Business strategy and thrust to be the focus areas

Disclaimer: The views expressed in this article are those of the author and do not necessarily reflect the views of the Economic Times – ET Edge Insights, its management, or its members

Business,Strategy,,Business,Management,Or,Business,Success,Concept.,Hand,Is

Business strategy and thrust to be the focus areas

Reality that we regularly encounter, can comprises dense interconnections between its constituent elements that impact each other almost continuously. Since all tasks undertaken by us has this as the backdrop, successful completion of any non-trivial task has, necessarily, to take this in account. Attempting to carry out an initiative while ignoring this truth could lead to unexpected outcomes and disappointing results. Traditional management practices that are largely accepted and followed in today’s world, do not cognize with this fact. These are derived from methods of science that are essentially reductionist in nature and hence carries forward the same thinking to management methods as well. At this stage we had introduced the concept of systems and an approach based on systems, that recognizes not only the problem but the context in which it has arisen. Solutions, derived from this approach, to problems therefore embrace the context as well and are appropriate for both rendering these sustainable and apposite. A system has been depicted as a collection of interconnected elements, but that is not the only type of system that is pertinent in our quotidian context. In this article we shall introduce two more ‘avatars’ of systems.

SYSTEMS BASED ON PROCESSES

Holism is the underlying principle of systems but in different circumstances one would need to view the whole differently. I shall illustrate this aspect with two real life examples. In the first case let us consider an organization that is currently manufacturing and selling computer peripherals. Quality of its product is paramount and the company is struggling with it and upgrading it is essential for future success. If we adopt traditional management practices for this task, we would recommend expanding and tightening the “Quality Control” department. I can almost hear the ‘big boss” say get a tough guy. I have witnessed such a situation when the QC Head was regularly rapped on the knuckles for a 30+ % of rejects by the customer company. If however, one were to view the problem from a systemic view, an entirely different perspective will emerge. The systems thinker will adopt a holistic perspective in attempting to understand and combat the problem, but the question is which whole will he consider? Will it be the organization with its immediate context or will it be something else?

The system, the whole under study, here would comprise the entire procurement and production processes along with concomitant action steps and is different from the whole considered in the earlier case. The identified system helps gain an appreciation of the process and how at each step the quality of the final product gets impacted. If our focus is the final quality of the product then we necessarily need to scrutinize all the steps and actions that contribute to the building of this quality and gain appreciation of the process. Does the Procurement function prioritize quality during the process of interacting with suppliers? Do they sacrifice quality for price or for quicker delivery? Is there a proper process for incoming quality testing, how’s the storage facility? At the production level are the equipment well maintained? Are the operators well trained to handle their allotted task? What is the commitment to superior quality at all levels of management?  All these components influence the final quality and if we wish to improve quality of the final product each of these inter related elements will have to be addressed. A critical, probably the most critical, determinant for success is the full commitment of all personnel. In this case we realize that in order to ensure success in our task we have to study the entire process with all its interlinkages (system) and then address all aspects in an integrated manner. Such an approach alone will ensure achieving the goal and sustaining it for the future. This design of system focusses on movement and quality of raw material and work in progress during execution of production and dispatch processes. The system that is studied, in this case, is the end-to-end process that eventually builds quality of the final product.

SYSTEM ELEMENTS AS PREREQUISITES

In the next example the system in focus alters to include prerequisites for the completion of large projects. Consider an instance that senior functionaries frequently encounter, implementing an organization-wide IT application. Here the type of holism needed for success has a slightly different hue. A usual scenario in such cases is the existence of IT systems that support certain parts of the business. Each of these systems has their data sequestered from the rest of the organization with usage limited to users related to that particular transaction. Quite often this bespoke software is built around transactions and are unable to support integrated operations and hence not effective in significantly impacting overall performance.

When we attempt to implement an integrated solution in such a situation a whole host of factors determine its success and consequently probability of successful implementation is, characteristically, rather low. In fact, the best results for successful implementation, as defined by apriori parameters, is less than 25% according to some reports. The first requirement is a business strategy and strategic thrust areas that this implementation will focus on. As systems thinkers we know that attempting any serious implementation without meaningfully integrating with the context is not workable. So, the first part of a holistic approach would be to design the new system either afresh or in a manner that seamlessly integrates (business process wise) it with existing systems. In other words, business processes that the new systems automate, should be dovetailed with existing ones to facilitate a unified working of all these processes.

This unified business process will immediately call for architectural integration. How will the new systems mesh with existing ones at the architecture, technology, hardware and software levels? Decisions taken at this stage will have both short- and long-term repercussions on the technology profile of the organization. For instance, does this new system require a new technology or can we accomplish this efficiently with existing technology, hardware and software. How, for instance would you integrate legacy and COTS applications? Would your existing strategy of APIs suffice? An interesting aspect that often develops in any such implementation is the infrastructure. While existing needs may be met satisfactorily often an integration may require significant enhancements, especially if on line real-time results are sought. A critical factor in all this is data. Data harbored in individual systems are often not easily accessible to other systems. In many situations exact nature of data required for integration is different from the form in which it is captured originally and hence requires further processing and so on. These data related issues will necessarily need to be sorted out before moving any further on implementing such an initiative. Another aspect that requires attention is the nature of available skills within the organization. Do the new systems require additional skills and do we possess those or do we have to engage external partners? However, the most critical factor is how do we get users to move away from existing practices and utilize the technology and concomitant integration. This would require organizational intervention, training etc.  As may be seen from this discussion, the system under scrutiny is different from the two that we presented earlier.

CONCLUSION

Based on the discussion above it is evident that a holistic approach differs substantially based on the specific situation or problem context. The system relevant to a particular problem situation, naturally, differs from situation to situation. Any exercise involving systems, therefore, will have to cognize with this fact. Additionally, a system is often contained in a larger system and contains systems within. In the next few articles we shall dwell on this fact and elucidate how to go about using systems for problem solving after duly acknowledging this ‘systems within systems’ characteristic.

 

Prashun K Dutta
Prashun has around 35 years of varied corporate experience, former CIO at Reliance Infrastructure and Tata Power, an Electrical Engineer and a fellow in Management of the IIM(C). He is well known for his contribution to the electric utility sector where the systems implemented by him at RInfra and Tata Power have been adopted throughout the country. He is now a freelancing consultant to corporates.

Disclaimer: The views expressed in this article are those of the author and do not necessarily reflect the views of the Economic Times – ET Edge Insights, its management, or its members

Leave a Comment

Your email address will not be published.