session 8: process critique - cis.gsu.edu© richard welke 2008-12 cis4120fa12 session 8: process...
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© Richard Welke 2002
CIS 4120 Fa12: Define/Innovate BP’s
Richard Welke Director, CEPRIN
Professor, CIS Robinson College of Business
Georgia State University Atlanta, GA
Session 8: Process Critique
CIS4120Fa12 Session 8: Process Critique © Richard Welke 2008-12 2
Getting from As-Is to To-Be
Value metrics Performance
measures associated with
the client’s perception of
value (tend to be external,
effectiveness related) Process
metrics Performance
measures associated with
the process owner’s key-performance-
indicators (KPI’s) for how well the process functions
Submit screenplay
Decision to produce
Submit-‐to-‐Decide
“As-Is” P-metrics
“As-Is” V-metrics
Submit screenplay
Decision to produce
Submit-‐to-‐Decide
“To-Be” P-metrics
“To-Be” V-metrics
As-Is Service-Process
To-Be Service-Process
Service-Process
Innovation &
Improvement
Improvement
Innovation
How we’re doing it
What we’re doing
Metrics drive the transformation
CIS4120Fa12 Session 8: Process Critique © Richard Welke 2008-12
Things to note with critique The process (operational) and value (customer) metrics should justify your changes
Your “ROI” (and business case) will be based upon these
As you move through the critique/improve/innovate stages following process discovery you’ll likely:
Discover new metrics Adjust definitions, measures and units of previous metrics Clarify which metrics are the true “key performance indicators” (KPI’s) – the two or three most important
Question: What *is* a KPI (in operational terms)? Can you relate it to CSF (critical success factor)?
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CIS4120Fa12 Session 8: Process Critique © Richard Welke 2008-12 4
How BPM (should) approach improvement
Set target based on “to-be” model Start by implementing the “as-is” model (with minor changes) Increment towards “to-be” gathering operational data and feedback
Can use collected operational data to support Six-Sigma/Lean efforts
“As-Is” “To-Be”
CIS4120Fa12 Session 8: Process Critique © Richard Welke 2008-12 5
Improvement vs. innovation
Improvement Innovation
Level of change Incremental Dramatic
Starting point Process (inside-out) Client (outside-in)
Frequency of change Continuous Discrete end-point
(can use increments to get there)
Support needed Process owner Client owner
Risk Moderate High (moderated if incremental used)
KPI focus Operational metrics Client value metrics
Substantially adapted from Thomas H. Davenport: Process Innovation: Reengineering Work Through Information Technology, Harvard Business School
Press, 1992.
CIS4120Fa12 Session 8: Process Critique © Richard Welke 2008-12 6
Shapiro’s seven process critique questions
1. Rethink 2. Reconfigure 3. Resequence 4. Relocate 5. Reduce 6. Reassign 7. Retool
Adapted from: Stephen Shapiro
The 24/7 Innovation www.24-7innovation.com
Question Apply when….. How can activity frequency be reduced or increased?
An activity is non-value added but necessary There is low variation in the process or product There is high variability and low setup costs and times
How would more information enable greater effectiveness?
Higher accuracy is needed Greater segmentation would yield greater marketing effectiveness
How would less information or fewer controls improve efficiency?
A high proportion of costs goes to data collection and controls The value received from information or controls is minimal Absolute accuracy is not necessary
How can critical resources be used more effectively?
Utilization of key resources is low Critical resources are performing non-value-added or waste work
7R’s of process innovation
Example questions & “apply when’s”
CIS4120Fa12 Session 8: Process Critique © Richard Welke 2008-12 7
Shapiro’s “Re-Configure” suggestions
Question Apply when ... R2.1: How can this activity be
eliminated? They are low-value or waste activities Processes have a low value density Value received from activity is minimal (e.g., approving small amounts)
R2.2: How can common activities be consolidated?
Common activities are performed in multiple locations Common activities are performed inconsistently There are economies of scale (e.g., shared services)
R2.3: How can reconciliation be reduced by putting quality at the source? Think client self-serve.
A lot of time is spent reconciling paperwork and correcting errors There is little accountability for errors
R2.4: How can intermediaries and non-value added work be eliminated?
Intermediaries add no value, and just relay goods, services
R2.5: How can best practices from other industries be borrowed and improved upon?
When you have access to practices in other, similar organizations or processes (books, trade magazines, vendors, professional org’s)
CIS4120Fa12 Session 8: Process Critique © Richard Welke 2008-12 8
Shapiro’s “Re-Sequence” suggestions
Question Apply when…..
R3.1: How can utilization predictions increase efficiency?
Accurate information on customer demand is available early Forecasting models have proved reliable Time compression is more critical than accuracy or inventory costs Product or service variations are relatively low
R3.2: How can postponement increase flexibility?
Customers want customized products or services Inventory carrying costs are too high Forecasting models have proved inaccurate
R3.3: How can concurrency reduce overall completion time?
There are limited timing dependencies between activities Time compression is critical Rework is necessary due to late error detection
R3.4: How can the number of interconnections and dependencies be minimized?
Where there are bottlenecks, large queues, or frequent handoffs
CIS4120Fa12 Session 8: Process Critique © Richard Welke 2008-12 9
Shapiro’s “Reduce” suggestions
Question Apply when…..
R4.1: How can the frequency of the activity be reduced or eliminated?
An activity is non-value added but necessary There is low variation in the process or product There is high variability and low setup costs and times (e.g., small lot sizes)
R4.2: How would more information enable greater effectiveness?
Higher accuracy is needed Greater segmentation would yield greater marketing effectiveness
R4.3: How would less information or fewer controls simplify and improve efficiency?
A high proportion of costs goes to data collection or controls The value received from information or controls is minimal Absolute accuracy is not necessary
R4.4: How can critical resources be used more effectively?
Utilization of key resources is low Critical resources are routinely performing non-value-added or waste work
CIS4120Fa12 Session 8: Process Critique © Richard Welke 2008-12 10
Shapiro’s “Re-Assign” suggestions Question Apply when….. R5.1: How can existing activities
and decisions be moved to a different organization?
Another organization has skills or resources you lack You want different branding It is too difficult to change previous operating model or culture
R5.2: How can the activity be outsourced?
You don’t perform the activity at world-class levels Another organization performs this activity at world-class levels You have limited resources and want to focus on core competencies
R5.3: How can the customer perform this activity?
Customers want to be empowered to help themselves (self-serve) Certain customer segments are not profitable Costs need to be reduced
R5.4: How can the organization perform an activity that the customer is already performing?
The customer wants more value and/or convenience The organization wants to get closer to the customer
R5.5: How can cross-training integrate and compress tasks?
Multiple tasks are needed to produce an outcome Processes are not complex enough to justify a specialist Only 20% of cases or less require special expertise
CIS4120Fa12 Session 8: Process Critique © Richard Welke 2008-12 11
Shapiro’s “Re-Tool” suggestions
Question Apply when….. R6.1: How can the activity be
automated? The current process is paper-based or manual and cannot be eliminated The activity suffer from errors, inconsistency, or reconciliation problems Greater transaction volumes are needed
R6.2: How can assets or competencies be leveraged to create competitive advantage?
You have world-class competencies Growth potential in the existing business looks bleak
R6.3: How can up-skilling, down-skilling or multi-skilling improve the process?
Customer satisfaction is low (up-skilling) Multiple specialists are needed to produce an outcome (multi-skilling) Technology can create knowledge workers (down-skilling)
CIS4120Fa12 Session 8: Process Critique © Richard Welke 2008-12
Improvement annotation suggestions Use color-coding of the process model to indicate where changes are to be made
The ‘As-Is’ would indicate which activities, gateways, etc. will be changed The ‘To-Be’ would indicate where new activities, etc. are introduced Use different colors for different major objectives being achieved (i.e. the primary metric being affected)
Use the same color for the As-Is and To-Be Use annotation to further highlight principle changes and/or objectives
People will read a model more easily than a lot of text so make the models work for you!
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