BPM Straight Up - Separating Fact from Fiction

Are Your Operations Doing the Right Things, at the Right Time, in the Right Way?

Dan Morris
Contributor: Dan Morris
Posted: 12/21/2015

Companies have focused on efficiency for over 15 years now. But are they making the processes effective?

For this column, let’s consider efficiency to be doing work as quickly as possible with a low error rate. Then let’s consider effectiveness as eliminating all work that is not really necessary – doing the right things, at the right time, and in the right way.

Too many BPM efforts however, are so narrowly focused on cost takeout that they miss the fundamental question of need – "do we need to do this in the first place?" Of course, the answer to this question must be backed by the answer to the question "why?" Anything that falls outside of this need is extra and is a candidate for elimination.

Not surprisingly, doing this before the team considers efficiency will save a lot of time and cost. Why improve things you don’t need to do? But it will also leave holes that will need to be removed.


Efficiency lives in process – no real news there. But where does effectiveness live?

I submit that effectiveness lives in fundamental "need". What do you really need to do? The framework for identifying this "need" and thus effectiveness is set by the company’s strategy and given context in the company operating model. Anything beyond this fundamental or basic need in producing the service or product is extra. What is left will require specialized support activities to knit together – but that can be managed through careful action and task justification.

So we can find what we need to do to be effective, and we can then make that efficient. But before we make anything efficient we need to first look at how we can guide work so that the right answers, components, business operations, and assemblies come together to deliver the service or product component. We need to find a way that guarantees the right logic is considered and the right questions are asked to comply with legislative and operational requirements while constantly being guided to the next step in the work.

This requirement for guidance is the realm of business, manufacturing, technical, and other rules. The fact is that rules define the "what" of the business - while process defines the "how". If we consider process to be the life blood of the company, carrying the components that are needed to produce something and thus keep the company operating, we can consider rules to be the "brains of the outfit". They direct everything and tell us how things need to be done. Rules thus set the operating framework and are both interpreted and supported by standards to set performance measurement limits on the work. Taken together, rules and their supporting standards, define how operational effectiveness will be viewed – within the context of company strategy.

Finding rules

Rules are everywhere. Most are, however, not written and those that are, are seldom up to date. So where do you start? The following is one approach – it is not the only one however. But, it works. Let’s start with effectiveness in any process, business unit’s work flow, or the applications that support the work.

The first step is the archeological dig through the company dustbins – existing documentation. Procedure manuals, HR rules, financial rules, sales rules, and compliance rules should be collected and the rules vetted. That is the foundation – you may very well find rule conflicts, out of date rules, and rules that no one knew existed. Vetting them is tedious and will probably be resisted. But it is critical and needs to be done to create a foundation for the operation
These rule collections will first focus on the business operation. IT should next add its technology related rules – the Do’s and Don’ts that must be considered in any business activity support design. To make this collection useful, care will need to be taken in finding a rules "engine" or storage application, coding the rules for electronic storage, and defining an indexing structure that will make it easy to find and thus modify, version, or reuse any rule.

With this foundation in place, it will be time to look at the business operation itself.

Any look at what makes a company effective must really start with strategy outcome and work backward. The outcome description is where you first know how goals will be delivered and where the business model must be changed to support the strategy. All capabilities will be identified and defined as part of the outcome definition. The capabilities then tie to process and a walk back up the process is a look at what it takes to build the product or services.

The activity in a business unit represents the work that actually creates the components and does the construction of a solution. The rules in the company guide every action, every decision, and every step of the work. But when many teams look at a BPM project, they focus on the activity, not the rules that help identify if the activity is even needed – if the activity is not important or complex enough to require guidance the team really must ask why it exists. Similarly, if the rules do not support the actual work, why do they exist? The two are partners in a corporate dance that determines what should be done and how it should be done.
Of course, if the rules are overly complex, the team will need to see if they can be streamlined.

In addition to the "easy to find" rules, teams will find other rules (often the most important ones) in the heads of the staff. They do the work and apply rules constantly – some they make up to control new work. Many of these unwritten rules are not found anywhere in the "documented" and now vetted rules. In some cases, these rules may be imbedded in applications that the staff has learned about over time through use. In other cases, the rules are work-around rules that have had to be informally created to get past changes in the operation, in law, and in application systems. I call these "white space" rules. Only the people doing the work of getting around things know these rules.

The fact is that these rules will tell the team how the activity really works. Comparing these rules with the ones you have already documented will point out redundancy, differences, conflicts, and erroneous activity. In some cases I have found old rules that no one knew were still in use had to be changed immediately to comply with current legal requirements.


As noted rules are everywhere and at many times are the hidden mandate for any activity.

But today we see that many from the BPM world do not pay enough attention to business rules and many from the BPMS world look at rules from a technical perspective – aligning them to the applications in the project or solution. In both cases, these rules are generally poorly defined and unavailable for general use. They are also not really adequately shared between the business and IT sides in creating a new business solution.

The need to address this is critical and cannot be underemphasized – you must get a handle on your company’s business, technical, production, customer, compliance, and financial rules. In healthcare, there are even more rule categories on the clinical side of services. Without a detailed understanding of applicable rules and immediate access to them, it is difficult to look at change and anticipate impact.

However, what we should do with rules is a matter of opinion. The same is true in determining what we need to do. The fact is that both considerations are often debatable. Today, I find that rules are often one of the orphans of the modern IT and business operation activities. Both IT and the business seem to have divided business transformation and IT solution development and in many ways are recreating the divide of the past 50 years.

The problem is that many teams really don’t look closely into the rules in a business or IT operation and ask the probing fundamental questions. These include:

1. Is the procedure manual up to date? How can we bring it up to date?
2. Do we really know all the rules that guide the work or the creation of IT support?
3. Are the company rules written down? Have they been reviewed by business area managers?
4. Has legal and finance reviewed the rules and vetted them?
5. Are the rules stored in a rules library? How are the rules organized? Are they linked to business activity and are they easy to find in the rules library?
6. Do we know every place in the business and every application that uses each rule?
7. Are all compliance related rules defined and aligned to the business activity work? – Are we in compliance with all important state, federal, and international (for the countries we do business with) rules?
8. Have we been fined for reporting violations in the past? What did we do about that?

Why is this important?

Compliance, HR, legal, and financial rules represent laws and require that you follow them or risk being fined and maybe go out of business. Other rules determine how things will be done and provide order out of what would be operational chaos. The fact is that rules are the logic of the company and project the beliefs and culture that executive management wants to infuse into the workforce.

In the context of this column, rules direct how all work is done and how all decisions are made. They provide the framework for business activity and they guide workers and managers down a specific path in interacting with customers, building product, and running the business.

The simple fact is that without rules, even if they are not written, everyone in any business would be able to do their work in whatever way they thought right. Chaos would reign and the company could not compete. So why are rules important? They simply guide all work and compliance with appropriate laws. They keep you in business.

So who owns rules?

Who is responsible for finding them, defining them, and then both managing them and changes to them? Not a small task. There are thousands of rules in any mid-sized company and a lot more in a large company. There are, however, no standards or norms for rule ownership that I am aware of.

There is also seldom anyone who has the authority to, or the responsibility to, collect, vet, index, and store rules. This is one of the big problems that hampers effective and efficient business operation and slows any type of business improvement or transformation.

But the fact that there are rules everywhere and that there are business activity rules, decision rules, compliance rules, HR rules, finance rules, legal rules, social rules, policy rules, technology rules, data rules and on and on, makes finding, updating, and controlling their use a difficult task. So who is responsible for rules? This takes commitment from a person like the COO or the CIO and it must be considered to be a strategic necessity. If not, it will not be funded.
The fact is that rules are a company asset!

Rules allow the company to run with some consistency and efficiency – they help make certain work get done the right way. They support strategy and compliance with laws. They are the combined intelligent evolution of the company and how it works – gathered over all the years that the company has been in business. They are one of the big things that provide any company with a competitive edge.

The fact is that whoever can change the fastest with the lowest risk will have a real advantage. Those who can include access to all relevant information for these rapid changes will have an even greater advantage. Arguably an advantage that combines rapid improvements to both effectiveness and efficiency offers a timing and cost of change advantage, and builds flexibility into the operation.

Because a company’s rules define and support this competitive differentiation, they should be considered to be undiscovered company assets. Many will represent trade secrets and some may be based on patents and proprietary thought leadership. All of which are company assets.

Formal rule definitions are also important in operations and business interruption – Disaster and Recovery. If they are not known and if known but not formal, a remote hot site for Disaster Recovery is not really much use in many companies. The computers will work in the hot site, but operations will be hurt.

Note: A Disaster Recovery hot site is a remote location that has fully operational computers and work space running 365 days a year.

A looming catastrophe

Companies are about to lose many of their senior workers due to aging. Without a clearly defined set of integrated rules that can be easily found we can expect the millennials who replace these workers to make procedure and execution errors – the infamous human errors that people are writing about. It is easy to predict serious competitive problems for companies that do not take the time or make the investment to create this foundation for understanding the business and how it functions. This is not only a business problem. It is also an IT problem, a manufacturing problem, and a problem in every corner of the business.

Tight budgets have caused cutbacks in the way BPM and BPMS groups look at creating solutions and in the move to integrating components into end to end processes for modernization. But the market is opening and competition is heating up. Given the changes in technology, business management, and the approaches to business streamlining, it is clear that some will leverage this emerging technology and some will not. However, for those that do, change will have removed a major anchor that is slowing the company’s ability to adjust and evolve.

The purpose of this column is to encourage BPM practitioners to increase their emphasis on identifying and defining business rules and in applying the understanding this discovery process will provide to looking at what rules and work are really necessary to start with. From that point the traditional look at efficiency can provide even better results.

I would like to alert my readers to two things. First, my new book will be out in February 2016. It is titled, "The Business Transformation Field Guide: Hints for Delivering Successful Solutions". It will be available through Amazon.com. The book provides both written guidance on the activities needed to be performed in a business transformation project and then over 840 separate brief hints on how to perform the tasks needed to create the solution. Secondly, I would like to alert everyone to the ABPMP January Webinar on Wednesday, January 20th at 2:00 central time. The Webinar will be on business rules and it will be presented by Denis Cagne, a Committee Chair at the OMG standards group. Please go to the ABPMP website and register.

Call me with any questions or comments. I welcome my readers’ opinions and thoughts. I can be reached at daniel.morris@wendan-consulting.com or 630-290-4858.

Dan Morris
Contributor: Dan Morris
Posted: 12/21/2015


Horseshoe Bay Resort, Austin, TX, United States
March 25 - 27, 2018
Norris Conference Centers, Houston, TX, United States
April 8 - 10, 2018
The Westin Austin at the Domain, Austin, TX, United States
April 10 - 12, 2018