August 17, 2017

Closing the Business and IT Divide

Millions of dollars spent, countless hours wasted, and frustrated business users seem to be fairly standard outcomes when IT and business try to work together. While this problem seems apparent, little progress has been made. What is happening?

I believe two key factors are in play. First both the IT and business folks are operating under a number of faulty assumptions. Here are some flawed assumptions from the IT perspective.

  • Business users know their process.
  • Business users know what is wrong with the process and how to fix it. (Give me an IT solution even if that is not the problem.)
  • There is no value in doing an “as is” flow chart.
  • If we do an “as is” map, then let’s put every variation of the process on one map. (It ends up looking like spaghetti and meatballs.)
  • IT can go it alone, and IT professionals sometimes try to be heroes, and will attempt to make things work even if no one else does their part.
  • We don’t have the time to do a lot of analysis because business wants a quick solution. (Which may be true, but is damaging.)

From the business side, here are some flawed assumptions:

  • IT is the only solution to the problem.
  • I (the manager) have already figured out what IT solution I need, just implement it.
  • I (the manager) know the process well. At least I know what they “should be” doing.
  • I (the manager) know what’s wrong with the process.
  • Business users know what their customers want. (A customer is the entity at the end of the process and receives the output.)
  • Business expects that IT will take care of everything, with little or no effort on anyone else’s part. (Which may be true, but is damaging.)
  • We don’t have the time to do a lot of analysis because we want a quick solution. (Which may be true, but is damaging.)

The second factor which causes the divide is a deficient methodology. I researched the International Institute of Business Analyst’s Body of Knowledge (IIBABOK), Version 1.6. While the scope is wide, there are some glaring omissions.

IT folks spend a considerable amount of time gathering requirements. From the IIBABOK, Chapter 4: Requirements Elicitation, here is the intended audience.

• Marketing

• Project team

• Subject matter experts

• Primary and secondary stakeholders

• Current/potential users of a system.

Interestingly there is no mention of the Customer. (The customer can be internal or external. The customer is the entity at the end of the business process and receives the output.) What does the customer of the process need, want, expect, or desire? The most important group in any improvement methodology is the customer. The Customer requirements are critical since I believe the purpose of all business processes is to meet or exceed customer requirements. Both Six Sigma and Lean methodologies are built around customer requirements. Shouldn’t we find out how the process is performing based on customer requirements? I have numerous examples of where the business users guessed what their customers wanted. When we interviewed the customers, we found the guesses to be way off target.

The next problem in the IIBABOK is generating the process model. According to the IIBABOK, a workflow model represents:

• business activities,

• the sequential flow of these activities,

• the persons who perform the work,

• key business decisions that affect the flow of work, and

• the start and end points of the process flow.

In addition to the diagram, some textual information is also required to ensure that the diagram is useful and understandable. For example, each activity requires at least a meaningful description. Other information, such as process volumes (e.g. time, costs, resources), may also be collected.

 

The main omission in the above is finding out what’s wrong with the current process. In my 21 year career as a process improvement consultant, I have yet to find a perfect “as is” process. How can you create a better process if you don’t know what’s wrong with the current one?

 

When we analyze processes we look at the process from various perspectives which I call “lenses of analysis.” The lenses are:

Customer satisfaction (As mentioned earlier)

Worker frustration

Quality issues (Six Sigma and Lean methodology)

Timeliness issues (Lean Methodology)

Cost (Activity Based Costing)

Waste (Lean Methodology)

 

I seldom use all six lenses. My favorites are customer satisfaction, worker frustration, quality issues, and time. After we have analyzed the process and found issues, problems, and key data, they are then placed on the “as is” flow chart so everyone can see them.  By making the problems visible, it:

  • Helps pinpoint problem areas
  • Shows that the “as is” needs fixing. We can’t just automate the
    “as is.”
  • Allows everyone to reach agreement on prioritization of problems
  • Identifies some obvious solutions
  • Shows many solutions require no IT
  • Is an excellent way to gather requirements
  • Makes the case to senior management to make the change
  • Reinforces that the problem is the process, not the people.

 

We propose another methodology to do process analysis, gather requirements, and create a new process. We think this methodology addresses the faulty assumptions mentioned earlier and at the same time overcomes the shortfalls in the IIBABOK approach. As you examine the approach, you will find that the IT representative is part of a team. And it is the team that identifies problems, finds solutions, and invents the new process. IT is there to enable the improved process.

 

This methodology has four phases and ten steps.

 

Phase 1:  Getting Started

 

1.         Introduction to Business Process Improvement:  This step is comprised of two parts.  The first is a meeting with senior management. In this meeting there is a discussion regarding barriers to process improvement, impact of job change, clarifying roles and responsibilities, identifying the project manager, and creating the communication plan to staff. The second part is an all-hands meeting to launch the effort and answer questions from staff.

 

2.         Process Improvement Team Formation:  The team is largely comprised of the people who work in the process.  We look for those who want to make a change and are considered the best and the brightest. One team member comes from outside the targeted process. This person is “hard-wired” to ask “why.” We call this person the Maverick. It is this person’s job to challenge the team to think outside-the-box. The team has a representative from IT. This person will learn in detail the “as is” process and the problems with the “as is.” She will be very helpful when the team creates the “to be” process. The team also has a facilitator and a project manager. The first work of the team is to create ground rules on how they want to function. Next the team crafts a communication plan to all affected stakeholders.

 

 

Phase 2:  Flow Charting, Interviewing and Benchmarking

 

3.         “As Is” Flow Chart:  Flow charting is a technique that allows us to map the current process in detail.  To create an accurate “as is” map, the team remembers a time in the past when the process occurred.  This is a true “as is” because this really happened. While this is only one variation of the process, other key variations are mapped on separate documents. By remembering a time in the past, it allows the “as is” map to be created very quickly. The process is documented in terms of time, poor quality, and where frustration occurs.  The bottlenecks, delays, areas of poor quality, and high frustration areas are ranked and prioritized.  Through process mapping, the team will identify which process design principles should be used in the redesign.

 

4.         Customer Interviews:   The customers of the process are interviewed to discover what they think of the current process, what they like about it, and what they do not like about it.  The process is evaluated by the customer in terms ranging from “excellent” to “unacceptable.”   In addition to interviewing customers, the staff members that work in the process but are not part of the Process Improvement Team are also interviewed to get their ideas, comments, and suggestions.  All of this information is shared with the team, Project Manager, and Senior Management.

 

5.         Benchmarking and Best Practices:  Often, other organizations have discovered innovative ways to design processes.  Instead of “reinventing the wheel,” we find out who does this process the best.  Members of the team will develop questions and then interview innovative organizations.  This information is shared with the team in order to incorporate the best ideas into the redesign.

 

Phase 3:  Process Redesign

 

6.         First Cut Redesign:  Since the IT representative now knows the process very well, we ask this person how IT can enable the changes the team is thinking about. We then ask each team member to create a new process that incorporates design principles, customer feedback, fixing frustrations, fixing quality problems, eliminating non-value added steps, and information technology. This task is done with a “clean sheet of paper.”  We ask:  “If we were to invent this process today with what we know, what would it look like?”  Here we are looking for “out-of-the-box” thinking and innovative ideas.  Process design principles significantly enhance creating the new process. Process design principles are distilled best practices from world class organizations. The team also creates a list of things necessary to bring about the redesign.  These items become action items when we move into implementation.

 

7.         Share Redesign with Senior Executives, Employees and Customers:  If the redesign has any controversial elements or requires major capital outlays, then the Senior Executives need to review and approve the plan.  Turf issues and other types of resistance may surface at this time.  In addition, the redesign is shared with the rest of the people that work within the process in order to get their ideas, comments, and suggestions.  If some customers are available and involved, the redesign is shared with them as well.  This type of feedback is extremely helpful and is used in the final redesign.

 

8.         Final Redesign:  Any changes that were required from the Senior Executives, the staff, and customers have now been incorporated.   Key items get prioritized, and the project is now ready for implementation.

 

9.         Implement Changes:  This stage of process improvement is often the hardest to gauge in terms of time, resources, and obstacles.  The project manager makes sure that everything gets done on time and that people meet their commitments.  Action plans are developed and assigned. The IT representative will begin implementing the key requirements which might require software changes, writing code, and equipment upgrades.

The facilitator can work with the organization to address obstacles that arise.  He can smooth the transition into the new process and help people adjust to new ways of working together.  Sometimes simulations or pilot programs are initiated in order to test the new design before a complete changeover is made.  This reduces risk and allows for a smoother transition.

 

 

Phase 4:  Celebrate Results and Continuous Improvement

 

10.       Monitor Results and Continuous Improvement:   At this point the Process Improvement Team has made significant, measurable progress in improving the process.  Feedback mechanisms, measurements, and continuous improvement become embedded in the process.  The team is rewarded and recognized for its accomplishments.  Expect the team to continue to meet on some regular basis.  Improvement in cycle time and quality will be an ongoing part of your organization’s culture.

 

We have been using the above methodology for 22 years with great success. The keys are:

Strong project manager

Senior management commitment

At least one bright team member

The IT person knows the technology cold

 

Let’s close the IT and Business divide. I think the above is a big step in that direction.

 

If you would like to discuss any aspect of this article feel free to call (925-459-8755) or email me (dan@valuecreationpartners.com).

What does the law, policy, rule, directive, etc really say?

When we are engaged in a process improvement effort it is not uncommon for someone to say, “The policy says we can’t do that.” Since this person has been with the organization a long time, we accept that pronouncement. However, I have found in about 50% of the cases, the interpretation of of the law, policy, rule, etc is wrong. In fact it can be radically incorrect.

I tell the folks on the team I am from Missouri. The Missouri state slogan is “Show me.” So when a policy, rule, or law is mentioned, I say “show me.” What I find is often surprising. I think there is a tendency in organizations to gradually drift to being more conservative. Consequently, the organization becomes more and more handcuffed.

Statements around policy, laws, directives, and rules often don’t challenged. But they should be challenged. You might be amazed by what you find. I know I  have.

Risk-Free Process Improvement for the Public Sector

Many public sector organizations are stuck in the status quo. Why is that? There are a couple of reasons:

In some places, the pressure to change has not reached a critical level.

Making changes entails risk. The perceived risks outweigh the rewards.

The current budget situation has been placing huge stress on many public sector organizations. The typical response has been to cut services, since these leaders do not see the waste that exists in their organizations. People who practice “lean” techniques can identify waste and then apply methods, techniques, and countermeasures to eliminate or shrink these wastes. If waste could be cut 20-30%, services could likely be maintained. Our Analyzing and Improving Office and Service Operations (Lean Office) seminar trains participants to see waste in their own organizations. By using lean tools and techniques, these wastes can be dramatically reduced.

What about the risk of making changes? A mistake in the public sector is disproportionately punished, especially if the mistake gets in the news. It is safer to maintain the status quo, even though the status quo is incredibly inefficient. So what can be done to make change safe?

The first and most important step is to test, practice, simulate, or role play the change. If we were using a military metaphor, we would not be using live ammunition. Of if we use a sporting metaphor, this is what a professional football team does from Monday through Saturday, practice. Hardly any organization tests, practices, or experiments with the changes they are considering. They go from idea to doing. Then they pick up the pieces.

If we precede every process change with a safe test, experiment, role play, or practice, then we can work out the “bugs” until things are going smoothly. We can do “what if” analysis in our practices, tests, and experiments. We can stress the new process until it breaks. Once our testing, practice, or role play is running smoothly, then we can up the risk a little.

The next step is to conduct a pilot program with the new process. Here we are using “live ammunition” so if something goes wrong it could have negative consequences. We reduce the risk by watching and monitoring the pilot very closely so we can react immediately to any issues. Secondly, because it is a pilot, the process change has not been rolled out extensively. Once the pilot has been operating successfully for some time, then we can begin to expand the process change in other areas. In fact, those who worked in the pilot can become trainers for others in the organization.

Make testing, practice, experiments, role plays, and simulations a part of your organizations change management approach. Stress the process change in a safe way to find its weaknesses. Do “what if” analysis in your practice or role plays. These techniques allow you to safely change your processes while dealing with the pressures of budget reductions. Manage the organization in a state-of-the-art, best practice fashion. Continue to deliver needed services, even though your budget is reduced. If you want to learn how to experiment, practice, test, or role play process changes, contact us at 925-459-8755.

Improving Business Results Through Process Management

Business processes constitute a significant portion of an organization’s operating costs. And the more bureaucratic an organization is – the greater the potential to reduce operating costs. Management silos (hierarchical structure) can be devastating to an organization’s performance and cost structure. Walls need to be torn down, and the internal customer/supplier model embraced.

Unfortunately, line and staff departments have become too myopic or insular. Process management is imperative in order to manage and improve cross-functional business processes. And the more process-centric an organization is – the more performance-driven it will be. If you think you can be customer-centric, without being process-centric – think again. Processes must put the customer first.

Process Management Introduction

The stark reality is that processes (especially cross-functional processes) are usually not documented, not systematically and continually improved, and not managed. So why improve and manage processes? Simply, processes are the fundamental building blocks for achieving business results, and streamlined processes are critical to building and maintaining a competitive edge.

When I ask a client to give us a snapshot of their business, the discussion usually starts off with their history, an overview of products and services, core capabilities, and even their customer base. Along the way, an organization chart is typically thrown into the fray. But, perhaps the most revealing snapshot of all is an “organizational map” that shows the interrelationship of company-wide key business processes.

An organizational map is a top-level blueprint of the fundamental structure for an enterprise. This macro-level flowchart shows the interrelationship of business processes at a twenty-thousand foot elevation. It is the foundation from which to build an agile, competitive organization. Yet, alarmingly few organizations have taken the time to construct this “capstone” document.

Process Management begins the process of visualizing the organization as a whole – determining how one aspect of the system affects another. Leaders need to extend their vision beyond the project or function – beyond their department – to see the organization through a new set of glasses. They must focus on those key business processes that affect business objectives and critical success factors. Leaders must be visionary, and they must see the world anew.

Process Management Focus Areas & Tools

There are three general focus areas. These are: (1) making business processes effective – producing the desired results; (2) making processes efficient – minimizing the resources needed; and (3) making processes adaptable – being able to adapt to changing stakeholder and customer business needs.

An integrated holistic approach is essential to process management. Process mapping and flowcharting (down to the task level) are central to this effort. You can use a combination of several process flowcharting techniques – process maps, block diagrams, standard flowcharts, functional flowcharts, and geographic flowcharts. But remember, the journey starts with an “organization map – a macro-level flowchart.”

Process maps provide a composite overview of the business process, from an organizational context. Block diagrams provide a quick overview of a business process. Flowcharts are used to analyze the detailed interrelationships of a business process, and geographic flowcharts illustrate the process flow among locations.

Process Management Roadmap

A systematic approach (roadmap) is needed to improve business performance. There are proven strategies, methods, and tools to create a streamlined organization with a significantly lower cost structure. An integrated process management approach should link the organization’s mission, culture, business objectives, and key processes.

Our methodology consists of ten integrated tools and/or steps:

  • Bureaucracy elimination – remove unnecessary administrative tasks, approvals, and paperwork.
  • Duplication elimination – remove identical activities that are performed at different parts of the business process.
  • Value-added assessment – evaluate every activity in the business process to determine its contribution to meeting stakeholder/customer requirements.
  • Task elimination/simplification – reduce the overall complexity of the process.
  • Process cycle time reduction – determine ways to compress cycle time to meet or exceed stakeholder/customer expectations, with fewer resources.
  • Error proofing – make it difficult to do the activity incorrectly, while standardizing the activity at the same time.
  • Problem definition/solving – utilize a problem solving methodology (roadmap) that focuses on identifying and eliminating root causes.
  • Technology/automation considerations – apply technology platforms and enterprise/legacy applications in innovative ways.
  • Business process reengineering – use a radical approach to change the process, when the previous streamlining methods have not provided the desired results.
  • Performance measurement – identify appropriate performance measures that will paint a composite picture of the business process performance.

Process Management Absolutes

There are a dozen process management absolutes that must be considered when you embark on a process management journey. You might also view these as “best practices.” Either way, these are critical to success:

  • Ensure management commitment upfront
  • Create an environment where departments are partners, not competitors
  • Reward cross-functional collaboration
  • Take a disciplined, integrated approach to process improvement
  • Allocate resources based on process needs
  • Link process improvement initiatives to your strategic plan
  • Identify critical business issues to drive improvement
  • Ensure that product and service processes are customer-driven
  • Put comprehensive and reliable process metrics in place
  • Define and implement strategies to keep each process measure in control
  • Measure levels of internal/external customer satisfaction for each process
  • Reward individuals for their contributions to process improvement

For more information on Process Management, contact Value  Creation Partners (925) 459-8755