Properly Defining Enterprise-wide Entities: The Critical Step

Tom Valva Sr. Director, Internet & Infrastructure ADP, Inc. Retirement Services Analysis: The Critical Step

Analysis – The Critical Step Large BPM integration initiatives can be frighteningly complex technology is often the ‘easy’ part of the job Organizational silos (silo-orgs) make integrative BPM initiatives particularly difficult Organizational ‘silos’ – why they exist; why they’re resilient, and why they cannot be ignored Silos often exist for good reason Silos are usually not 100% independent Integrative BPM initiatives often want to ‘break down’ silos, the better approach is to ‘drill-through’ Analysis and management techniques that can help Understanding silo-org’s current point in it’s lifecycle is critical Finding the powerful actors and understanding power A key negotiating technique that can make the difference

Complexity and Opportunity Identifying organizational entities as complex is not enough We must understand the sources and nature of this complexity As analysts, architects, and software engineers, we are called upon to engineer the illusion of simplicity in these complex environments We must learn to marshal the proper techniques for dealing with silo-orgs Previously, limiting the scope of large BPM projects was a viable technique in complex environments Avoidance or scope limitation may not be a viable strategy in larger integration projects Much of the ‘Low Hanging Fruit’ has been picked Talk of “tearing down” silos premature and uninformed Process Automation within silo-org may be ahead of, or far behind intra-organization BPM initiatives Significant benefits can accrue when the analysis is more comprehensive Simpler designs patterns can result that are more flexible than might otherwise be achieved

Complexity and Opportunity Margin/Budget pressures Supra organization may push cost reduction initiatives to reduce redundancy Reduction of redundant infrastructure Centralization of staff services, Finance, HR, Procurement Operational efficiencies Service continuity requires single point of entry to CRMs with navigation to silos of expertise Combined billing, reporting, compliance Strategic “bundled” products/services, and operational efficiencies demand integrated solutions Combining product/services “bundling” as a marketing strategy Client portals, common information shares via pub/sub Integrated security – single-sign-on, federation, role management

Complexity and Opportunity Tremendous pressures occur when intra-silo integration is attempted Organizational infrastructure and routines are threatened, causing political turmoil Architecture groups are often seen as elite outsiders, removed from “real” issues Methodologies might be different; RUP versus Agile, Test Driven, None Technological approaches differ (Java vs. .NET, Mainframe vs. Server) Analysis of silo-organizations cannot be done from afar Isolated Architecture groups with a corporate mandate often fly too high to see the details, and pick the easiest targets to ensure success Avoiding or generalizing silo complexity leads to problems down the road Solutions become too specific to the most significant silo (revenue, P/L) Required flexibility is often sacrificed All organizations (and silo-organizations) have life-cycles Knowing where a silo-organization is in it’s life-cycle can be critically important Organizations have different characteristics depending on their current life-cycle position Life-cycle position can define culture, organizational power patterns, and level of bureaucracy

Complexity and Opportunity Level of Funding Differs Supra-organizational integrative BPM initiatives might not be funded by the Supra-organization Unfunded “mandates” conflict with financial planning in the silo Best if funding is provided by supra organization Supra-Organization ability drive integration initiatives Silo-org “strength” and ability to resist can be significant Standards compliance is not enough; too easily ignored Tying BPM initiatives to “hard dollar” measures is best C-Level executive sponsorship is often necessary Focusing on the largest silo skews perception Assuming the largest silo is the most complex, may be simply the most scalable and therefore the largest Organizational routines may be much simpler in the “scaled” business Pressure to deliver can result in non-optimal results Too many assumptions Simplistic design patterns Insufficient flexibility

Analyzing Organizational Silos What exactly is a silo-organization? An organizational silo is defined as a distinct entity, with independent characteristics operating within the larger supra-organization Silo-orgs often have distinct operational routines and management Silo-orgs have their own mission, and often are their own profit/loss and budget centers, they are often ‘divisions’ Silo-orgs often have independent technical organizations and infrastructures, particularly where those infrastructures are critical to serving their specific market segment Why do silos exist? A silo organization may serve a specific market segment related or completely separate from other markets serviced by other silos Same is true in non-profit and public sector, areas serviced may be distinct from one another, requiring different skills and routines Regulatory coverage may force separation Acquisitions & organic ‘related’ growth in private sector, administrative combinations in public entities can result in siloed organizations

Analyzing Organizational Silos The supra-organization may be a confederacy of silo-orgs Supra-organization might be operationally weak, and cannot exert enough control to sponsor major integrative initiatives Supra-organization may struggle to gain compliance on initiatives because its seen as irrelevant by silo-orgs “ Holding company” mentality: supra-organization is really a reporting entity, a “roll-up” Largest silo-org may “act” as the supra-organization The “bully effect”; One silo attempts to exert it’s control over others Larger silo’s operational routines and systems may not fit the smaller silos Larger silo-orgs will be less likely to agree to modifications their systems or change their routines Lesser silos build resentment, mistrust, go into defensive posture

Analyzing Organizational Silos Silo-orgs often do share some routines, technologies, and features Some computing infrastructure (email, networking, security) Financial roll-up reporting Billing may be fully or partially integrated Executive participation in entity-wide committees However, silo-orgs often operate quite independently Related but separate market requires modified focus Completely unrelated market Related market but regulated distinctly Custom systems and operational routines necessary to provide product/service Client may be defined differently Custom development methodologies, metrics

Analyzing Organizational Silos Silo-orgs may service the same client Related products/services from the same enterprise, different silos Service infrastructures are often not integrated, CRMs, CTI Client ownership can be a critical issue Does the supra-organization own the client? Cost may be incurred to “globalize” client ownership Not getting client ownership right confuses clients and highlights non-integration Significant value may be identified by “bundling” services Sum of products/services viewed as greater than components Client retention increases, “stickiness” Lifetime total client value increases One-stop shopping often alluring to clients Unified service model Simplified billing and account management

Analyzing Organizational Silos Silos can have distinct cultures Retention of previous organizational identity after acquisition Geographic differences Technological culture Varying technologies, Java vs. .NET, Mainframe vs. server Varying methodologies, RUP vs. Agile, Waterfall, None Operational culture Large custom approach versus “in-box” scaling Relative financial strength and performance Relative political strength

Helpful Analysis Techniques Understanding organizational life-cycles Putting the organization “on the couch” Where is the organization on the lifecycle curve? How might our experience differ based on the lifecycle curve? Power dynamics Who has the power and why Targeting the right people and processes Working the informal organization Identifying interests versus positions Why organizational conflict is so common and what to do about it Some key techniques

Organizational Lifecycles Adize’s work on organizational lifecycles Ichak Adizes, Ph.D. – “ Managing Corporate Lifecycles ” Every organization has a lifecycle Where the organization is on it’s life-cycle curve defines it’s characteristics and behaviors The organizational lifecycle defined Stages of organizational life: Courtship – early conceptual stages Infancy – organization launched Go-go – early organizational success Adolescence – first signs of trouble Prime – well coordinated efforts The Fall – complacency, rigidity, aristocracy, hubris

Organizational Lifecycles Ascendant qualities in different stages, P,A,E,I Performance Administration Entrepreneurial Integration Stages of organizational life – fatal events: Courtship – affair Infancy, Go-Go – infant mortality Adolescence – founders dilemma Prime – divorce Problems at different lifecycle stages Normal versus Pathological problems Pathological problems lead to “death spiral” Solutions are often structural, and move the organization up the curve if successful

Organizational Lifecycles BPM, integration initiatives at different lifecycle stages Adolescent and Prime organizations are most probable targets Go-go organizations might be easiest to get a project buy-in, but continued focus could be an issue Adolescent organizations are the most problematic, power shifts, people versus process issues, inadequate methodology and consistent project management are an issue Prime organizations are best because the balance between PAEI is there by definition. Primes have the right mix of process and execution, and management focus. Pick the right targets In prime organizations, the target is a process. Initiatives will be prioritized in an orderly fashion, and executed on in relation to their priority In an adolescent organization, shifts could occur; sponsorship by a founder may be necessary, but a process may exist as well; cover the bases In a Go-go or infant organization, sponsorship by a founder is necessary, process for prioritizing initiatives will not be mature, or will not be rigorously adhered to

Power Dynamics Who has power, authority, responsibility Critical to understand who are the stakeholders and “movers” What kind of power? Expert versus Legitimate power Leaders often exercise legitimate power, but often are experts as well Expert power derives from workable knowledge Legitimate power derives from organizational office and position Organizations early in their lifecycles have tighter power structures Lines of communications are shorter, decisions are made quickly Integration among power-holders is high Power holders are often “founders” Organizations in prime often have more “legitimized” power structures Less individual influence More emphasis on process Adolescent organizations shift between legitimized and expert power structures Requires more effort to achieve buy-in Process may exist, but powerful individuals may disparage it

Power Dynamics Informal organizations Learning to identify the “informal organization” can be a key to success Usually consists of 2-5 powerful individuals who decide what gets done This structure is usually operative in adolescent organizations, but may also be found in prime ones, though less frequently Members are often the “founders” Informal organizations often operate independently of defined processes and can sanction or stop initiatives

Interests versus Positions Integrative initiatives will often run into initial resistance Arguing starts with statements of why integration won’t work Unique nature of the silo-org is frequently stated as a reason to avoid integration These are “positions” that are prepared and defended Positions are a form of “offensive defense”, meant to frustrate and defer outsiders Focusing on common interests Bringing the conversation to a higher-plane is often necessary Focus on client-value of integration Overall supra-organization goals like stock price, which is not tied directly to silo-orgs, but is likely a benefit for them Distributive versus collaborative negotiation techniques Long term relationships Shared supra-goals Assure silo-orgs existence Affirm need to cooperate

Summary Integrative BPM initiatives will become more complex Integrative solutions yield key advantages to organizations and their clients Understanding the nature of silo-organizations is essential Analyzing the organization’s position in their corporate life-cycle can assist in understanding organizational dynamics Understanding power dynamics and positions versus interests help prepare architects, project managers for conflict arising from integration initiatives Together, these techniques can form a powerful analytical heuristic for dealing with the “soft-side” of complex BPM initiatives

Thank You! Tom Valva Sr. Director, Internet & Infrastructure ADP, Inc. Retirement Services Contact Information: 973-712-2450 [email_address]

Properly Defining Enterprise-wide Entities: The Critical Step

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Properly Defining Enterprise-wide Entities: The Critical Step