Is a lack of Business Process Management imperiling our economy?
- January 16, 2009
- 1 Comments
Phil Gilbert, President and CTO of Lombardi, recently wrote an article for CIO.com, where he argues that the melt-downs in banking and in the automotive industries were primarily from a lack of visibility to crucial data and processes, rather than the common bogeymen of Unions and Greed. Well sure, Greed may have been part of the problem on Wall Street, but Phil makes a persuasive argument that lack of understanding and visibility led to underestimating risk. He also explains why Detroit’s problem has been primarily a white-collar problem rather than a Union problem.
Phil goes on to take a shot at off-shoring:
Ironically, the off-shoring, which was the first response to the symptoms of the artisan-economy-on-steroids, served to increase risk and darkness even as it hid behind the allure of cost savings.
Because the growth in the service workforce was not easily scalable (costs went up in a linear fashion as heads were added), CEOs found it easier to fire local workers and hire distant ones who were paid a fraction of their U.S. counterparts. These executives took the easy way out, often-times they actually added headcount to an already-unwieldy process and boasted about their “savings.”
So now our U.S. companies are in increased peril: white collar tasks are more opaque than ever, while customer and product risks are on the rise.
I think this is a truly concise way to capture the very real risks of off-shoring. I’ve tried to express the same risk-reward equation to others in the past, but Phil has hit upon a much better way to explain it and relate it to current events.
About 10 years ago, the company I was working for was persistently trying to sell services to GE, with mixed success. One thing we learned was that GE had some really deeply ingrained principles around business, and if you ran afoul of them you would not get the sale. At one point I remember a GE exec telling us that GE would not let another company get between itself and its customers on the Internet. Its a good policy: you have to have an ear for the voice of the customer to react to the market effectively. I think too many companies have lacked this same policy with respect to their processes:
Let no company come between us and visibility into our core processes. You cannot effectively off-shore or implement processes in remote locations without better process management so that you retain visibility to the big-picture data about the process as well as the internal workings of the process as needed. As a company, you have to be able to fine-tune your processes to react to market forces depending on the environment, in order to increase customer satisfaction, reduce waste, reduce response time, etc.
Without BPM, the discipline as well as the technology, our service economy might well become bloated and inefficient – Phil makes the case quite well.