CXO

Steps to Boosting Business Agility

Steps to Boosting Business Agility

Business agility is about adapting services, people, processes and finances to the changes in business environment. But, in many cases, it is attempted in a fragmented and opportunistic way thus undermining its full potential. How can we define and adopt ONE approach to managing data, architecture, security, and customer community across the enterprise towards best outcome?

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Top 5 Learning Points

  1. You not only have excellence within each of the process dreams but when they all come together at the end, the overall result is a well synchronized and agile result now.
  2. You have to turn data into information, and the information that you create should be directly related to how the business is actually going to make decisions.
  3. The fundamental question I think is how that information is going to be used to either measure the effectiveness of the processes that you have put in place or enable a business professional to make decisions about the direction of his or her particular business area.
  4. It’s the essence of that central governance process that ensures that they all stay in sync with each other and then a series of process review and governance boards that we have in place against which these different teams check in regularly to make sure that they are staying synchronized.
  5. From a systems perspective, when you talk about technical architecture, one of the things I think all organizations are facing now is the fact that our technical backbone is going to be hybrid. It’s going to be a combination of cloud based software as a service, applications and it’s going to be internally hosted.

Show Notes

  • From a systems perspective, when you talk about technical architecture, one of the things I think all organizations are facing now is the fact that our technical backbone is going to be hybrid. It’s going to be a combination of cloud-based software as a service, applications and it’s going to be internally hosted.
  • Take that with just about any data element that in itself is by simplifying the definitions of what the data means in the systems down to that level of clarity it makes the language with which different departments can talk about data with each other much simpler.
  • The fundamental question I think is how that information is going to be used to either measure the effectiveness of the processes that you have put in place or enable a business professional to make decisions about the direction of his or her particular business area.
  • But in absence of just a general governance process that interlinks them, you could have well-intentioned major processes that would go off and re-engineer themselves to be completely incompatible with each other.
  • It’s the essence of that central governance process that ensures that they all stay in sync with each other and then a series of process review and governance boards that we have in place against which these different teams check in regularly to make sure that they are staying synchronized.

Summary

If an organization is growing up at a fast pace, then keeping up the agility intact becomes key. In such scenarios how do people and processes cope up? Also, how does technological sustenance be possible? This discussion sheds light on these concerns and how.

Transcript

Sanjog: The topic for conversation is Steps to Boosting Business Agility. I have with me John Lambeth, Chief Information Officer with PAE. Every organization wants to be agile such that it’s able to adapt services, processes, people, and finances to changes in business environment. However, this effort does not deliver desired results since we are attempting or we have seen many cases where it has been attempted in a fragmented and opportunistic way. So, how can organizations take the necessary steps to define and adopt a more holistic approach to boosting business agility and that’s what we wanted to discuss today.

Business agility is relative and it is objective while it is still about responsiveness and adaptability. You go to different people in an organization, you’ll get different answers. With that lack of clarity or lack of benchmarks, how can we ever be on the same path as an organization to become agiler?

John: Well one of the ways that PAE has done that and certainly if you look at PAE over the last several years, we are a government services contractor, we do a variety of things. Everything from range support services to aircraft maintenance. Over the years, our business has grown but it’s also diversified in the number of things that we do. As we’ve grown like any business as it grows through time, you realize that the adage of the book “What Got You Here Won’t Get You There” in terms of you have your small business. You have small business processes and as you grow, and you need to become in some cases more complex in your business processes to match the complexity of the business itself. You have to fundamentally step back and look at the ways that you actually run your business. PAE has very much been doing that over the last year undergoing what we call our transformation initiative.

It’s really all about stepping back and looking at those key processes that we actually used to run the company. Looking at how we have traditionally done those processes if our goal is to become a bigger company which it is, are those same ways of doing things. If these are appropriate for a company perhaps twice our size and if not, what are the things that we need to do to adapt those processes to be reflective of a much larger company? Your assessment is absolutely spot on that in absence of a central approach to this, those kinds of efforts can very quickly become fragmented. At PAE, what we’ve done is we’ve actually created a single governance function that has ownership at the executive team level. So it’s very much a tone from the top approach. It has the organization stepping back and looking at its business processes holistically and says for us to become agiler as a large company, we need to not only look within each department. But also at how those departments need to adapt their processes. More importantly, focus on the interdependencies between departments because when you talk about especially back office functions, like HR and payroll and finance, they’re all intertwined and they all have interrelationships with each other.

It’s the essence of that central governance process that ensures that they all stay in sync with each other and then a series of process review and governance boards that we have in place against which these different teams check in regularly to make sure that they are staying synchronized.

You have small business processes and as you grow, and you need to become in some cases more complex in your business processes to match the complexity of the business itself. You have to fundamentally step back and look at the ways that you actually run your business.

Sanjog: Now with what you just mentioned that you have a tone being set from the top. There are organizations who are still facing this problem where things are fragmented or there’s an opportunistic approach taken to improve the business agility. Are we in a way directly saying that maybe the tone is not right or is a chaos at the top or there could be somewhere in between whether the tone was set right but something did not happen in terms of going in the right direction to take it holistically. There could be other issues as well which could be causing this issue besides voice at the top?

John: Absolutely. In some cases, it’s just a synchronization question. For example, in our organization, some of the key processes that we’re looking at or things like our process for hiring to retiring. A process from the time that we take in order to the time that we collect cash. Each one of those processes, there may be the tone from the top and it clearly understood the message from that department owner that we need to adopt that process. But in absence of just a general governance process that interlinks them, you could have well-intentioned major processes that would go off and re-engineer themselves to be completely incompatible with each other. Tone at the top is certainly an important part of it, but having a structure in place that ensures that azure doing it. You have these teams checking in with each other and that you have a central function that is heightening the interdependencies and is managing the many micro-projects that are ongoing as a portfolio ensures that everything stays synchronized with each other. You not only have excellence within each of the process dreams but when they all come together at the end, the overall result is a well synchronized and agile result now.

But in absence of just a general governance process that interlinks them, you could have well-intentioned major processes that would go off and re-engineer themselves to be completely incompatible with each other.

Sanjog: Let’s bring up this topic of data. As more and more of organizations are becoming more data-driven and they essentially should be given the way they are transforming our respective organizations. We also see that the volume, the variety, and the velocity of data is increasing at a maddening pace. Do you think we can realistically manage all of this data which is coming in which we don’t know what’s going to come next, proactively and holistically? If you were to tackle this problem, what do you think would be the related costs and challenges and would you see, say silver lining of the cloud if you will, in terms of ROI?

John: One of the key things, when you talk about the role of data and how could both hamper and contribute to the success of an agile organization. It all gets down to two fundamental precepts. One is that you have to turn data into information, and the information that you create should be directly related to how the business is actually going to make decisions. A classic challenge I think all IT professionals have when we go to create tools that turn data into information. To your point, we have volumes of data and we have data of different type. You start collecting customer requirements and you’re going to have a very wide distribution of needs and you start to try to figure out what you’re going to deliver.

The fundamental question I think is how that information is going to be used to either measure the effectiveness of the processes that you have put in place or enable a business professional to make decisions about the direction of his or her particular business area. Again, as a CIO, one of the things that I have experienced over time is, I’d really like a whole series of reports on every aspect of my particular domain. What I try to do is, I try to go back to that function and as you’re measuring the effectiveness of your business is the particular slice of information that you’re asking for, going to directly play a role in your business’s vision or is it nice to know. Actually, prioritize that information and get at the heart of what is a useful business information first and then go from there. It’s the adequate source of information that will help you to make a business decision with say 80% accuracy or an 85% accuracy, is it worth the opportunity cost to the organization to improve the fidelity of that decision by 5% or 10%, it may be, it may not be depending on the particular organization.

Agility can be directly impacted by whether or not the organization as it’s attempting to turn data into information is really trying to target. The key decisions with the appropriate and succinct set of data that will allow an organization to make an effective and quick decision.

The fundamental question I think is how that information is going to be used to either measure the effectiveness of the processes that you have put in place or enable a business professional to make decisions about the direction of his or her particular business area.

Sanjog: Let’s talk about the architecture. We seek over complication or over complicating architecture, over-engineering of processes and even overloading our workforce. As we go about boasting business agility. If we do that, we are essentially shooting ourselves in the foot and undermining what you could have otherwise accomplished. How do we prevent that?

John: Well, you’re absolutely correct that an overly complicated architecture can directly produce a negative impact in an organization and that extends not only to the infrastructure but also to the metadata. A couple of key precepts that an organization can adopt if you start at the systems level. One is that you have to have a consistent understanding of what a data element is and what it means to the entire organization. Of course, you can go to three different departments and talk about, what does a customer mean to you? What does a revenue mean to you? What does cost mean to you? You can get three different answers, by establishing an effective metadata layer that says, no matter where you go in the organization. As soon as someone says the word customer, everybody is focused on the exact meaning of what a customer is to the organization. Take that with just about any data element that in itself is by simplifying the definitions of what the data means in the systems down to that level of clarity it makes the language with which different departments can talk about data with each other much simpler.

From a systems perspective, when you talk about technical architecture, one of the things I think all organizations are facing now is the fact that our technical backbone is going to be hybrid. It’s going to be a combination of cloud-based software as a service, applications and it’s going to be internally hosted. For those systems to be effective, they all are going to have to interrelate with each other. We’ve settled in on two fundamental precepts as we talk about how from an architecture standpoint those systems will talk to each other. We have adopted and purchased a very specific enterprise information broker. The two rules that we have for systems development in PAE, if system A needs to talk to system B and either one of those vendors has written an API or a connector, all data transfer between those systems is happening using that connector. If there is no connector developed between those systems, we will use the same information broker tool for any interrelationship for systems.

We’re going to the ideal state that with the exception of those direct APIs, all systems communicate with each other through a common information broker. The second extends to the idea of workflow. When we create workflows that will certainly leverage multiple systems. Every system in our environment has some degree of workflow built into it that is organic. For any step along the way in a complex workflow, where we are using, where it’s going to interact with a system that has workflow rather than rewrite that workflow will use the organic workflow built into that tool. Then, for any steps that involve just general workflow that is interacting with a particular system, we’re going to use the same exact workflow toolset for all workflows through the organization. So that people become used to not only a common way of seeing how systems interrelate with each other but a common toolset that all workflows are written by. I think that combination of starting to develop a very strict set of integration standards in the midst of this very heterogeneous systems environment and a common understanding of data definitions really helped to simplify that technical architecture quandary that certainly we have at PAE and most organizations have.

I think that combination of starting to develop a very strict set of integration standards in the midst of this very heterogeneous systems environment and a common understanding of data definitions really helped to simplify that technical architecture quandary that certainly we have at PAE and most organizations have.

Sanjog: You did mention about cloud-based software. Let’s go, dig a little bit more into it because we definitely can see that cloud-based software can help with increasing business agility. With so many cloud delivery models, there could be potential where we could go wrong in selecting the appropriate one for our organization. What is that approach to selecting the right model and what do we do in terms of using the cloud-based software or SAS model is such a way so that we can simply IT?

Cloud-based software, we know can help with increasing business agility but we have so many different cloud delivery models, where do we go wrong in selecting the appropriate one for our organization? That is what many people struggle with.

John: Well, I think the question of what cloud applications are appropriate for an organization are going to be driven by multiple factors. Certainly, there are benefits and as you said, there are risks to selecting the appropriate applications for the environment. In our case, we’ve tried to do is, you look at things like human capital management, for example, which translates usually into systems HRI systems. That is a domain where the regardless the particular industry that an organization is in, there are certain harden fast requirements that all organizations have to worry about, benefits, eligibility, verification, and maintenance of people’s entitlements in their relationship to the firm. I mean, all those are all things that are to a certain degree standardized.

As a result, there are packages, for example, that are focused on human capital management that has very quickly adapted to the cloud. Organizations also look at things like they’re selling processes. There are structured selling mechanisms that DD and sales organizations use out there, that are just proven methodologies for effective sales cycles. Many tools looking at Salesforce automation tools, for example, have adapted their structure to map around these best in class processes. One of the ways I think that an organization can really take advantage of cloud-based tools is the mission of the IT organization to maintain competency around the core business of the firm. Or is it able to stretch and also provide all kinds of administrative support to these tools that maybe isn’t their core bread and butter?

I look at our government agencies for whom we provide services and many of them look at their own internal staff and they say, they exist to perform the mission of that agency. In cases where they don’t – a business process that is part of their organization isn’t part of that core mission. They often outsource those. From an IT person’s perspective, I can look at my staff and say do I want my team to specialize in maintaining HRIS systems or Salesforce automation systems when there is a very strong SAS based offering out there that can do that? I can focus on things like warehousing and logistics management solutions or range support solutions or work order solutions that are part of what we do on a day to day basis.

One of the ways that an organization can really assess the fit for those kinds of things specifically using SAS packages is, does it fit with their core mission or does it free them up to focus on their core mission within the IT department? One of the things that are always a risk is that an organization moves the cloud without being able to crisply define how it fits into their overall systems architecture. Organizations even within our customer base of the federal government are very strategically challenged to make sure that they are thinking about the cloud as the first option. Many of them have preexisting systems that go back for quite some period of time. One of the key architectural considerations is, how does that now fit into the overall fabric of systems? Because guaranteed you will have systems internally that need to talk to those external cloud systems. For example, our internal accounting system needs to talk to our external HRIS system and our external contracts system. The risks that organizations have and the mistake they can make is making those kinds of decisions and being too focused on the rapid deployment of a SAS package without thinking through those details because I think almost every organization, say the lucky few are going to have a hybrid infrastructure that is going to have both internal and external systems.

I guess my lessons learned and words of caution would be that as organizations are making that assessment about how the functionality of cloud applications fits within their architecture. Certainly, they need to focus on the functionality of the application but they also need to focus on things like their change control processes which don’t go away just because you move to SAS. Of course, the more practical things like how those systems are going to talk to internal systems.

I guess my lessons learned and words of caution would be that as organizations are making that assessment about how the functionality of cloud applications fits within their architecture. Certainly, they need to focus on the functionality of the application but they also need to focus on things like their change control processes which don’t go away.

Sanjog: In a way, you’re saying and could you confirm that for me is that if we are working towards simplifying IT and as long as we take due care of the architectural consideration and the change control, would you say that going to a pure SAS based model would be one of the best approaches?

John: It is certainly one of the major approaches that I would take, yes. There’s another benefit to certainly too many organizations is that the key concern many folks have I think with cloud applications is security. In this world of heightened information security, it is important that our cloud applications are safe. I would point to tremendous investment that the cloud service providers have made in information security. Even organizations like, again, our customer base, the federal government who have adopted standards that are very stringent like, the FedRAMP Standard for information security. They certainly supersede the level of security and investment that many of us, CIOs could actually make internally around information security. I think that one of the ways that this certainly makes us agiler. It is that they can expand their infrastructure much more quickly than an organization that has an extensive internal infrastructure. In terms of, if my business doubled in size tomorrow, it’s much easier for me to be agile leveraging a cloud infrastructure that I’m not directly running and go to my vendor provider and say, “I need twice the horsepower tomorrow morning and they’re able to deliver that.”

There’s another benefit to certainly too many organizations is that the key concern many folks have I think with cloud applications is security.

Sanjog: To that end, you’re saying that if you suppose vent for this peer SAS model and cloud applications or cloud delivery models, we are able to make sure that security can stay as aforethought and it is not going to be a crippling effect which will prevent us from going agile with our business?

John: Absolutely, yeah. I definitely believe that. You’d look at where the cybersecurity community is today around cloud versus even five years ago. The tremendous advances that we have certainly in terms of security of virtualization, security of data transport, and just in general the awareness of the robustness I think of security in the cloud today, I certainly myself provided that the same forethought around security happens with my cloud-based applications have little concern about the security of cloud-based applications.

Sanjog: Let’s talk about the very leadership. We started with the first question is that we are trying to get people at the top to set the tone and rest of them will follow suit or at least there will be a commonality of intent as we go along. When we take business agility as a core objective or would say the very underpinning of an organization, what would be the role that IT leaders can take in enhancing that business agility? Are we still thinking IT leaders as enablers or could we take that strong position? While we may have seat at the table but can we take a strong position as a driver of business agility, and if yes, if that’s possible, what support and sponsorship do you need from the organization to help you accomplish it?

John: Yeah. First of all, an IT leader who positions themselves as an enabler is limiting his or her role in the organization, as a key business leader. The IT leader today has got to be a strategist. Enabling is taking well-understood intent and well-understood vision of how technology could be applied to solve business problems and make it happen effectively. The role that a truly effective IT executive plays in an organization is being the person who comes to the leadership team with the technical knowledge that is probably not understood amongst his or her peers, and has the ability to listen to the CEO’s intent for what he or she wants to do the business and then be able to take that business mandate back and use it to define the overall technology strategy for the organization and also to be a source that can advise the leadership team about what the technology limitations might be of that particular business goal. And/or the investment that needs to be made to make it happen.

As I’ve talked to some of my peers, the peers that I think are in my view most effective are ones that can go back and often. If there is a stated technology goal coming from the business partner, what the business partner is doing is based on their knowledge of how technology could be applied. They’re coming back and asking for a very specific piece of functionality versus stating, “Hey, I have this business problem. Can you apply technology to make that business problem go away?” I think organizations where the IT leader is participating in the overall business strategy, they may be able to go back and say, “Well, I know you’re asking for a particular type of technology or a particular system but you’re asking for only part of the solution. What you really need is the following.” I think that my answer to your question then is that certainly being an enabler is important but having a positioning as a strategic contributor is where IT is really going to get the most opportunity and have the biggest impact toward impacting the agility of the organization.

I think that my answer to your question then is that certainly being an enabler is important but having a positioning as a strategic contributor is where IT is really going to get the most opportunity and have the biggest impact toward impacting the agility of the organization.

Sanjog: Once again, thank you, John, for sharing your thoughts and insights about how organizations can define and adopt a holistic approach to managing data, architecture, security, and even customer community to boost business agility.

Contributors

John Lambeth

John Lambeth, Chief Information Officer, PAE

John Lambeth serves as the Chief Information Officer for PAE, leading the company’s information technology strategy and managing all technical aspects of PAE’s service delivery including IT planning, deployment and support. Prior to joi... More   View all posts
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