18 minute read 21 Jun 2019
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Global process owners: the key to success in large-scale IT transformations

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US Americas

Multidisciplinary professional services organization

18 minute read 21 Jun 2019
Related topics Digital Technology

Companies need effective technology enablement to transform themselves…

Succeeding in business — and staying successful — isn’t easy these days. To survive and thrive, companies must be able to quickly adapt to and even benefit from change. To meet these imperatives, many companies seek ways to free up funds to reinvest in growth and innovation programs, form new alliances and partnerships, and simplify their operations.

Frequently, companies elect to launch technology-enabled initiatives to support business transformations. Such tech-enabled initiatives are large and complex, affecting vital end-to-end (E2E) business processes.

… but common mistakes lead to failure

Too many companies make missteps that can doom a tech-enabled transformation. For example:

  1. Standardization vs. customization decisions. Many organizations struggle with decisions about standardization vs. customization of IT systems, and how best to deliver organizational value. Some, for instance, take a standardized, “plug-and-play” system architecture approach and don’t customize it sufficiently to leverage their company’s unique operational strengths (such as how the business interacts with customers). Others over-customize their systems and integrations—incurring prohibitive implementation and maintenance costs.
  2. Broken processes. The business looks at IT to address process complexity (based on system abilities vs. operational requirements), often leading to optimization through technology (e.g., automation) with insufficient consideration of simplification or redesign of key operational processes. Rather than understanding the root causes behind a broken process (for instance, different people should handle particular steps or certain steps should be done in a different sequence), managers assume that simply automating some or all of the process will boost its performance. Instead, they get a process that’s still broken—but whose damaging consequences are still being replicated at a much larger and costlier scale.
  3. Lack of leadership. Program leaders may lack the critical skills needed to drive the level of organizational change triggered by these programs. While they know their support is required, they have difficulty leading their teams through the complexity of the change. To provide the right level of change leadership, top executives must champion the company’s strategic objectives and activate them in their process area, think about and tackle process problems holistically, be super connectors across the enterprise (connecting experience and knowledge to solve problems), and put themselves in the position of their teams grappling with how to maintain existing performance metrics while moving to a new model. If they can’t lead in these ways, they risk making decisions that solve one problem while creating others they haven’t anticipated.

These and other missteps can prove fatal to any tech-enabled transformation. Indeed, a shocking number of these fail to deliver the hoped-for benefits to the organization and, hence, must prove the business case through other areas. Moreover, many programs experience such severe difficulties during and after the implementation that they require considerable rework or are abandoned in full. This leads to wasted time, money, employee commitment, managerial attention and of course wasted opportunities to gain advantages essential for safeguarding the organization’s future. For example, Lidl (the German discount grocer) wasted seven years and €500 million on its SAP inventory management system implementation.1 In another case, a company had to bring in experts to rescue a beleaguered transformation program. (See “A pharmaceutical company gets its transformation back on track.”)

  • A pharmaceutical company called EY in to help get its transformation program back on track after it had spent six months and several restart attempts on its Enterprise Resource Planning (ERP) software implementation. The client had begun experiencing change fatigue. It harbored dreams of becoming a process-centric business enabled by leading-class technology, but it hadn’t taken the time to define a clear vision and a compelling case for change before jumping into launching the program. The IT executives leading the project had difficulty addressing inconsistent processes because they lacked buy-in from the business side, and the company hadn’t clarified process decision rights and accountabilities. In a rapid phase 1 sprint, EY took the project team through a set of interactive and hands-on design sessions to establish a process governance model and an execution roadmap that the client later implemented. The client team was able to successfully re-launch its ERP design effort.

It doesn’t have to be this way

Despite the many challenges, organizations can set the stage for a successful tech-enabled transformation program. But to do so, they must ensure that the appropriate people are representing the business and its requirements (vs. assuming that IT drives process redesign), as well as establish clear decision rights over E2E process changes. Designating global process owners (GPOs) can help organizations meet these imperatives.

GPOs oversee the design and implementation of the E2E processes most affected by the program. We introduced the GPO concept in our paper Is your business equipped for successful transformation? Below, we build on the concept — including describing the GPO role, detailing global process owners’ key responsibilities, and identifying qualities and skills that make a great GPO. A global process owner’s precise role and his or her relationships with others in an organization will differ depending on the transformation program at hand and the business’s unique circumstances. The information herein should provide a useful starting point for companies seeking to designate GPOs for an upcoming tech-enabled change effort. 

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Chapter #1

The GPO role: an overview

Understanding the GPO’s decision rights, working relationships and the fluidity of the GPO role

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:

  1. Process design. What steps and activities are required to execute the process? What key decisions must be made in the process?
  2. Delivery model. Who should execute (perform) the process? Where should it be executed? What skills are required?
  3. Policies and controls. What must be done to mitigate risks that the process presents for the company’s operations?
  4. Platforms and technology. What hardware, software, and other tools will be needed to execute the process?
  5. Data definitions and standards. What do the process’s data elements mean and how should these elements be represented?
  6. 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?
  7. 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:

Development phase Nature of GPO role Example
Design Strategic GPO evaluates how well the process supports company strategy, redesigns the process with the strategy in mind, and brings bigger business-design decisions to leadership.
Build Operational

GPO adjusts the design where necessary depending on requirements from other E2E processes, system limitations and the organization’s ability to absorb the change.

Test

Tactical

GPO focuses on stress-testing the new or redesigned process to reveal flaws or weaknesses that need fixing.

Deploy

Change management focused

GPO ensures that stakeholders throughout the organization are ready and able to adopt the new or redesigned process.

After the changed or new E2E process goes live and becomes part of the new “business as usual,” progressive organizations keep the GPO role in place. Those filling the role can, therefore, oversee the changed E2E process, and begin looking for ongoing improvement opportunities.

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Chapter #2

A GPO’s responsibilities: three core themes

Defining a GPO’s primary obligations and their impact across the organization

In any tech-enabled transformation, a GPO’s responsibilities can be thought of as falling into three major categories: designing future processes and solutions, leading others, and realizing benefits from the change program.

Designing future processes and solutions

In designing future processes and solutions, GPOs must be strategic visionaries — defining a clear vision for the E2E process they’re managing, tied to company strategy, and imagining how the process could be more strongly aligned with market and business trends, and demands. To do so, GPOs need to think through questions such as the following:

  • How does this process currently work, and where are the pain points? How might its subcomponents be designed to eliminate pain points?
  • What’s the best design for this process in the future, not just for today?
  • What are the broader forms of value we could unlock, beyond benefits that could come from simplifying the process? For example, could the process be designed to centralize key capabilities in the organization (such as marketing and sales activities across various product categories) and, thus, deliver a more seamless customer experience?
  • What process design strategies would help us maximize ROI in our transformation program?
  • How will we need to change our operating model to get the most value from this redesigned or newly designed E2E process?
  • Will standardized off-the-shelf technologies—or sophisticated, customized technologies—best help us with our process redesign? What trade-offs come with each choice?

GPOs must also consider their organization’s ability to adapt to the process changes they’re envisioning, and gauge when to take a small step vs. a leap. To illustrate, the global retailer client referenced earlier defined an incremental step change framework for improving supply and operations planning (S&OP). Instead of a fully centralized planning organization, the project team established a center-led S&OP process supported by the ERP’s planning module. The GPO thought it wiser to absorb bite-size change until the process had been tested and the organization was ready to move to a fully centralized process run by corporate. This is an apt example of how effective GPOs align processes, technology, and people to implement and sustain process changes.

This example also shows how great GPOs help their organization avoid wasting time, money, and managerial attention on solutions that ultimately won’t work for the transformation program currently under way. They do so by gently nudging executives and managers away from creating lengthy wish lists for the E2E processes affected by the program. And they challenge them to instead clarify what the business really needs to run these processes — taking into account factors such as the business models in various parts of the organization.

Finally, to arrive at the right design for the E2E processes they’re overseeing, GPOs coordinate design decisions across multiple players and teams in different parts of the company. Consider these examples:

  • Within the E2E teams they’re heading. GPOs guide people toward a process design that’s in line with the company’s strategy and ultimately approve the design.
  • Between their E2E teams and other GPOs in the organization. GPOs help resolve “handshake” designs between processes. For instance, at the example company, the client provides loans to customers, sometimes through a bank. The bank, therefore, needs information on the financing terms of each loan. Consequently, the order-to-cash and record-to-report teams must collaborate closely to capture reporting requirements and to design reports for daily exchange between the company and the bank.
  • Across functions and regions. GPOs establish who is ultimately responsible for performing the activities that make up the process. Our global retail client, for example, had to make fairly strategic pricing design decisions within its order-to-cash process that changed how it prices its products and services within particular regions. Given the magnitude of the impact, the GPO pulled together an ad-hoc committee of key decision makers that included the pricing lead (function), the regional managers (field operations), other process GPOs (like record-to-report), and leaders of other in-flight company initiatives (such as branding and marketing projects). The client also implemented a procurement module at the enterprise level. Therefore, the GPO for the procure-to-pay process coordinated with that team to ensure that the process design team was aware of deadlines, requirements, and process interactions to build an integrated solution.      

Leading others

Great GPOs aren’t just visionaries; they’re also a unique brand of leader. Of course, traditional leadership competencies, such as business acumen and delegation, still matter today. But as organizations shift from stabilizing their enterprises to dealing with disruption, and from industrial to digital production, they require leaders who embody an evolved set of knowledge, skills, and abilities. For instance, rather than cultivating individual relationships with a few key players, GPOs build networks and groups with common interests and goals. And instead of focusing only on managing change, they concentrate on embracing disruption. Such leaders are best positioned to drive success in today’s globalized, diverse, technology-rich, and constantly changing work environments.

    • Relationship Building to Super Connector —building one-to-one relationships is still important; but today’s leader operates in complex ecosystems of teams, suppliers and customers. Great leaders today understand their ecosystems, leveraging their relationships and act with agility in putting people and opportunities together.
    • Communication to Leading with Purpose —communication frequency and clarity is still important, but leaders today must communicate with purpose. Purposeful organizations have become magnets for young talent, and the penalty for straying from purpose are serious. As teams become more diverse and dispersed, connecting people to a common greater good becomes critical. Great leaders today are purpose-driven and connect others to that greater good.
    • Problem Solving to 360° Thinking — today’s problems are less binary and more complex than ever. Our world more sensitive and riskier; consequences of miscalculations are greater. Great leaders today think holistically and make fully informed decisions to drive solutions.
    • Teaming to Virtual Leadership — organizations are moving from horizontal to vertical, counting on team-based structures to deliver innovation and growth. Yet the people are more dispersed and virtual than ever. Great leaders today leverage technology to team and cultivate those teams.
    • Managing Change to Embracing Disruption — the nature of change has changed. It is faster, more unexpected, more potentially disruptive. Great leaders today know how to navigate disruptive change and when to pioneer it.
    • Learning to Intellectual Innovation — as innovation becomes everyone’s business, today’s leaders must stay curious, actively invest in learning and more intentionally apply that learning to creative solutions. Great leaders today leverage learning to foster innovation.

Effective GPOs provide this form of leadership by embracing the new competencies themselves and by coaching and guiding others to do. Equally important, they model newly emerging digital-leadership capabilities essential in today’s technology-driven business world. (See “Emerging digital-leadership capabilities.”)

    • Technology and human balance—minimizing the depersonalization of work that still requires human energy and ingenuity, and knowing when to turn technology off to make meaningful human connections
    • Mind clarity—combating the crush of information in the digital economy and helping others to stay focused and manage mental fatigue
    • Empathy—understanding others’ perspective as emerging technologies (artificial intelligence and robotic process automation) affect more jobs
    • Inspiration—painting a clear and compelling vision of the future, and engaging people in helping to make that vision real
    • Resilience—embracing ambiguity and persistently driving toward success despite it
    • Cultural connection—staying on top of shifts in how the working world is globally connected and diverse, and embracing inclusivity

    Source: The Global Leadership Forecast 2018: 25 Research Insights to Fuel Your People Strategy, ©Development Dimensions International, Inc., The Conference Board Inc., EYGM Limited, 2018

In the realm of team leadership, the best GPOs know how to transform mere collections of individuals who happen to work together into high-performing teams. Such teams are rare, and generate exceptional business results faster than ordinary teams do—giving their organization a sharp edge over rivals. To build such teams, GPOs first establish a culture of trust.

Revisiting our client example, in kicking off high-level design, our entire project team, including the client’s top leadership, held four week-long orientation sessions that included clarifying what challenges team members would encounter, how team members would work together, and what goals they would be measured against.

Thanks to the shared understanding of values and norms that emerged from the sessions, team members trusted that everyone involved in the transformation project could be counted on to demonstrate the agreed-upon behaviors. The company then incentivized and rewarded team members by offering them a percentage of base-pay bonus for successfully demonstrating the new behaviors. These behaviors are now routinely reinforced by individuals during meetings, and by leaders through written communications, recognition programs, and bonus payouts.

Realizing benefits   

As with any transformation program requiring hefty investment, a company must make a strong business case for committing resources to a large-scale, tech-enabled change effort. Such a business case spells out the benefits on offer from successful implementation of the program and articulates why those benefits justify the investment required. It, thus, specifies the value that each E2E process should ultimately generate.

For example, outcomes that our global retail client wanted to get from its transformation program included better planning and forecasting capabilities. Therefore, the GPO in charge of the forecast-to-produce process considered the impact of a proposed redesign on excess inventory and inventory turns—important benefit metrics for the business case.

Moreover, as GPOs consider design changes and weigh trade-offs between standardization and customization of their assigned E2E processes and of enabling technologies, they can monitor value leakage—the rationalizing away of originally estimated benefits from changes to an E2E process. To do so, they continually gauge the potential impact of standardization-vs.-customization decisions on the process’s performance. And they take corrective action as needed.

A GPO who’s looking across an E2E process will oversee the realization of benefits from the design or redesign of that process. However, he or she won’t necessarily be directly accountable or responsible for capturing every benefit on offer from reconfiguring the process. That’s because some functions within the process might not sit within that GPO’s control. Given this inherent tension between functional and process ownership of benefits realization, a GPO will have to make “handshake” agreements with other leaders in the organization to achieve those benefits. To illustrate, at the previously-mentioned client, the GPO for procure-to-pay is the CFO, who works closely with the vice president of procurement to document design requirements and to ensure that the procurement organization ultimately realizes the procurement-related benefits documented in the business case. Ideally these agreements would then be backed by shared goals and even individual performance metrics designed to optimize the end-to-end process rather than the performance of a single function.

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Chapter #3

Are you putting the right people in the GPO role?

Understanding the attributes and capabilities to look for when selecting a GPO

Are you planning a tech-enabled transformation program and do you want to designate GPOs for the E2E processes involved? If you have candidates in mind, that’s great news. However, be careful: The GPO role calls for a distinctive set of personal attributes and capabilities. Not just anyone can excel in it. With this constraint in mind, you’ll want to take time to ensure that the people you’re considering as GPOs would be most qualified to guide your transformation program.

Look again at the individuals you have in mind. For each person, ask yourself:

  • Is this person passionate about the company’s vision for its future and about being part of the journey to get there? Do you think he or she could inspire that same passion in others?
  • Does the individual thoroughly understand the E2E process he or she will oversee, and where it needs to go? Will he or she therefore have credibility in the eyes of other stakeholders in the transformation program?
  • Does he or she have stronger business acumen than IT expertise?
  • Can this person resist the impulse to optimize his or her own performance in the GPO role at the expense of other business units’ performance?
  • Does the individual possess the seniority and reputation needed to inspire and drive change and to make tough judgment calls quickly (such as process-design trade-offs)?
  • Can you imagine him or her deftly handling the competing priorities that crop up in the GPO role, given its part-time nature and the pull of the regular day job?
  • Could he or she tolerate the ambiguity of the GPO role stemming from its nascence and navigate through it while leading others?
  • Can this individual balance guidance and delegation within his or her team while also collaborating with other GPOs?

The more “yes” responses, the higher the likelihood that the individuals you’re considering could make effective GPOs. Now it’s time to think about how you’ll persuade the best candidates to take on the role.

Perhaps not surprisingly, attracting and retaining top talent for this unique role can prove challenging. To overcome it, you’ll want to emphasize the long-term career opportunities presented by the GPO role. In many organizations the role is still strongly oriented toward large IT system implementations and process design efforts. It originated in ERP projects on the assumption that the GPO teams assembled for the project would be disbanded upon project completion. However, your organization will benefit if you can ultimately elevate GPOs from short-term E2E process overseers to long-term operations experts who seek out opportunities to continually improve performance of new or redesigned processes. Remember: The most qualified GPO candidates will be asking themselves, “If I agree to take on this role, where can I go in the organization once the transformation program is implemented?” Those who can clearly see a rewarding future for themselves as operations experts will likely feel even more motivated to provide top-notch leadership on their assigned E2E processes. And that motivation may well prove crucial for ensuring the transformation’s success.

So: Who will be your organization’s GPOs?

  • 1. "Florian Kolf and Christof Kerkmann, “Lidl software disaster another example of Germany’s digital failure,” Handelsblatt Global, July 30, 2018. Accessed October 18, 2018; https://global.handelsblatt.com/companies/lidl-software-flop-germany-digital-failure-950223"

Summary

Defining the Global Process Owner role for companies undertaking a tech-enabled change effort.

About this article

By

US Americas

Multidisciplinary professional services organization

Related topics Digital Technology