Category Archives: Efficiency

Prioritizing BPM Projects is a Sign of Effective, Experienced Leadership

I received an email from a friend of mine today lamenting the projects he’s had to wave good-bye to. The email read: “That other process improvement stuff is nice, however, right now…revenue generation is the only process that matters. We have to keep the doors open”.  It made me think deeply about my clients and the projects we’re working on. How many of  them have leaders who’ve called emergency meetings in the past 12 months to reconsider and re-prioritize their approach and focus? None. How many of them have since been panicking and flailing? All of them. Most of them have reduced schedules and laid people off lately. Not a single one ever stopped to prioritize and shift attention when they could.

What’s a Priority?

First of all, if you’re still slogging through 4-6 month process improvement projects, you’re braver than I am. Get lean in your approach, folks. Secondly, if you don’t know how to prioritize in this economy and are struggling to choose which of your projects should “rise to the top of the list”, please ask your peers and ask the big boss. Go to the executive team and ask them to help you decide if you need help. But no matter what, show some initiative and demonstrate that you’re thinking like an executive. If not, you’re setting yourself up for disappointment.

Short answer: it’s a priority if it will immediately help us make more money (sales) or save on costs (making us more profitable). Sales are tough now so anything that can reduce costs is a big hit with executives and shareholders. If you’re a non-profit, cost reductions are popular with boards and donors. Toot your horn. If you’re a government entity, you have serious challenges too. You must get costs under control. Government doesn’t often lay people off but I have seen it happen in the past 6 weeks. I have seen it happen where people dragged their heels, hemmed and hawed, went to far too many meetings, and took too many vacation days. They complained and wondered who was in charge. They failed to prioritize and act swiftly and assertively. Now they’re looking for work.

Inventory your projects, identify the revenue generators and cost-efficiency opportunities and move them to the top of your to-do list. Everything else takes a back-seat until your executive team gives you the green light to relax and do something interesting. That may be months from now so get comfortable fighting fires.

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The Leaning of America: How BPM Can Play A Vital Role

I’m not sure what industry you work in but my chosen field – healthcare – has been on the short-list of sectors that are under a microscope AND looking at significant investment (stimulus is such a loaded term these days!). There are others: automobile manufacturers, education, border patrol, banking and finance. I frankly love the position the President has taken. He is asking for accountability and demanding an end to wasteful practices. While it’s still way too early to judge his performance, I believe he will continue to push for efficiency and better throughput and outcomes for our money.

Lean Healthcare

I have worked on all sides of this equation. As a healthcare provider in non-profit, social service, for-profit and government agencies. As a healthcare payer (insurer) in managed care and other insurance models on both the public and private sector sides. Let me assure you, there are mountains of waste to recoup in every corner. I will not suggest that a single-payer system is the answer (though it may be) but I will assert that there are scant examples of healthcare organizations in this country who run truly efficient and high-quality shops. Our system irrefutably, immutably wastes money. Our care costs much more and produces a poorer outcome than that of our global counterparts. Now that we are in a global economy, any country that can keep its workforce healthier than ours at a lower cost has a competitive advantage.

Healthcare is the last industry to “automate the shop floor”. Frankly, it’s ironic. So much information and so many processes can be automated. This country lags far behind other industrialized nations in the adoption of electronic medical records. Today, the New England Journal of Medicine reported that only 1.9% of US hospitals use a fully functioning electronic health record, for instance.

Prior to automation, however, so much can be accomplished using BPM methodologies, particularly as they relate to Lean and aspects of Six Sigma. Anyone who has ever worked in the field can attest to the waste and now, more than ever, we need to work together to eliminate all of the waste we can no longer afford. Healthcare is rapidly approaching 20% of our GDP. That’s not only astronomical, it’s unnecessary.

Wherever you are, whatever you do, whatever your motive, please spread the word and get into action. BPM and Lean methodologies can have a profound impact on the way things are done today so that tomorrow will be cost effective. If you’re not excited about the impact you can have, you should be!

Lean Markets Pulling For Rapid Process Improvements (RPI)

The economic news this morning is not so good. The Institute of Supply Management (ISM) manufacturing report sent the market into another free-fall today (down 425 points at the moment, following last week’s massive rally). The ISM index stands at 36.2% which may not mean much to the lay-person. The important indicator here is that anything below 50% is bad news and 36.2% is as low as it’s been in more than a quarter century. This is a report that measures factory output based on orders for manufactured goods. Only two sectors performed well: apparel and paper. European and Chinese factories are reporting similar output and demand for their goods. We all know how this is playing itself out for Ford, GM and Chrysler. They have a shot at financial support that will bode well for thousands of suppliers and – frankly – millions of employed people. For the remainder of the manufacturing community, there may not be a bail-out. What are small businesses and manufacturers to do?

Time is of the Essence

MarketWatch reports that economists now admit the recession began at least a year ago. Could have fooled me. Experts tell us we can rest assured that it will endure at least another year – maybe two. That said, small business and small manufacturers are faced with the need to get lean very quickly. There is no time for hemming and hawing and this is not the time to simply lay people off. Your path forward is as complex as the path that got you here. No silver bullet. Your costs are a reflection of (among other things) executive pay, labor, benefits, space, utilities, supplies, suppliers, marketing, hardware and – to a great extent – your business processes.

Those of you who are familiar with Lean Methodology or who might be familiar with a consultant who specializes in Lean may now be thinking: “This is the time for it.” I commend you. I agree that Lean can and will deliver the elimination of costs associated with waste in your processes. However, bear in mind that Lean can involve between 6 and 12 weeks’ time for execution.

Lean Liposuction?

Lean is a bit like a diet. You have new habits to learn and you glean life-changing insights from an examination of how you did things in the past. Lean is a lifestyle and it creates a certain culture. I want to suggest that you consider the Lean equivalent of liposuction or getting your stomach stapled. It’s quick, it’s dirty, but it works. It’s commonly referred to as Rapid Process Improvement or RPI.

RPI Works and Works Fast

An RPI event requires: 2-3 days; a core business process suspected of carrying waste (extra fat) and whose repair would make a big cost difference; a team of subject matter experts and decision-makers; the willingness to be brutally honest and trim the waste. In that brief 2-3 days time, the process can be articulated and modeled and business rules can be captured. Basic performance measures can be identified and the team can brainstorm ways that waste can be eliminated from the value stream without any adverse impacts. New, future-state process models can be developed and basic simulations can be conducted to assure you and your customers that quality concerns haven’t been introduced or exacerbated. You want the results to be faster and better.  Once you’ve nailed the future state, a solid RPI process involves mapping your implementation and measuring results over the next 3 to 12 months. Hint: measuring cost savings from the get-go is a must. Remember your baseline!

RPI Now

Rapid Process Improvement should be near or at the top of your list of things to do in the next 4-8 weeks. The small business owner and small manufacturer have got to make the time and prioritize events like this until all of the low-hanging fruit has been harvested. This is not business process management or improvement for the sake of developing software. This is crisis management and RPI may save jobs. Every job saved has an immediate impact on your entire community. A job saved is a person saved and that person may very well be your star player when the economy turns upward in 6 months. Don’t lose them when you could easily trim the fat and waste in your processes.

Positioning Your Business For Growth With Business Process Management (BPM)

If blogs are supposed to be about free-wheeling opinions, then I need to share a big one today: this economy is suffering in part because consumer sentiment, confidence and trust are at an all-time low. That’s a no-brainer. However, building rapport and confidence with consumers is not the responsibility of government. I am afraid for those business people at all levels in companies who are waiting for a legislative or bureaucratic solution to the consumer confidence problem. Government intervention can work for injecting capital and regulating banks but you cannot mandate or regulate sentiment. Helping your customers and prospects with the decision to buy what you’re selling is your responsibility. You need guts and new ideas right now. This isn’t to say that there aren’t macro-economic forces that need to be corrected. Of course, there are. It is to say that business plays a role and those who understand that role and the processes involved in injecting consumers with confidence will win big. Those who are passive, will not.

Carpet Baggers?

Here’s a very simple example of what I mean (I share this and other stories for the sake of the small business owner, the non-profit and the smaller government agency). I met a guy last week who is taking advantage – that’s right…exploiting – the current economy and selling carpet cleaning to people who had been thinking about buying new carpeting. He’s growing his business everyday because his customers see the value in preserving what carpet they have and delaying a bigger purchase. His marketing process literally seeks out those people who were going to buy carpet and he offers them a cheap alternative. He’s new to this service offering but he saw an opportunity and seized it. Bear in mind, he seized it in a rather big way by buying a carpet-cleaning franchise. That’s guts.

GM and Chrysler are designing their solution to their collective demise by entering into merger talks. They have a business problem so they’re looking for a business solution. Can you imagine the business process opportunities in this case? With any luck, they’re talking about engineering “green” cars that run on something other than gasoline – something they should have begun 30 years ago. If you’re struggling right now, are there any lessons to be learned from this example? Can you imagine a business process that involved another business even if it meant your competition? Can you imagine engineering new products now before you discover you’re in a deeper hole? That’s creative and disruptive thinking.

eBay is re-engineering and discovered they had inefficiencies. Sadly, those inefficiencies were directly related to positions and people. Those people have names and families. Many hundreds have lost their jobs. What if they had evaluated their processes much earlier and re-assigned people to developing new markets and products? Could they have staved off drastic cuts and grown their business instead? Can you look into your processes now and divert resources from wasteful cost centers to top-line profit centers?

Growth is a Process Too – Put the ‘B’ and the ‘M’ back into BPM

Keep in mind that BPM stands for BUSINESS PROCESS MANAGEMENT.  Break it down. BPM is an approach to managing business based upon a process view or perpsective. Business and management have everything to do with enabling growth. There are several dimensions to the “growth” role of BPM.

  • Growth by virtue of increased market share through improved sales processes and delivery systems
  • Growth in sales by virtue of reduced pricing and better positioning
  • Growth in profits on existing sales by virtue of cost cutting measures (elimination of waste)
  • Growth in sales by virtue of rapid innovation, differentiation, and new features
  • Growth in terms of customer loyalty resulting from higher quality and a reduction in defect-related complaints

Got Guts?

This is not for the squeamish. The kind of leadership I am talking about – the nerve to walk into executive offices asking for the time to discuss the process-driven way out of down markets – is a trait found in people who see growth as both vital and the natural bi-product of doing things right. People who see across horizons to a time when today’s innovation is tomorrow’s normal. People who believe in the relationship between customer needs (demand based on pain or desire) and a company’s ability to supply that need in a cost-effective yet profitable way. Always seeking to understand the demand side of the equation first!

Tell Your Story

BPM offers business people from all backgrounds and disciplines a common language and view into how things are done and can be done. In many respects, BPM is to management what film is to story-telling. It provides every story-teller and every audience a common platform for interpretation and dialogue. Get your BPM into the streets and tell people what makes you unique and how it is that you keep evolving for the sake of the customer.

Apple does this all the time. Steve Jobs schedules a big story-telling hour and everybody shows up to hear him tell the story of Apple’s latest innovation, new processes, new suppliers, new design. Can you do something akin to that in your market?

Where Are You Headed?

Give some serious thought to this direction thing. Are you shrinking or growing? Are you heading off in a lateral direction to find new markets in new geographies? Are you aligning yourself in a vertical market so that you become integrated in something else with new partners?  Either way, can BPM help you get there?

If you and your team haven’t stood in front of your core processes in a long time – big, colorful, projected on the wall – then I suggest strongly you do that. Don’t read them for the sake of technology or throughput. Look at your process diagrams and models with the eyes of an explorer and get the big picture into view. They are the best map of your territory. You need to know where you’re going and so do your peers. Use your maps and tell your story. Share your vision.

Key Performance Indicators: Before, During & After Your Business Process

I want to make a special case tonight for the reasoned approach to Key Performance Indicators (KPIs) that involves what happens before, during and after your process. This field (business process management and analysis (and on and on with the jargon)) makes the very most sense when we stop seeing processes as discrete “events” much the same way we advocate for “seeing” tasks in relation to one another when strung together to form a process. That was a mouthful but I hope you get the point. The more holistically we see these phenomena unfolding, the better we can manage them.

We’ve Seen This Movie Before

This is rather basic no matter how “new age” it might still sound to some people. My process can be viewed and considered in relation to the process prior (which constitutes the “triggering event” and the processes immediately following it. We’ve approached the physical sciences in this fashion for a pretty long time and it works very well. Smaller phenomena are nested inside larger phenomena. They are included in yet transcended by larger phenomena. It also helps to understand that the larger has more inherent value than the sum of its smaller parts.

By studying my triggering events and measuring them accordingly, I inform the process I am analyzing. By measuring what happens downstream, I similarly inform my analysis. Suddenly, if I have metrics for Input and Output that tell me something important which translates in favor of my goals and objectives, I will know precisely how to calibrate my process in terms of its productivity, efficiency, quality, volume, throughput and so on.

I know this is going to sound remedial to some of you and I also know that others will find this concept and practice confusing. The best I can do is point you in the direction of BPMS solutions that include simulators. There are also simulation engines from ProModel that are very good.

Simulation allows you tweak your Inputs and imagine what your Outputs will look like under different conditions. This is a practice that involves rigor and discipline. Everybody around you will find it boring. That is, until you point out the impact a process design change can have on suppliers at the point of Input or the impact on customers at Output. There are top-line sales and bottom-line inventory considerations here so do make sure your teams understand that it isn’t enough to see tasks strung together as processes but they must also see processes strung together – end-to-end – to form your entire enterprise. From this vantage point, you will all make your best business decisions and manage your risks effectively along the way.

Key A Good Fit

One final note relating to the title of this post: this practice of looking downstream and upstream for metrics is what makes your measures “key”. They describe critical indicators at critical junctures. If I screw up upstream, you can bet it will ripple through your process and screw things up downstream. One critical “key” performance indicator depends on others in its “ecosystem”. Again, I know it sounds a little cheeky for some of you but others of need to keep your eyes on all of these variables throughout your analysis. This is how you manage Unintended Consequences.

Do you have any horror stories you’d like to share? Any unintended consequences in making radical process changes? We’d love to hear from you.

Can Business Process Change Really Help Control Costs?

Kapalign’s Lean Self-Assessment Tool: Print Me!

It’s central to business process management that process variables are going to become known, managed, quantified and improved. It’s also a core concept that we go to this trouble in order to affect certain outcomes including: compliance, quality improvement, productivity and efficiency improvements and the facilitation of new product development. In the process, what kinds of changes wind up making a difference to the bottom-line? Without some degree of cost-control (which would produce a cost-neutral outcome or worse), I would strongly suggest opportunities are being missed. I contend that this is true in those cases where quality or compliance is your highest priority. It’s our job to quantify the savings and build the business case for the changes we’re recommending.

Lean Changes

Lean Methodology offers many kinds of variables you can analyze, modify, design, validate and simulate for the purpose of finding a bottom-line impact. However, Lean is not just about cost-efficiency so think more broadly than that. There are other variables and factors that produce savings if you know what to look for. Let’s start with Lean opportunities for MEASURABLY doing more with less. They include (arguably, with some overlap):

  • less human effort
  • less transportation and movement from place to place
  • less inventory and fewer carrying costs
  • less over-production and related waste
  • less set-up and “change-over” time
  • less time spent waiting in queue
  • less non-value-add time (usually between 90-98% of process time)
  • finding added capacity for production, quality improvement or innovation
  • fewer wasted parts and material resources

Lean Change Fundamentals

Essentially, Lean ought to be producing three core changes:

  1. Less Variability in the process
  2. Fewer Inter-Dependent Steps in processes
  3. Less Uncertainty in process

Other Changes to Control

The following categories or classifications of change can be addressed in your business process analysis, re-engineering and improvement initiatives. Further, you can continue to consider and modify these as long as you’re interested in finding cost savings in a process-driven fashion.

  • Changes in Frequency – consider changing an activity, step or task to hourly, weekly, monthly or strictly on-demand. What happens to your cost?
  • Changes in Scope – what happens to cost if you change your scope to the level of activity, process, department, or company-wide?
  • Changes in Role – what impact can you have on cost by assigning role/responsibility to a consultant, systems analyst, business analyst, line-of-business manager?
  • Changes in Mode – if you change your medium for an activity like customer service from the phone to IM or email, what impact can you have on cost?
  • Changes in Trigger – can changing from internal to external or business partner to customer triggers have an impact on cost?
  • Changes in Predictability – by changing the degree of certainty you have in a process, do you positively impact cost?
  • Changes in Duration – by modifying the process timeline, does change decrease costs?

Making the Business Case for Change

By assessing, simulating, or otherwise analyzing the cost side of these changes (despite my gross, over-generalized examples), you’re informing your cost-benefit analysis and can make a very strong business case for the changes you’re proposing. Stay focused on scenarios and provide leadership with pictures and data you can validate. Proving the cost control inherent in BPM is not only possible, it’s relatively straightforward and absolutely critical for good business decisions. Just bear in mind (in a process-oriented way) that some changes may have the “appearance” of cost savings at first but produce unintended and costly consequences later so devote some time to simulating and validating your assumptions.

All the best,

Patrick

Can BPM and Process-Driven Marketing & Sales Help Restore Your Consumers’ Confidence?

Kapalign Tool: Promoting your BPM Accomplishments – Print Me!

Is it possible that BPM can have a positive impact on your organization’s consumers? The short answer is “yes”. I assume you watch the news and are well aware of the economic climate today. Between banks caving in and stocks spiraling downward, we have a lot to worry about and – if we’re working – a lot to be grateful for. As for worrying, keep some perspective. There are still may trillions of dollars to go around and so much of what we are experiencing is a function of “consumer confidence”. The trick is, what can you do about that level of confidence?

Process-Driven Confidence

Let’s look briefly at the benefits of BPM and BPA:

  • agility and flexibility
  • improved service levels (including self-service)
  • elimination of wasteful activities
  • greater efficiency
  • improved production and productivity
  • faster time-to-market with new products for new markets
  • enhanced quality
  • ease of automation and implementation of new product features based on customer preference

The list goes on. We know that. There are some critical questions to answer this week:

  • Do your customers know?
  • Do your sales people know?
  • Is your organization applying process improvements in marketing and sales to become more efficient there?

I assure you that your organization is not immune from consumer confidence concerns. Do these simple things beginning this week:

  1. Train your marketing staff in process management. Look for savings, eliminate waste, and generally help them become faster, stronger and above all smarter. Look into new markets now.
  2. Train your sales team. A crash course in making the journey from lead to prospect to customer a short and pleasant one is called for. There is often a lot of waste in the sales process. Jump on this.
  3. Get more leads and prospects (inputs) into the pipeline.
  4. Get more proposals (outputs) out the door
  5. Invite consumers (customers) to provide you their input now. This is the Voice of the Customer so important to Lean and frankly so important to your business. When did you last solicit your most important customer’s input, advice and feedback? If it’s been more than 6 months, take them to lunch this week.
  6. Collaborate with your marketing team to let your market know about your BPM gains. If you’re more efficient, tell prospects how much more efficient. You get the idea. Let your market know what you’re capable of but begin by letting your marketers and sales force know.

Focus on your own agility during troubled times, renew your own confidence and shore up your consumer’s confidence in you. Don’t lose sight of what gives people confidence in you. If you don’t know that, then you have more homework than you bargained for.

What are you doing to raise your customer’s confidence in your offerings?