The Constrained CIO – Case Study 1 – Unique Supply Chain challenges on a global scale.
Blog: Capgemini CTO Blog
As part of my blog about the challenges of the Constrained CIO I identified 3 constraint areas with 6 specific constraints that are currently inhibiting an organisation’s ability to accelerate their journey to Digital Excellence and beyond. I recently visited a client, let’s call them Global Supply (GS), who whilst needing to change to adopt a more Digital way of working are constrained across the different areas identified.
GS operate a supply chain to some very diverse locations with a product range that is broad but essential to it’s customers. Expected lead times can be from days to months but at certain times responsiveness expectations can shoot up significantly. GS exhibits some of the typical constraints of an organisation that has been in existence for many years such as:
· Infrastructure Constraints – GS is constrained due to security restrictions that drive it towards on-premise infrastructure. In addition challenges around the use of mobile technologies leads to some restrictions in the ability to truly achieve a Digital Transformation.
· Application Constraints – Years of enhancement on enhancement has led to an aging, fragmented application portfolio. Many business processes are broken because they exist across multiple applications that should be fully integrated. When applications are replaced then often the previous, forms based processes are re-implemented in the latest technology leading to a sub-optimal solution.
· Project/Support approaches – Waterfall project delivery is the only way. Primarily based on history, but also because of the perceived rigour and control, a step-by-step approach to the delivery of projects is used with no consideration of Agile methods. Integration with support is heavily gated with little integration to project delivery to speed up the transition at the same time as reducing the risk of implementing defects. From a measurement perspective. support Service Levels are very internally focused without a proper alignment to the organisations expectations or outcomes resulting in low Customer Satisfaction.
· Business Processes – Many challenges exist in this area. As mentioned, with processes being spread across different applications there are many swivel chair integration points that add inertia and the opportunity for the introduction of errors. The age of the applications means that their usability is not up to the expectations of modern systems with many character based screens and no mobile options. A lack of system usability encourages the user to create off-system workarounds that exasperate a data quality issue that is already a significant constraint.
· Commercial Models – Fragmentation of applications and business processes has led to contractual arrangements with suppliers that are sub-optimal. Also, using input measures to gauge performance as opposed to anything that is aligned to an outcome or benefit means that it is difficult to, firstly, identify transformational initiatives that will deliver the most value to the business, and secondly, to drive suppliers to deliver those initiatives successfully.
Addressing these constraints, especially with the prevailing market conditions that GS faces, will be challenging but there are 3 key areas of focus that may help to start to turnaround the situation:
– Application Tiering – Not all applications are the same. Whether it be the segregation by Record, Integration, Innovation, Engagement, etc. it is important to apply logic to decide how to approach applications differently. An alternative approach, more relevant for support, could be to decide the business impact of the loss of certain applications or business processes so that appropriate support levels can be applied. If intelligence is applied to how important different applications are to the organisation then redundant applications/processes can be removed and greater priority given to those applications/processes that deliver the most value.
– Self Funding Model – Whether it be cost or resources a reason I frequently hear for inaction is insufficient money or people. Sometimes it is a huge challenges but there are specific areas that can be used to release funds or resources in order to re-invest in transformational activities. Some examples might be:
o Cloud Migration – Whether it be IaaS, PaaS or SaaS migration these activities can release funds that are often tied up for re-investment in transformation. Frequently an IaaS migration can be combined with rationalisation releasing additional funding from a CAPEX and resource perspective;
o Robotic Process Automation (RPA) – In order to address skill shortages or to release staff from non-value adding tasks RPA can be used to automate transactions so that little or no human intervention is required. Whilst not a replacement for the optimisation of business processes it is at least a way to tactically improve processes to deliver cost savings for re-investment in other areas.
o Usability Improvements – Creating new screens that combine many old screens or changing the screen flow of a laborious transaction can significantly increase user productivity, sometimes by up to 80%. Using a UI layer to abstract the user from the underlying application layer ensures that an attractive, easy-to-use interface frees up time, and potentially, cost for either more value adding activities or re-investment in other transformational initiatives.
– Incremental Approaches – The days of the big transformation are over. Projects are becoming more agile, support is becoming more DevOps, Business cases are becoming more the enabler to drive a value based, evolutionary portfolio. Identifying what piece of work will deliver the most value, the quickest and the minimising the time to value is essential. Implementing Lean Management techniques and a Continuous Improvement culture is essential to reducing constraints as well as delivering value.
So whilst it is clear that the GS Supply Chain continues to function and get the product to the user when required to execute their role there are opportunities being lost and resources and costs tied up unnecessarily. In this organisation the Constrained CIO has a clear line of sight to some of the constraints that exist the challenge, as ever, is to focus on the initial enablers that will underpin a far wider transformational change that is sustainable. An approach based on the “Excel. Enhance. Innovate” paradigm of Capgemini’s ADMnext will provide an approach the delivers evolutionary change at a pace that is acceptable to the secure environment GS operates in.
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