Co-management Will Play Key Role in Business Process Fusion

Business process fusion creates sustainable relationships between the participants in the processes, but the key to success lies in sustaining effective human interaction between organizations. Co-management enables these interactions to be continually analyzed and maintained. They are a fundamental component of sustaining high-performance, long-term business relationships.

The Six Co-management Processes

Maintaining the fusion of business processes requires good relationships between the people and organizations involved. Smart relationship management will be needed to keep the interests of all parties aligned as the objectives and capabilities of company departments and business partners change. This applies whether the partners co-exist within the same company or not. Clear definition of the boundaries, roles and responsibilities of the parties is vital to maintaining strategic flexibility when allocating resources between them.

Six key processes are needed for the successful maintenance of a complex, changing, long-term relationship. These can be considered as the “public” processes that sit between the “private” processes in each organization, but they work at a level above day-to-day delivery.

• The strategy process develops the overall objectives, priorities, policies and procedures, and makes the broad decisions that define how agreements will work. The strategy process sets expectations and maintains high-level integration and commitment across all stakeholders.
• The membership process identifies the capabilities that the business needs. It involves selecting appropriate service providers that offer the required capabilities. Specialist subcontractors may have critical roles to play, and this process must enable companies and their prime contractors to work together to assess and select key suppliers.
• The integration process builds and maintains disciplined cooperation between all service providers and the company. It includes defining and, where necessary, updating the roles, responsibilities, priorities and performance targets of each stakeholder.
• The equity process controls commercial arrangements, like funding, pricing, billing, asset ownership and intellectual property ownership. It ensures the continued alignment of stakeholders’ commercial objectives, and assigns responsibility for day-to-day administration.
• The audit process monitors the performance of all stakeholders (not just service providers) against their agreed targets. It assesses four critical components: Price and level of service, the state of the contract and relationships, stakeholder satisfaction, and vision and alignment. Most importantly, the audit process monitors specific metrics to focus on improving performance and resolving problems.
• The feedback process deals with regular reporting, captures lessons learned, and supplies the flow of information needed for short-term corrections and long-term enhancements. In a changing environment, the feedback process provides the information that makes it possible to look ahead (three to six months), identify potential problems and anticipate required changes.

Activities that fall naturally under these process headings can be brought together in checklist form to provide managers with a practical tool for taming the complexities of business-to-business relationships (se. The checklist can be applied – with only slight modifications – to any industry or project, as it focuses on success factors that sit above the day-to-day issues of performance and delivery.

Co-management Shapes Relationships That Work

These six co-management processes are generic and can be applied to manufacturing, purchasing, construction, collaborative design work and most other types of business activity. The research that went into defining them was spread across many industries. Most of the early testing and application of these co-management processes has been within the IT field. IT organizations offer some of today’s most complex examples of outsourcing relationships, but by understanding co-management processes, measurable performance improvements can be made across the whole spectrum of business process outsourcing.

Recommendations

Insist that all relationships are structured to accommodate uncertainty and unpredictable change.

Use Gartner’s checklist of six co-management processes to examine:

• Whether your arrangements provide management and contract structures to cope with the uncertainties and changes your business will face.
• Whether service providers and recipients have the skills and tools to manage their relationships successfully.
• Where improvements can be made.

Veto proposals that leave relationship management open to loose, ad hoc arrangements.

Co-management processes are vital. Create and maintain an integrated, co-management team. Involve all the stakeholders (business units, service providers, supplier management, executive management and external funding providers) and give everyone clearly defined roles and responsibilities.