Does restructuring your company actually add value?

Flowing data has posted a great animation from Justin Matejka showing Autodesk restructuring itself over a four-year period from May 2007 to June 2011.

Whilst it’s a very cool graphical display of data, I was depressed by the animation. Despite all of the energy HR put into restructuring, the Autodesk share price during this period generally tracked the NASDAQ Composite Index.

I’ve linked to the video below. Underneath the video is the NASDAQ Composite Index over the same period. As you watch the video, keep in mind that each dot represents one of Autodesk’s 8,000 employees.



Restructuring at Autodesk

Of course, it’s impossible to know what would have happened to the Autodesk share price if Autodesk had focussed on supporting their staff as they built good software rather than continuously restructuring … One thing is for sure, there would be a lot of HR staff out of work.

Chicago’s push to go paperless misses the point

At the end of a long article on Chicago’s initiative to go paperless by 2015, Matt Stroud concludes with the following passage:

“In essence, you have to be able to demonstrate that the reduction also has a financial payoff,”

“you’ve gotta keep in mind that these are extraordinarily large and complicated bureaucracies. Going into the code enforcement department, for example, and spending millions on new technology and training and retooling — it’s a huge expense and it’s going to disrupt the process. So unless there’s a really huge financial benefit, it’s high risk. …

The monetary gain, he says, is just too small to advocate forcefully for spending money on less paper.

In other words, there’s no way to say going paperless is going to pay off.

And he’s right, but he also misses the point. Going paperless should not be about substituting paper with PDFs. It should be about receiving information in a digital form and storing it in a database – skipping the step of PDFing it altogether.

Invoices and time sheets are good examples. There’s little point in displaying this information on paper or in a PDF. It should be recorded electronically and stored in a database in a way that it can feed into a financial system. Doing so typically requires fully re-engineering the process and establishing systems that store the data in an actionable format.

On the down-side, you can’t mandate that this take place across all paper processes across the entire government within a three year period. Some processes may be possible to automate quickly, electronic invoicing for example. Whereas other processes may take many years to tackle because one or more parts of the value chain cannot be made fully electronic – the example given in the article is correspondence with prisoners.

On the up-side, re-engineering each of these processes doesn’t necessarily require a significant investment in new technology. It simply requires a full understanding of the entire end-to-end process, some innovative thinking on how to make the entire process electronic, and an implementation plan that accommodates lessons learned along the way.

Governments across the globe can become more efficient and effective but they can only do so by improving processes rather than reducing paper.

Sunday morning data analysis: Automation trumps outsourcing

Reprinted from ProcessGo!

At ProcessGo!, we are privileged to see some of the best solutions to common challenges in areas such as Finance, HR, Logistics and IT Services.

We’re seeing a clear trend that operational efficiency is more highly correlated to automation than to outsourcing.

Over the past few months we’ve put 8 enterprise clients through ProcessGo!. These clients have described their Finance, HR, Logistics or IT Services operations using our standardised format and asked suppliers to respond (using the same standardised format) with a proposal to improve their operations.

Suppliers have responded with a variety of solutions ranging from software automation through to outsourcing, and all combinations thereof. The most efficient respondents fall into one of two categories:

  1. Outsourcing suppliers who combine high levels of automation with outsourced services and who have a mature offering. These suppliers will regularly propose solutions that reduce the operating cost of the process by 50% or more (provided the enterprise can adopt their process without modification).
  2. Software companies and integrators who have a highly automated solution that is managed internally by the enterprise.

The cost differential between these two types solutions is not significant. Once we have more data, perhaps we’ll be able to pick a clear winner. What is clear is that both types of solutions involve high levels of automation. The only difference is who manages that automation.

We’re excited to be working in this space at a time when enterprises are finally able to take advantage of unprecedented levels of automation. We expect to see huge improvements in the efficiency and productivity levels within enterprises over the coming years and will regularly share our analysis of the trends.

The ProcessGo! Creation Story

Reprinted from ProcessGo!

I’ve spent the past 12 years helping companies improve their operations. Throughout this time, I’ve continually faced two challenges

  1. Gathering and structuring the information required to understand my client’s operations.
  2. Proving that my recommendation, at the end of my engagement, is the best way for the enterprise to proceed.

Over the past several years, I’ve been honing how I gather and structure information on my client’s current operations to the point where, last year, I reckoned I had it about right. So I got together with Matt Allen, one of Australia’s most talented web developers, and put it into a web application.

The challenge with gathering and structuring operations data is one of staying at the right level. When you first start an engagement, it’s like you’re flying over a dense jungle at high altitude. You can identify the big rivers and a mountains and it all looks pretty easy to understand. So you and your team strap on your parachutes, jump out of the plane, start floating towards the jungle. As soon as you pass through the tree canopy, it starts to get darker and your visibility is limited to a few metres. By the time you reach the jungle floor, you can’t see anything but undergrowth and you’ve usually dropped your machete. You can spend months smashing through the undergrowth and produce no tangible results other than losing some weight and half your team to Malaria.

Photo courtesy Kings Park, Perth

At ProcessGo! we provide the toolset to keep you at the canopy level. It’s like a series of tree top bridges that keep you close enough to the action to understand what’s going on but high enough that you can still make good progress.

So, after starting to build our web app to gather and structure operational data, we met up with Tom Frazier, who became, in Matt’s and my estimation, irrationally exuberant about what we were doing. He said:

You realise that once an enterprise describes what they are doing in your structured format, you can put that out to dozens of suppliers who will pay to show the enterprise how to significantly improve their process using the supplier’s software or services

And so, ProcessGo! was born…