an investigation into business process management success factors: process ownership by martijn van...

E Squared UK Ltd

An Investigation into Business Process Management Success Factors: Process Ownership By Martijn van der Kaaij and David Key

Date: 24/09/2010

An Investigation into Business Process Management Success Factors: Process Ownership

by Martijn van der Kaaij and David Key 1.4 | 24/09/2010

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Contact Details

Please address any questions about this document to:

David Key E Squared UK Ltd 2 Cathedral Road Derby DE1 3PA Tel: 033 00 88 1950 Mobile: 0781 219 6876 Email: [email protected]



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Contents

1 The Purpose and Structure of this Paper ...................................................................................1

2 Findings from 2008 ...................................................................................................................2

3 2010: the impact of the transformed commercial environment .................................................3

4 2010: the current face of process ownership .............................................................................5

4.1 Implementation, integration and coordination ............................................................................ 5

4.2 Beyond Kaisen ............................................................................................................................... 6

4.3 Workflow and process clarity ....................................................................................................... 7

5 2010: proposals for improvement .............................................................................................8

6 Conclusions ............................................................................................................................ 10



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1 The Purpose and Structure of this Paper

A couple of years’ ago, IBM and others produced an interesting report entitled: ‘BPM: lessons from the

real world’1. In it, the authors proposed seven factors which they discovered were critical for the

successful application of Business Process Management (BPM) initiatives.

In the first in our series of seven white papers, each one addressing one of the factors proposed by IBM

and The Register, we look at the issue of process ownership.

In particular we ask whether clear and ongoing process ownership, which looks across organisational

and systems boundaries, is still a critical success factor today.

We open by précising the conclusions of the IBM report before reviewing the impact of the current

economic and commercial environment on process management and on process ownership. We then

look at the current face of process ownership, two years down on from the original paper before

presenting some proposals of our own for improvement.

As with all the papers in this series, the aim is to provide insight and provoke thought in an easily-

digestible form. Each paper is relatively short, designed to be read in no more than 15 minutes and will

be supported by follow up webinars, discussions groups and accessible international expertise provided

through E Squared’s new BPM Knowledge Centre. This, which will be launched after the issue of the

final white paper in this series, will be exclusively available through the E Squared website. Details on its

content and accessibility will be published on our blog at www.bpmblog.co.uk and announced through

our Twitter account www.twitter.com/esquaredgroup .

1 The Register ‘BPM: lessons from the real world. Practical ideas to apply to your organisation.’ Freeform Dynamics

Ltd, in association with IBM, October 2008

http://www.bpmblog.co.uk/

http://www.twitter.com/esquaredgroup




2 Findings from 2008

In the 2008 paper, IBM and their co-authors found the following.

“Effective and efficient management of the design, implementation and evolution of their

business processes is a weakness in most organisations. Process fragmentation across systems,

staff and organisational boundaries causes headaches in terms of performance and also poses a

challenge when people want to start improving things and corral available expertise and

support.

Process ownership, understanding and alignment are the foundation stones for BPM

improvement. Ownership drives accountability, which in turn increases an organisation’s

knowledge of the way processes perform, providing the scope for improvement. Building

understanding and alignment across multiple domains and stakeholders through activities such

as process mapping and modelling gets people onto the same page, sets expectations and

improves the likelihood of gaining support. Organisations which apply these ideas broadly and

deeply find their BPM performance improves.”

Importantly the authors of the 2008 paper went on to define ownership in a number or relatively

tactical terms such as:

Assigning responsibility for maintaining metrics or KPIs relating to a particular business activity

Creating a liaison role between those people using the processes and those providing support.

In the following two chapters we look at how these findings have changed in 2010 and in Chapter 5,

consider possible improvements.




3 2010: the impact of the transformed commercial environment

Clearly the world has move on significantly in the intervening two years since 2008. In particular:

We now have the global recessionary environment as a result of which organisational efficiency,

effectiveness and agility are more important than ever.

There are indications that in process terms, many organisations are going back to basics. Whilst

the 1st decade of the new millennium was characterised by a huge move towards process

automation in the industries where that could most easily generate competitive advantage e.g.

financial and customer services, 2010 appears to be the year where root and branch process

reviews are taking place, with a strong emphasis on human activities.

The days of the large, despotic IT department are numbered with more and more organisations

moving from technology management to information management. Whilst those organisations

that committed to multimillion dollar roll outs of enterprise-wide business process management

suites are still rolling those out (and will continue to do so if they have any hope of recovering

their investment), very few large server-based BPMS systems are being purchased afresh. The

capital outlay is too great and the ROI too nebulous. Instead there is a massive move towards

software as a service (SaaS): it requires less, if any, capital outlay; is available instantly without

any requirement for installation and the significant IT and consultancy involvement that entails;

and it can often be rolled out department by department. Some of the latest SaaS process

systems are also modular 2 and allow for a gradual roll out of functionality, aiding cash flow and

ROI even further.

These developments should have an effect on the way organisations deal with process ownership:

In order to improve efficiency, effectiveness and agility, process ownership needs to be defined

clearly and at the right levels in the organisation. Almost every process is capable of being

improved (rationalised), but to ensure that happens, each organisation needs to have a process

management structure in place to facilitate it. From strategy to planning; programmes and

projects to operations: somebody must be in the right place to either spot the possibilities and

take action themselves or to manage others to do the same.

With the growing emphasis on human activities, process ownership should be able to move out

of the IT department. In the large projects mentioned above, where the focus has been on

process automation, the design of workflows has often taken precedence over the proper

definition of process: process mapping has been seen as a necessary step on the way to

workflow automation, but not as an activity with merits of its own. This has led to situations

where IT was considered – and acted as - the owner of workflows and processes. , As

organisations move back to process basics, this will need to change.

The advent of BPM software, which focuses on the logic of a process instead of the automation

of workflows and is delivered to the organisation as a ready-to-run service also supports this

2 Qmap Studio is one such example.




movement away from a dominant IT department. It places the ownership of BPM programmes

back in the hands of operational managers and provides the ideal tool to enhance process

ownership across the organisation.

So in many respects, the recession has had a positive impact on process ownership and continues to

provide opportunities to improve it further. In the next chapter, we will consider how organisations

might deal with these opportunities.




4 2010: the current face of process ownership

4.1 Implementation, integration and coordination Awareness of the importance of BPM has been growing rapidly over the last few years and this trend is

reflected in the way organisations have changed their approach to process ownership. In 2008, IBM

found process ownership primarily at a tactical level; in 2010 it lies increasingly with senior management

(Managing Director / Vice President or Operations Director). It appears that at long last the penny has

dropped. Senior management now recognises that it needs the power of BPM for the achievement of

corporate goals and with this recognition comes responsibility: senior management needs to be involved

in BPM in order for it to be effective.

This is a massive turnaround, especially in relation to process improvement. In the past most process

improvement programmes were initiated at a middle management level (Quality Manager, Business

Improvement Manager or similar) or even at operational level and the most pressing task of the

initiators was to convince senior management of the wisdom of such a move. Today, it is often senior

management that initiates improvements.

That is real progress. However, when it comes to process ownership, the growing involvement of senior

management has if anything, made things less clear. In the past, the middle managers who initiated the

processes were process owners ‘by default’: senior management wasn’t interested. Today, however,

senior management often thinks of itself as the ‘strategic process owner’. Such a phrase implies that

there is probably also ‘tactical ownership’ and may be even ‘operational ownership’, but this is seldom

clarified.

This state of mild confusion results in a perpetual tug of war around the processes. At a tactical and

operational level employees regularly propose improvements, often based on their own, direct

observations. Many of those suggested improvements are quick wins, so the initiators stress the

importance of immediate implementation. At the same time, senior management tries to organise

process improvement from the top, down. In theory, a balanced state in which these approaches

complement each other should ensue. In practice, this hardly ever happens: senior management wants

to keep a close eye on developments and implements the model very strictly, making quick fixes almost

impossible. Other levels consider this stifling and either waste a lot of energy on discussion, or focus on

improvements and changes elsewhere (e.g. IT or work instructions) instead of proposing to improve the

process itself.

An integrated and coordinated approach is required, so that process ownership is aligned with the

customer delivery elements of the organisational value chain. This was touched on in our earlier paper

on organisational performance improvement3 and will be dealt with more fully in a forthcoming paper

within this series. However the elements are shown in the diagram below and the core questions it

raises are listed beneath.

3 Improving organisational performance through strategic process alignment, Stephen Justice and David Key, 30

th

June 2010




How does the current process ownership affect the corporate supplier to customer relationship?

How well does the ownership allow actions and decisions to be communicated throughout the

organisational hierarchy? Are there any bottlenecks?

How well does the process ownership structure integrate with and facilitate the

Act/Plan/Do/Study (Lean) cycle?

Is process ownership primarily structured for organisational effectiveness or efficiency? If the

answer is effectiveness, how well does it empower (or disenfranchise) middle management?

4.2 Beyond Kaisen The shift away from large automation projects is not just a result of economic developments. In many

knowledge-based organisations the introduction of Enterprise Content Management Systems and

Document Management Systems has raised process visibility. Most of these systems contain workflow

modules and whilst this has led to a number of DIY hits and misses, it has also introduced a wider

audience to the concepts of process management and opened a greater number of eyes to its

possibilities. Because employees find such tools on the work floor, they tend to be very involved in their

use. As a result, process ownership - or at least process awareness – is starting to be seen at operational

level, triggering continuous improvement initiatives from the bottom up. Although through Kaisen




programmes this has been the norm in manufacturing for some time it is a relatively new phenomenon

in the knowledge sector. Again, for BPM in general, this has been a positive development, but it has also

contributed to an increase in tension between senior and middle management.

4.3 Workflow and process clarity Process descriptions usually exist in several forms, are often difficult to access and more often than not,

very difficult to for the end user to comprehend. This is especially the case with flow charting

applications. These, which contain an enormous amount of icons and objects, inherited from flow

charting’s origins as an IT programming tool, can be totally baffling to the uninitiated – i.e. the average

employee.

Furthermore, a flow chart is not a process map: it contains the conventions, symbols, ‘what-if’

statements and alternative paths required by systems programmers to write software code.

A workflow is not a process map either. Ranging from fully automated to fully end-user focused,

workflows come in many shapes, but their main purpose is to instruct people or software in detail

regarding the execution of certain tasks. They are about implementation of (parts of) processes, not

about mapping a process itself. One process can result in the set up of many different workflows and

one workflow can be a part of the implementation of many processes. As the main purpose of a

workflow is to automate the flow – even if it is purely a flow past humans to make them execute tasks –

workflow systems, like flow charting applications, come with their own icons and conventions.

Alternatively a process map is at its most basic, a visualised simplification of a procedure for employees

to follow. Its initial power lies in its ability to clarify: to avoid ambiguity so that consistency, adherence

and compliance are all improved. When mapping processes, the language and tools of flow charting

applications and workflow systems - decision boxes, what-if statements, icons and arcane symbols-

confuse rather than clarify.

This is not a new phenomenon but in 2010, with the increasing roll out of workflow-driven business

process management suites focused on automation, it is a major issue. It has been estimated that at

best, 20% of processes in any one organisation are capable of being automated. In the knowledge

sector where human capital is everything, this figure is likely to be less.

So as the world turns to knowledge-based businesses for more and more value creation, the language of

process ownership is in urgent need of being addressed. Until it is, and the numerous discussions and

debates about possible standards are crystallised into a concrete code, the language of process

ownership, if it is not to become a major barrier to innovation, has to be kept as simple and as symbol-

free as possible.




5 2010: proposals for improvement

Those wanting to be process owners should accept a crowded field. Since it is processes that tie

operational and supporting activities to strategic goals, the owner of the process must accept that both

senior management (as ’owner’ of the entire value chain) and the owners of supporting processes (as

suppliers) have a legitimate interest. Through the extensive use of modern process management tools,

each prospective owner now has easier access to processes than ever before and through the

collaboration which these tools facilitate, everyone wants to have their say.

Transparency is therefore paramount and nigh-on unavoidable. In most developed cultures (China

being the notable exception) it is also the accepted norm. Whilst every person should have access to

the process information which is relevant to their job, many employers are going beyond this in order to

better align behaviours with corporate goals – and often this can work both ways. Just as a line

manager might benefit from understanding his place in the corporate value chain, so a senior manager

may benefit from having occasional access to process detail. Transparency allows people to step

beyond their own view of a process, which is always limited, either in scope or in detail. With that wider

view, discussions about process improvement become easier.

Even in the banking sector, previously renowned for secrecy, such a trend is emerging. As an example, a

major European bank is enabling process access for the whole organisation by default, only restricting

this when a specific case can be made to do so.

However, transparency and an increasing number of stakeholders can cause new problems: time and

time again visiting clients, we find mixed groups of senior management and other staff discussing things

like details of time constraints on low level process steps. Usually, these are very animated and time

consuming conversations, given the differences in approach and knowledge details.

Senior management, once involved in process improvement, has trouble in establishing the right level

for their involvement in process improvement. It is obvious that senior management should, as a rule,

not be involved in low level changes, but where – and how – to draw the line? KPIs, already mentioned

in the IBM paper, offer both a parallel and an answer. KPIs are widely used to monitor processes, but in

many organisations senior management still struggles to define the right KPIs for the strategic level.

However, once strategic KPIs have been defined, they can be used to initiate process improvement and

they can be used to determine the right level of involvement for senior management: formulating

changes to processes through changes to the strategic KPIs. As long as the organisation can deliver

these changes, senior management does not need to be involved in the detailed changes to processes.

At the same time at other levels in the organisation, changes to processes can be initiated without

referring to senior management, as long as the strategic KPIs are not being affected.

So many people, looking from several different viewpoints, should be able to contribute to a process

and its improvement. That places a load on the organisation to create a coordinator for each process;

someone who:




knows where his process fits into the wider organisation (includes knowledge of relevant KPIs)

collects (and filters) all complaints and ideas;

regularly reviews the processes in question, for effectiveness, efficiency and agility;

monitors associated processes;

maintains access to senior management and conducts a regular dialogue about the processes’

alignment with corporate goals and strategy;

is able to distinguish between process issues that require a quick change and those that can wait

for the normal cycle of development.

We think that this person should claim the title of process owner.

Finding these process owners is not always easy. On many occasions, especially in larger organisations,

we have found ‘process owners’, appointed by senior management, who were too high up in the

management tree. Without sufficient knowledge of the processes involved, they had to involve the – in

terms of the list above – ‘real’ process owners, adding an extra layer of communication and at the level

of the real process owners, some understandable resentment.

However, looking at our clients and the wider world, we can only be optimistic. In many cases, the

struggles and pitfalls mentioned above are just growing pains: out of it, a more mature and balanced

process ownership is emerging, and that is very beneficial.




6 Conclusions

We started this paper with the question whether clear and ongoing process ownership, which looks

across organisational and systems boundaries, is still a critical success factor today. The answer can only

be “yes, more than ever”. BPM is moving out of the IT department, process awareness is being

increased as a result of exposure to day to day systems which involve processes and senior management

is more and more interested in BPM and its possibilities. All of this means that far more people than

before are involved the design , daily running and optimisation of processes and in such a crowded

place, there is a great need for a clear division of responsibilities.

Whilst acknowledging that each process has many owners (at different levels in the organisation), we

define the key ‘process owner’ as being an individual who can coordinate all levels of process

management so that at all times the outcomes from each process are strongly aligned to the

achievement of corporate goals. KPIs could play an important role in getting this alignment right. When

senior management initiatives change, these process owners should take responsibility to deliver

relevant changes to the processes in their purview. Similarly, based on their extensive knowledge of

these same processes, they should be able to initiate smaller changes on their own.