Business of BPM

Marketing Process

Interestingly, yesterday, I heard from five different companies about using BPM for marketing. So, I have spent the day (and will continue to spend time) flushing out the marketing processes and the value proposition associated with improving marketing processes and managing them using BPM.

For example:
* Reducing the cycle time of product development
* Easing version control of public relations
* Minimizing pricing errors
* Using data triggers to initiate processes (e.g., competitive intelligence initiates change to promotional materials)

Pricing struck me as a good one since yesterday my wife was looking at a golf club (Taylor Made R7 driver). At the store we buy from, it was $300. Online and in the paper at the store down the street, it was $190. Our golf pro called the Taylor Made rep and found out that the other store had jumped the gun. The discount wasn't supposed to begin until this weekend.

Now, both the store and Taylor Made are going to sacrifice several days of higher prices all because the pricing coordination didn't happen right. Coordination of releasing information across channels and partners is a big deal but something that a basic rules engine could manage.

I put together a high lever pricing process (see below) that I am going to work up into a demo. Overall, I am going to try to put together the story for automating the entire marketing value chain. I think it has a great story leveraging DFSS (Design for Six Sigma) and Stage-Gate and a few other best practices that are out there. More to come...

Runner's BPM - BAM and BRE

I was out for my morning run and realized that my Garmin Forerunner is a good example of automating a process. I use the Garmin 201 to track my distance and speed primarily. It gives me my splits, elevation, total run time, etc. It is an amazing tool, and I have convinced dozens of running friends to buy it.

So, why blog about this. First, because I love it. Second, because I believe anecdotes are what help people think outside the box. The Garmin took a simple process like running and addressed the work around it.

For serious runners, we track miles, days we run, splits, total distance, and many other things as you prepare for races. The Forerunner captures all that data (like a BPMS).
It allows you to report on that data (for geeky people like me who love data analysis)...known as BAM or Business Activity Monitoring in the BPM world. It also has embedded rules in it...like a BRE or Business Rule Engine.

Some of the business rules are process level rules such as the one that stops calculating your average pace if you standstill for x seconds. Some are customizable rules that say whether to calculate your spilts based on each mile or half-mile or whether to beep at you when you go outside acceptable bands (i.e., too slow or too fast).

Time to Retrench

So what do you do once you have jumped into the pool around BPM and have stalled out. I have seen this several times now. Mostly where companies jumped right to technology. You have to understand your processes, what drives the business, how you measure success, what measures matter, how to drive adoption and change, and what your BPM vision is.

My suggestion is to pause. If you are struggling with your first or second implementation and can't answer those questions, step back. We are looking at helping a few companies with a 2-3 day facilitated session to flush out these answers.

We used this at E&Y all the time. It was amazing. You combine a series of individual, team, and group activities with a master facilitator to accomplish months worth of work in a few days. The benefit is also that everyone comes out bought into the solution and envigorated to fix it.

Imagine taking all your key process owners, your business executives, your continuous improvement people, and your IT leads offsite for 2-3 days. This could be 20-100 people. You then begin with an outside in perspective based on industry and cross-industry information. This market scan helps you understand the big picture and gets you thinking out-of-the-box. After this you move to focus in on the key ideas and key answers that you need. Finally, you move to an action plan.

We have engaged the group that did this at E&Y and has the same techniques and physicial facilities to execute on this. Your outcome can be what you want, but if you have stalled, you have to be able to answer the questions below to be successful.

* What is your company strategy?
* How do you measure success (e.g., Balanced Scorecard)?
* What processes drive this success?
* What process metrics are important - lagging and leading?
* Does the process require automation of the current state or reengineering (or lean improvements) first?
* What are the first and second level processes for the company (think value chain)?
* How do you prioritize BPM projects (IRR, hurdle rate, NPV)?
* What does your BPM team look like?
* What is your BPM methodology?
* What are your BPM standards (e.g., BPMN)?
* How are you going to capture lessons learned (e.g., COE)?
* Do you have a change management plan for driving user adoption?

BPM and Knowledge Management

Knowledge management is one of those terms that means different things to different people. In the 90s at Ernst & Young, I remember leading several efforts internally to create our knowledge management infrastructure. Our focus was on collecting lessons learned, key working papers, proposals, and deliverables. We would sanitize them (i.e., remove client specifics), review them with SMEs, and store them in Lotus Notes databases based on a taxonomy we had developed.

A few years ago, I led an effort at Express Scripts to select a document management tool to do much of the same. The idea was to get information off of people's desktops and from their file cabinets. We were going to load documents and scan documents. They would be approved by a central resource and categorized according to a metadata schema based on a taxonomy we developed. They then had role based security around the documents with a Google like search functionality.

But, knowledge management (at least in these forms) is difficult to embed into the daily processes. We ramp up efforts and get some initial push, but without continued focus, the databases become old and all you have done is spent money and effort to create a quickly outdated resource. That can be managed (of course). At E&Y, one of our performance metrics was what we had submitted for the shared repositories.

I haven't heard it explored much, but I see this institutionalization of knowledge management as a big value add for BPM. By capturing unstructured data (e.g., comments) along with documents in a process, you can create a shared repository for knowledge management. Additionally, you can begin to link outcomes data with those documents. Image at some point being able to analyze and say that project managers would used fishbone diagrams for analysis were 20% more successful than those that didn't. Imagine having the process prompt you based on previous experiences to say that if going down this exception path you should look at the following scenarios to understand what will be needed. Imagine that if you are working with a particular client that the technology could push information about that client to you at the right time of the process.

By simplifying and automating the knowledge, I think BPM could be a great enabler of knowledge management.

BPM Career Path

"Business process management (BPM) success requires organizations to take a formal approach to business process improvement (BPI) role definition, staffing, reporting relationships, training and career development" (Predicts 2007: Internal Skills Are Inadequate for BPM Maturity, Gartner, November 20, 2006)

About six weeks ago, I heard the BPM leader from Molson Coors talk about their efforts. One of the things that most interested me was the talk about an internal career path. It got me thinking about what the vendors and consultants are looking for; what skills are on the market; and what Gartner has to say about this. Here are some of my observations.

The vendors can be divided into three groups - process, function, and software.
* The process people are very focused on Six Sigma or lean people that can help a company jumpstart their continuous improvement efforts.
* The functional people (or industry people) have deep experience and are looking to help improve a particular area.
* The software people are typically focused on people with Java experience, AJAX experience, or deep integration experience.
* There are exceptions as some of the consulting groups at the software companies are building up process consulting practices.

When we look for people, I am looking for what I consider the impossible skillset:
* Experience and familiarity with technology (BPMA, EAI, Java).
* Experience with project management.
* Experience with process reengineering, Lean, Six Sigma, Kaizen, or other continuous improvement approaches.
* Ability to be both heads down (process mapping) and strategic (process architecture).
* Understanding of people (organizational change management) and how to drive adoption.
* Ability to work with and lead a client.
* Experience being a process owner.

Gartner has lots of research out about this. I looked at a few things including: "Predicts 2007: Internal Skills Are Inadequate for BPM Maturity" and "Key Issues for Business Process Improvement Role Leaders, 2007". Here were a few relevant comments.
* "Through 2009, the most successful BPI role leaders will be management consultants rather than internal staff."
* Comments about BPM leaders - experience with cross-boundary processes which typically can't be gained in a functional leadership role; experience in at least three operational areas; Six Sigma black belt or green belt; experience with lean or other methodologies; understanding of processes across companies and industries. (Likely to be a consultant...they predict BPI leaders will go back and forth between industry and consulting.)
* "30% of Global 2000 companies will establish BPM COEs by 2008." - funded by contribution of 2% of each group's resources.
* "the most successful BPI leaders will not build a lot of friendship among their executive peers." - points to the challenges of driving success and change...they go on to recommend a three year rotational role
* "Organizations worldwide are adopting process orientation to increase operational excellence and agility" which implies an ability of the leader to manage multiple balls, be innovative, and have an understanding of what process excellence means
* "Business process has traditionally been embedded in packaged applications; however it is becoming independent and open to modification and adaptation in a different way." which implies that the BPM leader needs to understand traditional application development versus RAD versus BPM to know which route to choose when faced with a technology option

This all paints an interesting picture. Who is the right leader? How do you train them? What is their lifecycle?

Creating a career path for your business analysts and BPM team is important. Insourcing of BPM as a strategic function is what will happen over time once companies have tested it out; proven the value proposition; and realized the bottom line opportunity.

Online Bill Pay Needs BPM

I was talking with a friend who complained about getting his cable cut off. He pays all his bills online and never checks his paper bills. I have heard this from several people now.

As companies increase their rates, consumers have set up either fixed payments or payments within certain rules. Over time, those escalating prices exceed the pre-approved payment ranges and the consumers go into default.

This seems like an easy BPM fix. First, when a company raises their rates, there should be some trigger to the consumer. Second, when the consumer approves online bill payment, they should get a printout of what was paid, when, how much, deviation from standard, and ideally this would be directly inputed into Quicken or Money. All of this process along with the payment approval rules could be implemented using a business process management solution.

As we deal less with paper and more with virtual solutions, companies need to make sure that how they implement pricing changes and other changes don't mess up these systems.

Credit card companies could play in this space too. When you lose your credit card, you have to remember to go to all these sites and re-register your new card. This would be a great service for Mastercard, Visa, AMEX, Discover, or any other vendor to provide to their consumers. If they could track where your card is on file and automatically update it, it would make the card replacement process much easier and be a great value add. I believe consumers would pay a small fee for this rather than getting notices that their payments weren't processed.

BPM #1 Technology Project in 2007

It is always nice to have someone else produce a survey which reinforces what you evangelize. 

Baseline Magazine just did a survey of over 350 IT and business executives.  The highest ranked project focus at over 1/3 of the participants was BPM.  (see article)

The article also talks about the focus on IT on business value.  Interesting timing since I was reading "Lean for Dummies" over the weekend and thinking about what a Value Stream Analysis would look like on a typical IT organization.  Lean defines anything that a customer wouldn't pay for; any step that doesn't transform the product or offering; or anything that isn't done right the first time as non-value added. 

9 Biggest Myths of the Workplace (non-BPM)

One of my favorite bloggers (and authors and speakers) is Guy Kawasaki.  He does a great job and his latest blog is no different.  This is totally off topic for BPM, but I think it is always a topic that many of us think about - the workplace.

He highlights The Nine Biggest Myths of the Workplace based on the work of Penelope Trunk.  It talks about things like the glass ceiling being dead...and not because it's shattered but because no one cares for whats on the other side.  It talks about backstabbing not being what gets you ahead (although we all know that person for which it seems to).  It says the average person has 8 jobs before they are 30 (amazing).  I think you will like it.

A couple of good takeaways

I had an opportunity to hear Rich Phillips (COO, Maritz Travel) and Phil Gilbert (CTO, Lombardi Software) present at an event last night.  It was great.

I scribbled a few notes that I thought were worth sharing although I can't remember who said which one.

• Describe your process only down to the level at which you intend to manage it.  This makes a great point about the value (e.g., BAM) of BPM along with the importance of business (e.g., Balanced Scorecard) before process flowing and technology.
• Most companies get a 40% improvement in their first two iterations of a process and the next 40% improvement after 18-24 months.  After that, the last 20% may not be worth pursuing.
• Try to avoid either focusing purely on a subprocess which no one cares about and has no strategic value or taking on too big of a reengineering project.  But, you do need a roadmap of where you are going.
• Just because your employees are busy doesn't mean they are adding value.  Are you aligned with the VOC (Voice of the Customer)?  Do you understand the value add steps in your process?
• You have to have a committed business sponsor that sticks with you to make this more than a fad.
• Think globally and act locally.  (We have been saying this in healthcare for years.)  The point is to make your project self-funding after the first project. 
• BPM forces business and IT to use a common language and get to the key points which eliminates ambiguity.
• Resistance to adoption will come as people want to be artists doing their job not managed by the process. 

Next St. Louis BPM User Group Meeting

AG Edwards has agreed to host our next BPM User Group meeting which will also be the official start of the first BPM Group user group in the United States.  The event will be June 29th from 7:30-9:00 and will include speakers from Maritz (Rich Phillips) and AG Edwards (Jeanette Lynch) talking about their experiences. 

If interested in attending, let me know.