The problem with books of record and how an EMS could help solve that problem
- Execution management systems are a new category of software that unlocks value in the hairball of enterprise IT landscapes. Here's how.
The book of record concept promoted by many ERP and CRM vendors is a farce.
These vendors centered some of their automation efforts around selected parts of popular processes but stopped way short of fully automating them. Just look at a business carefully and you'll see scores of broken or missing integrations. I still see lots of paper, fax machines, spreadsheets, and telephones in use at clients as they have employees using these to push events through to a useful conclusion.
To be a book of record, the data would be in one place, always current and complete. Today's business systems often have data stored, redundantly, in many places, with many elements incomplete and possibly out of date.
For example, look at how a new supplier setup unfolds. Besides the entry of the supplier information into an accounts payable system, there are lots of non-automated tasks floating around. There's the email from the buyer telling the supplier how to get setup in the buyer's systems. The supplier must then locate, scan, and transmit declaration pages on their corporate insurance, tax forms (e.g., W-9), etc. The supplier must also provide rate cards, product/service specification materials, etc. The buyer will then send a non-disclosure agreement that must be routed to the supplier's legal counsel for review. In fact, the legal counsel for both parties may need to have several exchanges via telephone and email before a satisfactory agreement is available. And that agreement will then uploaded to another system to support e-signatures, if supported.
Through it all, the process requires the use of paper, facsimile machines, telephones, collaboration technology, CRM/SFA software, accounting/ERP software, etc. It also requires many more people to be involved than just one buyer and one supplier. And, this is before the controls, approvals, and reviews even kick in.
The data for this process is distributed, diffused and not all together. Data is in emails, on third-party document systems, in the ERP software of the buyer and supplier, on paper tax documents, etc. There's no book of record, there are only islands of automation with piles of data at different processing way stations.
Solutions like Celonis' EMS (execution management) exist because few vendors have focused on all these information handshakes. To create a really efficient business environment, the devil is in the nooks, crannies, handoffs, manual steps, integrations, systems changes, queues, and more. Execution management is about documenting, understanding, integrating, streamlining, optimizing and reengineering how work gets done.
Put simply, Celonis' tools, in short, document processes, mine what's happening from the underlying systems to see what kinds of tortured paths are being followed to get work done and then, via benchmarks, best practices and smart automation capabilities, straighten out the flow.
When done well, an optimized process is highly automated, with software automating the routine and familiar. It should also be fast and efficient as many non-value-added and low-value-added tasks are eliminated. An automated process should include the ENTIRE process, not just the pieces of a process that exist within a software vendor's solution. Doing things part way is like sending soldiers into battle with guns and no ammunition.
When I was briefed on the EMS solution, I could see the efficiency and productivity angles Celonis was showcasing. But I could also see that the products would also free up a lot of time that otherwise would have been spent re-entering data, translating/integrating data from one system to another, shepherding a transaction through email/collaboration tools, waiting on approvals, etc.
Freeing up employee time is a huge benefit. Earlier in my career, I led the training of 19,000 consultants on process re-engineering. We wanted to help clients free up this time as the elimination of this expense could have a huge, positive impact on the bottom line. Alternatively, and just as importantly, we could also see how a client would want to re-direct their workforce to more strategic and valuable activities.
In today's world, cost savings are a highly desirable outcome but, I'd argue that redeploying people to more strategic activities is at least as valuable. Why? Businesses need to reskill their workforce so that more people are intimately familiar with all-new smart technologies (e.g., algorithms, ML, bots, big data, smart analytics, etc.) like Celonis' EMS. A workforce may also need to reskill as the company's business model is shifting or changed dramatically. And, of course, the company may need people to help fuel its own outsized growth opportunities.
Growth, in my opinion, is the real outcome products like EMS can enable. A value proposition that only espouses tweaks around process improvements doesn't do the solution justice. The smart software buyer will see beyond the initial process savings and realize the potential of the products to enable a company to grow materially without necessarily growing headcount. In doing so, a company's margins will be greater and possibly surpass those of competitors.
Growth is the real endgame here.