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MARCH -26 2015 CIOREVIEW.COM
BPM TECHNOLOGY SPECIAL
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38CIOReview
BPM as Springboard to Renew
Lean Sigma InvestmentsBy Jeff Sipes, Process Improvement and Manufacturing Strategy Specialist (Lean and BPM), Back2Basics
B
PM, when treated as a methodology for managing
business processes, has the potential to be a significant
“next wave” for business improvement. For most
businesses in North America, BPM is an untapped
source of improvement. I come to this conclusion as result of
working with my client base, teaching BPM and Lean Sigma
on-line courses for Villanova University (lots of opportunity
to interact with students from broad range of companies), and
participating in various forms of social media. This
article will position BPM as a springboard to
launch aggressive improvement, with
particular emphasis on renewing Lean
Sigma investments.
BPM is part of the
evolution of overall business
improvement approaches
and methodologies.
Throughout the
1900s, the
improvement
evolution has
had a strong
engineering influence. Even Henry Ford’s mass production (early
1900s), Lean and Toyota Production System (1950s), and Six
Sigma (1980s) have strong engineering influences that focus on
improvement of targeted operations and processes. Through this
period there was development of charting/diagramming/modeling
techniques that helped to illustrate and animate flow, but did little
to address the management of broader business processes.
BPM emerged as a business improvement methodology in
the 1990s. This is a relatively recent development in the bigger
scheme of business improvement. BPM began to fill the void left
by the other improvement methodologies. That void focused on
process. More specifically it focused on business processes that
cut across functions and addressed the bigger flow of information
and product or service. As automation and information technology
became drivers of business competitiveness, the need for a way to
manage the business process (horizontal focus) emerged. BPM is
positioned to fill this need.
Premise About LSS
Assuming my premise that Lean Sigma is used primarily on
targeted processes that are limited in scope (within one or two
functions) and centered around widget or service processes, then
BPM is uniquely positioned to help take these companies to the
next level of improvement. Even companies that have aggressively
and successfully implemented Lean Sigma find that they reach a
plateau where further improvement gets harder to achieve.
In these situations, BPM is a methodology that takes the end-
to-end business process perspective that can weave in the Lean
Sigma approaches a company has used. The plateau happens
because the Lean Sigma projects are functionally based. Hence,
the horizontal end-to-end business process orientation.
But I see a challenge that companies have experienced or
will experience with Lean Sigma. Most of the Lean Sigma
improvements happen within a function or two. In other words, the
improvements are happening within a silo. Once improvements
are made within the silo, the practitioner is left with the question
“Where do I go from here?” The results begin to flatten out or
plateau. The sizzle of Lean Sigma begins to wane.
Enter the BPM approach to improvement. The greatest
benefit comes when BPM is treated as both strategic and tactical
approaches to managing and improving the business by focusing
on optimizing end-to-end processes. This is not something that
CXO INSIGHT
Jeff Sipes
| |March 2015
39CIOReview
happens in a silo. If anything, BPM is a
silo “buster”.
BPM-Driven Changes to the Business
Companies that are serious about BPM
change the way they control the business.
Instead of the vertical orientation
they begin to operate with horizontal
orientation. This affects the organization
structure, the way people (from top floor
to front line) relate with one another,
and how information about processes is
gathered, analyzed, and maintained. It has
a revolutionary impact on a company’s
performance measures.
The BPM-driven changes will
challenge traditional ERP systems that
are excellent at managing functions, but
may not have the necessary flexibility to
handle the horizontal business. Metrics
will cut across functions, functions
will be more collaborative, and data
reconciliation between the front end
and the back end of the “end-to-end”
processes may necessitate system
modification. As the need for on-going
process documentation and maintenance
increase, the role of BPMS (business
process management systems or suites)
becomes more prominent.
Why Springboard?
So how does this position BPM to be a
springboard for Lean Sigma? Let’s take
an example of a company that invests in
improving its operations through Lean
Sigma. Perhaps they have reduced cycle
times by focusing on streamlined flow,
improved quality by narrowing in on
process deficiencies that cause defects.
The operational results can be tremendous.
But here are some impacts that present
opportunities or challenges, depending
on your perspective. As throughput
times decrease, you can reduce batch
sizes and move towards “make-to-order”
responding to customer demand rather
than to forecast. Now what started out
as improvements in a narrow part of the
organization (think the fabrication shop)
begins to impact a broader segment of the
organization (scheduling, procurement,
sales, and beyond).
In short, the end-to-
end business process
emergesasacandidate
for significant
improvement.
This issue
reinforces the idea that
of “people, process, and
technology”, get the process
right. Then bring the right “people”
(organization structure and reporting
relationships) and right “technology”
(software, hardware, integration points,
and others). This is a contrast to the
tendency companies have to make the
“process” fit in with the technology and/
or organization. Get the process right,
and let the other follow to support the
process.
The BPM methodology is positioned
to be the springboard for further Lean
Sigma investment returns because it can
“shake” the business out of complacency
and open up new opportunities for Lean
Sigma “reinvestment” as companies
seriously address the “end-to-end”
business process. Some ways BPM
shakes the complacency include:
• Develops an intense business process
focus that cuts across functions and
delivers value to the customer
• Animates information-based and
transactional processes that are hard to
see but essential to successful business
outcomes
• Creates methods and practices to
manage, measure, and improve business
processes to achieve optimization and
avoid backsliding
• Aligns organization structure around
business processes and workflows
• Designs and implements processes
that are drivers of technology needs and
solutions
Conclusion
As you can tell from this narrative, I have
takenapositionthatBPMisamethodology
to manage business processes. It addresses
the way a company is organized, how
processes are measured, definition of
reporting relationships, how processes are
documented and maintained, and much
more. Note that I did not go down the
path that defines BPM as “technology”
in and of itself. But it is a methodology
for business improvement that will drive
technology needs.
For companies that have not started
Lean Sigma or are at very early stages,
the introduction of BPM can be a catalyst
by approaching “process” from a more
strategic position. For companies that
have previously invested and have reached
that plateau I described earlier, BPM will
shake the complacency and open up new
Lean Sigma opportunities. Regardless of
the starting point, BPM rounds out the
robust nature of the overall improvement
methodology set.
The greatest benefit
comes when BPM
is treated as both
strategic and tactical
approaches to managing
and improving the
business by focusing on
optimizing end-to-end
processes