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TRANSCRIPT
Leveraging Process Frameworks to Simplify Process Management
Jeff Varney Business Excellence Prac3ce Lead APQC
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Objectives
Many people inherently sense the value of a process framework but struggle to realize the benefit within their organiza3ons In this presenta3on we will discuss… � Key principles that make frameworks effec3ve � Overcoming barriers to end-‐to-‐end process
management � Aligning to what leaders care about � Accelera3ng your journey to higher process-‐
based performance
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What is a Process Framework?
A process framework is a list of business processes that are: ü mutually exclusive, ü collec:vely exhaus:ve, and ü hierarchically decomposed
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Process Classification Frameworks at APQC
Industry Versions Aerospace & Defense Automo3ve Banking Broadcas3ng Consumer Electronics Consumer Products Educa3on Electric U3li3es Health Insurance Payer Petroleum Downstream Petroleum Upstream Pharmaceu3cal Retail Telecommunica3ons
Best prac:ce organiza:ons blend and tailor these to best represent their businesses
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Frameworks are Fundamental
� Organize your structure for process informa3on on the front end!
� If you don’t… n Process informa3on will eventually be built in
pieces by dozens of people and projects.
n You will struggle to integrate process informa3on across your organiza3on.
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Primary Uses of Frameworks
Accelerate Governance Iden3fy Process Owners
Manage Content List of all processes Structure
Manage Content Reusable Processes Cross-‐Func3onal Processes
Align to Strategy Evaluate poten3al for improvement
Benchmarking What to measure Aggregate/Drill-‐down
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Focus Deployment for Value
� Strategic alignment of processes n High-‐value ini3a3ve
n High-‐value products
n Processes requiring high integrity (i.e. where mistakes are costly)
� ‘Size of the crowd’ around any one process n Number of individuals/teams/processes
using a specific part of the framework
� Business value is ul3mate purpose of framework
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Deployment Approaches � Reorganize
ALIGN organiza3onal elements to framework n Costly and difficult—seldom successful approach n Organized around func3ons in the process framework n Similar to reengineering approach
(Excep9on – mergers or dives9tures) Ø At most disrup3ve—restructures the organiza3on
chart to match process framework Ø At least disrup3ve—changes the organiza3on chart
to resolve gaps or overlaps
� Overlay MAP exis3ng structures to framework
n Faster—less opposi9on
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Cross-Functional Processes Exist…
... but when they are not managed n Processes are ad-‐hoc and inconsistent
n Management is unmonitored and uncontrolled
n Management is using poor or inappropriate measurements – if measuring at all
n Process workers have limle insight into upstream and downstream impacts
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Defining Cross-Functional Processes
� Best prac3ce organiza3ons leverage frameworks to define cross-‐func3onal flow
� Refer to consistently defined and commonly used building blocks n Defini3on is based upon specific elements
of process framework n Contextual reference is valuable to iden3fy
process gaps and overlaps
� Iden3fy each sub-‐process n Consistent documenta3on n Accurate defini3on
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2.0 Develop & Manage Products & Services
3.0 Market and
Sell Products & Services
4.0 Deliver Products & Services
5.0 Manage Customer Service
1.0 Develop Vision and Strategy
Crucial Cross-Functional Processes Can Often Require Multiple Handoffs
6.0 Develop & Manage Human Capital
7.0 Manage Informa:on Technology
8.0 Manage Financial Resources
9.0 Acquire, Construct, and Manage Property
10.0 Manage Environmental Health and Safety (EHS)
11.0 Manage External Rela:onships
12.0 Manage Knowledge, Improvement, Change
Build New Facility
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Cross-Functional Process Strategies
� Thousands of cross-‐func3onal processes exist in typical organiza3on n Focus on cri3cal few n Iden3fy owner early n Orchestrate components n Iden3fy first, improve later n Go only as far as you need to go—
make sure what you are doing is valuable
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Cross-Functional Process Governance
� Each iden3fied cross-‐func3onal process must have an owner n May not perform the process themselves n Accountable for process results, integrity,
and improvement n Open a func3onal or product manager n Open one of many that rely
on the process Ø Act as a focal point for
the process Ø Coordinate and collaborate
to gain buy-‐in
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Real World Cross-Functional Example: Order-to-Cash
� Assump3ons n Marke3ng is complete n Organiza3on is ‘build to stock’ rather than ‘build to
order’ n Offer terms of ‘Net 30’ n Products are in stock n No customer order inquiries
Take Orders
Fulfill Orders
Shipping & Logis:cs
Invoicing, Payment & Receipt
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Example: OTC – High-Level � Which process
categories are involved?
§ 3.0 Market and Sell Products and Services
§ 4.0 Deliver Products and Services
§ 8.0 Manage Financial Resources
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Example: 3.0 Market& Sell Products/Services (Take Orders & Check Availability)
Take Order
Check Availability
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Example: 4.0 Deliver Products/Services (Fulfill Orders, Shipping & Logistics)
Pick, Pack & Ship
Deliver
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Example: 8.0 Manage Financial Resources (Invoicing, Payment & Receipt)
Invoicing
Payment & Receipt
Check Credit (part of sale?)
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Analyze How Pieces Fit Together
ORDER TO CASH
3.5 Develop and Manage Sales Plans
4.5 Manage Logis:cs and Warehousing
8.2 Perform
Revenue Accoun:ng
8.2.2 Invoice
Customer
8.2.3 Process Accounts
Receivable
4.5.3 Operate
Warehousing
4.5.4 Operate Outbound Transporta:on
8.2.1 Process Customer
Credit
3.5.4 Manage Sales Orders
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Benefits Take Effort to Realize
� Benefits may be elusive if you don’t monitor and control n Establish performance targets n Support roll-‐out and transi3on n Measure and evaluate effec3veness n Communicate and collaborate with all players
� Uncoordinated changes may break con3nuity
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Summary � Key principles that make frameworks effec3ve
n What, not how
� Overcoming barriers to end-‐to-‐end process management n Ownership of both framework elements and cross-‐func3onal
processes n Focus on cri3cal few
� Aligning to what leaders care about n Evaluate elements in framework for impact n Priori3ze, select and manage improvements
� Accelera3ng your journey to higher process-‐based performance