Putting People Back Into Collaborative E-Commerce
Are These Collaborative Situations Familiar?
The executive viewpoint. For the executive vice president of sales and marketing, the algorithms used to create a market forecast are not nearly as important as the forecast itself, the effect of potential changes to that forecast, what customers will be affected by those changes, and how those customers might affect overall business strategy. The executive needs such information in one place, in real time, at one time, without having to ferret through some fairly sophisticated systems to get to it.
Likewise the manufacturing supervisor needs to know the effect changes by sales and marketing will have on current production, machine utilization, and cost. Having the complete forecasted flow of production is nice to know, but it will not help determine changes in the profit margins associated with a production changeover.
The internal operations. A multinational, multi-site, manufacturing company has 40 to 50 people in a manual environment dedicated to resolving customer billing discrepancies. There are no "best practices" to quickly resolve such discrepancies; every customer interaction winds up being a unique transaction. The hand-offs between billing clerks involves hand carrying or using FedEx to forward relevant supporting documentation, especially where multiple participants are involved, even within the manufacturing company itself.
The supply chain perspective. Manufacturers want greater visibility into inventory across their entire network of vendors, distributors, and customers. When an imbalance between supply and demand occurs or an exception or discrepancy needs to be managed, manufacturers want to respond in real time, thereby preventing problems or reconciling issues prior to shipment.
In each of these scenarios, people are integral to problem resolution. Yes, technology is, too, but let's put technology in the proper perspective: it's only an enabler. If technology could perform the problem resolution in these scenarios, you wouldn't need people. Today's technology can't do that. And therein lie several issues in today's technology-driven collaborative operations. First, business today involves a high degree of collaboration within and among companies. This collaboration involves more than integrating business processes at the application level; it relies on decision support, whether from people or from information systems.
Second, daily business operations often involve exception processing. For such transactions, people need to intervene; technology just isn't quite ready and may never be ready to manage exceptions. Somewhere along the line in the collaborative process, people have to synthesize information and use it in a manner that best suits the business at hand.
Last, when companies begin to integrate their businesses, they typically focus on automating system-to-system exchanges of data, such as purchase orders or invoices. This level of integration is important, and it does create business efficiencies and reduce operating costs. But as we have seen time and time again, applying or implementing collaborative software alone does not get user companies to the nirvana state they were looking for.
The problem is that the focus is on collecting and managing data, versus delivering data to make a decision. The link that's missing is people.
The solution? Ironically, more technology is required to help people do their jobs. However, technology is only part of the solution. People are the other part. We haven't come to a day and age as of yet where technology manages everything, including decision making and the human impact of those decisions. The human impact is the tough part. It's not sexy. It doesn't sell. But it is the back bone of sound business decision-making.
I contend there are two fundamental requirements for collaborative processes - and the technological systems that support those processes. First, technology must deliver the right information to the right people in the right context at the right time to make decisions. Second, rather than merely pass data to one another, more must be done for people to use information effectively. Technology must actively integrate people and their knowledge into appropriate points in a business process.
Technology Doesn't Cut It
It has not been so long since the market became flooded with technology that answered the basic questions about operations and supposedly responded to operational issues. With that technology, we focused on how to get better information about forecasted demand from the customer base or from our marketing organizations. We included all types of algorithms that utilize historical data, economics, geographies, demographics, and other data to predict what the requirements were for a product, for the marketplace. We implemented high-technology to develop optimized schedules, all of which to streamline and reduce the lead time from customer order to customer delivery and, in some cases, for return. We streamlined distribution, consolidated physical facilities, and maximized transportation to the customer or through retail and subsidiaries.
All of these solutions focused on systematic and complex technical support. They focused on managing within the four walls of the enterprise. Globalization and e-commerce has exploded that focus. Now companies are linking from inside their four walls to outside their four walls - to other companies - and have these other companies, through collaborative processes, respond in kind.
Our initial approach to this change has been to re-implement the same technical expertise from within the four walls of an enterprise at other companies - and somehow connect the companies together. Hence came trading exchanges, which initially focused on auctioning, buyer/seller matching, and procurement. Now trading exchanges are driving toward collaborative planning and the integration of demand management.
Human Nature is the Real Issue
In the business world, two types of business processes stand out: decision-based processes and reactive processes. In the first, countless business processes are so complex or dynamic that they require a knowledgeable person to make decisions as an integral part of the process. For example, if customer demand exceeds the capacity to deliver, a person must make a decision about allocation based on customer profitability, order sizes, and the current and desired relationship with the customer.
In the second case, automated business processes may go "out of tolerance" because of data entry errors, exceptions, unplanned events, or even unexpected opportunities. Resolving such events often requires people to apply their knowledge or to simply grant their authorization. Too often, managing or executing the resolution of such an event requires manually interacting with a variety of back-end systems, including a series of phone calls, faxes, and emails between employees and trading partners.
So here's a third reason why information technology (IT) hasn't worked as planned: the combination of unpredictability, complexity, and human nature is a very real problem. Let's face it: People do not always respond the way automated systems might predict. (Plus at the macro level, market changes, adjustments to manufacturing, equipment failures, and so on can all effect this collaborative nirvana we've tried to build in technology.)
People may be very strong professionals in their field, but they might not necessarily be technically suited to use all of the technology at their disposal. These people understand what the technology is for, but using it requires a training effort that might be too time-consuming, confusing, or just plain lacking. A bigger problem is that people may focus too much on how to use the information system, thereby subordinating the issue of how to run the business! That takes away from the whole reason for IT in the first place.
Figure 1 - Collaboration applications link the entire organization from people
to data
The Look of People-Centric Technology
Ironically, people-centric collaborative e-commerce still needs information technology - with a difference. The people-centric solution must couple technology and applications with a decision support environment where knowledge management, interpersonal communication, and real-time process execution capabilities - with relevant coaching available for each step - are embedded within a single interface. This solution would have the following basic requirements:
- Provide a process-centric environment that spans tasks, applications, departments, and organizations;
- Support both "lights out" processes and collaborative processes that involve people;
- Provide best practices that address areas involving complex and labor-intensive business collaboration;
- Provide workflows that can be granular or high level, depending on the user's experience and knowledge about a process or issue, whether internal or external;
- Provide capabilities for users to adjust processes (workflows) that need to be changed (given appropriate approval), without requiring IT support;
- Mask the complexities of underlying systems, converting process tasks and functionality into common, everyday language in a simple, click-by-click execution environment;
- Establish a collaborative environment that integrates people, knowledge, process, and technology; and
- Co-exist and leverage a company's existing infrastructure of applications, systems, and communications.
The key here is in making people the center of the automated, technological solution. I perceive there are three key components for this. First, people-centric collaboration must identify "best practices" that address both high-value intra- and inter-company functions, such as supply chain synchronization, human resource services, and product lifecycle management. These best practices must then be translated into specific workflows that match the individual processes within the best practice.
These workflows must be specific about the individual processes actually being performed. The workflows must account for the reality that for every "order event," a multitude of supporting processes and transactions exist - and all of these must be synchronized. A holistic approach must be considered: who touches a process, when do they need to touch it, and what specific information do they need to perform that process. Plus, the workflows must drive the integration of participants in those workflows, whether they are situated internally or externally.
Second, the people-centric collaboration platform must provide information linkages to all data sources. Key to this is a platform that is both non-invasive and that can co-exist with existing technology infrastructures, including back-end databases, applications, and enterprise application integrations.
One way of ensuring this, as evidenced by increasing numbers of enterprise systems coming on the market, is to present tasks in a Web-enabled, email-like environment. The user interface should closely couple these emails to software wizards and other forms of prompts to help guide the user through each step of a process (if the user so chooses that level of assistance). Such undercover agents contain the required data to perform the task in question, thereby isolating the user from the complexity of the back-end system. Processes need to be identified that include the specific information needed by both internal and external organizations, who within those organizations - cross-functionally - need to be part of that decision process, the sequencing to make a decision, and the timing for completing that decision process. By identifying these and executing to this plan, only then can you truly streamline the value of the decision process and achieve optimum benefits.
Last, because each integration process represents an opportunity to affect the performance of both internal and external business processes, no systems would be complete without some form of monitor to measure the progress of decisions. Such progress, graphically displayed, would help decision makers and senior executive management compare current operations to historical performance.
Figure 2 - Collaboration applications let companies bridge the last mile of
process automation.
(See Larger Image)
The Benefits of People-Centricity
In tangible terms, accelerating the rate, accuracy, and efficiency of interactions and processes within and between companies typically saves time, and thus money. Just clearing up a process - not necessarily changing it - reduces the time involved in that process. Less material lead time, for example, generates greater cost savings through lower on-hand inventories. Shrinking the amount of time to make decisions or somehow streamlining that decision-making process leads to reduced processing time and overall time-to-market. All of these reductions may lead to reduced head counts from streamlined processes and, in the long run, a reduction in the total cost of a product or a business operation, or both.
In addition to these direct economic benefits, a people-centric collaboration environment gives people more, and more-relevant, information. It focuses on the business issues, highlighting the processes to go through to manage a situation - and giving people the data and tools to manage.
Last, a people-centric collaboration environment benefits internal business needs. For example, a collaborative human resource system could present a set of bundled one-click links for "hire-to-retire" processing, each link leading to vendors and employee forms for payroll, 401k, insurance, office supplies, and other needs. Such a system would put order to the chaos that typically exists in such highly repetitive, paper-intensive, manual business processes.
In truth, all technology providers say they can provide data at varying levels. And they do; they manage data quite well. But what's now required is for businesses to focus on the key operations, datasets, and processes to make better decisions. This focus includes the following:
- Know that people still need to make decisions.
- Technology needs to support the decision making processes that people do every day at their job.
- Develop operational performance indicators to trigger people interactions and to help guide those people into making better decisions.
- Use technology to provide the right information rather than a core dump that leads to information overload.
I'm talking here about basic concepts that need to be put into practice: Implement technology that delivers the appropriate level of information to the person who needs to respond to the needs of the business. This imperative becomes even more critical today in effectively gaining real value in the true end-to-end supply chain - the ultimate collaboration environment.
