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

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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.

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.

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”

Google has led the way here. Remember the first time you landed on that spare, slightly dorky page, with just a multicolor logo and an empty box? We take it for granted now, but at the time it was revolutionary; every other search portal was competing to cram as many links, categories, ads and blinking gifs into 800×1200 pixels as it could…

But the art of less got a significant boost since economic conditions deteriorated, and less became the one thing we all had plenty of. In the best case scenarios, creative “power of less” responses to dramatic budget cuts have resulted in outcomes much better than the status quo, especially when technology was leveraged…”

180 View – When assisting organizations with software selection, the tendency for most organizations is to create a substantial list of requirements. We ask our clients to prioritize the requirements so as to just focus on the most important ones. We ask the vendors to just respond to the high priority items. It’s our way of doing more with less by nailing the most important requirements and not getting bogged down with less important requirements.

As well, when designing the to-be businss process, it’s a good idea to keep it simple if possible. This is a huge challenge for organizations with multiple profit centres each with their own unique way of doing things. If the profit centres could share the same business processes, you also achieve more with less.

180 View – We agree except with the ROI. Although ROI would be great, it’s usually not possible as many performance improvements are often impossible to calculate. We think the metrics, often called Key Performance Indicators (KPI’s), should relate to Critical Success Factors (what an organization must do well in order to be successful) and achievement of these KPI’s is the key.

In 1999, the MIT Auto-ID Center was born…The Auto-ID center vision was largely oriented on the consumer goods-to-retail supply chain. Parameters were developed for this more simple tag, which came to be known as the Electronic Product Code or EPC, with compelling visions for how this would transform the retail supply chain…

EPC activity in the consumer packaged goods arena, where it all started, is at a virtual standstill. The Walmart program is stalled, and its future uncertain…

On the positive side, EPC-based technology is being adopted in a large array of other types of applications, from aircraft manufacturing to an increasing number of distribution center applications, to asset tracking and more…”

180 View – There was a lot of hype when RFID was mandated by Walmart in 2003, and RFID seemed like the next big thing in technology. Conferences just on RFID were held to pave the way. But a funny thing happened along the way, and it was not the technology. There wasn’t a compelling business case for its adoption. But as the price of the RFID tags fall, that may change.

All applications need trustworthy IT infrastructure (operating systems, database management systems, networks) to manifest their destiny and to breathe life into their lines of code…”

180 View – We recommend taking a look at the article and the accompanying chart that shows the interdependence of systems and controls. I think the author is getting a little carried away with IT infrastructure – “manifest their destiny…” It does support the application but it is not any guarantee that the application is controlled or operates effectively.

180 View – ERP systems are supposed to break down the silos. But it won’t happen unless those responsible for the various silos embrace the change.

180 View – The article has an easy to understand summary of “lean manufacturing”. But it gets confusing after that. The argument is that a savings in inventory leads to a write-off and loss of profits. That is, you credit inventory and debit cost of goods, which leads to less profit. I can’t imagine too many accountants complaining about reducing inventory, which has many advantages including improving cash flow, and on-going savings in the carrying costs associated with the inventory which would include interest, warehousing, handling, obsolescence, insurance and shrinkage.

The other problem is “duplicated data collection and reporting is indeed a form of waste” using traditional forms of accounting. And “Lean accounting attempts to find measures that predict success. Standard cost accounting measures results after the fact.” It seems to me that we need both measures and there should be no duplicated data collection with a system that contains the data and tools to extract it in the right way.

180 View – The “secret sauce” are Critical Success Factors – what we define as what an organization must do well in order to be successful. If you don’t look after the “secret sauce”, it will eventually go bad. The theme for this month is secret sauce, which is really found in the last article/video.

Think about some of your own experiences. Have you ever wondered who came up with the process being used to “service” you? I have had some recent experiences with major retail and service companies that were mind boggling at best – complicated package deals, pricing terms, and rebate requirements. Not only was I confused, but the customer service employees were struggling, too! It always makes me wonder how organizations establish and maintain effective internal controls around all this complication…

In a recent conversation with an assurance partner at a national CPA firm, he told me he sees lots of situations where an organization’s ERP system isn’t implemented in its entirety or management doesn’t seem to trust it. Instead, they use procedures outside the system (i.e., spreadsheets) to verify what’s going on inside the system or to “do the consolidation.” He surmised that this may be caused by people at the functional level not wanting to be overly reliant on the ERP system or on IT people. Sounds like a matter of trust to me.”

180 View – This short article raises 2 big problems although it does not get into any detail or solutions. The first big problem is complexity of business process. When the complex process was introduced, it likely made sense. The question is whether it still does. A design principle in improving business process is to reduce complexity. So challenge the reason for the complex business process and try to keep it simple.

The second is reliance on spreadsheets. The article points out two reasons – lack of trust in the system and not wanting to rely on IT people. Lack of trust in the system is a huge problem and the answer is not more spreadsheets but the implementation of strong internal controls. Not wanting to rely on IT people is understandable as it may require a long wait time, but the solution should not be more spreadsheets. The solution should be using reporting tools that leverage the data in the system. The reporting tools likely exist, they just need to be implemented, which requires an investment in training and support.

180 View – The article does not get into any detail but reminds us of the importance of leading indicators. When developing Key Performance Indicators, make sure you have a mix of both leading and lagging indicators.