Tag Archives: process

Business Process Management (BPM) Core to Business Models Capable of Succeeding in this Economy

Reading the newspaper or watching TV news lately is an exercise in developing a blistering case of depression or anxiety or both. At the close of business this week we learned about record numbers of unemployment claims as well as lay-offs at Kodak, Ford, Starbucks, Caterpillar and Home Depot. Nearly twice as many people are unemployed today as were 12 months ago. The Dow dropped more than 8% this week and new home sales dropped almost 15% in December to their lowest point ever. How can anyone envision improved business prospects in this climate?

There’s Hope!

You can find examples of success if you look in the right places, folks. While the International Air Transport Association was reporting record losses for airlines this past year, they (in a January 30 USA Today story) acknowledged that “the only major carrier to report a profit in 2008 was Dallas-based discount giant Southwest Airlines.” Another story this week confirmed that while retailers continue to count the change in their pockets (and Circuit City says good-bye), this side-bar managed a small mention: “Citing its best holiday season ever, Amazon.com reported 4th quarter profits of $225M. The retailer said revenue rose 18% to $6.7 billion exceeding analysts estimates.”

This is Still an Economy After All

Those of us who remain in business must remember that we are in business. This is not family and it is not a social event. Nothing is certain in business and it is rich with risk and speculation. We are involved in developing and continuously massaging business models and business plans. If ever there was a bell weather event demanding BPM, this recession is it.  I have heard people tell me (this week!) that they do not want to “lose the art” involved in how they conduct themselves and execute their core processes. They “prefer the judgment and reflection involved in making choices as to how to proceed” and want to “preserve that unique and individualized process”…while they go out of business!

BPM is not and should not be about hard-coding anything. Rather, it enables you to design work and process that can more easily be tweaked and simulated to suit conditions assuming you stay on top of both the conditions and the process. This is active, dynamic and organic stuff.

Several people have commented that Southwest, Amazon, Wal-Mart and Costco are thriving right now because they have a different business model than their competitors. I want to suggest that that is the point. It is past time for all of us to question our business model and challenge (aggressively) our enshrined assumptions concerning the way we do business.  Each of these companies challenged their entire industry and introduced unparalleled and disruptive innovation.

When, in healthcare for instance, professionals wonder why their patients seek health education online at WebMD rather than making an appointment, someone is evidently not paying attention.  1,000,000 medical tourists will take their hard-earned money to Thailand, India and Mexico for that hip replacement. Wal-Mart sells prescriptions for $4 and Minute Clinics are popping up in malls and grocery stores by the hundreds. Times have changed so it’s best to invest in change.

Innovate or Die?

Most of us can find plenty of evidence for what it is our customers and prospects don’t want to buy. How many of us are working as hard as we can to discover what it is they do want to buy? How many of us are innovating our business processes so that we can drive a new business model in a new business and economic environment? Using BPM to bring a visual/graphic dimension to what you do and how you do it will allow you to unlock the “Special Sauce” potential in your business. Until you can look into the core of your business machinations, you lack the perspective to see how it is that you can discover quality and efficiency gains while incorporating the voice of your customer in the process.

Some people argue with the “Innovate or Die” adage. Ok. Try this: Adapt to rapidly changing conditions by changing your business model (customer value proposition, resource mix, processes, financial formula). Choose your market carefully and sell what your customers want to buy at a price they can afford.

Remember: there are still many trillions of dollars in the economy! What can you do to tap into that? How can BPM support your mission?

Advertisements

Proof of Concept (PoC) Important to Success of Business Process Re-Engineering (BPR) and Workflow Improvement Initiatives

How’s Business?

According to Bloomberg.com, “confidence among Americans fell by the most on record and single-family housing starts hit a 26- year low, posing an increasing threat to consumer spending that accounts for more than two-thirds of the economy. The Reuters/University of Michigan preliminary index of consumer sentiment fell to 57.5 this month from 70.3 in September. The measure averaged 85.6 last year. Construction of single-family homes dropped 12 percent last month, the Commerce Department said in Washington.” It’s high-time we turn this ship around. Words like “confidence”, “sentiment”, “trust” and “fear” are at the heart of this problem. Business people (you!) play an absolutely essential and vital role in restoring trust and confidence. What does all this have to do with a Proof of Concept?

Proof Restores Trust & Confidence

It’s the innovators and those who seek to disrupt the dynamic that lead the rest of us out of the dark. Consumer confidence is a function of trust and trust is a function of your product-quality, price, brand and your market. In your zeal to disrupt and innovate OR in your more conservative endeavor to make your current operating environment more stable and predictable (also a good idea when the market is tight), make sure you employ a Proof of Concept (PoC). Now is not the time for costly mistakes that erode trust.

What About Smaller Companies, Non-Profits and Government Agencies?

I can hear some of you now: “Who does this need for PoC apply to? Do small businesses, non-profits and government agencies need to take these measures as well? Isn’t this just for technology companies and manufacturers?” – The answer is that the need for PoC or some semblance of it applies to all of us in every instance of business process re-engineering (BPR.)

There are a number of approaches to testing and proving your concept: simulation, pilot testing, prototyping, and/or developing a business case. Whatever your chosen approach, proving and substantiating your concepts in business process re-engineering and workflow re-design can save you a lot of money and time. It may also save your job. It will certainly prevent fiasco with customers.

Proof of Conceptkinda self-explanatory

What problem are you addressing and how is your re-engineered process or re-designed, improved workflow going to solve that problem? A PoC will include results or actual measures of efficacy. You need to provide your leadership team (or yourself) with sufficient data to support your claim that this concept will have the desired impact. A Proof of Concept addresses:

  • a clear definition of the problem you are solving
  • specific attributes of the solution you are recommending
  • measures of efficacy, outcome and performance and how you will measure them
  • resource requirements
  • technology requirements
  • the full range of project mgmt and implementation variables (critical path, timeline, milestones, tasks, interdependencies, etc.)
  • budget
  • logic model (or use-case scenario) that supports your assertion that “it works” and satisfies your business requirements

In essence, a proof of concept is a prototype of sorts. It allows you to roll out your proposed solution on a very limited basis and test, validate and verify your approach and results. It establishes the feasibility and viability of what you’re proposing. In manufacturing circles and among engineers, a PoC actually precedes a prototype and establishes that a prototype is a worthy next step in the R&D and product development process.

In services sectors, a PoC may include allowing your prospective customer to try a service and prove the concept to themselves. This is actually a ripe time to take this approach in your marketing and sales.

The Benefits of a PoC?

It ought to be clear by now that by developing an approach to Proof of Concept and an environment within your company that recognizes the importance of rapid testing of innovations, you can begin to shape your products and services in new, more efficient and more customer-specific ways. You do all of this and you avoid the dreaded Unintended Consequences of making changes without considering all of the implications. This goes back to pre- and post-process metrics. What happens up and down stream from a process will become apparent to you when you begin testing in a disciplined fashion.

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.