Category Archives: End 2 End

The Digital Transformation Framework

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Digital Transformation is a large commitment for organizations to change how it works, thinks and generates its business. Everything has to change to think, work and act digitally across the entire organization.

For being successful in making the leap for digital transformation, the organizations must follow a solid framework along with talents from both inhouse employees and outside partners. The digital transformation scope must also cover the landscape of the business partners to ensure they are equally digital equipped to work and deliver seamlessly.

The digital transformation framework provides a well thought through roadmap steps that can be applied to any organization to achieve transformation goals with agility, speed and accuracy. Digital transformation framework along with organizations’ digital value chain helps define organizations full path to succeed digitally.

Let’s do a quick run through on Digital Transformation Framework steps and supporting areas for achieving first time right successful transformation across the organization.

Digital Transformation Framework
Digital Transformation Framework

Step 1: Understand Impact of Transformation – Organization must clearly articulate and know what’s in it for them, why do they need to transform and what will be its impact across the organizations, taking in account all internal and external stakeholders involved. Eventually part of this is what the board of management will use for communicating towards the entire organization.

Step 2: Map the end to end As-Is value stream – This is an important step where the organization lays down its as is value stream on how their current business works. Full End to End mapping must be done involving talents from all divisions. It will also be useful to map the processes up to 3 sub levels deep to make it meaningful to understand processes and eventually gaps and improvements.

Step 3: Map the end to end To-Be value stream – Once the As-Is flows are mapped the important and often difficult step is to map the To-Be value stream. This can be achieved by taking input and lead from external partners hired for digital transformation. It can be also achieved by identifying gaps, manual steps, Lean waste in the processes and repetitive as well as duplicate work. The To-Be process map should result in automation and standardization of work. It should improve productivity and efficiency as well as competitive technology edge.

Step 4: Create a full list of Gaps and Improvements identified – Ensure the list is prioritized and owners assigned to ensure who would own and help drive which gaps and improvements. Eventually it will be a team work and many more people including technical IT inhouse and outside team members will be involved. The prioritization will set the tone for which are the important must have items that will create most of the impact and must be done first. As the list could be long, MOSCOW method can be applied to come to a shortened must have list.

Step 5: Create Transformation Roadmap and Blueprint – The information collected from step 1 to step 4 can now be converted to a transformation roadmap and blueprint documents. As this will be a long program involving multiple projects and tasks with dependencies, it will need to be well defined and executed with Lean, Agile and Design Thinking methods. The roadmap and blueprint will also ensure all compliance and audit related activities are well covered in the scope.

Step 6: Setup Multidisciplinary Program Team – Once the roadmap and blueprints are approved, the core program team can now setup the full Multidisciplinary program team required for various phases and projects to initiate execution. Inhouse talents as well as external partners must be onboarded to form the team.

Step 7: Manage Communication, Execution & Change – Initial communication of the program roadmap and blueprint must be shared widely across the entire team. The Daily dashboards and tracking and weekly/bi-weekly steerco updates and measurement metrics along with the definition of done must be communicated. The execution standards like Agile (Scrum or Scaled Agile) and Lean methods must be well communicated and ensure the team is trained to operate seamlessly. This is also the step where most of the technical execution and readiness takes place. So this step will require a lot attention and energy from everyone in the program.

Step 8: Deploy Solutions & Services – Once various tracks and projects have completed their execution, the important step of testing, cutover and release management comes up. In this step user acceptance testing, rework and sign offs on definition of done are achieved for all projects and for the entire program as a whole. 

Cutover activities planning including data migration and phase in / phase out of systems / solutions / services is planned. User trainings are done for all. The interdependencies including exact sequence, date and time along with primary and backup owners for each cutover activity are confirmed. This also involves getting our partners ready to cutover and release. Communication of release and cutover command center for effective release management are put in place. Multiple checkpoint meetings and Go/No-Go signoffs are achieved. Point of no return is clearly mentioned and underpinned. 

Go Live is achieved and first set of end-to-end golden transactions are carried to ensure entire process, people and systems are working as expected. Upon completion of the golden transactions the ramp up towards business as usual gets kicked off and generally with in 1 to 2 weeks of go live full ramp up and business as usual stage is achieved. Alongside from the day of go live 24×7 support to fix any teething issues is put in place. All transactions are tracked and progress reported on daily basis to ensure full control and attention on priority basis to keep the business smooth. This is also the step where best teams and team members are awarded/rewarded for their efforts. Overall team’s success celebrations are done.

Step 9: Measure Continuous usage and improve – In general the program team and its support structures continue for 6 to 8 weeks post go live to ensure a full cycle of 1+ month or even 2 months are done before concluding the closure of the program. This is also the step where community for practice (CoPs) are setup for users to interact with key users and subject matter experts. CoPs are online discussion forums of specific function, division or process experts and users to interact even after the program is closed.

Change control boards are also implemented to ensure changes are submitted, reviewed and approved through a board consisting of multi-disciplinary team that can approve/reject the changes. It serves both the purposes, one it to ensure continuous improvements are done to keep the business running and second is reject any unwanted changes that can lead to Lean waste again.

The Digital Transformation Framework ensures a successful implementation of organization’s digital needs of installing a new brain that can change how the organization functions as a whole, how it innovates (thinks) and how it operates (acts) to achieve its results.

Do look out for my second article covering 9 important areas that must be taken care for effective digital transformation and to make it successful.

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Business Process Management, Process Maturity Model and Implementation

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Introduction

The businesses are required to continuously change and improve to meet their customer needs and to achieve their goals. For any organisation to be able to achieve growth one of the important criteria is to have a solid operational excellence for effective and efficient operations management. For operational excellence and growth, organisations have to have clearly defined ways of working and full visibility of end to end business process value chains. The term end to end means clear visibility of Idea to Market, Market to Order and Order to Cash processes and supporting internal processes for HR, Legal, Finance and IT departments.

On one hand the organisations are under pressure to remain agile and flexible for adapting change while on the other hand for operational excellence it’s important to have a structured way of working and execution to be able to achieve the results with required level of quality. Organisations have to identify business areas that are their unique competitive advantage Vs business areas that are industry best practice standard and can be kept compliant with industry best practice standards.

For achieving the standard and structured business processes and their compliance, a framework and process maturity model is essential. The framework and process maturity model will help in identifying, implementing and continuously improve the organisations business processes.

Overview of Business Process Management

Business process management as the name suggests focuses on end to end activities involved in managing business processes. This starts from business process requirement definition, design, deployment and post deployment monitoring and control followed by continuous improvement.

Although most organisation have business process management done using one or the other method, the challenge is to ensure that its tailored to meet the real needs of the organisation. Starting and implementing business process management initiative requires time, efforts and commitment from all levels of the organisation especially from the management team. These initiatives involves multiple departments and so are executed as business transformation program instead of just one department making steps for business process management. It is also essential that such initiatives are done first time right as failure could lead to high business impact especially in the area of operational excellence.

Business Process Maturity Model

For effective business process management implementation as well as continued monitoring and control post implementation, it’s essential for organisations to use either market standard or own business process maturity model. A business process maturity model allows organisation to check their current maturity level / state of respective business process. This not just help in identifying but also defining improvement actions that would help strengthen the process maturity level. It also helps the organisation in identifying and ear marking the business processes where they need high level of maturity Vs. those where they can live with a slightly lower level of maturity.

Over past decade as more organisations realize the need for effective business process management; many maturity models have come to existence. However, only few are successful and used widely, namely Capability Maturity Model Integration (CMMI) and Business Process Management Maturity Model (BPMM).

One of the most widely used models is Capability Maturity Model also known as CMM developed by software engineering institute at Carnegie Mellon University. It came in existence in year 1989 and was shaped as a maturity assessment model in year 1993. During past 15 years it further evolved and become broader and being used in different areas of an organisation from IT to People to Product and Services. This maturity model helps organisation evaluate the business process maturity on 5 levels named as Initial, Managed, Standardized, Predictable and Innovating. The organisation can measure their process maturity against each process area at various levels and decide to take up best practices specified.

The other widely used model is Business Process Management Maturity Model (BPMM) developed by Object Management Group (OMG). It came in existence in year 2007 and is based on Humphrey’s Process Maturity Framework and CMM. This maturity model helps organisation evaluate the business process maturity on 5 levels named as Initial, Repeatable, Defined, Managed and Optimized. The organisation can measure their process maturity by answering the standard questions with evidences for each level of maturity.

After words

Business process management is essential and important for all organisations. In this era of change its important that business processes are standardized and optimized for use. Its even more important to differentiate the amount of efforts and time that need to be spent in specific business areas in standardizing. This allows one end for organisation to use best practice standards and on the other end help them measure and continuously improve the business process management within the organisation. From the review of this paper following are the key points to note,

– Depending on the size of the organisation the approach used for BPM Implementation can vary

– For Large multi-national organisation, business process management initiative must be run as business transformation program

– The program must have support for organisation management team and must be ready for required governance and culture change

– The execution must be planned based prioritized end to end business process value chains with highest priority for processes adding direct value to business growth

– Post implementation for ongoing improvement, a robust process maturity model must be adapted and put to use through the organisations business process management organisation

– Industry standard business processes in the area of support departments must be adapted using industry standards and tools

– BPM implementation and process standardization lead to application rationalizations and lower IT costs for the organisation

Looking forward the business processes management will continue to get stronger and standard. For all organisations to be able to do business in effective and efficient manner, it is necessary to have a strong BPM implementation. BPM is further evolving where organisations are faced with Agile and Lean concepts which required organization’s business processes to be equally agile and lean. Agility is important for faster change while Lean supports the organisation in faster adaption of change.

Enterprise Resource Planning Systems – Part II

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Today’s ERP Systems

Today’s ERP Systems are vast and cover end to end business process integration and automation. Key features of them can be listed as follows,

  • End two End enterprise wide business process integration and automation
  • Ready to use industry based solutions that are made from industry practices
  • Fully configurable system with possibility to customize specific areas for business needs
  • Faster and effective decision making using self configurable and drill down reporting
  • Standard interfacing based on industry standard data interchange standards making it easier to interface and integrate existing applications with ERP Systems
  • Internet and Collaboration capabilities making it easier to collaborate with customers, colleagues, partners and vendors.
  • Software as a service solutions for small and medium enterprises to able to afford and use industry standard based ERP systems at lower costs

Top ERP vendors in today’s market

There are many ERP vendors for different industries and business sizes. Key vendors that standout and are world known are SAP, Oracle and Microsoft.

SAP

SAP is world’s largest ERP vendor with high market share and revenues. SAP was founded in 1972 by a group of ex-IBM German employees. The product has its own evolution cycle over past three decades and its now the market leader in wide range of industries. SAP has created various solutions based on industry best practices and packaged the solutions with power of full customization (meant for multi nationals/fortune 500 companies), minor customization (medium to large size companies) and out of the box (for small and medium size companies). It further continues to develop a complete suite of ERP solutions consisting of end to end business processes.

Oracle

Next to SAP, Oracle is the second largest / known vendor in ERP market. Oracle was founded with focus on relational database management software and systems. Even for SAP the backend database many of the times would be Oracle. Oracle entered in the field of ERP systems over a period of past decade and has gained momentum with acquisition of some of the 1990s well known ERP software companies like PeopleSoft who had before acquired JD Edwards. This gave Oracle a big base of customers to expand its ERP Systems and solutions. Oracles recent acquisition of Sun Java further adds a feather in Oracle’s capability to build and deliver sound ERP Systems

Microsoft

Microsoft entered the ERP Systems with a product named Dynamics and has started emerging in last decade with focus on small and medium enterprises ERP Systems and Solutions. Microsoft Dynamics has a positive point as it combines the full end to end software needs as Microsoft makes the server and client operating systems (world known as windows), the relational database management system (known as MS SQL) and the thin browser client (known as Internet explorer). On top Microsoft is well known for its collaboration tools like Microsoft office range of products, Microsoft Sharepoint and Microsoft Duet solutions which help combine ERP systems with collaboration functionality.

ERP Systems – Further Evolution

Given the importance, dependency and need for ERP Systems, the evolution of ERP systems will continue with even more speed to bring more agility in the solution provided and adaption/implementation of ERP solutions.

ERP Systems in coming years can focus on and evolve in the areas of,

  1. Enhancing the internet based system performance and user experience. By doing so discontinuation of any client software need to use ERP systems. The need also arises from the speed with which business needs ERP systems changes done and implemented. In doing so the user experience of ERP systems usage will further help to reduce the time and effort spent on training/re-training users on ERP System functionality.
  1. Cloud based offering in the area of Software as a Service could open up easy and affordable ERP solutions for small and medium enterprises. ERP vendors are already having Software as a Service solution available for businesses. These would further evolve in cloud based low costs and easy ready solutions.
  1. The transformation of PCs to laptops and laptops to tablets on hand and other hand mobile devices becoming as powerful as laptop computers in processing speed and functionality. This opens the need for at least part of the ERP Systems solutions to be available on mobile devices.

After Thought

ERP systems have came long way over several decades and in doing so they improved the functionality offered, user experience, industry best practices and focusing on standardized solutions.

The evolution will continue towards cloud based offerings for possible small and medium business enterprises making process automations available on internet at a click of a button. The evolution will also continue in the areas of making ERP systems available on tablets and mobile devices.

As the speed of business change continues to grow higher, the ERP systems would be under constant need to become highly Agile in the area of change implementation, user experience and execution.

Enterprise Resource Planning Systems – Part I

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Background

Enterprise Resource Planning (ERP) Systems started in 1970s the years’ when business and markets were heavily focused on mass production of materials and industrialization was on the peak. The so called enterprise, five to six decades back was in need of automation of industrial materials and their effective plus efficient management. The prime focus remained on materials and resources management.

In this fast changing business environment and heavy dependency of businesses on automated processes running using various IT Systems; the value and need for a reliable ERP System is constantly on rise.

ERP Systems have evolved over several decades and still continuing to evolve to become more fit for today’s business needs.

Legacy Systems

Legacy systems are generally any systems that are old systems built using software and hardware platform that is more than a decade old. Systems that are built using old programming languages like ‘COBOL’ and are running on mainframes, considered legacy systems. In some organisation such systems are still in use as they are complex, costly and difficult to replace. Legacy systems are difficult to interface with and make changes.

In organisations systems that are archived or not actively used and kept for audit purposes are also referred to as Legacy systems. These systems normally were built and used 7 or more years back and consist of business transactions and information that are of use for historical referencing. Older ERP systems are also termed as legacy if they are kept running and used for historical transactions referencing.

ERP System Contents

The enterprise resource planning system is software package that brings together various business processes by automating plus integrating them and maintaining a central database with all relevant master data and transaction data. One of the Key benefits of using ERP systems is they are normally having real time availability of information which is key for businesses.

Enterprise resource planning systems cover a wide range of business processes management namely Manufacturing, Supply Chain, Financials, Human Resources, Projects and Customer Relationship.

ERP Systems structure is made up of various modules ideally focused on respective functional domain like Manufacturing, Finance, Supply Chain, Human Resources. The system needs one central database which consists of Master and Transactions data for various modules.

Decades of ERP Evolution

ERP Systems have evolved over 4 decades. If we look at the evolution in each decade major steps happened.

1970s – MRP

In 1970s all systems were standalone and separate systems. Given the ear of industrialization 1970s ERPs started with MRP systems called Material Requirements Planning System. MRP offered production planning which helped businesses in inventory management. In the same decade the standalone financial and human resource systems evolved.

1980s – MRP II

In 1980s MRP systems where further enhanced as MRPII which helped bringing inventory management and production management together. In the same decade for financials management, FMIS systems arrived.

1990s – ERP

In 1990s major evolution happened and ERP Systems emerged which offered one integrated MRP, FMIS and HR system. In the same decade Supply Chain Management systems emerged to take care of planning, scheduling and distribution of products. As this was also the decade of Internet boom customer facing systems like e-commerce, sales force automation and customer relationship management emerged.

2000s – ERP End 2 End

In last decade (2000s) ERP systems have become robust and evolved as one end to end system covering the entire business portfolio needs. ERP systems took a turn to become industry based and various standard industry best practice based industry specific solutions emerged. In the same decade ERP vendors increased focus on making ERP systems web based and making it available as viable out of the box solutions for small and medium enterprises.

Continued in Part II …