the processes that need to be improved. This is where they focus their continuous-improvement efforts, and they encourage the organization to identify the anomalies so they can be addressed… As a result, they have not enabled the organization to continuously improve its processes…”

180 View – Our methodology for our business process improvement and software selection projects include the notion that every problem is an opportunity and employees are encouraged to expose any problems. The only time that employees may be reluctant to expose problems is when they think that a more efficient process/system might lead to their position no longer being required.

October 19, 2011  from Industry Week – “I have often been asked whether continuous improvement (CI) is possible without technology change, and I tell people that CI is about making changes to business processes, not necessarily technology. Without a doubt, technology change is often an enabler that allows CI to occur, but it is not a prerequisite since it is often working on different aspects of the business. We tend to think of technology change in relation to things like information systems, new product developments and refinements or radical new production processes, while CI is focused more on changes to our business processes…

What you should not do is allow yourself to be stopped from your goal of continuous improvement by others throwing out the red herring that you can’t do anything because it would require substantial changes to the technologies used in your business. It usually doesn’t, so don’t let arguments that they will  stop you on your CI journey.”

180 View – We agree that technology is not the only enabler  of  business process or continuous improvement. The article is not specific about the other enablers that we would include, namely simplifying the business process, changing motivation, improving HR and improving the facilities. However just as money can’t buy happiness, but it sure helps. The same goes for IT in that it does not ensure efficient and effective business process, but it sure helps.

November 10, 2011 from InfoWorld – “Fraud cost organizations 2.1 percent of earnings in the past 12 months, which is equivalent to a week of revenues over the course of a year, according to the Kroll Annual Global Fraud Report, a recent survey that polled more than 1,200 senior executives worldwide.

The research does contain some good news, however, and found a decline in the frequency of fraud over last year. Of the executives polled, 75 percent suffered some kind of fraud-related loss in the last 12 months, which is down from 88 percent the year prior.

However, fraud remains predominantly an inside job, according to the report, and insider jobs increased this year. The 2011 figures show that 60 percent of frauds are committed by insiders, up from 55 percent last year…”

180 View – The article discusses fraud related to the data that has now become more easily accessible as well as the traditional methods such as procurement fraud or internal financial fraud. Although access to information is much better than before, fraudulent employees could have taken hard copy reports in the past and shared them with competitors. With good access restrictions built into the system which are enforced using third party reporting tools, we think fraud opportunities should be diminished. As far as the more traditional forms of fraud, there are tools that can help reduce these risks. These tools include comprehensive audit trails, workflow which enforces division of duties and access restrictions.

April 18, 2011 from strategy+business – “Many executives think of business intelligence (BI) merely as a software solution that needs to be bought and installed, a reporting tool for serving up data on a convenient “dashboard.” As a result of this misperception — and despite the significant procurement, installation, and maintenance costs — BI systems often generate inaccurate data or distract employees by delving too deeply into corporate minutiae. Gartner Inc., an IT research and advisory firm, predicts that through 2012, 35 percent of the top 5,000 global companies will regularly fail to make insightful decisions because they lack the right information, processes, and tools…”

180 View – You don’t need to be implementing a business intelligence system to benefit from the ideas in this article.

February 16, 2011 from Industry Week – “..Improvement initiatives may help an organization improve, but rarely do they provide a competitive advantage, says Michael Bremer, co-author with Brian McKibben of “Escape the Improvement Trap: Five Ingredients Missing in Most Improvement Recipes.”

That’s because the competition is likely implementing the same methodology. “From a competitive scene nothing much has changed because everybody goes about getting better in pretty much the same way,” he says. The end result is that most companies are merely average, he says. And that’s the trap. In their book the authors outline five characteristics they say the most effective companies display, yet which are either missing or significantly underused in most firms’ improvement programs…”

180 View – The five mentioned characteristics are

1. Customer value
2. People engagement
3. Key metrics
4. Process thinking
5. Executive mindset

We would also recommend adding alignment of improvement initiatives to Critical Success Factors (CSFs) to the list. We define CSFs as what an organization must do well in order to be successful. By focusing on CSFs, the right things get done.

October 22, 2010 from The Enterprise System Spectator – “…The term best practices has at least two major and totally different definitions, and second, in many areas of business, there is not generally agreement on what are the best practices…”

180 View – This is good article that reflects our philosophy. The major vendors and consulting firms always pitch best practice to their prospects and clients and that they are the source for best practice. I often see proposals that are based on the assumption that best practices will be applied to an implementation. But some processes are strategic in nature and best practices may not apply. In other cases, the costs to implement best practice outweigh any benefits.

December 20, 2010 from Bog Fat Finance Blog – “APQC research conducted during the fourth quarter of 2010 points to renewed enthusiasm among CFOs and controllers for investing in financial process improvement, with another round of cost elimination being the primary goal. Particularly in the area of accounts payable, we see large organizations taking steps to reduce the total process cost by eliminating headcount. Along these lines, there has been a lot of interest in document imaging and management technology that aims to reduce the mountains of paper invoices that gum up payables processing. That, in turn, allows organizations to consolidate many of the positions previously needed to manually process all that paper.

But beyond cost efficiencies, there is the issue of slow cycle speed. This is where you tend to see the hard-to-quantify benefits of process streamlining and automation in stark relief. With the APQC metric below, taken from our Open Standards Benchmarking database, we can achieve a snapshot of performance variance in the times needed to close the books on a monthly basis…”

180 View – The short article shows a chart with the cycle time to complete consolidated monthly financial statements. Top performers do it in 2 days and bottom performers do it 9 days. Although the difference is not huge, a few days could make a huge difference if a change is required as a result of the numbers. Ideally the organization should have already been alerted to problems before the consolidated financial reports are produce based on real-time dashboards and leading indicators, which foreshadow things that could happen.

I (Michael Burns) will be discussing “Deltek’s 2010 Operating Statistics Report for the Project-Focused Professional Service Firm” in Vancouver on November 17 and Edmonton on November 18. If you’re in the neighborhood and work for a professional service based organization, check it out.

I think that Deltek provides a useful service in publishing this report, which includes key performance indicators over 10 years. You can only get the executive summary of the report right now at http://www.deltek.com/clarity/ae/default.asp but contact someone at Deltek if you want the complete 73 page report.

September 23, 2010 from Ventana Research – “The vast majority of organizations — almost nine out of 10 — in Ventana Research’s new finance analytics benchmark report said they can improve the way their company uses analytics. If you’re also in need of help, don’t miss this research, which reveals trends, best practices, and the maturity and direction of organizations’ analytics efforts…”

180 View – The research has found that although there is good technology and data available to support analytics, there is a big problem with “stale or outdated data”. This is curious as the technology should support real-time updates of metrics. It’s more likely a case of some metrics don’t get generated by the underlying business systems. For example, metrics on customer satisfaction may take time to generate. Nevertheless there is no reason to have delays with information in your ERP, CRM, HR… systems. Another source of problem not discussed in the report is lack of benchmark data. But help is on the way from 180 Systems and CAmagazine. In the December issue, we will offer a benchmark survey on business processes. Stay tuned.

August 2010 from ProjectTimes – “Business process improvement initiatives are frequently key projects within an organization, regardless of the size of the organization or, frankly, the size of the business process improvement initiative.  Even if a business process improvement initiative is targeted at an individual department, the impact of the change will be organization-wide. By ensuring that the initiative is managed as a strategic project, there are increased opportunities for success…”

180 View – The article provides recommended steps for the project, metrics to consider as well as a case study. The information might be of some assistance for organizations planning a business process improvement project. But I think the main point is that project management methodology can and should be applied to business process improvement projects.

We have just launched three new portals to complement our popular ERP portal.

1. Business Intelligence / Corporate Performance Management
2. Customer Relationship Management
3. Business Process Improvement

All portals list systems and VARS as well as recent articles. The portals allow you to filter systems and the VARs that support them based on the application, size of company and distribution model (on premise or on demand).  Vendors and VARs can enter their information online after picking the portal and registering at http://www.180systems.com/portalSelection.php

December 8, 2009 from Baseline – “Despite a multidecade focus, business-technology processes in many companies are unmanaged, invisible and unmeasured.

Consequently, they are executed haphazardly and inconsistently. This results in delays, errors, low quality and high overhead costs. Such unmanaged processes cannot detect and adapt to changing market conditions—and that can be fatal in today’s business environment.

There are countless reasons for this continuing breakdown. Principal among them is that many processes cross an enterprise’s internal and external boundaries as part of business networks and, therefore, they become the province of no one…”

180 View – It is true that one of the reasons for suboptimal business processes is that processes cross boundaries but the problem is not just that they become the province of no one. The problem is more likely that the various departments, profit centres, or business units often have their own agenda. As they are measured on what they do and not on the business as a whole, they can optimize their own processes at the expense of the enterprise. There are some suggestions in the article as to methods to improve business processes using “business technology capabilities”, which are helpful but don’t address the underlying lack of motivation problem.

July 27, 2009 from CFO and sponsored by Deloitte – “No surprise, cost-cutting initiatives are more crucial than ever for executives: “Where will I get the most impact without negatively affecting our ability to serve customers?” “Where can I reduce costs without endangering our ability to rebound quickly when the economy improves?” “Are opportunities the same from one industry to the next?”

Measuring internal strengths and weaknesses — and comparing them against “best-in-class” performance — can help executives in their efforts to identify and mitigate gaps that have the potential to impair the performance of both the finance function and the entire business.

To quantify various improvement opportunities, Deloitte’s Global Benchmarking Center has conducted diagnostic studies of core finance activities:

• Transaction processing
• General accounting and external reporting
• Controls
• Tax and treasury
• Performance management…”

180 View – Unfortunately the metrics are based on a survey of global companies with an average of $2.3 Billion in revenues. The other problem with the report is that many of the suggested “effective practice attributes” (or best practices) sound like motherhood such as “Tools are fully automated, standardized and consistently developed” or “Management information system is fully integrated and automated, thereby allowing for centralized management and operating reporting.” As the report is an executive summary, perhaps there is more useful information in the detailed findings. In any event, Deloitte does provide a useful approach for improving business process.

2008 from Ventana Research and published by BPM Magazine – “…Improving business performance is a goal that cannot be realized without mutual cooperation and alignment between business and IT. In collaboration, IT focuses on architecture, system administration, scalability and performance, security and infrastructure, while business evaluates the practical usability and capabilities of tools being considered and how effectively they can be integrated into organizational and business processes. All parties must ensure that both technical requirements and the business needs are well defined, harmonized and prioritized. Leaving everything to one party or the other can be a sure path to failure…”

180 View – The article’s title is really Aligning Business and IT to improve Performance on SAP but the content is mostly not about SAP and contains some useful advice such as “A related danger is that companies that have made significant investments in a large ERP system such as those from SAP reasonably wish to reduce the total cost of ownership (TCO) as much as possible over the life of the system. One failure-prone way to do this is to use the system for purposes beyond those for which it originally was designed or purchased”