The Many Factors of Enterprise Maturity

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All organizations strive to meet their commitments to customers, employees and partners. By definition, ‘high performance’ firms fulfill commitments with correct decisions and precisely completed process cycles. Yet almost no company is perfect. Improved performance means improving maturity in many areas. Enterprise Maturity is a goal I find in the work of several important authors.

All organizations strive to meet their commitments to customers, employees and partners. By definition, ‘high performance’ firms fulfill commitments with correct decisions and precisely completed process cycles. Yet almost no company is perfect. Improved performance means improving maturity in many areas. Enterprise Maturity is a goal I find in the work of several important authors. Most maturity methods propose a series of changes that progressively improve:

  • Process definition and ownership
  • Decision management and ownership
  • Business performance and agility

In the April 2007 Edition of the Harvard Business Review, Michael Hammer touches on this theme in an article entitled 'The Process Audit’. He describes an approach to assessing maturity in 13 process competencies and 13 ‘Enterprise’ competencies. Remarkably absent from this audit is the role of effective decision management. For instance, a factor of the Hammer Enterprise Maturity Audit is the commitment to customer focus in the firm. Customer focus is the firm’s awareness of their mission to ‘deliver value to the customer’.

Delivering high value to customers, by definition, means meeting commitments (promises). The essence of commitment is an aggregation of processes and decisions. A firm’s policies and guidelines support and define decisions. Employees promise customers products that are defined, produced and priced. In a mature firm, product offering and policies are consistent and understood by all employees. Next, processes deliver the recipe for carrying out the commitment. The mature firm consistently executes well-designed processes in a digitized (mostly) form.

Improving maturity in processes and decisions is a daunting challenge that all executives must accept in today’s competitive landscape. There are many characteristics of a mature business. The common thread that emerges from theorists, technologists and leaders is that business must strive for maturity in three separate areas: mature decision management, or business rules maturity, mature business process management and mature strategic enterprise architecture. The autochthonous thread each of these practices is that business leaders, striving for maturing, performance and agility, must evaluate the levels of maturity of their organization and make corrective measures. At each maturity level there are management and technology changes that should occur. The hope of these maturity-movements is to give firms the tools they need to start the planning, management, and operational actions for improvements. Yet, as I have noted, there is no comprehensive framework for assessing progress towards this goal. A comprehensive framework would include the business practices necessary to assess and the current state of a corporation’s strategy, processes decisions and architecture.

Briefly: I would describe strategy, process, decision management and architecture as:

Strategy:

Strategy is a plan of actions and policies that are delivered in a business model. In the book Open Business Models, Henry Chesbrough states that a business model “creates value and captures a portion of that values … creates value by defining a series of activities from raw material to the final customer.” Chesebrough presents a diagnostic questionnaire for business models, akin to a maturity model.

Processes:

Hammer defines a business process as tasks, sequences, responsible personnel, conditions and information. This is close to the BPM technical descriptions in which processes are comprised of activities, participants and data.

Decisions:

Critical to business strategies are the many large and small decisions made by all lines of management and operational personnel. The goal of mature decision management is to take control of all business decisions so they can be understood, strategically aligned and positioned for change. In Taylor and Raden’s forthcoming book Smart (Enough) Systems, operational decision’s critical value to the enterprise is described. In addition, Jim and Neil document research on decision’s value to the enterprise. Decisions are an aggregate of one or more business rules. Readers of the BPM Institute have been exposed to Barbra von Halle’s rules maturity model (RMM).

Architecture:

Traditionally, enterprise architecture has been considered an Information Technology discipline; however the Enterprise Architecture reflects the business, in much the same way architecture reflects a city.  In Enterprise Architecture as Strategy, Ross, Weil and Robertson, define an enterprise architecture as “the organizing logic for core business processes and IT infrastructure … reflecting a company’s operating model. A maturity model for Enterprise Architecture is presented in chapter 4. In their thinking, progressive maturity is achieved with progressive quantities of digitized processes.

The first goal of enterprise maturity should be perfecting commitments to all stakeholders – the essence of a customer focus. The next goal is the creation of simplified, flexible processes that responsively handle changes in strategy, events, and competitive conditions. Another goal strengthens the weakness of knowledge work processes (learning). The mature enterprise incorporates this expanded capability into measuring cause-and-effect relationships and leverage data, processes and decisions across the enterprise’s mission.

Many of the cited maturity models, including Ross, et, al, von Halle, and  Hammer, cover the same topics with a different focus. It would be efficient to merge these approaches into a unified approach to achieving enterprise maturity. The challenge would be to accomplish this without losing the nuances of each focus. For instance, the set of owners and stakeholders for processes is often different than the owners and stakeholders in decisions.

Not surprisingly, these topics are the focus of BPMInstitute.org.

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