break down the walls: how to structure your reporting lines and integrate a global model across an...

Break Down the Walls:How to Structure your Reporting Lines and Integrate a Global Model Across an Extremely Siloed Organization

Darin M. BallDirector, Customer FinanceDS Services of America, Inc.

“Functional Silo Syndrome”

• The term “Functional Silo Syndrome” was coined by Phil Ensor in 1988 to describe an organization whose functional groups work independently, with their own agenda and set of unique goals and objectives.

• Silos are created from an organizational compulsion to control. The perceived need to control is due to a lack of trust and suppresses creativity, narrowing the view of the employees and limiting their potential and impact on the organization.

Managing Through Silos

Sales/Marketing Department

Prospecting

On-board customer

Credit Department

Assess risk of prospect customer

Establish payment terms

Customer ServiceDepartment

Account Set-up

Order Entry

Account Maintenance

Billing Department

Invoice Generation

Tax Documents

Collections Department

Past Due Follow-up

Dispute Resolution

Determine Bad Debt

Provisions

Cash ApplicationDepartment

Apply cash receipts

Maximize Auto Application

Rate

Order-To-Cash Process

New Business Acquisition

Credit Management

Maintain account and enter new

orders

Bill the customer per specification

Collect on open customer

receivables

Apply payments timely and accurately

Goal: Revenue Growth

Goal: Mitigate Risk

Goal: AccurateOrder Fulfillment

Goal: Timely Invoicing

Goal: Maintain Current Aging

Goal: Timely Application of Cash

Process vs. Organizational Structures

• GPO Models can run horizontally, vertically, or in parallel…

GPO Model ExampleCEO

VP - Sales & Service

Department Head

Specialist

Specialist

Specialist

Specialist

VP - Finance

Department Head

Specialist

Specialist

Specialist

Specialist

VP - Production

Department Head

Specialist

Specialist

Specialist

Specialist

VP - Procurement

Department Head

Specialist

Specialist

Specialist

Specialist

VP - Logistics

Department Head

Specialist

Specialist

Specialist

Specialist

GPO Model Example

Global Process Owner




CEO

VP - Sales & Service

Department Head

Specialist

Specialist

Specialist

Specialist

VP - Finance

Department Head

Specialist

Specialist

Specialist

Specialist

VP - Production

Department Head

Specialist

Specialist

Specialist

Specialist

VP - Procurement

Department Head

Specialist

Specialist

Specialist

Specialist

VP - Logistics

Department Head

Specialist

Specialist

Specialist

Specialist

Purchase-to-pay

Order-to-cash

New product development

Lead-to-order

Global CEO

Global Sector CEO

Business Unit CEO

Business Unit CEO

Business Unit CEO

Business Unit CEO

Global Sector CEO

Business Unit CEO

Business Unit CEO

Business Unit CEO

Business Unit CEO

Global Sector CEO

Business Unit CEO

Business Unit CEO

Business Unit CEO

Business Unit CEO

Dysfunctional GPO Model Example


North American Region

CEO

Asia Region

CEO

Global CEO

Global Sector CEO

Business Unit CEO

Business Unit CEO

Business Unit CEO

Business Unit CEO

Global Sector CEO

Business Unit CEO

Business Unit CEO

Business Unit CEO

Business Unit CEO

Global Sector CEO

Business Unit CEO

Business Unit CEO

Business Unit CEO

Business Unit CEO


North American Region

CEO

Asia Region

CEO

NA Sector

CEO

NA Sector

CEO

ASIA Sector

CEO

ASIA Sector

CEO

Global CEO

Global Sector CEO

Business Unit CEO

Business Unit CEO

Business Unit CEO

Business Unit CEO

Global Sector CEO

Business Unit CEO

Business Unit CEO

Business Unit CEO

Business Unit CEO

Global Sector CEO

Business Unit CEO

Business Unit CEO

Business Unit CEO

Business Unit CEO

Previous Efforts to Break Down the Walls

• Efforts over the years to break down silos:• Supply chain management• Process re-engineering• Shared Services business models• Six Sigma/Lean manufacturing• ERPs

• In many cases these efforts fail. Why?• Lack of a clear plan• Poor communication • Poor change management• Undisciplined project management• OWNERSHIP

Global Process Ownership is Trending

Plan-to

-resu

lts

Time-to

-pay

Account-t

o-report

Purchase

-to-pay

Customer-t

o-cash

0%

5%

10%

15%

20%

25%

30%

35%31% 30%

28%26%

10%

Processes with Global Ownership

Source: Enterprise process ownership study, The Hackett Group, 2013

Global Process Ownership is Trending

Processes are defined and implemented regionally

Processes are defined globally but implemented regionally

Processes are defined and implemented globally

Regional process owners

Global process owners

Local process owners

No centralized process ownership

Source: Accenture research report: Trends in Shared Services

The majority of companies have globally defined processes but leave the implementation and management of those processes to regional resources

The role of the GPO defined

• Global Process Owner• Approves the process standards, policies, guidelines, and KPIs;• Sets priorities for process improvement projects;• Coordinates process management with performance

management, change management, and technology changes;• Ensures alignment across all organization sub-processes;• Ensures all technology, application, and data changes are aligned;• Responsible for the overall performance of a specific global

process.

What Skills Should a GPO Have?

Risk Management

Accounting

Negotiating

People Management

Project Management

ERP Awareness

Business Acumen

In-depth Process Knowledge

Influence and Authority

Communication

Change Management

0% 10% 20% 30% 40% 50% 60% 70% 80%

16%

24%

24%

26%

29%

34%

36%

57%

67%

68%

71%

Source:Tungsten/Sharedserviceslink.com survey 2014

The Importance of Influence

“A leader must inspire, or his team will expire”-Orrin Woodward

mo·ti·va·tionnoun \ˌmō-tə-ˈvā-shən\ : the act or process of giving someone a reason for doing something : the act or process of motivating someone in·spi·ra·tionnoun \ˌin(t)-spə-ˈrā-shən, -(ˌ)spi-\ : something that makes someone want to do something or that gives someone an idea about what to do or create : a force or influence that inspires someone The difference between good leadership and great leadership is the difference in motivating your team and inspiring them. To motivate them is to expect in return that which you are asking of them. To inspire them is to release their full potential and let them exceed your expectations…and theirs!

Implementing a GPO model must address the 4 key areas of a process

People• Organizational Structure• Alignment of goals• Training/development• Collaboration

Processes• Standardization• Automation• Implementation of best

demonstrated practices

Technology• Automation• Workflows• Comprehensive, real-time

reporting capability

Performance• Cost reduction• Continuous Improvement• Sustainable/repeatable• Predictive

People:• Do I have the right people?• Have I created a culture of trust or of control?• Have I provided the proper training?• Do I have the appropriate support/authority?

Processes:• Can I repeat my successes and ensure

consistency?• Am I measuring performance based on best-in-

class or prior performance?

Technology:• Is my technology enabling or inhibiting?• Does my technology provide the level of visibility to ensure

success?

Performance:• Have I established the proper KPIs to measure and

reward performance?• Are my goals smart and do they encourage

collaboration rather than silos?

Roadmap for Building A GPO Model

Transform Achieve

Continuous Improvements

Process Manage

ment

Performance Management

Breakdown of

Barriers

LeadershipClear Vision

Change Management Plan

ConsistencyCost Savings

Improved performance

Satisfied CustomersEBITDA

Build

• Clearly define the role and scope of responsibilities

• Ensure proper level of authority

• Ensuring senior management support is critical

• Gain a full understanding of the end-to-end process

• Brush up on your change management & project management skills

• Ensure the role is supported by proper governance

• Establish culture of continuous improvement

• Sharpen your influencing skills

• Manage to clearly defined metrics

• Reinvest into business with savings realized

• Improve customer retention• Positively impact the bottom

line

• Global Process Ownership is not “one-size-fits-all”• Building trust is paramount to tearing down silos• Whether vertical, horizontal, or a hybrid, goals and objectives

must be aligned with the business owners• The term “global” can refer to ownership of processes across

the pond, or across the enterprise• Ensuring senior management support is critical• However, don’t let the lack of support to derail your success• Brush up on your change management & project management

skills• Sharpen your influencing skills – Inspire rather than motivate

Key Takeaways

Questions?