Tag: governance

It’s High Time to "Up the Cool Quotient" in Service and Governance Reporting | Sherpas in Blue Shirts

In an industry that has changed dramatically over the past decade – expanding beyond a handful of countries, Global Business Services (GBS) pulling together services across an organization under a single umbrella, “as-a-service” delivery models, autonomics and service delivery automation, etc. – one would expect to be hard-pressed to find a component that hasn’t kept pace.

However, one key enabler of effective ongoing client/provider governance has changed little, if at all.

Across the layers of governance, there are multiple monthly and quarterly reports that provide the basis for regular review meetings. But a comparison of governance reports generated over the past year with another set (across different relationships) from close to 10 years ago revealed no major discernible difference in the messaging, format, structure, or – to an extent – the content of the reports. The profound impact of digital and user experience-driven visualization appears to have eluded them altogether!

Some of the issues that were evident in the majority of the cases included:

  • High on data, low on context: As a central theme, most reports have too much upfront data with minimal context behind it. “All green” metric performance is never a guarantee of client or provider satisfaction. Honest and open context actually helps avoid uncomfortable situations during discussions.
  • Inconsistency of structure across towers: In multi-tower engagements there are often inconsistencies in simple elements like type of charts and terminology used, which increases risk of miscommunication between client and provider.
  • Lack of coherence across governance layers: At times, there was lack of coherence and linkage between operational level governance reports and executive/management-level reports for the same outsourcing engagement. Even straightforward items such as FTE numbers and team descriptions failed to tie up in several cases.
  • Resistance to evolution: Even if the entire service delivery has gone through multiple iterations of change, the reporting philosophy seems to be the same in Month 6 and Month 48. Just changing the month-to-month line items containing the metrics is not enough.

All this equates to a lot of time and effort utilized in going through data, with some important subjective discussions being lost or pushed to subsequent follow-up sessions. This can cause a high risk of misalignment in objectives and a potential trust deficit. The situation is aggravated if there are new stakeholders inducted into the governance structure who may interpret similar data in different ways!

Quick fixes

As a principle, any document intended for circulation to a group of stakeholders should be clear in its objective and explanatory enough for an uninformed reader to understand. It needs to foster honest, engaging discussions, and must be modular enough to avoid re-work in bringing together reports for consolidation.

Some easy to implement practices to consider include:

  1. Use infographics in the executive summary: It might sound radical, but professionally-rendered infographics can be powerful tools to deliver a high-line summary, as compared with lines of text. They also make for better contextualization and more freedom to change formats on a periodic basis.
  2. Standardize terms and major assumptions: All service towers and team members preparing reports across the levels of governance should adhere to similar naming conventions. While this appears to be a simple thing, it is surprising to see how often it fails to happen in real life scenarios!
  3. Apply the relevance thumb rule: Teams responsible for preparing these reports need to regularly assess the relevance of each element for the intended audience, particularly at given moments in time. For example, very detailed incident or missed SLA analyses may be needed for operational governance reports during the stabilization period, but post stabilization, the focus needs to change to other priority areas
  4. Explore interactive visualization tools like QlikView or Tableau: Organizations have started adopting use of real-time data visualization and reporting across platforms like desktops, mobiles, and tablets. This provides users with flexibility to view dynamic charts based on their preferences. Providers supporting services to mature organizations in which users are comfortable using such tools may want to explore using them to buoy their governance reporting capabilities.

Governance Reporting

Some of the most conservative companies have had to modernize the structure and layout of even their Annual Reports to keep them relevant and more aligned to changing communication needs. The global sourcing industry should take the cue and look to infuse some change into the very documents that form the basis of their ongoing relationship health assessment!

Tales of Outsourcing Horror | The True Story Edition | Sherpas in Blue Shirts

Despite all the successes in the marketplace, we all know there have been outsourcing arrangements that have gone terribly awry. So, in the spirit of Hallowe’en, I wanted to share some true outsourcing horror stories. But, be forewarned, and read on at your own risk…these true stories will send chills up and down your spine. 

Sales process | the secret in the lab

A service provider’s salesperson and solution architect promised to a large enterprise client a transformational technological solution that would save considerable amounts of money, enable realization of all its objectives, etc. The client was very happy with the promise of the solution, as it knew similar approaches provided by other service providers had been successful for the buyer organizations.

But when the engagement moved from transition to presumable steady state, and the results were supposed to start coming to fruition, the provider’s on the ground team had no idea what the client was talking about. The salesperson and solution architect knowingly and willingly sold a solution that their company did not have and had no intention of creating.

Sadly, the secret in the lab for the client was that there was no solution. And not at all surprisingly, the deal faltered and the provider was terminated. 

Transition | the monster under the bed

A client that had never outsourced before believed that transition management was the provider’s job, and thus chose to have no involvement in the process. Of course, without active participation from the client, things started to slide. The client began sensing things were going awry, but the provider consistently assured the client that all was fine. The client asked all the right questions, but because they weren’t actively involved, had no insight into what was lurking below.

When they got to the go live date, the provider listed a litany of things that weren’t yet ready, and in a real attempt to make the transition work, suggested alternatives. The client rightly questioned what impact the alternatives would have, but – looking at the situation from its own risk perspective, and truly wanting to fix the issues – the provider again assured the client there wouldn’t be any problems

Of course, there were massive problems. Missed deadlines, impossible turnaround times, finger pointing. The engagement became such a train wreck that no amount of corrective actions could recover the client’s original objectives.

Moral of the story? If you think there’s a monster hiding under your bed, don’t expect someone else to check for you. Actually, the real moral of the story is that it takes two parties to do the transition tango, and buyers must take management responsibility and accountability for their portions of the transition.

Governance | drinking the witches’ brew

For a number of years, a client was very happy with its ITO provider. It was productive, innovative, and collaborative. But, over time, the provider languished and lacked energy, and the initial objectives that everyone had been focused on seemed to die. Hard feelings grew, and eventually one person on the provider’s governance team developed an axe to grind with his client-side counterpart. Before anyone realized what was occurring, this influential person fed his witches’ brew to all his team members. The poison then spread to all the client’s governance team members. The bitter taste in everyone’s mouths grew until every meeting was a new, adversarial battle between the two separate factions. They could no longer work together toward a positive end result.

Ultimately, the only way the deal could be salvaged was by replacing enough people on both governance teams with new people who hadn’t sipped the poison.

On this day before All Hallows’ Eve, be aware that ghosts, ghouls, and goblins may be lurking in your deal. But also be aware that accountability, governance, and knowledge can help you spot and fight the bogeyman.


Photo credit: Flickr

Google to Alphabet – Lessons for Global Service Providers | Sherpas in Blue Shirts

“Google is not an unconventional company. We do not intend to become one,” said Larry Page, co-founder of Google, in his original founders letter in 2004, when Google went public. He reiterated that last week, when, on August 10, Google announced a new operating structure, creating the new entity Alphabet, with Google as a wholly-owned subsidiary.

Much has since been said about the company, its leadership, its transition, and its people. However, the more I read about Google (or should I say Alphabet now) and its reorganization, the more I am inclined to draw parallels between the internet behemoth and service providers, both Indian-heritage and multinationals. The way I see it, here are a few lessons service provides could take from the reorganization:

  1. Structure:

    Most, if not all, large organizations seek to carve out subsidiaries or focused business units to reorganize themselves. These units, with their respective heads, are then entrusted with the responsibility to scale the business. With “digital” being an almost-abused cliché, it is not difficult to hear about service providers hiving off separate digital business units. This unit or subsidiary is like a “child” of the “parent” service provider, which retains control of the child.

    Google defied the norm. Rather than creating a specialized business unit, it created an entirely new holding structure, effectively making Google, previously the parent, the child, and creating Alphabet as the parent. This umbrella organization now retains control, with the child (Google) getting a tunnel-vision focus.

    Lesson for service providers: Service providers that have attained enormous scale and that are at a stage where they can cause industry turbulence by their initiatives would do well to consider possibilities beyond the conventional norms and innovate even at that scale.

  2. Simplicity and control:

    When an organization grows too large, it becomes a management challenge to control it. Simplification becomes a necessity. By breaking down its business units into multiple, independent, and accountable entities, Google has created an operating structure that is much like a conglomerate.

    Seems simple enough, right? The challenge, however, is that the leadership of such an enterprise has to relinquish control of at least some of its units. By entrusting Mr. Pichai with the responsibility of running the world’s largest internet-based engine, Mr. Page has relinquished control of the company he co-founded. Surely, founders ceding control has to be personally challenging; however, the need to look beyond itself into something grander has clearly worked well for Google so far.

    Lesson for service providers: Management of colossal corporations should hand over control of highly functional cash cows to their number-twos and invest their time on pursuing grander ambitions. When the senior leadership (or the board) is loath to relinquish control, it indicates either a lack of faith in its next-generation leaders or an obsessive need to retain control or both, all of which culminate in lack of relevance and eventual obsolescence.

  3. Culture of radical innovation:

    The mention of Google always has the word innovation lurking around and for good reason. Google has always been known to be innovative in the way it perceives and solves problems. When it seemed to reach its comfort zone, it stirred the pot vigorously and conveyed its discomfort with status quo or even incremental changes.

    Lesson for service providers: Service providers should embrace such an outlook towards change and not be hesitant to adopt a radical approach. If a US$66 billion enterprise with one primary revenue source can do it, so can a much nimbler service provider with lesser risk exposure and higher market stability.

  4. Belief:

    Google has illustrated that moonshot vision and out-of-this-world ideas are not a necessity to become what it is. Pursuing what they believed were smart ideas and chasing them with relentless passion has given us products that have almost become a necessity.

    Often, during our interactions with service providers, we discuss their vision and philosophy about next-generation technologies and services. We seldom see those being relentlessly pursued, as the ideas fall victim to the next flavor of the day, management changes, or “change of strategic direction.”

    Lesson for service providers: The trick lies in being fast and nimble so that the idea is commercialized before the market moves on, and also relentless, so that innovators aren’t distracted by the whirlpool of daily business.

  5. Investor focus:

    Last but not the least nicety of Google’s restructuring is its ability to placate its investors. While the same can be said of many other firms, it is Google’s call to action and time to market that stand out. By creating a more accountable structure, Google alleviated a lot of investor concerns, which had been growing owing to the company’s cash-burning yet low-yielding moonshots.

    Lesson for service providers: If your initiatives, especially in the digital landscape, do not resonate with your investors, it is time to reconsider those. Service providers should create a more accountable structure for their digital initiatives and appease both customers and investors.

UK Outsourcing Giants Take Diverging Paths | Sherpas in Blue Shirts

Last week both Serco and Capita announced their interim results. Not only did the two companies show a widening gap in terms of financial performance, but they also highlighted diverging business strategies.

Firstly, their financial performance in H2 2014 to date was very different:

Operating margin:

  • Capita has managed to stay on track to achieving at least 8% organic growth, net of attrition, for the full year 2014 (2013: 8%). It also stated that it expects to maintain its operating margin in the range of 12.5% to 13.5% for the foreseeable future
  • In contrast, Serco announced that the 2% organic growth in H1 2014 has turned into a mid-single digit decline in H2. This has been primarily due to reductions in volume of work in the Australian immigration contract but also due to contract losses and reduced volumes elsewhere. Serco expects to shrink significantly by 2016, with revenue reaching a nadir of £3 billion to £3.5 billion from a forecasted adjusted revenue of £4.8 billion in 2014. It expects to return to growth in 2017
  • Serco also announced a proposed equity rights issue of up to £550 million in the first quarter of 2015 to strengthen its capital structure
  • Capita announced that it has secured £1.63 billion of major new deals to date in 2014 (nine months). This is down by £1.27 billion year-on-year (largely accounted for by the signing of the £1.2 billion O2 mega deal in 2013). At £4.1 billion the bid pipeline is also lower on a sequential basis compared with £5.7 billion announced in July 2014. However Capita reports a strong win rate of one in two
  • Serco reported £900 million of contract awards since the half year to date. It also said that its current pipeline and win rate are considerably weaker than before

Secondly, the strategic directions of the two companies are diverging:

  • With its strategic review still ongoing, Serco announced that it is going to focus entirely on business to government (B2G) in the areas of justice and immigration, defense, transport, citizen services, and healthcare
  • In contrast, Capita aims to grow its private sector business and in particular in the customer management services (CMS) arena. Like Serco, it made a number of CMS acquisitions in the past few years including Ventura and parts of Vertex. Another growth target is its burgeoning legal business with the acquisition of Eclipse Legal Systems. It is also expanding its presence beyond its UK stronghold to countries such as Ireland and Germany
  • Serco will be divesting a number of businesses that are now non-core to its strategy. These include the Environmental and Leisure businesses in the UK, Great Southern Rail business in Australia, and the majority of its private sector BPO business which are mostly CMS businesses delivered by two companies that it acquired in recent years: Intelenet and The Listening Company
  • Capita has made 13 acquisitions to date in 2014 for £285 million, with more likely as it continues to expand or enhance its capabilities

Interestingly, both companies have also announced changes to their boards:

  • Alastair Lyons, Serco’s chairman has resigned
  • Capita’s CFO Gordon Hurst is stepping down following a 27-year stint at the company

Serco’s tale of woe began in 2013 when the British government discovered that it had been overcharged by Serco for offender tagging services to the Ministry of Justice (MoJ). The company is still recovering from the fallout more than a year after the issue first came to light, and having repaid more than £68 million of fees and gone through several reviews and management changes. It is ironic that Serco’s new board has chosen to focus on B2G services only, given that the troubles began in a government contract. That said, front line government services is and has always been at the core of the company’s business.

Serco has suffered from failures of governance and risk management. As it rebuilds itself, it will seek to enhance these significantly. In terms of business strategy, it will target growing opportunities in the government sector, as the pressures from aging populations and rising demand for services pushes governments to outsource more. Serco will seek to differentiate itself with its international approach, as part of which it will give its businesses a portfolio of services to go to market within specific regions of the world, to share experience and expertise.

Capita boasts of robust financial and governance structures and highly selective approach to opportunities that it pursues. Robust governance is highly needed given Capita’s aggressive acquisition strategy that has seen it take over more than a dozen companies a year for many years. Even with robust governance problems can still occur. For example, in its eagerness to win more government clients, in 2012 Capita acquired Applied Language Solutions (ALS), which had been awarded responsibility for courts interpreter services in England and Wales. For a while service delivery was less than smooth leading to the MoJ withholding fees in some instances and bad publicity in the press. Overall though Capita has benefited from many niche and strategic acquisitions that it has fully internalized, and which have largely created value and revenue.

Serco and Capita

There are lessons to be learnt from the performance of the giants of UK outsourcing. Today, one thing that is common to both is the belief that bid and governance structures have to be robust and maintained at all times.

Enterprise Mobile Apps – Are We Done? | Sherpas in Blue Shirts

The state of today’s enterprise mobile apps industry is akin to the dark side of a jungle: a dense forest and tangled vegetation, inhabited by hundreds of largely unfamiliar animals and plants that rely on its delicate ecosystem to survive, perhaps to thrive. This is creating frustration among stakeholders including the CIO, CFO, CMO, and CEO, who believe they might have over-invested in mobility initiatives.

However, this is far from the truth. Mobile apps have a long way to go in enterprise. Yet, to avoid the earlier pitfalls, enterprises and technology providers need to be fully aware of the following dangers in the mobile apps jungle:

  1. Business process transformation: Few enterprises or technology providers even consider that enforcing mobile access to an existing business process may be a poor idea. Making the end-user consume the same business process albeit through a different, perhaps “cooler,” app is not true mobility. User interest will not last if the business process is itself unsuitable for mobile. At the same time, not all business processes require this change. Enterprises must be selective in changing business processes while undertaking the mobility journey. Consultants, vendors, and others with vested interests will always extol the virtue of business process transformation for mobility, but enterprises should be very wary of this aggressive spiel.

  2. Line of business collaboration: In their desire to be the first movers, many line of business managers are creating all kinds of mobile apps with little collaboration with other business units. Given the increasing influence of non-CIO budget centers to approve technology funding, the tried and tested processes of application development are being compromised under a convenient, self-pleasing argument that mobile apps do not require a structured or “traditional” approach.

    Will this ad-hoc development blow up in our faces? I think it will. Can we prevent this? Unfortunately not. Business users are happy getting the needed application functionality on mobile devices, yet no one is thinking about the mobile application lifecycle. A long-term technology adoption framework is an unthinkable thought for these budget owners. They do not believe collaboration is their mandate or their responsibility. Their KPIs are linked to business outcomes, not to channelizing or seamlessly introducing mobile technology, and thus they will rarely ever have an incentive to create the needed structure.

  3. Cost of mobility: Enterprises and technology providers need to understand that while business agility, flexibility, and access is all good, the cost of these should not outweigh the rewards. Therefore, enterprise mobility should be viewed in its entirety to understand whether the incremental business has come at a greater cost of management and complexity. Yet the existing mechanisms across enterprises, where different unconnected lines of businesses are creating their noodly soups of mobile apps, does not engender great confidence that they will take a view of the broader picture any time soon.

  4. Mobility governance: It is fashionable these days to ignore any advice from someone who wants to instill structure or a governance model on enterprise mobility. Governance is perceived as “anti-growth” and “uncool.” Given this perception, few technology managers, despite their strong opinions, express any sentiments against the ad-hoc enterprise mobile strategy. This is a recipe for disaster.

So what can enterprises do to quash the mobile apps jungle’s beastly flora and fauna?

  1. Be selective about changing/transforming the underlying business process while mapping to mobile apps
  2. Create an environment that incentivizes lines of businesses to collaborate rather than compete in creating the next “cool” mobile app
  3. Adopt a lifecycle management approach to mobile apps
  4. Balance the growth objectives with the cost implications of enterprise mobility
  5. Incorporate an “eagle eye” to govern mobility projects

If you are undertaking an enterprise mobile application initiative and want to share your experiences and perspectives, please comment below or reach out to me directly at [email protected].

The Good and Bad News in Governing Cloud-Based Services | Gaining Altitude in the Cloud

Cloud-based services are distinctly different from traditional outsourcing not only because of the obvious cost and agility benefits but also because they fuel the need for a different kind of management of the services. From a management perspective the governance is transformational because it allows the governance team to change their focus on how they manage the services.

The distinction between managing cloud-based services and traditional outsourced services is critical to the outcomes and value achieved from the service.

In traditional outsourcing, the customer has a lot of say, particularly up front, in terms of designing the solution. The solution often starts with taking over what the customer currently has and then moves into a transformation journey. The customer is responsible for defining how the service components fit together and also is responsible for managing the use of those components.

But this tends to lead customers to overbuy. For example, in infrastructure the customer tends to buy more service space and more storage than is needed at any particular point in time just to ensure coverage for peak usage times and volume growth. Because it is cumbersome to contractually change the volumes, the customer ends up buying usage in step changes with the net result of overbuying.

But the real issue is how much time and effort it takes to manage this traditional kind of service. The governing cost in time and effort can overshadow the benefits of the service.

In contrast, the fundamentals of cloud-based or next-generation services are usage-based pricing combined with bundling. The customer buys bundled services rather than discrete components, and this impacts service management. For example, in traditional outsourced services, the customer manages how much capacity is needed for storage, how many licenses to purchase, etc. In the newer service models, the customer manages a few metrics around usage rather than managing the components that allow utilizing the service. The newer models enable customers to avoid the trap of overbuying.

But more importantly, cloud-based and next-gen service models profoundly change the governance aspect in the following ways:

  • Governance is much simpler and communication with the vendor or service provider is much simpler.
  • Governance efforts focus on how the organization consumes the services and on spending time helping the business units to better use the service for more value outcomes instead of managing the vendor or provider.
  • Governing demand management is much easier and reduces the complexities of billing and invoicing to keep track of usage.

The real issue of simplicity in governing cloud-based and next-gen services carries both good and bad news. The good news is that the simplification of management tasks means the customer will need a smaller management team. The bad news: The team will need a different set of skills. Instead of skills in managing vendors, purchasing, and invoice tracking, the governance team needs skills in change management, project management and business transformation.

Video Interview: Balancing Cloud Decisions between Executive Team and Business Unit | Gaining Altitude in the Cloud

At CloudConnect 2012, Everest Group’s Marvin Newell moderated a lively panel discussion on next generation IT governance. The panelists included Thomas Barton, Global Enterprise Architect at Novartis Pharmaceuticals; Jeromy Carriere, Chief Architect at X.commerce; and Erik Sebesta, Chief Architect and Technology Officer at CloudTP.

The panel focused on the governance concept of holding on loosely but not letting go. Though executive buy-in is important for cost-efficient and holistic migration to the cloud, the business unit knows operations and needs the best.

In the third CloudConnect video interview of the series, Erik Sebesta answers the question: How does one balance the decision-making between the executive team and the business unit?

In case you missed the first blog, this is the second video interview of a series we taped at CloudConnect 2012 in Santa Clara. Everest Group’s Scott Bils chaired the Organizational Readiness track and enlisted an impressive lineup of speakers.

Watch the first video, featuring Francesco Paola of Cloudscaling.

Watch the second video, featuring Simon Wardley of the Leading Edge Forum.

Watch the last video, featuring Clayton Pippenger of Quest.

Time to Call the Real Experts – What We Can Learn from Ants about Cloud Governance | Gaining Altitude in the Cloud

IT rarely loves end users, and for good reason…they constantly invent new problems. They customize their laptops, creating unmanageable software Frankensteins; they bother IT with all kinds of new whims; they want to use all types of new mobile devices, each scarier than the previous one, etc. But the biggest reason of all is that end users always think they know better than IT what tools they need to conduct their business.

But IT can fight these battles with a mighty tool – centralized governance. The less control IT gives end users the better and more stable the system architecture will be, and centralized IT control always produces more efficient results. . Right? Actually, it’s no longer true. While centralized IT governance works well in a traditional IT ecosystem, it quickly fails in the new generation IT environment. The powerful promise of cloud computing is that any user can get easy access to a diverse set of IT resources – not just those available from the internal IT group –for the precise period of time they are needed, and shut them down once the project is completed. But all this requires a new type of governance – decentralized – which allows every user a choice of technology tools and operational flexibility, while still enforcing integrity and consistency of the IT architecture.

Is this even possible? Is there any precedent that shows this can work? There sure is, but not exactly where we would expect to look for it.

Introducing Governance, the Ants Way

Ants solve very complex problems everyday. A few of them include:

  • Conducting comprehensive project management of building large anthills capable of accommodating the whole colony
  • Running sophisticated logistical optimization exercises of finding food for the whole colony day after day
  • Administering a complicated supply chain of anthill maintenance and repair, food storage, and perimeter security per major environment changes (e.g., rain), and constant competition (e.g., other ants)
  • Managing HR – or rather AR, (Ant Resources) – of ~40,000 ants

What’s most striking is that they do all this under conditions of completely decentralized governance!

Ants

In fact, every ant has total operational flexibility to select its own tools, make optimization decisions, and manage its own work. The only guidelines they follow are their direct job responsibilities (e.g., worker, soldier, queen) and the overall goal of the colony.

This type of decentralized governance is what IT today must adopt and embrace to successfully manage cloud-based IT delivery. Business users will need to make IT decisions every day, and there is no way they can run every one of these decisions through IT for architectural approval, procurement for buying authorization, finance for budgeting, etc.

New flexible guidelines must be designed to support end users’ IT decision making. IT will still need to maintain the overall architecture, but it should not, for example, dictate to the end user exactly which server build and OS stack needs to run the user’s email. Procurement will still negotiate deals with cloud providers, but it should not micromanage every end user’s buying decision as long as the decisions comply with the overall goals. And finance will still set the budgets for business units and business users, but it should step away and let users select their own tools within the budget guidelines. Indeed, the enterprise will operate just like a colony of humans, with every worker optimizing his or her IT decisions within the overall company guidelines. Yes, to attain the full benefits of flexibility and agility of the cloud, enterprises need to learn to govern it the ants’ way.

This approach is certainly not without its challenges. While ant colonies have no issues with guidelines enforcement as ants are “compliance hard wired,” we certainly can’t say the same about human IT end users. Hence, IT’s issue will be how to enforce policies while still enabling users to enjoy the benefits of the cloud model. This is a non-trivial challenge for which there are no easy answers…yet.

Is End to End Really the End All? | Sherpas in Blue Shirts

It’s all the rage. Global organizations are starting to take a more “user” centric view of process workflows and operations. As opposed to organizing their delivery capabilities around discrete functions like procurement, finance and accounting (F&A), and HR, the world’s leading firms are organizing around end to end (E2E) processes like Procure to Pay, Hire to Retire, and Record to Report. But is E2E simply a “Hail Mary” pass, a wishful attempt to find value beyond labor arbitrage? Or, as evidence suggests, are the benefits – e.g., better EBITDA, tighter compliance, and greater financial control – real and proven?

A comprehensive CFO survey IBM conducted last year clearly demonstrated that organizations that consistently outperform their peers in EBITDA do, in fact, organize and deliver their global services around principals consistent with an E2E approach. Additionally, these companies all have standardized finance processes, common data definitions and governance, a standard chart of accounts, and globally mandated, strictly enforced standards supporting these E2E processes.

Everest Group’s experience supports IBM’s survey results. And while it seems clear that every large, complex global organization should be chasing E2E in order to improve results and reduce risk, it’s important to note that doing so is neither easy nor without challenges.

To realize the benefits of E2E, Everest Group typically recommends a developing a three- to five-year roadmap with a heavy focus on building the business case, defining the target operating model, and managing stakeholder expectations and change.

Roadmap

Yet even the best game plan will have to address key challenges, including:

  • Fragmentation – The core of many E2E processes, F&A, is often fragmented in large companies. Finance processes are commonly distributed not only by business unit, but also often by geography. A global rationalization of F&A to understand the base case (current state) is a critical first step.
  • Vision – It is essential to document and agree on a common target operating model definition for each E2E process which details:
    • activities, standards, and data definitions
    • a common set of E2E process metrics used to measure performance, provide transparency on delivery performance, and underpin dashboard reporting
    • a framework for controls, oversight, and balance sheet integrity
    • a compelling and thorough business case that clearly defines the current state, investments, and future benefits
  • Technology – Even under the best of technology frameworks, a single, global instance of an ERP system like SAP, a further “thin” layer enabling technologies and tools, may be needed to drive standardized processes.

No, E2E is not a Hail Mary pass, but rather a sustained and balanced drive down the field for a game winning touchdown. Success will require strong leadership, talented personnel, technology, a sound game plan, and solid coaching staff to pull it all together, building momentum and confidence along the way.


Related Blog: Building a Robust Global Services Organization

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