Ep: 20 Process Critical Success Factors/Notes 6

00:04 Therese Snow 

Welcome to our DELMIA podcast, Global Operations on the Go. Today, we continue our series on the transformation journey. Our guests, Eric Green, Vice President, DELMIA and Mike Bradford, DELMIA Strategic Business Development, will continue the discussion on the Transformation Journey Note series. They'll discuss Note 6: Process Critical Success Factors. Let's listen in.

00:29 Mike Bradford 

Thanks, Therese. So Eric, technologies used for digital transformation, Industry 4.0 and other initiatives seem to get most of the attention, followed closely by people issues. How critical is process to the transformation journey?

Process as a Critical Factor in the Transformation Journey

00:44 Eric Green 

Hello, everybody. Mike, that's a really good question. There's a lot of emphasis on the technology because of how it can be used to support and drive transformation. And of course, there's a lot of focus on the cultural and people issues, which we've noted in previous research notes. But a key element that does seem to be overlooked, or one that's not necessarily referenced and supported effectively, is the development of the processes and the processes that are trying to be created or formed or adapted in the transformation of the given initiative for a given company. Let me give an example. In many cases, companies start an initiative where they're looking to change a set of business processes or a go-to-market approach. And they’re focused on the transactions.

They focus on the data, they focus on what they've done in the past, and look for ways to automate those activities, when fundamentally, the process may be looked at holistically, and needed to be reassessed. And therefore, the entire process should change. And as a result, those companies that just automate or try to standardize on processes without looking at them holistically, many times result in a less than optimal solution, or one that doesn't provide the results at the conclusion of the transformation step or the implementation of those technologies, even if they're using good technology, even if they're addressing the cultural and people issues. Because after all, if you don't change the process, you still may end up having the same outcome. And if you don't change the process holistically to look at all the variables, you just might end up in a situation where you get the same outcome, but you just get the same outcome faster, which may not be what you're trying to accomplish.

02:50 Mike Bradford 

That makes a lot of sense, Eric. Could you please outline the Process Critical Success Factors for us?

Defining the 6 Core Elements

02:56 Eric Green 

In our research notes in our Transformation Journey series, we've identified 6. There's obviously more, but there are 6 core elements that we've identified that we think that are important, and each company should look at these, but also look at the additional ones they've identified as well. Because this list is by no means exhaustive. The first one is a need to have a documented and widely communicated strategy, and the regular communications on the metrics of progress against that strategy. We touch briefly on this, as we highlighted this in a previous research note on the importance of communication, and the importance of communication by different individuals based upon their role in the organization, and how that can help drive change. Another element is having an agile methodology. Like, gone are the days where the traditional deployment methodologies and implementation methodologies of change through a waterfall type of approach, or through a big bang type of approach really aren't as relevant now. There are situations where they do make sense.

But if you're looking at transforming and you're looking at transforming in a highly adaptive way, and a market that's changing, the need for an agile approach is critical. The third element that we've identified is one that's focusing on the use cases, and prioritizing the right use cases is extremely important. As we highlighted earlier in the research notice series, there are some use cases that are around data, you have to have your data infrastructure put in place so that you can get benefit. Those don't necessarily have a long-term large quantifiable business case, they lay the foundation. But when we get into process, we're now looking at what processes need to change and which use cases can actually drive the most business value. So, here it's extremely important to understand which use cases actually have the biggest impact. And moreover, which of those use cases had any impact within the timeframe you're looking to accomplish given your agile approach or given your timeline, and not all use cases are created equal and therefore prioritizing the right use case is extremely important. The fourth element to this is establishing a Center of Innovation that works alongside the Center of Excellence, and having an effect and impact on your operational processes to drive those metrics, whether it's in excellence, or efficiency, or completely new processes that you're creating.

The fifth key success factor around process is, I'm going to use the word compression – reducing and compressing the organizational silos, we don't just want to simply re-automate those existing silos, we want to compress them and then change those silos based upon the business processes that you're, being deployed. Now, the last key success factor we've identified is one of developing a data operations and data lifecycle approach to transformation. Because after all, we're talking about a new process, it's going to have a lifecycle, that lifecycle is going to revolve around the data and the lifecycle approach for that data, so that you can evolve from a legacy business process to a new business process and do so without having significant issues. So, those are the 6 key areas we've identified. By no means is it exhaustive, there are others. But these are the ones that we focused in on this Research Note number 6.

06:31 Mike Bradford 

Okay, well, it may not be exhaustive. But that does sound like a pretty good, pretty complete list. I'd like to dig in a little further on a few of those. Can we start by talking in a little more detail about the agile methodology?

Agile Methodology and Approach

06:43 Eric Green 

I'd be glad to. And it is a foundational list, there obviously could be more. But on the, if you want to dive into the agile methodology and approach, we're all familiar with the different approaches I referenced earlier, the waterfall, the Big Bang, deployment, and then of course, the agile approach. We believe that having an agile approach in the transformation is important for a few reasons. First, it allows you to number one, pivot and change based upon the prioritization of use cases. So, as you start out with the sprint, and you're focusing on a given use case that has an associated business value with it, that may change based upon a market dynamic. And we have seen that very clearly in the last two years with the effect on different supply chain disruptions and manufacturing disruptions associated with workforce not being available, with supply chain disruptions associated with bottlenecks and ports.

Or, you know, with the Suez Canal that was blocked, and the other associated bottlenecks with supply based upon ship shortages and other inventory shortages that have been resulting from either manufacturing capacity issues, or those that have been affected by the pandemic. At the end of the day, you need to have an agile approach and methodology so that you can capture and pivot to those new areas of focus, given the market dynamic, while at the same time maintaining a focus on those that are going to provide the most business value. So for example, in an agile approach, sales and operations planning in some industries is done in timeframes that span months and years. Well, given the recent events in supply chain and supply chain disruption has taken place over the last, let's say two years, that process and cycle has to be compressed. So, what new business process do you want to deploy in an agile approach as part of your transformation, so that you can collapse the time you do your S&OP or your sales and operations planning in an integrated business planning process, so that you can respond to the market much sooner.

That's just one example. And to do that requires changes in how you go about that business process, so that you can collapse the time from that planning exercise to the actual exercise of bringing products to market and executing against orders. Another example would be, from an agile methodology perspective, is on focusing on bringing a new product to market, and I'm going to source and build that product in a couple of factories around the world to support different markets and the demand in those different geos. If for some reason, because of supply chain risk, or because of certain geopolitical risk I need to move my production, I need to have an agile methodology that supports moving those business processes to different facilities even though those may not be core to my transformation when I started the initiative, but now they're core because of the risk associated with that new product launch. And that new product launch may have a revenue impact delay because if I don't address it, I'm not able to launch the product on time.

So, having an agile approach is key to pivot and address the market based upon those priorities, and what's changing in the market, but also to reprioritize those use cases that are going to have the most effect and impact so that you can have a step change in your business. Those are just a couple of examples. And you know, a third example is something I think we all can relate to and all of our customers are relating to is, you know, there may be you know, a series of sprints that are taking place for supporting a transformation initiative. And for whatever reason, you know, there may be multiple sprints going on in parallel, or in close sequence. And for some reason, maybe because of the availability of individuals, and expertise are not available, because of, their dealing with the protocols in given countries for not being able to travel or having to work remote, or not being available because they're dealing with safety concerns that you have to reprioritize and sequence those sprints, while still maintaining some momentum with the initiative. So, these are three simple different examples of how an agile approach is key, so that you can be very quick to adjust to the market or your internal challenges and still maintain momentum as you go through your transformation.

11:34 Mike Bradford 

That discretion around moving production from plant to plant is a really good lead in to my next question.

11:40 Eric Green

Okay.

11:42 Mike Bradford 

We've talked about Centers of Excellence in earlier research notes, how does the Center of Innovation in the success factor fit in with the COE model?

Center of Innovation and the COE Model

11:52 Eric Green 

It's a really good question. And it's really one that explores a lot more than we're going to cover here. And we do dive into it a little bit more in the Research Note number 6. But if we talk about the Center of Excellence, and how transformation teams need to leverage and extend their COE model for real success, it needs to evolve in how the COE is deployed and used. And it's incredibly important to understand what new processes can be deployed, whether they're new processes altogether, that's being introduced into the business for a new manufacturing technique or manufacturing process. Or if it's a revamping of an existing process, that's going to compress manufacturing cycle time. Well, that type of innovation resides in the operational teams in the plants. And so as part of this exercise of looking at business processes as part of the transformation journey, when we talk about the Center of Excellence transforming and including elements of what we call a Center of Innovation, it's leveraging those people on the OT side with the IT side, to not only focus on the actual execution and deployment of the processes and delivering of the transformation, but more importantly, how to innovate those in a way that actually drives additional change.

And so, when we talk about Center of Innovation, it’s not a Center of Innovation necessarily bringing new products to market, obviously, that occurs on the engineering side working with customers and the product teams. But we're talking about innovation also on the operational side. And what can be done by leveraging the talent that are in the operations, that are in the factories and the plants, to drive true innovation, to streamline, improve, or change the manufacturing supply chain processes that allow for the company to help progress to their goals faster. And that's really what the key is, it’s not looking at the COE as a deployment model, but looking at how you can leverage those experts in the in the OT world to really create new innovative approaches to drive manufacturing to the next level, or to change their supply chains in a way that they can truly create innovation in their business processes.

14:19 Mike Bradford 

Okay.

14:27 Mike Bradford 

One more point I'd like to get a little more detail on. Can you go into a little more detail on the data operations and data lifecycle approach in that final success that you discussed?

Helping Companies Transform their Operations

14:37 Eric Green 

I can go into that a little bit of detail. I think it's important to understand what we're talking about here. One thing that we found is helping companies transform their operations, regardless of their approach and regardless of where the right in their maturation, is teams need to learn to manage the data around the processes and data lifecycles associated with those, these are critical. Why is that? Well, if you're starting to evolve business processes or you're leading an initiative that's dependent upon operational data and IT data, you want to make sure that that data, and the lifecycle for that data is still relevant. More importantly, you want to be able to have a governance model that allows you to make changes and updates to the supporting data in the infrastructure, so that you can actually capitalize on the business processes or the initiatives that you're deploying, so that you can be successful. You know, after all, you don’t want to make a change in a manufacturing facility, when the reality is you don't have the ability to capture the data to measure and track that initiative.

And the success of that initiative, for that given sprint, or wave in your agile methodology. So, you need to have in place an organization that can support the creation and growth and evolution of an operational data model. And this needs to be done not only in the plants, but also across the enterprise. This is where we're starting to see with data sciences and other industry segments around how an evolution of job titles around managing data lakes, managing ownership of data, I heard a term the other day that we actually incorporated in the research note, which I found was interesting was a term called data wranglers. People that actually manage the data, the ownership and lifecycle of the data. There's new job titles and new job categories that are evolving, because of the recognized need for these data engineers to not only have a key input into the transformation initiative, but because of the size of some of these areas, these are actually becoming full-time jobs.

16:49 Mike Bradford 

Interesting. So, how does Dassault Systèmes enable or support process innovation?

Supporting Process Innovation

16:55 Eric Green 

Well, there's multiple ways that we as a company help our customers do that. First and foremost is we have a reputation, and we've been known in the past, and through current day to help companies transform. That’s core to our culture. And if you look at the large successful projects that many of our customers have executed and performed against, you'll see this across many of our customer examples. So, one is I think is a culture where we can help companies transform their business and support their initiatives. You can look at any one of our press releases, where we demonstrated and shown that success with all these customers. The second is we do have a platform for business that allows companies to support their transformation with the 3DEXPERIENCE platform. And as part of our solution and technology, its all inclusiveness that allows us to not only, you know, break down the silos between engineering, manufacturing, services and support, but also the ability to bring everybody together into a model based approach is key. And these elements manifest themselves in what we call the Virtual Twin Experience.

And so with any transformation with processes, having the ability to model your factories, model your supply chain and represent these business processes in a virtual environment that you can then simulate and optimize, and essentially test before you deploy that strategy and deploy those processes, helps enable an agile team to understand what and how they can effectively deploy business processes in a given factory, or across factories, and mitigate the risk of making mistakes that cost money in the form of either time, overhead, extra hours and overtime. Or, you know, utilization of assets like equipment and machinery that get diverted because you're trying to fix a problem. And the fact that you can do this all in a virtual environment, and test out all these different business processes and simulate how it will behave in a factory and then how you can optimize those business processes, enables companies to essentially accelerate the transformation by doing this legwork up front. And the end of the day, with the Virtual Twin Experience being able to provide this capability, companies actually can accelerate their activities, and more importantly, innovate so that they can identify new ways of working that support their business, whether they're manufacturing an automobile or manufacturing a consumer packaged good, that we as a consumer might all consume.

19:32 Mike Bradford 

That makes a lot of sense. Thanks Eric. Finally, what have I missed? Is there anything I haven't asked about that you believe is vital to this topic?

19:40 Eric Green 

I think we've just touched on a few. We highlighted the 6 areas that we think are critical for success. Then we talked about other elements of the research note, focused on process. So, I think we've covered the basics. I would encourage the audience to take a look at the, and do a download and read the research note and look at the entire Research Note series, if you haven't seen it yet. that it will give you a good feel for what we see our roadmaps and key success factors and key considerations across the entire journey. The one thing we haven't covered yet, which will be covered in Research Note number 7, is technology. And we'll dive a little bit more into the technology, which I just alluded to. So, we're looking forward to publishing that one here very soon. But to answer your question, Mike, I think we've covered all the basic points here. I would encourage anybody who wants to learn more to reach out to us, we'll be glad to answer questions or download the research note from our website.

20:33 Mike Bradford 

All right. Thank you very much, Eric.

20:34 Eric Green 

Thank you, Mike. Have a great day.

20:36 Mike Bradford

You too.

20:38 Therese Snow 

Thank you, Eric and Mike for continuing the conversation on the Transformation Journey. Our listeners can access Note 6 by clicking on the link under the podcast for download. I’m Therese Snow, and thank you for listening to Global Operations on the Go.