Measurable Benefits: How Heroes are Made in Enterprise Apps
Are enterprise applications working for my company? If you don’t measure, you are merely guessing.
More often than not, heroes have more help than is publicly recognized. While scaling Mount Everest, Sir Edmund Hillary had his Sherpa guide, Tenzing Norgay, by his side every step of the way. Helen Keller had Anne Sullivan, the teacher who broke through her deaf and blind isolation. The fictional brilliance of Sherlock Holmes is ably buttressed by the collaboration of Doctor Watson.
In the world of enterprise applications, experienced practitioners are often the unrecognized but complicit abettors of business heroes. Take, as a real example, the American chief information officer whose huge insurance firm had recently completed a very expensive SAP enterprise applications implementation. In the halls of leadership of her company she kept saying that she knew that their business processing was very much improved, but her executive wing colleagues did not buy it. Their opinion was that the investment in SAP had been a colossal failure and the company was no better off than it was before.
This argument went nowhere and was unwinnable because neither side had any credible, numbers-based business measures of ‘before SAP’ and ‘after SAP’. All that anyone had were perceptions.
The failure to apply numbers-based measures of business process efficacy before and after an enterprise applications implementation is such a frequent failing that the mere mention of ‘measuring’ regularly elicits reactions such as these:
“We don’t have the time for measurement.” (Or “It’s not in the budget.”)
“We already know things are going to be better, so why bother?” (Though this would not be sufficient to answer the question from your board: “What did we get for our $100-million enterprise applications investment?”)
“We can’t agree on KPIs.” (Or “We already have too many KPIs.”)
“The project is already justified.”
“We don’t really want to know how awful we’ve been.” (Or “We don’t want anyone to see how awful we’ve been.”)
At the outset of its implementation project, the CIO’s firm cited the fourth reason, confusing the need to measure benefits with a need to financially justify the project. Further, the project justification that was tendered was bullet-point based, not numbers based, and thus lacked both credibility and measurability.
When Numeracy Beats Literacy
Literacy, in business, is an obvious asset. In the world of SAP, however, what we have too often is a failure to communicate, even when literacy is at its apogee. Consider the following statements of intent:
“We are streamlining our insurance claims process.”
“We are speeding up our collection processes.”
“We are reducing litigation levels.”
Each of these optimistic statements describes a positive business outcome, but none of them provides any precision or direction. Further, they all simply lead to questions rather than answers. What is being streamlined in the claims process and to what degree? What in the collection processes will engender acceleration? What changes in how we work will reduce litigation? How will we know when we have achieved improvement?
It is bad enough to be this vague on a day-to-day basis but such literary mumbling can be catastrophic at a highly strategic level. As it nearly was at the CIO’s insurance firm.
Scaling a Business Mount Everest
To counteract negative perceptions and to put the firm on the path of enterprise applications satisfaction, the CIO diligently sought out an ambitious company executive and together they identified a business problem – the high cost and time for catastrophic insurance claim processing – that their enterprise software could solve. This time, actual company performance was measured relative to affected business tasks and processes. All of these were redesigned and SAP enterprise software was configured to enable their fulfillment.
Once the credible and measurable results were in, the ambitious executive had the enormous satisfaction of presenting to his colleagues, with numbers and charts, how he had identified and solved a business problem and thus saved the company many thousands of dollars. This led to envy, of course, but envy of a positive nature as others quickly stepped forth with proposals for their measurable business improvements that could be enabled through enterprise applications.
Inevitably, the firm created a formal Business Improvement Committee comprised of business process owners with the charter of saving the company money and improving customer satisfaction through the judicious and measurable deployment of enterprise software assets.
Result: a dramatic change in culture keyed by a) an understanding of how SAP can best be deployed, b) constructive business and IT alignment and c) the utter importance of business process measurement.