When Brad Clay became chief digital officer of GlobalFoundries in early 2021, he knew his role would be less about technology implementation and more about process change.
In 2018, the $8 billion global semiconductor manufacturer announced a pivot in its business strategy: The company would no longer develop and produce 7-nanometer and smaller chip technologies; instead GlobalFoundries would focus on producing specialized chips for high-growth markets such as automotive, 5G, and the internet of things.
“When we shifted from commodity contract wafer manufacturing to delivering more value to the device manufacturers, we faced a different set of business problems,” says Clay. “We had to align our business processes with the new strategy.”
Wholesale shift in process management
GlobalFoundries grew up from a collection of companies, each doing things differently, so processes had become siloed and fragmented, with no single person or organization accountable for an entire process. This, along with the change in business strategy, required a wholesale shift to global process management.
Clay, who is also CIO, worked with the IT team to spearhead development of a global business process owner model. “We wanted to understand and define how our processes could be interconnected and work end to end,” he says. “We had to break down the silos that naturally occur between finance, planning, and supply chain, for example. We did not start with an organizational construct; we started with a process construct.”
Once the global process model was defined, the technology team would create two common platforms, one for global processes and the other for data, but they could not put the cart before the horse.
“When you start a transformation, everyone wants a quick win,” says Clay. “We resisted that approach. We spent a year developing, defining, and visioning our new process model before we bought any software. That approach has paid huge dividends.”
Introducing a new role: Global process business owner
Clay and his senior executive peers identified eight global processes: idea to product, hire to retire, order to cash, demand to deliver, source to pay, market to contract, make to order, and record to report. They then identified people for a new role, global process business owner (GPO), which would be the linchpin to the new model.
In companies that have a relatively clear understanding of their global processes, that GPO might be a Six Sigma Black Belt with a continuous improvement lens, but this was not the case with GlobalFoundries. “Because the concept of global business processes was new to us, we needed VP-level leaders to step into the new role. We had to drive the transformation from the top down.”
Taking on a GPO role is not for the faint of heart. Clay needed the newly appointed leaders to understand the magnitude of the change they would drive. “We communicated that this was not a continuous improvement effort where the owner would make the process 5% better,” he says. “Our message was that transformation starts at 50%, and that our leaders had to have the vision and courage to sign up for that level of improvement. Anyone will sign up for 5%; it’s in the margins. But 50% is where people get nervous. That’s a very visible level of accountability.”
Once process owners were identified, they went through training so they could have a common understanding of processes, lexicon, and ways of interacting. “We even did 360-degree assessments on the leaders, because we needed the process owners to be a tight-knit group,” says Clay. “They would be accountable for driving common process through the company in a way that had never been done before.”
Under each GPO are process advisory groups that span the various departments involved in a single global process and have a stake in its improvement. Because a GPO cannot have detailed knowledge about every single piece of a process, these advisory groups are critical to making the global process owner model work.
“The advisory groups ensure that the GPO understands the user stories, and they make sure that everyone knows what is going on with the processes,” says Clay, who also reorganized IT so each GPO has a dedicated technology owner.
With the GPO model in place, Clay and his IT team could now address the challenge of implementing new software to automate the global processes. “We had primarily been using point solutions for specific requests held together by manual effort,” he says. “We had to cross ‘the gap of stranded investment’ and focus on platforms. We replaced pretty much everything — ERP, CRM, PLM, quality management — new software soup to nuts.”
GPO lessons learned
Now that Clay can see the faster decision-making and increased productivity that has resulted from the GPO model and platform architecture, he has some lessons to share.
The first: Transformation is more than software implementation. GlobalFoundries’ GPOs are aware that transformation has two elements: digital enablement and business change, which ensure that your operating model is aligned with the business strategy.
“That is why the GPO has to be a senior person,” Clay says. “The GPO aligns the processes to the corporate strategy and then makes sure that what IT is building into the platform aligns. I believe that digital transformations fail because its leaders miss that duality.”
The second lesson is that when you implement the software, minimizing customizations helps you avoid “fighting gravity.” Clay sometimes gets up in front of his colleagues and drops a rubber ball to make the point that when you choose to veer from a vanilla ERP, for example, you are trying to keep the ball in the air.
“Commercial software was built by people with expertise in business processes,” he says. “When you decide to customize the software, you are deciding about whether you are removing friction or fighting gravity. Our goal is to fight gravity only where we absolutely have to.”
Finally, Clay points to the importance of senior-level support and business engagement. Early on in the transformation, hundreds of people across the entire global company came together to walk through each process, with each GPO standing up to address plans for their own area. “It was the global process owner explaining how processes are going to change,” he says. “It wasn’t an IT person explaining how SAP works.” That, and the fact that CEO Dr. Thomas Caulfield described the program as “business transformation enabled by IT,” were critical to the program’s success.
“At GlobalFoundries, we manufacture semiconductor chips in four different facilities across three continents,” says Clay. “But the GPO model was a true transformation, which we had never done. And that’s the challenge of transformation. It’s always unique.”
Business Process Management, Digital Transformation