A Case for a Platform Based Approach to Optimize and Drive End-To-End Business Processes to Achieve Operational Excellence

Optimizing End-To End (E2E) Business Processes is considered the Holy Grail for businesses looking to drive Operational Excellence. This goal is a common goal regardless of the size or complexity of an organization.

Most organizations have common E2E Business Processes such as “Order To Cash”, “Source To Pay”, “Recruit To Retire” or “Design To Operate”. There are of course variants to these E2E processes, but these are the most common.

Now that we have that out of the way, let’s then look at the different approaches we see out there that organizations take to achieve this goal of Operational Excellence.

Best in Class vs Best of Breed

Over the years, discussions have centered around which of the two: “Best in Class” versus “Best of Breed” capabilities are best suited to achieve the Operational Excellence goal.

Best in class is a single platform approach that allows organizations to run their E2E processes based on "industry best practices", based on a common data model that provides interoperability across E2E functions.

Best of Breed is typically a “cobbled together” set of disparate systems to run E2E processes that may have their own industry templates or best practices, which require integration to get all the pieces to work well together.

To set the stage for why one is better versus the other, let’s look at what I believe are 3 key tenets for an efficient and optimized set of E2E processes:

1.?????Visibility

2.?????Cause and Effect Impact Analyses and

3.?????Agility

Let’s now look at how these are important in the context of a specific set of E2E processes that are typical at organizations that Design, Plan, Procure, Manufacture, Deliver and Operate products and services for their customers.

This set of E2E processes, namely Design to Operate is the core focus of this discussion.?The Fig. 1 below represents a typical multi-dimensional value chain that is part of such an E2E process. There might be sub-processes as well but let's roll with this in the interest of simplicity for the sake of this discussion.

Let's now explore the 3 key tenets for an efficient and optimized set of E2E processes in this context.

Key # 1 – Visibility: Real time data driven insights across the E2E processes is a critical need to be able to understand how to optimize these processes.

Fig. 1: Multi-Dimensional Value Chain

In such a connected set of E2E processes let's ask ourselves: Do systems that have disparate master data and integration elements that are cobbled together able to provide this much needed visibility in near real-time?

Now that we have addressed visibility across the value chain, let's look at how to equip organizations with the ability to do actionable cause and effect impact analyses.

We know that different decisions have different timescales and in effect different impact both from an operational as well as from a cost impact standpoint.

Key # 2 – Cause and Effect Impact Analyses: – the ability to do actionable “what if” scenarios – especially important in a volatile market environment.

Fig. 2: Cause and Effect Impact Analysis

In the need to do actionable cause and effect impact analyses, let's then ask: Do systems that have disparate master data and integration elements that are cobbled together able to provide this much needed cause and effect impact analyses in near real time?

We know that any event – be it a once in a lifetime pandemic we have witnessed, a rare event such as the disruption owing to the incident in the Suez Canal or even natural events such as hurricanes and storms – can have a tremendous impact and stress on supply chains, so this is a key to mitigate risks.

Now that we have addressed cause and effect impact analyses, let's look at how to equip organizations with the ability to do be agile enough to take actions in an agile manner to make a positive material impact based on the analyses.

Key # 3 – Agility If a system can provide visibility and the ability to do cause and effect impact analyses in near real-time, what use is all of this if these insights are not actionable in a timely, near real-time manner or have reaction latency,?

Fig 3: Agility

The above shows the typical latency in making informed actionable decisions and acting on them and the impact from a business value standpoint.

While looking for agility in making actionable, timely decisions , let's then ask: Do systems that have disparate master data elements that are cobbled together provide this much needed agility to help drive actions to mitigate or course correct in a timely manner in near real-time, with minimal reaction latency?

The reason for me posing these questions, is that these are central to the approaches and the discussions around “Best in Class” versus “Best of Breed”.

My humble opinion based on the above analysis is that a Platform Based Approach is the best way to enabling the 3 keys of Visibility, Cause and Effect Impact Analyses and Agility which are all critical to Optimize E2E Processes to achieve Operational Excellence.

What are your thoughts?