If you want to
increase the agility of your back-office functions, you need to consider three
essential steps. All are a bit on the immature side in the market today, but all
are also evolving quickly.
1. Adopt a Services Catalog. While the term may conjure images of a
restaurant menu, a Services Catalog enables informed decisions around service
design, sourcing, and lifecycle management. A Services Catalog applies the
disciplines of product/category management to the world of back-office support
functions.
A well-designed
Services Catalog provides an assortment of building blocks. These blocks
represent capabilities that are managed through a holistic lifecycle. By this I
mean that they are created, deployed, scaled and eventually retired in response
to competitive requirements in the markets you serve, even if those markets are
frames by internal business units.
We are still
early in the adoption of a Service Catalog governance model for IT or for a Shared
Services organization. There is, however, an obvious nexus for the application
of a Service Catalog – it’s the point of intersection among the demand-side
business and the supply-side support functions.
This is not a tool, but rather a management discipline.
2. Embrace and empower the role of DevOps in
their support for business partners. This is a cultural shift, not a technology job description. Firms that
adopt such a mindset are demonstrating true progressiveness in capitalizing on
a generation of knowledge workers who are central to innovation.
The Service
Catalog has the potential to conjure fears of overly structured and tightly disciplined
constraints that restrict innovation; DevOps is the perfect offset to such
fears.
I ask every one
of my clients whether their organizations utilize DevOps techniques to accelerate
the business-to-IT agenda. Over the past several years, I’ve seen the positive
responses increase dramatically.
The DevOps role
is to make change happen both quickly and efficiently within the operating
parameters of business expectations for resilience. Those are tough hurdles to
meet: rapid innovation, with positive effect, without undue risk. But the
mission of DevOps is to drive speed to effect.
3. Create a mature and transparent Charge Back mechanism. This is another term that evokes images of
bureaucratic cost allocations within the hairball of corporate structures. In
reality, it’s actually an essential discipline for effective governance through
a program of change.
Most companies
recover the costs of back-office operations by applying allocations of those
costs to their market-facing business units. The most common techniques for
making the allocation decisions are to spread the costs based on such factors
as net revenue, or headcount, or office locations. While the accountants might
favor the mathematical ease of these algorithms, most business leaders detest
allocation-based cost recovery approaches.
Achieving
progressive capabilities in back-office support functions demands high
correlation between the needs of the business and the form of the associated
support. That fidelity implies choice. Those choices – such as the quality of
the office space, the speed of response, etc. – carry varying costs.
A modern Charge
Back mechanism empowers innovation by making clear the effects of decisions
around business options. A business unit that can lower costs and/or increase
revenues will enjoy those benefits directly.
Like the prior points, this is less about a tool than it is about a
management philosophy.
When combined,
these three ingredients – Service Catalog, DevOps, and Charge Back – will
improve your organization’s agility. Without them, agility is just a pipe
dream.
Peter
Allen has many years of operating experience as a top executive
of rapidly-growing multi-billion dollar companies and in assessing sales and
marketing effectiveness. He is now a Boston-based Managing Director at Alvarez &
Marsal.
Image: dark_ghetto28/Flickr
