GPOs are executives who oversee the design, implementation and execution of each E2E business process affected by the tech-enabled transformation program. The more E2E processes are in the program’s scope, the more crucial the GPO role becomes. GPOs ensure that their assigned processes are designed in ways that best meet the needs of all functions, business units, and regions involved in the execution of the process. To do so, GPOs have decision-making authority for sign-off on all business policies and procedures related to their assigned E2E processes. They also establish close working relationships with leaders throughout their processes’ functions and with business users. Let’s examine these characteristics of the GPO role more closely.
GPO decision rights
GPOs have decision rights for some or all of these key elements of process governance:
- Process design. What steps and activities are required to execute the process? What key decisions must be made in the process?
- Delivery model. Who should execute (perform) the process? Where should it be executed? What skills are required?
- Policies and controls. What must be done to mitigate risks that the process presents for the company’s operations?
- Platforms and technology. What hardware, software, and other tools will be needed to execute the process?
- Data definitions and standards. What do the process’s data elements mean and how should these elements be represented?
- Improvement opportunities. How does the process currently work, what problems does it have, and how might those problems be corrected? What process improvement practices should be encouraged in the organization?
- Performance measurement. What key performance indicators will be used to monitor the process’s efficiency and its effectiveness
With tech-enabled transformation programs, GPOs are often placed in the role to rethink the company’s existing processes and to design a desired future state aligned with a newly envisioned operating model. With that in mind, GPOs typically focus on items 1-5 in the design stages of the program and shift attention to items 6 and 7 when they pivot into operations.
For example, a large global retailer that EY member firms are working with had built up an extensive network of sales locations through acquisitions, with little focus on standardization or efficiency. The company’s legacy IT systems were reaching the end of their life, and the organization decided to replace them with a new, sophisticated Enterprise Resource Planning (ERP) software. Given the program’s large scale and complexity, the client re-evaluated its decentralized and autonomous operating model and re-designed it in line with its newly defined growth strategy. To kick off the high-level design phase, the program leadership team designated a key executive to serve as a GPO for each E2E process in scope for the transformation. (We’ll trace additional details in this client’s story in subsequent sections of the paper.)
GPO working relationships
GPOs report to the executive sponsors of the transformation program. They are chosen for the role because they know how to leverage working relationships within the program and across business functions. They are viewed as leaders who have the right level of respect in the organization; as a result, others tend to trust and follow their decisions. Contrast that against leaders who can put programs in motion, but often at great cost to the business’s people side. Indeed, in their interactions with others, GPOs know how to make process-related decisions even if they don’t have all the input they want as well as solicit buy-in for needed changes in their assigned processes. Such collaborations enable GPOs to:
- Deliver on strategy and business objectives
- Understand “pain points” that different parts of the business are experiencing with the E2E process in question
- Find people, process, and technology solutions to those pain points
- Escalate strategic, cross-GPO issues as needed to the transformation program’s executive sponsors
- Review process design decisions and address implementation issues and questions about project scope
- Champion the transformation program throughout the organization and across initiatives that are in-flight at the same time
- Maintain and govern the assigned E2E process after the IT transformation has been implemented
Many GPOs are paired with a specific business lead with deep expertise in the E2E process at hand. However, to fulfill their role, GPOs may also interact with other business leads in the company. To illustrate, at the client noted earlier, the GPO for the organization’s record-to-report process is the company’s controller, and the business lead that person paired with is a specialist from the accounting department, who has many years of experience at the company. The order-to-cash GPO is a regional sales manager, paired with a former division office head with extensive point-of-sale experience.
Additionally, project timelines with tech enabled transformations are usually aggressive, and GPOs have little time to build consensus across multiple layers in the organization and across numerous other in-flight initiatives. They, therefore, need to make process-design decisions and functionality trade-offs quickly, connecting the right people in at the right time. Sometimes that means informing others; other times, it means consulting with them. Given these demands, it’s perhaps not surprising that GPOs’ authority level is often higher in tech-enabled transformations than it might be in steady-state operations. These executives, thus, are more owners than facilitators of their E2E processes.
GPO role fluidity
Organizations typically use a waterfall, agile, or hybrid approach to manage the development lifecycle in a tech-enabled transformation—a lifecycle that typically comprises four phases: design, build, test, and deploy. Regardless of the development approach selected, the focus of a GPO’s role will shift with each phase of the lifecycle. For example: