Business of BPM

St. Louis User Group

I just sent this out to some local contacts of mine and thought I would post it here to encourage other participants. 

A group of us have been talking about getting together every other month to share information about BPM and network.  There are two groups that have talked about creating chapters here – the Business Process Management Group (BPMG) and the Association of Business Process Management Professionals (ABPMP).  We are going to have people from both groups participating in this initial event.  We will also likely invite a software vendor to sponsor each subsequent meeting to cover any costs of food or space. 

Our first meeting will be March 9^th from 7:30 – 9:00 AM at Talisen Technologies.  Talisen is located at

12655 Olive Blvd.

in

Suite

500

.  (Mason and Olive)

We will use this first meeting to talk about the local community, define objectives for the group, define structure, and determine how to make this productive for all of you based on your different needs and stages of BPM maturity. 

Please confirm your attendance in advance with me.  If you cannot make the meeting, but you would like to be invited to future events, please let me know.  And, please feel free to forward to others within your organization.  This is an open invitation. 

We are planning a series of webinars on BPM in March and April and subsequently having BPMG training here in

St. Louis

in May.

1. People: Change and Adoption of BPM on March 16th from 10-11
2. Process: The Roadmap to BPM Success on April 6th from 10-11
3. Technology: Key Considerations for BPMS on April 27th from 10-11

SaaS announcements

Not only does the market seem ripe, but the offerings are maturing to a point where they can go after the Software as a Service (SaaS) market.  So far, the primary adopters of BPMS technology have been the large Global 1000 companies.  I have met with numerous small companies that would love to automate their processes (and need to to compete), but they can't pay the price or hire the resources to support the application.

An outsourced model that provides them with the benefits without the upfront costs or the ongoing support requirements is very attractive.  In the past few weeks, two of the market leaders that I follow closely have put out new offerings in this space:

• Appian announced their Appian Anywhere product and
• Lombardi announced their BluePrint product

They are different focuses, but the investment on both companies points to the greenfield opportunity here.  I expect this to be very interesting as it is a different animal to sell into this space.  And, Blueprint creeps into the BPA (Business Process Analysis) space which has a whole different set of competitors like Mega. 

The Only Option???

In the WSJ (2/15/07), there was an article "Time-Zoned: Working Around The Round-the-Clock Workday".  It talks about people working 18 hour days to accommodate calls with international team members.  Companies have become leaner over the past decade and ask managers to do more and more.  But, everyone should realize that continuous long days leads to a lack of productivity and a greater amount of mistakes.  I can't find the article, but I remember reading that operating on a few hours of sleep is like operating after a few drinks.  Your decision making ability is greatly impaired.

So, what do you do.  In the article, Dow Corning has created a "no-meeting week" once a quarter.  IBM has created "ThinkFridays" which allow people to block Friday afternoons to think and not meet.  These seem like desperate measures to me.  Can't we find a way to manage our lives without it being mandated?  The article did quote Xerox talking about doing collaboration via online tools such as Wikis. 

Not to be a hammer looking for a nail, but I think this time issue should be a key driver for BPM.  Capturing your processes; streamlining them; standardizing them; and then automating them allows your staff to focus on value added activities.  We are never going to go back to the "fat" organizations of the 70s and 80s.  And, the world is not going to get smaller.  Working across timezones, cultures, and companies will continue to be the norm.  Unless you can bring a tool to the table that manages your processes and wraps collaboration around that process, you are going to be forced into these 18-hour days to compete.  I for one believe there is a better way, and it is sitting right in front of all of us. 

BPI #1 Business Priority

Not a big surprise to me, but it is always reinforcing.  Gartner just came out with a ranking of top business and IT priorities for 2007.  At the top of business list is business process improvement.  Further down the business list you have use intelligence in products and services and innovation - both upside of process improvement and automation.

From the technology side, you have all the aspects of a BPMS (Business Process Management Suite) that enable your processes - Business Intelligence (BI), collaboration, and document management.  Those three areas are critical when you move to a cross-functional, cross-application solution which is more than just workflow.  The technology list also include SOA (Service Oriented Architecture) which is another large enabler for a sophisticated BPMS.  This allows you to create services which can be called from the process at multiple points and minimizes your need for constant integration between systems. 

Table 2
Top 10 Business and Technology Priorities in 2007

Top 10 Business Priorities	Ranking	Top 10 Technology Priorities	Ranking
Business process improvement	1	Business Intelligence applications	1
Controlling enterprise-wide operating costs	2	Enterpriseapplications (ERP, CRM and others)	2
Attract, retain and grow customer relationships	3	Legacy application modernization	3
Improve effectiveness of enterprise workforce	4	Networking, voice and data communications	4
Revenue growth	5	Servers and storage technologies (virtualization)	5
Improving competitiveness	6	Security technologies	6
Using intelligence in products and services	7	Service-oriented architectures	7
Deploy new business capabilities to meet strategic goals	8	Technical infrastructure management	8
Enter new markets, new products or new services	9	Document management	9
Faster innovation	10	Collaboration technologies	10

Source: Gartner EXP (February 2007)

It's the process not the stars

One of my favorite quotes is the following from Toyota which appeared in the HBR article "Decoding the DNA of the Toyota Production System" a few years ago.

“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.”

I was reading a Malcolm Gladwell (author of Blink and The Tipping Point) article a friend had sent me a while ago from the New Yorker called "Are Smart People Overrated?" which made a similar point.  The article itself is very interesting and talks about the culture at Enron which was a culture of "stars" focusing on MBAs that grabbed the bull by its horns and ran with it.  It points out that stars work to write books or in other individual focused challenges, but "organizations that are the most successful at that task are the ones where the system is the star".

The article compares Enron's failure and the Navy's failure in WWII vs. the German U-boats to the successes of Southwest, Wal-Mart, and Procter & Gamble.  All of the later are cultures more focused on the process versus creating a culture of all-stars. 

As you think about the importance of process, these are good examples.  Building a process that survives turnover, acquisition, market change, and other typical issues is critical.  Your processes need to be able to adapt and change, but they also need to have codified implicit knowledge so that you can survive change. 

Stockholm Process Syndrome

I was talking about Stockholm Syndrome this morning, and it hit me.  This is the explanation for why users or companies struggle to move away from a bad process.  We have all been there where we are part of a process which is obviously broken...BUT, we are so close to it, and it is all we know.  We don't know how to change our situation.

I think the problem is that people become comfortable with the process they know even if it's bad.  They have found a way to make it work for them.  They know the rules.  They understand it's faults.  So, why move away from it.  Change looks scarier than the current state. 

So, how do we move on.  The key is showing users a better way.  Helping them understand the longer term value.  Putting them in touch with people using a better process.  It's about managing change so that a better process can take over.

BPM as the Enabler of the BA

It is an interesting question...what is the role of the Business Analyst (BA) and is it changing?

As technology changes and becomes more intertwined with normal business, it seems like the BA is getting redefined.  Disappearing are the days of BAs in the business that just do financial modeling and don't have to understand data warehousing and don't have to write custom queries.  Disappearing are the days of BAs in IT that simply capture requirements but don't have to understand the business objectives or the business processes.  Outside of a few industries, the company's technology has become the business. 

There are lots of discussions on this all pointing out the fact that things are changing or need to change.  I sum this up well from a conversation I had with an executive at a large company the other day.  I asked him why he would hire a consultant to help him with his BPMS project.  He said that IT viewed it as a threat and his Six Sigma team wasn't focused on technology.  He needed people that understood business and technology.  This wasn't an isolated incident.  I have had several clients tell me the same thing.  This is the role that companies haven't built, and the role that is hard to recruit. 

1. Blog on the Year of the BA
2. The Accidental Business Analyst
3. Difficulty of hiring BAs
4. Business Process Expert (SAP article - simply click ok to the digital certificate request to view)
5. GeekGap book

From The Power of Process, Kiran Garimella talks about the role of the BA says "They need to ask the right questions, they must challenge assumptions, they must know how to model processes, they must know how to model data, and must understand the capabilities of the IT systems as thoroughly as possible." (pg. 28)

I think this topic deserves lots of focus.  Where do these new BAs come from?  How to you groom them?  What is their career path? 

I think that BPM and BPMS may be the catalyst to drive this change.  These implementation teams are small so people need to be proficient in technology and process.  The software is simple but requires a basic understanding of coding, integration, architecture, and software engineering.  With a small team, everyone plays a role in project management which means the BA has another hat to wear.  I think this is a good thing, but companies need to understand and look for this. 

BPM: Greenfield or Not

I struggle with this question a lot.  How greenfield is the BPM/BPMS space?  On the one hand, most business users I talk to have never heard of the space.  On the other hand, almost every company has some type of process improvement effort going on.  The question is how much of that is looking at software as an enabler.  (FYI: This is what I see as the big difference between 1990s and now...We have done process improvement for a decade or more but only now do we have software to help us and automate our solutions.)

Ken Vollmer (Principal Analyst for Forrester Research) estimated that BPMS growth would go from $1.2B in 2005 to $2.7B in 2009 (Key Drivers for BPMS Growth - January 11, 2007).  A billion software market is certainly not an immature market.  But, with over 100 software companies in the general space, it is hard to say it is mature.  Maturity usually indicates some consolidation and a short list of software companies with a stable product, long client list, and solid financials.  We are starting to see that with a few companies that consistently come to the top. 

BPTrends put together a good summary of what is driving BPM in their January 23rd newsletter.  As you can see from the image below, it is a pyramid that breaks the trends down by Enterprise, Process, and Implementation level.  I think the summary is that there is lots of change driving companies to think creatively and look at innovation.  Process is one of the last easy bastions of opportunity and companies are looking at how to leverage what's in front of them.

So...my take is that it is a market with a lot of upside, but it has already moved through the early adopter stage and is "crossing the chasm" to become mainstream.     

Patient as Process Instance

Anyone who has ever been sick knows that our healthcare process is inefficient.  There is lots of paper.  There are numerous handoffs.  Things get dropped.  Patients spend lots of time resolving things that should be automated.  Well, I am not going to give you the answer since there are millions out there trying with limited success.

But, I do think a BPM framework (strategy, process, and technology) makes sense here.  First, I think you need to abstract the healthcare industry.  Think of each component (MinuteClinic, doctor, hospital, outpatient clinic, home health nurse, pharmacist, insurance company, PBM, case manager, therapist, acupuncturist, personal trainer) as a system within an overall company.  Second, think of the patient experience as a process filled with logical steps and driven by rules. 

Conceptually, you have a systemic view of healthcare that parallels a typical process view of a inter-company process.  You have constituents.  You have a process.  You have rules.  You have systems (i.e., companies).  Ideally, each of these systems (e.g., the physician's office computer) could be accessed by the process using a common language.  (I am speaking to a Services Oriented Architecture (SOA) without going there technically.)

Each time a patient engages the system through a doctor's appointment or a visit to the ER, a new process instance would be initiated.  The patient could be tracked through the process and know where they were at any time.  All the constituents would have shared data (i.e., a personal medical record) about the history of this patient.  Rules would be codified so hopefully there were less errors or miscommunications. 

Now, who pays for this is the question which I am not going to debate.  But, the system is broken and finding some fix is important.  I think this is a lens through which to view the problem.

Link vs. Attachment

I was having an interesting discussion last night about status reporting which I believe is germane to BPM.  The discussion centered around executives reading information sent to them via a link compared to attachments or physical distribution of paper.  I think we would all love to see a world without paper, but I don't see that happening anytime soon.  Reading a 50 page white paper on the computer is difficult.

At one company, I observed us go from paper to attachment to link.  The use of the status reporting dropped dramatically.  Initially, first line management all got a paper copy of the status reports every Monday morning.  Everyone would look at them and our boss' assistant would insert a blank page with your name on it if you forgot to update yours.  There was pressure to keep your information current.  After a few years, we moved to send an attachment which I estimated about 50% of people clicked on most weeks.  We then moved to a link which maybe 10% clicked on.  Eventually, 60% of us stopped updating the status reports weekly since no one (including our boss) appeared to be using them.

As you think about BPM, it is important to keep in mind your different audiences and how to share context throughout the process.  Efficiently and lean approaches are critical but certainly not at the expense of effectiveness. 

Management and especially senior management typically have days that consist of 6-8 hours of meetings after which they get back to their desks to see 100+ e-mails; 10+ voicemails; and several urgent items put on their chairs.  Additionally, they have staff management issues to deal with.  Getting your message to the top isn't easy.

At one job, my boss told me that he only listened to voicemails for the first 30 seconds and only looked at what appeared in his e-mail pane in Outlook.  If you couldn't make your point there, it was like you never contacted him.  Harsh...perhaps.  But, he could only digest urgent and pointed issues.  Don't forget this when you think about your process and what the user experiences.