Improving How We Improve Processes
When people think of BPM programs their heads are immediately filled with visions of whiteboards and process mapping workshops. Which is fair, discovery and process standardization work is often the initial impetus for why BPM programs get started. Its from that foundation of standardized and documented processes that BPM teams can drive strategic support and valuable improvements.
But its also where BPM programs tend to stall and ultimately flatline at a level 2 BPM maturity. The reason is simple — we are really good at mapping, but struggle with making process efforts actionable through best fit process-based measures and a systemic approach to identifying high value improvements. Which really means we need to up our game and focus on improving our:
- Process performance—understanding how we are doing using data in a structured approach to maintain the health of our processes.
- Process improvement—prioritizing opportunities to perform better and understanding what’s the best approach to accomplish that goal.
Performance and maturity encompass the measurement, monitoring, and controlling of processes. Which means asking: How well do you know your processes and their execution? And how effectively can you identify which changes need to be made?
The measurement aspect of performance enables you to answer those questions. Though most organizations actively assign measures to their processes, they tend to be ad hoc and loosely based on what’s easy to measure. Rather than linking to purpose and providing the ability to identify anomalies early.
The other aspect of performance is established control points. Which are simply business activities embedded in the process to ensure that the process is executed in a controlled manner and to mitigate risks. Ultimately, the measures should be associated with control points should provide information around the performance of the process such as its accuracy, timeliness, and the amount of rework or waste with an acceptable range of variation.
Unfortunately, organizations tend to conduct ad hoc control point monitoring within business unit silos. Which means organizations miss out on the ability to use control points as part of their risk mitigation approach and include actions that address risk, which are triggered when processes move outside of the acceptable variation of the measures.
What Does Good Look Like?
Best-practice organizations’ performance measures are based on the impact of the process in the organization’s strategy, and external benchmarks are used to establish goals. Performance measures include a mix of efficiency, effectiveness, impact, and satisfaction. Predictive and prescriptive analytics are employed to help identify potential process performance issues and to help select the most effective solutions.
For example, Concentra Analytics established a performance management tool to communicate its process standards and identify improvement opportunities. To accomplish this, Concentra laid out the process activities and conducted an assessment to estimate the cost, time, and current responsibility allocation for its activities. This information—along with the status or value of each process (i.e., if it’s strategic or transactional) and the potential efficiencies available (levers such as stop, reduce effort, consolidate, outsource)—provide an easy visualization of all the organization’s processes and what they cost the organization and how they can be improved. This approach allows Concentra to run an assessment to estimate the cost, time, and current responsibility allocation for processes, which helps the team quickly identify the best-fit opportunities for improvements.
The goal of process management is to improve performance. Whether the emphasis is customer retention, cycle time, employee satisfaction, efficiency, business growth, productivity, or any other goal, organizations implement process management to improve something.
Although you can pursue process improvement without the benefit of process management—as many organizations do—this typically results in fragmented, random acts of improvement. Unfortunately, most organizations conduct ad hoc improvements. Which are typically surfaced as part of a larger transformation or by whichever team yells the loudest. By doing so, organizations not only risk redundant projects, but also risk optimizing performance in one aspect of the process to the detriment or sub optimizing the work of other teams and their processes.
What Does Good Look Like?
Best-practice organization ensure their processes are reviewed on a consistent basis to ensure optimization and identify further improvement opportunities (although employees across the organization can submit improvements opportunities for consideration). The process improvement portfolio process will include strategy-related criteria for prioritization and selection, standardized performance measures, forecasting based on historical trends, and structured project/portfolio reviews.
For example, Children’s Hospital of Philadelphia (CHOP) leverages a traditional portfolio management approach to its process improvement efforts. This approach includes required performance reviews by process owners and a formal performance improvement request form. The form provides the BPM team with the information it needs to determine the value of each project, make apples-to-apples comparisons for entry into the portfolio, and assign appropriate re-sources. The form request includes three key sections: project summary, value and risk, and resource needs.
Standardized project requests, combined with clear criterion that determine the value and resource requirements for a potential improvement project, help ensure that the best value and highest impact improvements are pursued. A formal portfolio approach also create visibility around value and helps link process improvement to organizational goals.
Process improvement and process performance management are intrinsically linked. Performance management is the systematic approach to monitoring how processes are executed and should be a source to methodically identify improvement opportunities. Without tackling the process measurement challenges around alignment to purpose and consistent monitoring organizations will continue to struggle with getting ahead on providing value to the organization with proactive identification of improvement needs based on their value and before they become catastrophic.
Building on more than 10 years of business research and consulting experience, Holly Lyke-Ho-Gland is a principal research lead who conducts and publishes APQC research on process management and improvement, quality, project management, measurement, and benchmarking for APQC’s Process and Performance Management research team. Her research supports APQC members and clients across disciplines and centers on helping professionals and project managers solve business problems with strategy, process and measurement.
Holly regularly partners with other APQC research leads to look at improving the end-to-end business processes in areas such as procure-to-pay or order-to-cash where true improvement rests in the entire process versus one functional department. On a biannual basis, she conducts APQC’s extensive research survey and report on The Value of Benchmarking as well as annual surveys and reports on how organizations adopt and use the Process Classification Framework®.
She is a regular contributor for APQC’s blogs on topics of process and performance management, benchmarking, and IT and organizes monthly webinars on these topics for APQC members and subscribers. A few of her more in-depth research reports include, Transformational Change: Making It Last and The Value of Benchmarking.
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