How a Business Process Vision May Boost Innovative Ideas

Salvatore LATRONICO Francesco BATTISTA

BPM Consultancy Director Marketing Director

openwork

Session Title:

How a business process vision may boost innovative ideas

Welcome to Transformation and Innovation 2007 The Business Transformation Conference Welcome

Agenda

BPM focus and purposes

From issues to a software solution in a real BPM project case (TNT Global Express Italy)

Software solution implementation: classical cycle vs. Implementing-Analysis

Implementing-Analysis boosts innovative ideas and creativity

Vertical approach and Horizontal vision Sales & Marketing Financial & Controlling Procure ment Production & Logistics ERP CRM Legacy

Functional Islands and Process Bridges

Introducing a real case

Analyzing a real BPM project case (TNT Global Express Italy), we will show how a BPM suite may help organizations to evolve from a departmental/functional vision into a process vision, where operators and systems are guided and orchestrated together, with substantial and valuable operational and strategic benefits.

Adopting BPM not only as a mere technology but taking advantage of its most sophisticated methodological approaches, provides the opportunity for a prompt alignment of organizational models and processes execution.

As a consequence an ideal environment for agile and continuous process improvements is set up, with sustainable costs and timings, stimulating more and more business people in proposing new ideas and creative suggestions.

Project requirements

Fiscal purposes require the company to generate, verify and store securely, on a monthly basis, a set of documents for each legal entity belonging to the company group.

During the whole year, F&A department prints from the ERP system all necessary accounting documents, producing very large files, each containing thousands of accounting records related to one single legal entity and one single month (with a special procedure for end of year closure period).

Every accounting document is stored into the Document Management System (DMS) and at defined deadlines an IT operator accesses the DMS and verifies all required accounting documents are already available in the system.

Then the IT operator selects relevant documents in the DMS, creates documents volume and corresponding hash codes file (standard well-known file fingerprint) and electronically signs them along with related timestamp.

Criticalities

Information System solutions split into several environments

Organizational process involving and impacting different departments and areas

Software tools providing functional solutions, but each limited to one single area/ environment

Frequent and rapid organizational changes

Time-consuming process

Wrong ability/skill management/allocation

Owner not allowed to control its process and related timings

Unstructured (unreliable) communication among process actors

Main action lines

System vs. Human : split process into basic activities separating ones requiring human intervention form others that may be automated.

Orchestration : assemble basic activities in an automated process to guide people and system in compliance with organizational rules.

Evolution : agility and ability to apply changes to processes from an organizational (model) and a technological (execute) point of view.

Ownership and delegation : each process actor has to actually and directly do what he/she is capable and responsible for.

Push vs. Pull : procedure has to be an active element guiding, reminding and pressing process actors instead of waiting for their intervention.

Content check : accounting documents check has to be allowed also during and after the archiving process and not only at the beginning.

SLA : alerts related to process deadlines have to be introduced to measure service level.

Abstract Business Process (BP)

System to System

daemon

single instance

System to Human to System triggered by DA for each volume multiple instance

Atomic activities Knowledge of DMS and indexing tool Action 8 Completed DMS and indexing tool IT Indexing and store on DMS accounting documents, hash codes file and related receipts 11 Knowledge of e-mail software Pull Mail System Finance Receiving signed hash codes file receipt 10 Knowledge of e-mail software Action 7 Completed (positive verification) Mail System Finance Sending signed hash codes file to EA 9 Action 7 Completed (positive verification) Finance Storing DVD in fireproof safe 8 DVD received File System Finance Verifying DVD 7 Action 5 Completed IT Delivering DVD to F&A 6 Use of DVD burning software Action 4 Completed DVD burning Software IT Burning DVD 5 Investigate and verify content of each document before signing Action 3 Completed Signature Software IT on behalf of F&A Director Creating and signing volumes hash codes File 4 Knowledge of deadlines and rules for volume creation PULL File System IT Creating Document Volumes 3 Use of document-optimizer dedicated tool PULL Document-optimizer dedicated tool IT Optimizing Documents 2 Knowledge of ERP printing functions PULL ERP Finance Printing Documents 1 Ability Trigger Tool Owner Activity

Fully Specialized Business Process Executable Business Process

Project outcomes

People know what to do even when not knowing (partially or totally) the process

People understand what is happening in the process thanks to e-mail, reminders, alerts helping the process to advance

People are now monitored and traced during activities execution.

The BPM solution delivered, fully satisfied customer requirements on the GO LIVE project date… but…

Volume Signature: evolution 1

Why should the F&A Director always sign a volume for approval?

What would happen if she/he detects an error in one of the volume

documents?

Those questions originated a change in the process, allowing the F&A Director to approve or invalidate volume in case of errors, requesting F&A operators to print again all volume accounting documents.

All this was made by applying very simple modifications to flow chart and related web form.

Why should the F&A Director always entirely approve or reject a volume?

Why should even one single error in one single volume document cause the entire volume to be rejected?

Those questions originated a change in the process allowing the F&A Director to even partially approve volumes requesting the F&A department to mend errors and print again invalidated fiscal documents only.

All this was made applying very simple modifications to flow chart and related web form.

Operational and Strategic benefits

TIME REDUCTION : reduced timings needed for requirements definition and functional analysis.

EASY EVOLUTION 1 : lack of initial clear and well defined specifications has not required major intervention/changes on what previously delivered.

EASY EVOLUTION 2 : further subsequent analysis performed during implementation have not required major intervention/changes on what already delivered.

AUTOMATION : everything possible has been automated and user are now involved in processes only when strictly required.

IMMEDIATE : simple and direct process documentation as a direct consequence of the definition of the process model.

COMMON GROUND : the solution delivered is the direct result of business people knowledge (specialized when needed for operational details) and not a translation of their ideas and point of view.

Focus points: specialize vs. translate

Abstract BP

Fully Specialized BP

Executable BP

specialization

using same tools and concepts

specialization is NOT translation

From business management tools to software applications not re-building knowledge representation but detailing it

Starting from the initial Abstract business process, working on it with subsequent specializing steps, we can finally define business operational details, executable business processes: the software solution.

Focus points: specialization SPECIALIZATION Abstract Business Process Executable Business Process Macro activities Atomic activities

From Business needs to software solution Implementing-Analysis : one phase specialization

Implementing software solutions Approach, methodologies and Business-Software distance ! BUSINESS SOFTWARE

From Business needs to software solution Classic cycle: phases ANALYSIS DESIGN IMPLEMENTATION

From Business needs to software solution Classic cycle: phases

Analysis

detailed functional (generally) non-technical description of what

the customer does (AS IS) and wants or needs (TO BE)

Design

high level technical and technological directions defining the correct

architecture and environment to build what the customer wants

Implementation

technical activities (code writings, system configurations or

similar) in compliance with defined architectural context to functionally deliver what the customer wants

Market-Business-Software alignment Classic cycle: performance BUSINESS MODEL ANALYSIS TECH LAYER DESIGN SOFTWARE EXECUTION IMPLEMENTATION real world / market SPEED SPEED SPEED SPEED

Market-Business-Software alignment Classic cycle: performance

Market-Business-Software alignment Classic cycle: performance BUSINESS MODEL ANALYSIS TECH LAYER DESIGN SOFTWARE EXECUTION IMPLEMENTATION

From Business needs to software solution Classic cycle: concepts translation approach ANALYSIS DESIGN IMPLEMENTATION Business skills IT skills IT skills

From Business needs to software solution Implementing-Analysis : one phase

Market-Business-Software alignment Implementing-Analysis performance

From Business needs to software solution Implementing-Analysis : concepts specialization approach IMPLEMENTING-ANALYSIS Business skills IT skills

From Business needs to software solution Implementing-Analysis : concepts specialization approach Business skills IT skills

From Business needs to software solution Implementing-Analysis : the higher maturity, the lower IT skills required Business skills IT skills

Processes: creativity first!

As proposed by Mark KLEIN and Claudio PETTI (MIT Sloan School of Management - “A Handbook-based Methodology for Redesigning Business Processes”) modeling organizations it’s a creative process where inventing or re-inventing is a key factor.

Implementing – Analysis supports this process allowing to link ideas with real-world just-in-time.

So where BPM is going?

While today is very clear and generally agreed that one of the most important topic in BPM is the integration among systems, it’s important to underline that this is one but not the only challenge.

Implementing-Analysis approach suggests another important area that brings organizational new opportunities in terms of business agility and change management, enabling and extending company people contribution to business continuous improvement.

From this point of view, BPM is not simply another piece of software but a key organizational element able to boost ideas and innovation in a competitive world where the ability to change quickly may make a great difference.

Thank Y