Process Is The Main Thing

@ Anatoly Belaychuk’s BPM Blog

Posts Tagged ‘BPM’

BPM Methodology: Strategy and Tactics

Although a single agreed definition of BPM has not yet been developed, most experts agree that BPM is a combination of management methodology and software tools. But what is BPM methodology and does BPM have a methodology of its own?

To get started, what process methodologies constitute today’s mainstream?

  • The most popular today is Lean Six Sigma - a combination of Lean and Six Sigma approaches.
  • Lean is a business transformation methodology derived from Toyota Production System (TPS) that focuses on increasing customer value by reducing the cycle time and elimination of waste.
  • Six Sigma is a business transformation methodology originally developed at Motorola, it focuses on customer’s value by reducing process variations and elimination of defects on the basis of strict statistical techniques.
  • Theory of Constraints (TOC) is a systematic approach to process improvement that views the business as a system of interconnected processes. The key point is that the performance of the whole is constrained by the weakest step like the strength of a chain equals to the weakest link’s strength. Although this methodology’s scope is narrower it brings genuine and practically valuable ideas. As a result they become widely accepted and partially incorporated into Lean Six Sigma.
  • Total Quality Management (TQM) is also widely known yet now it’s part of the history rather than evolving methodology. Its basic ideas became part of Lean and Six Sigma as well as the ISO 9000 series of quality standards.

In addition some companies and analysts promote their own, sometimes very interesting methodologies. But perhaps only TQM, Lean, Six Sigma and TOC have reached the mainstream, meaning that there are communities around them, many books are written and training courses are available. Given that these mainstream methodologies overlap with each other to a large extent we can hardly expect that any new methodology would gain wide acceptance in a sudden.

Viewing from this perspective one comes to the conclusion that BPM doesn’t need a process methodology of its own: first, such a methodology would be competing to the mainstream without a chance to win, and secondly, BPM can be successfully applied in any of the mainstream methodologies.

Within BPM we should only talk about «tactical» methodology which is closely related to the tools. For example, BPMS promotes efficient business process discovery. Another example is rapid prototyping of executable processes within BPMS which helps bridging the gap between business and IT and improves agility.

But the strategic issues of process management - like the company’s value chain definition - are rather part of the outer context than the BPM itself. That doesn’t mean underestimating: the context is very important because it sets the business goals; without them the BPM program would be no more than IT department exercise.

What practical conclusions from this are for companies thinking about implementing the BPM program?

  1. Take care both about technology and methodology. Within technology you should choose a BPMS, agree business process modeling style, adopt a standard business process lifecycle etc. On the methodology side you need to know e.g. how a particular process for the next project within BPM program is choosen: what’s the procedure and who is in charge. How the key metrics are choosen at the project start and how the goals are measured at the end? How the visibility of processes and their reuse are promoted within the organizations? Who is responsible for business processes to join into a value chain and not becoming scattered islands of suboptimization?
  2. Leverage on ready-to-use BPMS and methodology. Developing a methodology of your own as well as developing a BPMS will bring you too far from the ultimate project goal which is improving your business efficiency. Keep in mind that developing a unique methodology could only afford such giants as Toyota (Lean), Motorola (Six Sigma) or Xerox (TQM). Stand on the giants’ shoulders - spend time on the books and trainings, hire consultants that have experience in implementing process management with BPM. This in no way means the call to blindly copy other’s experience. In fact, all methodologies establish only general principles and leaves more than enough room for the adaptation to the conditions of your particular business. And they all emphasize the importance of developing your own competence rather than buying it from someone else. So you’ll need talented and motivated individuals starting from the company’s top and you will have enough tasks adequate to their ambitions.
07/28/09 | Articles |     Comments: 1

(Русский) Впечатления от семинара BPMS.ru 08.07.09

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07/09/09 | Responces | , ,     Comments: 4

Process Anti-pattern: “One Man Show”

Alternative title: “Micromanagement”.

The typical first BPM project issue: how deep to dig into a business process details?

We were engaged into a process called “Purchase order by the three-tier agreement” in one of our first projects. Here is the brief:

  • A three-tier agreement is concluded by and between the buyer, the manufacturer and the supplier - manufacturer’s authorized partner.
  • The agreement is designed as a framework: it specifies prices, terms and conditions, but not the items to be purchased nor the volume. Each purchase shall be specified by a separate specification containing items and quantities. When signed such a specification enforces contractual obligations to all parties.
  • The process is managed by the supplier and there were no intention to directly attach the buyer or manufacturer to BPMS. The whole process runs inside supplier’s organization yet there were such activities as “send the specification to manufacturer for signature” or “ship the goods to buyer”.

The process consists of four majour phases:

  1. Agreeing the order.
  2. Signing the specification.
  3. Delivery.
  4. Payments and deal closure.

Let’s consider the first phase “Agreeing the order”. Despite terms and conditions are set by the agreement, the bargaining may happen here, e.g. the buyer may request an additional discount for a large order or tougher delivery terms tied to the internal project schedule. In such cases the account manager should agree on the conditions within the organization and with the manufacturer; if the buyer requested too much then a compromise acceptable for all parties should be found. Several iterations may be necessary lasting for months. It’s a delicate work highly depending on account manager’s skills. And this is the key point of the process - the remaining activities are pure routine.

The first version of the process diagram looked like this:

Then it became more compliacated. First, if the manufacturer made a counter-offer that we found acceptable then we should only agree it with the buyer on the next round; the same is true with respect to buyer’s counter-offers. Then it was rightly pointed out that the process may be speed up if negotiations with the manufacturer and the buyer was made in parallel. And so on.

Let me skip the evolution of the process and proceed directly to the resulting diagram:

The key point of this process is that there is a single performer: account manager. No one else cares about where we are inside. Agreeing started / agreeing ended successfully / agreeing failed - that’s all the business (the process owner) is interested in.

I’ve seen process diagrams similar to the first one several times. For example, there was customer’s process of accepting goods to the warehouse with about twenty activities, all performed by a  storekeeper. It doesn’t make sence. You get cumbersome scheme prone to frequent changes yet the details do not add value to the process.

Target BPM on the overall process performance and cross-functional problems which are responsible for poor performance in most cases.

It is not easy - you must be ready to find yourself under crossfire if your studies affect existing borders between organization departments. But don’t go the path of least resistance and don’t use BPMS to document a sequence of activities performed by a single person.

06/30/09 | Articles | , ,     Comments: 11

(Русский) Впечатления от семинара BPMS.ru 24.06.09

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06/26/09 | Responces | , ,     Comments: 11

(Русский) Ближайшие семинары BPMS.ru

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06/22/09 | News | ,     Comments: closed

(Русский) Занимательная статистика

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06/11/09 | Responces |     Comments: 3

BPM = Less Costs + More Value + More Agility

There is a new post at Jim Sinur’s blog: “Business Process Management Grows Value While Saving Costs“. He says how great it is being able to achieve two results by single activity:

1. BPM Saves Costs

2. BPM Increases Value

Not quite new idea but Jim adds some specific arguments which makes the post worth to read.

Yet with all my respect to him I dare to say that the list above isn’t complete - it misses:

3. BPM Increases Agility

Sounds too abstract? I suspect many people aren’t really sure what the hell this “agility” thing is. OK, let me show you the money behind it.

Generally speaking, there are three ways to compete:

1. A new market segment is opened by innovators who excel in time-to-market. They offer something that didn’t exist before.

2. Then comes those who deliver superior quality.

3. And finally when neither the concept nor the production quality is no secret then it all becomes about the cost.

Do you see? The second list matches to the original one in reverse order!

Now how does this third advantage like in practice? Quite simple, actually: there is a strategy of “waiting for the window of opportunity to open”. This strategy implies that you must be fast because the window only opens for a short period.

Let’s assume that you are a bank which achieved an outstanding agility from SOA+BPM that allows you to launch a new product say in two months while industry average is six months. Being in such position you are able to copy any good idea that your competitor may get while he won’t be able to copy you because you’ll make the next step meanwhile.

(I used a bank as an example because for them product = process. For other industries it isn’t that obvious but still being able to implement a new process or redesign an existing process promptly is a clear advantage.)

Still not conviced? Here is another argument: it’s well known that business, warfare and chess have much in common. Both in chess and war strategy there is a notion of “tempo”: if you made your opponent stressed in time then it increases your chances to win. Hence it’s not uncommon to exchange say a pawn for a tempo in chess so this “canned time” is absolutely material thing in chess.

And so it is in business. When you invest some resources into BPM you not only obtain more customers and serve them more efficiently - you also posess a “canned time” which makes you better prepared for changes, either positive or negative.

The final note: the process management discipline has a long history and it always was about costs and value. Agility is a new thing that BPM brings. So we shouldn’t forget about it and shouldn’t be shy to articulate its value to our customers.

04/30/09 | Responces |     Comments: 9

(Русский) Семинар BPMS.ru: “Бизнес-процесс логистической компании”

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04/29/09 | News | ,     Comments: 2

Humans Swimming In The Intalio Pool

Somehow I got involved into the long discussion with Rick Geneva about best practices of process modeling and execution. Now after we’ve spent a lot of bytes at his blog it’d be fair to allocate some of my provider’s. Besides, after initial verbal firefight Rick resorted to the heavy artillery of process diagrams. Being unable to retaliate in comments at his blog I had to retreat to my own turf. :)

I spoiled Rick’s intention to remain vendor-neutral and eventually we came to studying Intalio’s way of using pools and swimlanes which I believe is… well… not quite obvious and not widely used. Yet it’s great for me to know how things are done with Intalio because I know several specialists who seem to be happy with it but couldn’t get the idea.

Rick presented a diagram of a simplified sample process where a manager wants to hire someone:

Rick comments:

The diagram style is a hybrid, which shows both the swimlane approach and the single pool approach that shows only the BPM automation system. In this case the primary participant is the automation system. However I could easily reverse this to have any one of my people participants to be the primary.

Now this is how I’d model the same process:

It differs from Rick’s diagram in many aspects:

  • Pools are used for external entities and/or processes. “Candidate” is such an entity: we don’t control his process, all we have is a messaging protocol.
  • There is no such thing as “primary participant”. There is a single swimlane in “Hiring Process” pool but it’s only because we simplified it to a bare minimum. In reality there would be also “Functional Manager”, “Security Officer” and maybe others. From my point of view, the idea of primary participant is bad: the process is supposed to break the walls between department walls. More participants, more separated they are in terms of geography and organization structure - more value one may expect from process management and BPMS.
  • There is no such thing as “executable system”. For me it’s like drawing “DBMS” on a database diagram. 

Rick argues:

Systems that only support one pool with many lanes are implying that they are human centric workflow, with some system capability.

Sorry Rick, I have enough of this: one party call the other “some legacy workflow vendors” and they in turn call the opponents “webservices orchestration vendors”. OK, I draw this diagram in a modeler that doesn’t have execution engine yet I can see how it can be executed in Tibco, Interstage or Oracle aka Fuego. The key is engine’s capability to process messages flow - workflow can handle only control flows.

Anyone wants more pools? No problem, I can draw internals of the Candidate’s process:

Is the diagram better now? I don’t think so. The beauty of process choreography is loose coupling: the changes in one process does not affect the other as long as messaging interface is followed. One cannot achieve this with process orchestration as I noted in my previous post and I believe this is Rick’s point too.

Previous diagram lacks loose coupling so I’d rather draw the candidate’s process in a separate diagram:

I share completely Rick’s concern:

I suggest the collaborative approach where IT and BA work together.

But sorry Rick - I didn’t meet a business analyst that would accept your style, it’s too technical. So we fall back to the traditional way: an analyst draws some vague diagram then throws it over the wall to developers and they convert it into executable code that the analyst is unable to read.

And I don’t believe it must be that technical like it is in Intalio.

04/19/09 | Responces | , ,     Comments: 4

10 Reasons Why BPM Market Doesn’t Meet The Expectations

The current financial crisis isn’t a threat for BPM because there must be a boom before to talk about a crisis and there were no boom in BPM.

Some people anticipated the boom by calling BPM “The Next Big Thing”. Pure-play BPMS vendors have made big bids on the boom. The stack vendors aquired BPM assets.

In Russia, every BPMS vendor now has about one and a half BPM project - one successful and one decent - and shows them at every event. The first BPM conference in Moscow held in 2006 so companies invest into BPM marketing minimum for three years now. The results aren’t very impressive; not a boom anyway.

» read the rest

04/04/09 | Articles | ,     Comments: 37

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