Victor Vizzuett, Director of Continuous Improvement and Project Management Office, AkzoNobel
A few years back, I had the opportunity to do an internship with a boutique investment bank that operated in the UK and U.S. They facilitated the buying and selling of mid-size businesses.
One of the initial steps to determine the value of a business was also to determine its readiness for a successful due diligence. When selling a business, much like when you sell a house, you have to take care of all the repairs you have been procrastinating about. Normally, when a business is sold, the founding members want to retire and are not part of the transaction, but the staff, equipment and sometimes facilities remain as part of the sale. Therefore it is critical that the business can create value and be operated by the new owners without relying in the previous owner’s leadership.
What was puzzling to me being a “process guy” was that most of the businesses were run without document processes and therefore had a huge exposure risk by relying on a few key people for the success of their business operations. The business’ success was highly dependent on the leadership of the owners and their managerial faculties. Although I agree that leadership makes or breaks a business, this should be mostly because of their understanding of the market conditions and the capacity to internalize it and use it to turn our business capabilities into levers to become successful market leaders, not to firefight day-to-day operations to deliver routine products or services.
When it comes to business processes in large conglomerates, the view from many business leaders is not that different from mid-size business owners, although to a lesser degree there is still sometimes a paradox between flexibility and rigidity. Some leaders squeezed their teeth(and fists) at the simple suggestion for the need for further processes because they see it as innovation or growth inhibitors, or maybe because it would be boring not to firefight. However, imagine the growth prospects if instead of firefighting a regular Monday shipment, they could focus on optimizing the business or expanding markets or segments. Having processes to ensure bottom line delivery ensures consistency and frees up time for leaders to focus growth or innovation.
The approach to business process requires experience, business acumen, or at least a good framework of reference. Many process practitioners think of process as flowcharts and if flow charts were wrapping paper they would love to wrap the whole business.
The approach to business process requires experience, business acumen, or at least a good framework of reference
However, doing so would suffocate the business, making it so rigid and unadaptable that it would soon start weighing on the business and triggering infighting with its own processes in order to serve customers rather than fighting competitors on the market place. Fortunately, process frameworks can bridge the expertise gap and democratize the knowledge for the proper management of business processes.
Business Process Management (BPM) is a program or function that is more than flow charts. A proper BPM should provide an all-encompassing structure for ease of navigation and access of processes, methods and tools to document processes, a change management/transformation structure to ensure our processes will continue improve or transform and proper governance to ensure process support and management. A proper Business Process Management can help create a clear structure on processes that business leaders can relate to and more importantly support.
Challenges of Business Process Management
The process parking lot
At a recent conference on operational excellence in San Francisco, I attended several presentations on BPM and had in-depth discussions with several practitioners across many different industries, from utilities to banking to pharmaceuticals. I found there seems to be a consensus that BPM as an initiative has an inherent risk of becoming a stagnant parking lot of processes.
Where processes are updated annually or referred to only when process crises’ arise due to process breakdowns or onboarding of new employees, most of the industry practitioners were concerned with increasing traffic or utilization to the process platform. Industries with highly repetitive processes and compliance, like banking and insurance, are further along the BPM maturity roadmap and they are more concerned with process compliance or adherence.
The platform investment dilemma
Most organizations agree with having processes documented. However, even for large organizations or subsidiaries of large organizations with rigid software acquisition policies it is a struggle to justify spending on a global BPM platform even as a SaaS platform.
Previously, when I have tried to acquire a platform for process mapping, I encounter difficulty creating a business case to justify the expense of the platform. In fact, the time that my project managers spend measuring the benefit of process mapping is difficult to quantify because the simple mapping of a current process, unless it is being optimized, does not yield a structural cost impact. Most of the companies were using an HTML extension of Visio within Sharepoint, which generates a lot of extra work when updating processes.
The future of BPM
Speaking as a BPM practitioner and from my past experiences, organizations are moving towards making BPM programs more than process parking lots, with process adherence and performance metric integrations, ongoing task level instructions being added. In some instances for example a large utility company in California is having its call center employees write tips for good performance directly on their BPM platform, thus making it more of a live process platform. Also, commercial BPM platforms have started adding process intelligence versions using big data to enable process improvement for the industries that are further down the road of BPM. The future of BPM is full of exciting possibilities, however is not easy to get there and BPM must prove its value to the business beyond being a platform for the training of new employees first.