Ten years ago this May a journalist named Nick Carr stirred up a ruckus with an article in Harvard Business Review claiming that IT Doesn’t Matter. Using the telephone and shipping by rail were great sources of competitive advantage – until every business could afford them. Then they no longer differentiated those who used them. Carr argued that IT is a mature industry, its presence is assumed, and such things as standards will make it even more of a commodity in the future.
Consultants Howard Smith and Peter Fingar shot back a month later with a paperback retort entitled IT Doesn’t Matter – Business Processes Do. I ordered a copy the day I met Peter last week, and I read the booklet yesterday evening. In 120 pages, Smith and Fingar skewer Carr, show why IT will matter more than ever, and explain how business process management creates riches.
The big argument is that “Business process management (BPM) systems can, for the first time in the history of business automation, let companies deal directly with business processes: their discovery, design, deployment, change, and optimization.” As long as there’s innovation, there’s room for making processes better. BPM promises to obliterate the “Business-IT Divide.
To optimize a process, the right hand must know what the left is doing. Enterprise Application Integration (EAI), the melding of ERP, SCM, CRM, PLM, and what-not into one all-encompassing application, is a major step forward, but it doesn’t link the organization with those outside the firewall such as partners and suppliers. Web Services integrate the enterprise with the outside world, connecting business to business, just as the Web connected consumers to businesses in the last decade.
Does this mean all business is going to be carried out using common processes that embed best practices? Not on your life. “BPM will be used both to differentiate (best-in-class) and to standardize (best-practice).” Count on Amazon, for example, to use best-practice standards for email and credit-checking, and FedEx will deliver your order. Don’t expect Amazon to let you peak into proprietary systems such as One-Click Ordering, for that’s where their competitive advantage lies.
Nick Carr’s screed in HBR attacked data processing as we’ve known it. Indeed, that’s not where to look for big value in the future. Business organizations are moving up the ladder a notch to MetaIT. Instead of one-time automation to save labor, they are establishing structures to continuously improve the way they do things.
Authors Smith and Fingar tell us it’s time for the IT tail to stop wagging the Business dog. In their vision of the future, business people will define and own business processes. Instead of doing what-if analyses with numbers on spreadsheets, decision-makers will do what-if analyses of how their business operates or might operate.
As I recently wrote here, it’s as if builders could move walls by shifting them on blueprints displayed on their laptops. With a comprehensive business blueprint, an executive can hand off an entire bundle of processes, say payroll, with minimal fuss (and with knowledge of precisely what savings will result.) A manager can experiment with different ways of getting a job done and chose the one with the most profit potential. A worker can fix a glitch in the system that has been irritating customers for once and for all. In the BPM world, business runs the show.
The authors propose a daunting laundry list of other functions the new paradigm can help accomplish, among them “accountability, activity-based costing, business process outsourcing, competitive intelligence, concurrent engineering, crisis management, inter-organizational systems, just-in-time (JIT), key performance indicators, lifetime customer value, pay-for-performance, resource-based strategy, security audit, scenario planning, and supply chain optimization.” (Whew.)
My interest in all this is how it improves learning and human performance. Process-oriented environments will impact traditional training just as word processing and social change eliminated most of the nation’s secretaries. Process innovation empowers us to create jobs that provide more throughput and greater worker satisfaction, although not through traditional training departments. Imagine the potential of:
- Workflow learning
- Transparent human development
- Grid learning
- Accountable training
- Activity-based certification
- Training value analysis
- Learning performance management
- Concurrent knowledge capture
- Customer learning alignment
- Personal flow monitoring
- Psychological stress alerts
- Individual performance indicators
- Team competency management
- Lifetime worker contribution
- Individualized learning paths
- Tailored management development
- On the fly simulations
For training directors and CLOs, the future holds good news or bad news. It depends on where you’re coming from. Training administrators who fail to understand the new dynamics of business as likely to find themselves stripped bare, evaluated by metrics they do not understand, and looking for another line of work. Those who adopt the process mindset take on significant new responsibilities, for everyone knows that the people in the organization are more important than the technology.
After fifty years of waiting for instructions in its corporate cocoon, training is ready to unfold its wings and be recognized as a full-fledged business process.
I wrote this post nearly ten years ago. The wheels of innovation turn slowly.