Business processes are a new kind of wasting asset…….
Time for CRM with integral Agility!
Are We a ‘Cooked Frog’?
Some mornings I sip my coffee and ask myself if we’ve entered a cooked-frog era (you know the story of the frog who didn’t jump out of the hot water because he didn’t notice it was getting hotter). Every day something is slightly different, but like previous generations I live today as if there was an agreement that there would be no major change in my lifetime (‘without my agreement’). Somehow, we know that there is no such ‘deal’; but unfortunately, many of us are living our lives as if it were still true.
What Can a Cooking Frog do in a Recession?
Businesses have assumed that the ‘High Street’ would be there forever. Many are gone! The recession of 2009 showed us that nothing financial is true. So for those who can see it, surely we should all be redesigning our lives to be more accommodating, more flexible. We are going to need to be more AGILE if we are to survive. Being safely agile means having the ability to adjust to the unforeseen. There is a recession rumoured for 2019, and some people say it’s time to pay off your credit cards as soon as you can! Do we?
How Are We Coping with Rapid Change?
We are reminded daily that things are changing. I have come to be aware that things I used to know as facts, like for example UK membership of the EU, have changed. And even BREXIT is not a fact. With each new bit of news or information we adjust unconsciously to a modified way of life. Soon I will have smart meters for my gas and electricity; how much will that change my life? I’m keen on music, so how do you think I feel when Michael Parkinson on the BBC reminds me that Frank Sinatra is no longer with us so someone else will sing his great songs? The evidence is all around us that things are changing faster than ever before. What would it mean if the world changed faster than our ability to adjust? What would that feel like? Is there already evidence that we are not coping? We are not doing all that well on climate change, are we?
Rapid Evolution is a Game Changer for Business
The rate of change in our everyday world produces a feeling of niggling uncertainty but it’s not really painful. How often do we turn on our sensitivities and really listen to our environment? How often do we ask what this all means? Previous generations lived their lifetimes pretty much as their parents had. How much of our lives and business assumptions are based on the ‘fact’ that nothing much is going to change in the next 5-10 years. Everyday change is easily visible in the media, but how much of the significant issues that change business conditions are visible to the business planners?
Universities Preparing for 2019 Need a New Kind of Agility
So we’re scheduled for a recession in 2019; what does that mean? The birth-rate dropped a few years ago and now our universities don’t have students for all their places. Next year will be worse. Some of them were investing in buildings for the ever-increasing demand for education predicted 20 years ago. Now the loan payback horizon is out of sight. It is unthinkable that a university could go insolvent! We know as an absolute fact that universities are permanent institutions. Aren’t they? Environmental uncertainty is calling out for agility, but what does that mean? Uncertainty and the rate of change in higher education has traditionally been greater than the commercial sector. It may be quite serious in the longer term to ask how the type of agility needed in HE might be different in nature from the commercial world? Finding a solution might also be more urgent.
New Strategies Needed as Business Process Infrastructure Goes Obsolete
Business strategists project forward estimates of sales and trade and raw materials, but how many look at the need to continuously evolve their business administration processes; and in response to what environmental change? It is instructive to look back over the last 12 months and list the processes that have had to be modified? What percentage of the administrative infrastructure did not need modification? Do we assume 90% and dismiss the question? Could it be as low as 60%? With the advent of process automation is there a financial threat that is not being put on the balance sheet?
Administrative Infrastructure is a Wasting Asset
Do management know what the invested cost is in all the processes supported by IT? Department by department looking at each process as an asset is there an assumed payback and ROI expectation based on a normal process lifetime (say 5 years)? In JI, we’ve been involved in the implementation of CRM systems for over 25 years. We know that very few organisations have done the sums on process payback. Is your CRM process repertoire delivering on its necessary payback? In our Management Consultancy methodology for CRM Readiness, we seek management sign-off on business process payback. One symptom of an impending chronic financial problem is the length of the queue for system amendments (months? years?). There is not much hard evidence published, but anecdotally, we are hearing that CRM processes are still being designed for payback assuming a static world.
Lower Birth-rate and Student Recruitment
For business strategists in HE there are already very threatening messages coming from the environment (birth-rate etc.). Without much publicity it is evident that there have been significant redundancies, and restructuring is taking place. Senior staff are disappearing only to emerge as self-employed consultants. We hear that the student recruitment standards of prestigious institutions are being lowered and unconditional offers are the new normal. Many universities will survive with that strategy but a few institutions have expressed some discontent. This issue relates to the head count or as some poetically phrased it ‘bums-on-seats’. What about the administrative infrastructure?
The reason for this white paper is to bring into focus the need for a new dialog on investment management KPI’s relating to business process benefit payback. Where in the business planning cycle can we see strategies for managing ROI numbers on the process repertoire of the administration of the institution itself? We have anecdotal reports of lengthening process amendment queues in IT maintenance and development areas. Perhaps the symptomatic KPI’s could be made more quantified with commercial cross-charging of software maintenance resource. Are people already doing this (in business? In HE?)?
Negative-Equity Now a Threat to Administrative Process Infrastructure
CRM implementations without a payback constraint run the risk of being uneconomically comprehensive or over-sophisticated. This might be in pursuit of excellence in IT support for process design (probably but not entirely CRM-driven). Perhaps it’s in pursuit of a ‘Big Data’ resource? The basic evidence is available showing that this risk of over-design is real; user complaints attest to that. When the rate of process obsolescence is high, an increasing percentage of process investments will need to be replaced before reaching their payback horizon. We now need agility by design. Do you have the KPI’s in place to signal the onset of negative equity?
Disruptive CRM Technology
The real-world simplicity of the vast majority of CRM processes has been talked about for some time. Why does so much of the implementation cost of CRM have to be based on business analysts and software development teams. Some organisations are also recognising that ongoing process modification costs are visibly escalating uncontrollably as the commercial environment evolves. The old-world ideas of programmed-process CRM are being invalidated. Now ‘low-code’ and ‘no-code’ CRM’s are emerging to challenge the market leaders whose design thinking is rooted in the IT economics of 1990. With today’s rate of process obsolescence bespoke code becomes uneconomic everywhere but the highest value, highest complexity processes. Programmed-process CRM is no longer fit for purpose as a one-size-fits-all solution. For other reasons, perhaps it never was.
Process Ownership: Centralised vs. Departmental
More significantly, is there an inherent risk with programmed-process CRM in centralising all business process ownership/control at one point losing both flexibility and agility? Why can’t there be a way of devolving and simplifying the process evolution work to the departmental level where it used to be? Perhaps a LEAN approach based on moving process ownership to operating departments would mitigate the negative equity threat? (in business? In HE?). New tools will be needed; perhaps the era of ‘low-code/no-code’ CRM has arrived? How would you know if your organisation was suffering from this new kind of ‘negative-equity’? (or threatened?) If so, would a more agile approach to process support become attractive? We can help. We would welcome the opportunity to work with any organisation eager to have support on the necessary analytics/migration. We await comments and thoughts on these propositions.