where is your organization on the journey to becoming
TRANSCRIPT
Where is your Organization Where is your Organization on the Journey to on the Journey to
becoming Process Based ?becoming Process Based ?
Pat Dowdle Pat Dowdle Process Strategy GroupProcess Strategy Group
ABPMP Chicago Chapter February 10, 2009
Copyright © 2009 Process Strategy Group, LLC 22
AgendaAgenda
Key Principles of Process Based Key Principles of Process Based ManagementManagementKey Findings on the JourneyKey Findings on the JourneyA Roadmap and an Assessment A Roadmap and an Assessment Are you Ready for PBM? Are you Ready for PBM?
Copyright © 2009 Process Strategy Group, LLC 33
WhatWhat’’s the Big Deal About Process s the Big Deal About Process Based Management?Based Management?
Processes are Processes are howhow you provide products you provide products and services to their customersand services to their customers
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In RealityIn Reality……
Most Most do notdo not manage manage their processes, their processes,
or they manage or they manage processes in isolationprocesses in isolation
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The ResultThe Result……
Most companies Most companies do not managedo not manage how they how they provide services to their customers.provide services to their customers.
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Bad customer experiences:Bad customer experiences:
Changing a telephone carrierChanging a telephone carrierResolving problems on your computerResolving problems on your computerFixing an error on your credit reportFixing an error on your credit reportResolving a medical billing errorResolving a medical billing errorTimely response to a voice mailTimely response to a voice mailAirline flight delaysAirline flight delaysPhone tree hell Phone tree hell
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Questions for you: Questions for you:
How are you involved in process efforts?How are you involved in process efforts?Does your organization manage processes?Does your organization manage processes?Do you use your SOX efforts for compliance and Do you use your SOX efforts for compliance and process improvements?process improvements?Do you have process owners for your key Do you have process owners for your key processes?processes?Do you have a view of your organization that is Do you have a view of your organization that is different than the organization chart?different than the organization chart?
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Current Pains ..Current Pains ..Require a Process Focus:Require a Process Focus:
Products/services donProducts/services don’’t meet customer t meet customer expectationsexpectationsCompetitors are getting ahead on Competitors are getting ahead on price/product/service.price/product/service.Downward price pressureDownward price pressureChallenge of ERP and CRM to deliverChallenge of ERP and CRM to deliverInitiatives are poorly linkedInitiatives are poorly linkedCompliance mandates (SarbanesCompliance mandates (Sarbanes--Oxley)Oxley)
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What is Process Based What is Process Based Management?Management?
A holistic management approach that focuses A holistic management approach that focuses on:on:
Promoting a processPromoting a process--based based culturecultureManaging Managing endend--toto--endend business processes to business processes to continuously improve cost, time and quality of continuously improve cost, time and quality of products and services delivered to customersproducts and services delivered to customersUnderstanding and meeting Understanding and meeting customer customer expectationsexpectationsIntegratingIntegrating diverse initiatives into a processdiverse initiatives into a process--oriented oriented approachapproachLinkingLinking incentives and compensation to process incentives and compensation to process performanceperformance
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Customer Expectations
• Leverage existing programs• Identify linkages• Develop common terminology
• Processes named• Boundaries identified• Standard methodology• Infrastructure established
• Measurement Architecture• End-to-end performance• Best Practices • Benchmarks
Process Based Management Process Based Management
End-to-End Processes• Classification• Portfolio• Structure
Mindset / Culture
• How things are done• Values, Rules, Practices
• Awareness & Communication• Executive leadership• Process included in strategy
• Process Performance• Incentives / Compensation
Process-based measures
• ABC/M• ISO/Quality Standards• Baldrige• Six Sigma, etc
Initiative Integration
• Voice of the Customer• Customer driven Products & Services
A holistic management approach that focuses on:
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PBM vs. BPM ,etcPBM vs. BPM ,etc
How is PBM different from other 3 letter How is PBM different from other 3 letter process acronyms?process acronyms?
Focused on the management approachFocused on the management approachIndependent of any specific tool, method or Independent of any specific tool, method or softwaresoftwareIs driven from the business with partnershipsIs driven from the business with partnershipsA robust assessment and roadmap to guide A robust assessment and roadmap to guide organizationsorganizations
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Process Based Management at CAMProcess Based Management at CAM--II
• 1994-1997• Experiences of 7 companies heavily engaged
in reengineering, with negative consequences• Developed an approach to becoming process based
• 1998-2004• 5 case studies and additional research• Developed the PBM Loop for evaluating implementationprogress
• Collaborative research 2004-2008• Developed:
• PBM Implementation Roadmap • Assessment Framework
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Findings from PBM Case Studies Findings from PBM Case Studies and Research: Required Actionsand Research: Required ActionsMindset shiftMindset shiftIntegration of initiativesIntegration of initiativesExecutive engagement and commitmentExecutive engagement and commitmentProcess GovernanceProcess GovernanceProcess performance measuresProcess performance measures““ProcessProcess”” for Process Based Managementfor Process Based ManagementLong term perspectiveLong term perspective
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Impact of Business Process Orientation:Impact of Business Process Orientation:Research results showed that Research results showed that withinwithin an an
organization:organization:
Greater levels of BPO reduced Greater levels of BPO reduced interfunctionalinterfunctional conflict and conflict and improved interdepartmental improved interdepartmental ““connectednessconnectedness””..
The greater the level of BPO, the greater the organizational The greater the level of BPO, the greater the organizational performance.performance.
•• 16.6% increase Leads to 19.4% performance improvement16.6% increase Leads to 19.4% performance improvement
The greater the level of BPO, the greater the organizational The greater the level of BPO, the greater the organizational esprit de corps.esprit de corps.
Per Dr Kevin McCormack (Business Process Maturity: Theory and Application; 2007)
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On the Journey On the Journey ……..to become Process Basedto become Process Based
Assess where you areAssess where you are
Develop steps to get to your objective Develop steps to get to your objective
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Why a PBM AssessmentWhy a PBM Assessment
Evaluate progress in implementation Evaluate progress in implementation Benchmark other business unitsBenchmark other business unitsFeedbackFeedback on strengths and opportunitieson strengths and opportunitiesDefine a path forwardDefine a path forward
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Assessment CategoriesAssessment Categories
Governance
Culture & Adaptation
Strategy & Planning
Deployment&
IntegrationEvaluation
Process Knowledge Management
Organization Profile
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Why an Implementation RoadmapWhy an Implementation Roadmap
To address issues like these: To address issues like these: where do we startwhere do we startwe arenwe aren’’t making progress t making progress wewe’’ve encountered roadblocksve encountered roadblockswhere do we focuswhere do we focuswe still act like functionswe still act like functionswe do not leverage our IT Projectswe do not leverage our IT ProjectsII’’m concerned this will not stick m concerned this will not stick
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AwareCommitted
EngagedManaged
Integrated
Embedded
Realized
DiscoveryDiscovery
FoundationFoundation
TransitionTransition
Transformation
InstitutionalizeInstitutionalize
OptimizationOptimization
Management of individual process(s) Process Based Management
The Roadmap to PBM The Roadmap to PBM
Defined Defined ““PathwaysPathways”” for moving between Stagesfor moving between StagesIdentified detail steps for each PathwayIdentified detail steps for each Pathway
What, Why, How, WhoWhat, Why, How, WhoInputs & OutputsInputs & Outputs
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RoadmapRoadmap
Pathway steps
Pathways to PBM
PBM Stages
AssessmentAssessment
Suggested Action plans
Gaps in implementation
Stage of PBM
Implementationof Action Plans
Diagnosis Prescription
PBM PBM –– Check up and PrognosisCheck up and Prognosis
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AwareCommitted
EngagedManaged
Integrated
Embedded
Realized
DiscoveryDiscovery
FoundationFoundation
TransitionTransition
Transformation
InstitutionalizeInstitutionalize
OptimizationOptimization
Management of individual process(s) Process Based Management
The Roadmap to PBMThe Roadmap to PBM--Discovery Discovery
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Discovery Pathway Discovery Pathway
Key Outputs:
• Readiness profile• Inventory of methods, initiatives and tools• PBM Implementation Plan, including the Communication Plan
Key Roles:
• Advocacy Group• Sponsor• Senior Leaders
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PBM Assessment OverviewPBM Assessment Overview
Strategy & PlanningExamines how your business strategy and Process Based Management (PBM) strategy integrate. Evaluates how the
organization executes its plan for implementing and continuously improving PBM.
GovernanceExamines the roles, responsibilities and structure in place to
oversee the implementation and
management of PBM.
Deployment & IntegrationExamines the extent to which PBM
deployment has been achieved, your approach for cross-process
integration, alignment with improvement methodologies, and
stakeholder involvement.
EvaluationExamines how measures
are designed and monitored to track the
implementation of PBM. Evaluates PBM
implementation against leading practices.
Process Knowledge ManagementExamines the structure and practices for capturing and utilizing process
knowledge.
Culture & AdaptationExamines how you communicate PBM strategy, develop and maintain PBM competencies, and adapt your culture to
PBM.
Organizational ProfileProvides an overview of the organization’s efforts toward Process Based Management.
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Exercise : SelfExercise : Self--AssessmentAssessmentScore how well your organization is doing in each of the categorScore how well your organization is doing in each of the categoriesiesScore on scale of 0 Score on scale of 0 --1010
CategoriesCategories ScoreScore
Strategy & PlanningStrategy & Planning
GovernanceGovernance
Deployment & IntegrationDeployment & Integration
EvaluationEvaluation
Process Knowledge ManagementProcess Knowledge Management
Culture & AdaptationCulture & Adaptation
Total Score -
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AwareCommitted
EngagedManaged
Integrated
Embedded
Realized
DiscoveryDiscovery
FoundationFoundation
TransitionTransition
Transformation
InstitutionalizeInstitutionalize
OptimizationOptimization
Management of individual process(s) Process Based Management
The Roadmap to PBMThe Roadmap to PBM--Foundation Foundation
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Foundation Pathway Foundation Pathway
Key Outputs:
• Process Classification Framework• Selection of a Process Improvement Methodology• Establishment of a PBM Office (including budget)• Establishment of the Process Council• Appointment of Process Owners for Prioritized processes
Key Roles
• Process Advocacy Group/ PBM Office• Process Council• Process Owners• Senior Leaders
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Background
Classification FrameworkClassification Framework
Identity
Priority
Mandated
DefinitionDefines the company for itself, its customers and its investors.
Strongly influences how well identity processes are carried out.
Processes that are legally required.
Processes which support daily operations.
ExampleFed Ex - Guaranteed on-time deliveryMcDonalds - Speedy, consistent food preparation
Fed Ex - Airplane operationsMcDonalds - Food supply management
Regulatory reportingIncome tax filing
Many administrative & overhead functions like payroll processing, accounting, office management
Adapted from: The Process Edge, Peter Keen - 1997
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Dept CDept A Dept B
Company X
Customer
Activity BActivity B
Activity AActivity A Activity CActivity C
Activity FActivity F
Activity XActivity X
Activity YActivity Y
Activity ZActivity Z
•Objective: Maximize departmental performanceManage budget centers• Separate / distinct activities
• Traditional management structure
Traditional View: Functional Traditional View: Functional
• Minimal focus on externalcustomer
• I report to my boss
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Process Classification Management Structure
Process-based Measures Initiative Integration
Dept BDept A Dept CCustomer
Activity B
Activity AActivity C
Activity F
Activity X
Activity Y
Activity Z
• Focus is on the Customer ( I report to my customer)
• End-to-end process spans functional organizations
Objective: • Customer satisfaction• Manage time, cost and quality• Competitive advantage• Retain & attract customers
Process ViewProcess View
• Delivery of value addedproducts & services
Company X
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Process Team Leader- Sub-process owner- Full-time
Process Owners- Top level management- Process & functional hats
Process Team- Subject matter experts- Rotate
•Formulate vision•Establish targets•Assess performance
•Obtain resources•Approve action plans•Integrate across processes
•Process design•Performance measurements•Oversee implementation
•Set process goals•Monitor performance•Identify improvements
Process Performers
Function Function Function
Process
Governance ModelGovernance ModelProcess Council- Process Owners- Functional top management
•Manage cross process issues•Monitor process measures•Link to strategy and op plan
•Allocate resources•Approve process changes•Manage the communication plan
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AwareCommitted
EngagedManaged
Integrated
Embedded
Realized
DiscoveryDiscovery
FoundationFoundation
TransitionTransition
Transformation
InstitutionalizeInstitutionalize
OptimizationOptimization
Management of individual process(s) Process Based Management
The Roadmap to PBMThe Roadmap to PBM--Transition Transition
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Transition Pathway Transition Pathway
Key Outputs: Key Outputs:
• Documentation of the end to end processes• Current process metrics• The measured impact of the improvements• Updated performance plans, based on the performance of end-to-end processes• Prioritized process improvement projects, based on the key drivers of performance
Key RolesKey Roles
• Process Owners• Process Teams• Process Council• PBM Office
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AwareCommitted
Engaged
Integrated
Embedded
Realized
DiscoveryDiscovery
FoundationFoundation
TransitionTransition
Transformation
InstitutionalizeInstitutionalize
OptimizationOptimization
Management of individual process(s)
Reality: Path to PBMReality: Path to PBM
Process Based Management
Managed
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Transformation Pathway Transformation Pathway
Key Outputs:Key Outputs:
• Process Governance• Cross-process integration plan• Cross-process measures and targets• Stakeholder follow up and assessment plan
Key RolesKey Roles
• Process Council• Process Owners• Process Teams• PBM Office
Create the Framework &
Governance for Cross-Process
Integration
Implement and Manage
Cross-Process Integration
Analyze Results and Take Action
Identify and Address
Stakeholder Issues
Define / Update Requirements
for Moving Forward
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Aware
Committed
Engaged
Managed
Integrated
Embedded
Realized
Pockets of process success
PBM implementation strategy
Executive support
Process governance
Classification framework
Process teams launched
Process teams operational
Managing individual processes
Goals & objectives based on process
Process Council assumes ownership of PBM
Cross process integration and measurement
PBM transformation is part of goals & objectives
PBM goals & objectives are part of the organization’s culture
Alignment of integrated processes and strategy
Process performance tied to incentives
PBM extended externally
Processes are primary structure supported by functions
CI initiatives integrated, prioritized and resourced by strategy
Management of individual process(s) Process Based Management
PBM Roadmap PBM Roadmap –– Stages & MilestonesStages & Milestones
Minimal process effortsPBM Assessment completed
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Other Items to Consider: Other Items to Consider:
Do Not map processes just to map Do Not map processes just to map mapping does not impact performance mapping does not impact performance Instead:Instead:•• improve prioritized processesimprove prioritized processes•• Measure and manage performanceMeasure and manage performance
Get people involved Get people involved not for them, but with themnot for them, but with themChange requires involvementChange requires involvement
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Are you ready for PBM?Are you ready for PBM?Specific Conditions are in place: Specific Conditions are in place:
Success with other Success with other ““managementmanagement”” techniques techniques Support for managing and integrating crossSupport for managing and integrating cross--functional processesfunctional processesSome process successesSome process successesTechnology enablers in placeTechnology enablers in place
Business requirements dictate: Business requirements dictate: Better manage customer interactionsBetter manage customer interactionsIncorporate customer requirements into processesIncorporate customer requirements into processesHolistic view of how products and services are deliveredHolistic view of how products and services are deliveredImprove cycle timeImprove cycle timePreserve process knowledgePreserve process knowledge
Copyright © 2009 Process Strategy Group, LLC 3838
More InformationMore Information
www.processstrategygroup.comwww.processstrategygroup.comPat Dowdle:Pat Dowdle:
847847--501501--43194319(([email protected]@processstrategygroup.com))