Changing face of Business Process Analysis

The Business Process Analysis (BPA) market is evolving. There are strong market forces are work. And this change is being recognised by Gartner who comment on and rate software vendors.

Over the last 5 years BPA tools have been used by Business Analyst (BAs). BAs are all about building systems or configuring systems and they used to be the final word on how the business should run. They were the experts on analysing the business. So the BPA tools have been developed to support the requirements of BAs; data modelling, entity relationship diagrams, flowcharting, metadata, object modelling, and strong analytical tools.

But the BPA market is changing for a number of reasons. End-users are developing far more power, and they want to take ownership of the process design and analysis as they will have the on-going task of maintenance and continuous improvement.

These ar real people out in the trenches dealing with customers, producing products, paying the bills etc. Their requirements are all about associated with widescale adoption of changes in working practices; change management.

As there is currently no recognised market for change management applications, the BPA market is the closest to satisfying the requirements, and is where we should look to try and predict the future winners. But just as IBM PC was wrong footed by the more nimble Dell who has gone one to dominate the market, this “discontinuous change” in requirements could bring other vendors to the forefront which are better suited to meeting the requirements.

So why “discontinuous change”? Because it requires a different type of thinking, as illustrated by the table below, and many of the requirements for the BAs cannot co-exist with the end-user requirements. It is a functionality compromise.

Functionality BA perspective End-user
Process mapping Capable of being “executed” by a workflow engine Capable of being understood by my mother
Data modelling Support for BPN / BPEL / etc notation Export capability at lowest levels
Access Key BA’s with powerful PCs Dynamic to anybody with a browser-enabled device
Ease of use Once trained, easily used Intuitive, just like their favourite website
Appealing to use Not necessary as power users Critical to encourage adoption
Personalisation Not required Critical to eliminate information overload
Performance Fast PC 24X7 100% availability
Multi-language English is business language Personalised multi-lingual support
Authorisation Version control Full ISO/FDA/FSA compliance and audit trail

The analysts that cover the markets (Butler, Gartner, Forrester and Ventana Research) often have very different views. However, they have managed to agree on one thing. That is, that control-ES (www.control-ES.com) has upset the happy established BPA status quo and is currently setting the standard for the change management marketplace.

Day in the life of a CEO - 2007

As her latest CEO webinar closed and she looked around the room, Anne knew that she’d pushed her company forward again.

No matter how good the technology, at the end of the day it was about people – so she had insisted that every significant transformation project was launched properly. And for bigger projects like this one, that meant her hosting the launch and showing her commitment to continuous improvement.

Since she took over as CEO at Pharma Dynamics back in 2004, she had embedded continuous improvement into the company’s culture. The mechanics of change were almost automatic by now – managing change well had become business as usual.

This latest project, to improve the way that the company’s manufacturing units in East Asia integrated with new a component supplier in Hungary, was typical. From the original idea through to her own authorisation, she had tracked its progress through the company’s Lifecycle change environment.

Likely most projects these days, it wasn’t going to deliver a dramatic ROI - maybe it would make the supply chain just one or two percent more efficient in this case – but it was yet another in a continual and relentless stream of business improvement projects.

The ability of Pharma Dynamics to generate projects like this, and execute them well, was what competitors envied and analysts valued.

It hadn’t always been this straightforward. Like most major corporations, Pharma Dynamics had spent the 90’s going through dramatic interventions to re-engineer the business and implement ever bigger software packages. There was a lot of smoke and noise, and things changed - but when the last consultant’s BMW pulled away it wasn’t necessarily obvious that different was better, or that the pain had been worth the cost.

Lurching companies forward through Big Bangs went out of style – it came to be seen as a shallow easy option next to positively transforming people, processes and culture. Improving any company’s game now was organic - about incremental change, and everyone being involved. Workforce engagement had become recognised as critical in managing change well.

Anne had sensed this change in her previous role as CIO at Pharma Dynamics, and it was a pivotal moment in her career. Like most of her executive colleagues, Anne had experimented with Six Sigma and other process improvement methods. They’d delivered but not convincingly – the initial energy behind each project was often dissipated early on, and it wasn’t clear that costs weren’t simply being shunted around the business rather than truly taken out. And frequently the enthusiasm for change, and people’s involvement, was limited to a small band pressing on against the odds. Anne knew from the ‘change fatigue’ she’d seen on her improvement projects that continuous change demanded new thinking.

Coming at it from the data end, the CFO had initiated projects using dashboards and scorecards to drive performance improvement. But their value was fundamentally constrained because the metrics were disconnected from the business processes: the traffic light was blinking red – but the causes and the potential remedies were not usually obvious.

Human capital development was moving up the Board’s agenda. The definition of leadership was being re-focussed on workforce engagement and motivation as a critical capability in a world where outsourcing was becoming ubiquitous.

The pressure for active compliance had also driven her to search for enabling technologies that could create a new environment. “Keep me out of jail!” had become the mantra of every CEO.

When she took the Lifecycle concept to the Board, they loved it. Leveraging the capabilities of the emerging PPM (process and performance management) software applications, it promised an organisation better integrated and more agile. Lifecycle would deliver an environment where performance improvement and compliance would go hand-in-hand – all threaded together around the end-to-end processes that ultimately delivered value to Pharma Dynamics customers.

Appointed CEO to deliver it, implementing Lifecycle hadn’t been easy. There was initial resistance to yet more change - but as she travelled around the company selling people on Lifecycle, she noticed the climate changing. People felt increasingly empowered by being more involved, and while tough business decisions had still to be made, and could blow things off course, the correction was quicker. Lifecycle had helped create a business that embraced change.

“Ready to go with the award?”- her PA burst into Anne’s thoughts.

“Sure” she said. One of the things she’d cemented into the Lifecycle culture was rewards. It was time to recognise the contribution made by the manager in Brazil who had kicked off this latest project. He had no line responsibility for the East Asia manufacturing units – but, like everyone in Pharma Dynamics, Lifecycle had given him visibility of their processes. By applying lessons from his supply chain work in South America, he had spotted the potential for improvement and posted the original idea on Lifecycle, which had sparked off this latest successful project. That’s how best practices usually now spread across the company - collaboratively and from the grass-roots.

As she turned to the plasma wallscreen for the videocall, Anne wondered whether some awards didn’t merit a personal visit from the CEO – to Rio, for instance…

Contributed by Mike Gammage (mike.gammage@nimbuspartners.com)

Better second time around? Getting the benefits from CRM and ERP

The whole of the western business world has been blighted with CRM and ERP projects which have delivered limited or no business benefits. There even some that have killed companies. Nucleus Research has built a business around looking at the ROI (Return on Investment) delivered by software packages. Sounds like a great job, but it must be soul-destroying because most of the stories they hear are of failed projects and squandered benefits.

I was with a Research Director from Gartner last week who specialises in CRM. He was saying that when clients ask for advice they are looking for ways of getting the cost savings and productivity gains from their existing implementations which they were promised but never materialised.

When I started to talk about how many of our clients had used a process-focused approach for implementing software applications with incredible results - such as halving the implementation time - he became very animated. This is not only because the software is configured dramatically faster, but because the business transformation of the workforce was achieved far more quickly and effectively.

We got to the end and he sat back and said, "Very interesting, you should write a book about what you've told me." Every author waits a lifetime to hear that line. I proudly reached into my briefcase and produced my recent book "Common Approach, Uncommon Results" that devotes a chapter to the successful implementation of software packages.

That approach is echoed in a very compelling White Paper by the Accenture Institute for High Performance Business called "The Return of Enterprise Solutions - The Director's Cut". The argument of the paper was that most films are better second time around once the Director has had a chance to recut them with complete artistic control and no time pressures. The authors argue, supported by research, that is very similar to many organisations are now revisiting their enterprise (ERP & CRM) implementations looking for the benefits they never received first time around. Their Director's Cut will give them the results.

This work focuses on the business transformation (business change) work that the original implementation didn't deliver. Why? Normally because the last thing in the plan was business transformation, and project ran out of time or budget. Now we can all only stand back, open mouthed at this stupidity. Wasn't business transformation the whole point of the original project? But what happened was the enormity of the task configuring and integrating the software overshadowed everything else.

The approach discussed in the book, "Common Approach, Uncommon results", ensures that business transformation is woven into every phase of the project. And it is not theory, it is proven in clients in a wide range of industries. Clients are getting staggering results - a 10,000 person utility implementing SAP in 4 months, a multi-national implementing SAP & Siebel across 40 countries in 18 months, when the original estimate from the SI partner was 36 months.

Accenture White Paper is compelling reading and the PDF can be downloaded at The Return of Enterprise Solutions:

To go back to the main website http://www.ideas-warehouse.com/

What is Corporate Performance Management (CPM)

The companies, who want to adapt themselves to the changing competition conditions in a short time, support their improvement activities with various management types, information technologies and accumulation management activities. One of the management approaches is CPM. Could you please provide brief information about CPM?

CPM (Corporate Performance Management) draws together a number of existing, proven management approaches and combined they will allow the company to understand its current level of performance, and therefore take actions to improve.

The approaches or disciplines are Strategic Planning, Budgeting & Planning, Process Management, Scorecarding & Metrics, Compliance Management. i.e. the metrics, processes, roles and responsibilities all presented in a consistent coherent picture which everyone in the business can understand, with an auditable history of all changes.

It is expected that the demand for CPM will be increasing in 2005. Do you think there is an inclination to CPM solutions in today's environment? Could you give some numbers as an example to this increase?

Firstly you should consider Performance Management rather than CPM, as this term is more general. Various analysts and software vendors seem to each have their own version and acronym: BPM (Business P.. M.. ), CPM (Corporate P.. M..), EPM (Enterprise P.. M.. ) SEM (Strategic Enterprise Management) and so on.

We are seeing that there is significantly greater interest at the Executive Team to consider Performance Management overall, rather than as individual initiative or projects being delivered in isolation down in a business unit or department.

Another measure is the number of well-attended conferences. I now speak at 2-3 events per month on the subject of Performance Management.

There are niche analysts covering purely Performance Management, and all the major IT analysts, such as Gartner, Butler and AMR Research have dedicated analysts covering the area.

One final point, is that for some Business Intelligence software vendors CPM is seen as simply Planning and Budgeting for the Finance Department. This is far too narrow a definition.

Do you think the companies started to apply CPM in an efficient way?

Every company has a different driver (or catalyst) for starting to get a better understanding of the metrics, processes, roles and responsibilities in their business. Only once the basics are in place can a company consider CPM.

We are already seeing companies with fantastic benefits from applying CPM, and these projects have been delivered in less than 12 months. For example Lockheed Martin, the defence contractor, in the UK has reduced costs by $8m this year and expect year on year savings of $6m, and have identified process improvement savings of $21m. This has resulted in their contract win rate going from 30% to 100%.

The greater level of awareness, plus the improvement of the economy combined with strong competitive pressures is forcing every company to consider how it can improve its operational performance. And that is what CPM is focused on.

Time, cost and efficiency-based directing and monitoring are essential to achieve success of the projects that have been started by the companies, who want to adapt themselves to the competitive environment. What could be the difficulties that a company faces with during the realization of the strategies? How can a company overcome these difficulties?

With any initiative / project the challenge is getting the changes in working practices or improvements, which were identified by the project team, adopted or accepted by the rest of the company.

In the book we have a formula R = I x A2 where R is the result for the company, I is the initiative / project and A is Adoption of the changes suggested by the Initiative. Some people have said it should not be A2 (squared) but An where n=14. It is FAR more important to get adoption for a few key initiatives than no adoption on a huge range of disconnected initiatives.

For the success of the organisations, the ability to realize the strategies is as important as determining them. The research shows that only 10% of the companies realise strategies successfully. What is the most important reason for this?

I think that there is a real problem with company's ability to translate the strategy into a series of activities which are clearly communicated and can be understood at the lowest levels in the organisation. The strategies stay in senior management's heads, and the workers carry on as normal.

When the CEO says "We will be more Customer Focused", what does that mean for the Call Centre operator? Should they pick the phone up and smile, or give a bigger discount. The critical part is – "How to you want me to act differently based on the corporate strategy, and how am I going to be mesured".

The approach of hierarchically breaking down the top level picture of the business (the strategy) which is described in terms of metrics (outcomes) and activities to deliver those outcomes (processes) is THE way to communicate the strategy and turn it into reality.

Two of the reasons of project failure are not to spread the project deliverables amongst employees and not to connect the strategy to the people's daily operations. What must the companies do for the possession of the strategies by the employees? What are the benefits of the adoption of the project outputs and the strategy?

I think that I've covered the first part in the answer to the previous question.

The benefits of adoption are
- better staff morale (people know what is expected of them)
- more efficient/effective operation (people are doing the right things)
- the business is more agile (change to react to markets can be faster)
- can expand more easily (you have a blueprint of how the business works)
- alignment of strategy with day to day activities

If a company applies the CPM in an effective way would there be an increase on its profit?

Of course – that is what we are seeing from our clients in profit making industries. In non-profit making industries (Government) we are seeing reduced cost, or additional capacity.

Do you have any advice for small and medium sized companies? What do they have to do in order to increase their profitability? How must they use CPM?

The principles of CPM is relevant to large as well as small companies. It is is more difficult for an organisation with less than 75-100 employees, because they cannot necessarily afford to dedicate a full time project manager and part time project team to really make the project deliver. However, when we were only 40 people Nimbus adopted the principles and it has enabled us to respond to a huge demand from the market.

My advice is to start to apply the principles, no matter what size of company you have. It is is critical to appoint a Project Champion who is part of the Executive Team and who has the energy, vision and rive to ensure that the work is completed.