Ever engage in a serious spring cleaning? Nothing is overlooked! Every closet is opened, every drawer tidied, every crevice vacuumed. When it comes to business transformation, have you overlooked the importance of spring cleaning?
Many companies underestimate the importance of spring cleaning, failing to take a close look at what is out of order, cluttered, dusty, or dysfunctional within their own house. But if efficiency, productivity, and cost are three primary drivers for your business transformation (as they pretty much always are), then you should take a long, hard look at what you are doing and how you are doing it – and get ready to clean up the problem areas you are inevitably going to find.
Assess Your Capabilities
That long, hard look starts with assessing your capabilities – and recognizing weaknesses where they exist. Ideally, each unit of your business needs to take a service approach to their main functions. That is, business units should ask,
- What specific services do we deliver to the rest of the company, to our vendors, and to our customers?
- Which services do we excel at delivering?
- Which services do we struggle to consistently deliver at desired service levels?
- Which services are we (honestly) lousy at?
Most companies discover that each service consumed (whether in the area of IT, legal, finance, HR, etc.) needs to be reassessed to find out if it makes sense to use internal or external resources.
Decide What Stays and What Goes
Once you have determined what you are good at and what you are not, you need to decide what stays and what goes. Don’t assume that you always outsource what you currently don’t do well, or that you always keep what you’re good at. You may decide that it is worth your while to learn to do a job better yourself, rather than turn it over to a vendor; or that you should outsource a function even though you’re good at it to free up resources to better meet business goals.
Asking some basic questions about each service helps this decision making process:
- Does this service fit into our core competencies?
- Do we have the talent to do this in-house?
- How much does it cost us to deliver this service?
- How much time does it take us to deliver this service?
- If we do this well, should we continue doing it, or is our time better spent concentrating on other revenue-generating efforts?
- If we don’t do this well, should we learn to do it better, or should we source the function to someone who specializes in it?
The answers to these questions are made at a business unit level, but with the best interests of the entire company in mind, rather than focused on a single department’s efficiency or budgetary goals.
Encourage A Mental Shift
You’ll decide to keep many things in-house after your spring cleaning. Others you will divest to outsource providers. For those functions you keep internally, part of your business transformation will be encouraging a mental shift within your employees.
Namely, business transformation includes evolving from a “tasks completed” mindset to a “services delivered” mindset. “Tasks completed” has a narrow, departmental focus: “Can we check this off our list?” “Services delivered” has a broad, holistic perspective, “Did we help our company/vendors/clients achieve their goals?”
You may find that you need to create new positions within some or all departments to facilitate greater collaboration between functions, e.g., assigning account managers to care for relationships with other departments and explain internal service catalogs. This allows each department to immediately see what’s available and what, if anything, requires outsourcing.
Developing a method of internal chargebacks is also recommended. When internal chargebacks are established, each unit is better able to show value and control their own profits and losses for services rendered. This means that each department can act not only as an internal service provider, but also as a service broker for externally-sourced services.
If you’re still hesitant on where or how to begin, go back to the idea of spring cleaning. There are de-cluttering services and closet organizers who can help you around the house. Likewise, there are consultants who can analyze your current business structure and processes and help you kickstart your business transformation.
After a good spring cleaning, your company will have “a place for everything, and everything in its place.” And that is a great way to ensure efficiency, boost productivity, control cost … and achieve the total business transformation you are striving for.
This article was previously published on Forbes and Sungard Availability Services.