It has been a while since I added a new Blog. Living in Malta has got me into the Mediterranean ways, the holiday period here is full of festivals, with excessive drinking and eating, making me laid back and, perhaps, a little lazy. Now we are moving into winter, there is a motivation to get back to work.

I hope all those that have been following my blog have realised the importance I place on getting commitment from the top when engaging in a Performance Management project. There has to be someone with authority who has a vision of where the organisation plans to be within the next few years, and has the drive and motivation to execute plan successfully. Having Goals and Objectives for the organisation is a great way of setting an expectation with the Shareholders, Stakeholders and Employees. With a highly motivated community of people investing in an organisation the confidence and energy shines through giving customers and suppliers, assurance in the ability of the organisation, and let’s not forget they too are also investors in the organisation. They are betting their livelihoods as investors in our capability and reliability to manage our organisations successfully. We are all so intertwined, one fails and we all feel the pinch.

It takes a hiccup in the economy to focus all of us on the vulnerability of each of our lives, and how we depend on the stability, growth and profitability of the organisations in which we are employed. I am constantly reminded of the fragility of the situation each of us find ourselves in, and the utter dependency we have on the management of our counties and employers.  It has to be time for a major shakeup; we cannot rely on governments, politicians are notorious for wriggling their way out the mess they have created. It is time for all of us as individuals to demand a work environment where the performance of the company is monitored against a plan and strategy. That the plan is made available to all investors in the organisation, employees are investors, and ratified by those who depend on it. Ensuring all that have stake in the plan and benefit for its success are rewarded for their contribution. None of us have the right of employment; we have to earn the right and contribute what contracted to do.

Ok, off the soap box. Since coming back to work in Europe, I am finding things a little slower, and there is less innovation in the workplace, than I experienced in Asia. I am not going to comment on this, as the economies are more mature in the west and values are different. This will equalize out overtime, I was starting to see major changes in the work style of employs in Asia when left Asia a bout year ago.

One of the biggest failings in adopting a performance management initiative is the inability to assign accountability.

With ownership and accountability performance of the organisation cannot be measured. There have been many approaches to drive accountability through programmes such as Lean and Six Sigma initiatives. But going back to my earlier point this will happen we realise as employees our livelihood depends on our competitiveness and energy to perform. This is a mindset change and those organisations that drive change consistently through the bsuiness will the ones that succeed. Innovation comes through creating an open mindedness amongst those engaged in a common cause to succeed.

Whilst working at my current company, I was given the responsibility of developing the To-Be Business Processes in a major Project. I had to think carefully about how I was going to approach this project because I wanted to take into account that I was entering it after a considerable amount of work had already been completed.

I wanted to try and introduce into the project a more modern approach to Business Process development. The As-Is processes had been developed in Visio but not in a conventional way, never the less, they were easy to read and detailed. The To-Be processes would be built to support a new software architecture centred on a new ERP system which utilised Workflow both to support procedures in application areas and external supporting activities. 

This was a great opportunity to introduce BPMN as the process mapping notation, as I foresaw that in the future additional services would need to be developed to support the selected ERP solution. Also the internal workflow in the selected application used a BPMN like notation. In looking for a Tool I came across Aris Express, which support BPMN diagrams but had an additional advantage as it included Process Landscaping, Organisation Charting, IT Infrastructure and produces RTF documentation. This was important as I intended to include in my design some of the tools we have previously discussed in the Blog.

I will now run through the approach I have taken to the project and hope it will help all who have taken the time to read my Blog.

The Approach

1.       Analyse the RFP and tender documents plus the response to the tender and structure the key information in a mind mapping tool. The one I use for this is Freemind it’s a really great open source mind mapping tool.

2.       Map the As-Is Organisation and the To-Be Organisations recommend changes along with any changes in responsibility. This exercise was carried out in Aris Express

3.       Map the Core Application software areas that the To-Be processes will be interacting with. The new software was very different from the old software in that the Master Data was build up in a particular sequence. Also Master Data had to be in place before the in-built workflow could be executed.

4.       Build the Entity Business Model, this provides an overview of the high level processes for a particular Industry and Company. It also documents the external influences on the Core Processes. I try to align this to the Value Chain.

5.       Next step was to build a Value Chain, this provides with the means of having a clear understanding of how value is created with an organisation. Also it provides a view of the end to end process which is often forgotten.

6.       Having completed the Value Chain the next step is to agree the Nomenclature which I usually base on AQPC- PCF (Process Classification Framework)

7.       Once the Framework is in place then I will investigate the quick win areas, and focus my attention in starting to build the processes. Obviously at this stage you need to review the As-Is processes and new application requirements.

8.       When building Processes with Tools that have no database I build a folder structure that represents the AQPC Nomenclature to store the processes and design documents. I also number each activity within a process; this is to manage changes that may occur through a BPI exercise.

9.       The next step in this case was to create a report that documents the process for signoff.  To create this document I combined the Aris RTF document with a template I created taking into account the Entity Business Model.

In Summary

The project is ongoing and will take some time yet before I get any feedback on the both the approach. There many hurdles still to overcome, but the project team I a working with have very receptive to the approach and results so far. There will be workshops with the various parts of the organisation to introduce the new approach to creating Business Processes. We have decided to focus primarily on one area of the organisation that has been identified as a quick win and will start piloting very soon. It is complex project and as such will be a good test of whether the approach I used in Asia can be accepted and adopted here in Europe. I will keep you posted as the project progresses and feed back to you the results as they come in.

Working as an Employee can be frustrating and at times seems pointless without direction and reward for success. Many Organisations, who do not share with their workers their aspirations and drive for success, reward their workers with yet another Dull Day in what has been a Dull Week, Month and Year. The Grey and Dull environment percolates through the business reaching the very top and very bottom of the company.

In contrast an Organisation that states it’s Goals, articulates its Strategy and the Value it intends to deliver to its Customers, Suppliers, Workers and Investors is Bright and Shines. It is a self motivating environment that touches all who come into contact with it. This way of thinking is what motivated me to focus on Business Performance, and by way the term Business can be substituted for all the things we do that can be improved upon. The focus on performance, eliminates waste, it questions product introduction strategies that threaten our environment, health and the future of this planet. It provides stability, sufficient financial reward and a community pride in our collective work environment. By training to optimise performance you are bringing value to your organisation and community you serve. There is no better thing to do!

All employees, Stakeholders and Owners have a right to know the goals, objectives and the delivery strategy. That said if the organisation does share its insights with you then be prepared to take ownership of your positions contribution to the success of the plan.

Currently as previously stated I am working on new project in Malta. I am learning a lot from the project, and from the cultural changes of working in a new country. That aside I am confident I can make a difference and will strive to deliver what I have employed to do. What I am enjoying most at the moment is that it’s give a me a great opportunity to investigate new Business Process Tools and some of the more well known  Open Source Workflow Management systems. Of the next few weeks I will share some of this experience with you.

In the mean time, think positive, think performance, think I want to be measured and rewarded for contributing to the success of the organisation or project. Back soon

It’s been a few days since my last posting, for which I apologise. This has been due to starting work on a new project, which entails mapping the To-Be processes for a Maltese Government Department project.

The original As-Is Processes were previously mapped in Visio, as part the early stages of the project.  I am not great fan of using Visio for mapping business processes. It is difficult to manage standardising of conventions, and in this case the Visio cannot be imported into the tool I am working with because it has been developed using a very basic nomenclature.  

That aside I decided to try, in this case, to drive them towards using BPMN (Business Process Management Notation) using a Business Process development tool. In looking round for a tool I came across ARIS Express. I have used Aris and Oracle BPA (Oracle BPA is built on Aris) on a number of projects but using their EPC convention. Since the acquisition of Aris by Software AG it seems they have become more open to using the BPMN standards. I was delighted to find ARIS Express which is a free version of Aris, all be it with a reduced functionality that also supports BPMN V2.0.

ARIS Express is a simple tool to use and I find sufficient for documenting processes. There is no database with ARIS Express and so the diagrams have to be stored in a folder, which means that the links between objects have to be redefined if the folder structure is changed. The other inconvenience is the Pools and Swim lanes are placed in the workspace and objects are dropped onto the pool / swim lanes objects rather than defining the pool / swim lanes as attributes in the process activities objects. The limited number of attributes on the objects is a problem as this prevents swim lane analysis by multiple dimensions i.e. Organisation, Department, and Role etc.

One thing I do like is the ability to use traditional ARIS conventions with the BPM Notation as this provides a means of linking the Value Chain Diagrams to the BPMN detailed processes improving navigation. Also I the documentation generated by ARIS is good providing very detailed process information.

As I build more processes, there will be around 80 to 100 processes in all, I will get a better idea of the capability of the tool but, my first impression is good.  The link for ARIS Express download is http://www.ids-scheer.com/en/ARIS/ARIS_Platform/ARIS_Express/151392.html , also I have below is a attachment with the standard BPMN convention defined in ARIS Express.

 BPMN 2 Elements.doc (285.00 kb)

Strategy maps provide the means of linking an organisation’s Goals and Aspirations to their Operational Scorecards. Although strategy maps were originally developed by Kaplan and Norton to support the balanced scorecard they can be applied to any scorecard framework. The strategy map, thus, provides a roadmap linking the operation performance indicators to the strategy of the company.

Strategy maps without a destination statement, or ultimate goal, are of little use.  This important addition to the strategy map was added at a later stage giving it a purpose and set of stretch targets over a period of 2 to 3 years. As show in the diagram above for each perspective there are a set of objectives. Measures within the scorecard framework are aligned to the objectives and targets set. An action plan is linked to the objectives and along with this an associated budget.

Frameworks for linking strategy to the measures and defining actions have been around for a long time. Many eminent researchers have developed ways of grouping the processes resulting in an assortment of metrics based frameworks. Some frameworks however are operational, such as SCOR, without an obvious link to the financial process types. Others like balanced scorecard do not push down far enough into the operational processes. I personally like to mix and match, using the Balance Scorecard and industry specific Scorecards to link the operational measures to the financial measures. Because the Balanced Scorecard has a Financial and Customer perspective this provides a link from sales through the value proposition to finance driving asset utilsation and revenue.

The Strategy map provides a link between the Business Modeling and the Business Intelligence and Business Process Management activities. It establishes the objectives and their corresponding Critical Success Factors (CSFs) and Key Performance Indicators (KPIs). Knowing the performance expectations provides the means for designing optimal business processes and driving the business performance improvement programmes.

I have had a number of comments regarding the use of Entity Level Business Modeling. So let me try to explain why I use this method of describing the business.

This type of model is used by accounting firms to provide a means for their audit staff to understand the characteristics of a business and assess the risks associated with none performance. We often view our business from an internal perspective and do not consider how external organisations see us as a business. It is important if we need to attract investors, appease the regulatory bodies and convince internal stakeholders to describe our business in a manner that provides a risk assessment on non-performance and the steps management will take to corrective the situation.

What I will try to do is use a Telco example shown below extracted from one of the models I have created to illustrate how the Entity Level Business Model works. After this you can make your judgment as to how usefulness of this approach might be to you.

The overview diagram is a succinct way of showing a typical business model illustrating clearly the external factors that impact the internal processes. When reviewing a Business Process Management or Business Intelligence project it is advantageous for the Business Architect to have a clear understanding of the business drivers. This diagram although simplistic provides a good overview and is used to obtain an agreement with the client on their understanding of their business. This can be taken one step further to gain agreement with the customer on the Value Chain.

Once we have the overview diagram and value chain agreed we can then move to a specific level 1 process (End-to-End) and put together the information required to start building the detailed process diagrams. There is a template for doing this which I have described in a previous blog. However, what I will do now is select a level 1 process and show a generic completed template form. The process I have selected is “Customer Care and Billing”

The methodology provides a framework for setting the Process Objectives and linking the Critical Success Factors (CSFs) to both the objectives and Key Performance Indicators (KPIs). This is important as quite often I am asked how to define the operational KPIs, which hopefully now is explained.  Another important consideration is that the main functions groups within the End-to-End process are defined and linked to their Inputs, Outputs and Systems for maintaining the data along with the main transaction groupings.

The risks of non-performance are also discussed and their impact on achieving the objectives along with how management perceive their responses to mitigate the problem. The document also tries to identify the areas to be considered for performance improvement. This can be very useful information when identifying the “Quick Wins” during a Business Process Improvement project.

The information for the input to the “Entity Level Business Model” is captured during workshops with Process Owners and Stakeholders. Usually the workshops will include those process owners and stakeholders that interface to the Level 1 Process under discussion. In preparation for the workshops I consider competitive companies and how they are structured as well as their financial performance. This is useful benchmark data and helps with understanding the businesses competitive pressures. There may also be specific industry frameworks with predefined industry processes that can be considered i.e. SCOR (Supply Chan) and eTOM (specifically for Telcos).

This question in the Blog Title was posed by one of the readers. It never ceases to amaze me how we only react to external factors after they have happened. In my humble opinion we should always be looking to improve the Business Processes with our organisation. Business Process Improvement is not something we do to prevent an event from happening again, as it is very seldom that an identical event will happen more than once. We need to be vigilant when monitoring our processes and take the necessary steps to ensure we can identify quickly an adverse occurrence and be resourceful in correcting it.

I read an article which was published during the recession, unfortunately I cannot remember who wrote the article, defining a number of rules on how to handle the recessionary situation:

•       Rule 1: Protect Your Best Customers, Products & Channels

•       Rule 2: Refocus the Customer Experience Around the Value Equation

•       Rule 3: Sweat Your Customer Management Assets

•       Rule 4: Cut Non-value-adding Costs while Protecting Value

•       Rule 5: Support & Incentivise Staff to Deliver Value

•       Rule 6: Focus on the Long-term while Supporting the Short-term

These six simple rules do not just apply to recession, they apply to all organisations doing business when ever or whatever the situation. These are drivers for significant drivers for implementing a Business Process Improvement culture within a business.

There are many methodologies for analysing process and activities within an organisation with the aim to continuously improve the performance of the business and reduce waste. One of the early advocates was Edward Deming who modified Walter Stewarts’ concept of Plan, Do, and See to create the Deming Cycle (PDSA). This concept has been utilised and modified by many, to create continuous improvement cycles. There are many different methodologies available for continuous process improvement:

1.       Six Sigma

2.       Kaizen

3.       Lean Manufacturing

4.       Total Quality Management

5.       Toyota Production System

6.       Theory of Constraints etc.

Many of these methodologies were originally developed for manufacturing companies have been adopted for other industries. In my limited experience though the problem I have seen with many implementations of continuous improvement, it has not extended to the management level.

In one of my earlier Blogs I did touch on the Business Process Improvement Cycle (BPM is an essential part of a Continuous Performance Improvement Project). This is also an adaptation of the Deming Cycle. I would also state that in some cases, and this would depend on extent of the changes to the Business Model, it may be better to create another division and re-design the Business Processes from the beginning.

Having worked for American companies for most of my working life, I am accustomed to using the term Value Proposition. However, if I translate this into English “Statement of Direction” is probably the closest interpretation, and for those familiar with Balance Scorecard it is translates closely to “Destination Statement”.  The purpose of defining a Value Proposition is to provide a means of driving the Strategy and to give direction to the organisation and its constituents. When Kaplan and Norton introduced strategy maps to provide a means of connecting strategy and objectives to Performance Indicators it emphasised the focus on driving value, however, later it was necessary to add a Destination Statement to define a goal and purpose. You might ask why? The reason is clear, I have map of how to get there (strategy), and I have a defined set of objectives (KPI’s) but have no defined destination.  

In my previous Blog “Disruptive Business Modeling” where I discussed business modeling it highlighted the importance of establishing a Value Proposition or a “Statement of Direction”. A Value Proposition is defined as “an analysis and quantified review of the benefits, costs and value that an organization can deliver to customers and other constituent groups within and outside of the organization.” To build a Value Proposition the following points can be considered:

1.       The Value you bring as an organisation

a.       A selected set of customers

b.      Why they need your offerings

c.       How your Products and Services fulfill their needs

d.      What benefits you will bring to them

2.       How you differentiate the Value you bring to your Customers and Stakeholders

a.       How you position yourself from the competitors

b.      What differentiate you Products and Services

c.       Identify and produce proof of this differentiation

There is a strong link between the Value Proposition and the Profit Model. Customers and Suppliers  require a company or organisation to have a sustainable financial structure that ensures they will be in business for the foreseeable future. Financial strength is built on healthy sustainable growth in revenues supported by a programme focused on managing and containing costs ensuring the ability to invest in the resources required to grow the business.

There are three principle drivers when considering the development of a Business Model:

1.       Increasing Velocity - The ability to deliver products to end-users as fast or faster than competitors and to reconfigure the business strategy & operations as fast or faster than competitors in response to changes in market or supply/supplier conditions

2.       Improving Visibility - The ability to monitor, control and change the business strategy & operations from supplies acquisition to product or service delivery at end user.

3.       Controlling Variability - The ability to continuously monitor and improve planning and forecast accuracy and reduce the impact of unplanned events on business performance.

Business Processes are developed to maintain the integrity of the business model, that are built into and around applications and data stores supported by the IT Infrastructure. The design and the management of the processes impact the performance of the business and its ability to respond to change. To ensure a quick response, the performance of the business processes are monitored and analysed to assess their impact on the performance of the business. Each activity that is monitored is analysed in terms of its contribution to the overall performance of the business. This ability to roll up and drill down performance indicators are an important aspect to ensure problems are pin pointed and resolved as quickly before they, in conjunction with others, create a much bigger problem.

In conclusion the Value Proposition is not static; it is reviewed periodically to ensure it is maximising value for the business and constituents. The business processes supporting the creation of value are monitored and analysed to ensure they are still relevant and change management processes are used to manage the changes required to keep the business on track or put in place new processes delivering value for new opportunities. This is a continuous improvement programme that adjusts to the changing business environment.

It helps when implementing a BPM project to have a delivery framework; it accelerates the planning phase and serves as a checklist to make sure nothing is missing. The framework I have used is shown below. It has eight distinct phases with deliverables defined in each phase. You notice also the deliverables are colour coded to indicate responsibilities within the project team. The eight phases are depicted in the insert as a continuous cycle with the output of the Improve phase feeding the Stimulate phase. 

There are essentially three major terms used when engaging on a Business Process Project and these are:

·         Deliverables - The diagram above lists the deliverables in each phase with falling four categories;

o   Process Management

o   Information Management

o   Change Management

o   Human Resources

·         Techniques – These are methods used to achieve the deliverables an example is the Business Entity Diagram and Value Chain, discussed in an earlier Blog, to define the Holistic Business Model)

·         Achievements – This is the final goal or completion of the defined Milestones.

The Purpose of the Eight BPM Phases:

1.       Stimulate – Used to Kick Off the project and for the Management Team explain motivate the team by explaining the reason for investing in the project and their expectations .

2.       Imagine – Provides the means to develop a common content and understanding (between CEO, senior management and the consultant) of the organisation, its current challenges and its future direction.

3.       Focus - Identify the major opportunities for performance improvement that are associated with existing processes, technology and human resources.

4.       High Level Design - Develop a portrait of how the client organization will conduct business in the future

5.       Detail Design - Design the details and understand the consequences to the organisation of implementing the preferred “To-Be” business solution.

6.       Build - Construct and test all outputs of key components of the business solution.  To build an infrastructure capable of supporting the “To-Be”  processes

7.       Implement - Set in motion across the company the newly built processes, technological and social changes that have been designed and built.

8.       Improve - To establish mechanisms to ensure that performance improvements resulting from the BPM programme are sustained over time and ultimately lend to opportunities for additional performance gains.

I want to stress this is only a framework and although I use this as starting point depending on the organisation and the project scope I will vary the sequence and eliminate some deliverables.  I have attached a list of possible BPM deliverables as a reference.

High Level BPM Deliverables.pdf (506.58 kb)

In my last Blog I mentioned the IBM Business Component Model which was used as a Business Architecture tool for a client I was involved with in Singapore. So as not to keep you in the dark I will give you an overview of this methodology and let you form, your own opinions as to its suitability.

I believe the tool was developed by IBM Global Services to support their approach to delivering their SOA (Software Oriented Architecture).  As the above diagram shows they have defined five dimensions of a Business Component the last being Business Services which highlights the purpose of the approach and that is primarily to support the WebSphere suite of products and services.

The component structure is defined within a Matrix of Business Competency and Accountability. This provides a breakdown of the structure of the Application Architecture along the horizontal axis and establishes a hierarchical decomposition of responsibility on the vertical axis. Also colour coding is used to define external and internal components. On a past project I have used a nomenclature based on an APQC Process Classification Framework (PCF) to uniquely identify processes and activities in conjunction with the IBM Component Model. This is extremely useful when managing changes, versions and identifying the points of integration between process activities.

Supporting the Business Component Model is an implementation methodology which is not too dissimilar to many of the ones I have used in the past. This approach should not be confused with an Enterprise Architecture as it only fulfills part of the requirements with its primary focus on identifying SOA opportunities.

In my opinion there is no one tool that meets all the needs of the Business Architect and Business Process Modeler. Most certainly before embarking on developing software applications and services the Business Architecture needs to be defined. It has to support the Value proposition and profit model and the business processes should be decomposed from the profit model to ensure accountability with the organisations operation.

For more information on the IBM Business Component Model I have attached the IBM overview and would recommend you read “The New Language of Business SOA and Web 2.0” by Sandy Carter.