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Transcript of Break Down the Walls: How to Structure your Reporting Lines and Integrate a Global Model Across an...
Break Down the Walls:How to Structure your Reporting Lines and Integrate a Global Model Across an Extremely Siloed Organization
Darin M. BallDirector, Customer FinanceDS Services of America, Inc.
“Functional Silo Syndrome”
• The term “Functional Silo Syndrome” was coined by Phil Ensor in 1988 to describe an organization whose functional groups work independently, with their own agenda and set of unique goals and objectives.
• Silos are created from an organizational compulsion to control. The perceived need to control is due to a lack of trust and suppresses creativity, narrowing the view of the employees and limiting their potential and impact on the organization.
Managing Through Silos
Sales/Marketing Department
Prospecting
On-board customer
Credit Department
Assess risk of prospect customer
Establish payment terms
Customer ServiceDepartment
Account Set-up
Order Entry
Account Maintenance
Billing Department
Invoice Generation
Tax Documents
Collections Department
Past Due Follow-up
Dispute Resolution
Determine Bad Debt
Provisions
Cash ApplicationDepartment
Apply cash receipts
Maximize Auto Application
Rate
Order-To-Cash Process
New Business Acquisition
Credit Management
Maintain account and enter new
orders
Bill the customer per specification
Collect on open customer
receivables
Apply payments timely and accurately
Goal: Revenue Growth
Goal: Mitigate Risk
Goal: AccurateOrder Fulfillment
Goal: Timely Invoicing
Goal: Maintain Current Aging
Goal: Timely Application of Cash
Process vs. Organizational Structures
• GPO Models can run horizontally, vertically, or in parallel…
GPO Model ExampleCEO
VP - Sales & Service
Department Head
Specialist
Specialist
Specialist
Specialist
VP - Finance
Department Head
Specialist
Specialist
Specialist
Specialist
VP - Production
Department Head
Specialist
Specialist
Specialist
Specialist
VP - Procurement
Department Head
Specialist
Specialist
Specialist
Specialist
VP - Logistics
Department Head
Specialist
Specialist
Specialist
Specialist
GPO Model Example
Global Process Owner
Global Process Owner
Global Process Owner
Global Process Owner
CEO
VP - Sales & Service
Department Head
Specialist
Specialist
Specialist
Specialist
VP - Finance
Department Head
Specialist
Specialist
Specialist
Specialist
VP - Production
Department Head
Specialist
Specialist
Specialist
Specialist
VP - Procurement
Department Head
Specialist
Specialist
Specialist
Specialist
VP - Logistics
Department Head
Specialist
Specialist
Specialist
Specialist
Purchase-to-pay
Order-to-cash
New product development
Lead-to-order
Global CEO
Global Sector CEO
Business Unit CEO
Business Unit CEO
Business Unit CEO
Business Unit CEO
Global Sector CEO
Business Unit CEO
Business Unit CEO
Business Unit CEO
Business Unit CEO
Global Sector CEO
Business Unit CEO
Business Unit CEO
Business Unit CEO
Business Unit CEO
Dysfunctional GPO Model Example
Dysfunctional GPO Model Example
North American Region
CEO
Asia Region
CEO
Global CEO
Global Sector CEO
Business Unit CEO
Business Unit CEO
Business Unit CEO
Business Unit CEO
Global Sector CEO
Business Unit CEO
Business Unit CEO
Business Unit CEO
Business Unit CEO
Global Sector CEO
Business Unit CEO
Business Unit CEO
Business Unit CEO
Business Unit CEO
Dysfunctional GPO Model Example
North American Region
CEO
Asia Region
CEO
NA Sector
CEO
NA Sector
CEO
ASIA Sector
CEO
ASIA Sector
CEO
Global CEO
Global Sector CEO
Business Unit CEO
Business Unit CEO
Business Unit CEO
Business Unit CEO
Global Sector CEO
Business Unit CEO
Business Unit CEO
Business Unit CEO
Business Unit CEO
Global Sector CEO
Business Unit CEO
Business Unit CEO
Business Unit CEO
Business Unit CEO
Previous Efforts to Break Down the Walls
• Efforts over the years to break down silos:• Supply chain management• Process re-engineering• Shared Services business models• Six Sigma/Lean manufacturing• ERPs
• In many cases these efforts fail. Why?• Lack of a clear plan• Poor communication • Poor change management• Undisciplined project management• OWNERSHIP
Global Process Ownership is Trending
Plan-to
-resu
lts
Time-to
-pay
Account-t
o-report
Purchase
-to-pay
Customer-t
o-cash
0%
5%
10%
15%
20%
25%
30%
35%31% 30%
28%26%
10%
Processes with Global Ownership
Source: Enterprise process ownership study, The Hackett Group, 2013
Global Process Ownership is Trending
Processes are defined and implemented regionally
Processes are defined globally but implemented regionally
Processes are defined and implemented globally
Regional process owners
Global process owners
Local process owners
No centralized process ownership
Source: Accenture research report: Trends in Shared Services
The majority of companies have globally defined processes but leave the implementation and management of those processes to regional resources
The role of the GPO defined
• Global Process Owner• Approves the process standards, policies, guidelines, and KPIs;• Sets priorities for process improvement projects;• Coordinates process management with performance
management, change management, and technology changes;• Ensures alignment across all organization sub-processes;• Ensures all technology, application, and data changes are aligned;• Responsible for the overall performance of a specific global
process.
What Skills Should a GPO Have?
Risk Management
Accounting
Negotiating
People Management
Project Management
ERP Awareness
Business Acumen
In-depth Process Knowledge
Influence and Authority
Communication
Change Management
0% 10% 20% 30% 40% 50% 60% 70% 80%
16%
24%
24%
26%
29%
34%
36%
57%
67%
68%
71%
Source:Tungsten/Sharedserviceslink.com survey 2014
The Importance of Influence
“A leader must inspire, or his team will expire”-Orrin Woodward
mo·ti·va·tionnoun \ˌmō-tə-ˈvā-shən\ : the act or process of giving someone a reason for doing something : the act or process of motivating someone in·spi·ra·tionnoun \ˌin(t)-spə-ˈrā-shən, -(ˌ)spi-\ : something that makes someone want to do something or that gives someone an idea about what to do or create : a force or influence that inspires someone The difference between good leadership and great leadership is the difference in motivating your team and inspiring them. To motivate them is to expect in return that which you are asking of them. To inspire them is to release their full potential and let them exceed your expectations…and theirs!
Implementing a GPO model must address the 4 key areas of a process
People• Organizational Structure• Alignment of goals• Training/development• Collaboration
Processes• Standardization• Automation• Implementation of best
demonstrated practices
Technology• Automation• Workflows• Comprehensive, real-time
reporting capability
Performance• Cost reduction• Continuous Improvement• Sustainable/repeatable• Predictive
People:• Do I have the right people?• Have I created a culture of trust or of control?• Have I provided the proper training?• Do I have the appropriate support/authority?
Processes:• Can I repeat my successes and ensure
consistency?• Am I measuring performance based on best-in-
class or prior performance?
Technology:• Is my technology enabling or inhibiting?• Does my technology provide the level of visibility to ensure
success?
Performance:• Have I established the proper KPIs to measure and
reward performance?• Are my goals smart and do they encourage
collaboration rather than silos?
Roadmap for Building A GPO Model
Transform Achieve
Continuous Improvements
Process Manage
ment
Performance Management
Breakdown of
Barriers
LeadershipClear Vision
Change Management Plan
ConsistencyCost Savings
Improved performance
Satisfied CustomersEBITDA
Build
• Clearly define the role and scope of responsibilities
• Ensure proper level of authority
• Ensuring senior management support is critical
• Gain a full understanding of the end-to-end process
• Brush up on your change management & project management skills
• Ensure the role is supported by proper governance
• Establish culture of continuous improvement
• Sharpen your influencing skills
• Manage to clearly defined metrics
• Reinvest into business with savings realized
• Improve customer retention• Positively impact the bottom
line
• Global Process Ownership is not “one-size-fits-all”• Building trust is paramount to tearing down silos• Whether vertical, horizontal, or a hybrid, goals and objectives
must be aligned with the business owners• The term “global” can refer to ownership of processes across
the pond, or across the enterprise• Ensuring senior management support is critical• However, don’t let the lack of support to derail your success• Brush up on your change management & project management
skills• Sharpen your influencing skills – Inspire rather than motivate
Key Takeaways