We’ve all played the old game “rock, paper, scissors” (aka Rochambeau) to settle a dispute or just for fun. Everyone knows the simple hierarchy that forms a path to victory: Rocks crush scissors, paper covers rocks, but scissors cut paper. This is a lesson we learn as children, but such simple hierarchies of superiority can govern outcomes in professional life, too – even when implementing a successful technology solution.
Since the beginning of our species, solutions to problems have always involved a formula with three components – people, process, and tools. If we apply this formula to a simple outcome like digging a hole, the “people” component might be a trained digger. The process component is governed by requirements specifying a location for the hole, its depth and width, and the method by which the tool will be applied to complete the task. Finally, the tool component in this example is a shovel.
Of course, the tool is important, but it should be obvious that even with the most glorious tool available, the shovel cannot complete the task by itself. (Not until we get robotic shovels, but this isn’t the point!)
So, let’s apply a version of our rock, paper, scissors hierarchy to see which combinations of outcomes achieve the objective.
- Untrained person, bad process, excellent tool = fail
- Trained person, bad process, excellent tool = fail
- Trained person, good process, weak tool = success (albeit with greater effort)
- Untrained person, good process, excellent tool = success (the tool would have to compensate for the skill gaps with the people)
You can run every permutation of this hierarchy in your mind – as I have – and here is my conclusion: You need at least two of these components to be good to achieve success, and one of those must be a good process. However, most enterprise performance management (EPM) solutions treat process as the lowest consideration!
Let’s correlate that to EPM, analytics, and every technology-based solution every organization has tried to implement. Advances in technology are exciting and very compelling as to what can be accomplished, but of the three problem-solving components required:
- The strength of the technology is the least indicative factor for success. Highly effective people and a productive process will carry the day even if the technology is suboptimal.
- But then, technology and people, no matter how well-configured and prepared, cannot out-execute to overcome a poor process. Since process is so important, you’d expect vendors to be articulating precise instructions to ensure that their customers have consistently successful results. Unfortunately, that is not the case. The default is to assume that the existing process is perfect as-is and that the improvement will come from the implementation of the new tool with the same process and the same people.
- We don’t dispute that there are some benefits to acquiring a better shovel. However, the benefits will be limited more by the process and the limited skills of the people.
In accounting, there are millions of certified accountants who rightfully tout their credentials as a qualification to participate in the process of business accounting. There are certification boards, compliance courts, and government agencies all arrayed to enforce these definitions to ensure absolute compliance.
However, there are no equivalent certifications, published standards, or oversight agencies for processes within EPM disciplines like budgeting, management reporting, and analytics – or for the solutions that support these processes. The output from such unregulated processes is consequently rather arbitrary, while quality and effectiveness vary widely from company to company.
We believe the primary reason for poor outcomes and variability across organizations is the lack of appropriate process.
But what can be done? Column5’s response is to define our own advanced framework we call “Dynamic Networked Analytics,” or DNA.
Implementing a framework
This framework specifies standard capabilities that our customers view as their competitive advantage. The DNA blueprint has organizational (people) structures to properly operate and support the EPM solution, standardized business processes, and rigorous technology requirements to fully support the people and process side of an EPM or analytics solution. Aligned together in the specified manner, per the DNA framework, superior outcomes from business processes like planning and reporting cycles across strategy, operations, and finance can be realized by any organization.
The historical lack of definition on process in the EPM and analytics solution area will not remain for long. AI is putting extreme pressure on the status quo to embed process components in underlying technologies to ultimately replace humans. In fact, AI depends on this integration to be seamless. Revisiting our analogy of rock, paper, scissors, AI covers technology, embeds process, AND in some cases, even replaces people to deliver consistently flawless outcomes. In order to embrace and adapt to this new reality, the entire business management process needs rethinking to embrace technology and be compatible with a hybrid workforce of human and automated workers.
Applying analytics to improve processes
In addition to our DNA process framework above, the Column5 team is recognized thought leaders on the topic of applying analytics to improve processes. We have a strong vision and so much to say and want to share our insights about how your organization can benefit from this time of transformation. You have a lot to prepare for, and we believe this dialogue requires an extended conversation to address the changing stages your organization will face over time. You cannot get all you need to know in one sitting or by reading one article or book.
Therefore, we are changing our long-established EPM Summit Event to put in place the necessary education and dialogue to plant and nurture the seeds of transformation in your organization with our new EPM Summit Network Membership program.
We look forward to hearing our thoughts on this topic. To join the discussion, shoot me an email.
Column5 Consulting is an SAP gold partner.