However, as these smaller innovative companies grow and scale, they are unable to keep up with the needs of their operations and IT infrastructure. A similar reality holds true behind the firewalls of the more established leading organizations – a continued lag of operations and IT infrastructure to support faster time-to-market and lower cost of operations limits how many innovative ideas can be funded and brought to the market. Conventional wisdom suggests that customers see less than 10 to 20 percent of the ideas that could have been brought forward had these organizations solved their internal operations challenges.

This article analyzes the underlying realities that force high-tech organizations to operate in such sub-optimal fashion, including the dichotomy of innovation, external versus internal perspectives, simplicity of use, operations transformation, and finding a proper balance between operational excellence and employee morale.

Dichotomy of Innovation

As a general trend, many high-tech companies are unable to take advantage of their product innovations. Let us take the example of companies engaged in the business of storage technologies. While these high-tech organizations are directly or indirectly benefitting from an unprecedented surge of storage business, they struggle internally to make a case for how to better leverage storage technologies within their own business. As a result, they are not able to take full advantage of better managing large amounts of data around their customers, customers’ technology assets, legal contracts, service contracts, partner contracts and intellectual property contracts.

The irony is that these same companies are the ones who have shown many successful businesses the path from the early days of 64kb of storage to the present 100 terabytes of storage. One might argue that having something in abundance doesn’t really solve the core problem – in this case the availability of more efficient storage technologies has not really solved the problem of managing enterprise-wide data for business decision making.

External vs. Internal Perspectives

Leading high-tech organizations are extremely competent in creating a compelling case and selling proposition to their corporate customers and evangelizing the advantages and benefits of using new technologies to their consumer segments. However, it is a completely different story in terms of how these firms run their internal operations as they cling to old processes and legacy systems for years. It is paradoxical that the same technology company that wants its customers to buy new technology is internally stuck running their operations on legacy ERP systems, out-dated and siloed processes, and lagging IT infrastructure. One would be surprised to know that most large, multi-billion dollar enterprises have operations that are at least three to five years behind where their business should be and at least five to ten years from their goals based on their view of market opportunity.

Simplicity of Use

“Simplicity of use” is a much abused term in business and is easier said than done. While the salient selling point of most technology solutions is its simplicity of use and ease of adoption, the internal operations of these firms are exactly opposite – very complex and difficult to learn or change. Most operations leaders would tell you their operations are highly unique and complex and require years of knowledge to make significant change. They firmly believe that the option that has most merit is making incremental changes so they don’t fundamentally break things.

Operational Transformation

This concept is often talked about as a way to get operations in-line with or ahead of the business needs. The problem is that most transformational initiatives are multi-year journeys, and if they are not successfully delivered, they can set the firm even further behind. The key reasons for the time and complexity required for transformation are:

1. These programs make a quick case of stopping a lot of incremental operational improvement projects
2. The best and brightest talent is moved to transformation change programs instead of supporting immediate business opportunities
3. Sales, marketing and engineering organizations had already planned programs assuming they would have those transformation capabilities ready for them to leverage for new product / service offerings.

So while transformation is definitely a great endeavor, companies must acknowledge the consequences of not completing the journey, especially in recessionary times. Don’t launch a rocket if you don’t know when and where to land it.

Balancing Operational Excellence an Morale

Finally, companies must deliver operational excellence without killing the morale of operational leaders by making the only measurement of success how much operational costs were reduced. Operational improvement has to directly tie with innovation, customer experience and employee satisfaction and productivity. The goal of an operational improvement program cannot be tied only to cost savings, rather it should be seen as a means to stay competitive and support the business need to innovate. Every time an operational improvement program is undertaken, it needs to recognize the operational leaders who enable new business.

A commonly held business view is that Internet expansion and innovation up to 2000 was led by enterprises and corporate users, while in the 21st century, it is being driven by people who haven’t yet been exposed to the intricacies of corporate know-how or even earned their first paycheck. The innovative use of technology in last 10 years has been driven by consumers who are untrained but still can figure out ways of improving productivity and provide rich experiences of using technology in unconventional ways. The question that today’s generation of business leaders needs to answer is how can the same principles of innovation be applied in the realm of operations and IT infrastructure, where new technologies and ideas can find equal adoption and usage among people who are highly trained, experienced and knowledgeable.

Contributor: Keshav Gupta

“Path or ‘pipeline’ through which goods and services flow in one direction (from vendor to the consumer), and the payments generated by them which flow in the opposite direction (from consumer to the vendor). A distribution channel can be as short as being direct from the vendor to the consumer or may include several inter-connected (usually independent but mutually dependent) intermediaries such as wholesalers, distributors, agents, resellers, retailers. Each intermediary receives the item at one pricing point and moves it to the next higher pricing point until it reaches the final buyer. Also called channel of distribution or marketing channel.” 1

To summarize, distribution channels are the process by which products and services are transferred or sold by a producer to an end customer.

Forms of Distribution – Direct and Indirect

Direct distribution is as simple as it sounds. It is the direct selling of services or products to an end customer. The direct selling model is often perceived as optimal because of the lack of an intermediary or a broker (usually a reseller or distributer). It is an effective distribution method when the manufacturer has a range of services and products that entice the customer to engage them or their retail location (depending on industry). Direct distribution also takes the risk out of distributors or resellers learning details about the manufacturer’s various products and trying to evaluate them against another manufacturer’s line of similar products. Though direct distribution can be less complicated and risky than indirect distribution, it can make reaching the maximum number of end customers very difficult.

There are many versions of indirect distribution, but we will concentrate on 1-tier and 2-tier channels. In a 1-tier distribution channel, manufacturers engage a third party vendor to help sell and distribute their products and services. 1-tier channels usually flow from manufacturer to reseller to consumer or from manufacturer to wholesaler to consumer. In either case there is an intermediary that helps the distribution of products and services to reach the end customer base.

In a 2-tier distribution channel the manufacturer effectively engages two vendors to help sell and distribute their products and services. The 2-tier distribution channel primarily flows from manufacturer to distributor to reseller or wholesaler to consumer. The distributor receives the products at an adjusted price and then sells them (with a negotiated mark up) to the reseller. The adjusted price and mark up then drives the price that the product will be sold at to the end customer. The manufacturer usually stays out of negotiations between distributor and reseller.

Figure 1

Incentivizing Resellers

In order to motivate resellers it behooves the manufacturer to take into account the needs of the channel partners. To encourage the third party vendor to push the targeted products through the distribution channel, manufacturers take certain measures to incentivize resellers. The most important criteria for resellers is the profit margin (the difference between price sold to end customer and the price acquired from manufacturer) that is accumulated from each product sold. If the profit margin meets the resellers’ financial objectives, they are naturally more inclined to push the manufacturer’s product rather than their competitors.

Aside from profit margin, the manufacturer can offer other incentives in the form of additional market development funds to the reseller’s teams within the third party that meets or exceeds sales expectations. These extra incentives entice the vendors’ sales force to put extra efforts into selling the targeted product. Other incentives come in various forms ranging from performance-based commission, volume-based discounts, and a higher level of training and support to sell complex units of the products that have higher margins. These extra incentives motivate the reseller to push products.

Other ways that manufacturers take into account channel partner needs is by offering targeted training and making sure ordered products are delivered in perfect condition. When a reseller orders products, it is imperative to guarantee timely delivery and fully functioning products to build a good working relationship with the channel partners. As far as training is concerned, some products require deep subject matter expertise to display the product to potential clients that is not a part of the resellers’ skill set. By offering training in these specific products, the manufacturer builds a partnership with resellers, as well as ensuring that their demonstrations to prospective clients are accurate and knowledgeable.

Conclusion

Whether utilizing direct or indirect distribution, an efficient and successful channels program should satisfy the needs of the company’s maximum end customer base. Manufacturers that do not optimize their channels distribution strategy may struggle to get their product into the hands of their end customers. By incentivizing, motivating, and partnering with resellers, the manufacturer increases its chances of running a distribution channel at high efficiency and profitability.

Resources:

1. http://www.businessdictionary.com/definition/distribution-channel.html

Contributors: Carolyn McDonald and Sanjay Shitole

PDF of Article: Distribution Channels

Many leading ERP vendors like SAP and NetSuite have taken the initiative to address these issues on one or more fronts. While some are offering improved business process alignment capabilities, others have increased focus on seamless integration. Oracle, on other hand, has been focusing not only on improving out-of-the-box business process capabilities and state-of-the-art integration capabilities, but also lowering the total cost of ownership of enterprise applications. 

Oracle released EBS Release 12 (R12) in February 2007 with quick wins in operational capabilities such as Sub Ledger Accounting (SLA), Convergence of Discrete & Process Manufacturing, and Multiple Organization Access Control (MOAC). This release has become the most reliable and adaptable global platform with the highest focus maximizing business capabilities and minimizing customizations.

Many existing customers of Oracle EBS have chosen to upgrade to R12 to obtain the maximum business value from the newly available functionality. The new business capabilities in R12 are now making enabling organizations to automate many of their manual processes (e.g. in the area of shared services). When it comes to mapping your road to Oracle R12, it is critical choose the right approach which takes into consideration scalability, maximum business process alignment, and lowest TCO.

In this article, we will discuss three possible roads to upgrading to R12: 1) Technical Upgrade; 2) Fresh Implementation; and 3) Hybrid. 

Option 1: Technical Upgrade 

In this approach, when the application is upgraded to R12, only existing business capabilities are tested to ensure that current business practices will be supported. The technical upgrade does not call for any changes to the business processes. In many cases IT is the key initiator of such upgrades and business involvement is minimal during the testing of the existing processes.

As the instance gets upgraded, it lays down the infrastructure and path to enable additional business capabilities that will be needed in the future. This is the most simple and cost efficient way of upgrading to R12. Unlike the fresh implementation and hybrid approaches, organizations will follow this path when

• They need to upgrade to the latest release to ensure adequate support from Oracle
• Additional R12 capabilities are not adding enough business value to the organization
• There are constraints of budget and / or resources for implementing additional functional capabilities
• The organization is not ready to accept or incorporate new business capabilities
• There is the possibility of breaking existing customization after the upgrade

Due to the changes in the user interfaces, proper end user training is required to ensure the application is used effectively. Training and adoption are critical components of any R12 upgrade, irrespective of the approach followed.

Option 2: Fresh Implementation

The fresh implementation approach requires the highest investment from both a cost and resource perspective, but it yields the highest returns by aligning the organization’s processes and systems to meet current and future business needs. If any of the situations below ring true for your organization, a fresh implementation is the best bet.

• We are still hanging on the old Oracle EBS release and there is so much new functionality available that can improve efficiency.
• We have heavily customized our Oracle EBS instance to align with our business capabilities.
• We are unable to scale our business due to systemic limitations and broken processes.
• Despite having an enterprise system, we often rely on manual processes because our enterprise system has limited functionality.
• Our chart of accounts needs major changes to meet our reporting needs.
• Our business model has recently changed due to a merger or acquisition.

This approach follows the same steps as a new implementation, including documenting business requirements, conducting a fit-gap analysis, executing multiple testing cycles, and converting data from the existing e-Business system. A comprehensive training must be provided to the end users. In this approach, the organization has the opportunity to improve their business processes and leverage the out-of-the-box functionality available in R12. The organization may also reduce many of its customizations by implementing standard functionality. This approach involves a significant time commitment, investment and change management. For many organizations it may be difficult to wait to achieve the benefits.

Option 3: Hybrid

Sometimes neither the technical upgrade nor the fresh implementation approaches are suitable for an organization because just doing a technical upgrade does not justify the investment, or there are insufficient resources and budget to execute a fresh implementation. In this case, a hybrid approach may be suitable for organizations that want to create the latest R12 infrastructure and derive certain focused benefits of R12 leading functionalities within a shorter period of time and with a limited budget.

In the hybrid approach, the instance is upgraded to R12 with the existing functionalities and customizations. Certain key process areas for improvement or customizations are identified to be replaced with new R12 functionality. Organizations may utilize this approach if they:

• Would like to take the advantage of certain new features and functionalities of R12 that would bring maximum value
• Don’t have excessive customizations in the existing instance
• Have the budget and resources to not only test existing processes but also new capabilities
• Are mature enough to accept or incorporate new functionalities without major scope creep

Many of the finance functionalities have been modified in R12. Organizations may choose to just revisit the finance-related processes and implement the latest functionality within the finance modules and just do a technical upgrade on the remaining modules. This way there is a higher return on investment for the upgrade. For organizations taking this hybrid path, it is important to identify all the required new functionalities and modules to be implemented in advance and tie them to specific business drivers and objectives. New test scripts and training documents to cover the existing and new functionalities must be created. There needs to be a strong change control process because it is easier to get carried away and try to implement additional new functionality that was not planned initially, leading to scope creep.

Compared to the technical upgrade, this approach will require more resources. This approach may not work when the existing instance is many releases behind R12. In many cases process reengineering may be required to use out-of-the-box functionality instead of existing customizations. Due to the addition of new functionalities, additional efforts are required for training and change management.

Establishing a Baseline

Whenever an organization plans to upgrade to release R12, it must compare the new and existing capabilities. Establishing a baseline and identifying future requirements of additional capabilities will help the organization make decisions effectively, whether in relation to the R12 upgrade or other improvements. Organizations need to document their current capabilities and business process flows if they have not already done so, and must create and capture test scripts either in a testing tool or in some other format.
Decision-Making Process

Determining which approach will best meet the organization’s needs is a complex process. Many factors affect this decision, including the organization’s future roadmap, current baseline, organizational priority, and resources and budget availability. Instead of depending on gut feeling, following a systematic process will help organizations determine which approach is right for them. A typical decision-making process flow chart used by many organizations is illustrated below. However, changes in the process flow may be required depending on the baseline and the complexity of business requirements.

Figure 1

Conclusion

Organizations with Oracle eBusiness instances will soon be upgrading to R12, and it is critical that they select an implementation approach that best suits the needs of the company. In order to make the best decision, organizations must carefully examine their maturity level, requirements of new business capabilities, organizational goals, and the availability of resources and budget. Establishing a current baseline and following a repeatable decision-making process will help the organization to select the most beneficial approach.

Contributors: Kamlesh Desai and Amit Chopra

PDF of Article: Road to Oracle EBS Release 12

Envision a project that consists of developing and deploying a proprietary application to be used by both internal corporate personnel as well as a network of outside sales representatives. These outside representatives (as well as the internal users) are expecting the application to provide the functionality specified in the scope statement. The need to meet this expectation severely limits your ability to change the scope. At the same time, for a number of technical, legal and financial reporting reasons, the application must go into production at the beginning of the fiscal year.

Following these constraints, you develop your schedule. Because some extra time is available, and thanks to some foresight by the project manager, some ‘slack’ was incorporated into the schedule to allow for some of the unexpected delays that often accompany complex deployments.

Imagine that development of your application proceeds smoothly through the early stages of your project and a relatively robust system is ready for testing as planned. At this point, though, the first troubles appear: developers failed to deliver some of the planned functionality and during the QA process testers discover twice as many defects as you expected them to find. To make matters worse, many of the defect fixes either fail to resolve the problems or lead to new defects. Soon, you realize that you have already eaten into most of your ‘slack’, and your deployment is still behind the planned schedule.

You next increase expenditures and bring in more technical resources. While this is helpful, it is not enough as these resources only have certain technical skills and the project can only accommodate a certain number of ‘cooks in the kitchen’ before it leads to declining marginal returns. At this point, you have no flexibility to change the deployment date, reduce scope, or increase expenditures. So, what do you do?

Making Changes Inside of Your Constraints

While your constraints limit your overall ability to deliver your project, there are some options available that allow you to work inside of your constraints in order to meet the overall project parameters. These options include:

Prioritizing Your Work Efforts

Imagine for a moment that there are two cars in a garage, neither of which works. You can either devote an equal amount of time and effort to each car until they both work, or you can devote more time to one car until it works before turning your attention to the other car. This is analogous to approaching scope constraints – you can choose to focus on scope areas that are important to your external sales partners to ensure their comfort with the application before working on areas that affect only internal users. You are still working to have all required functionality operating by the deadline, but your top priority is to be sure your external partners are not disappointed.

Overlapping Development and Testing

Ideally, you would have completed your development before testing starts. This allows you to focus your technical resources on addressing defects, improving system stability or enhancing functionality. However, when you are operating behind schedule, there are alternatives to consider. One possibility is to deliver specific functionality to your test team. While that functionality is being tested, your development team can be working to deliver the next functional component. This concurrent process can help a project return to its schedule.

Focusing Your Resources

In most workplaces, people face a large number of distractions. Even workers who diligently focus on getting work done are likely to spend significant time helping coworkers, participating in work area discussions and undertaking other tasks that, while they may be helpful to the company, are distractions from the key goal of getting the project back on schedule. One effective tactic to address this problem is to establish a ‘war room’ where those tasked with fixing defects or developing functionality are able to work without outside distractions – even work-related distractions. Optimally, the war room will have a moderator who can make sure there are no interruptions and who can help workers focus on the task at hand rather than distracting each other.

Conclusion

There are always project constraints. However, not all constraints are created equal. While project managers always hope they are lucky enough to have projects that allow constraints to be adjusted as the project unfolds, the reality is often the opposite. However, with creative thinking and resource agility, there are steps that project managers can take to complete their work within their original constraints. It isn’t always easy, but it is easier to attempt such adjustments than it is to concede failure.

What is ITSM?

ITSM is a discipline for managing IT systems. The IT Infrastructure Library (ITIL) defines and documents the best practices in this area. ITSM enables these best practices by addressing the need to align the delivery of IT services with the needs of the business. ITSM provides the visibility, control and automation needed to deliver quality service, manage risk and compliance, maximize return on investments, and accelerate business growth.

IT Challenges

Due to the current economic climate, IT is under pressure to provide targeted, value-added services for enhancing the operational effectiveness of IT and related business processes. IT departments are expected to maintain the same level of service to business users with more efficient use of resources and lower margins of error. In most cases, getting data in a timely and efficient manner can prove difficult. That’s why more organizations are turning to integrated ITSM solutions to meet cost and efficiency imperatives. The integrated ITSM solution is also one of the key enablers in transforming IT from a support group to a true business service organization.

Business Benefits of Adopting Integrated ITSM Solutions

Better Decision-Making: The need for making informed decisions has never been greater. Managers need to accurately estimate the effectiveness of IT investments for keeping performance on track. Better decisions about availability, cost and efficiencies require access to data that is typically spread across multiple best-of-breed solutions. Business data that is hard to access and use will slow down decision-making to a crawl.

Effective Service Delivery: With the increasing maturity and widespread adoption of process frameworks like those found in the ITIL have helped IT closely align and integrate with the business, integrating different tools together for effective service delivery.

Access to Actionable Information: Organizations today have many tools that provide information about their IT assets. However, what is missing is access to actionable data, where and when it is needed. Though the tools individually are meeting the requirements of the respective business units or functions, there is no common data source that is available to get all the information about a particular asset because the information is stored in different data sources and there is no easy way to access them.

Return on Investment: An integrated service management solution helps organizations maximize return on their existing investments. There are different kinds of integration that can be done – data level integration, integration with other Operational Management Products (OMPs) or process level integration. The integration not only provides one common source for information, but also helps organizations to deliver proactive, on-demand service management.

Multi-Vendor Product Implementation Challenges

Outdated Legacy Systems: Organizations have invested heavily in existing tools and no organization can afford to rip out their old set of tools. Hence, IT managers are looking to integrate in a multiple tool environment.

Lack of Vendor Support: Vendors have made little or no investments in tool integration – most vendors have struggled to integrate their own portfolio of tools. The Big Four vendors have made significant acquisitions in point solutions to complement their ITSM portfolio and have invested most of their time and resources in integrating their own solution portfolio.

Complexity of Integration: The workflows, processes and categorizations involved make integrations very tricky. A large part of the implementation budget of ITSM tools is actually spent upon these integrations. Organizations should be prepared to invest significant time and budget for integration efforts and look to either third party providers or internal staff to get over integration humps. Integration of IT processes and tools itself is a challenge, and it becomes even more complicated with a large number of diverse OMPs from different vendors which are developed at different times. Organizations have to deal with multiple versions, compatibility issues, data formats, and available interfaces. What has helped today in meeting some of these challenges is the use of the Common Information Model (CIM) standards and the federation option in the CMDB.

Challenges of Maintaining ITSM Tools & Technologies

Changing Product Roadmaps: Vendors are continually changing product roadmaps for ITSM tools while offering little help on the integration front. Organizations will need to leverage best practices and process frameworks for standardizing across the entire set of tools of different vendors and must budget early on for the length and complexity of integration efforts.

Shifting Internal Environment: Fluctuating business demands, increasing complexity of technology, multiple IT regulatory compliance requirements and finite IT budgets all pose significant challenges for businesses to efficiently manage their ITSM application portfolio. Today, IT departments are no longer viewed as mere cost centers but are rather expected to operate as a business unit. IT not only provides the technology but the services and metrics required to support the business goals of the company. Due to the increased dependency on IT departments, upkeep of ITSM applications is highly critical for an organization’s success.

Outsourcing and Tools Considerations

Leverage Best Practices: When organizations look at their internal resources and vendor firms for integration expertise, IT managers realize the need for extra help in best-of-breed tool integrations. By leveraging what other organizations have accomplished, IT managers can quickly improve visibility into their IT Service Management portfolio.

Select the Right Partner: Third party service providers have significant expertise in best of breed tool integrations and are a natural partner for complex service management integration efforts. Choosing the right partner is as important as choosing the appropriate ITSM tool to buy. It is imperative to pick the right partner with a fine blend of business, process and technical expertise to integrate all the tools in your ITSM portfolio.

Select the Right Tool: Getting the tool up and running is 10 percent of the battle. There is no long-term value unless the tool is able to work with other tools in your environment. A mediocre tool that integrates well with other tools in your environment is better than a great tool that lacks such integration capabilities.

Implement Value-Rich Solutions: Unlike traditional IT maintenance activities, support and maintenance of ITSM tools require specialized skills, resources and facilities. Organizations should look for single-point multivendor solutions for meeting service levels and ensuring continuous availability of applications. The vendor must have the capability to help customers automate, maintain, and support core ITSM functions and reduce the overall cost of IT operations.

Key Considerations When Selecting Service Providers

Beware of Hype: Because the integration of data is so important, organizations get caught up in vendor hype about the ease of tool integration. However, it is not easy to integrate various best-of-breed tools for enabling higher availability of business critical applications.

Implement a Validation Process: IT mangers will need to ask pointed questions to vendors about implementation capabilities, total cost of solution implementation, list of reference customers, training, and post-sales support.

IT managers need to ask themselves the following questions:

• Do we have visibility into service management tools’ availability and utilization?
• Can we quickly classify assets based on business criticality?
• Can we capture assets in the depth required for federation into the organizations’ CMDB?
• Are service management implementations aligned to meet business goals?
• How are budgets being optimized effectively to manage ITSM tools and technologies?
• How can we improve customer satisfaction service levels while reducing operational costs?

Without an integrated ITSM solution set, it is nearly impossible to deliver the quality of service expected by business users. The vendor must work closely with clients to bring visibility to their assets, making the best use of existing IT investments and ensuring infrastructure knowledge is available to all IT functions to bring the highest quality of service to their customers.

Contributors: KC Sreeram, Sanjay Shitole, Carolyn McDonald

PDF of Article: Integrated IT Service Management (ITSM) Solutions

The Marketing and Sales functions are highly dependent on effective collaboration with prospects, clients and colleagues, and can benefit a great deal from social media technologies. While traditional enterprise products provide end-to-end technology and functional & marketing capabilities that support traditional business processes, it is important to integrate new social media technology into existing technology investments as well. Social media technologies can be leveraged to drive specific business benefits such as using blogs to enable employees to share ideas and perspectives on different business scenarios.

Marketing

As online users spend more time on social networking sites, online marketing products using targeted ads have become increasingly effective in gaining prospects. Social media platforms capture valuable user information, such as customer interests and background, which organizations can use for targeted marketing. Marketing campaigns on social networking sites are becoming extremely effective ways to increase the volume of sales prospects. Twitter, Facebook and LinkedIn have provided their own advertising platforms for advertisers to publish targeted ad campaigns.

Sales Prospects

Social media has also changed how sales teams can use their contacts information to get new prospects. Websites like LinkedIn have the capability to enable sales representatives to search for “contacts of contacts”, which exponentially expands the reach of their networks. This allows sales representatives to reach prospects through known contacts and avoids cold calls.

Sales Collaboration

For a large enterprise deal, there is often an entire sales team, rather than an individual sales representative, working on the account. In addition to sales representatives, there may be various product specialists, sales engineers and other overlay sales team members working together during a sales cycle. Sales teams require effective collaboration to achieve their targets. The sales collaboration may happen over various mediums such as phone, email, instant messenger and different enterprise applications used for tracking sales opportunities, contacts, solution, configuration and pricing information.

The data exchanged between sales team members during a sales cycle is confidential, and an information leak on public sites can lead to losing a sales opportunity. Sales collaboration using public social networking sites therefore poses a threat to data security.  Instead, many enterprises prefer to use internal social networking sites which provide collaboration using the Software as a Service (SaaS) model to make sure the company data is confidential and not accessible by users outside the company.

Impact on Enterprise Platforms and Applications

The potential of using social media to increase sales productivity has influenced many companies providing Enterprise products and platforms to reposition their product portfolio with social media capabilities. Gartner has predicted one of the changes to observe in 2010 is how enterprise platforms will start adopting social networking concepts. Enterprise social software is helping companies to increase the collaboration and productivity within organizations. Companies like SalesForce.com, Microsoft, and Oracle are providing social media capabilities in their enterprise products.

Salesforce.Com

Salesforce.com is adding social media capabilities to their platform with a new function called “chatter”. The chatter platform adds collaboration capabilities with Twitter and Facebook like feeds, notifications, and groups in Salesforce.com. The notifications are created by applications running on the Salesforce.com platform and other enterprise applications using chatter APIs. The chatter APIs will help enterprise applications to enable social media capabilities and integrate with the chatter platform. The chatter platform allows sales teams to share order status, revenue and booking details, information about opportunities, knowledge about customers, and market trends. It provides users with the ability to follow the updates to enterprise data which they are allowed to access. When events occur which update the data, the chatter platform will provide notifications in the user’s homepage with details.

Figure-1: Personalized dashboard to manage customers, sales opportunities, and tasks

Figure-2: Ability to follow other colleagues and also any enterprise data from different applications

Figure-3: Notifications generated by user comments and data updated by applications

Oracle

Oracle has provided integration with social networking websites in social CRM products like Oracle CRM Sales Prospector. Oracle CRM Sales Prospector allows sales teams to find contacts in Facebook and LinkedIn who can help them get in touch with prospects.

Microsoft SharePoint

Microsoft SharePoint allows users to create their profile, follow colleagues with certain subject matter expertise, manage office documents, and collaborate with other colleagues by using Wikis, blogging, and subscribing to RSS feeds.

Social media will continue to impact the architecture and business processes of in-house enterprise applications. The in-house applications will be required to integrate with social media platforms hosted either within enterprise or hosted outside with a SaaS platform like Salesforce.com. Traditional enterprise platforms have begun adding the ability to do the following to leverage social networking benefits:

• Create user profiles, blogging, podcasting, wikis, manage contacts
• Search contacts of contacts and add them to contact list
• Follow specific users and the data generated by enterprise applications
• Collaboratively create user content and subscribe to user-generated data as RSS feeds
• Join users or groups with certain interests
• Connect to subject matter experts within the organization to solve business problems

Conclusion

Social networking capabilities provide the ability to manage the knowledge base regarding customers, prospects, and subject matter experts within an organization. It allows the sales team to use this information to increase sales, better serve customers, and improve productivity. Businesses need to start leveraging social media to develop a competitive advantage by increasing the effectiveness of their sales force and marketing campaigns.

Enterprise IT organizations face the challenging decision of whether to integrate social networking capabilities through an in-house effort or to wait for large-scale enterprise platforms to provide required the social networking capabilities. One thing is for certain, given the momentum of web 2.0 and social networking, enterprise platforms will need to be influenced by these new social networking capabilities, and enterprise IT organizations will need to develop a convergence strategy for the long-run enterprise platform migration.

References

Twitter Ad http://www.twittad.com/

Facebook Advertising http://www.facebook.com/advertising/

LinkedIn Advertising https://www.linkedin.com/directads/

Salesforce chatter www.salesforce.com/chatter

Microsoft SharePoint http://sharepoint.microsoft.com/social/

Contributors: Sanjay Shitole, Carolyn McDonald, Kristen Pham

PDF of Article: Leveraging Social Media Technology to Increase Sales Productivity

What is the clinical trials process?

A clinical trial is a medical research study designed to elucidate the efficacy, safety and additional information about a compound, device or biologic agent. Any given trial involves an experimental protocol, up to four phases, considerable expense in terms of time and money (up to 15 years and $500 million) and many stakeholders who may be geographically dispersed. A clinical trial is “successful” if it results in regulatory approval for a product or if it enables researchers to eliminate (the earlier the better) products that display undesirable side effects or other negative characteristics. In some cases, the results of clinical trials can lead to uses of the drug, treatment or device that were not originally expected.

Before being tested on humans, the organization holding the rights to a promising compound performs a series of laboratory experiments to determine effects they are likely to encounter. It is during this preclinical stage, lasting about five years, that drug companies typically file and receive patents, which sets the patent clock ticking. From this data, the company determines whether it will pursue the lengthy and costly process of human testing. If it does, the company submits an investigational new drug (IND) application to regulatory authorities, which decides whether to grant approval for testing on humans.

An IND is a request for an exemption from the federal statute that prohibits an unapproved drug being shipped in interstate commerce. Federal law requires that a drug be the subject of an approved marketing application before it is transported or distributed across state lines. Because a sponsor will probably want to ship the investigational drug to clinical investigators in many states, it must seek an exemption from that legal requirement. The IND is the means through which the sponsor technically obtains this exemption from the FDA; however, its main purpose is to detail the data that provides documentation that it is reasonable to proceed with human trials of the drug.

In addition to in vivo and in vitro data, the IND application will also typically include information pertaining to the composition, manufacture, stability, and controls used for manufacturing the drug substance and the drug product. This information is assessed to ensure that the company can adequately produce and supply consistent batches of the drug. The application also includes detailed protocols for proposed clinical studies. These protocols are included to assess whether the initial trials will expose subjects to unnecessary risks. Also, information related to  the qualifications of clinical investigators (professionals who oversee the administration of the experimental compound) is collected to assess whether they are qualified to fulfill their clinical trial duties.

Unless the FDA rejects an IND, the IND becomes effective 30 days following its receipt by the FDA. Once trials have commenced, the FDA may stop the trials by placing them on clinical hold status if concerns arise regarding the safety of the product.

Human Clinical Trials

Clinical trials are a highly regulated process designed to collect and analyze data to support claims concerning the safety and efficacy of a product. Clinical trials involve the administration of the study drug to healthy human volunteers or patients under the supervision of a qualified investigator, usually a physician, pursuant to an FDA-reviewed protocol.

Human clinical trials typically are conducted in three sequential phases, although the phases may overlap. Clinical trials must be conducted under protocols that detail the objectives of the study, as well as the parameters to be used to monitor the safety and efficacy criteria being evaluated. Each protocol must be submitted to the FDA as part of the IND. Each clinical trial must be conducted under the auspices of an Institutional Review Board (IRB) that considers, among other factors, ethical factors, the safety of human subjects, the possible liability of the institution, and the informed consent disclosure that must be obtained from participants in the clinical trial.

Although the goal of a clinical trial is to obtain safety and efficacy data, the overriding consideration in the study is the safety of the participants. The FDA monitors the study design and the conduct of clinical trials to ensure that subjects in the trials are not exposed to unnecessary risks.

Phase I

Phase I clinical trials represent the initial administration of the investigational drug to a small group of healthy human subjects or, more rarely, to a group of selected patients with the targeted disease or disorder. Certain drugs are administered to the targeted population only (healthy individuals are excluded) due to ethical constraints relating to drug toxicity and benefit versus risk.

The goal of Phase I clinical trials is typically to test for safety, dose tolerance, absorption, bio-distribution, metabolism, excretion and clinical pharmacology and, if possible, to gain early evidence regarding efficacy. The total number of subjects included in Phase I studies varies with the type of drug being investigated, but is generally in the range of 10 to 40.

Phase II

Phase II clinical trials involve a small sample of the actual intended patient population and seek to assess the efficacy of the drug for specific targeted indications, to determine dose response and the optimal dose range, and to gather additional information related to safety and potential adverse effects. Phase II studies typically are closely monitored and conducted with a relatively small number of patients, usually involving 60 to 200 subjects. Phase II lasts on average two years.

Phase III

Phase III clinical trials are initiated to further establish the clinical safety and efficacy of the investigational drug in a broader sample of the general patient population. The studies are conducted at geographically dispersed study sites with patients who suffer from the target disease or disorder, to obtain definitive statistical evidence of the efficacy and safety of the proposed product and dosing regimen.

Trial size differs depending on the disease being addressed, and trials often are designed to accommodate factors such as statistical significance and avoiding bias. Phase III studies usually include 100 to several thousand people. About three to four years elapse before the pharmaceutical or biotechnology company can accumulate enough data to validate these experiments.

If the Phase III data is positive, the company files a new drug application (NDA), a document that contains data to support the safety and efficacy of the drug. Regulatory authorities, such as the U.S. Food and Drug Administration (FDA), review the NDA and decide, usually within two years of the application, whether to grant approval for the sale of the drug. If the drug is approved, the company can market and distribute the drug.

Phase IV

Phase IV or post-market surveillance studies are conducted after a drug / device has received marketing approval from the regulators and is being sold to the public. Studies in this phase address such issues as differential effects in various populations and side effects resulting from long-term use. Phase IV studies are usually long term studies that can last over 15 years and enroll hundreds of thousands of patients. These studies can also identify additional uses for the drug and can result in the sponsor submitting a supplemental new drug application (sNDA).

The New Drug Application (NDA) Filing

The new drug application is the vehicle through which drug sponsors formally propose that the FDA approve a new pharmaceutical for sale in the U.S. All data obtained from a comprehensive development program, including research and product development, manufacturing, preclinical and clinical trials and related information, are submitted in an NDA filing to the FDA and the corresponding agencies in other countries for review and approval.

In addition to reports of the trials conducted under the IND, the NDA includes information pertaining to the preparation of the new drug or antibiotic, analytical methods, details of the manufacture of finished products and proposed product packaging and labeling. Although the FDC Act requires the FDA to review NDAs within 180 days of their filing, in practice, more time may be required. The FDA also frequently requests that more information be submitted, requiring significant additional review time.

At the conclusion of the FDA’s review of an application, three possible action letters can be sent to the NDA’s sponsor:

• Not Approvable Letter: Lists the deficiencies in the application and explains why the application cannot be approved.
• Approvable Letter: Signals that, ultimately, the drug can be approved. Lists minor deficiencies that can be corrected, often involves labeling changes, and possibly requests a commitment to do post-approval studies.
• Approval Letter: States that the drug is approved. May follow an approvable letter, but also can be issued directly.

If the FDA issues either a “not approvable” or “approvable” letter, it provides the applicants the opportunity to meet with the agency and discuss the deficiencies. The purpose of the meeting is to discuss what further steps are necessary before the application can be approved. Once the FDA signs an approval action letter, the product can be legally marketed in the U.S. starting that day.

Fast Track, Priority Review, and Accelerated Approvals

Fast track is a formal mechanism to interact with the FDA using approaches that are available to all applicants for marketing claims. The benefits of fast track include scheduled meetings to seek FDA input into development plans, the option of submitting an NDA in sections rather than submitting all components simultaneously, and the option of requesting evaluation of studies using surrogate endpoints. The fast track designation is intended for the combination of a product and a claim that addresses an unmet medical need, but is independent of priority review and accelerated approval. An applicant may use any or all of the components of fast track without the formal designation. Fast track designation does not necessarily lead to a priority review or accelerated approval.

Priority review is a designation for an application after it has been submitted to the FDA for review for approval of a marketing claim. Reviews for new drug applications are designated as either standard or priority. A standard designation sets the target date for completing all aspects of a review and the FDA taking an action on the application (approve or not approve) at 10 months after the date it was filed. A priority designation sets the target date for the FDA action at six months. A priority designation is intended for those products that address unmet medical needs.

Accelerated approval regulations apply to products used in the treatment of serious illnesses that appear to provide meaningful therapeutic benefits over existing treatments. These regulations permit approval of such products before clinical research is completed based on the product’s effect on a clinical endpoint or surrogate endpoint. When a product is approved under the accelerated approval regulations, the sponsor may be required to conduct additional well-controlled studies to verify that the effect the surrogate endpoint correlates with improved clinical outcomes or to otherwise verify the clinical benefit. In the event such post-marketing studies do not verify the drug’s anticipated clinical benefit or if there is other evidence that the drug product is not shown to be safe and effective, expedited withdrawal procedures permit the FDA, after a hearing, to remove a product from the market.

Who Is Involved in a Clinical Trial?

Clinical trials involve many organizations and roles:

• Sponsors: These are the entities that initiate and pay for the trial. Sponsors may include life sciences organizations (LSOs) – pharmaceutical companies, biotechnology companies or medical device companies, government agencies (e.g., such as the National Institute of Health (NIH) or the U.S. Army), physician-investigators, healthcare organizations and institutes.
• Contract Research Organizations (CROs): These are proxy research representatives that sponsors may contract with to administer the trials.
• Site Management Organizations (SMOs): These are independent clinical trial offices that manage investigative sites.
• Research Institutes: These are the sites where clinical trials take place, usually hospitals, universities, doctors’ offices or community clinics. These investigative sites can be private, public or government-owned. Often, a clinical trial is conducted by multiple facilities working collaboratively.
• Principle Investigator: Typically, this is the scientist who initiated the clinical trial and was primarily responsible for the preclinical studies that established the scientific validity of the current clinical trial.
• Clinical Researchers: These can include physicians, Ph.Ds, nurses, social workers and others in the clinical environment. Their backgrounds and experience levels can vary considerably. For some of these individuals, clinical trials provide a significant portion of income.
• Clinical Research Associates (CRAs): These individuals are part of the investigating team and provide services such as laboratory, data collection and analytical support.
• Collaborative groups: These are groups of researchers who play different roles depending on the group, its sources funding and its objectives. Collaborative groups may provide site management functions, access to research institutes, find or provide trial sponsorship or have a CRO role, depending on the trial.
• Patient / Participants: These are human volunteers of a clinical trial. These volunteers may be paid or unpaid, healthy or ill, depending on the role they play. The participants are often geographically diverse.
• Research Ethics Boards (REBs): These are independent groups of physicians, statisticians, academics, community advocates and others whose mandates are to protect the rights of the trial’s participants and to ensure the trial is conducted in an ethical manner.

Contributors: Mark D’Oliveira, Carolyn McDonald

PDF of Article: Introduction to Clinical Trials

The new generation of social web technologies is clearly becoming popular and driving mainstream adoption.  For example, Wikipedia, Twitter, blogs, and Facebook have all left their marks on popular culture. Companies, generally known to be more conservative than the public at large, have only recently begun to take advantage of these tools. Various web-based social media applications and technologies are easy to implement, encourage creativity and collaboration, inspire innovation, and increase productivity.

Social media is the engine that has transformed the web from being a one-way informational tool into a two-way collaboration mechanism. In the world of social media, customer preferences for products or services are influenced by ideas, perspectives, insights, and experiences provided by other users. This is achieved through peer reviews, referrals, blogs, tagging, social networks, online forums, and other forms of user-generated content.

In the workplace, social media emphasizes a bottom-up approach that can empower workers. This represents a major cultural shift for traditional organizations that are mostly hierarchical and top-down. Social media, which has been popularly termed as Enterprise 2.0, requires a shift in an organization’s state of mind, emphasizing a more open and responsive way of interacting with both consumers and employees. Web-savvy employees are increasingly using free time at work to check social networks and chat with peers. This peer-to-peer interaction can be beneficial to organizations, though undisciplined access to social media in the workplace does have its risks

Some companies have adopted social media like Facebook to encourage employee participation. These tools help vendors, partners, and prospective employees to learn about the company easily. Businesses are fast realizing that customers are talking about them on social media websites and smarter enterprises are finding ways to collect those comments to provide immediate customer service.

Social media is just a tool, and tools can be beneficial or harmful to an organization’s operations. Companies need to make a conscious effort to ensure that these tools are working to their advantage.

Rewards of using social media in your organization:

• Social media sites enable companies to host videos and other materials related to its marketing campaigns and to popularize corporate social responsibility efforts.
• Social networking sites can facilitate the publicizing of annual user events by encouraging employees to put links to the event in their “status updates”, such as their LinkedIn profiles.
• Social networking sites can also increase the interest of potential employees who forward resumes to their contacts.
• Status updates communicate a member’s current activities to interested parties and also allow members to be in touch with what their contacts are doing. This can reduce the time required to keep in touch with contacts and expand networks.
• Blogging enables organizations or employees to share knowledge, expertise and experience.
• Ardent supporters of products and services from businesses are becoming unofficial spokespeople for the company.
• Social media connect workers in different departments who may work on similar business problems but wouldn’t typically cross paths, especially in large enterprises or companies with distributed workforces.
• As telecommuting becomes more common for knowledge workers, contributing to a wiki can complement traditional conference room brainstorming sessions.

Risks of using Social Media in your organization:

• Social media risk the exposure of confidential and personal information.
• It can create a ‘record’ of rants, flame-wars or inappropriate conduct.
• It can disclose too much information about employees, risk harassment or stalking, or put the company in awkward position with respect to personal conduct.
• Collecting interactions on social media platforms is a challenge.
• Certain social networking communications may be seen as creating hostile work environment and puts the company and employee(s) in jeopardy.
• Businesses need to invest in monitoring to see how their brands are being represented on social media platforms.
• Focusing on the technology may distract organizations from thinking about what they are trying to accomplish.
• Employees may over-invest their time in social media applications and become distracted from other elements of their roles.

Conclusion

Bringing social media platforms to the enterprise is more than just the latest technology; it is changing the traditional business model and tapping into the creativity, intellect, and passion of every single employee. The power and reach of social media tools has empowered individuals to have their voices heard around the world in an instant.

Still, these applications can be a cause of concern to organizations because of the concentration of power is in the hands of the individuals utilizing them. Organizations continue to struggle with whether to allow employees to participate in these networks, how to enforce policies, and how to adjust to all that the networks have to offer. Organizations must assess the risks and rewards expected from social media adoption, and more importantly they must monitor and evaluate those expectations after they set their course.

Social networking is a trend that empowers individuals to stretch, collaborate, and participate in ways that traditional organizational structures have not allowed. From this expanded freedom, companies may find great new ideas, routes to market, ad hoc groups formed to address certain issues, new ways to encourage customers or the public to participate in the organization’s mission, or simply a boost in employee morale and participation.

Tools are emerging to make leveraging the information stored in our social networks beneficial to those participating in them. Social media can have meaningful business impacts in multiple areas of the organization:

• Sales teams can use social networking tools to prospect customers, since these sites offer all manner of information that is useful in relationship building. Sales representatives can stay in touch with their network of hundreds of contacts by regularly updating their status to report on events, promotions, and customer successes.
• HR can utilize networking tools to recruit new employees and market the organization to a larger audience.
• Marketing departments can use these tools to promote brand awareness, publicize news and events, and announce new product / service offerings.
• Organizations as a whole can use social media tools like Facebook, blogs, Twitter, and podcasting to share knowledge and expertise amongst employees, connect with employees in different departments, collaborate with employees in design discussions, train new employees, promote best practices, and network.

So what is the tangible Return on Investment (ROI) for using social media, and how does allowing employees to be part of this new networked world help enterprises increase sales or make employees more productive? The answer is that the benefits of social media are very difficult to measure given the unprecedented, unquantifiable way it works – it is true paradigm shift.

We cannot measure how many employees ask business-related questions or share ideas on Facebook or Twitter, but the organization will be aware that valuable knowledge transfer happening. The number of new customers as a result of brand outreach cannot be counted, but the organization may be seen as more ‘human’ and customer interactions will have more of a give-and-take, rather than just pushing messaging at them. The investment in social media will mostly be in employee time. Since many elements of these tools are absolutely free, organizations can expect to have knowledgeable employees as well as happy customers.

References:

http://blogs.harvardbusiness.org/cs/2009/11/six_social_media_trends.html

http://www.businessweek.com/technology/content/may2009/tc20090522_078978_page_2.htm

http://blogs.open.collab.net/oncollabnet/2009/05/how-do-facebook-twitter-help-me-sell-more-widgets.html

http://blogs.open.collab.net/oncollabnet/social-media/

Contributors: Sanjay Shitole, Tom Wilson

PDF of Article: Social Media in the Work Place

The first challenge many organizations face is organizing a high-performing project team to lead the shared services implementation efforts. Many companies make the mistake of solely relying on the business process outsourcing partner to organize the implementation team. While the thought partnership, best-practice sharing, and project management support of a consulting or BPO partner with experience in this area is critical, it cannot substitute for a strong internal team. While the support of the senior executive team is critical to influence internal stakeholders, it will not be enough to move the program forward. Knowledge of the internal systems, processes, and people (the most critical piece) cannot be gained quickly enough by the consulting team without significant ramp-up time.

With a dedicated team of internal resources working alongside the consulting experts, the organization can avoid starting from the clean slate and overinvesting in the development of the capabilities it may already have. Furthermore, the credibility and personal relationships, established over the years by the internal team, will be a vital asset in driving such a complex and often organizationally sensitive effort. Therefore, when identifying the successful team that will build the shared services organization, the executive management needs to do the following:

• Identify a strong internal leader to lead the effort
• Dedicate some of the most talented employees to the shared services implementation team
• Use consulting resources to cover gaps in specific knowledge, frameworks and industry best practices

The second challenge that needs to be addressed early in the process of building a Shared Services organization is the clarity of the scope and management’s expectations. Companies tend to start with a vision of shared services, which includes a wide range of services to be delivered through this operating model. While the long term vision may be the right one, the time to get there is often underestimated. If the implementation team faces problems, such as operational issues, push-back, and political resistance, the scope must be reduced to a fraction of the original vision. As a result, the project may be deemed unsuccessful, which will make it difficult to get the internal stakeholder and executive support necessary to continue the effort. To avoid this shortfall, it is critical to do the following:

• Set realistic expectations on what can be achieved in the short-to-medium term
• Make sure the proposed changes are transformational enough, but not more than the organization can handle within the given timeframe
• Demonstrate patience and continuous support

The third challenge organizations face is a natural desire to build the organizational structure of the shared services before having a complete and thorough understanding of the scope. Working with organizational design experts, we learned that putting together an organization chart in itself is not a complex exercise, once you know what the organization is going to do, the skills that will be required, and the future internal and customer-facing processes. However, if a company attempts to develop a clean organization chart and then try to retrofit the new organization and what it does to this chart, most likely it will not be successful. In addition, if the processes and engagement scenarios are not adequately understood and documented, it will be difficult to manage the new organization, deliver the services to customers, and interact with partners. The recommended approach is to focus first on the processes, the activities, and required skill sets within the future organization, with the organizational structure to follow.

Finally, the transition to a shared services model often generate political / cultural resistance. This is probably the most well-known but least understood challenge, and for a good reason. As one of business leaders who led his company through the process of building a shared services effort said, “People may be nodding their heads at the meeting, but as soon as their office door closes, there is nothing but resistance.” That is why change management is an integral part of the roadmap of building the shared services model. It is important to approach all of the key stakeholders early and often to promote the overall effort and seek input on issues that directly affect their organizations. Just as importantly, the executive management should make it clear that there is no “opt out” option to the proposed changes.

The transition to the shared services organization involves many factors, including cultural changes that are difficult to absorb. The list of above challenges is by no means complete, but helps us understand the complexity of building a successful shared services model. Despite the complexity, more and more companies successfully utilize the shared services model to reduce costs, scale operations, and provide higher level of service to their internal customers.

Contributors: Keshav Gupta, Cindy Lo

In today’s recessionary market, many organizations are trying to do away with waste and create efficiencies by optimizing and consolidating operations through the implementation of shared services. There are many design considerations an organization must assess when deciding to implement a shared services model. Due to the breadth of changes in the organization’s design and structure that will result from such a model, careful planning and coordination are required from the cross-functional program management team. Other factors that are also critical to the success of a shared service model include governance, organization, operations and metrics. Most importantly, shared services needs to support the different teams in an organization while the model is taking root.

In our last blog, An Overview of Shared Services, we discussed data management shared services, AP shared services and the high level challenges of implementing shared services. In this blog, we will discuss the implementation of shared services, including developing an approach and effectively transitioning people within and outside of the shared services organization.

Phased Approach

As an organization begins creating a new shared services organization, setting up a program management office (PMO) to plan and guide the shared services journey is critical to success. The PMO should outline the vision, define the value proposition and put the tools in place to ensure continuous improvement. Additionally, program leadership should build a platform to manage the execution, migration and change by defining a multi-phase program roadmap. This also serves as an input to the broader business case for socialization to stakeholders and impacted groups. This roadmap should include four key phases for the shared services journey: strategy and planning, design, implementation, and continuous improvement.

The initial phase of the roadmap, strategy and planning, focuses on strategy formulation and brainstorming to build the foundation and alignment of the overall work effort. This is the opportunity for the organization to define the shared service vision, strategic objectives, and scope. Typical efforts include performing a data collection and inventory analysis of the current state across people, processes, policies, systems, and critical inputs and outputs and customers and suppliers. The program team can leverage the data to drive an overall cost / benefit analysis. The leader of shared services should be appointed immediately and the PMO team should help shape the shared services operating model and determine the change strategy and requirements needed to implement the new organization. Resource mapping for shared services can be a time-consuming and tricky task that requires careful planning because of the sensitivity to the employee jobs that are getting replaced. The key to resource mapping is to get the right people involved at the right time. This includes both appointing the right people in the organization to the new shared services organization and hiring the right people or shifting the right people from existing job functions that will be replaced by shared services.

The second phase of the shared services approach is focused on the design of the organizational structure and operations (i.e. processes, systems, policies). Design principles include establishing governance and standards of excellence, funding models, service delivery / management framework, performance measurement, business and technical architecture design, workforce transition planning, facility and site selection, communications and training, and roll-out strategy. The program team should work with the business to define quick wins and longer term recommendations. Some key considerations when designing the shared service structure are determining where the shared service will be implemented and where the structure will sit in the organization. Creating a centralized team enables participants to work together more closely, whereas creating a decentralized team might make them more global in reach and coverage while working together on a virtual basis.

The third phase is the implementation of the shared service. This means that the shared service center should be built with the capabilities / services offered and organization design complete. Usually, a shared service is not rolled out with a “big bang” approach, where the entire scope is implemented at once, but rather is divided up into different phases with different capabilities and functions implemented at each phase. For the initial rollout, management should choose a capability that will make the most impact to the organization. That way the team will be able to point to the success of that shared services model when implementing the next phases. This success will also help to gain buy-in from stakeholders and support to for the next phases. Some options that management might consider when choosing a capability for the first phase are:

1. High-volume data services that can be easily automated
2. Various experts within the organization that know the services and capabilities that are highly visible in organizations to create a “Center of Excellence” with these experts
3. Cost effective reduction of resources through a combination of people, process, systems, data

Other work efforts include the detailed roll-out planning, training delivery, and synchronization with technology and applications required to set up the pilot organization.

The final phase, continuous improvement, is the global roll out of the shared services model to the broader organization. Effective communications and training help to enforce workforce transition, and additional organizational movements may occur after the pilot shared services program has stabilized. The goal is to optimize a fully operational shared services organization that centralizes fragmented activities across the organization, streamline processes and automation, drive cost savings and scalability, and balance services with customer-facing functions.  Key metrics and cost savings measurements are important in this phase to assess the effectiveness of the shared service to the organization. These statistics can be delivered to executive and operations level stakeholders so management can improve upon what is already being delivered.

Stakeholder Adoption and Change Management

To ensure a successful deployment of the designed shared services organization, it is critical to understand, plan, and implement necessary and practical steps to support people through the organizational transformation. In other words, the leader of the shared service must be effective in managing the people in the organization through the change. They must be actively involved in preparing the entire organization to transition to the new shared services model, which is vital to its success. Effective change management and communication are needed to reduce risk and potential costs, and increase the likelihood of a successful transition and a positive relationship between the newly created shared services organization and the retained functions. A thoughtful and thorough change management strategy significantly contributes to a successful shared services implementation by developing a leadership team and organization that is focused on achieving the objectives of the shared services program, preparing employees for the transition by building the new skills they will need, creating customer confidence in the new model, and building buy-in among all stakeholders.

A carefully planned and executed change management strategy translates into an end-to-end process that includes building buy-in, optimizing the workforce size, and training employees. To ensure a successful outcome, change management should span the entire duration of the transition, beginning at the decision to create the shared services organization and ending after the governance model is in place. After the transition is complete, the operational leadership team within the shared services organization assumes the role of managing change and takes the forward-looking responsibility of identifying, planning and integrating new shared services and process improvements into the shared services solution.

Common elements of shared services change management include communication, sponsorship, ownership and accountability, workforce transition and training, change readiness, and implementation, rollout and stabilization. The success of shared services change management can be measured by the following outcomes:

• Disruption to the organization during the transition is kept to a minimum
• People directly impacted by the movement are guided through the change to the shared services organization
• The right kind of leadership and structure are established to support the shared services organization’s objectives

Conclusion:

The shared services model has been implemented by many organizations, but only a handful of companies have successfully reaped the full benefits that this model can offer. It is imperative for leadership to view the program as a long-term strategic shift rather than a myopic cost-cutting effort to leverage labor arbitrage. Shared services can be a cost-effective means to scale and grow the organization. Some of the key decision regarding location and funding might be harder to change than others; therefore due diligence needs to be done before executing the shared services vision. At the end of the day, the success of the shared service organization needs to be measured by setting and measuring against goals and finding the right balance between financial and operational measures.

References:

• SS Principles.pptx
• John Phillips: A View of Shared Services
• Alsbridge. Change Management for Shared Services and BPO, Part 1. Retrieved October 9, 2009, from www.sourcingmag.com/content/c070502a.asp
• Accenture. (2007). Managing Shared Services Change: Beyond Communications and Training. Retrieved October 9, 2009, from www.accenture.com/Global/Consulting/Finance_and_Performance_Mgmt/R_and_I/ManagingTraining.htm

 Contributors: Keshav Gupta, Sanjay Shitole