The Digital Competitive Advantage Of Organizations

Positioning strategically IT within the Enterprise is at the heart of many CIOs concerns. In these turbulent times, it is not uncommon to see  IT relegated to its sole cost element. Conversely strong signals exist to prepare companies for growth. Here is the opportunity for CIOs to reap the benefits of  the situation and identify the Digital Competitive Advantage for their organizations.

Making a board to acknowledge the value of IT has always been a difficult exercise for CIOs. Current economic pressures and global uncertainty makes it even harder. The current cash flow focus challenge any investment with a short term view, exposing potentially the company to future risks. Conversely we need to admit that this systematic questioning of where we spend has value and lead to the critical Quest of : “What are these Strategic/Core Resources we should be protecting?”

Time To Change

For many reasons, most of IT organizations elude this question and focus on the cost/quality of service ratio. It is now time to challenge our approach and offer our business different perspectives. “What are our core IT resources that will provide sustainable competitive advantage? ” – “What type of resources should we leverage: Organizational, Process, Technology” – “How do we define Core?” These questions should be fully integrated in the screening process of any IT related investment process and spend analysis.

Defining Core/Strategic Resources

It fits with the “Resource Based View of the Firm” introduced by Wernerfelt B. in 1984 and how Valuable, Rare, Inimitable and Organized (VRIO) a resource can be. A core resource should answer all of these criteria.

A resource is Valuable if it helps the organization meet an external threat or exploit an opportunity. Rare if it is not widely possessed by other competitors. Inimitable if it is difficult for another firm to acquire it or a substitute something else in its. place. Organized if the firm is able to actually use it.

What is it about IT?

Most IT organizations have articulated their strategy (see “Is There Such Thing as IT Strategy Anymore?“)around the value IT witch fulfill the first criteria of (V)RIO, but let the others on the side. Value is driven at the pace of economics, and objectives like efficiency, quality, customer responsiveness, and innovation are inevitably calibrate on the expected Return on Investment. However criteria like Rare & Inimitable required a focus on long term.

The Digital Competitive Advantage (DCA)

DCA is the ability of organization to grow and exploit the IT resources that fulfill the CRIO criteria. Think about your next strategic workshop and identify what part of your IT culture, leadership, solution portfolio, reputation, organizational expertise make you deliver this Digital Competitive Advantage and make your business outperform the competition.

Pattern Based Strategy: A new Hype?

Pattern Based Strategy is new framework launched by Gartner to pro actively seek, model and adapt to leading indicators that form patterns in the market place.

We must admit that Gartner has been very creative lately to create new hype: Cloud computing, Enterprise architecture, and now Pattern based strategy. Beyond the promotion itself, we can see an emerging demand to reassure the business community to anticipate what tomorrow could be.

Predictive Business Intelligence is one element in the equation, but a fundamental shift in the way organization are planning need to happen, and it could be done by integrating the necessary variability of risk whilst establishing a path for growth. An approach by scenario is suggested by Gartner to accommodate this uncertainty.

Will BI market be the sole winner of this trend or will we assist to the birth of a more fundamental change in the way organization are managed?

You can see a video here of Peter Sondergaard (SVP Research). If you are interested on the subject find below some additional resources on the subject:

- “Gartner Identifies Four Disciplines of Pattern-Based Strategy“

- “Gartner Says Companies Must Implement a Pattern-Based Strategy to Increase Competitive Advantage“

You can read a post that I wrote early this year that was suggesting a similar approach:

… Last but not least, reactivity has been pushed  as a strategic enabler for growth, and if the vendors are quickly adapting, internal IT might have issue to address this need. While being reactive is certainly a good thing, being proactive is even better. IT has focused for decade on monitoring system that support the business. Why not changing the concept and establish a Business monitoring. There is tone of information present in systems today that are not exploited and could be the basis for pro-active analysis. Developping this competency within the organization memory could create tremendous value for organizations.

Looking forward for your comments.

Investment Strategy: Seed or Leverage

I always felt that the way companies are looking at their investment portfolio was somewhat missing perspectives. Focusing their needs on the current year, without any red flag mechanism (See “Confronting the Brutal Facts“) showing the limit of their investment strategy.

There is a good practice that could enable Enterprise to understand when the tipping point is reached, and when return on investments could only decrease.

Whilst investing in new performance businesses are either using past investments to grow further their return (“Leverage”) or either setting up a new platform on which future investments can easily deliver incremental benefits (“Seed”). The S-Curve theory concurs to this approach. (See “The dark Art of IT investment“)

For example following the implementation of an integrated package (such as an ERP); which will streamline the processes and improve data management, a quality department can then tackle with uniform management dashboards across business units which will trigger additional benefits. Investment in such ERP platform (“Seed”) enabled a future investment in quality dashboard (“Leverage”).

Whilst considering a balanced investment strategy, leaders should focus on which part of their investments is related to “seed” future performance and which part is to reap benefits and leverage. “Seed” investments should always be measured and control over a long period, and challenged by  new opportunities that could deliver better incremental benefits.

During your next annual plan try this practice by identifying “Seed” and “Leverage” investments related to new performance. You might get signals that might change your approach of investment.

Enterprise Investment Portfolio (Part 1) – Improving Performance

Looking at  Internal Investments as a portfolio put in perspective the way Enterprises are internally investing in changes considering risk and opportunity at a global level rather than at project level.

The following classification of investment (introduced in  “How to fight “Business Urban Legends”) follows this approach: 1- Improving Performance 2- Sustaining the current Performance 3 – Survival & Adaptation to context

Improving Performance

THINK PORTFOLIO OF VALUES: Chris Potts, a well-known corporate strategist, suggested to approach the performance of portfolio as a set of values rather than the cumulative NPV (Net Present Value)generated by individual projects (I recommend his book “FruITion: Creating the Ultimate Corporate Strategy for Information Technology“) . Using this approach, arbitration of investments is appropriately Aligned With The Overall Company Strategy. Each organization can define its own strategic measurements dashboard and consider it as a validation point whilst investing in changes. Concepts such as “Balanced Scorecard” are perfectly adaptated to this.

THINK RISKS & OPPORTUNITIES : Back to the proposed classification, “Improving Performance” investments are specific in nature as they challenge the way an Enterprise is generating value. Processes, organizations and technologies will need to be overhauled to reach a better level of performance. These changes creates Risks, that need to be mitigated, & Opportunities, that need to be exploited in the future.

THINK UNCERTAINTY OF RETURN: Another uncertainty to consider is linked to reaching or not the level of performance expected by the investment at a specific time. This has to be managed according to the “risk profile” of the company. Two classes of variables are usually responsible for this situation: The Execution Alea (Initiative on time, on cost, performance expectation fullfilled etc…) and the Context Alea (Expected Market growth, variation of the competitive landscape, regulatory environment, Industry Economics etc…).

LET SEE HOW IT WORKS: Let’s have now a closer look at the footprint of this type of investment, and how other categories might be impacted. For example we could consider improving our market reach by investing in expanding international dealer/distributor agreements, restructuring a division by industry, implementing a Customer Analytic System, developing promotional materials in different languages. All of this make sense and priorities will have to be established.

Most of the time companies are looking at the amount to invest, when they can expect a return and what are the risk (Execution Risk) and make their decision. This is rather a limited view of economical decision as it push them to choose the shortest term return – hence minimizing the risk. In addition when designing the investment, it is common to only integrate the one time cost of the initiative and new recurring costs they might incurred.

By using the suggested approach, organizations should look at the Impact of such grow and :

- Understand the necessary adjustments to sustain, in the future, such level of performance. For instance, how our back-office is going to handle an increase level of orders, or talking with people that are not English native.

- Understand that new practice adjustment will need to take place; for instance doing business with dealer abroad might required specific regulatory and market expertise that an organization does not have today.

- Understand that implementing a quick IT package could generate redundancy of data which could further create inconsistency and negative productivity impact.

Conversely,

- understanding that dealers or industry associations might be interested by getting some analytics and paying for this could generate a future stream of revenues if we are investing in the right infrastructure.

- Understanding that investing in the comprehension of market network, and industry network work could lead to earlier leads and thrive the company branding.

SO WHAT? All of this is common sense, when a Disciplined Approach is used and we are looking the Value Created Globally not project by project; it becomes rather evident,  that analyzing investment thru the cumulative list of expected returns from individual initiatives could lead to an increased Risk and missed Opportunities.

I hope you enjoyed this first section.

How to fight “Business Urban Legends” – Integrate Investment Portfolio to BI

Business Urban Legends are everywhere and sit at the heart of each investment decision. Interestingly enough, companies claim their unique needs, culture and business models which make them different from the competition; yet they are prone to follow generic public statements (investment in central ERP has no ROI for instance) in the very heart of their strategy.

This could lead us to think that overall investments for a business are not managed properly, and companies prefer to apply others (the ones that are different from them) principles & lessons learned to overhaul their strategic assets.

If understanding what the competition is doing and what has been the result is always useful, it is different to a apply systematic process when it comes to understand the return on our own investments which goes beyond the usage of discounted cash flow methods.

It is not unusual to see businesses spending an incredible amount of time and energy to justify an investment; yet when it comes to control its final performance, no consistent effort is existing. There is here, at my opinion, two major flaws in the process: 1 – The lack of continuity in the investment discipline thru the entire life-cycle, and 2 – The focus on return project by project. (see “Integrate IT in the Company’s Portfolio“

This approach leads companies to rely on “Business Urban Legends” which could be existing within the company itself.

In this post, I suggest to use a disciplined approach which could allow company to optimize their investments based upon the capability of their strategic resources not on beliefs . The decision of “where to invest” should be dedicated by the strategy and is not part of this exercise.

If we are looking at the overall structure of business investments, we could consider investing in:

1- Improving Performance & Growth

2- Sustaining the current Performance & Protecting market share

3 – Survival & Adaptation to context

We can observe that these proposed categories are highly integrated. For instance “Improving Performance” will required to absorbe this new value in the “Sustaining”. Conversely not investing in “Sustaining” will at a point of time required to invest in “survival”.

The interest of this classification is that it pushes organizations to approach investment with a minimum discipline and develop awareness regarding their potential impact (Risk & Opportunity).

Optimizing an investment portfolio will become a matter of managing the risk & opportunity generated by investments and  external context (Market, Economics, Social), based on strategic priorities.  If it sounds simple, the execution of this principle is becoming extremely complex without having in place a living knowledge repository for investment. If the basic attributes could be tracked on a simple excel spreadsheet like: investment amount, expected return, break even; the understanding of risk & opportunity required a much broader set of attributes to answer questions such as:

- “What could be the premium cost to leverage an investment, and what is the cost of exercising this option?”

- “What is the overall profile of a past investment and what remaining potential value I can get from it, and at what price?” (See “CIOs, Manage your S-Curve“)

-”What is my exposition to risk?(See “The Dark Art of IT Investment“)

This is where BI solutions could help structure and extract relevant metrics to guide an organization toward the optimization of its investment portfolio. Today most of the companies are relying on market generic statements or beliefs for investments, but implementing a strong discipline and leveraging BI technologies, will enable them to lead their own destiny.

I will develop this model in future posts and elaborate a complete example on how it can be applied in a real case.

CIOs – Manage your S-Curve

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The S-Curve is the graphical representation of the complex relationship between Performance and level of effort (or investment level). I have highlighted the critical importance of this concept in a previous post: “The Dark Art of IT investment“.

Businesses are adapting Organizations, Processes and Technologies (OPT) to deliver superior performance in a specific context. Adapting them means managing their investments, which could be done by changing any possible combination of OPT.

It will be interresting for any leader to understand the full potential of an OPT capability toward its potential performance limit. Driving therefore to design the best approach in managing his/her investment in changes. When this limit is reached, it is recommended to revisit the fundamental of the OPT combination, leading to an important paradigm shift in the business model (Often called the “Inflection Point”).

Let see some practical examples.

For Start-Ups, Entrepreneurs are assuming light organizations with cross responsabilities in term of execution and can implement rapid decision cycle. Processes are not clearly designed up front but tend to impose themselves as the organisation grows. Information Technology is introduced sporadically, delivering non measured benefits. It comes a time when the owner has to overhaul the fundamentals of its business model to ensure future performance. Bringing new people, structuring the organization in distinctive responsabilities, and one of them is IT. This new changes in OPT capability will drive performance according to this new context of growth.

For Corporations, we can observe effort to rationalize their processes by leveraging automation, introducing quality insurrance, and refining their go to market model. Acquisitions campaigns can lead to harmonization of technologies and applications or simple integration of common infrastructure. Continuous Improvement Program focused on the introduction of best practices in a particular industry using benchmarking.

At this point, let try to summarize some basic facts that we can all relate with our personal experiences:

Investment in changes can be done incrementally, introducing progressive adjustment of the OPT set, but there is a performance limit  established by the industry itself. The question becomes how to reach as fast as possible this performance.

We observe different business phases as the organization grows, and context changes that required important investment in changes and will ultimatly drive the company performance to the industry standard. The question here is when to launch this critical steps (Inflection Points) if they are following the S-Curve model and generating disruption and drop in performance.

Last but not least, going beyond Performance of Industry Standards required radical innovations.

Structuring an OPT capability lead to an optimization of number of steps, a business can take to reach a specific performance. It is obvious that successive steps could create less risks for a company but will go with a much bigger effort in term of investment.

It is leaders’ responsability to establish the right path to reach ultimate performance according to the business context. Here are some examples of this context:

• Volume of process output, such as number of customer invoices to handle, number of products to manufacture, number of customers, markets to support, number of employees to manage, lead to adapt OPT to improve or sustain performance.
• Time is critical in term of ability of organization to change. Practicing on a regular basis changes lead to a more flexible and adaptable organization.
• Constraint – The current crisis is one example on how market condition can change the way we are investing in changes.
• Expectations in term of structure of value creation (Shareholder, customer, employee, communities…) can lead to focus our investment in specific value segment. Change in expectations for gross margin can lead to focus on low cost sourcing  separating this function from engineering and leading to high Escape Rate.

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Leaders should seek the optimization of their S-Curves. When and how to invest in OPT should be driven by the perceived change in context, the potential of an OPT Capability  and the company appetite for risk.

The Ultimate Guide: Strategy to Invest in IT Related Projects

How to ensure sustainable performance of your investments?

The suggested approach on how to evaluate an investment is steered toward its integration within an overall company investment portfolio. Most of the time organizations make their decision at project level, missing the big picture of strategy for resource allocation and are subsequently confronted with internal politics pressure.

I have created and used these guidelines in many situations to build a trusted relationship with senior management when deciding on where the company should invest.

Specific Assumptions Regarding this Guide: All project management matters should be treated separately. The focus in on the decision to invest, not on the organizational ability to execute. We focus here on investments that create new capability for the company by exploiting Information Technology; Investments sustaining the current capability could be dealt with a different approach, not describe here.

Expected Values for the Organization

What is the primary reason of this investment? Most of the time small investments are focused on delivering one key value segment for the organization. But when it comes to major changes like ERP, multiple values could be generated. Trying to allocate part of the investment to a specific value can become rapidly complex.

Focusing on the main reason of why we want to invest, force us into a two fold discussion: How do we define value, and can we structure (potentially phased) the project in a way that we are addressing key value segment? Value segments should be defined at the right level (Operational Efficiency versus Working Capital Improvement), measured with a key metric, and integrate the identification of the primary beneficiary of the value created (Shareholders, Customers, Employees, Partners, communities,). While other implicit values could be generated by the investment, identify them clearly as secondary.

Tip(s): Design your investment to focus on one critical value segment.

Suggested Reading(s): Potts

Underlying Variables and Risk Topology

Return on investment is usually based on critical assumptions, like market size, competition move, political climate, regulation framework etc…. Whilst investing, we need to identify clearly these parameters and their inherent level of uncertainty. In 80/20 Hugh Courtney suggests a framework to tackle with different profiles of uncertainty which could be used to improve our understanding of risk exposure. It is called the “4 levels of residual uncertainty”: “A clearenough future”, “Alternate Future”, “A range of futures”, “True ambiguity”.  A balance approach is recommended based on the appetite for risk of the organization (“Utility Curve”).

A company could define standard assumptions for the entire portfolio of investment and monitor their evolution over time. This will enable a more accurate picture of the value created and improve the confidence of senior management and shareholder in the way we invest in the company. It is all about managing expectations in an uncertain world.

It is important to notice here that topology of risk will drive the choice of the method used to calculate the return on investment (DCF, EVA, Decision tree, Real Options…).

Tip(s): Understand that you balance your portfolio on critical assumptions that you may not be in control of.

Suggested Reading(s): Trigeorgis, Courtney

Featured Video(s): Bernstein

Relationship between Effort & Performance

I have raised the importance of this relation, in one of my previous post (“The Dark Art of IT Investment”), and suggested to approach this paradigm thru the S-Curve model. When optimizing a portfolio of investment it is important to understand how far we are in the process in term of leveraging past investments. Further we should determine if we are reaching an inflection point when a more drastic change is required versus pursuing continuous improvements that might deliver less and less value.

It is interesting at this step to introduce some flexibility in your investment by incorporating “Options” that you could exercise later, or leverage past ones that you might have created. Several categorizations of these “Options” exist in the literature – Lenos Trigeorgis suggested: “Defer Investment”, “Time to Build”, “Expand”, “Contract”, “Shutdown & Restart”, “Abandon”, “Switch”.

Although theories and mathematical models are available on this subject, I strongly recommend keeping it simple and focusing on the big picture.

Tip(s): Calibrate your portfolio between leverage and future opportunities and optimize it by incorporating flexibility thru premiums.

Suggested Reading(s): Fibol

Tool(s): Working Capital Profiler

The True Recipient of Investment

This is where we bring the human side in the equation. We are all aware of the IT’s potential of disruption on process and organization. Even more, they impact People. A restrictive view is to consider the only change is related to the way people work. But we should consider an investment as a possible lever to change the way people are perceived, see others, and develop the organization as a whole.

Organization, Process, and Technology (OPT) are concepts that could potentially dehumanize the decision process. So rather than considering investing in OPT we are truly investing in People who will subsequently grow the organization. Having said that, it is critical to understand in which population we are investing, and how we intend to maximize the value from them.

Tip(s): Structure your portfolio around effective people and efficient processes.

Suggested Reading(s): Dupuy

Big Picture

To make a sound decision, leaders need to have a clear understanding of the commitment they are created for their organization. If establishing financial footprint of an investment for the next 3 to 5 years is common discipline nowadays, the operational impact of multiple investments is not generally not consider. One of the key advices that I offer when dealing with IT related Investment is to look at the big picture, and to use common sense whilst deciding on moving the entire organization.

Tip(s): Picture the organization after all investment decisions, and use common sense to ensure that this is where the organization should be according to its values and principles.

The Dark Art of IT Investment

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Companies have struggled during years with the allocation of their investments. Is 50% of them going to business infrastructure a good thing, should we not invest more in protecting our brand or increasing our operational efficiency? One of the underlying complexities is the relationship between level of investment and the expected value we get from it.

CIOs have learned to segregate their investment portfolio by type of value they are getting. But when it comes to validate the structure of their portfolio (% allocated to different value contributions), the discussion with senior management turns short, and often ends by “That’s sounds good, but investment pool will be under a lot of scrutiny this year, and projects will be approved on an individual basis”.

Most of the time businesses have set up clear strategic objectives and identified two to three strategic axis, such as developing market reach, improving the efficiency of our supply chain, accelerating the introduction of new product. Based on these critical assumptions, CIOs are ensuring that money invested goes to these strategic buckets. However depending on several factors, minor investments could bring incredible value with rapid return, and large investment might result in additional risk for the company but could eventually generate important future cash flow. It becomes obvious here that if we are trying to architect the overall investment structure of a company by working at projects level, it will un-doubtfully lead to a short term approach, and select initiatives with rapid return and low risks; two separate discussions need to take place to tackle with this issue.

One of my previous post “Integrate IT in the Company Investment Portfolio” highlighted the importance to separate the formulation of an investment strategy in changes from its relative optimization: 1- The formulation will enable the identification of value segments where the company should invest and the expected performance targets to achieve,  spread over a cycle of 3 to 5 years and the overall envelope of investment. The company should as well clearly state its appetite for risk. 2 – Optimization is a close loop cycle  developing alternate scenario on investment structure to satisfy targeted performances.

This second step is certainly the most challenging one as it can trigger important changes in the organization. Performance and Effort are linked and expressed by the S-Curve model.

It implies a limit to performance (whatever the effort provided) if we continue to operate under the same business model and lead organizations to define new working assumptions to eventually continue to improve their performance.

The chart depicts this process (X axis: Effort; Y axis: Performance).

As any important change the immediate performance will drop in the first step and grow progressively. This paradigm shift is disruptive but create opportunities to limit the size of future investments whilst growing rapidly the performance.

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CIOs are certainly one of the best resources in the Enterprise to understand impact of changes and their expected return. Using this approach they could feed a strategic discussion with senior management and enable long-term creation of value for their company.

If you are interested in S-Curve for IT, you can consult “CIOs Manage you S-Curve“.

The title picture is a John Gilbert’s Sculture representing “The symbol of Uncertainty”, 2001, Ceramic on Marble.

Integrate IT in the Company Investment Portfolio

Information technology alone does not create any value. The quality of its integration as a whole within the Enterprise’s strategy does. Considering the value of individual IT related projects could hinder the optimization of the overall investment allocation. To address this weakness, techniques such as Project Portfolio Management (PPM), have been introduced in IT for several years now, but failed to deliver the expected results.

Back in October 2001, Scott Berinato wrote a lead article in cio.com magazine : “Using Project Portfolio Management to demonstrate IT value” , suggesting to leverage Schlumberger’s experience and implementing a 5 steps process: “1 – Put all your projects in one database, 2 – Prioritize the projects in your database, 3 – Divide your project into two or three budgets based on the type of investment, 4 – Automate the repository, 5 – Apply Modern Portfolio Theory to IT”.  All this, will “help align IT, manage value and get you a seat at the big table”. That sounds good, doesn’t it?

Although the approach deserves important credits in term of introducing more discipline in the selection of IT related investments, we can observe that it does not meet completely the original expectations. I see three major drawbacks to this proposal:

1. We have witnessed during the years 2000’s, important buzz around PPM, and lobbing from key vendors and analysts to promote off-the-shell solutions. These solutions were essentially targeting IT communities, with limited penetration in the other functions of business. I assisted a couple of years to a vendor’s event stressing the importance that CIOs should convince their management to use the product inside the business community. Although the commercial approach can be critized, it reveals the true nature of the problem. The proposed PPM concept was approached with the goal to resolve an IT issue not to optimize value for the company.
2. We all practiced the everlasting debate of IT projects versus business projects, and know how inter-related Information Technology is with process and organization. Trying to separate them thru a specific focus on their investements is leading inevatably to a loss of value for the company.
3. The concept of modern portfolio theory proposed by Harry Markowitz in the 50’s has an underlying complex mathematical framework that could overcome the targeted benefits. However the concept stays interresting to balance risk of investment to optimize value of a porftolio. One of the key problem as today is that there is no simple proposition to leverage this theory in the business world (versus financial market). Some attempts were made with the introduction of the “Real Options Theory”, but continue to fail on its promises. If you are interrested in this subject, I recommend here the reading of “Real Options: Managerial Flexibility and Strategy in Ressource Allocation” by Lenos Trigeorgis.

PPM is still an interresting proposition, but have a tendancy to isolate the IT function by focusing on its “own” projects, and fails short in term of optimizing the related investments by absence of a simple available model.

There is a certain confusion with leaders, using PPM, between investment strategy and its optimization. They are often confronted with the delicate exercice of prioritization of initiatives and amounts to allocate to different value propositions – What should it be, based on the strategy? This confusion is often exhacerbated by the quality of the governance process in place. The importance to separate the formulation of an investment strategy in changes, that must be conceived as a whole (all functions of the Entreprise) from its relative optimization is critical.

I will come back in the coming weeks with specific posts on this subject. So stay tune….

The Standardization imperative

This is a common belief within corporations that standardization is limiting the potential for innovation. Being true or not, companies need to recognize this, and integrate it in their effort to implement standardization. Here is an interesting paradox, more we standardize, and more the people are claiming their differences. What creates this perception from people that are most of the time feeling apart of the game, or does not want to be part of it. Standardization often means in the mind of people, not be recognized as individual contributor, being part of a broader community that they did not choose. Is standardization really the problem or is it more related to the initiative itself that challenges the true identity of a person, a group of person or an organization as the whole.

What is driving standardization effort?

• Analyze global performance
• Unique service to our customer (one face)
• Acceleration of changes – Enterprise agility – implementing changes
• Foster global innovation by increasing collaboration & developing a common language.
• Transfer of competencies across the organization
• Improve compliance efficiency
• Optimize cost and provide opportunity for economy of scale
• Reduce cost of enterprise project that required important consultant assessment
• Reduce risk of company memory loss and of employee replacement or transfer
• Ease back office consolidation
• Improve decision-making process by better understanding the impact of changes on organization.

Typical arguments against standardization
Senior management

• It takes too long
• Leadership turnover

Line of business management

• We are different, our market is different
• We have specific statutory requirements
• Feel a loss of control on driving their business
• Feel they are watched

What does it takes to implement process standardization?

• Strong & continuous senior management leadership & adhesion of line of Business management
• A strong communication management program
• A proper supporting structure to develop
• A proper supporting structure to maintain in the long run
• Accept that it will take time and a phased approach is probably the most reasonable. Start small… & use continuous process improvement.
• Forget about “one size fits all”
• Approach the standardization with a cross enterprise process modeling – avoid the silos effect of functional department and have a focus on which process is delivering value.