Why digital is the key to internationalising processes

How to internationalise processes by creating a shared and scalable efficiency model*.

Vi ricordate il Cluetrain Manifesto, con le sue 95 tesi che sono un invito all’azione per tutte le imprese che operano in un mercato interconnesso? La prima versione risale al 1999, ma è ancora attualissima.

I quote the first thesis: "Markets are people". People who have common needs to satisfy. I am sure the authors of the manifesto were talking about consumers, but we can apply the same argument to employees.

In fact, internationalisation is leading companies to have to manage processes in places where habits, culture, laws are very different from our own. With offices and colleagues scattered around the planet, new obstacles obviously arise.

Indeed, language, cultural and organisational barriers hinder dialogue and it is difficult to communicate and verify the achievement of objectives between such different realities within what should be a single company.

But if processes and the resulting information are so diverse and fragmented, how do companies know if they are going in the right direction? To identify new segments in which to invest? Or where to revise the organisation?

They can't, because they are caged in a word that I am sure you all know and have heard repeated many times. In SILOS. They have no overview. But putting standardised procedures in place is the only way to align everyone to the same plan.

Is process standardisation possible?

We have seen many companies try: rivers of documents, shared settings, meetings.

It is a pity that it then ends up depending on the discretion of the various contact persons in the various locations, who can:

1. not applying them, because they are used to working according to already constructed mind-sets (and we know how ingrained habits are in people!)
2. applying them, but misunderstanding the instructions received (unclear orders, carelessness, etc.)
   
   

We bring you the example of a large multinational company operating in the chemical-pharmaceutical sector. As agile digital transformation consultants, we closely followed the standardisation of budget and operations management processes. The company wanted to use the leverage of computerisation to promote adoption, while mitigating the impact of change.

This pharmaceutical giant has 17,000 employees in just over 100 companies, is the Italian parent company but has several coordination hubs spread across Europe, Central America and Asia.

It is a company accustomed to working by projects, as they see them as the ideal tool to monitor the evolutionary development of the company and the achievement of business objectives.

The difficulties of process management

When we met with them in 2014, they felt the need to increase control over their core element: projects.

They organised periodic meetings - project portfolio reviews - where each project manager interfaced with the steering committee. So far so good. Each contact person, however, used his or her own format when presenting the progress of the projects he or she oversaw: different structures, KPIs, presentation methods.

Management at this point was in trouble because it had to look at dozens of projects without a lowest common denominator. Banally, with different measurement metrics, it was difficult even to make comparisons, let alone to analyse deviations.

The result was obvious: everyone did what they wanted following their own idea of development.

Let us relate a short (made-up!) anecdote that gives us a clear idea of what it means to have control over projects.

The CEO of the company had centralised on himself the authorisation of all kinds of expenditure, even the smallest. One day he receives an RdA for approval with the description 'a cloche'. Having so many approvals to validate, he always read the descriptions very hastily and concentrated only on the largest ones. Puzzled, he called the division manager to ask him "a cloche? What are we going to do with a cloche?" and to be told by the division manager, very calmly, that they had already bought the rest of the helicopter in pieces.

The feeling of control is haphazard, because there is a lack of overview. In our pharmaceutical giant, were the targets being met? It depends.

Individuals lacked the ability to have an overview, to understand how the company strategy could be “grounded” and whether a project was to be considered strategic. There was no unambiguous method and therefore no understanding of the overall trend, with all this parcelling out to the development of individual local projects.

Management's decision

This is how the need arose.

The board gradually perceived this difficulty and wanted to create with us a standardisation of the budget management processes, first and foremost, through a shared web platform. Obviously, one cannot talk about the budget without touching the areas where it is spent, so we also had to manage the areas that govern the management of projects, contracts and ordinary and extraordinary maintenance.

The adoption of a shared software platform inevitably leads to users being bound to it, to fill in the fields it asks for in the order it asks for them, because otherwise this simply does not go ahead. No arguments, no discussions.

In doing so, the processes were made non-discretionary. Because the individual project managers had to “compulsorily” follow what the software dictated. As they say in the movies, no manager was mistreated during this transition.

Simply, with this application accessible via a simple browser, managers had to enter the information, steps and developments relating to their projects in pre-filled fields, the same for all. All in the same way. From Europe to Asia via America. By digitising project management as well as everything else, a single method of interlocutor was achieved, which could be adopted absolutely painlessly.

Within a short time, the contact persons themselves realised how the adoption of this platform had greatly simplified their organisational methods and the time they spent even simply on reporting.
The multinational company thus found itself with a single information repository:

1. to monitor requests and budget allocation
2. the progress of projects and the consequent expenditure of the allocated budget
3. perform automatic data analysis, also in aggregated form
   
   

Processes are company know-how  

From what has been said, it is clear that the problem is never “which medicine (read technological product) I use” and whether it is more or less emblazoned.

People's experience and culture really make the difference in an environment characterised by processes that must first be mapped, then normalised and finally standardised. Data is only a consequence of these, which is why if you want to have a department's budget already committed, you should not start with the numbers but with the processes that lead people to define those numbers.

Projects are the way companies manage evolution and, for this reason, are an important tool for growth. Projects are “boxes” that contain money (to be spent and already spent), deliverables, partners, risks, allocation of people, timetables, processing and delivery dates... to have control of these is to ensure the achievement of important business goals.

This drives us to never look for a one-size-fits-all approach: in their singularity, we try to understand on a case-by-case basis  which technology best supports their processes. 

The benefits of process standardisation

Back at our company, after a running-in and activation period, the results were immediately visible. The Corporate IT Manager, with whom we interfaced on a daily basis, admitted that, compared to before, now:

• they clearly understand what they are doing, both globally and locally
• they finally have a shared method (it is as if they all speak the same language at reviews!)
• they continuously learn from the projects... they see bottlenecks and areas for improvement. The biggest benefit is in terms of  lessons learnt.
  
  

The true meaning of digitisation

The fact that a top manager of the company had experienced the benefits of digitisation at first hand led him to recommend it to other departments. To believe in it and promote it internally, aware of the improvements that digitisation could bring.

But what is digitisation? We commonly think of digitisation as the dematerialisation of processes. Less paper, everything is online: all you need is a PC to find what you need. This is partly true, but the real value of digitisation lies in redesigning processes. For the better.

What used to require complicated digital work-arounds is streamlined. The effort required is less, there are no redundancies, information is always shared... An approval, for example, can be handled with one click, without endless e-mails. Robotic Process Automation in this respect is making great strides.

Digital creates an efficient model, which is scalable n times, as many times as there are markets in which the company is present. It creates a shared method, which cannot be bypassed: think of the constraints imposed on project management by the IT application.

Conclusion

What is the lesson we can draw from this example?

Operations can be decentralised, control cannot. That is why we have to implement standardised, digitally supported processes.

It is very common in companies to find people who resist to change. When it comes to digitisation, the most uttered phrase is "we have always done it this way" . Sure, but why not do it better?

From our personal experience, we can advise you to test it out on an early adopter department... once they see for themselves the benefits they can gain even on a personal work level - time savings, simplified work, better reading of data - a snowball effect of interest is created.

That is why in our opinion digital is the key to internationalising processes. Because it makes it possible to export control, in the first place, and efficiency in the second.

*Article by Francesco Clabot - Professor of IT Service Management at the University of Padua and CTO of WEGG, taken from his speech at the event "Be International. Be Digital. The role of digital transformation for the international development of enterprises. New normality and future trends" organised by CUOA Business School on 14.09.2021