Enterprise Initiatives

One of the challenges of process improvement initiatives is getting the subject matter experts (SMEs) to think outside of the box. Quite often, people defend existing processes even though they know that there is a better way to do it. I often hear statements like "sales insists we do it this way", "we can't expect our customers to change their processes", and my favorite, "we don't have time". We need to get out of our old habits of living under constraints of legacy rules and start challenging why these processes exist and see if they still support today's business.

So when people declare that "sales insist we do it this way" we should find out why. What business reason does this rule apply? What is the cost of this business decision? Is there a better and more cost effective way to do this? What would it take for this rule to change?

When people say "we can't expect our customers to change their processes", do we know that for sure or are we making assumptions? Have we engaged our customers in a discussion about process improvement? Are they happy with the existing processes? Before we write off any process improvements we should first ask the questions.

When people say "we don't have time", do they realize that this excuse is the underlying reason why the processes are ineffective to begin with? Always taking the short cuts leads to ineffective and non-value added processes that waste company time and money. If you don't take the time now, don't expect to find time later to fix it.

In an effort to break the bad habits of old, we must constantly educate people on the value of process improvement and the true costs of waste and low value processes. When people resist changing an obviously inefficient process, you owe it to your company to not give in without at least asking some questions. Here are some questions to ask:

• What percentage of time does this occur? (does the 80-20 rule apply?)
• How frequently does this occur? (are we addressing something that happens infrequently?)
• Does this apply to all customers or a few? (are we addressing our high or low value customers?)
• If we were starting from scratch, would we still do it this way?
• What problem does this solve?
  

In addition to asking questions like these, we should perform an analysis to discover what the cost of an existing process really is. Not everyone understands process improvement, but most people understand money. Computing the cost of low value processes is often an eye opening experience for users. Once they see the expense, the amount of waste in labor, and/or the impact on quality, they become more open to change. Simply telling them to change without any real data is a tough sell.

Over time, the users will experience the power of process improvement as they work on new systems that leverage BPMS tools. The more hands on time they get with the tools the more they will see the benefits in the form of ease of use, visibility into the workflow, assess to information, and improved quality. When you first launch into your BPM initiative, these benefits are not as obvious. The best way to break them of bad habits is to quantify the costs of the waste. You will not always be able to convince people of a better way, but if you simply accept defeat without asking the questions, you may miss a huge opportunity to make a significant impact to the bottom line.

Another lesson learned I encountered recently is to clearly define the intentions of your BPM projects. There is a huge difference between attempting to improve processes versus automating processes. First let's discuss the pros and cons of each:

Process Automating in a BPM world

Pros

• Quick wins (unless processes are extremely complex)
• Less culture shock
• Reduce human error
• Start collecting process metrics baselines to analyze future process improvements
• Reduce paper, fax, emails, etc.

Cons

• Only small efficiency gains are realized
  
• Automating non-value add processes
• Missed opportunity to optimize work flow
• May never get a chance to improve processes

Process Improvement in a BPM world

Pros

• Reduce or eliminate waste
  
• Potential huge return on investment
  
• Improve employee performance and customer experience
• Reduce complexity of systems
• Financial justification of process steps
  

Cons

• Potential culture shock issues
  
• Requires more executive support
  
• More expensive to implement
  
• Requires more attention to change management

Like any other large enterprise initiative, a company must have a vision or a roadmap. Some companies may want to achieve financial benefits as soon as possible. For those companies, they should embark on a process improvement initiative right out of the gates. This means that the company must invest in training the business on process improvements with tools like lean sigma, TQM, and others or bring in talent to assess and recommend new processes.

Other companies may want to ease into the culture transformation and start with process automation. This allows the employees to get familiar with the BPM tools and to start collecting data about the current processes (time, costs, bottlenecks, etc.). This information can lead to process improvements down the road. The downside to this approach is that it will take the company much longer to reach the "promised land" of having streamlined and cost effective processes. The real danger that I see is other priorities may take precedence and the company may never get the opportunity to eliminate waste. In my opinion, process automation by itself may not justify the expense of purchasing a BPMS tool. The real value is in process improvement.

Fellow ITToolbox blogger Vladimir Stojanovski wrote a good post on this topic several months ago called Synergies of Process Improvement and Process Automation. In his post he pointed out some interesting statistics that I will mention here:

• Process automation resulting from technology investments yields 2 percent productivity gains. These are the types of projects where technology is used to make old, tired, and broken processes run faster.

• Process improvement through re-engineering yields 8 percent in productivity gains.

• When done together, productivity improvements from both process automation and improvement yield 20 percent in productivity gains.

Mark Smith wrote a post back in 2005 called Process Automation Can Undermine Performance. The key take away from this post is his closing statement:

To succeed at BPM, assess for success, think beyond automation and make performance improvement your number-one process improvement goal.

My point is, the real value in leveraging BPM is process improvements. Process improvement combined with process automation is a powerful combination that can bring real value to an enterprise. Process automation by itself is nice, but it still allows waste to exist in the organization. But whatever your BPM strategy is, make sure it is clear to all team members what the direction is. If some people have an expectation that the goal is automation, while others think the goal is improvement, you will create a lot of unnecessary conflicts.