New performance management trends in Saudi Arabia

The beginning of February accommodated an important QPR visit to Saudi Arabia where I had the opportunity with my colleague, Tero Aspinen, to meet local QPR partners and customers. One of the highlights of the visit was meeting with PMCGA (Performance Center for Government Agencies), a QPR key customer. PMCGA carries out tasks such as measuring productivity rates of government agencies by checking the optimal use of human, financial and material resources. In effect, it is the key organization that supports Saudi Arabia’s government agencies in performance management.

QPR visits key customer PMCGA in Saudi Arabia

Reflecting on the above, interest in Kaplan & Norton’s balanced scorecard, as a strategic planning and management system, has increased in recent years in the Middle East. Demand seems to be growing especially in the public sector, where there is regulatory pressure to raise transparency and efficiency. Meeting with customers in Saudi Arabia helped us to gain important insight about the growing market opportunities within the region.

Another exciting trend is the spreading interest in Enterprise Architecture (EA). EA is starting to gain visibility in the agendas of organizations. Organizations seem to be especially interested in combining balance scorecard and strategic level performance management with EA so as to generate a holistic view of companies’ operations. The main reason for this is that EA is a discipline that covers all the dimensions that are needed to align strategy with business operations such as organizational structures, processes and It systems.

The recent change of regime in Saudi Arabia will inarguably bring about both big and small changes in governance and organizational structures in the Kingdom, including ones affecting PMCGA. But the above mentioned boost in demand for operational excellence through increased agility and efficiency is a refreshing direction.


Sakari Lapinsuo

https://fi.linkedin.com/in/sakarilapinsuo

Is change your friend or your enemy?

Change has become constant in global markets. Globalization and digitalization have created new market dynamics, lowered traditional barriers of entry in many markets, revolutionized distribution in many industries and have given customers more choice and influence than ever before.

This kind of environment creates exciting opportunities but is also makes and breaks organizations at a much faster pace. They face increasing number of challenges in global competition and their strategies need continuous revising and refining. This means that strategy execution has to be more agile than ever. Change is good for those who understand their position in this new environment and are able to pursue arising opportunities faster and more effectively than the competition. Change is their friend.

This is why we have taken as our mission at QPR to make customers agile and efficient in their operations. We provide insight to their business operations – through modeling, analyzing, measuring and performance monitoring. This insight enables customer organizations to streamline and improve business operations and to execute their strategies swiftly and effectively.

In these economically challenging times, there is a strong demand for this. Last year, our net sales growth accelerated towards the end of the year and reached +16% organic growth in the fourth quarter 2014. This development shows that in tightening competition, there is a growing demand for tools to drive profitability and operational improvement initiatives. This is why we are forecasting that our growth will continue also this year.

How are things in your organization? Is change your friend or do you sometimes feel threatened by it?

Jari Jaakkola

CEO

http://fi.linkedin.com/pub/jari-jaakkola/4/3ba/2b 

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/

IRM UK EA/BPM conference - Achieving business outcomes with enterprise architecture a major theme in the event

Last week QPR sponsored IRM UK EA/BPM conference that took place on 16-18 of June 2014 in London. QPR’s UK reseller Performance Analytics joined QPR in the event to promote QPR’s comprehensive and innovative enterprise architecture (EA) offering. The event brought together both EA and BPM experts from several countries and provided a venue for excellent discussions and presentations.

QPR team in full action at the stand

A clear theme in the EA area was that EA should focus on delivering concrete business outcomes and provide value to the key stakeholders of an organization. This theme was strongly emphasized in the event key note speech “Who Cares?: Getting a Grip on your Stakeholders’ Needs and Expectations” presented by Roger Burlton from BPTrends Associates. Burlton highlighted that the starting point for EA and BPM efforts should be to look at the needs of the main stakeholders’ of the organization – such as customers, owners etc. – and focus the efforts on delivering value to them. Burlton also emphasized the importance of performance measurement as part of EA work to demonstrate the results to the management and highlight the results with visually appealing dashboards and reports. Other dominating EA topics in the event were the significant role of EA in business transformation and strategy execution, as well as business architecture, which had its own track in the conference agenda.

As usual, the discussions at the expo floor proved to be very interesting and QPR’s comprehensive and innovative EA offering created a lot of interest.  Notably, the QPR business driven approach to EA received a lot of interest among EA and BPM practitioners. This was a really positive sign, as typically the ideas of the methodology gurus presented in conferences are ahead of the actual, real-life practices in organizations. But this year’s IRM UK event indicates that the gap between business outcome driven EA and traditional IT oriented EA is narrowing, as practitioners also seem to be keen to adopt this new approach. Or is there still a clear gap? Thoughts?  

Tero Aspinen

Director, Partner Management

fi.linkedin.com/pub/tero-aspinen/2a/592/344/