Our friend and colleague, internationally acclaimed consultant and speaker Mark McGregor has written an interesting article contributing to the understanding of Business Process Management (Definition by BPTrends). Enjoy!

"Given the hype and the publicity that has surrounded the term business process management (BPM) over the past 18 months to two years, there can be few in the information technology industry - whether vendors or users - who have not at least heard of the term. But the mass of information about BPM has, in many cases, led to confusion over what it stands for and what it really means.

The acronym BPM, for example, has been variously used to describe business process modelling, business process management, business performance management and best practice management. The emerging consensus, however, is that the term BPM stands solely for business process management, while the practice of BPM includes process modelling, performance management and best (or next) practice.

From a technical perspective, BPM started out being used to describe a new generation of technologies that could be viewed as workflow++ or workflow 2.0. But like so many elements of the computer industry, that early definition has become blurred.

For instance, it has since been used to describe new versions of everything from document management systems, content management systems, workflow systems, enterprise resource planning (ERP) systems, customer relationship management (CRM) systems and in fact just about anything where the vendor thought they might get greater traction in the market by using the BPM acronym.

But BPM is about much more than just technology. It is very much a management philosophy and is about doing business differently.

Customer focus A key differentiator is that it approaches business from an 'outside-in' perspective rather than mimicking the inward-looking focus of most other approaches to the management of business processes. The main tenet of BPM then is to look at, and to organise, the business from the perspective of its most important element - the customer.

Looking at the business from the perspective of the customer involves much more than merely adopting a 'customer focus' or a fancy mission statement asserting the organisation's 'customer centricity'.

It requires a far more fundamental examination of the business, with senior management asking questions such as: What constitutes success for the customer? And how can the business profitably deliver against those success criteria?

Only once those questions have been answered can the organisation reorganise the way it works accordingly, so that everything is geared to generating more of those successes - and minimising failures.

Of course, it also means questioning other things that the business does and asking, "If it does not contribute to those customer successes, then why do we do it?"

Interestingly enough, experience has amply demonstrated that organisations that take this 'outside-in' view and think long and hard about customer successes first, find it much easier to also drive waste out of their processes and systems.

Furthermore, the resulting cost savings tend to be greater than with a purely cost cutting program alone, and more importantly, such an approach does not risk damaging the very fabric of an organisation - as pure cost-cutting often did and as 1990s style business process re-engineering projects frequently did, too.

All too often, cost cutting and systemisation tends to be looked at from a purely balance sheet perspective, without sufficient regard to the damage that the resulting cuts may cause to an organisation.

By way of example, in times of economic downturn many organisations traditionally look to cut back on their marketing spend. However, it is now well proven that those companies that maintain their spend come out of the downturn much stronger and, in fact, very often overtake those who cut back. Why? Bec-ause, invariably they have started to cut away at the fabric of their organisation.

One example of the benefits of a strong - some would say relentless - customer-focused business is South West Airlines in the US.

The company has posted a profit every year for the past 30 years - when bigger name US airlines have struggled and failed - and is arguably a leaner, faster, better-motivated organisation than all of its competitors.

Why has the company been so successful? Because South West Airlines has a clearly defined strategy that is relentlessly focused on the customers it wants, and the way it keeps those customers happy - flight after flight.

Most importantly, the company has organised itself entirely based on what it takes to deliver on this strategy. South West Airlines has proven that the combination of strategy, people and process make the difference, particularly when placed in the context of customer outcomes.

Old and new For BPM to deliver the biggest benefits, organisations have to look and think differently about their business and its processes. It is in this requirement that BPM differs from the existing workflow and document management systems approaches that companies might already be familiar with. But at the same time, those systems are still likely to be needed to support BPM when it is fully implemented and understood.

In short BPM is not about throwing away those old systems and approaches, but instead it is about ensuring that those systems deliver both the intended benefits and the required benefits in order to maintain a competitive advantage.

Simply putting in a system to reduce costs is of no long-term benefit to the organisation if that system does not in some way deliver greater benefits to the customers.

Perhaps the biggest challenge facing any organisation considering undertaking a BPM initiative is dealing with cross-functionally. To be effective in BPM means breaking down artificial, internal boundaries and instead organising people and resources in the most appropriate way to deliver the goods and services to the customer.

Inevitably the idea of challenging the status quo of traditional hierarchical structures meets with many objects and a lot of obstacles! That is why BPM is not something that can be driven by IT or managers low down in the structure of an organisation.

To be successful, BPM has to have a profound impact on the organisation, which means it will require support and approval from the very highest levels."

We are very sorry that we haven't been able to write a blog entry since the 30th of June. We had a few colleagues and friends suffering from the recent bad flu outbreak in Australia (it's Winter here and it shows) and the rest of the crew had to hold the fort in the meantime. Now we're back on our regular staffing level and all of you can expect regular blog entries from now on (unless another event stops us doing so).

For this blog entry we selected a great article by our friend and consulting colleague Bob Lewis, president of US-based IT Catalysts, Inc. Bob uses the right words when he reminds us to win the hearts and minds of those people who are most affected by a new project or any engagement for that matter. Some may call this "Stakeholder Management", which sounds mechanic and is not exactly what Bob had on his mind when he wrote the following piece. Enjoy!

 

"Carl Sagan told the story of the last question on a biology final exam: "You're part of the first expedition to Mars. How would you determine if there's any life there?"

One essay -- it earned an A -- went like this: "Ask the inhabitants. Even a negative answer would be significant."

Here on Earth, the anthropologist and adventurer Thor Heyerdahl sailed a raft, the Kon Tiki, from South America to Easter Island. His goal: To demonstrate that his hypothesis regarding cultural diffusion from South America into Polynesia was possible.

Prior to Heyerdahl's landing, archaeologists and those who play on the fringes of scientific inquiry had developed a wide variety of elaborate theories to explain how the island's famous multi-ton stone statues came to be erected. Among the more popular: Space aliens did it, presumably as a change of pace from leaving crop circles in the English countryside.

Heyerdahl took an approach to discovering the answer that was, if anything, more daring than sailing his raft across the Pacific ocean. He asked the inhabitants, who happily demonstrated the technique their ancestors had used.

In corporate America, right now as you read these words, there are companies in trouble. The executives responsible for running them don't know they're in trouble, but they are.

The reason these executives don't know their companies are in trouble is that they've never pondered the question of life on Mars, nor the mysteries of Easter Island. Their knowledge of the companies they lead comes from financial reports, information provided to them through the chain of command, and their memory of how things used to be when they were lower in the hierarchy and closer to the action.

Were they to ask the inhabitants -- were they to talk directly to employees and customers -- they would know that:

• Recent attempts to cut the cost of raw materials have resulted in deteriorating product quality.
• The "successful" system replacement project didn't actually turn off the old system, which means that a third of all financial transactions are posted using unaudited ad hoc patches.
• Following the recent offshore outsourcing effort, on-shore employees are spending a quarter of their time translating variable names and comments written in Urdu to English. They charge their time to maintenance so the outsourcing project will look more profitable.
• Employee morale is in the sub-basement because, following the significant wage concessions by employees needed to save the company, the top executives received serious bonus packages. Employees drew the obvious conclusion -- that their wage concessions were needed, not to save the company, but to fund the bonuses. (Okay, this last one didn't require talking to the inhabitants. Even the tiniest amount of empathy would have sufficed.)

Many executives have read about the importance of "walking around." And so they do. They walk around, exchange pleasantries with "rank and file" employees and figure they've taken the pulse of the company.

An observation which might or might not be relevant: In my admittedly limited and indirect experience, officers (and former officers) who use the term "rank and file" are also the ones who consider their military forces to be nameless and faceless troops who they blithely send out to be shot at for no valid tactical reason.

They are also more likely to refer to dead civilians as "collateral damage," not as tragedies.

The officers who refer to these same people as "soldiers" or "men and women" are more likely to choose the right battles and tactics. They are also more likely to have real conversations with the men and women who do the actual fighting and know what conditions are really like on the ground.

They listen, that is, to the inhabitants.

Since we're on the subject of military tactics, here's a piece of wisdom that's at least as old as Sun Tzu: The battle is always for hearts and minds.

Taking and holding land certainly matters. It just doesn't matter as much, because if you have the hearts and minds of the men and women who fight for you, and of the civilians who live in the disputed territory, you'll end up with the land. Without their hearts and minds, you'll lose tomorrow the land you took today.

While the stakes are less dramatic, as an IT leader the same wisdom applies to you. Whatever you're trying to accomplish, you first need to win the hearts and minds of the men and women who have to make it happen.

They are the inhabitants. If you want their hearts and minds, talk with them."

• Awareness for Enterprise 2.0 worldwide has risen considerably since last year,
• The technology progress is excellent, even that Andrew feels he is "drowning" trying to keep up with the evolving toolsets,
• Yet communication of the results to interested organisations is still spotty.

 

After a long week spent with clients I was about to write a blog entry about Systems Integration as I came across a brand new article by our friend Bob Lewis of US based IT Catalysts, Inc. It addresses a severe problem that many business processes have: They sometimes switch off brains of those people who are assigned to perform the process tasks:

"I've discovered a new process design methodology. I call it "Six Stupid."

Everyone knows that a group of people is dumber than its least intelligent member. Six Stupid is based on this insight. Unlike the better-known Six Sigma, Six Stupid requires the collaboration of at least six idiots, to design process flows that defy reason and preclude exceptions. To illustrate:

My wife and I ordered furniture on-line from a prominent multi-channel retailer. A few hours later we stumbled upon a better alternative at a much more attractive price.

The first retailer's website refused to cancel our order so I called customer service, where a polite representative told me she couldn't cancel it either. The reason? It had already been sent to the warehouse for processing.

When I suggested she contact the warehouse, she explained that it had no telephone number to call. Really. The only solution was for them to ship the merchandise and for me to refuse the shipment. When it arrived back at the warehouse, they'd restock it and credit my account.

Which is how it happened.

This wasn't a case of customer elimination management. Quite the opposite -- customer service took care of me just fine. No, this was an example of Six Stupid. Even if the merchandise had been picked and was waiting on the shipping dock, anyone with a gram of sense could have figured out that logging the shipment as departed, then rolling it directly to Restocking would have saved paying UPS twice to ship it back and forth. But policy, and the lack of telephone service, made sure everyone Followed the Process.

Then came the blizzard, and with it a Six Stupid airline experience.

It happened like this: I'd bought round trip tickets to New York City. A week after that trip I'd booked a long weekend in Florida.

Then plans changed and I had to stay in New York an extra week, which meant I'd fly to Minnesota Thursday evening so I could get on a flight to Florida the next morning. The fare rules, you see, didn't allow converting two round-trip tickets into one triangle fare.

Then, the day before I was to return to Minnesota, the weather service forecast snow there, and lots of it. The airline cancelled my flight in anticipation and rebooked me for the following morning, to arrive a half-hour after my flight to Florida was scheduled to depart.

I called customer service, explained the situation, and suggested that under the circumstances, routing me directly to Florida clearly made more sense for both of us.

But the fare rules still wouldn't allow it. The best they could do was to rebook my Florida flight to later in the day. I asked the guy on the phone to check with his supervisor, which he did. No-go: She wouldn't or couldn't override the system. "I guess I'd better speak to your supervisor, then," I suggested. He connected me.

"I know you have complex fare rules that mere mortals like me can't fully comprehend ..." I began. Those were the last words I would successfully utter for at least five minutes.

The customer service supervisor scolded me ... that's the only accurate description ... for (1) being disrespectful to the airline; (2) trying to game their fares to get a cheaper flight to Florida; and (3) now trying to cheat to get the best of both worlds.

I confess that by the end of the call I became somewhat testy. Anyway, the next morning I spoke to a different supervisor, described my previous attempt at resolution, and asked if the airline really wanted to fly me in and out of a blizzard zone when a simple and easy alternative was staring both of us in the face.

She told me the first supervisor had placed a red flag in my records. It said that under no circumstances should anyone help me out. She did anyway, routing me directly to Florida.

It was the opposite of the first Six Stupid situation: The airline's process did allow for exceptions. But I caught someone in a very bad mood who insisted on Following the Process anyway.

The point of this week's tiresome missive? There are two.

The first: Don't use the Six Stupid methodology to design whatever processes you're trying to implement. Make sure every process has a process bypass process to handle situations that just don't fit.

And second, make this rule inviolable:

Turning a new process on does not justify employees turning their brains off."

My take on this

People processes are not integration processes which force machines to do things logically. People processes should always be used by people with the brains switched on. That way execeptions can be handled which lead to customer satisfaction, sometimes even to customer excitement...a term by the way, I haven't heard since the heady days of Total Quality Movement in the beginning of the 1990s.

Saying this, I am back to integration...I will talk about that in a new blog entry...integration of people and integration of systems.

 

"As the new Chief Information Officer you spend the requisite month listening instead of talking, making no commitments, figuring out what's going on. You find a department that operates through oral traditions and improvisation. It needs, in other words, a healthy dose of process.

What's your next step?

Here's what the answer isn't: Design and implement great processes.

One of the stranger aspects of organizational change is that you can't often fix a problem by trying to fix the problem. At least, you usually can't fix problems directly, for two reasons. The first is that most of the problems you see are the symptoms of other, less apparent issues you don't see. The second is that the number of levers you can pull and buttons you can push to influence the behavior of the organization you lead is surprisingly small.

If an organization is underperforming, its processes aren't working as well as they should. This is a matter of definition: Process means how employees do their work.

That doesn't mean you can fix an organization by fixing its processes. Far from it. If you want stronger processes, starting with process design doesn't work very well. The buttons and levers lie elsewhere. Among the more useful:

Changing the business culture, to encourage a process state of mind. If you need an organization that's more orderly -- one that operates through well-defined, continuously improving processes -- begin with culture change. Otherwise, everything else you try to do will wither and die, killed through the passive resistance and malicious obedience of employees who just don't see the point and who like the less-bureaucratic way things are right now.

Educating process managers in the niceties of process management. Just as employees, left to their own devices, generally prefer informality to well-defined processes, process managers, left to their own devices, often prefer managing the work to managing the processes that manage the work.

Nor is this necessarily a bad attitude. You can, in theory, manage processes by watching key performance indicators, dashboards, and exception reports without once interacting with a live human being. To manage the work you have to interact with the people who do it.

If you want process to happen, process managers must learn the discipline of process management. If you want process to happen without doing more harm than good you'd better make sure they understand that process management isn't an alternative to leading people -- it's a complement.

Fixing the policy manual, most often by throwing out most of your policies. If the policy manual is thick it almost always means compliance has replaced strategy as the force driving the company.

It also means that whenever anything goes wrong, most managers instinctively try to prevent recurrence with a new rule. The result: A stifling, choking bureaucracy in which following the steps, filling out the forms and above all following the rules matter much more than achieving anything that resembles a useful result.

Once you've finished clearing out the policy underbrush, institute one new policy: Whenever possible, institute a guideline instead of writing a policy. Guidelines do the same sort of work that policies do, but they leave enough flexibility to get the job done.

Reorganizing. Many executives reorganize the way Correge models change attire -- frequently, as the mood takes them, to stay in fashion. Doing so has, as the saying goes, much the same effect as rearranging the deck chairs on the Titanic. A roll of duct tape would be more useful.

One reason the tool of reorganization is so often used incorrectly is that organizational structures are mis-represented whenever anyone draws them. Showing them as a hierarchy does a fine job of presenting reporting relationships. It fails to depict something far more important: An organizational structure is a set of boxes packed within bigger boxes set within even bigger boxes.

The rule for business processes is straightforward: Processes break in proportion to the number and height of the organizational barriers they have to cross. The challenge for organizational designers is that however you organize, the total number of boxes ... and therefore the number of barriers ... won't change very much.

So when you reorganize you aren't going to remove the barriers to all processes, because you can't.

All you'll be able to do is to decide which processes you improve, and which you make more difficult.

Choose carefully."

 

On another note:

For all of you who are waiting for Part 2 of the Business Value article by Stephen Alexander, this is due to be published at the beginning of May 2007.

 

We love Easter. In Australia it is the time after a hot summer and marks the beginning of autumn but it still has around 24 lovely degrees (Celsius that is). It is a time for celebration and relaxation before the project work has us in its grip again.

We thought we start Easter by giving you, dear readers, something to laugh about. The video shows a somewhat disturbed relationship between a computer geek and a business person; we find it hilarious.

Have fun and see you after Easter !

 

 

Fun aside, watch this truly inspiring video featuring Bill Clinton in the spirit of Easter:

You may remember that we blogged in January about the annual TED 2007 conference to be happening in March

this year.

Today, Good Friday 2007, TED published videos of outstanding speeches given recently in Monterrey, California.

Watch and listen to Bill Clinton giving his acceptance speech of the TED 2007 award for his accomplishments with the Clinton Foundation.

This is powerful stuff as William J Clinton is a dedicated and passionate humanitarian today. He is very

successfully helping to make our world a much better place with social responsibility, business acumen and great

technology.

I have a dream - A truly inspiring speech by Bill Clinton in Monterrey

Happy Easter !

 

The internet is no longer just a bunch of fancy online marketing brochures, repositories of downloadable documents and e-business applications. It has further developed into a communication platform, sparked by new technology commonly summarised with the term "Web 2.0", the second generation of the internet.

In short, Web 2.0 can be classified as technology that allows people to easily communicate (i.e. read, write, speak, watch) over the web. The hurdles are low and almost everybody can do it; a real challenge to professional communicators such as journalists and professional web designers.

In Nov last year we blogged that Web 2.0 already spilled over to the business world. First mover CEO's and company members write weblogs (blogs), companies set up wikis and entrepreneurs form online communities using social networking platforms. The media sometimes classifies this development as "Web 2.0 for enterprises". Last year Harvard Professor Andrew McAffee coined "Enterprise 2.0 (or E2.0)", a term which has been widely accepted since.

In contrary to Web 2.0 the adoption of Enterprise 2.0 has proven not to be an easy ride. There are a number of concerns attached to its further adoption in organisations of the private and public sectors, a few of which are:

Legal issues

Companies have to be sure that blogging employees represent their organisations in proper ways in openly accessible blogs and wikis. Since blogging became widespread, there have been several cases where people disseminated confidential information about their employers and clients.

One way how to deal with this issue is, to set up blogging policies (e.g. similar to our own) and train employees in communication and compliance behaviours as well as the proper use of blogs and wikis.

Issues of alignment between IT and business

Enterprise 2.0 is user driven, in that employees know Web 2.0 applications from their private use of the internet and request similar capabilities in their work environments. Traditionally, though, IT departments under the leadership of the CIO drive the selection and implementation of enterprise applications.

With Enterprise 2.0 this is going to change. Business users assemble tools, even put together applications themselves without IT involvement. This includes personal starting pages such as Pageflakes and Netvibes, or application builders such as Coghead and Teqlo. These tools don't require much IT know-how and are relatively easy to set up.

Commercial IT vendors already respond to this trend and provide tools for end-user development; e.g. IBM recently released QEDWiki. Find a list of white-label social networking applications that organisations can deploy with their own brands here.

Organisational hierarchy issues

Enterprise 2.0 doesn't know of any hierarchies, it is an even playing field. All users have the same right of writing about or comment subjects they are passionate about. This can present a not always welcomed trait of the internet for more hierarchically oriented organisations. The history of intranets has this story to tell: Typically there is not much communication going on on the intranet; yet the same people working for the organisation privately blog passionately and communicate regularly on social networking sites such as MySpace and Facebook.

Prof Andrew McAffee says that the E2.0 technologies really are something new under the sun. "They’re not extensions or enhancements to previous generations of corporate tools for collaboration and knowledge management; instead, they’re radical departures from them". They offer new communication opportunities with all stakeholders to organisations:

What if organisations would activate their people's passion for communicating via enterprise 2.0 tools with their colleagues about matters that concern their companies and the sector they are in?

As a practical example, what if Australian corporations would encourage their employees to use Enterprise 2.0 communication tools to start or further their engagement for Corporate Social Responsibility (CSR) ? How much money could be saved, business processes improved and positive PR generated ? Given the current public discussion about climate change this would definitely improve on communication within the organisations and across company boundaries.

A related, more personal, example: Two years ago I purchased a small fuel efficient car and financed $3,000 of the purchase price with a discount earned through my credit card sponsored by the manufacturer of the car. That was the only reason why I kept on using the card even that their interest rates are considerably higher than their competitors'. I am ready to replace my car now, but surprisingly received a note from the card company that they've decided to grant the full rebate of $3,000 from next month only to the large sized cars of the manufacturer. What's interesting is, that the card company is eagerly pursuing a corporate social responsibility program through public ads.

How handy would an E2.0 social networking platform come into play where I could discuss the issue of them promoting larger less fuel efficient cars via their credit card benefit program.

The more people that apply the new communication capabilities Enterprise 2.0 has to offer, the better they get at communicating with one another about company matters and the better the new tools are being actively applied. This will definitely affect organisations' bottom lines positively sooner or later.

 

I have been aware of a new milestone of the digital evolution creeping upon us over the last 18 months and increasing in its intensity since everyone returned from the Christmas break: