April 05, 2009

Operations Management – Lesson 5


Center of Excellence

IBM has moved into the direction of creating COE for mainly support role functions (such as Accounting)

When properly designed and managed, an ECM Center of Excellence (COE) can help customers make sure their new business solutions are planned, executed, and maintained in the most efficient manner possible.  This efficiency helps speed time-to-market and reduces cycle times, while producing higher-quality solutions through the re-use of proven resources.  Helping maintain focus on individual solution needs, while ensuring business solution flexibility also helps to ensure effectiveness across the enterprise.

A Center of Excellence can help customers:

  1. Improve efficiencies
  2. Reduce project development and deployment times
  3. Enable reuse of resources
  4. Create higher quality solutions
  5. Improve user productivity and technology adoption rates
  6. Enable corporate governance and compliance solutions
  7. Ensure effectiveness across the enterprise


Finance CoE Bratislava

lesson_5_v0412.odt

In this Center IBM has created 5 Services which are staffed to support all of Europe;

  1. Accounting
  2. Finance & Planning
  3. Fixed Assets
  4. Incentive Operations
  5. Logistics


By combining the above streams into a single Center:

  • the "upstream" part of the process, being with the actual processing of the financial/accounting data and
  • the "downstream", being the final results and subsequent financial analysis and expense tracking performance are all within the same environment.



Lean Sigma

Lean Sigma has implemented Lean in Rochester (USA) Bratislava COE as the activity level has increased to a level that customer satisfaction is being critical, complete with on-line material for customers.


Supply Chain Relationship

Creation of specialised functional teams - in a Partnership Relationship environment - the sharing of information, learnings, problem solving is critical as they all have the same overall Manager with common objectives and this should contributes to the effectiveness and quality level of the output, however this is not in 100% of the cases the fact.

Quality of output - As the Center needs to be cost effective you often see higher employee turnover, as employees seek faster career track which in a COE is bit more challenging -  which affects the quality/output and consistency as the "ease of doing business" is interrupted as you have to start dealing with a new "service contactperson/coordinator" and build trust again. This is in the minority of the cases, however it still forms a challenge. Hence putting aside the challenges, the quality level of the COE's are overall consistent in timing and quality.

Ability to cope with volume - key aspect of the COE is to provide Service at consistent quality level and on a timely basis, which as the COE grows and the activity levels grows with it, the timing of completing tasks is put at risk as the required "processing time" is pre-determined, however the customer often waits as the COE is not always able to "deliver" the output/service on time, as the learning curve for new comers adds to this dilema. Again in this case, these are minor cases, but in a customer satisfaction environment it is a challenge.


Supply Chain Dynamics


Main reason for creating a COE are;

[a] Increased Efficiency - instead of having in each country a complete Accounting, Finance Team or Fixed Assets Team, the COE has all the resources together in one place and gaining efficiencies based on Economies of scale and as there are dedicated inviduals become SME they make fewer mistakes and also execute the role much faster.

[b] Information Sharing - as the COE has centralised TeamRooms (databases) all relevant information is stored and maintained for immediate release and usage, hence increasing the knowledge sharing/transfer.

[c] Channel Alignment - this is achieved as most of the Services are part of the same family group and lead by the same overall Manager, aligning the processes is much easier as Middle Management are also aligned with similar objectives, hence everyone is singing the "same song from the same sheet of paper" and with the ONE bandleader, which in the de-integrated environment is more difficult as each Chief Accountant has his/her own perception of matters.


End


References

Slack et al, 2006, "Operations and Process Management", Prentice Hall

Wally, 2009, Warwick MBA Study note on "Operations Management"


Websites

https://w3-03.ibm.com/finance/finsubp.nsf/WebPages/N01FF00leanSigma

https://w3-03.ibm.com/finance/finsubp.nsf/WebPages/B1DC865DAAB221E90025724A004BC3C2







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