Saturday, September 22, 2007

The 5 competence-areas for real process transformation

I often use this model to explain but also check if a company is well positioned to achieve succesful process transformations - the 5 competence areas:

  1. Process orientation
  2. BPM technology
  3. Change management
  4. Process improvement
  5. Subject matter expertise

1. Process orientation

This competence area is what I would call the typical "BPM as a discipline". It asks for people, supported by methods and techniques to see the processes that are embedded in the organization, see the interrelation between them and the alignment with the busines goals, and see opportunities and risks in the as-is process situation. It asks for people that understand how interventions in process, people and technology can help the company to perform better. Concepts, methods and tools that people should be able to understand/use are for instance:

  • Business model - linking goals, business services and processes
  • Business architecture
  • Process architecture
  • Business case - TCO of processes, sourcing
  • Process models for operational processes, supplier/client linked processes (supply chain understanding), management processes, supporting processes and change processes
  • Information architecture - what information concepts are used, and in which step in what process is what information needed to perform the step and what information is delivered
  • Performane measurement and process control models - what to measure when (based on CSF's and KPI's) for whom and to control what risk - and the possible steering that management can do when measures ask for action
  • Business rules - what rules and knowledge drives what decisions in the processes
  • Methods for analysis of processes, and problems-cause analysis and knowledge

2. BPM Technology

IT offers many powerful innovation possibilities. But, people are needed, with the ability to see the possibilities and potential benefits. This requires competences in the technology, including:

  • Business process analysis technology, to support people to model / visualize processes
  • BPM Suites - automated process coordination engines
  • BAM - process intelligence
  • WFM - Workflow management, often as part of the BPM suite, offering functionality to support people performing tasks in the context of a process
  • Case management - again, functionality to support people performing tasks in processes, where the processes are more difficult to predict and model, and part of the process execution is based on people knowledge and decisions at run-time
  • SOA - a way to architect automated processes, based on calling services
  • ESB / EAI - Enterprise Service bus (or SOA grids) and other ways to deliver functionality and data needed to perform processes or tasks in a process
  • STP - Straight through processing, where the process is coordinated and executed in a totally automated environment with no or very limited (exception handling, sample checks) human involvement
  • BRE - Business rules engines (or in EDM terms: platforms for Decision Services)

Important to note it that people are needed that can think outside the "tool". E.g. we do need people that understand specific vendor technology (BEA, IBM, ARIS, Oracle, Cordys, etc), but we also need people that see beyond the limitations and design patterns of these tools, and understand the bigger "process model, execute, measure, improve" needs and features of your business.

3. Change management

Process transformation is a change. And change, asking people and their supporting systems to change, can be hard. It's an area often forgotten - many BPM projects are, unfortunately, run either from a technology perspective or an architecture/blue print perspectice. Change is not following a design-implement paradigma, and asks for people oriented interventions - two-way communication, training, coaching, steering, etc. It asks for people with competence in:

  • Change management
  • People management, development of people
  • Project management
  • Requirements management (as-is, to-be)
  • Design, simulate, evaluate, test, learn

4. Process improvement

I am very happy that process improvement is slowing turning into a art and science on it's own. In fact, improvement can come in a number of impact/scope combinations:

  • BPI - Business process improvement : small changes within the current processes, e.g. removing or reshuffling tasks, tuning business rules and tuning work/workforce-assignments
  • BPT - Business process transformations: medium to large changes, were processes are analyzed and thoroughly adjusted, including BPM/Case management/STP automation
  • BPR - Full scale process redesign, with often a total new look at product-market-channels orientation.

Beware - do not let a simple business analist or architect design process improvements - it will lead to nothing. Process improvement asks for people with skills in:

  • Outside in thinking
  • Measurement & benchmarking, statistical process control
  • Lean
  • Six-Sigma
  • TOC
  • Operations Research and modern Logistical concepts (JIT, Kaizen, Flow, Pull, Agility)
  • Simulation

5. Subject Matter

Whenever you start a process transformation programme, make sure you involve the subject matters. The people you need, are people with extensive knowledge of

  • Your company's internal structure, network, power grid and culture
  • Your current process portfolio
  • Your products
  • Your customers
  • Your suppliers
  • Your legal and compliance environment

I hope this list can help you, as a checklist. Try to make sure you covers these skill area's. Whatever you miss - will mean risk to your transformation project. Risk is okay, as long as you are aware of it.


jreiling said...

I think this is an excellent overview of the framework for business process management. I think there is a great deal of need out there for this, but even more need to keep the perspective. Most things are not that complex. The greatest skill in this arena, I think, is the ability to keep the perspective and recoginize the degree of vigilence the problem requires.

For example, not every problem requires painstaking analysis and documentation, and is best handled by doing some simple flow diagrams that can be understood by stakeholders, and derive some conclusions rapidly from that. On the other hand, there are larger and more complex situations where a heavy dose of the authors outlined procedures is very important and can yield big dividends.
John Reiling, PMP
Project Management Training Online
Lean Six Sigma Training Online

Roeland Loggen said...

John, thanks and good points.
Agree - we need to approach the specific goals and issues in a specific situation with the right tools and right scope.

A key question, businesses should ask themselves when turning to various BPM approaches, is what they are trying to solve.
I have come across various reasons to apply BPM and each reason asks for another "variance" in the model that I present here.
Typical situations and possible "variance":

- Pain in the process, in terms of issues around leadtime, quality, to much inventory, e.g. efficiency and effectiveness
=> Focus on the process (in context with related processes) and fix the problem!

- Need for compliance
=> Use a risk & compliance approach, which usually has a broader process portfolio focus

- Need for better information to steer the process and decisions
=> Find the key processes, and make them more visible

- A greenfield process or a reorganisation
=> Use a more business architecture approach, with a structural larger scope perspective

- Sourcing questions
=> Understand core competence and management preferences, and focus on parts of the process portfolio where sourcing is an option

I see two basic forces in the use of BPM:
1. Projectbased efforts because there is a clear signal that a process transformation is needed
2. A process mentality, where we realize that processes, as a natural development, over time loose their power, focus and agility, and where we periodically go through a proces area to see if we can re-sharpen, improve or innovate, based on fresh energy and new ideas.