Silos, almost every business has them. That may not have been an issue historically, but in today’s fast-moving, demand-driven landscape, it could mean the difference between gaining market share and losing it.
Whether we want to admit it or not, business silos exist. They are a reality for almost every large organisation, but smaller enterprises are by no means exempt.
There are many reasons why such silos exist, but they frequently arise due to organic growth, internal restructuring, failed efficiency improvements, disconnected processes and acquisitions.
Silos can occur between different business structures, merged as part of global acquisition, between different business departments operating out of the same site or even different teams working within the same office.
Why can silos be so detrimental? They significantly impact collaboration and the speed of decision-making across a business, reducing competitiveness and responsiveness, and increase the vulnerability to disruption.
The result? Ineffective workers, low productivity, lost market position, and declining profits.
The most common functional silo lies between finance and operations – functions found in almost every organisation, regardless of size, sector or location.
Eliminating these silos represents one of the biggest business challenges of 2019 and beyond. The time and complexity involved in successfully uniting previously separate business systems, processes, data structures, plans, targets, KPIs, reports and organisational silos shouldn’t be underestimated.
A more integrated approach
“Given the scale of the task, it’s little wonder that many departments continue to operate as essentially separate entities,” says Alan Bagnall, manufacturing lead for business intelligence and corporate performance specialist, BOARD International.
“Yet by doing so, they miss out on the rewards a more unified approach offers – namely greater control, forecasting and agility.”
This article first appeared in the March issue of The Manufacturer magazine. To subscribe, please click here.
So, what are successful companies doing differently? Many businesses have found the answer in connected, collaborative planning and reporting – or ‘Integrated Business Planning’.
“The key,” says Bagnall, “is to try and achieve a single version of the truth, something which relies on standardising and making sense of all your data and turning it into a usable form.
“Innovative entrants to markets are successfully competing and winning business against established giants thanks to their greater agility. Faced with such a level of disruption and weighed down by legacy infrastructure and disparate hierarchies, large companies are struggling to react. To remain relevant, they need to embrace change and transform.”
A central data source
In the face of such disruption, many organisations are justifiably stepping up their scenario-planning. However, it can be almost impossible to accurately assess the ‘what if’ without a firm grasp of ‘what is’ – something made even more problematic if the same data isn’t being universally shared.
A major client BOARD has successfully partnered with is one of the world’s largest logistics companies. With BOARD’s Decision-Making Platform, the company’s senior management team can now make better, more-informed business decisions by unifying business intelligence, enterprise performance management, planning and advanced analytics in one tool.
By centralising data sources from across the business, BOARD enables the logistics company to conduct analysis, simulation and planning activities simply and easily within a self-service environment.
“Senior managers have always desired a single overview of their business, but increasingly they want to be alerted on an exception-basis, given the volume of information now available,” Bagnall notes.
“Having pretty dashboards that let you know everything is performing well doesn’t get anybody excited. Management teams want to know what’s going wrong, and they want to know faster and more accurately.”
Another key challenge, according to Bagnall, is weaning businesses off their over-reliance on spreadsheets. Many organisations understand they rely too much on spreadsheets, but not enough understand that it’s their ingrained working practices that create such a dependence in the first place.
BOARD often works with businesses that are suffering from issues around their data (too much, too little, unstructured or poor quality) and are working with fragmented, incoherent processes and systems. Such situations force employees into exporting data into their own individual spreadsheets to plan, analyse and conduct reporting.
“Things become so complicated and disjointed that businesses settle for ‘good enough’, for getting the products built and out the door at roughly the level of volume demanded,” Bagnall describes.
“Spreadsheets are the ultimate example of human ingenuity, you can do pretty much anything and everything with them. You can make tweaks and bodge them to get things done, but it becomes so disorganised and uncontrollable that it’s just not scalable.
“If manufacturers really want to differentiate themselves and move beyond the 0.5% or 1% improvements, then they’ve got to take a much closer look at the strategic play. Stepping back can be a real struggle, but conversely, that’s where the real, transformative value lies.”
For those keen to become more strategic, agile and flexible, Bagnall advises first understanding what your pain points or bottlenecks are, and then being realistic about how far your culture will allow you to actually change, at what pace, and the complexity involved.
“Unless you really understand the inertia that exists within organisations at all levels, you won’t come up with a realistic, achievable plan. The next step is getting everyone to embrace change and buy-in to the project. Unless these projects are driven from the top-down, with literally the CEO sponsoring them, then you’re going to run into difficulties.”
Like in most aspects of business, technology is also offering a helping hand here. As much as people are the real drivers of change, a centralised platform can help create realistic, adaptable plans that can be easily shared and updated in real-time.
Frequent updates on individual goals and the overall objective creates stronger project cohesion and greatly aids internal alignment and collaboration.
“That can help address the core issue at the heart of many unsuccessful implementations,” says Bagnall, “which is they cover such a large timeframe that the business has evolved in terms of its challenges, half the team has moved on and the project has been too unwieldy and rigid to adapt.”
Flexibility and agility
As much as implementation planning is important, there comes a point when the talking must stop, and technology must be brought to bear. And that’s where BOARD comes in.
BOARD enables businesses to break down their silos by centralising data, processes and reporting. This allows different functions, teams and sites to collaborate more effectively, and provides the level of control, forecasting and planning the modern business environment demands.
Its USP centres around flexibility and agility – not just in enabling a business to become more flexible and agile, but in implementing solutions that aren’t tied to fixed projects.
A manufacturer can start with a specific pain point or bottleneck, resolve it and then go deeper, Bagnall concludes.
“We take long, multi-faceted transformation projects and break them down into smaller, more achievable, manageable steps. BOARD recognises that manufacturers operate in a volatile environment, so our enterprise solutions can quickly and easily pivot and adjust accordingly.”
A solution capable of supporting rapid growth and adapting to a changeable business environment
ZF is one of the world’s largest automotive suppliers, operating 230 locations in nearly 40 countries and employing around 137,000 employees.
To continue its success, ZF spends around 6% of its annual €35bn turnover on research and development. Yet its previous reporting process was showing its age and no longer met the requirements of an innovative and globally oriented high-tech company.
Click to read a case study outlining how BOARD provided ZF with a reliable and flexible tool that rapidly adapts to changes and enables true innovation.