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Commentary: Developing Processes in a World of Plug and Play Managers

Too often companies turn to technology as a panacea to bolster lackluster corporate performance and remedy a problem that could be fixed with process redesign. Here is a perspective on why technology is often part of a solution, but seldom the major driver of change.

By Craig Fuller

Technology facilitates a significant amount of the explosive global economic growth. It has enabled businesses to exchange information with one another, and has allowed global corporations to make effective decisions. Information exchange is imperative in any business, especially in those with global operations. While technology enables information exchange, process design and execution holds the key to successful supply chain management.

The later decades of the 20th Century saw a major change in how people view technology. Prior to the explosion of consumer goods and mass retailing of the last 30 years, when a machine broke, one could expect to go to a technician and pay to have it fixed. The technician would charge a fee in return for fixing the defective or broken device. That is no longer the case. Today it is often much cheaper to just replace, particularly when one considers the cost related to inconvenience. Often, the broken item can be replaced by a newer one that performs better and is less expensive to operate. This is particularly true as more products incorporate digitized components.

An entire generation has gown up with this perspective. They expected that products or components should be replaced every couple of years because they will either be obsolete or the newer version will be more efficient.

This plug-and-play generation is now beginning to come to power, and still has the tendency to believe that technology or product replacements can fix an out-of-date process. If something is not working, buy another one. If a process is not working change the software. Such is the plug-and-play world.

Working with plug-and-play managers can be challenging. They have been taught that new updates will emerge every few years, and if the existing version does not work well, it could quickly be replaced.

In large firms, system developers may not be familiar with the firm’s operating processes, but they are often focus on ensuring that technology is aligned with the operating goals of the company.

They often make snap decisions and show limited tolerance for system breakdowns. Not surprisingly, they may attempt to encourage the development of technology rather than focusing on understanding and refining the operating processes.

Often their education background has encouraged this. Instead of learning complicated formulas by rote, the use of programmable calculators has been encouraged. For quick answers, they went to Internet search engines and did not have to complete the tedious manual searches through textbooks or libraries. Written communications, spelling and research have been made much easier by technology.

Technology has become a close friend to these would-be managers. They are able to move beyond the questions of why and how and focus on the question of what technology can be implemented to solve the problem. In fact, it seems technology has become panacea for their business problems.

Unfortunately, business does not necessarily work this way. Firms are not computers, and processes are not software. You can not always insert a new technology and expect everything to work perfectly. Too often, firms invest in technology without understanding its impact on the overall operation. In large firms, system developers may not be familiar with the firm’s operating processes, but they are often focus on ensuring that technology is aligned with the operating goals of the company.

Too often management believes that failure can be addressed through new technology and may attempt to fix an issue with technology that should be fixed with process redesign. While technology may be a part of the solution, usually it is not the major driver of change.

As an example, a large transportation company desired to update its driver dispatch process. Initially, the firm’s dispatch system was extremely simple. Once a customer called, the firm’s system used a paging system to communicate with a potential driver for the load. The driver was notified about the load and requested to call in. When the driver called in and read the load information, the driver was placed in dispatch status.

As the company grew, the dispatch system was enhanced to send the driver a complete message including load information. The message contained all the information required by the driver who only had to call and confirm the load.

As technology became more sophisticated, the firm adopted two-way pagers so that the driver was able to send in an automated response that he had received the message and would comply with the load information Technology had made the process very easy, and the dispatchers loved using the automated system. They like it so much that they asked for a number of enhancements.

They realized they could send fuel-routing information, log-book information and even track the driver through each stop. The process was simple and automatic. There was no need for the dispatcher to interfere. The dispatch process went from five minutes to under 30 seconds.

The dispatchers essentially became robots, and stopped asking questions. The firm grew and more functionality was added. Each manager had their own specific functionality added to the system. The goal was automation. Eventually, the dispatch process covered every available scenario. The only problem was that the dispatch process went from 30 seconds to 10 minutes. What happened?

As the system developers worked to meet the needs of specific managers, they inserted process after process onto the application. The managers would ask the IT department to add a simple process enhancement, and the IT department would complete their request without following their lead.

Department managers would outline their request to the system developers and leave the “Creative people” to do their magic. Eventually, the majority of the development time was spent integrating disparate processes to work with together. The system was out of date. But since the managers wanted a simple process fix, they were not concerned about the impact on other processes, nor the elimination of old systems.

As users circumnavigated through the increasingly difficult applications, managers created more and more rules to keep the users from outsmarting their designs. This cycle continued as the firm aged.

One day, the company bought a new dispatch system, and realized they had an inadequate process. No one in the entire company was sure why such a simple task had become so complicated. No one could even determine what the different applications did.

The firm had relied too much on technology to solve the process problems. The managers kept adding rules in the technology, yet never changed the operating process to address their concerns. The developers spent 40 percent of their time integrating components and ensuring compatibility, slowing the growth of innovation at the company.

It was always easier to rely on programming changes, rather than to examine processes for efficiency and effectiveness. The result was millions of dollars lost in a lack of productivity due to process waste. Competition caught up to the firm, and market share began to decline. Middle-management did not understand the nuances and business justifications of the existing processes. They were told that it was the only way to dispatch a truck.

Eventually, they stopped asking deeper and more pressing questions. They were not encouraged to look at their operating processes for efficiencies. As a result of these circumstances, this firm nearly declared bankruptcy, before being purchased by a more innovative competitor. The trucking firm had become a slave to its technology. Instead of driving the system, they allowed the system to drive them.

When the new owners examined their systems, they found them inadequate and the processes inefficient. Initially they were confident that there was a better explanation for the establishment of such an inefficient system. But they never found the rationale for it. Eventually, most of the middle-management and many of the front-line people were replaced with innovative and dynamic people that questioned and searched for better answers.

The firm must educate the users so they understand the processes and have a great appreciation for the interrelations of the different systems and processes.

“Creative people do not need direction. They are best left alone to do their work.” This is common point of view. Yet, it is incomplete and inadequate. Creative people need direction, especially when dealing with mass changes in a firm’s operating processes.

The creative types, if included in the process design, can serve as a great resource in eliminating waste. Not only should they be included in the initial design, they should also be encouraged to explore the rationale for the requests. At no point should anyone say, “That’s the way it always has been done.” This is a cop-out and can close great opportunities for the elimination of process waste.

If left to their own devices, they may create a complicated and ambitious system that neither meets nor solves the needs of the user. If the technology is out-of-touch with the front-line user, the investment may never realize its full potential. Front-line people need to have a say throughout the technology development. They should be asked to outline how they achieve certain tasks. In the example of the trucking company, the dispatchers should be interviewed to outline how they go about dispatching a truck. One must be very careful to allow the front-line user to outline all ways they circumnavigate the system, even if the way they chose to operate is against policy. This will help identify the inefficient processes. If the user opts to bypass the company’s systems and performs successfully in their job, then the systems they are by-passing are likely a waste, or outdated.

Firms should have an inventory of every system they use. This inventory should be more in-depth than a superficial list of systems and hardware. It should show the interrelations and interactions between systems. The goal should be to determine the most routine processes, and ensure that the technology simplifies, rather than complicate operating processes.

The systems should be linked as close as possible with the company’s operating process. If the operating process is very different than the technology, then the firm should determine the most efficient process and then adopt the technology around this operating scenario.

The firm must educate the users so they understand the processes and have a great appreciation for the interrelations of the different systems and processes. They should be encouraged to provide suggestions and feedback on the various processes. By the end of the initial education process, they should be able to identify the short-comings of the technology, and will additionally have an idea of improvements that can be made to the functional operating process.

This initial development could take months, perhaps even years, but will prove well worth the investment. This process will also allow the firm to identify wasteful systems and technology that fails to deliver an appropriate return. If effective, the firm should be able to innovate more expeditiously in the future without being constrained by the lack of synergy in the various systems.

Firms must also create process systemization. They need to ensure that every interaction with a customer is consistent. The customer should be able to expect the same experience every single time they interact with the company. This only happens with systematic processes.

Process systemization can only occur if the firm has determined the correct way to handle a task. It must be documented and everyone must follow the same process. The front-line people must know the correct process, and rely on it to deliver a consistent experience.

Our plug-and-play managers understand this world as well. It is very familiar to them, although they may not understand how these systems are developed. Surely every one of them has paid a visit to McDonalds, the king of process standardization. You can visit any franchise, and expect to have a consistent experience, regardless of whether you are in New York, Toronto, or Hong Kong. This is because McDonald’s documents and systemizes everything. Their processes are about delivering a consistent experience, regardless of geography. The technology only enhances the system, and gives McDonalds a unique advantage in delivering a consistent system with little apparent waste.

Other firms can enjoy this level of systemization as well. In order to achieve this, they must have documented procedures, an inventory of processes and systems, and should use technology to facilitate the development and execution of a systematic experience.

Plug-and-play managers may have a few challenges ahead in adapting to a culture where technology does not fill all gaps. But by focusing on systematic design and implementation of processes, they can prove to be more successful at managing their empires.