session 8: process critique - cis.gsu.edu© richard welke 2008-12 cis4120fa12 session 8: process...

© Richard Welke 2002

CIS 4120 Fa12: Define/Innovate BP’s

Richard Welke Director, CEPRIN

Professor, CIS Robinson College of Business

Georgia State University Atlanta, GA

Session 8: Process Critique

CIS4120Fa12 Session 8: Process Critique © Richard Welke 2008-12 2

Getting from As-Is to To-Be

Value metrics Performance

measures associated with

the client’s perception of

value (tend to be external,

effectiveness related) Process

metrics Performance

measures associated with

the process owner’s key-performance-

indicators (KPI’s) for how well the process functions

Submit screenplay

Decision to produce

Submit-‐to-‐Decide

“As-Is” P-metrics

“As-Is” V-metrics

Submit screenplay

Decision to produce

Submit-‐to-‐Decide

“To-Be” P-metrics

“To-Be” V-metrics

As-Is Service-Process

To-Be Service-Process

Service-Process

Innovation &

Improvement

Improvement

Innovation

How we’re doing it

What we’re doing

Metrics drive the transformation

CIS4120Fa12 Session 8: Process Critique © Richard Welke 2008-12

Things to note with critique The process (operational) and value (customer) metrics should justify your changes

Your “ROI” (and business case) will be based upon these

As you move through the critique/improve/innovate stages following process discovery you’ll likely:

Discover new metrics Adjust definitions, measures and units of previous metrics Clarify which metrics are the true “key performance indicators” (KPI’s) – the two or three most important

Question: What *is* a KPI (in operational terms)? Can you relate it to CSF (critical success factor)?

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How BPM (should) approach improvement

Set target based on “to-be” model Start by implementing the “as-is” model (with minor changes) Increment towards “to-be” gathering operational data and feedback

Can use collected operational data to support Six-Sigma/Lean efforts

“As-Is” “To-Be”


Improvement vs. innovation

Improvement Innovation

Level of change Incremental Dramatic

Starting point Process (inside-out) Client (outside-in)

Frequency of change Continuous Discrete end-point

(can use increments to get there)

Support needed Process owner Client owner

Risk Moderate High (moderated if incremental used)

KPI focus Operational metrics Client value metrics

Substantially adapted from Thomas H. Davenport: Process Innovation: Reengineering Work Through Information Technology, Harvard Business School

Press, 1992.


Shapiro’s seven process critique questions

1. Rethink 2. Reconfigure 3. Resequence 4. Relocate 5. Reduce 6. Reassign 7. Retool

Adapted from: Stephen Shapiro

The 24/7 Innovation www.24-7innovation.com

Question Apply when….. How can activity frequency be reduced or increased?

An activity is non-value added but necessary There is low variation in the process or product There is high variability and low setup costs and times

How would more information enable greater effectiveness?

Higher accuracy is needed Greater segmentation would yield greater marketing effectiveness

How would less information or fewer controls improve efficiency?

A high proportion of costs goes to data collection and controls The value received from information or controls is minimal Absolute accuracy is not necessary

How can critical resources be used more effectively?

Utilization of key resources is low Critical resources are performing non-value-added or waste work

7R’s of process innovation

Example questions & “apply when’s”


Shapiro’s “Re-Configure” suggestions

Question Apply when ... R2.1: How can this activity be

eliminated? They are low-value or waste activities Processes have a low value density Value received from activity is minimal (e.g., approving small amounts)

R2.2: How can common activities be consolidated?

Common activities are performed in multiple locations Common activities are performed inconsistently There are economies of scale (e.g., shared services)

R2.3: How can reconciliation be reduced by putting quality at the source? Think client self-serve.

A lot of time is spent reconciling paperwork and correcting errors There is little accountability for errors

R2.4: How can intermediaries and non-value added work be eliminated?

Intermediaries add no value, and just relay goods, services

R2.5: How can best practices from other industries be borrowed and improved upon?

When you have access to practices in other, similar organizations or processes (books, trade magazines, vendors, professional org’s)


Shapiro’s “Re-Sequence” suggestions

Question Apply when…..

R3.1: How can utilization predictions increase efficiency?

Accurate information on customer demand is available early Forecasting models have proved reliable Time compression is more critical than accuracy or inventory costs Product or service variations are relatively low

R3.2: How can postponement increase flexibility?

Customers want customized products or services Inventory carrying costs are too high Forecasting models have proved inaccurate

R3.3: How can concurrency reduce overall completion time?

There are limited timing dependencies between activities Time compression is critical Rework is necessary due to late error detection

R3.4: How can the number of interconnections and dependencies be minimized?

Where there are bottlenecks, large queues, or frequent handoffs


Shapiro’s “Reduce” suggestions

Question Apply when…..

R4.1: How can the frequency of the activity be reduced or eliminated?

An activity is non-value added but necessary There is low variation in the process or product There is high variability and low setup costs and times (e.g., small lot sizes)

R4.2: How would more information enable greater effectiveness?

Higher accuracy is needed Greater segmentation would yield greater marketing effectiveness

R4.3: How would less information or fewer controls simplify and improve efficiency?

A high proportion of costs goes to data collection or controls The value received from information or controls is minimal Absolute accuracy is not necessary

R4.4: How can critical resources be used more effectively?

Utilization of key resources is low Critical resources are routinely performing non-value-added or waste work


Shapiro’s “Re-Assign” suggestions Question Apply when….. R5.1: How can existing activities

and decisions be moved to a different organization?

Another organization has skills or resources you lack You want different branding It is too difficult to change previous operating model or culture

R5.2: How can the activity be outsourced?

You don’t perform the activity at world-class levels Another organization performs this activity at world-class levels You have limited resources and want to focus on core competencies

R5.3: How can the customer perform this activity?

Customers want to be empowered to help themselves (self-serve) Certain customer segments are not profitable Costs need to be reduced

R5.4: How can the organization perform an activity that the customer is already performing?

The customer wants more value and/or convenience The organization wants to get closer to the customer

R5.5: How can cross-training integrate and compress tasks?

Multiple tasks are needed to produce an outcome Processes are not complex enough to justify a specialist Only 20% of cases or less require special expertise


Shapiro’s “Re-Tool” suggestions

Question Apply when….. R6.1: How can the activity be

automated? The current process is paper-based or manual and cannot be eliminated The activity suffer from errors, inconsistency, or reconciliation problems Greater transaction volumes are needed

R6.2: How can assets or competencies be leveraged to create competitive advantage?

You have world-class competencies Growth potential in the existing business looks bleak

R6.3: How can up-skilling, down-skilling or multi-skilling improve the process?

Customer satisfaction is low (up-skilling) Multiple specialists are needed to produce an outcome (multi-skilling) Technology can create knowledge workers (down-skilling)

CIS4120Fa12 Session 8: Process Critique © Richard Welke 2008-12

Improvement annotation suggestions Use color-coding of the process model to indicate where changes are to be made

The ‘As-Is’ would indicate which activities, gateways, etc. will be changed The ‘To-Be’ would indicate where new activities, etc. are introduced Use different colors for different major objectives being achieved (i.e. the primary metric being affected)

Use the same color for the As-Is and To-Be Use annotation to further highlight principle changes and/or objectives

People will read a model more easily than a lot of text so make the models work for you!

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