Fresh from salvaging a technology project sale bedeviled by a series of document errors, near misses on deadlines and late nights, it’s become apparent that technology, e-procurement expertise, contract management plans, deep pockets, or even possession of all of these things, is not going to save us; not now, probably not ever, from recurring (and expensive) business issues.
So what will? Three of the most basic tenets of effective business process management. This example highlights them, or more accurately, their omission, in action.
Should Have Been Easy, Right?
This particular sale included pretty standard hardware and services for a long-term client. We do the professional services part, and resell the equipment from Fortune 500 vendor partners and as in this case, occasionally enlist a top-tier financial services company for lease servicing. Flanked by experienced partners with vast resources, specialized skills in contract management services and enviably advanced technology, this integrated solution sale should have been a breeze.
Instead the entire process was wracked by a bewildering tangle of incorrect prices, confusion on terms, document rewrites, numerous phone calls, chains of e-mail, the risk of missed deadlines and most importantly, a potential loss of trust and client goodwill.
Lesson One: “I Found the Quote in My E-mail.” – The Right Information
It’s the last week in the quarter, and we’re energized for our client, having secured for them an exceptionally favorable interest rate for a multi-year lease on the servers and storage equipment for this project. We submit the standard VAR documentation to the equipment vendor who owned the next step in the process; coordinating with the financing company to get lease documents prepared for client signature.
The next morning we receive an e-mail from the client telling us how very pleased they were with the lease price of the equipment, which was several thousand dollars less than what we had actually quoted, and to my horror, far below our cost. How did this happen?
So begins the cycle of calls and e-mails for damage control and to rectify the error. We discover the finance company received an incorrect price quote from the hardware vendor. When I ask the vendor’s sales consultant where she got the errant quote, she tells me it was “… in an e-mail I had received in the beginning of the month.” Turns out, this multi-billion dollar equipment manufacturer’s processes over-rely on e-mail correspondence. Sales coordinators and vendor contract management team members access quotes that reside in their company e-mail, in many cases after subsequent equipment reconfigurations and pricing negotiations have occurred.
Quarter-end bonus quotas put additional stress on this inherently flawed process, as consultants process higher work volumes and step in for other team members to facilitate sales finalization. Company e-mail has essentially become the system of record for quotes, confirmations, purchase orders and other key documents. There is no single content repository, no point-in-time view of quote history or modifications and no direct way for anyone outside of the e-mail chain to access critical documents for review or verification (or even understand where the process finds itself). The process ensures that the wrong people, with the wrong information are making key financial decisions for multiple parties (not just themselves, but the reseller, leasing company and the end-customer)! Talk about liability, not to mention WASTE!
Lesson Two – “I Only Checked The Specs.” Having the Right People Engaged in the Process
Okay, so the lease documents are calculated with incorrect information. Surely the next-step process owner will catch the mistake. And they would have --- if the right person actually was involved at the next step – but NOPE – doesn’t happen. Unfortunately, rather than getting the lease documents concurrently to finance, VAR purchasing and project management teams to verify them against customer purchase orders, sales requisitions and project plans, the unoptimized workflow causes the documents to advance to systems engineering. The infrastructure team reviews equipment specifications, because after all, that’s their only responsibility, right? Well, that all looks good, so guess what happens next? THEY FORWARD THE EMAIL CHAIN TO THE END-CUSTOMER WITH ALL OF THE WRONG PRICING INFORMATION!
Accurate information must be available to all the right people at each process step – and, of course, the right people have to be pulled into the process at the right time! Workflow routing (or in this case, email forwarding) is NOT business process management. Effective BPM starts with well-defined, optimized and risk-aware process definition, incorporating automated processes with human interaction junctures. Intelligent BPM embraces the collaborative and sometimes iterative nature of complex, multi-stakeholders processes, which are facilitated through carefully constructed business rules that require simultaneous review, multiple sign-off and step reversion when necessary.
Lesson Three: “What Delivery Charges?” – Why Timing Matters
Hours of damage control and several reworks later, including painstaking manual review at each process step to insure accuracy, we finally succeed in assuaging customer doubts and securing a set of corrected, verified and complete documents. As owner of the next process, we initiate purchase order submission to the distribution center, which prompts a call inquiring if we or the customer should be billed for delivery charges. Wait, what delivery charges?! These costs were waived as part of the initial price negotiation, but notification of this had not arrived at the distribution center yet, creating a narrowly averted shipping delay which would have had further negative implications for every stakeholder in the process, up to and including our client.
The right information available to all process owners at the right time in each process step. It sounds simple. It IS obvious – but amazingly it often doesn’t happen. Technology gives us very powerful tools to leverage and workflow can help automate the process, but effective business process management is the lynchpin; the system transforming all the pieces into a delivered solution that differentiates the vendor and delights the customer.