Taking BPM concepts to the next level: Interview with Smarter Solution's Forrest Breyfogle
Getting everyone in your organization excited about Business Process Management is only part of the battle. There are still many things that can go wrong when it comes to actually deploying your BPM program.
In this PEX Network interview, Forrest Breyfogle, a Lean Six Sigma and process improvement expert who has authored over a dozen books on the topic, talks about common errors that companies make when embarking on BPM and offers suggestions on what you can do to avoid these pitfalls.
This is a transcript of a recent podcast. Click here to listen to the original podcast. Please note: this transcript has been edited for readability.
PEX Network: What’s a Lean Six Sigma guy doing in Business Process Management?
Forrest Breyfogle: I’ve noticed over the years that there are some issues with Lean Six Sigma: When people get certified they may have done a project as part of their certification (but not always); however, they don’t always take on another project at a later date. We also find that it seems to take forever for projects to get done. Finally, often the process owner is not asking for the projects to get completed. It’s supposed to help their part of the business, so why are they not asking?
Take a different approach to BPM
I’ve been mulling over these issues for quite some time. I think what is happening is that a lot of the time the reason for them is that we’re not doing the right thing. We may report a $100 million savings, but, in reality, the executives at the top are not seeing the money.
So I think we need a different approach where we go in and have measurements that are important to the business as a whole evaluated collectively. Then we determine where we ought to focus our improvement efforts relative to the metrics.
Then, the process owner is responsible for making improvements that impact those metrics. What that means is now we’re creating a system where the measurement needs of the business as a whole pulls for project creation, rather than us trying to push projects into the overall system from our Lean Six Sigma deployment.
If we start looking at BPM, we can then start integrating Lean Six Sigma within BPM so that we can address some of those issues and make Lean Six Sigma much more beneficial.
PEX Network: So how do you think Lean Six Sigma, as a discipline, can help in BPM programs?
Forrest Breyfogle: If we go back and look at what is stated in the book written by the Association of Business Process Management Professionals, we’ll note that technically BPM does not include process improvement. I was surprised when I started really looking into the book, but that is what’s actually stated there. [Editor’s note: this comment refers to version 2 of ABPMP’s Common Body of Knowledge. Version 3 of ABPMP’s Common Body of Knowledge includes a section on "continuous improvement" and "improvement methodologies" and ABPMP’s position is that continuous improvement is an important part of BPM. Thank you to ABPMP for the clarification].
Some people may integrate this in and some may not. However, I think that BPM implementations need to include process improvement efforts. And that’s what Lean Six Sigma brings to the table. There is a benefit to BPM and Lean Six Sigma, or individually, so that they collectively have a better overall system. So that’s the reason I think Lean Six Sigma should be integrated within BPM.
PEX Network: BPM projects themselves are, obviously, not without risk to a company. There are lots of examples where they’ve gone wrong, or perhaps not achieved the level of benefits that a company may have been expecting. What do you think are the biggest mistakes that companies make when embarking on BPM?
Forrest Breyfogle: I think there are a couple things. When I look at how BPM is actually implemented within organizations, a lot of the time people start from the position that they want to have automated systems. Automation is their primary driver.
However, we might be automating things that are not necessarily important to the business as a whole or they may be siloed improvements. I’m not saying those improvements will be bad, but are they really impacting the business as a whole? And shouldn’t there be more than just automation relative to BPM deployment?
Other people, they may be just doing their BPM deployment by going in and doing documentation and that sort of thing.
What I think that we really need to do is pull this all together. Do automation where it’s going to help the business as a whole, and do documentation where it’s really important and also at a pace that’s manageable for the organization as a whole.
PEX Network: So it sounds like taking a much more thoughtful approach to the outcomes you’re expecting to achieve?
Forrest Breyfogle: Yes. I think that needs to be done as part of what’s called the Enterprise Process Management with BPM. In the book that I talked about previously [ABPMP’s guide to BPM] they make reference to Enterprise Process Management being a part of BPM. However, more often than not, it doesn’t seem to be happening in real deployments of BPM.
PEX Network: One of the things that you talked about in your last webinar with us earlier this summer was how critical having a framework – and you called it Integrated Enterprise Excellence – how critical that framework was. What does Integrated Enterprise look like? What does it actually mean?
Forrest Breyfogle: Integrated Enterprise Excellence, or called IEE, provides a framework for integrating Business Process Management with Enterprise Process Management. This overall roadmap has been alluded to in my previous books on Integrated Enterprise Excellence, but I formalized the structure with the book that’s coming out in September of this year.
This new book describes the roadmap for actually doing the integration between Business Process Management with Enterprise Process Management. It takes BPM concepts to the next level in that it really gets involved into the day-to-day activities, whether they’re automated or not. It also involves and integrates enterprise decision-making, which I think is often neglected in BPM deployment.
With this overall system at the enterprise level, we’re really looking at integrating predictive scorecards, with strategy development, so that the enterprise as a whole benefits. Basically, with an Integrated Enterprise system we’re pulling everything together so that process management becomes systematically part of what we’re doing throughout the organization, and we’re using data to help us with our overall decision-making process.
PEX Network: How can "Integrated Enterprise Excellence" prevent some of those mistakes that you were mentioning earlier?
Forrest Breyfogle: It’s critical to start out with a system that looks at what we do and how we measure what we do. If you’re in the medical profession and you have a hospital, you’ll do certain things that a hospital does. Likewise, if you build bridges you do certain things that it takes to build bridges. Regardless, in each of those situations we want to look at what we do – our processes – and hook those processes to how we’re going to measure how they’re are performing. That can help us to determine what we should do, not only on the local level – the process level – but also the enterprise level.
Michael Porter, in his value chain, alluded to this concept. However, what I’m suggesting is that we really need to have more of what I describe as an Integrated Enterprise Excellence system. In this system, what you do and how you measure what you do is really important to me.
Often what happens, is that organizations have the scorecards in the "north wing" of the building – that’s the people who work on them there – and the people in the "south wing" of the building work on process improvement. And guess what? They don’t talk to each other!
What I’m trying to do with this overall IEE value chain is integrate scorecards with what you do. That becomes a foundation so that now you’re looking at data on a daily basis about how you’re performing. Then you can make those decisions from the process point of view, and you can also look at it from the executive point of view.
I’m suggesting that now you have this form of reporting available to everybody that has authorization. Then you can determine which metrics are important at the local level and the ones that have strategic benefits.
That’s when you can go in and integrate the concept of Lean Six Sigma projects that are basically trying to not just only to make cost savings, but also how they actually improve the metrics that impact the enterprise as a whole.
What we’re looking at here is creating the structure so that now we have these improvement efforts where we’re going in and looking at the big picture because I think that’s one of the mistakes that is often happening. We have local improvements, and they sound pretty good, but the enterprise as a whole doesn’t really feel the benefits. As a result the executives don’t appreciate what we’ve achieved.
Additionally, we want to also automate the processes so that we get "big-picture" benefits. We need to be systematically determine which process we’re going to be focusing on and, if automation is appropriate, then we undertake that as part of our BPM deployment, too.
PEX Network: Now you’re going to be giving a presentation on PEX network later this month on five practical ways to enhance you’re BPM implementation. What exactly will you be looking at in that webinar?
Forrest Breyfogle: The title of the webinar is Five Practical Ways to Enhance Your BPM Implementation. The first one is we want to create this value chain that I just described for the enterprise business. We think that’s one of the things that’s very important for BPM deployment.
The second thing would be identify the key enterprise and process performance metrics before we’re actually doing this deployment. That’s one of the first things that you really want to start looking at: how you’re going to describe what you do, and then how you measure what you do.
Thirdly, we want to adopt a performance metric-driven business decision-making process. In other words, we really want to have decisions made whenever possible through looking at data and looking at them in a structured way that evaluates it as a process.
It can really get us a lot of firefighting modes where we look at the problems of today. In reality we’re not addressing our systematic problems, if we’re giving over to day-to-day trouble shooting.
Number four would be to modify the business rules to minimize constraints. Often we’ll have organizations report how much money they saved through Lean Six Sigma. I can remember having a conversation with one person that was part of an $80 billion company, and he was really proud that he’s been typically saving $30 million a year. I said, well that’s really great. I’m pleased that you’re making that kind of savings. But let’s look at it from the CEO’s perspective. In an $80 billion company, $30 million is rounding errors, so that’s still small change relative to the big picture. Now don’t get me wrong; process improvement is beneficial, but let’s go in and expand the bounds for process improvement.
So let’s start looking at rules. Let’s consider one of the rules. For example, they pay their sales organizations relative to meeting goals on the quarter. So if you meet your quarter projection you get a bonus. Let’s look at what might happen in an organization. Some organizations might be going in and giving sales prices at the end of the quarter, or they’re going in and pulling future orders into this month so that they can go in and have better numbers for this particular quarter so they met their goals. All sorts of craziness can happen.
But think about if you have a manufacturing organization associated with this, what kind of problems you can have in manufacturing. All of a sudden now at the end of the quarter our volume goes up. Now we’ve got to go in and make more product, and guess what? We’re probably going to make more mistakes, and we’re going to have more expenses associated with that. It’s really impacting our bottom line. But that’s a rule.
Now the question is if you could change that rule so that now manufacturing has more of an even flow and you don’t have all this over time and you don’t have sales organizations going in and giving sales at the end of the quarter so they can get their numbers, how much is that work to an organization? That alone, by that rule change, could be worth a lot more than $30 million.
Now the fifth one would be improving targeted processes before automation. That can happen in organizations where we automate a process, but we really didn’t go in and really do a great job of improving it before we started automating. So that was the final area that we thought of for improving BPM deployments.
Forrest will be presenting a webinar later this month on 5 Practical Ways to Enhance your BPM Implementation. Join this LIVE session to find out how to make sure your BPM program doesn't go the way of the Dodo. Sign up now!