BPM – where is your organisation on the process maturity journey?
“Brilliant process management is our strategy. We get brilliant results from average people managing brilliant processes. We observe that our competitors often get average (or worse) results from brilliant people managing broken processes.” Source: a senior Toyota executive
Business process management (BPM) is a systematic approach to making an organisation’s processes and workflows more effective, more efficient and more flexible in a changing business environment. Processes are at the heart of all business activities and ensure that consistency and repeatability can be achieved. Achieving processes excellence improves the way that businesses create and deliver value to customers. The important point here is that processes serve the customer rather than the organisation itself.
The goal of BPM is to reduce human error, process variation and wastage and focus stakeholders on the requirements of their function or role.
Many organisations make the mistake of investing in technology solutions to automate processes and workflows before they really understand the processes themselves. The process understanding must come before the technology, otherwise there is always a risk of just automating the inefficiencies of a manual process.
The Business Process Maturity Model
The concept of a maturity model can be helpful in identifying where your organisation is on its process management journey and the optimum support or solution required. The model below has been adapted from the Capability Maturity Model (CMM) originally developed for use in software engineering.
There are many methods and systems available to consultants and management to improve all aspects of the business process to achieve greater efficiency and leaner cost values. My view is that the methods applied must be appropriate to your culture and management style, and ideally should be designed specifically for your business.
Knowing where you are on the Process Maturity Model will help to guide your thinking on your process management journey and help to identify what your priority areas are.
As technology extends to all areas of the business, automation is no longer enough to differentiate yourself from your competitors. Companies that adopt Business Process Management will increasingly be able to adapt quicker to new opportunities and ensure resources and staff are utilised to the best of their ability.
“Continuous improvement is not about the things you do well – that’s work. Continuous improvement is about removing the things that get in the way of your work. The headaches, the things that slow you down, that’s what continuous improvement is all about. Source: Bruce Hamilton, President GBMP
Like this:
Case Study – From Initiative Overload to Project Portfolio Management
I have recently written this case study demonstrating my skills as a project management consultant. It was written for a proposal submitted by my consulting network, The Lamberhurst Corporation.
The Company
The private wealth management arm of a well known global banking group, with offices in several jurisdictions.
The Business Problem
Internal changes within the parent bank had resulted in this standalone business reporting into a new global Division. This Division required the business to implement a new operating model resulting in a lot of change in terms of processes, procedures and management oversight. In parallel with this there was a general tightening of the regulatory environment which required a number of compliance related changes. The conflict between business growth initiatives, regulatory improvements and senior management restructuring caused the organisation to suffer from ‘initiative overload’ – too many projects being run simultaneously with limited resources. Most projects were rated as high priority with the inevitable outcome of missed deadlines and project overruns. Support staff were ‘fire-fighting’ responding to whoever shouted the loudest or which process was most broken.
The Solution
A Lamberhurst consultant was initially commissioned to provide independent management of one of the internal business change projects. However, it quickly became evident that this project would not achieve its objectives in the given time-frame because of a lack of formal project discipline within the organisation and no dedicated effort by internal subject matter experts (SMEs) and managers.
The consultant recommended a standardised approach to project management, using the initial project as a prototype with simple templates to be used for project briefs, business cases, project initiation documents and regular status reporting. The methodology was based on the industry standard PRINCE2 but simplified to ensure it was appropriate and manageable for the size of organisation and projects. Once senior executives saw the benefits for the first project they requested that all business change projects adopted the same methodology.
In parallel with the project management methodology an audit of all work that could not be categorised as ‘business as usual’ (BAU) was carried out by the Consultant. The review identified well over 40 initiatives that were absorbing management time. However, outside of the IT Department there were no formal methods to initiate, prioritise or govern this non-BAU change. Even within the IT Department it was discovered that the PRINCE2 methodology (rolled out by Group IT in the European head office) was being poorly used due to its heavy bureaucracy and unwieldy documentation.
The consultant recommended establishing a central change Committee, chaired by the Chief Operating Officer to oversee the portfolio of change and ensure that individual projects were prioritised and aligned with the group strategy. The solution was flexible enough to suit small one-off projects lasting a couple of months to longer term strategic programmes of change.
The first few meetings were quite painful as each of the 40+ initiatives were reviewed against standard agreed criteria and reprioritised. It came as quite a surprise to the local senior management team that there was so much going on, with many initiatives being started without senior management buy-in.
With no budget for dedicated project portfolio management solutions the Consultant designed a spreadsheet based reporting system, that required each project manager or initiative lead to complete a single page status summary each month. The focus of this ‘project scorecard’ was to collect key strategic data with minimal overhead. The results were rolled up into a summary sheet with one line per project, providing senior management with the following key information:
- Project name and objective
- Sponsor and manager
- Start date, planned and forecast end dates
- Priority (Mandatory, high, medium or low)
- RAG status
- Trend (i.e. improving or getting worse)
- Budget (actual vs planned)
- Benefit Category
- Commentary
The Benefits
Adopting a portfolio approach to project management gave the organisation much needed clarity around their business and technology change initiatives. Some projects were stopped to enable others to have a greater share of the limited resources, whilst others were reprioritised. This resulted in the remaining projects being completed on time and within budget.
Another related benefit was a general improvement in staff morale as they could see the improvements that the new approach provided. There was less frustration and people felt more valued. There was nothing worse than trying to juggle too many initiatives as well as trying to do a demanding day job – the inevitable result was that everything got done badly.
The simple spreadsheet based approach to portfolio reporting and standard project status reports required minimal overhead to produce but provided the necessary management oversight and key performance indicators. This approach was so successful the templates and spreadsheets were adopted by the Division head office as part of the Group Chief Operating Officers regular monthly reporting cycle.
The Lamberhurst Mission
Our ambition is simple – to be the preferred provider of consultancy services to the clients we serve. Lamberhurst consultants have a wide range of specialist skills and many decades of direct experience enabling Lamberhurst to provide a comprehensive consultancy service that delivers practical and measurable solutions for all types of business issues. Our business is our people.
The Changing Times – realising value creation
For the March edition of ’the changing times’, the bi-monthly newsletter from my consultancy network The Lamberhurst Corporation, click here.
The focus on this edition is ‘realising value creation’ with articles which include:-
- Mergers and Acquisitions – finding the right deal
- Outsourcing
- Case Studies
- Consultant Profiles
Efficiency & Effectiveness
“Efficiency is doing better what is already being done.
Effectiveness is deciding what to do better.”
Source: Peter F Drucker
I used this subject at a presentation to the 7.45 Breakfast Club this week. Given that the club has members from a very broad spectrum of businesses, including sole traders, I wanted a subject that would be equally relevant no matter how big your business.
I use the Efficiency and Effectiveness matrix as a discussion tool to help businesses identify where they may need to focus their efforts. It is a good way of prioritising ideas for change and focusing on the areas that will achieve the maximum benefit.
To explain the model I typically use the following examples:
Effective & Efficient = ‘Thrive’
Organisations that implement the right strategy, efficiently tend to thrive. Sometimes they are so effective and efficient that they rapidly outgrow strategies, by meeting their targets earlier than planned. The best will then go on to define and achieve more challenging strategic targets, thus increasing their ability to thrive.
Effective & Inefficient = ‘Survive’
A lot of organisations get by, ‘surviving’, forever showing potential, but never meeting their growth targets. Such organisations include public sector services, operating to a clear brief, that never quite achieve the levels of service to match the investment that is made in them. Private sector organisations with poor management or inefficient practices also fall into this category.
Ineffective & Inefficient = ‘Die Slowly’
These organisations do not have the right strategy to achieve what they are aiming for. They also suffer from poor management and / or badly managed process discipline. Many small family run businesses fall into this category and exist in an almost permanent state of decline.
Ineffective & Efficient = ‘Die Quickly’
Organisations that are highly efficient at doing the wrong things fail heroically; unless emergency action is taken to redefine their strategy. Although they may have invested heavily in modern and efficient processes and systems, they share a lack of management awareness that they are headed for danger. Basically the vision driving their strategy, does not match the realities of the marketplace.
So where do you services fit within the matrix?
Are you as efficient and effective in all the product or service areas you provide?
If not what are you going to do about it?
If you are still not sure, drop me a line and we can discuss further.
Proactive Risk Management
“[T]here are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns – there are things we do not know we don’t know.” Source: Donald Rumsfeld
The above statement articulates one of the key challenges facing those responsible for managing risk – that the risk landscape is changing. As well as ‘known risks’ and ‘emerging risks’ organisations need to be able to prepare themselves for ‘unknown unknowns’ or ‘black swan’ events as they have become to be known[1].
What is clear is that the risk landscape is changing. Today’s fast changing world creates more uncertainty for organisations – and makes it harder for them to understand where new risks are going to come from[2]. Stephen Platt stated at a recent conference[3] “we value achievement not prevention, and laziness means we don’t measure the value of disasters averted; instead we merely measure the cost of controls and business lost”.
Changing this mind-set is not easy, particularly when most Risk & Compliance Officers are swamped with demonstrating compliance through form-filling, producing checklists and carrying out reviews.
To give the Compliance Officer capacity to address these issues and re-focus on proactive risk management they need tools that will help with the regulatory compliance. Senior managers also need reliable information to make informed decisions on risk issues.
The problem in most companies today is they look at risk from a one sided perspective to meet their regulatory compliance needs. Risk management is viewed as a fixed cost to help the company avoid financial penalties, litigation and/or bankruptcy. This recognition of the cost of managing risk provides a good base to build and leverage a framework for proactive risk and compliance.
Governance, Risk Management & Compliance (GRC)
Governance, risk and compliance activities are increasingly being integrated and aligned to some extent in order to avoid conflicts, wasteful overlaps and gaps. GRC typically encompasses activities such as corporate governance, enterprise risk management (ERM) and corporate compliance with applicable laws and regulations.
Interest in GRC was initially sparked by the US Sarbanes-Oxley Act. However, the focus of GRC has since shifted towards adding business value through improving operational decision making and strategic planning. Integrated approaches to GRC will also assist in meeting the requirements of Anti-Money Laundering legislation. This is a mandatory requirement of all regulated businesses in the fight to combat the financing of terrorism.
To remain competitive, companies must have a GRC strategy in place that keeps pace with new legislation and stakeholder expectations. An associated framework will aid strategic decision making by clearly defining risks and opportunities.
What is still needed is a near real-time proactive monitoring process that will minimise unexpected incidents by providing the right information to the right people.
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The changing face of Risk Management:
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An integrated approach – without spreadsheets
The ‘single view of the client’ is promoted by many vendors of integrated technology systems for financial services businesses as a panacea for proactive risk management and compliance. In an ideal world this is great and for many new businesses there are plenty of options to choose from. However, back in the real world, most existing businesses have invested heavily in legacy systems where the cost of change is just too high. To meet their regulatory Compliance requirements many ‘bolt-ons’ are developed using ad-hoc systems usually based around the humble Microsoft Excel spreadsheet. Whilst enormously powerful, spreadsheets actually increase risk due to the ease of update, errors in formulae and portability of client data.
To mitigate risk and drive value from existing investments intelligent ‘middleware’ can be deployed that draws information from existing systems; replacing spreadsheet based registers, reviews and checklists; eliminating double keying of data and automating much of the administrative burden of the Risk & Compliance Department. Properly configured and deployed, this type of solution can provide real-time warnings of potential breaches of policy that will completely avoid the need to manually review update client files.
One such system is the new Risk Management Suite from BankClarity Limited. With a reputation for providing tools to bridge the gap between in-house systems and the banks to create the ‘completely compliant payment’ the next logical step was to use the same data to provide an enhanced toolset for the Risk & Compliance Officer.
A review of your current structure, process framework and systems can be used to identify the opportunities to streamline processes and workflows and generate a case for change. The automation of common tasks, removal of duplication and elimination of spreadsheets can all help to give back time to your Risk & Compliance Department to enable them to focus on proactive Governance, Risk and Compliance to support the Board. A further benefit, over some of the other solutions only offering screening capabilities, is the ability to create and change your own bespoke systems using the proven .NET framework.
How Solitaire Consulting can help you
There will always be unknown unknowns or ‘black swan’ events in any business and our very survival depends on the ability of all leaders, but particularly Risk & Compliance professionals, to do a good job in preparing for them. An appropriate GRC framework, supported by technology, will enable these professionals to proactively focus on managing risk, rather than on administering yet more controls and monitoring programmes to identify issues after they have occurred.
Engaging with Solitaire Consulting will bring our many years of practical experience of using technology to drive business change to your organisation to assist you in creating an efficient and effective approach to Risk & Compliance.
[1] The Black Swan: The Impact of the Highly Improbable. Nicolas Taleb: 2007
[2] Black swans turn grey. The transformation of risk. PWC: 2012
[3] Jersey International Business School Annual Leadership Forum 2011
the changing times – January 2012
For this month’s edition of ’the changing times’, the bi-monthly newsletter from my consultancy network The Lamberhurst Corporation, click here.
In this edition we have some articles which include:-
- New Mergers and Acquisitions Group
- An Overview of the Lamberhurst Corporation
- Case Studies
- Consultant Profiles
Is Vision, Passion and Action enough?
A while ago (click here), I stated that to be successful a business must have a vision of where it wants to go; it must be passionate about what it does and it must get on and do something about it – i.e. there must be action!
I was reminded of this last night as I reached the half way point of reading Steve Jobs, the biography by Walter Isaacson, which is an excellent read and is definitely to be recommended. When comparing Jobs early years at Apple and his time running NeXT you can can’t disagree that he was a visionary, he was certainly passionate about what he did (some would say too passionate) and there was a huge amount of action. Despite this it wasn’t enough to prevent both Apple and NeXT failing to deliver what they had set out to do.
This doesn’t mean that Vision, Passion and Action are not relevant, on the contrary; what is vital is that the passion and action must be directed towards achieving the Vision. This sounds fairly obvious, but how many leaders or their teams get sidetracked and spent time and energy on things that are not directly related to their vision for the business?
The answer lies in Leadership, but I don’t mean just a charismatic person at the top of the business. Leadership needs to be displayed at all levels in the organisation and in all directions – managing your boss, your colleagues and yourself through the use of personal power and not relying on the authority power given to you by your position in the company.
Going back to Steve Jobs, he certainly was able to use personal power to influence those around him. This power was so strong though it became manipulative and did not always bring out the best in people. He also failed to listen to feedback so did not get the benefit from the talented people around him.
Having said that he was hugely successful and really did change the world. Bear in mind I am only half way through the book so far and this is my opinion just on his early years in business, I am sure it will change over the next few chapters!
To summarise my new mantra for successful business, which I intend to use to help both my own business. Solitaire Consulting and the organisations I help is being extended to:
Vision, Passion, Leadership, Action
Using Technology to drive change
“The number one benefit of information technology is
that it empowers people to do what they want to do.
It lets people be creative. It lets people be
productive. It lets people learn things they didn’t
think they could learn before, and so in a sense it is
all about potential.” Source: Steve Ballmer, Microsoft Corp
Most businesses today invest heavily in Information & Communication Technology (ICT), but often this is only seen as a necessary cost of doing business. Business leaders need to be asking themselves:
What Value do we gain from investment in ICT?
From the perception of the ICT Department this is likely to focus on the nearly 100% uptime, speed and accuracy of transaction processing, or the ability to provide staff with instant access to email and office systems from anywhere they choose to work from.
Whilst this is very important the real value of ICT must go further than this if it is to help enable the business to develop and compete. In order for ICT to provide this next level of value companies need to focus on the use of technology to enable:
• Process optimisation and improvements in efficiency
• Innovation and improved decision-making
• Collaboration and interaction with customers, suppliers and partners
This is not just about the acquisition of new technology, which on its own is not enough to drive meaningful business change. It is about how that technology is deployed and used across all levels of the business.
Technology as an enabler for efficiency
In most businesses technology is embedded in almost every business process. It is at the core of a company’s cost centre, and in particular sectors is inextricably linked to productivity and a company’s core value proposition. But in how many of these companies is this technology being used to its full potential?
ICT implementation projects have a reputation for attempting to deliver too much too quickly, with the inevitable result being the project overruns in both time and cost. Projects are scaled back to deliver minimum functionality and commitments made to deliver the additional value in later phases. How often do these phases get postponed indefinitely? The result is a business which is operating sub-optimally, using short-term workarounds that become part of ‘business as usual’.
The most successful ICT projects aim to deliver 80% of the benefits for 20% of the cost. This can only be achieved with a very strong link between ICT and business people.
Technology to improve decision-making
Businesses generate and store a mass of data. Data needs to be transformed into knowledge to make it useful to decision makers. This value-adding process relies on technology to:
• Aggregate, manipulate and organise data;
• Carry out analysis and evaluation; and
• Report the information in proper context for human use.
A business’s ability to do this better than its competitors gives it a strategic advantage, particularly in the context of innovation and development of new products and services.
Technology to develop strategic relationships
In the global economy the ability of a business to take advantage of new ways of communicating and transacting business can drive value and lower the cost of interactions between a company and its suppliers, partners and clients. Technologies such as social media, open source, cloud etc can challenge the traditional ICT Department and require new ways of working.
Increasing the benefit from investments in technology
In many cases companies already have access to the technology, but there is a lack of co-ordination between the business and ICT, and a lack of innovative thinking to make the most of these opportunities. Left to their own devices staff will serve their needs first and a plethora of mini-systems will evolve across the business. The culture of the company and a disciplined ICT department will ensure systems serve the company and its customers first.
The key to making more use of the technology present within the business is to harness the creativity of the staff that use this technology. They know the frustrations of inefficient processes, they know what data is collected and they know how their own jobs can be improved.
Solitaire Consulting can help unlock this potential within your people and technology systems. Large gains in productivity and process efficiency can often be achieved without having to resort to high cost, high risk IT projects. The aim is to help you achieve 80% benefit from 20% of the investment.
The Change Equation
The change equation was first developed by Richard Beckhard and Reuben Harris, based on an idea by David Gleicher. It is a great tool for focussing a team when planning a major change and can always be relied upon to act as a catalyst for discussion.
I was first introduced to the Change Equation by Peter Duschinsky in his book of the same name. Since then I have had the pleasure to meet Peter on several occasions to share and debate our views on organisational change.
The key premise of Beckhard’s Change Equation is that meaningful change can only be achieved when people’s natural resistance to change can be overcome. This is represented by the following equation:
D x V x F > R
Where:
D is dissatisfaction with the present
V is the vision of how things could be
F is knowledge of the first practical steps i.e. a plan, and
R is the resistance to, or cost of, change,
In other words, people’s natural resistance to (imposed) change will only be overcome by the combined force of dissatisfaction, vision and knowledge of the first steps to achieve the change. By multiplying the three factors the model implies that if any one factor is zero or missing then change will not happen at all.
How many times have you worked in an organisation that has a really good vision for change, has developed pragmatic plans to achieve the change, but it still doesn’t happen? This is usually because there isn’t the sufficient will in the organisation or people aren’t dissatisfied enough with the status quo to change.
This ties in to one of my previous posts where I talked about complacency as being a barrier to change. Complacency and dissatisfaction are very similar in this context.
The strengths of the model are its simplicity and that it draws attention to the fact that a lot of change projects fail because they fail to overcome the internal ‘resistance’. Most people do not like to be moved from their comfort zone, unless of course they are initiating the change for themselves – or to put it another way “I love change except when it is happening to me!”
If you haven’t used The Change Equation just try it and see if it helps explain why your project isn’t achieving the traction you originally hoped for. And please let me know what you think.
