Johnson Controls – Deploy a ‘Business Operating System’ (BOS) to Realize the Full Potential of Digital Transformation in 19,000 Users

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Digital transformation is much more than replacing paper with zeros and ones. One of the most critical elements to success is creating a cultural foundation for everyone in the company to have a shared understanding of how the organization works.

A Business Operating System (BOS) is the instrument of a cultural foundation. A BOS puts everyone in the company on the same page, with the same vision, working towards the same goals. Clearly defined expectations, processes and accountability enable the company to achieve its goals and execute its strategy like a well-oiled machine.

Johnson Controls and strategic partner Infosys have successfully implemented a BOS on top of a highly heterogeneous set of systems acquired over many years. Against this backdrop, I was excited to have the opportunity to speak with Diane Schwarz, Chief Information Officer at Johnson Controls, to hear her success story.

“Datapools” to Data Lake

Johnson Controls is a 136-year world leader in smart, healthy and sustainable buildings and a Milwaukee-based company that develops products and services for buildings such as fire, HVAC, security, and building control products for predictive analytics and smart facilities. To quote Diane, “The IT infrastructure at Johnson Controls has more ERP systems than you can trust on your fingers and toes.” It’s a situation many of you can relate to, I’m sure.

The Enterprise Resource Planning (ERP) consolidation started in two parts of the business and the installation and service side will continue. Oracle Fusion and production facilities HANDLE. This is the first time I’ve seen an ERP split between two vendors and I thought it was interesting. Honestly, this is the first client I’ve heard of “not all rolled into one” with a single vendor.

It didn’t affect the BOS project, which required fetching data from various systems, as Diane affectionately called “data backlogs,” before achieving the transformational results of ERP consolidation. Johnson Controls selected Microsoft Azure Data Lake as the target warehouse.

A systematic way of running the business

Johnson Controls needed a systematic way to manage the business to avoid surprises. Initially, it started with a handful of Key Performance Indicators (KPIs). The first task was to pull data from legacy ERP systems into a data lake. A standard set of dashboards with training across the entire organization. Each branch manager and sales leader used a standard dashboard to run their weekly operations meetings.

The instrument cluster has become more than a number register. If a KPI did not meet the target, every leader had to take countermeasures. Countermeasures allowed leadership to be aware of the problem, understand the remedy and who is responsible – a closed-loop system.

In a few years the process has matured with more metrics developed for different people covering all aspects of the business such as sales, service and supply chain.

BOS is now a strategic platform at Johnson Controls. Data comes from 30 sources with over 400 KPIs spanning different areas with much more on the roadmap.

19,000 users currently use the system with over 1,200 standard operating procedures.

BOS has become a tool that enables a predictable and consistent way of working, measuring progress, and driving financial results. Johnson Controls can point to areas where BOS has improved resolution time and business margins. As one manager put it, “CSF helps leaders lead.”

The BOS dashboard is a plan of record that keeps the organization on the same page. New tools reveal a better understanding of risks and opportunities. The future will be more about using analytics to understand anomalies and predict future outcomes than looking in the rearview mirror to find out what happened to KPIs. This will be a game changer.

Facing challenges with a good dose of perseverance and perseverance

The cultural challenge of getting everyone to fit the standard scorecard was a major hurdle. Consider a branch manager who has been told by corporate leadership to change a system that he has thought has worked great for them for decades. The typical response is “that’s extra work.” The task was to convince the organization that working consistently across the organization and stopping local practices was replacement work, not extra work.

Over time, Johnson Controls eliminated native practices as the leadership team strengthened appropriate practices. Not weekly or daily, but at every meeting! “Where are your countermeasures?” “Who is responsible?” Diane jokingly said, “Change management is simple as long as someone else changes!”

Conclusion? No more PowerPoint! Tools and KPIs drive operational reviews. It’s very powerful – a gold standard for measuring work.

The second challenge was that it took time to build the foundation and people didn’t see the results right away. It took time to develop the KPIs, connecting 30 systems to several hundred data points.

“You have to be persistent and persistent. Sometimes it feels like you’re using a sieve to get data into the data lake. But persistent data is valuable,” Diane said aptly.

Infosys: strategic partner and an extension of the technology team.

Infosys has been a long-term partner of Johnson Controls, both operationally and in terms of delivery, with the corporate know-how to keep legacy systems up and running. Additionally, Infosys has played a pivotal role in the transition to new ERP systems.

Infosys helped with compliance and standardized definitions in different business areas. Infosys also helped extract information from backend systems and consolidate it into a standard model using Microsoft Azure.

tidy up

The key takeaway from this analysis should be that understanding the human side is critical to understanding the benefits of digital transformation and preparing your company for scale.

In this brave new world, organizational silos can be costly, putting organizations at risk of failure or at least difficult to scale.

A BOS is a critical tool for maintaining control throughout the organization. A BOS is a playbook for leaders to run the company and a set of expectations for every employee, and the absence of it can lead to miscommunication, individual agendas, and team conflicts that derail your company’s success. To avoid frustration, wasted time, and energy as you grow, I recommend that you seriously explore the options for a CSF.

Note: Moor Insights & Strategy authors and editors may have contributed to this article.

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