Tag Archives: KPI

Business Process Data: On Dashboards and Windshields

Reading about IBM’s “Stream Computing” in Business Week magazine this week, I am reminded of a time in a meeting several years ago when I groaned: “I don’t want a better dashboard; I want a cleaner windshield. I want to know what’s coming and a dashboard can’t tell me that. Those are lagging indicators.  At best, a dashboard tells me what I have done in the recent past. I want to know what my suppliers and customers are doing as they approach…before they get here.”

On My Windshield

I never did get my Windshield. Today, we’re lucky if we have a dashboard. It would  put many of us in a small minority if we could have near-real-time indicators of what just happened  on our desk-tops. From a business process management perspective, how would life be if I could see changes in my supply chain before they affect me? If I could see my suppliers’ dashboards, would that be enough to give me an idea of what I could expect?  If, instead of relying on marketing, I relied on interoperable business data between my company and my customers, could I see their demand before they pick up the phone and place an order? That information would help me in innumerable ways.I suspect very large companies can afford supply-chain and distribution information management and reporting but what is a mid and small sized organization to do?

Is it possible that my contracts with suppliers and customers might involve strategic dashboard exchange? Of course  it is. In a business-to-business relationship, my clients might even think they were doing business with a pretty smart guy if they knew I needed to know something about their data prior to them needing to know they need me. I bet they would be happy to give me that information in small packets called “Bugs”. Throughout the day, “bugs” would hit my “windshield” and I would know what’s coming down the road. You could have a lot of fun with this metaphor. Landscape, traffic signs, intersections, accidents, traffic jams, you name it.

Operations, Finance, Marketing and Sales: Performance Metrics During the Race

Dashboards are helpful. Don’t get me wrong. I find them especially helpful once I have arrived. I can quickly look back over the course of the trip (or the day at work) and understand where I have been, what my top speed was, how many miles I covered and how much fuel I used (plug your favorite business metrics in here). A windshield, however, lets me calibrate  what is happening in the midst of a high-speed race. As a former football player, I can tell you that my stats after the game were a lot less important to me than was knowing where the line-backer was when I pulled out on a sweep. Failure to see my adversary or my teammates often caused me great pain. Successfully anticipating blows led to touchdowns.

The Importance of Anticipation: Getting Out of the Blind Spot

We are living through the negative consequences of not anticipating what lies ahead. We’ve all become so enamored with the rear-view mirror and the mounted DVD players in our SUVs that we have forgotten to simply out the window in front of us and drive defensively.

This may all seem trite and I may sound like I am beating this metaphor to death but I think we need simple reminders these days. Look outside your vehicle and assess what is happening down the road. Many companies have done this very well and managed to keep staffing levels and inventory at quite safe levels. Other companies were so busy fiddling with their dashboards and cell phones and doing their make-up while they drove that they missed their exit and went over a cliff.

What do you need to know about the road ahead and the drivers around you? What kinds of “bugs” do you want hitting your “windshield”? This is a great question for your next executive team meeting. It’s also a great question for your business analysts and your line staff.

  • what would you need to know about your customers’ “demand behavior” that would allow you to do your job better?
  • what would you need to know about your suppliers and supplies?
  • what would you need to know about the economy?
  • political changes around the state, country, world?
  • currency and credit changes?
  • social trends and patterns?
  • legal developments?

Keep in mind that as you’re driving in LA, for example, you don’t want to know what’s happening on the roads in Brussels. Keep your expectations “close” to you. There is little true and accurate value in looking “down the road” for more than 30-60 days at a time. Conditions on the roads are changing far too quickly. Pay attention to the drivers next to you where it matters most. The next bend in the road is far more important than the bridge several hundred miles away.

Give your data needs some attention, ask your suppliers and customers for data and use it effectively. Good data makes good information. Reliable information becomes intelligence and enough intelligence used appropriately over time makes one wise.

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Addressing Fear and Confabulation In Business Process Management When Times Are Tough

Happy Halloween. I am writing this post in the wake of some pretty harsh economic indicators. This week has not been good for BPM. For the most part, the news has been about consumer confidence and consumption being at all-time lows and news of lay-offs and job losses peaking at nearly 750,000 in this calendar year. BPM initiatives in this climate are deeply challenged to keep people engaged, productive and cooperative. This is especially true if what you’re doing has even the slightest appearance of cutting costs. Executives are thrilled with the idea of cutting costs but you can expect all of your stakeholders will identify themselves as a cost in the process. And what do people do when they’re afraid for their jobs? They modify their behavior.

Fear and BPM?

Fear evokes instinctual reactions in everyone. The very fabric of our being is primed to fight or flee. So much is at stake right now that it is only natural for people to struggle with objectivity and complete honesty. They become protective and defensive. Some people become angry, some blame others, some withdraw and lose their confidence and will to compete, and some lie like there’s no tomorrow. Either way, if fear is running amok in your shop, your BPM hopes for lasting improvement are being compromised.

I met with a public health client this week who is beginning to show signs of wear and tear. It’s more difficult than ever to get subject matter experts in one room with all of the competing agendas they now have. Budgets lack certainty so it’s harder to commit to plans and strategies. Heavy questions like State financing hang over projects like brooding storm clouds. People doubt and that doubt is a mind-killer. Process improvement and doubt are nearly mutually-exclusive phenomena.

Confabulations!

To confabulate is to tell people what you think they want to hear about the way things are and the way things ought to turn out. You’ve heard of people doing this in psychotherapy. Well, it happens in BPM projects even in the best of times and circumstances. People – particularly managers – tell process analysts and consultants what they want based in large part on what they think the rules of the game demand. Basically, if I think you want to model a current state that has certain features, I will make it up as we go along so the model comes out looking like I think you want it to. It’s because people do this that I invite as many experts to process documentation meetings as possible (within reasonable constraints). I want to hear what everybody has to say about the process. It’s also why I don’t include the boss in the first session. They fear for their lives so I bring them in toward the end to validate what their staff have told me. Staff are so much more candid when their boss is out of the room! If this sounds like an intervention on an alcoholic it’s because the approach is similar. Only the problem is not the manager. It’s a less-than-ideal process that some managers believe reflect poorly on them and their performance.

What To Do About Fear and Process Confabulation?

  • Make some strategic decisions at the executive level about the viability of your initiative. If it’s best to hold off for a few months, then wait.
  • Go easy on terminology like “eliminating waste” and even “automation” for that matter (unless you’re clear that is what you’re after and you’re prepared to deal with the fall-out)
  • Communicate, market and promote your BPM initiative in positive terms. Share the benefits, value-add and goals for organization. Have your executive sponsor write a short, persuasive and motivating letter and make sure everybody reads it or hears it.
  • Observe workflow and process by means of direct observation first
  • Document process with the help of non-management experts. Be inclusive and cross-functional in who it is you invite.
  • Validate processes with managers and directors
  • Identify process-related data and metrics and validate your model and assumptions by reviewing the data. The data rarely lies. If you have 100 customer complaint letters and a manager telling you people complain “once in a while” then you can deal with that discrepancy. If a manager tells you their staff processes 10 invoices per hour each and there are 5 staff working 7 hours per day, then somewhere there should be data supporting 350 invoices per day. Close the loop and don’t get snookered into believing without evidence of performance.
  • Be objective, firm and confident.
  • Lead by example and engage others in the same productive, positive behaviors.
  • Believe that BPM projects and initiatives that overlook human behavior and organizational dynamics like these are guaranteed to flop. This is not an IT project.

HR Dimensions of BPM (business process management) Are Mission-Critical

Business Process Management (BPM) promises to bring the disciplines of IT and HR together. That’s the promise, anyway.  BPM draws the map and establishes goals while HR provides the framework to hold people accountable for those goals. Sadly, I rarely see the integration of HR in BPM projects led by IT folks and yet I believe it’s absolutely essential. Bridging the divide between HR and IT is not so difficult if you follow some simple guidelines.

  • Understand HR’s Role. This is fundamental to your success. You must understand that significant changes in business process cause changes in job description and performance expectations. HR can help you decide which changes are significant enough to have a material impact on job descriptions and can identify those performance measures that make a difference to performance appraisal. Similarly, significant changes in processes may mean change in employee recruiting (you may, in fact, be seeking a different skill-set than previously thought) and it will likely mean considerable change in supervision.
  • Integrate From The Beginning. Include HR in the BPM discussion from the start. Invite HR to the table and seek their input and advice. If you don’t have an HR professional on your staff, invite a consultant from the community. Trust me, the lawsuits that can result from botching this aspect of your BPM initiative will outstrip the cost of hiring an HR consultant by a factor of 100.
  • Include HR in Human-Centric BPR (re-engineering). BPM and BPR are not simply mapping exercises. Eliminating waste, finding efficiencies and improving quality in the way things are done is about modifying human behavior. All of our models and talk of “suppliers, triggers, resources, outputs and metrics” must bear in mind that real people are involved at every juncture.
  • Conduct HR/BPM Gap Analysis. Involve HR in assessment of the changes you’re making to the current state. Review your future state designs together and determine:
  1. What rules need to be properly documented and how will people be held accountable for following those rules?
  2. How will employees navigate the decision-making processes and who do they seek permissions from?
  3. What training will employees require to implement the new state of your business processes?
  4. Who will provide that training and how will you know when your people are competent in the new way of doing things?
  5. Are there any risks associated with your new business processes? Exposure to dangerous conditions? Risk of accident or injury? Violations of workplace safety laws? Your HR professional can answer these questions for you.
  • Establish New Performance Metrics Together.  Assume the new key performance indicators (KPIs) will have a direct impact on the way employees are appraised and rewarded. There may be some exceptions and your HR professional can help you decide.
  • Enlist HR to Communicate your BPM Initiative. Establishing buy-in and overcoming resistance to change (your biggest barriers to success) are dealt with by executing a comprehensive communication plan. You must create and maintain momentum by including all of your stakeholders in the conversation. Your greatest asset in communications is your HR professional. IT people in particular should not attempt to communicate without the help of HR.
  • Implementation & Training. You want to implement changes in process and HR professionals want to properly train people. Implementation is the intersection where HR and IT usually collide. If you’ve followed these guidelines reasonably well till now, implementation will be a success because it will have been a collaborative effort.
  • Assess Compliance. Compliance is a creature with many heads. While IT may have ERP, XML and integration standards they are trying to comply with and the CFO has Sarbanes-Oxley compliance issues with the new process, HR will have a full slate of compliance issues to assess. There are safety and occupational hazrds to assess, discrimination and disability conditions to review and the full array of hiring/training/supervising processes to evaluate in light of a modified workflow. It’s not impossible, for instance, to engineer or design a business process that suddenly creates a disadvantage for people with a disability who had been properly hired to do things the “old way”.

The most often-cited reason BPM projects stumble and fall is that organizational dynamics and human behaviors weren’t properly assessed and accounted for. There is a lot of psychology at work here. HR people are a different breed and IT people – most often asked to lead BPM – need to accept and include HR. I think the creation of HR/IT teams for the purpose of BPM ought to be your first BPM initiative. It’ll create the conditions for everything else you’re hoping to accomplish.

Market Roller-Coaster Ride Strongest Justification For Business Process Management, Analysis and Re-Engineering

Business Process Resiliency

The past week’s tumultuous downward spiral, global banking interventions and stock market spike speak to the need for organizational resiliency everywhere. I’m speaking primarily to those of you who are scrambling this week to get your shop under some semblance of control in the wake of your market’s turbulence. You’re desperately seeking answers and you’ve heard or read somewhere that workflow management and business process management (inclusive of documentation, analysis, design and re-engineering) can transform the way you do business. The promises are lofty but, like technology, workflow management and BPM are essential tools. The difference is not in saying “we do BPM” but in the way that you implement BPM in the social, cultural, and operational fabric of your organization. The value and benefit is in HOW you use BPM. But the bottom-line is BPM produces a degree of resiliency not possible without it. That may be a strong opinion but I will stand by it. One cannot adapt to invisible conditions. BPM makes conditions visible and adaptable. You do the math.

BPM Builds Resiliency

To contend that BPM builds resiliency is not quite complete. It makes resiliency possible. It is the lens through which you can identify your resiliency needs. Without visible processes, you have to rely entirely on anecdotes, opinions and assumptions concerning your strengths, weaknesses, productivity and efficiency. All of which vary from one employee, supervisor or director to another. Social constructs like that are always relative. BPM is the closest thing we have to a mechanical view of your enterprise and much less susceptible to relative interpretation. A business process model is the shortest and potentially most accurate model depicting what you do and how you do it. Imagine military leaders discussing strategy and tactics in the midst of battle rather than at the perimeter of a table housing a model of their battlefield and you begin to get the picture. If you’re in the thick of the trees, it’s tough to see the forest and your place in it. If you’re slogging it out in the muck, it’s tough to develop an adaptive strategy with your mates.

Resiliency is about adapting to conditions and bouncing back from blows. Adaptation requires knowledge of conditions in the environment or ecosystem as much as it requires knowledge of ones own capabilities, traits and resources. There is no substitute or alternative at the moment for BPM in demonstrating, reflecting, modeling and measuring conditions in both the company and its market. It’s the shortest route to a complete assessment and planning.

Measures and Metrics Count

Notice that adaptation is also a function of measuring conditions. Unlike natural selection processes which might favor traits and capabilities honed over decades, centuries, and millenia, we need immediate access to accurate data concerning our strengths and weaknesses. Our environment is changing much too fast to wait for year-end results. BPM will equip you with deep knowledge of what it is you need to measure. A high-performance entity measures in surprising ways and – of course, – what gets measured varies widely across industries. However, what gets measured gets managed. It’s not what you expect that will change deliberately. It’s what you inspect.

Break The Rules?

Our experience with economic upheaval ought to be having the effect of causing you to challenge your assumptions, myths and deep-seated beliefs in the rules you follow. Not sure what rules govern your business? Don’t worry, that’s what BPM will help you discover. BPM establishes the rationale for process and articulates the business rules you follow. Upon identifying your business rules, challenge them. If you can break them and establish new rules without breaking the law or any ethical/moral codes and without compromising your quality, customers, employees or mission then you will be participating fully in your own adaption and resiliency. How about that!

If the rules you live by don’t change while the economic and market forces around you are changing at the speed of light (as they have been for a month or two) then, my friends, you will get left behind. Don’t let this happen.

Up and Down

Like the roller-coaster we’re on, you need to assess what you’re up to at the macro levels of strategy and economic/market factors as much as you do at the more micro levels of business process and key performance metrics. Inside, out, up and down. Many of you are new to this field. Some of you are new analysts and some of you are executives. All of you may be wondering if business process management is right for you. The answer is that it is essential.

Business Process Analysis: Lean Toward Elimination of Waste

Of all the reasons to build a process-driven culture and infrastructure in your organization, the elimination of waste is a very logical and compelling reason. Eliminating waste can feel like Christmas. Your ability to deliver deep savings and performance improvement is a wonderful gift for everyone including the customer.Your prices might even come down! What might that mean for sales? The Lean Methodology – even in its most rudimentary form – is your greatest tool in identifying the waste you must remove from your process. In case you haven’t noticed, the state of the global economy is sort of tugging on your shirt-sleeve to get with the program.

Lean and Mean Metrics

I run across this scenario all of the time in my consulting work:

Client – “We want to get really efficient, Patrick. Help us reduce the waste and improve overall performance.”

Me – “Ok. How are you performing now? What are your key performance indicators and what are your industry benchmarks? How are you doing in comparison to your competition?”

Client – “Huh?”

Your obligation – whether you are the new business analyst on the team or the CEO – is to make sure that you can identify your key performance indicators and perhaps even more granular performance metrics. Otherwise, identifying waste and verifying that you are making progress is kind of tough. This is a science.

Waste: 7 Fruity Flavors

Lean tells us there are 7 types or categories of waste. They occupy a great deal of your time and represent a considerable chunk of your overall cost. Would you be more competitive if you could eliminate the following:

  1. Overproduction Waste (the biggie)
  2. Waiting Waste (time in queue)
  3. Motion Waste (moving stuff around)
  4. Transport Waste (conveyance that adds no value)
  5. Over-Processing Waste (processing the customer doesn’t value or pay for)
  6. Inventory Waste (stockpiles – see Wal-Mart for the antidote)
  7. Defect Waste (re-work, correcting mistakes)

Value-Add Your Way to Success

Value is defined by your customer. Don’t forget this very important fact. Waste is anything that doesn’t add value. Whether you work for a non-profit, a school, a prison, a high-tech firm, a hotel or a retail store, waste is a big deal. You may think you have built-in features and processes that are wonderful, however, if your customer doesn’t share your enthusiasm and cannot identify the inherent (intrinsic or extrinsic) value, you probably have waste. Get rid of it. Value-Stream Mapping is a great visual aid and a perfect tactic for this purpose but I want to warn you: don’t get lost in the weeds. If you came to my house to find waste, I assure you there a few places you could look first and you’d find 75% of my waste. It’s no different in your shop. Start with the biggest and ugliest offenders. Do it now.

Think and draw from the perspective of your customer. Ensure decision-makers are involved. Invoke tough decision-making processes. Once you identify the waste, the will to eliminate it must be there.

What’s your story? What success story can you share? What did you do and how did you do it?

Thanks for chiming in!