Bob Curtice, Associate Researcher for the Institute for Process Management, Babson College and Vice President for Performance with Improvement Associates LLC. Bob Curtice is the author of books and articles on database management, systems planning, and process improvement, including “Fundamentals of Process Management” and “Role of the Process Owner”.
Curtice said that cross-functional business processes yield the most important business results. The processes need to be managed end-to-end in order to achieve benefits for the entire organization. The impetus for new projects usually include:
- New systems effort
- Finding a solution for a specific business problem (broken process)
- Need to reduce costs
- Need to speed things up
- Improve customer service
- New product or service introduction
- Merger or reorganization
- Management directive
As an example, a normal business process for selling something could have eight major steps.
- Customer inquiry
- Prepare quote
- Receive order
- Allocate inventory
- Check customer’s credit
- Ship goods
- Issue invoice
- Collect receivable
This single process effects people in Sales, Order Entry, Production, and Accounting. Each silo has a piece of the above process. Normally, each department has its own metrics and way of doing business that may or may not dovetail with the other departments. Generally, departments are only concerned about their part of the process. One of the first and most important tasks in a BPM project is to chart the process through the departments and take organizational control over the management of the entire process. There are many challenges to getting a BPM project to work. Typical causes for failure include:
- Resources and management attention diminishes during implementation.
- Anticipated benefits are not measured or audited
- Adherence to the new process begins to falter soon after implementation
- Local variations to a standard process begins to creep in
- No one pays attention to the process
Ongoing management of a process portfolio can help solve this problem. The first step is to define and identify the portfolio of business processes. Typical processes in a portfolio would be:
- Develop products
- Market and sell products
- Produce products
- Service customers
- Manage finances
Start at the top to achieve a top-down view of the processes within the whole organization. Curtice pointed out that most employees only have one function within an organization, but typically work at multiple processes during the day.
The second step is to relate each process to the strategic business objectives. Typical objectives would be to reduce costs, reduce time-to-market, improve quality, gain market share, or broaden the product line. Each process needs to be evaluated regarding which strategic objectives it addresses.
The third step is to establish summarized diagnostics for each process. Is the process on a par with the competition, better than the competition, or worse? Establish a benchmark grade and it becomes obvious which processes need the most enhancements.
The fourth step is to assess the portfolio of processes regularly in order to make sure the improvements stick.
The fifth and last step is to put in place a process management governance structure made up of the process owners, the process sponsors, a process council, and process support. The process owners own the process and the IT budget, but not the people. They chair the process council and report to the sponsors. The sponsors are senior managers. They control the process improvement efforts. The process council includes representatives from the business units and the geographies of the organization. Process support includes the methods and tools used in process projects.
