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Six Sigma, BPM, Digitalization - Different paths to the same destination?
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Discussion of the 5 Good Business Practices that all successful process improvement efforts share. This presentation was the most attended solution provider session at the 2015 Gartner BPM Summit in Maryland, USA.
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Six Sigma, BPM, Digitalization - Different paths to the same destination?
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- Bizagi & Innovelocity 2015 | Six Sigma, BPM, Digitalization – Different Paths to the Same Destination? Established in 2007 Deep Industry Expertise with Full-Service BPM Consultancy Customers ranging from SME-Fortune500 Who are we…? Healthcare & Health Insurance High Tech Manufacturing Automotive Manufacturing
- Bizagi & Innovelocity 2015 | Six Sigma, BPM, Digitalization – Different Paths to the Same Destination? Most of our clients are business divisions, looking for a solution to specific business challenges
- Bizagi & Innovelocity 2015 | Six Sigma, BPM, Digitalization – Different Paths to the Same Destination? What typical Business Challenges are customers trying to solve? Effective Utilisation of Resources (Productivity) Improvements aligned to Customer Expectations (Satisfaction) Speed of Execution (Cycle Time) Compliance (Regulatory, Financial)
- Bizagi & Innovelocity 2015 | Six Sigma, BPM, Digitalization – Different Paths to the Same Destination? The Promise of BPM Higher levels of customer service Reduction in operational costs Improved cycle time Competitive advantage Consistent SLAs Improved visibility Efficiency gains Faster time to market Paper-less office Improved business performance Increase agility Better employee productivity Improved cost per transaction
- Bizagi & Innovelocity 2015 | Six Sigma, BPM, Digitalization – Different Paths to the Same Destination? According to Gartner 70% Of BPM initiatives Fail…
- Bizagi & Innovelocity 2015 | Six Sigma, BPM, Digitalization – Different Paths to the Same Destination? Should you try a different Program? Six Sigma Operational Excellence TQM Lean DigitalizationBPI Helix Methodology HEI/BPA PDCA ISO 9000 Trillium Model Baldridge Criteria
- Bizagi & Innovelocity 2015 | Six Sigma, BPM, Digitalization – Different Paths to the Same Destination? Your existing BPM effort can be leveraged. We argue “No”
- Bizagi & Innovelocity 2015 | Six Sigma, BPM, Digitalization – Different Paths to the Same Destination? Different Programs, Common Ground ‘In the Beginning’ Deming Method: systems thinking, variation, 14 points ‘80s TQM/BPR: improve, simplify, integrate processes end-to-end ‘90s Lean Six Sigma: statistical theory, measurement, eliminating waste ‘00s BPM: modeling, automation ‘10s Digitalization: IoT & mobile The evolution of Business Process Improvement
- Bizagi & Innovelocity 2015 | Six Sigma, BPM, Digitalization – Different Paths to the Same Destination? Good Business Practices of successful BPM / business transformation initiatives 5
- Bizagi & Innovelocity 2015 | Six Sigma, BPM, Digitalization – Different Paths to the Same Destination? Define project in context of mission, strategy and customer needs … and repeat the context constantly Establish measurable goals for the project that are clearly related to key business indicators Start solving significant business problems – prioritize, commit, and focus on delivering value right away 1 – Align projects to Strategy & Goals
- Bizagi & Innovelocity 2015 | Six Sigma, BPM, Digitalization – Different Paths to the Same Destination? 2 – Secure Business Engagement & Ownership Leadership must give constancy of purpose and communicate expectations, drive commitment Give each process a clear owner from the business to drive adherence and make decisions - full consensus is not always possible. Provide advancement and learning opportunities, proactively working to overcome fear ITIT FinanceFinance OpsOps Single X-Functional OwnerSingle X-Functional Owner
- Bizagi & Innovelocity 2015 | Six Sigma, BPM, Digitalization – Different Paths to the Same Destination? 3 – Design with a Systems Approach Find the proper scope and set realistic boundaries: start from the top and decompose to the correct level.
- Bizagi & Innovelocity 2015 | Six Sigma, BPM, Digitalization – Different Paths to the Same Destination? 1 2 3 Every business area, business process, or process step is a system: Start from a model of the highest level system for your company Break down to the correct level: Business Area Business Process Sub process Decomposes to multiple Decomposes to multiple
- Bizagi & Innovelocity 2015 | Six Sigma, BPM, Digitalization – Different Paths to the Same Destination? Establish a Baseline measure and document the current state of your process first. Measure Often understand and eliminate causes of variation. Commit to continuous improvement release often (<90 days), observe and improve. Don’t wait until everything is designed perfectly. It will never happen – design, deploy, review, enhance. 4 – Establish Measurement & Continuous Improvement
- Bizagi & Innovelocity 2015 | Six Sigma, BPM, Digitalization – Different Paths to the Same Destination? 5 – Implement Adaptable Business Applications The Bizagi Way…
- Bizagi & Innovelocity 2015 | Six Sigma, BPM, Digitalization – Different Paths to the Same Destination? Good Business Practices are Universal Deming Six Sigma BPM Good Business Practices Plan Define Define Align to Strategy and Goals Business Engagement & Ownership Do Measure Model Systems Approach Analyze Improve Execute Adaptable business applications Check/Act Control Monitor/ Optimize Measurement, Feedback and Continuous Improvement Repeat Focus on improving: Cycle Time, Customer Satisfaction, Productivity, Compliance = Happy Customers, Successful BPM Program
- Bizagi & Innovelocity 2015 | Six Sigma, BPM, Digitalization – Different Paths to the Same Destination? Is BPM the right road? BPM is proven to deliver improvements in cycle time, productivity, customer satisfaction and compliance. If you follow key good business practices in your BPM implementation, you’ll successfully reach your destination
- Bizagi & Innovelocity 2015 | Six Sigma, BPM, Digitalization – Different Paths to the Same Destination? Start your BPM journey today… www.Bizagi.com www.linkedin.com/company/bizagi www.twitter.com/bizagi Neil Simpson | Bizagi: steve.yount@bizagi.comContact speaker: | #BizagiLive
Editor's Notes
- Today we’ll talk about a question that as process professionals, we tend to hear a lot: for a process improvement effort, is the best choice to follow a Six Sigma methodology, or a BPM methodology, or something else? Or, are these simply different paths to the same end result?
- Let’s start with a little background. We’ve been in the BPM consulting business for over 8 years working with clients of all sizes, including some household names involved in everything from short training engagements to long term partnerships. providing the full spectrum of services: strategy, modeling, implementation, integration, support.
- In our case at least, 80% of our customers are not looking for BPM technologies specifically
- Effectively: meeting customer needs better/faster/cheaper and not violating the rules
- BPM methods and technology are a great fit for these types of challenges.
- However …
- I was asked by one prospect whether they should abandon a fledgling BPM effort and start a Six Sigma Program, or something else to solve these issues.
- We argue no. Those other programs bring great tools to the table, as does BPM. But, the keys to success are the same in all.
- To emphasize this, let’s take a step back and look at the evolution of business process improvement. …. BPM practitioners: if you are not familiar with some of these, you could do worse than to pick up Deming’s “Out of the Crisis”, Hammer’s “Re-engineering the corporation”, and Six Sigma handbook (a relatively cheap investment of around $80 on amazon.com) [14 points include constancy of purpose, continuous improvement, driving out fear]
- To summarize some of this reading, let’s step back and take a look at the 5 key business practices that we have found to be essential and in common across all of these approaches.
- Key questions to ask here are … Can everyone working on or receiving the output of your project explain clearly how this is helping make the company successful? Can you measure the output of the project against those key business indicators of … ? Does it link to something measured at the executive level like a balanced score card? Is your initial project something that will make a significant impact to those indicators? Companies may be tempted to start with low business value, low difficulty. High danger program lose momentum and support. One of our clients started with purchasing processes right out of the gate. Direct impact on all the indicators, highly visible, a pain point for the company. A big risk, but was executed well. The whole enterprise took notice and the program took off like wildfire.
- Key questions to ask here are… Does leadership communicate consistent expectations of what success looks like, and the importance of that success being achieved? Without this at some level, it’s common knowledge that business transformation efforts can fall apart quickly. One area where this support is important … ensuring there is one person who can drive decisions for the process both while it is developed and can “look after it” when it is in use. Single process owner across multiple silos who can communicate the voice of the customer. Process changes tend to bring a lot of fear. Do people feel like the objective is not to eliminate jobs but to eliminate wasteful work? Key is to ensure there advancement and learning opportunities for people affected. We’ve worked on projects where people who spent half of their time doing data entry and were quite fearful of automation, became super users and the strongest advocates for using the new tools.
- How to find proper scope and set realistic boundaries is one of the biggest challenges we hear on BPM projects. Scope creep and unintended omissions and impacts can have a huge negative effect on your success. We recommend designing with a systems thinking approach, starting from the top and decomposing to the correct level. But what does this mean?
- Whether you are looking at a single process step, a whole business process, or a whole area of the business, each one of these boxes it’s own system which can be designed with a specific goal or output in mind, provided certain inputs are provided. The question is just the scope of the system you are looking at. To get the full context, we recommend starting with a simplified high level view of your whole organization – what are the major systems that interact in your company. As an example a typical manufacturing organization with R&D gives product requirements to Planning and Manufacturing which in turn work with Purchasing and Logistics to acquire material and supplies and make deliveries to customers. From this point of view, you have some boundaries, and can begin to “Decompose” by identifying the processes that make up this area in detail. An excellent tool we borrow from Six Sigma is the SIPOC diagram to help us brainstorm and summarize the scope of each system.
- Key questions here… How do you know if you are improving? You need to understand the current state of the process in a measurable way. During the process of making improvements, do you have the right measurements in place to understand whether you are meeting your targets and what the causes of deviations are? A BPMS like Bizagi can provide real-time insight into key process indicators and help your team to identify the sources of variation. Can you make changes in your business process quickly based on these observations with minimal disruptions?
- The main reason most companies launch a BPM program is because of the technology on offer to allow processes to be automated, measured, and improved rapidly. Absolutely critical is ensuring that the technology selected offers: Simplicity – ability for a wide range of stakeholders to be able to create and interact with automated processes without extensive training Speed – ability to quickly translate models into working processes without extensive coding/testing/deployment cycles Light Footprint – operating without a massive IT infrastructure but able to scale Collaboration – ability for a whole enterprise to be able to make improvements without tripping over one another or going through extensive change management I would be remiss not to mention that we chose Bizagi because it is the only platform we’ve seen so far which delivers on this promise
- Back to our goals – improving cycle time, customer satisfaction, productivity and compliance If you implement good business practices A well structured BPM program works in a similar way to Six Sigma’s DMAIC or Demings PDCA cycle
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