While the days of internet time may have passed us by, the shift in focus to competition based upon the speed of innovation is here to stay. Organizations know that in the new business model, where work can be sent anywhere in the world to the low-cost provider, that one of the key competitive advantages they have is the ability to differentiate themselves with unique offerings. But even these new offerings have a shelf-life as other firms move to quickly imitate innovations.
There are two key paths that can be pursued to increase the rate of innovation. First, is fostering an environment that rewards innovation to increase the amount of innovation within the organization. Second, is to increase the ability of an organization to react to the innovation quickly enough to be able to be able to sustain a competitive advantage over other firms. Fortunately the two are interrelated. An organization that fails to successfully demonstrate the ability to implement innovations will not long be able to continue to produce them. Just the same, organizations that have the ability to implement innovations but lack any flow of innovations to speak of, will quickly return to approaches that don’t invest much effort in supporting innovation.
Many firms already have embraced this outlook and are groping for ways to build that virtual cycle we just described. BPM is currently the technology that organizations are being told provides the underpinnings that enable an organization to work this magic. But is BPM the real answer? The answer is decidedly unclear. One of the key issues is that while focusing on process change makes sense from a strategic point of view, the greatest volume of business changes are typically smaller tactical changes.
Business Processes change is a relatively intrusive type of business change. Not surprisingly, any significant strategic business initiative will almost certainly involve business process change. But business process change fundamentally implies changes to who does work, what work was done, or the order in which work is performed. The nature of this kind of change is that issues involved with these organizational changes will likely be at least as time-consuming as dealing with changes to the automation portion of the business process change. Because of this, speed in changing an organization’s process definitions isn’t typically the sole or even the primary constraint that an organization faces when embarking on this kind of change.
While business process change may represent an essential undertaking to achieve any kind of significant business change, it is not the sole driver of business change. In fact, most business change is operationally driven rather than being strategic structural change. Because these types of changes typically have a much smaller organizational footprint than do major process change initiatives, the ability of an organization to be able to quickly respond to these kinds of needs should be much greater. But if business processes aren’t changing what really is changing?
What are changing are business judgments. These business judgments are the things that control things like: how many applications follow a particular review path, which marketing promotions are offered for a particular customer profile and what claims are selected for auditing. Judgments like these exist in all organizations. And whether or not they are formally modeled, there are processes in place to deal with the results of these judgments as well. Ironically, it is typically those organizations that have the most formalized processes and have provided the highest level of automation support for them that find that they are least able to respond to the need to make changes to these kinds of judgments.
Why is it that organizations find that they cannot make these kinds of changes at the pace that their business demands? The issue comes down to a failure to properly separate two different areas of concern: business process and business rules. While business processes codify the possible paths that can be followed and the work that will be done along those paths, business rules codify the judgments that determine which branches along a path will be followed. So what happens when these judgments are buried in business process definitions?
Embedding business rules into business process definitions has two damaging side-effects. First, since rules typically change much more frequently than do process definitions, combining the two presents a management challenge because business process change must be coordinated with all the other organizational changes that typically must accompany it while business rules changes typically do not. This causes a mismatch in management objectives between the strategic control objectives embodied in the business process and the operationally driven objectives that business rules serve.
The second side-effect is more damaging still. By failing to treat business rules as a separate discipline organizations diminish their capability for determining the impact of making changes to business rules. The inability to determine how many processes are sensitive to a change in a business rule-driven judgment slows an organization’s response to the need to make the operational changes while increasing the risk that the dependencies will simply be missed. Since these operational changes are where the highest volume of business change is focused it is easy to see the potential for this to greatly undermine an organization’s ability to be agile in the face of business change. Understanding and managing the relationship between business processes and business rule driven knowledge is key to allowing formalized business process definitions to remain responsive to an organization’s operational needs. That’s where real business agility comes from.
