What's the deal in LATAM?

My colleague and I did a 3 week road trip in Latin America where we visited some of our  partners and customers as well as hosted several marketing events in different countries such as Brazil, Chile, Mexico and Trinidad and Tobago. It was a great experience as we got firsthand insight of the local business environment in both private and public sectors. During the trip we learned how organizations approach strategy execution and operational development.

Focus on Performance Management and Strategy Execution
What we perceived when talking to customers and partners is that the business environment in Latin America is not significantly different from Europe.  Organizations are facing similar kinds of challenges - political changes, new laws and directives as well as pressures caused by the downturn in economic growth. These pressures force organizations to rethink their strategies and business models and also think how to improve operational efficiency.

However, organizations in Latin America and Europe do differ considerably in the way they approach the above mentioned challenges. In Europe, the market pressures are tackled by aligning strategic requirements with operational development and to support this organizations have already adopted methodologies to measure performance and model operations such as business processes and IT-systems. In Latin America, organizations are focusing, or starting to focus, on making their operations transparent through Performance Management and only few companies have started to model their operations with the goal of making plans on how to improve the performance.

From left: Angel Arturo Perez Cotero (Laguna Verde), Mario Nuricumbo (NG Business Value -QPR partner), Raul Partida (QPR), Tero Aspinen (QPR), Martin Nuricumbo (NG Business Value - QPR partner)

Another focus area for organizations in Latin America is strategy execution and by far the most adopted methodology is Balanced Scorecard. Many companies have achieved brilliant results with this approach. For instance, the largest Nuclear plant in Mexico, CFE’s Laguna Verde power plant, won a prestigious BSC Hall of Fame award based on their successful strategy executions using Balanced Scorecard methodology.

New approaches to operational improvement create interest
When facing the current market challenges, organisations in Latin America are driven to improve their strategy execution and operational efficiency with Balanced Scorecard and Performance Management being the most popular approaches at the moment. But I see great value for organizations when they will, probably during the upcoming years, apply also methodologies focusing on planning and identifying how they can improve their operations based on strategy and performance requirements. In this area methodologies, such as strategy driven Enterprise Architecture and business process modeling as well as Automated Business Process Discovery (ABPD) will offer organizations great value. This provides great opportunities for organization working with QPR as QPR’s total offering supports organizations to formulate and communicate their strategy as well as to monitor and plan the operations to match the strategic requirements.

Raul Partida
https://fi.linkedin.com/in/raulpartida 

Tero Aspinen
http://fi.linkedin.com/pub/tero-aspinen/2a/592/344

Data and processes in Portugal

Couple of weeks ago QPR joined OnGlobal Solutions, our partner in Portugal, to a breakfast seminar in Lisbon titled “Improving and monitoring performance with QPR ProcessAnalyzer”. Sharing the stage was also Link Consulting who presented how process performance monitoring is linked to overall process management and improvement. In QPR’s presentation I concentrated on describing how organizations can get value out of the data that they already have in their existing IT systems such as SAP ERP.

It’s actually surprising how many organizations still improve their processes and performance merely based on a “gut-feeling” and on perceptions of individuals. According to a study we published in September in Finland, about 40% percent of the interviewed organizations said that they are not measuring the performance of their processes and only 1/3 of the organizations measured a crucial KPI like delivery accuracy. Truthfully, these results were a bit shocking to us. But they also showed that there really is a lot to do within organizations when it comes to process performance measurement and monitoring. And the best value can be reached by using existing data.

The seminar presentation in Lisbon and of course data driven process improvement itself generated a lot of discussion amongst the audience. Many of the participants were not aware how much information regarding their process performance and inefficiencies they actually could get from the data they just have “laying around” in their systems. And how easily and visually it can be done with QPR ProcessAnalyzer. The discussion continued also after the seminar in one-to-one meetings with customers together with OnGlobal Solutions and so message of using data to improve processes is well on it’s way in Portugal.

Mika Leonsaari

fi.linkedin.com/pub/mika-leonsaari/3/359/495/



EA – it’s magic!

The leading IT research and advisory company, Gartner, recently made an analysis of the top EA vendors and again assessed each vendor’s entry into its magical EA quadrant. This time around, QPR was one of the shortlisted EA vendors, and we entered the playing field as a new entrant based on Gartner’s assessment of our completeness of vision and ability to execute against it.

So what exactly is our vision?

We believe that EA modeling and analysis alone are not enough to safeguard real business value. To avoid modeling for the sake of modeling, EA initiatives must be monitored and measured to ensure the delivery of a full development cycle and continuous improvement; and above all, EA initiatives must serve a purpose! This purpose can take the form of a strategic goal or a desired business outcome that steers EA initiatives toward a common goal. It all sounds like common sense, right? But in the middle of a diagram jungle and an army of stakeholders pulling you in different directions, it’s easy to lose focus. In our vision, EA brings a unique insight to your operations, which provides decision making support and therefore, allows senior management to execute strategy, reduce complexity and achieve operational excellence.

Now you know our vision, but what does the market think?

Through our daily interaction with many different people and organizations, we have noted that the perception of EA is shirting from an IT centric framework for infrastructure brains to being a tool for senior management to achieve business outcomes. Gartner, too, talks about putting “business objectives and outcomes first in developing EA signature-ready guidance and actions” and leveraging “EA to produce desired business outcomes and guide your enterprise from chaos to competitive advantage”.

With our vision and the shifting market demand in mind, we have developed a unique set of tools, templates and best practices to make our vision of EA come true. Our customers really value our offering for the ability to link strategy with operations and transformation execution packages, the simple and appealing look of the readily configured templates, the pragmatic best practices and  the many EA viewpoints provided to identify change and evaluate business impact.

For more information on our EA offering, visit http://www.qpr.com/QPR_EA-EBPA_offering.htm.

Is your organization using EA to deliver real business outcomes or still trailing behind with countless diagrams?

Virpi Nieminen

fi.linkedin.com/in/virpinieminen

 

Balanced scorecard aligns initiatives. .. And then what?

Balanced scorecard alone is not enough for successful strategy execution. To achieve significant change, it's critical to understand how strategic objectives and initiatives influence organization's business operations and architecture.

Balanced scorecard (BSC) is an excellent framework for defining and aligning strategic objectives and initiatives to support strategy execution. However, many organizations struggle with the discrepancy between strategy execution planning and the actual execution. Based on our experience, the discrepancy is caused by too high level strategic initiatives, which do not take into account organization's existing architecture and operations.

So what should be taken into consideration after a strategy has been defined? How the strategic objectives should be made actionable? You certainly want to avoid your organization ending up in the below situation where planning and execution are going to opposite directions. As per an earlier post by colleague Sami Lotvonen, 44 % of enterprises still fail at strategy execution.

Figure 1 - How not to do strategy execution planning

What to consider in strategy execution planning

Initiatives in BSC are strategic in nature and often drive for significant change. Based on our global experience, initiative planning is often on a too high level and done without proper understanding of organization's current business operations and architecture. To become actionable, the initiatives must cover three vital dimensions of strategy execution: process, people and IT systems. Only by doing this, you get through the strategy execution chain described in the below picture.

 

Figure 2 - Strategy execution chain

Processes
To achieve strategic change, processes must change. You can say that all activities in an organization belong to either core or support processes.  Some processes are automated using a workflow solution or other IT tool and some are based on people, following instructions and formal process models. Especially the latter can be ad-hoc and happen differently every time, giving its own flavor to making changes.

People
Regarding people, you need to consider two aspects: allocating enough resources to strategically important activities and making sure that the people have sufficient competences. Be aware that for most people, the big challenge is to give up tasks that don’t lead toward strategic execution and take on new ones as “walking on the unknown territory” is often uncomfortable. Nowadays it’s more common to cascade balanced scorecard down to individual level so that the high level strategy leads everyday activities.

IT systems
Cloud technologies, big data and mobility open opportunities for completely new business models. Therefore, IT is not only a pre-requisite for efficiency but it should be utilized as a source for innovations and as an enabler for competitive advantage.

Four steps to avoid discrepancy in strategy execution planning
1.       Understand the ‘as-is’ situation of your business operations and architecture.
2.       Consider the three dimensions already when analyzing feasibility of different strategic options. For example, an old technology platform can stop an organization from executing a brilliant strategy. If this is not noticed on time, it will lead to some very expensive corrective actions.
3.       Plan ‘to-be’ business operations and architecture.
4.       Design transition roadmap and deployment for strategy execution.

When in the strategy execution phase, remember to establish continuous monitoring and feedback loops from all three dimensions. This allows you to steer your business towards strategic objectives.

Maija Erkheikki
http://fi.linkedin.com/pub/maija-erkheikki/2/303/a11

Tero Aspinen
http://fi.linkedin.com/pub/tero-aspinen/2a/592/344

Mikko Rajala
http://fi.linkedin.com/pub/mikko-rajala/a/102/179

“You have reached your destination”

When planning your way to a less known destination, it’s good to take a short break and think ahead. If you travel by car, the planning is made easy with the emergence of car integrated navigators. They monitor how much gas we have left or if a road is blocked, reflecting this on our journey. This kind of solution would be perfect in business as well, where planning should be done every day. But often we sit down only once or twice a year when some major strategic lines have to be defined. 

Equally important to reaching your destination, is reflecting on the now; where you are and what you have. That's just what we did recently at QPR Software with a group of colleagues from different units. We know of course well what we can offer in the fields of Process Intelligence, Enterprise Architecture (EA) and Enterprise Business Process Analysis (EBPA), as well as Performance Management. But while doing this reflection, we also observed that our tools enable organizations to know where they are and how to plan forward. 

In a changing business environment, you need to react fast and be proactive. This agility means that all tools supporting operational development must be interconnected, leaving no room for guessing and reducing complexity of root cause analysis.

As said previously, first you need to know where you stand in terms of your operations and see how you're doing. Dashboards and reports using the performance management standards of your choice must be easily available at all times to provide your current status compared to your objectives. When the red light starts blinking, many fail however to discover the real root cause of their current performance problems, because they don’t have the visibility to the actual processes behind them. This can be easily handled by linking performance metrics to the actual processes. 

Knowing your current performance is not just a matter of numbers and sitting down to review your operations. You need facts and process intelligence. Especially when processes become complex and produce vast amounts of data to your business information systems, it's vital to use the information and see what works and what doesn’t. Process tools use the data to provide process intelligence for monitoring performance and gaining visibility needed to make correct decisions on improving and developing your processes. 

After you know what happens under the hood, comes the part where you need to draw the map to your goals. It all comes down to evaluating and aligning your assets against the strategy in order to make your business successful. Your strategy map should not be linked only to the actual performance information, but also to your current as-is enterprise architecture model. Often when discussing with our customers they tell us how important it is to be able to fast track the dependencies of one single item to the tens or hundreds of other items in process, application, information and technology layers.  At first glance the layers often seem to be a complex grid of elements; however the right EA tool will highlight and help you recognize the necessary connections and dependencies. This considerably reduces the needed time to plan a future to-be model and the transformation roadmaps associated with it.

Support for successful business transformation and continuous improvement should remain a high priority. QPR sees that taking a comprehensive approach to develop operations drives sustainable results. Reducing and managing the complexity of operations becomes a key asset in growing organizations. The integration of software tools supporting EA, EBPA, Process Intelligence and Performance Management might not yet be at the same level as a car integrated navigation system, but at QPR we can already offer our tools together as an integrated solution to help the work of business units, planning functions and ICT.

Jussi Siltanen

Product Marketing Manager

fi.linkedin.com/in/jussisiltanen/

THE ANSWER IS 44 (warning: Strategy and Enterprise Architecture used in the same sentence)

It used to be 90. Then, 70. A year ago, it was established at 44. While this is not the answer to the Ultimate Question of Life, The Universe, and Everything, it’s still an important one: What percentage of business strategies fail?

A multitude of reasons and factors explain why strategies or transformational initiatives fail. For example, a long time ago Dr. Kotter found that shortcomings in defining and communicating a compelling vision, and mobilizing around the planning and implementation result in failure. More recently, Dr. Kaplan and Dr. Norton in their book Execution Premium, found that roughly 2/3 fail because a formal strategy execution process is missing. An Economist Intelligence Unit & PMI report from 2013 says the biggest barriers to successful strategy implementation are: The organization lacks change management skills, initiatives are poorly resourced, and the organization lacks project management skills. (They also found out it’s “44”.)

The recommendations from these studies urge  you to embrace a smarter and a more wholesome approach to the execution of strategy. Yet something is missing: a methodology that supports the connecting of strategy to the components of the execution. Let’s summarize from the learnings above and add the missing, connecting piece:

1. Adopt best practises. All of the proposed best practices and improvements are needed. Ensure your team cherishes competences and methods for communications and change management. No excuses allowed!

2. Get organized. For execution, a program office is needed as a mechanism of prioritization and implementation of projects. Also needed is a guiding process that integrates the typically separate corporate activities. This process should be clear to all parties from formulation to implementation.

3. Get systematic. A comprehensive approach needs to be supported by a methodology where things can be connected in a meaningful way: Enterprise Architecture. Yes, that thing that’s based on ancient cults of Zachman and TOGAF, and that uses a clandestine language of ArchiMate to explain, with a holy metamodel, how all things necessary in IT, business, and universe are connected. The novelty in EA is how you use it in a business outcome driven way. EA forces you to define strategy, and its goals with concrete targets. It can also provide transparency – an improved understanding of what can be achieved. Taking advantage of new technology can be enabled by using EA, and it also helps in closing the feedback loop on execution.

With these actions, I believe THE ANSWER will be improved. As my favorite aphorism goes: Current ways of working equal current results; New ways of working equal improved results.

Please comment: Did you already try it – what are your key learnings? What is you way of ensuring the implementation plans are aligned?

PS. Thanks to Gail Severini and others in Balanced Scorecard /Strategy Office Executives Linkedin group for throughly clarifying the topic.

Sami Lotvonen

• fi.linkedin.com/in/samilotvonen/