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MAX MASTRANGELO

Max Mastrangelo

Max Mastrangelo

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The courage and strength to change

Those who said that the end justifies the means forgot to point out that the means determine the outcome.

When human beings are among the means, each one of them-even the least responsible from the point of view of his or her duties-exerts a decisive influence on the achievement of the result.

In order to change the quality level of the result for the better, it is strictly necessary that each human "means" assigned to the operation be prepared to change its basic attitude as many times as necessary until the goal is achieved.

Change, within an organization, always means interaction.

Interacting in maneuvering change together with others requires the courage to break down and rebuild oneself to go and constitute a collective entity, abandoning the primitive essence of an individual entity used to negotiate rather than co-interpret.

The prize that -- professionally -- accrues to individuals ready to intelligently "merge" into a new collective and functional entity is personal identification with the results of the entire organization.

"I am Samsung/Apple/Ferrari/BMW/(...), in that the excellent result of the whole organization is the inseparable contribution of everyone; each of us, individually, is a man in the street. Together we become a winning entity whose prestige reverberates in equal parts on each of us..."

The way people interact in a given situation represents what makes those people unique.

The way in which economic, production, financial and service dynamics interact is what creates-in the context of those dynamics-differentiation and any competitive advantages that might follow.

Such interactions are processes; a series of actions, changes, functions, or even non-actions that are directed toward a certain outcome, or that--according to what degree of governance they are subjected to--force their protagonists to achieve a certain outcome in lieu of what they would have liked to achieve.

In a word, the processes through which the outcome is pursued are the primary cause of success or failure in the pursuit of that outcome.

There are processes that look simple and intuitive, such as asking a question or systematically forwarding a given type of information to a colleague, and there are others that are less easy, such as manufacturing a product or devising a strategy for attacking a foreign market to which the company wants to enter.

Whatever their characteristics, there are no processes in one company that are perfectly identical to analogous or similar processes iterated in another company, be it - by market placement and individual requirements - entirely homologous to the first. Every process observed in any company, has its own degree of uniqueness that - for many excellent reasons we shall see below - is inescapable, physiological.

The inevitability, the physiology of such uniqueness of processes has at its basis the uniqueness of human beings themselves who are the protagonists of such processes.

Any action of supra-firm standardization of management and production processes may lead to a significant reordering of inter-firm communication channels, and also to significant efficiency gains, to a significant improvement in the productivity of the companies individually evaluated, but it cannot - in fact - make the comparative operations of two companies perfectly identical, since the human beings operating in them are neither androids nor robots, and thus represent a significant and scarcely predictable variable capable of visibly affecting the processes themselves.

To make the communication channel effective between multiple production and management units of the same company, and consequently between multiple companies, we now have ERP, CRM, Supply Chain Management.

They have enabled companies in the second decade of the third millennium to achieve almost complete liberation of internal processes from physical logistical constraints such as personnel travel, interchange of information by means other than the network, or extra-accounting reconciliations.

This has not "dehumanized" and will not dehumanize our companies, which even in 2030 will (fortunately) be populated with human beings, with their uniqueness and-why not-all the benefits derived from their personal talents; what - instead - will constitute an important first medium-term goal will be the standardization of methodologies through which human beings effectively place their personal talents at the service of their host organization, using the most efficient times and ways possible, with the goal of having the result of actions so intelligently processualized flow through the accounts of ERP systems of every generation, capable of transforming--at last--the work of the organization into a complex, standard and constantly updated data, readily usable both within and outside the business organization.

There was talk, therefore, of 2030.

Then, as now, although the optimization of internal process management methodologies, as well as the enhancement of information systems at the service of business will have - as already stated above - relieved daily operations of most of the logistical and communication burdens that still characterize business life; the processes that it will not be physiologically possible to deprive of their fundamental logistical and "physical" part will continue to be the most difficult part, the most demanding in terms of maintaining quality levels to which it will no longer be optional to conform, on pain of exit from the market.

These processes, also in the future, may be identified in all those types of daily operational events that require physical product handling, such as:

- purchase of material

- supply of material

- selling products

- Realization of products for third parties and subsequent transfer of the product

- the interactions resulting from the processes of buying, supplying, selling (people's behavior, the preponderance of interest in one or the other segment of a process, people's knowledge, their skills).

These are already quite complex processes to manage; and they are so complex that the degree of complexity of the sub-processes themselves can lead us to lose sight of the main process of which they are a part.

How, then, from today and going forward, will we be able to make sure that the heaviness of certain subprocesses does not cause us to lose sight of the efficiency and effectiveness of the main processes and--therefore--their very value?

It is all too common-as much as physiologically an economic system can bear-the tendency of productive organizations (especially medium to large ones) to circumvent the problem of the excessive cumbersomeness created in the processes described above through an impositional and fatalistic attitude (we do this thing this way. this is how it happens with us and it is impossible to change...).

This sort of refractoriness to change very often leads to fragmentation of processes among different applications and/or different instances of the same application, with the result that-in the folds of such fragmentation-the backbone of the original process is permanently and irretrievably lost.

In such a situation, it is almost physiological and consequential that the information systems that were adopted to be the answer to such fragmentation end up being fragmented themselves, with the result that a process that should be the basis of proper economic, financial or logistical iteration, fundamental to the success of the business object, finally disappears.

Can the path of data integration among all these fragments be the right one in order to recover the full functionality of processes vital to the company?

Approaches such as EAI (Enterprise Application Integration), which is a mere, albeit sophisticated, action of interconnecting data between fragment and fragment, have been observed in the past, in the context of which interconnection action, however, the problem of the big picture view is not contemplated.

A kind of transport "bus" makes the data flow, converts them, routes them, and assembles them between fragment and process fragment, thus achieving a form of integration which, however, fails to prevent the processes subject to the "pasting" action from remaining fragmented and hidden in individual business areas, and that the data that are the consequence of this uncoordinated and inefficient operation continue to remain nothing more than the result of uncoordinated actions poor in efficiency.

In a word with methods like EAI there is flow of data, but not of processes (which are and remain the fundamental elements of an economic system).

This would entail no secondary considerations of work ethics, since-seen in its pure essence-a system of this kind is first and foremost an instrument of cure rather than prevention, a kind of emergency surgeon always ready to stitch up the wounds that the incongruous operation of certain managers brings to the system every day.

Better would be to do prevention; to teach such perpetrators not to hurt the system on a daily basis, or to oust them from the processes altogether should they prove hostile and/or resistant to necessary and healthy change.

In other situations, the inconsistency of internal processes (at the source of which, let us never forget, there are always human beings), is only partially resolved by circumventing, once again, the obstacle of reengineering through the uncritical interconnection of different applications. An example: an order arrives from a customer.

A CRM (customer relationship management) application records the order and sends a check request to the warehouse management system to check the stock existence of the ordered item. The warehouse management system automatically discharges the existence of availability and, before sending the order approval back to the CRM system, performs a brief check with the company's order/payment management platform on the existence or non-existence of invoices issued to the same customer whose payment is overdue or rejected.

Once the OK is obtained from the finance department, the warehouse system sends the order approval to the CRM, which sends an instruction to the Operations division system to fulfill the order; the latter system, interlocking with the finance division application for the relevant billing, coordinates the shipment and oversees all the final stages of transition of the ordered product from the supplier's warehouse to the customer's warehouse.

In the illustrative framework just sketched, machines interact with each other to the exclusion of human intervention at every level and leave no room for the possible variables that characterize a company's daily operations, but especially its relationship with the customer (an important asset above all else, among the company's intangible assets).

If, in the case of the example just described, a customer had rejected - outright - payment of an invoice on the grounds that it had been issued with errors or in error, in the event that the subsequent order occurred before the supplier issued the credit note, the system would automatically reject the order to the customer, an unnecessarily rude action and a harbinger of problems in the business relationship. The eventual apology phone call following the incident would place the responsible party taking charge in the double embarrassment of having to apologize for an unnecessary offense, and having to implicitly admit to the customer the supplier's defective operation.

In a counter example, in the event that a customer habitually made contractually incorrect use of goods purchased from the supplier (unauthorized sub-supply or redistribution, etc.), taking advantage of a fully automated order fulfillment system would be sufficient for him to be in good standing with previous payments to have other goods automatically delivered to him of which he would continue to make, in the marketplace, unauthorized use by the manufacturer, unless the system included the possibility of placing a "flag" on a given customer to send him to a sort of blacklist, which would, however, continue to require critical monitoring by one or more human beings to be properly managed.

CREATE PROCESS GOVERNANCE IN THE COMPANY

The real trump card that a company has today, and-increasingly so-will have in the future, is and will be the ability to govern not already the information systems (also an indispensable and fundamental tool of progress), but-before them-the internal operational processes.

In the future there is no room in the market for companies that do not have the strength to steer the direction of their macro and micro internal processes; in the scenario of the future, there are no companies where one or more managers are pointing their feet and resisting a high degree of result-focused and firmly customer-centric operational flexibility.

Either that, or out of the company; and if not, it will be the company that goes out of business, like a Titanic sinking with all the officers and crew on board, some of them completely innocent.

The ability to quickly govern and direct its internal processes gives the whole system great visibility, quality management, cost and time efficiency in both internal and external interactions.

The ability to analyze, redesign and apply new internal processes must necessarily go hand in hand with the ability to create solid and logical interconnections among them, and - consequently - with the knowledge of methodologies that - applied intelligently and consistently - will enable the successful achievement of this new and necessary State of Grace.

Creating proper synergies between internal processes and technologies available to the company requires the necessary presence of three components:

- Analysis

- Blueprint

- Technology

Once we have located and "grasped" these three fundamental strands of the skein, we will be able to approach the redesign of our organization with greater awareness and with a greater degree of effectiveness, whatever-after our initial reflections-is the degree of depth we will have aptitude to bestow on our reengineering action.

It bears repeating: the process reengineerings that aim the highest, those that have the greatest chance of making the company make a significant and epoch-making leap in quality, are those that place at the top of every other goal that of making the organization adhere-perfectly and accurately-to the ultimate cause of the highest possible quality of its economic, industrial and commercial action.

Humanly speaking, one can well understand (less justify), the tendency of the simplifying schools of thought, those who would like to strike a balance between the needs of customer satisfaction and those of technological instrumentation.

The actions of reengineers in companies where such schools of thought have prevailed end up resulting in more or less happy (but never completely effective) adaptations of the existing business reality to the architectures of recently adopted systems, often of advanced design, but-in this eventuality-never excellently deployed for what their potential is.

The action of forcing old procedures into the grid of new computer systems is--conceptually--unquestionably wrong: the enterprise's resource planning systems are born not already for the purpose of speeding up inconsistency in order to cushion the delays that constitute its physiological bearer, thus giving the entire organization a greater lung of time in order to correct its unsatisfactory results ; they are born having already inherent the so-called "best practices" precisely so that the enterprise has an exceptional guiding tool, capable of ferrying the entire organization with speed and efficiency to a qualitative behavior focused on customer satisfaction.

Here is the precise moment when the Business Process Reengineering activity becomes one of the indispensable building blocks in the construction of the qualitative organization of the future: it stands to the adoption of an Enterprise Resource Planning system, as - for a human being - the necessary diet and increased physical activity stand to the purchase of a suit two sizes smaller.

Would you go out and buy a Valentino dress two sizes smaller than yours, only to take it to any suburban tailor for alterations and poor adjustments in order to see it fit on you?

This would be a completely illogical action and a harbinger of unnecessary costs: it would involve the cost of the garment, plus the cost of adaptations, in order to achieve a poor and unsatisfactory result in looking at yourself in the mirror with your new, very expensive, designer garment and subsequently modified.

Such an operation may well compare to the abstruse and illogical tactics of those who spend substantial corporate funds to bring in SAP, Oracle or any other management system that is certainly not on sale, and then unleash private customizers-often young and inexperienced-on customizing transactions, tables and operational flows "that you cannot, under any circumstances, change," with the end result of seeing their own management mistakes speeded up.

Better would be, in buying a Valentino dress, to decrease one's food income and increase one's outgoings, with adequate physical activity and personal care, in order to make one's splendid figure once one enters the garment signed by the great master.

Here is a smart way to invest your money in order to improve your image!

Let us make sure, therefore, that before any, now dutiful, injection of new technologies, it is our organization that enters the gymnasium, and reason with necessary analytical capacity about the way it feeds itself and the actions that dissipate (or do not dissipate) its available energies.

Just think, after a wild and mindless wave of so-called "customization," a new computer system can end up costing twice as much and decrease to a mere tenth its period of actual usefulness in the company!

After the modification of a standard code, a new release issued by the system manufacturer and delivered to you free of charge (due to precise contractual obligations), cannot be installed on your workstations except through further customizations, costing not only in cash, but also in time; days and weeks that will bring you inexorably closer to the issuance of the next release, when ... it will be time to spend all over again.

A few years ago, a very nice TV philosopher often came up with sentences like, "it is better to spend a month as a guest in a grand hotel than to pay for a week's vacation in a Canadian tent at a super-crowded campsite".

Is there anyone who would dare to blame him? Hard to find (at least among so-called sane people).

We could sympathetically paraphrase it by ruling that "it is better to spend a reasonable amount of money to have a company that functions well, than to spend three times as much and end up with a company on your hands that functions poorly and dispersively".

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