Process Silos
Removing Silos in Planning - Part 2
Process silos are the type of functional silo that has been known and tackled by businesses the longest. I will not rehash what has been more than adequately studied and published over the last decades. However, this article will cover some high-level essentials from a technical angle to clarify the distinction with the other silo types.
Process silos occur when business processes are not aligned. Before the pervasive use of computers, these silos were not as much of a problem because the speed of business was low enough to align the manual processes manually. But once computers started getting used for calculations in more than one process and recalculated more frequently they started getting out of sync. Communication by fax or phone was not only leading to data errors but also timing problems.
Removing those issues meant automating the integration of data as well as carefully choosing the timing of automated processes so they would be in sync. Integration protocols such as ETL and EDI replaced faxes and phone calls for batch and record transmissions. The automated processes would run at set times, like 3 AM on the first day of the month to allow tabulation of the end-of-month inventory to be finished beforehand. Alignment occurred through a one-time careful design of all the dependent processes, sometimes tweaked over time.
Many companies went through system integration implementations to better align all their critical processes. But as soon as the consultants were gone, slowly but surely, misconnects started reappearing. By Y2K most medium-to-large businesses had system landscapes that looked like the top image. Expensive enterprise applications were failing to meet end-user requirements, so the latter started bypassing the system and doing the real work in spreadsheets. Both the decision-making in spreadsheets and the communication of those spreadsheets would typically go through emails, leading to myriad versioning and formula error issues.
By now, most companies have realized that they need to solve process silos and data silos simultaneously. In large highly automated system environments, the only way to remove process silos is to completely remove every single manual step. This in turn requires removing all dependencies on spreadsheets, emails, phones, and faxes. The human needs to be taken out of the machinery and placed on top of it. The human can still intercede, change direction, or tweak, but the process will not be held up if the human is not available.
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Automated workflows now replace rigid predesigned timing of process starts. Workflows trigger the next process automatically when the prerequisites are all completed, and hold off when one is delayed or failed altogether. Many companies have implemented workflow systems that can access and orchestrate between and within multiple of their planning and other business process systems. Many, however, still need to come to terms with the fact that to get out of their Excel hell they need to replace or augment their existing enterprise software that is failing to provide the functionality or accuracy required by the business.
The next frontier is sure to require another round of process alignment improvements. As the speed of business increases and concurrent planning becomes a competitive necessity, the requirements for process alignment will change again. But this should not surprise anyone.
This article is part of a series covering the 4 types of functional silos in planning:
Find all my articles by category here. Also listing outstanding articles by other authors.
Planning Supervisor, at SMTC
3 年Thanks for posting
Industry Account Executive | Major Accounts
3 年Then add all the flavors of each of those silos and the magnitude of a data rationalization or process integration project really hits you. We see a version of this in operations, where machine learning projects can get bogged down because the assumption is that all the relevant data needs to be lined up and prepared, so it almost becomes an endless data project.
Researcher
3 年I want to bring up that ERP vendors promised a fully integrated system that would eliminate silos. Gartner promoted ERP systems, but did a poor job explaining how badly ERP systems failed at this as Gartner adjusts what it writes depending whomever is paying them. So we have the issue where previous promises are forgotten, and the promises are forwarded to a new item. Writers tend to have selective amnesia on previous promises, especially if they made them. For a long time ERP apologists came up with things like a lack of change management, lack of top management support to explain this. But the reality is that when implemented as designed, ERP provided very basic benefits in integration of business processes, but at a great cost to flexibility. I am not contesting anything in the article, instead I am providing some historical overlap with the article.
Retail Supply Chain Planning Consultant | Author | Educator | System Integrator | Flowcasting Specialist
3 年Wight's 35th Law: Poor systems breed more systems. - Oliver Wight (1930-1983) "Systems" in this context is not necessarily referring to computer systems (although it definitely applies), but business processes as well.