Business Process Management (BPM): Does your initiative deliver strategic value?
Five critical success factors you should assess
Many organizations have derived less value than they could from their BPM endeavors because they fail to understand all of the key elements of effective BPM, writes contributor Jim Boots. Here are 5 things that are critical to success – how does your organization fare?
As reported in the Wall Street Journal in 2012, 60% of process improvement initiatives fail to yield the desired result. Only a small percentage of organizations have derived significant value from BPM efforts. This seems to be at least partly due to a lack of understanding of what it takes to "do BPM" well.
In this article I propose five critical success factors that you need to have in place in order for your BPM initiative to be capable of delivering strategic value. As you read each of the following sections, I encourage you to estimate where your organization currently falls on a 1-5 point maturity scale. The five critical success factors are:
While some tactical value may be gained at lower maturity levels, it is typically only at maturity level 3 or higher in each of the five areas when an organization can start to derive strategic value from BPM. See the graphic at right for a brief description of the five maturity levels.
Before diving into the details, let’s consider what is meant by strategic value. For the purposes of this article, strategic value means that the value created is significant (for example, it positively impacts a public company’s stock price because it adds multiple percentage points to profitability) and it is sustainable (that is, it continues to add value over the long-term because there is embedded capability and not just a one-time change).
Working on any one of the five critical success factors addressed below will not be sufficient. To achieve strategic value from BPM, efforts will probably need to be made in all five. The good news is that there are synergies among them.
Where does your organization sit on the maturity scale?
#1: Executive Sponsorship of BPM
How effectively do your executive sponsors support your BPM initiative? Are executive sponsors knowledgeable about BPM? Do they actively reinforce core elements of the BPM initiative (such as use of a common process language)? Do they provide the necessary funding for the development of BPM expertise and technologies? Do they regularly monitor and reinforce progress up the BPM maturity scale?
No broad-based initiative delivers strategic value without executive sponsorship, and BPM is no exception. Effective BPM sponsors learn about BPM (by reading articles like this one, reading books, taking courses, and/or consulting with experts) so they can talk about BPM intelligently and can view BPM as a broad, workforce-enabling initiative rather than as a narrow program driven by analysts and experts. Effective sponsors understand the critical success factors (CSFs) of the BPM initiative and take the time to develop their own behaviors that reinforce those CSFs. For example, when problems occur, the effective sponsor insists on a discussion of the processes involved and expects the discussion to refer to graphical process representations that follow the notational standards adopted by the organization. On the flipside, effective sponsors reject blaming people since they realize that even incompetence is most likely traced back to hiring, training, promotion, or reward processes.
Effective BPM sponsors understand that BPM is a multi-year maturity development effort involving investments in people and technologies. They do not throw money at the initiative from a distance. Rather, they engage in discussions about BPM investments then monitor them to understand why they pay off or not.
How does your organization rate on a 1-5 maturity scale with regard to executive sponsorship? On the low end of the scale, there may be little awareness of the potential benefits of BPM by executives. At maturity level 3, executives are taking an active role in promoting BPM and investing in it. At the higher levels, executives have embedded process thinking into the organization’s culture and they embrace BPM as a competitive differentiator.
#2: A BPM Center of Excellence
How well does your BPM Center of Excellence (CoE) provide expertise and shared standards, methods, models, training, and technologies to enable and accelerate process management efforts in business units and departments? Are there personnel in the CoE who possess a high-degree of BPM mastery, a long-term commitment to the BPM initiative, and an effective approach with stakeholders?
Another essential ingredient for a successful BPM effort is to have at least one employee—and preferably more—committed to the long-term development of BPM capability. Such a person—who might be referred to as a BPM Champion—must ensure key decisions made in the BPM initiative focus on delivering long-term, strategic value for the enterprise while also creating short-term value that keeps stakeholders engaged and supportive. The importance of having one or more BPM Champions acting with passion to expand BPM capability cannot be overstated. Lacking such passion, the BPM effort is likely to settle into nothing more than a string of projects that does not broadly engage managers and staff in the processes of the organization.
To develop, deploy, and improve a full slate of BPM standards, methods, models, training, and technologies will almost surely require an organization larger than one person. As an organization’s BPM maturity increases from low levels, a Center of Excellence (CoE) comprised of several people performing several roles may be a logical outcome. The unique roles, however consolidated or divided, that eventually will need to be covered by a BPM Support Group include the following:
- BPM Champion (as described above)
- BPM Competency Manager
- Lead Developer of BPM Standards, Methods, and Models
- BPM Technology Specialist
- Lead Process Automation Solutions Developer
- BPM Consultant
- BPM Promotion Specialist
(For more information on each of these roles (and on the ideas in this article, in general), refer to my book, BPM Boots on the Ground.)
Rate your organization’s maturity level regarding the formation and development of a group dedicated to supporting effective BPM implementation across the enterprise.
#3: A Common Process Language and Platform
How well do personnel in your organization communicate about processes? Is there a common process notation that is used by all personnel to describe processes? Is there a common technology platform in which process representations are captured and shared?
One of the inhibitors to mature BPM is lack of a common "language" to represent and talk about processes in a rigorous way. In organizations with less mature BPM, processes may be talked about, but the ideas float off into the ether with limited understanding between discussion participants of activity specifics, roles and responsibilities, the specifications of key inputs and outputs, and so forth.
On the other hand, a mature organization chooses a notation—i.e., a set of symbols and rules about their use—that becomes the lingua franca for all personnel when they address processes. Common notations include Business Process Modeling Notation (BPMN) and Universal Process Notation (UPN). Note that some organizations adopt more than one notation: for example, a business-user-friendly notation such as UPN that is used for most business discussions and a more precise notation such as BPMN that is used by process automation developers and analysts. This approach can be effective so long as there are clear guidelines about when to use which notation. The key is to make sure that the general population of employees, not just IT professionals, uses a common notation so they can communicate about processes efficiently, effectively, and with a minimum of training.
In addition to a common notation, it also is highly useful to have an online repository where process representations can be easily governed and accessed. To achieve this requires selection of a software platform for managing process content. Many BPM software applications provide this capability.
What is the maturity level of your organization when it comes to representation of processes? If there is no commonly used notation and no standard place to store process representations, then your maturity is low (i.e., level 1 or, at most, level 2). If standards and a repository are in place, and if there is strong governance surrounding use of the standards and repository, then your maturity is at least level 3 on this aspect of BPM.
#4: Integration of BPM into Business Plans
How are process improvement efforts decided upon? How are process improvement plans documented? Is there a list of process-related projects documented in the organization’s business plan? Is progress on process improvement projects monitored and reinforced?
Do your BPM efforts take a broad view?
In most large organizations, management teams develop plans (typically on an annual cycle) that address issues such as finances, facility construction, expansion, and shutdown, and hiring of employees and contractors. These days, such plans also often address investments in critical IT systems. However, most organizations do not address processes in their plans.
An organization that is mature in BPM treats processes as organizational assets that must be addressed along with finances, facilities, personnel, and IT systems. Indeed, a mature management team understands that processes are deeply integrated with other assets, and only the right combination of assets—including effective processes—has the potential to deliver optimal value.
To include process efforts in a business plan, it is first useful for management to identify its key processes and understand their performance. At lower levels of maturity, process documentation projects may be the first projects included in business plans. As maturity increases, process measurement systems, process improvement projects, and process goals and accountabilities may be specified in business plans.
And, of course, as with anything captured in a business plan, the management team should monitor and reinforce progress against all process-related efforts. When processes are addressed in this way, processes are an integral part of the management system of the organization. How mature is your organization on this aspect of BPM?
#5: A Governance Model for Key Processes
Are the right people accountable for the performance of key processes? Is there a management level owner (or sponsor) for each key process? Is there an operational level owner (or advisor) for each key process? Is there a coordinating role or mechanism to help prioritize process improvement needs?
Mature organizations understand that it is not sufficient for the management team to pay attention to process performance. Most processes operate every day, and as needs or circumstances change the processes also must evolve to deliver effective outcomes. Each key process in the organization deserves continuous attention; and the set of organizational processes also must be considered as a whole.
There are many possible models that could be effective for governing key processes. Chevron (where I worked previously) introduced a process governance model associated with its Operational Excellence initiative that proved to work well. The Chevron model had a dual process ownership structure. In each business unit or department, each key process had assigned to it a high-placed manager who performed the role of Process Sponsor and an employee who worked within the process who performed the role of Process Advisor. The Process Sponsor was accountable for the overall performance of the process. The Process Advisor was responsible for the day-to-day execution of the process in alignment with expectations embedded in process documentation. The Process Advisor also acted as a key sensor for the process, highlighting problems and issues to the Process Sponsor so they could discuss remedy options.
Also, in some of the more mature business units at Chevron, a BPM Coordinator was assigned to ensure Process Sponsors and Advisors performed their roles as expected and to help the organization prioritize - across the entire set of processes - the opportunities that would be turned into significant process improvement projects. (Small improvement efforts typically would be accomplished without fanfare by the Process Advisor under the guidance of the Process Sponsor.)
In organizations with low BPM maturity, accountability for the performance of processes is typically unclear (and workers, rather than the process, may be blamed for performance issues). At higher maturity levels, there is both clear accountability for processes and high visibility of performance. How mature is your organization?
Most organizations have derived less value than they could from their BPM endeavors because they fail to understand all of the key elements of effective BPM; and they fail to sustain the multi-year commitment needed to develop BPM maturity. This article addressed five critical success factors of BPM that, if well-developed, will enable your BPM initiative to deliver strategic value. Gaining long-term commitment from management to sustain the maturity development effort is a topic for another article and may ultimately depend on the passion, persistence, and persuasiveness of a self-appointed BPM Champion. Are you that person?
What do you think?