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The path to business process transformation

This article appears in the issue May 2011, [Volume 20, Issue 5]
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Business process pros live an exciting life-operating at the intersection of business and technology, while bringing process methodologies, business knowledge and technology insights into business transformation initiatives. However, finding the right balance of process discipline, business insights and technology depth on your business process management (BPM) team can be difficult. The danger comes from an imbalance in any of those three areas.

Business-led BPM projects driven purely from a Lean or Six Sigma perspective often flounder on the technology side, usually because methodology purists are instinctively allergic to technology solutions; plus they get shored up by business stakeholders who are tired of having technology shoved at them. As a result, business-led BPM teams, usually heavy on process discipline expertise, often miss out on the very solution that can help enforce process transparency, support continuous improvement and automate transformational jumps in cross-functional processes.

Or, the process experts may be too purist for the business stakeholders. For example, several years ago an organization made a big effort to tackle Six Sigma by training several hundred green belts and black belts. Senior management was totally bought in. But the practitioners took a completely purist approach to Six Sigma by forcing everyone to learn the terminology and approach. Ultimately, they failed and disbanded. However, the business need never went away-now the organization is pursuing BPM, and some of the Six Sigma experts are involved in this project too. But they've learned their lesson. The project teams have adapted all training materials to the company's culture, rather than forcing a rigid approach down the throats of management and workers.

Similarly, IT-led BPM projects are often doomed from the start because they lack strong sponsorship, commitment and involvement from the business. Why? Because techies on the project yak non-stop about technologies-business rules, BPM software, analytics, complex event processing, dynamic case management and so forth-when the business expects a cogent discussion about the financial analysis, the business plan and all the pieces that need to happen from a people perspective to make the project a success. There's a disconnect-a failure to communicate from the same shared values and points of view.

During the last decade, business process owners across all industries have invested heavily in a broad range of enterprise applications and then leaned on business process professionals to get them implemented. Companies have invested in technologies such as enterprise resource planning (ERP), business process management suites (BPMS), customer relationship management (CRM), data warehouses (DW) and business intelligence (BI) to boost business performance through process automation and optimization. But many of those business process change initiatives have not delivered the expected results, and a few have even produced spectacular failures and spending nightmares. For that reason, business stakeholders usually, and rightly so, approach all business transformation discussions that start with the technical solution with extreme skepticism.

Where does your organization fit?

Understanding where your organization sits today and what processes it needs to improve, change or transform is the first step toward introducing business process change discipline. A simple framework can help business process pros position their organization and determine its roadmap to drive two sets of goals: innovate for superior business value and differentiation, and provide efficient operations through streamlined, waste-free processes and resources.

According to this business change framework, organizations fall into four basic profiles:

  • Artisanal executors. These immature process organizations throw up thick walls between different business units, discouraging or even preventing business and technology insights from being shared.
  • Constrained advisors. A few highly engaged business executives and/or business process pros act as change agents and attempt to break silo walls by developing and evangelizing common process management policies, developing portfolios of common process change methodologies and tools, and providing training and advice across business units. While these advisors have high hopes, ultimately they have limited visibility, power and resources to broadcast changes across the entire organization.
  • Efficient operators. Nearly all process organizations of this type have deep roots in IT. Most frequently, they focus on well-defined standardized processes that limit innovation and rarely export their organizational best practices outside their domain of expertise.
  • Value integrators. These mature process organizations deliberately link process change initiatives to their business strategy. The commitment of top-level executives, who view process improvement as a key element of business strategy, is critical to the overall success of these organizations. Most typically, a corporate level function drives the development of a well-articulated process change strategy and actively supports the business units implementing it.

After business process professionals have assessed their organization's readiness, they can systematically enhance the business process change discipline in their organization. The four practices of process management discipline related to strategy, execution, culture and structure have been inspired by the Harvard Business School's (HBS) Evergreen Project. The HBS project analyzed the impact of more than 200 different management best practices on the performance of 160 business organizations over a period of 10 years to identify what "evergreen" organizations (i.e., those that constantly outperform their industry) do for superior performance. When applied in the context of changing business processes, those practices fall into the following categories: strategy, execution, culture and structure.

Because BP pros spring from diverse backgrounds, it's impossible for a single person to master all process skills, techniques and business domains, or the dizzying array of technology. Success will depend on focus and for the business process pro executive acting as the change agent, which means having a laser focus on the disruptive and transformative aspects of the process improvement initiative. To start, master the most important questions regarding process discipline, business domain and technology. In particular:

  • Hone in on the process skills needed for the specific type of process improvement project. Organizations need to adopt and develop specific process disciplines-like Lean, Six Sigma or Lean Six Sigma-that help offset typical ailments that undermine change efforts, such as hazy approaches for analyzing business processes and envisioning new processes, unclear goals and failure to dismantle thick silo walls. To be successful, your process discipline must provide clearly articulated change strategy, reliable methods to execute the change strategy, a culture of performance and a collaborative structure to support the change initiative.
  • Don't try to master the entire business domain, but answer key questions that drive the process. In most cases, obtaining deep knowledge about business requirements and best practices, with a diversity and range of processes, is not achievable. So how much knowledge and depth in any specific business process is really needed, and where can this depth be obtained? Part of the answer is for business process pros to embrace transformational thinking, identify key disruptive forces, emphasize the customer experience and foster change agent behaviors to launch process initiatives.
  • Focus on the key technology that delivers the highest business value to process transformation. It's easy to become fascinated with technology's wide ranging potential. But a better bet for the business process pro is to focus on technologies that have the greatest potential to transform the process they are working on at that time. Examples of transformational technologies that give businesspeople significant ability to change processes over time include BPM suites, business rules, dynamic case management-all built on a service-oriented architecture (SOA) foundation. Other technologies that impact the customer experience include information workplaces and social media.

Consider BPM suites

To a CEO, BPM means delivering breakthrough process innovations that transform operations, reducing significant costs and delivering competitive differentiation. To a CIO, BPM means moving at the speed of business to quickly adapt to changing business conditions, keep pace with business expectations over time and adjust to potentially disruptive industry trends. And to the CFO, BPM might mean greater insight into financial performance, consistency across similar processes in different locations and detection of potential regulatory compliance issues.

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