Tag Archives: Business Process Fundamentals

Taking Care of Business: Why Context and Need are at Heart of Business Process Design

For those of you who don’t know, my BPM consulting work focuses on the healthcare field. Nowhere is the answer to the question “Why?” more striking and evident. When people begin (and I do mean begin) to think in terms of “Why do we do this?” and “Why do it that way?”, the answers inherently gush with reasons that make you sit up and take note. And nowhere have I paid witness to answers and reasons that are so incomplete as to send shivers up and down my spine. If you’re not sure what I mean, give up an afternoon of your time, sit in your local emergency room and watch how people there do their thing. It’s free, entertaining and the best open source forum for organic, dynamic examples of workflow and process in action.  You won’t be sorry. Mortified at times but certainly not sorry.

From this healthcare standpoint, let me say a few things about context. First of all, if you’re relatively new to BPM, BPR, BPA and all of the other acronyms, you should become aware and fluent in context diagrams. Context models and diagrams allow you to illustrate (simply) understanding of the transactions between stakeholders or entities and the outcomes that are expected as a result. For instance, if a hospital submits a billing to an insurance company, the expected outcome is a payment. These diagrams also take into account indirect interactions. In doing so, they begin to conjure SIPOC diagrams but are different in that they take a very broad Business Process Overview that includes all of the possible stakeholders (direct and indirect) and display – at once – all of the interactions in simple, straight-line fashion.

Business Process Overview – The Bird’s Eye View of Context

By illustrating all of the transactions and expected outcomes possible over an entire array of workflow and activities in a highly simplified diagram, the reader gains immediate insight into the context and the needs of all of the stakeholders (my expected outcome is directly related to my need). This may sound elementary but I promise you that in this highly inter-dependent and inter-connected world, few people grasp and understand the value and relationships involved in the working world they inhabit. Again – from the healthcare field – how many people understand that the answers, information and data they harvest are being used by Immigration, CDC, Public Health, Policy and Legislative, and Insurance officials simultaneously for vastly different reasons?

Taking Care – Taking Heart

When people understand fully the value of their work product, when they can see themselves and their activities in full view of the context, then they grow more intimatley connected to the people and stakeholders they are in exchange with. It isn’t a matter of giving you what you asked for. It  is a matter of helping you satisfy a goal or a need. If I work in a restaurant for example, the meal I serve may be the context for a marriage proposal, a landmark business deal, a birthday or the only respite a couple will get from their hectic schedules. That meal may be what restores patience or hope. If I work in a clinic and I have to enter data today, I may be entering the data that enables an epidemiologist to spot a viral outbreak or I may be entering the data that assures my patient of full and prompt insurance coverage. I may be avoiding a medication error and saving their lives. If it sounds dramatic, context reminds us that  it is.  Take pride in the work you do, my friends.

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It’s Time for Strategic Business Process Management

I am coming off several weeks’ having to reassure clients that they are doing well and that – so long as they stick to their knitting – they’ll be ok a year from now. I have others who have required some serious, adult discussions. They lack a cohesive strategic plan, therefore, they lack in the areas of discipline, direction, commitment and – frankly – workflow IQ. They struggle with change, flexibility and orientation (“where are we?!”)

The disconnect is rampant. Perhaps it’s in the name. Shall we refer to business process management (BPM) as Strategic Process Management (SPM) from now on? You heard it here first, folks.

Strategy+Goals+Objectives+Metrics

I’ve heard others call it Business Motivation Modeling and agree that we need a deeper understanding of critical business drivers. This field and the broader business interests and stakeholders it serves needs to reminded constantly of the “means”, the “ends”, and the “influences”.  By keeping a strict focus on strategic goals (building the business, becoming #1, being fastest, cleanest, safest, whatever) and tactical objectives, business analysts and process engineers ought to be able to produce the outcome they’re looking for and they ought to be measure whether they’ve achieved their goals or not.

Environmental Analysis

However, failing to manage strategy and failing to carefully and comprehensively assess what is happening economically, politically, socially, technologically, competitively and legislatively will absolutely result in painful surprises. I have seen people very proud to have hit sadly meaningless targets lately.

Strategic and Technical Advisory Groups (STAGs)

I am calling for the formation of STAGs in every organization with 25+ employees. This committee will review and evaluate business process and other organizational change from both a technical standpoint and a strategic standpoint. Strict adherence to strategy (bearing in mind that strategy – not values – can and ought to change to reflect the environment) will be their direct responsibility. There will be an executive on each STAG until and unless every organization recruits a Chief Process Officer. Perhaps then, the brilliance of BPM will have been fully activated.

Spy: Small Business Process Improvements Based on Process Benchmarks

I have to admit to being a chronic process observer and critic. Every time I sit in a restaurant, go into a store, arrive at a hotel, go to the doctor or shop online I pay attention to what staff and managers are doing and I judge. Sometimes I am deeply fond of what I see and other times I am vicious in my critique. While I am a little obsessive about all this, there is some virtue in the exercise. As a consultant, it’s important to have had exposure to tactics and process that work especially well in order to make stronger recommendations for clients. It’s also important, working across sectors to develop a mental inventory of what doesn’t work, what can be emulated and what can be tweaked to serve cross-purposes. Frankly, I would hope that anyone aspiring to build a business, product or consultancy in this domain would be doing the same kinds of things.

Spy versus Spy: Lean Innovation

Welcome to the age of transparency, reverse engineering and piracy. Watching the equivalent of So You Think You Can Dance on Indian TV broadcast by satellite last night, my Indian friend quipped: “They copy everything we do”. Reading about the new film Duplicity in the latest issue of Fast Company I am reminded that the “leanest” forms of adaptation are mimicry and emulation. It’s called “evolution” folks.It’s the 100th Monkey Theory in blazing sound and technicolor. In some cases, it’s downright criminal so be careful where you draw the line.

I’m sure by now you’ve heard that the sum total information in the world is doubling every 3-6 months or something like that. Similarly, in an open information age, we have the capacity to observe, re-engineer, implement, measure and observe again at dizzying rates. Knowing that competitors are observing and mimicking us should serve as a catalyst for greater and faster innovation (and ever more patent filings).

How About A Small Business?

Small enterprises can’t afford teams of engineers and analysts that prowl the web and deconstruct rival products the way Toyota and Honda tore into the Saturn. There is no virtue in piracy so what’s a small business to do? Give observation and emulation a try. Watch what others do and then think in terms of business process. What process can you borrow and pilot in your own shop?

Process Benchmarking

A Benchmark is a standard and, for our purposes, the Gold Standard. The Best Practice. I want to advocate for an open process exchange that enables up-and-coming enterprises to learn from the best. This idea may never take root in the private sector but it might in government and non-profit sectors. For example, what can my library learn from the Pentagon? What can a Blood Drive learn from the Census? What can the EPA learn from Green peace?

As a small business owner, I can effectively identify the leader in my market, the highest quality product or the lowest priced competitor and I can start studying how they deliver their products and services. Similarly, I can go to the leader in a totally unrelated field and observe them in action.

Benchmarking

Rivals’ and leaders’ strengths my not be in their products (engineering, materials, quality and performance) alone. You can look for benchmarks in the following areas:

  • Suppliers – supply chain, quality, ethics
  • Human Resources – recruiting, hiring and retention
  • Customer Service – walk-in, online and telephone, service responsiveness policies, dress code, etc
  • Marketing and Sales – packaging, pricing, branding, placement, promotions, sales tactics and pitches
  • Finance – pricing, financing, terms

The point is, identify some leaders, grab a pad of paper and a pen and go observe what they do and HOW they do it. Imagine how you could mimic, emulate or adopt what they do.

Keep it Simple

A final word on simple. While their algorithms are crazy complex and probably cannot ever be emulated, Google stands as the single greatest example of simplicity in customer experience. That simple one-box web page with scarcely 50 words on it – as of today – owns 64.2% of the world wide web’s search activity. They are killing their rivals with simplicity. How can you do the same?

Airlines Offer Excellent Example Of Importance Of Business Process

I’ve picked on them before and I am going to do it again. It’s just too easy. From time to time, I have to fly American Airlines and every time, my experience is abysmal. This past Sunday was no exception.  Flying out to a national healthcare conference, leaving from Southern California to arrive (with any luck) in Texas was a hopeful and optimistic experiment. Sadly, my worst fears were realized. My worst case scenario, it happens, plays itself out on a large scale for this company with great regularity. They have earned this Dunce Cap.

How Does Southwest Do It? What Makes Them So Good???

USA Today reported (Monday April 6, 2009) that most airlines performed better in the past 12 months. Consumer complaints to the Department of Transportation were down approximately 20%. Southwest Airlines had the very best performance based on consumer complaints with only 0.25 complaints per 100,000 passengers. One important measure – delays – showed, however, that American Airlines had the worst performance among 17 airlines measured with only 69.8% of flights on time.

What Role Do Employees Play?

American Airlines, in a related story, is unable to conduct talks with its unions. No agreements in the past year. USA Today reports that American Airlines’ pilots union has said its members will disrupt (delay) flights to pressure the company until they get a contract. Their bag handlers and mechanics have launched an ad campaign ridiculing American Airlines executive bonuses! Their own VP of HR states: “No one in the industry believes airlines are in a position of financial strength.” What is going on here?!

If you’re not in a position of financial strength, American Airlines, don’t pay out executive bonuses so obscene that your bag handlers(!) are provoked to run ads nationally. If you’re scoring lowest in terms of flight times, negotiate new contracts with your pilots (AA is the only airline NOT to have done so since 9/11).

Bringing all of this back around to the personal level, my flight out was delayed by 90 minutes on the tarmac at the gate. Why? “Ladies and gentlemen, we’re delayed because the crew landing this plane on the previous flight noticed a mechanical problem so we’re waiting for a mechanic and can’t find one.” They knew about the issue BEFORE loading us into the plane, had no mechanic in sight and boarded us anyway. My flight to Dallas ended with 30 minutes on the tarmac while they waited for an open gate. Arriving at my final destination (2 hours late) we waited at the gate 30 more minutes while they tried to find (!) someone who could open the door(!) and hook us up to the jet-way. No crew to be found for literally 30 minutes. This is a mockery of the way a business should be run. Is it any wonder the lead story in USA Today the following morning blasted this joke of an airline? I think not.

What does this have to do with you?

If you run a business or operational area and have anything to learn from this series of blunders, by all means, please apply the lessons. Lessons learned include:

  1. Apply BPM to produce superior customer experience
  2. Be on time – eliminate time wasting steps and take a “zero tolerance” stance
  3. Score high in consumer ratings
  4. Get good press
  5. Perform well and pay people appropriately
  6. Learn from your competitor – especially when it’s Southwest Airlines (King of Process Innovation among airlines)
  7. If a product needs mechanical work, take care of it before involving your customer
  8. If you suck, make sure you make amends with your customers
  9. Don’t pay big bonuses if your performance is in the toilet

Seriously folks, apply what you learn from others’ mistakes. Bring those lessons into your shop and apply them before you become your own achilles heel.

Is Present Reality (Current State) a Prerequisite for Design of the Future State?

Once in awhile, a riddle so obscure and enigmatic comes along that it baffles and stumps most of our brightest thinkers and deepest philosophers, qualifying as a Zen koan. Like the sound of one hand clapping or the sight of your face before you were conceived, the answer cannot really be found in any conventional sense. Well, in my humble opinion good people, the tension between current state and future state and the need to document and analyze the “as-is” prior to taking on the “to-be” doesn’t qualify as a Zen Koan or a crossword puzzle for that matter. There is no question. You have to understand the present dynamics and process in order to sensibly develop something new.

I know that I will offend some of the business process management wizards and high priests by saying as much but my position is one of firmly believing in the value of documenting and analyzing the current state to ensure a high quality future. Frankly, jumping into the design of the future state without regard for a rather precise current state is irresponsible. Not unlike asking someone how they’d like to perform in graduate school without first ascertaining whether they can read or not. Or promising someone full health without first diagnosing their diabetes. The present state in business tells a vast and deep story that shapes the possible and potential future.

Dangerous “Experts”

I attended a conference recently (devoted to the adoption of EMR in physician practices) whereupon I was able to listen to a discussion at our lunch table between a woefully ignorant doctor who wondered aloud what it would take to implement such a thing as an electronic medical record and an “expert” across the table who piped up and assured him that he needn’t worry about how things are done in in his practice today. He would only be required to imagine what life would be like with his new system. What a  load!

Notwithstanding that particular “consultant” and his advice to the good doctor, it got me wondering, “How many of my colleagues would suggest the same?” I wish I could survey all of my BPM brothers and sisters out there. Do you honestly think you can account for all of the business rules, decision-making, forms, customer preferences, suppliers, and key metrics involved in a process without concerning yourselves with the current state. Do you really think you can skip that step and begin modeling the future state without compromising quality or any other vital business attribute? I think not.

Change without consideration for the present is invention

Don’t get me wrong. I love to invent stuff and get wickedly creative when given a chance to roam free. However, invention cannot capture all of the good reasons why my system dynamics are what they are and cannot account for the benefits and value inherent in my current state without first elucidating them. Failing to harvest and capture the good, the rules, the data, the preferences, and the logic and simply launching into invention risks losing a lot including compliance with standards of all kinds. The risks involved can cause an invented business process to become fatally flawed in short order, grinding business to a halt.

Take your time and carefully document what you do today and how you do it. Inventing the wrong thing, failing and trying weeks or months later to return to an undocumented state is fools work.

BPM Must Align with the Business Model

I have witnessed several very strong process-related projects fall  flat in the wake of our economic conditions. That’s not surprising given the spate of lay-offs and bankruptcies. What is surprising is the lack of fundamental integration I bear witness to. BPM and related projects, when they stand on their own, are weak, fragmented, vulnerable and will be deemed to lack business viability  in a heart beat (especially during an economic heart attack). Failure to fully integrate and demonstrate inherent value in the business model is the surest path to obsolescence.

I believe firmly in the practice, art, science and discipline of BPM and all of its cousins (Lean, Six Sigma, workflow, etc.) however, I remain steadfastly concerned that IT is much more akin to BPM than are operations people and executives. That has to change. Unfortunately, the projects I have seen shrink and dissolve these past few weeks were mission-critical.  However, it is only reasonable to expect that executives must make the best decisions they know how with the information they have. I hope we, as a field and as a discipline, can do more to demonstrate value and weave BPM into the very fabric of our organizations. As a consultant, I hope I can find new ways to better and more fully make the case for the integration of BPM within and throughout organizations so it matures into a business fundamental and not a “project”. I sincerely hope that you and your peers can provide your executives with the most succinct case for continuous process management in order that they might make the most informed decisions.

Business Modeling – the Essence of Viability

The latest Harvard Business Review (December 2008) has a section dedicated to the development of Business Models. Bear in mind that a business model is not a business plan and it is not a business case. Somewhere in between though. A business model is akin to a logic model in that it quickly establishes the logical connections or relationships between who you are, what you do, how you do it, and the effect you want to have. A business model (in particular, the model suggested in HBR by M. Johnson and C. Christensen) is best boiled down to 4 big chunks:

  1. Customer Value Proposition
  2. Financial Formula
  3. Key Resources
  4. Key processes

Now, if you’re paying attention and you think BPM is pretty swell, you noticed #4. Let’s start at the top though.

Customer Value Proposition

  • who is your targeted customer?
  • what problem are you going to solve with your product/service?
  • what is your product/service and how does it solve the problem?
  • who else is doing anything similar (the competition)?

Financial Formula

  • how do you propose making money/generating revenue?
  • what are your costs?
  • what will your profit margins be?
  • how long will it take you to generate revenue and make a profit?

Key Resources

  • People
  • technology, systems and other tools
  • information and R&D
  • brand, reputation, relationships, allies, market data and sales channels

Key Processes

  • core processes and process owners
  • business rules
  • performance metrics
  • other norms and standards

BPM’s “Must Do”

While business modeling, planning and the like are not usually in the domain of your average analyst or IT staffer, it is imperative that support be generated for the fourth dimension of business models. This is especially true in smaller organizations…the vast majority of companies. You must make your case and educate people within your organization. The best way to do this is to become fluent in business-speak (to refine your business acumen). Approaching your peers with a business model in-hand, making the case for improved Key Processes to enhance the overall business model – complete with simple examples and data-driven ROI scenarios – is your best bet. Demonstrate the relationships and dependencies between these four moving parts and move away from fragmented and discretionary “projects” until you are firmly ensconced as an unequivocal  fundamental. A business is a 4-legged animal. You must become one-fourth of the team that will lead your organization to victory.

Business Process Management: An Exercise in Good Judgment

Working with clients and working on a couple of proposals this week, I was struck by comments coming from very senior people. The first was: “All that workflow documentation is so time-consuming and tedious” and the second was: “The price could be lower if it weren’t for all that business process analysis.” Comments like this require swift and comprehensive attention lest BPM fall out of favor with those who develop budgets.

People…please

By show of hands, who has ever paid someone-an outside consultant-to document their workflows? Is it any more time-consuming or tedious than the work of an accountant? How about a lawyer? Ever hired a marketing consultant? Ever hired a developer or programmer to crack custom code? Is workflow documentation more or less time-consuming or tedious (expensive)? The answer is NO. This is an example of bad judgment. The judgment of someone who tried it (BPM) him/herself and got stuck in the “weeds” and burned out. It’s especially bad judgment when the work being done (and questioned) involves the automation of terribly inefficient manual processes that produce myriad quality concerns. How do you say “duh” in .NET?

It Takes Vision and Skill

I think the best workflow and business process analysts are visual. They can “see” the big picture and the composition they are creating and they think spatially. They can whip through a workflow MUCH FASTER than the clients I quoted earlier can write and edit a procedure. Another factor contributing to speed might be special handling of the BPM tools expert analysts should be using – including MS Visio.

Purpose and Context: Elements of Good Judgment

I read a very good article on the context of project management at the Project Management Hut today (http://www.pmhut.com) and was reminded of the importance of purpose and context in business process analysis and management.  My point is: the degree to which I capture and document data/information in a workflow or process diagram is a reflection of the purpose and context of the diagram. In other words, as the purpose for documentation varies, the degree of detail and notation will vary.

Context-Specific Notation

Consider the following over-simplified examples:

  • When the purpose for my documentation is to create efficiency, I will note value-stream mapping elements
  • When the purpose for my documentation is the automation of a workflow or process, I will document rules and functional requirements in a JAD (joint application design) session so my developers or vendors can develop the system I need.
  • When the purpose for my documentation is compliance with the law, I will supplement my simple diagram with a professional narrative and policy language.
  • When my purpose is innovation, I will document the essence of the process and allow my team to play with it until the future state materializes.
  • When my purpose is quality improvement or performance improvement, I will gather and document key measures and metrics and follow Six Sigma rules for notation concerning DMADV (define, measure, analyze, design and verify) for example.

Not the Kitchen Sink

There is so much you can do with workflow and business process documentation and analysis. This is a great field and we have a wide array of tools and methodologies. Remember that we don’t have to use all of our tools and approaches all of the time. Use your best judgment. It’ll help calm peoples’ nerves.