10% 20% 30% What’s a “Good” Process Improvement?

 

By Craig Reid @ The Process Ninja | November 28, 2013

 

6a00e554fa70848834019b00f6150d970c-800wiI’m often asked by clientswhat levels of improvement they can expect from mI’m often asked by clients what levels of improvement they can expect from my work. Clients are fascinated by pinning a percentage on each process so that they can show this to senior managers and say “We’ve saved 30% of the total cost of the process!”

But let’s clarify a few things here…

Firstly – what time are we measuring? Is it elapsed time or actual effort time:

  • Elapsed time refers to the total time from start to finish of the process from the customers point of view.
  • Effort time means the actual amount of time your staff take to do work in the process

A classic example is that it may take 2 minutes for your staff to write an email (effort time), but if the email sits in an inbox for 2 hours that is adding to the time of the overall process (elapsed time).

Both types of timings are important depending on the goal – elapsedtime has a greater customer impact (“OMG! Why is it taking so long!”) whereas effort time is a more telling diagnostic for efficiency. Of course a reduction in effort time also decreases elapsed time – and it is still possible to have a process which is efficient in terms of effort time but a laggard in elapsed time (watch out for those sneaky ones).My tip is to measure both for whatever process you look at.

So what is a “good” level of improvement? Well it’s not quite that simple. A 0.5% elimination of effort time can be a fantastic improvement – it all depends upon one very crucial ingredient:volume.

A small improvement upon high volume can result in huge savings – take the example of a company that receives millions of calls to it’s contact centre – shaving even seconds off a call can be a huge cost saver. Converesly, if you can save 75% of effort time off a process that is only conducted 200 times a year, the costs of implementing the process change may outweigh the benefits.

So to answer the question, there’s no such thing as ”good” percentage improvement in terms of effort time – it has to be measured along with volume. But to quash the fires of curiosity I’ve achieved effort time reductions on processes up to 75%, but commonly from 30-70%. If we look at elapsed time, a percentage reduction on its own can be a useful measure – but again transaction volume should be taken into account as part of the cost / benefit analysis.

Courtesy to Craig Reid. This blog is also available on The Process Ninja.


How to take the best part of BPM Solutions?

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Source: Semana Informática

O ritmo de crescimento na adopção do BPM tem sido lento, pelo que o seu impacto ao nível dos recursos humanos também não tem crescido significativamente. Mesmo assim, os fabricantes de tecnologia e as consultoras que trabalham nesta área reconhecem que há escassez de recursos especializados e que o número de pessoas nas empresas com formação adequada para ajudar a fazer do BPM um mecanismo de redução de custos e não apenas um investimento é reduzido.

O Semana perguntou a cinco especialistas em business process management (BPM) o que devem fazer as empresas para tirar melhor partido destas ferramentas. Aqui ficam as respostas:

«Mesmo com a tecnologia adequada e a implementação correcta, o saldo positivo na implementação de um projecto de BPM só será alcançado se também dedicarmos uma boa fatia do esforço às pessoas. Estes projectos têm por definição um significativo impacto nas organizações, na forma como as pessoas desempenham as suas tarefas, resultando numa mudança cultural.» Fernando Dias, Portugal sales consulting manager da Oracle.

«Para tirar partido das vantagens deste tipo de soluções é preciso que as empresas observem diversos factores, que vão desde o grau de preparação tecnológica ou do nível de consolidação dos seus sistemas, passando pelo estágio de desenvolvimento da sua estratégia de integração, até ao nível de preparação dos seus colaboradores, quer estes sejam técnicos ou funcionais.» José Tavares, business developer da SAP Portugal.

«Na área de BPM, o processo de mudança é fundamental. Envolver os diversos interlocutores e alinhar os conceitos, a abordagem e as linhas transversais que se pretendem para o resultado final são aspectos determinantes para o sucesso. A participação do negócio em cada momento é essencial, porque se sabe, concretamente, o que se necessita para atingir os objectivos colocados, e com uma intervenção activa contribui-se para esse resultado.» Pedro Moutinho, manager da Novabase.

«Mais do que o foco na tecnologia, é necessário que as empresas caminhem no sentido de aumentar o seu nível de maturidade nesta área e que sejam organizações efectivamente estruturadas, organizadas, geridas e orientadas a processos. Esta mudança de paradigma altera não só a forma como os decisores e executivos pensam e estruturam as suas instituições, mas também inclui alterações na estrutura organizacional, na lógica de avaliação do desempenho, nos papéis, nas responsabilidades, nos valores e na cultura.» Luís Correia, manager da Safira.

«As pessoas são um factor-chave de sucesso dos projectos de BPM. No contexto das soluções de BPM, o factor humano é ainda mais crítico, pois em muitos casos as pessoas escondem algumas ineficiências das organizações sob pena de serem dispensados, ou por sentirem receio que as ferramentas automáticas e as plataformas de BPM as possam substituir, constituindo um factor de resistência assinalável.» Jorge Pereira, CEO da Infosistema.


BPM market to achieve significant growth

Source: http://www.companiesandmarkets.com/News/Information-Technology/BPM-market-to-achieve-significant-growth/NI7648

The BPM market (Business Process Management) has been forecast to hit a total value of $8.3 billion by the end of 2019, increasing from a valuation of approximately $2.8 billion at the beginning of 2013.

Key factors set to drive growth within the market include the increased adoption of more efficiently ways to collaboration between people and provide an interactive process based on exception management.

BPM software is achieving the ability to connect people across applications within the siloed lines of business software capability. As enterprises realise that automation of process is key to market growth BPM is creating new market opportunities.

The global industry is poised to achieve significant growth. As people move to cloud computing and use their smart phones and tablets to access apps, exception management of business process becomes a significant aspect of doing business. Patterns are being used to control automated process better and interact with it in a more flexible manner.

Cloud computing, mobile computing, and smart devices represent the major forces impacting business process management (BPM) markets.

Using BPM as a regulatory tool is especially important in light of the challenges presented by cloud computing, mobility and social media.

When information is crossing organisational barriers and flowing between such diverse technological environments, it can be extremely difficult to identify where information is at any time and ensure it is available and secure. A significant level of transparency is needed to provide insight into these background operations.

IBM and others are leveraging patterns to gain competitive advantage in enterprise BPM markets. Managers use large BPM systems and small and mid-size business use the BPM cloud.

IBM gained two points of market share in BPM platforms as WebSphere extended its functionality to encompass cloud and more of the process interactions that occur on an everyday basis in an enterprise. IBM is positioning to let people connect across the lines of business from within the business process applications.


Taking on a BPM Project in Three Steps

Scott Cleveland

Author: Scott ClevelandTaking on a BPM project in 3 steps

Company: Impac Systems Engineering

 

BPM [business process management] is about managing your business processes.  Software is not required to manage business processes.  Companies have been defining and managing their processes without software for years.

 

Identify the Business Need

You are looking at BPM because you have a problem.  Maybe a process takes too long or it costs too much.  Maybe the problem is just a daily annoyance that you would like to get rid of.  No matter the reason, its always about money.

 

The Discovery Phase

Start the discovery phase with a project manager and a ‘cross functional’ team.

Define the problem process.  Identify the steps that take place.  At each step, who performs what activities?  What do they need in order to perform those activities [information, materials, etc.]?  What are the dependencies?  Are there business rules that must be followed?  What are the customer ‘touch points’?  Where has this process been failing?

Document your findings.  Document the process.  Confirm with your ‘cross functional’ team that you have accurately documented the process.  Put in place some metrics to measure this process – you will need these numbers to determine costs and success.

 

Decision Analysis

You now have some ideas of the cost.  What would you have to spend [opportunity cost] to make the needed improvements?  If the spend is less than the cost, you can move forward.  What is the cost of a BPM software implementation?  When you implement BPM software, you still have to manually make the needed improvements and then implement them in the software.  So, you add the 2 costs together.  If the spend is less than the costs, you can make the case to move forward.

BPM Software provides control and visibility. It is not automatic, you have to define the controls and you configure what you want to see from the software.

There are some great benefits to be had managing your business processes either manually or with software.  I recommend that you look into it…


We have BPM and we still use paper? Really?

 

Michał Rykiert

Author: Michal Rykiert – We have BPM and we still use paper? Really?

Company: WEBCON – http://www.webcon.com

 

We have BPM and we still use paper? Really?

According to recent AIIM Report – ‘Winning the Paper Wars’, 74% of companies have business improvement campaigns that would benefit from paperless initiatives, but only 24% of those have a specific policy to ‘drive paper out of business’. In the era of BPM, BPMS, iBPMS, ERP, ECM (and dozens of other acronyms), I’m asking: how is it possible we still use paper? Isn’t (paper) document processing a part of business that would benefit from being optimized?

In the same report we read: ‘Nearly half (47%) of organizations made only 5% progress towards processes that could be paper free. 18% haven’t even started yet’. So basically 2 out of 3 companies are still in 1990s when it comes to paper documents. But wait… it gets better:

‘On average, respondents feel that driving paper out of the business would improve speed of response to customers, citizens or staff by 29,7%, rising to 35,4% for those with more experience [with paperless processes]’. In plain words: those 65% of companies that made none or little progress towards eliminating paper are missing a chance to rise up productivity by more than 30%. OK, but what about ROI then?

‘Two-thirds of those adopting paper free processes report a payback within 18 months. 50% see payback in a single 12-month budgeting period’. ‘Why don’t we have it implemented yet?’ – a stunned CEO might ask…

 

Let’s identify the three biggest obstacles:

 

1. Building a business case. Even with the most appealing arguments and ROI numbers, convincing top management to spend money may be hard. No budget, not enough resources, lack of will to take responsibility for a project – you name it. There are always plenty of reasons not to spend money… unless an organization absolutely has to.

2. Integration and maintenance costs. In some cases an integration DMS capabilities with existing IT systems is too complicated and too expensive. Requires an external service, creation of custom solutions, hiring additional staff for maintenance etc. Additionally when something goes wrong, there’s yet another vendor to call and deal with, which make resolving problems more complicated.

3. The power of habit. Change is foundation of every improvement process. However the reality shows that transition from paper to electronic documents is one of the hardest to introduce. It is especially a difficult case when it comes to veterans who are very reluctant to increase the impact of technology they are not familiar with.

 

Handling paper documents within BPMS
In my opinion, for a long term strategy, using paper documents is not an option. Of course it is not possible to go 100% paperless but organizations should gradually minimize the role of paper in their businesses.

Two technologies are particularly helpful in that matter:
barcodes – to optimize document scanning, filing and archiving
OCR – for digitalization, automatic registration, full text search and archiving

But using them as a standalones doesn’t make much sense. Integration with company’s BPMS or ERP is better, but as I mentioned, it could be expensive and potentially problematic. At the end organization could end-up using only some of the potential in that solution.

From my perspective, the best course of action in order to maximize productivity and ROI, is to invest in BPM suite that would also have capabilities of DMS (Document Management System) with fully integrated OCR and barcodes modules. It allows to handle all business processes end to end (along with these processes that start with paper hard copies) within only one platform. Therefore end-users have only one interface to deal with, and IT department only one vendor to contact when necessary.

When it comes to functionality, besides usual BPMS capabilities, it allows for:
• precise document routing (executed by BPMS)
• full text search (OCR)
• mass document scanning (barcodes)
• easy and transparent filing (barcodes)
• automatic document registration and workflow initialization (OCR)

 

Full scope of process optimization

 

We often discuss what’s the best way to optimize certain processes and at the same time we tend to ignore other ones that have significant impact on organization(s). I’m constantly surprised by the fact that most of the top BPM suites noted in Gartner’s Magic Quadrant are still missing some of the aforementioned DMS functionalities. Isn’t it a major overlook? Aren’t BPMS supposed to be truly comprehensive when it comes to process optimization?

What’s your take on the subject? Is dealing with document hardcopies worth time and effort? Is ‘one to rule them [business processes] all’ approach appealing?


Why you need to think about BPM in a different way

Business process management (BPM) has an unfair reputation as one of the least sexy areas of IT.

But look at BPM the right way, and it has the potential to transform businesses, says Theo Priestley, newly-appointed chief technology evangelist at Software AG.

Theo_Priestly_Software_AG._Crop.jpg

The problem, says Priestley, who has built-up a reputation as an influential blogger on BPM technology, is that most organisations regard BPM as an overhead rather than a technology that can drive business growth.

Necessary evil

“I think BPM is still seen as relatively unsexy, a sort of necessary evil,” says Priestley. “We must do something to streamline our processes. And unfortunately its always driven from a project or process perspective.”

Used in the right way, BPM can help companies become more agile and more profitable, but it needs a change in mindset from IT leaders.

“For a CIO, it’s about getting away from project mentality, from cost-efficiency mentality and to actually start thinking of BPM as a way to enable your business to be more reactive, proactive or adaptive to the changing conditions that are out there,” he says.

Treat BPM as a continuous process

That means treating BPM as a continuous process rather than the one-off project – the way it is viewed by most organisations.

“You perform a process every day and you have to think about how you can change it and improve it continuously, as the world is changing every day,” he says.

Mobile BPM 

Mobile technology is helping to broaden the scope of BPM by enabling, for example, applications that allow customers to order food, clothes or insurance from their mobile phones.

But building mobile processes requires dedicated mobile apps or web interfaces specifically built for mobile, says Priestley.

“You can’t really work the same way on a mobile as you can on a webpage on a desktop. The user experience and user interface has to be built in to the process according to the form factor,” he says.

Cloud slow to take off

However cloud has been slower to take off in BPM than it has in other areas of IT, such as customer relationship management (CRM), says Priestley.

“SalesForce, for example, has made cloud software its mantra, almost, and that has really propelled CRM into the limelight. BPM not so much,” he says.

One reason may be that a CRM implementation, by its nature, is simpler and more defined than a BPM project, making CRM a more obvious candidate for the cloud.

And BPM systems tend to handle more data that typical CRM implementations and that means more compliance issues – the second reason why BPM may not be so popular as an off-premise technology.

“If you look at the German market, for example, it is extremely stringent on data privacy,” Priestley says. “So much so that you can’t have your data leave the country.”

Financial services industries have been particular cautious about adopting BPM in the cloud. “They are a lot more regulated. They don’t really want to be in the limelight or in the press around a data breach,” he says.

Social BPM 

Meanwhile, the incorporation of social media into BPM is making it easier for organisations to map their business processes.

“If you are working on a particular step, you are not confined just to speaking to the supervisor, you can actually ask a network of people to feed in and impart their knowledge,” says Priestley.

Nevertheless, suppliers and industry analysts will need to work harder to educate businesses about the benefits of BPM.

The technology still means different things to different people, and there is still  much confusion out there, Priestley suggests.

“Some CIOs see it as a means to document processes. Others want to improve compliance and transparency of process, streamlining and cost efficiencies,” he says.

Why companies cannot afford to ignore BPM 

One thing is certain, however; if businesses want to stay ahead of the game, they cannot afford to ignore BPM, Priestley claims.

“If you don’t understand your business, the way BPM can understand your business, how can you change your business to beat a competitor and get ahead in the market?” he says.

Source: http://www.computerweekly.com/news/2240204297/Why-you-need-to-think-about-BPM-in-a-different-way

 


Why does BPM matter?

Scott Cleveland

Author: Scott ClevelandWhy does BPM Matter?

The Business Process Management Professionals Group posed this question:

Why does BPM matter? Why should we practice BPM?

Brian Vinson’s response…

“Either you’re in control of your business processes or they are in control of you. You manage your suppliers, revenue, cash flows, inventory, distribution and personnel. Why would you not manage the processes that make sure all these things work together effectively?”

My Thoughts…

I keep thinking about his first sentence – either you’re in control of your business processes or they are in control of you.

I think that this is true, but I question whether having your process control you is a bad thing. If the process is working and no one is complaining, is that a bad thing? [If a tree falls in the forest and no one is there to hear it, did it make a sound?]

I do think that it is important to monitor processes to make sure they are working properly. If you are not aware that customers don’t like your process, you have a problem and it could be a big problem.

Compare this to the squeaky wheel getting the oil. If the process isn’t functioning properly or it is annoying the people in the process, then it needs attention. The bigger the problem, the easier it is to sell the problem to management.

Your Thoughts…

How do you see it?