The Number 1 enemy of most Business Process Improvement efforts within organizations is current organizational reality! Ironically, those companies in the developed countries that have been the most avid technology adopters are the most cursed!. We have run into many such organizations that have a long history of adoption of latest technologies for their work, have been very successful at what they do and have slowly grown into large bureaucracies now with clearly defined fiefdoms within their world with competing agendas. Many in the BFSI (Banking, Financial Service and Insurance) sector are classic examples of these kinds of companies. Unfortunately, they are the ones that need to change the most because of new models of business execution, especially online, web based versions of what they have done for the past 25+ years.

Many of them have come to be invested in large IT backbones that support their business and these are applications that have been in use for a while, work O.K. and do what they are supposed to do properly. However what they may lack is the nimbleness and the technical characteristics needed for morphing themselves into nimble, online, web based versions of themselves so that they can compete effectively. For example, old line companies like State Farm Insurance and Farmers Insurance have all had to rethink how and where their local agents could add value in the face of increasingly online, web-based, self-service based companies like GEICO, Progressive Insurance, etc.

There are some very useful BPM solutions that can Orchestrate the Business Processes with workflows that can be built with Glue like integration that can link into multiple backend software systems that form part of the end to end workflow. These can make things flow with Service Oriented Architectures (SOA) and Business Rule Systems.

In reality, many of these BFSI companies are also huge users of Business Process Outsourcing (BPO) services, many of them offshore. This puts in an extra wrinkle over any Process Improvement efforts you may have. Parts of an end-to-end business process is now in the hands of some offshore provider. For example, let us assume that it is an Order to Cash process and part of the Cash process is a Collections Process. This may have been outsourced and the offshore service provider may use their own local hardware, software and applications infrastructure to execute this part of the overall process.

Now visibility into detailed data may be limited because the process is now broken up in to pieces and handled by different people around the globe!

Just getting a good AS-IS picture of the whole process becomes much more difficult, much less do any process improvement. However organizations will continue doing this if they are saving money!

Organizational Reality always intrudes just when you see organizations place higher priority on end to end business processes, either in the form of an IT History or current outsourcing efforts!

Reality is merely an illusion, albeit a very persistent one. ~Albert Einstein

Gartner surveyed 1500 CIOs and published their results about their business priorities in their companies and the technologies that they were planning to spend money on in 2008. The #1 business priority is Business Process Improvement and the #1 Technology that they will be spending money on is Business Intelligence Solutions.

This raises the profile, expectations and the roles CIOs will play in Business Process Improvement! There is a lot of discussion about whether an IT person should be directing Business Process Improvement efforts or should those be in the domain of the Business People!

This is one of those Chicken-And-Egg situations. Unless CIOs get down and dirty among the Business Process weeds, they will not get an idea of what the problems are and draw upon their technology expertise to come up with good solutions. Unless business people are convinced that CIOs can contribute something worthwhile to the Business Process Improvement effort, they will consider them techies who just want to talk about some arcane technologies.

This impasse can be broken in some creative ways. CIO Offices should split themselves into Business Units and Company Insfrastructure units. The Business Unit related people in the CIO office should be attached to the businesses and sit along with business people. They will have only dotted line relationships to the CIOs office. The Infrastructure group within the CIO offices does not do applications, or implementations of IT solutions to business problems. Their only job is to make sure that hardware and basic software operating systems and office desktop software are all standardized and be only responsible for the hardware, basic software applications, security, business continuity, etc.

All business unit related applications and software should be in the domain of the business. They are the best people to manage this properly and should be in close proximity to the business end users. This way, they can be very familiar with the business processes side of things and come up with good solutions.

I know of a handful of companies that have reorganized their IT department this way and found that it is working well! Bringing Business Process Improvement to the top of the business priority list is very useful for the CIOs. They have a lot to contribute to Business Process Improvement, if only they leave their technology hats behind and put on their business ones!

I am enough of an artist to draw freely upon my imagination. Imagination is more important than knowledge. Knowledge is limited. Imagination encircles the world." -Albert Einstein

Before you can effect any Process Improvement you need to have a clear, accurate and reliable picture of the AS-IS condition of a Business Process in terms of its Key Performance Indicators (KPIs). These KPIs can be measured against SLAs if it is outsourced, or in the Shared Services context. In case it is not outsourced, companies may need to benchmark their KPIs against the Industry Best. There is hardly any point in improving a Mortgage Loan Processing process from 21 days to 20 days when your competitor has an online system and they do the same process in 5 days! Sometimes you may need to leapfrog over your own old benchmarks! Incremental process improvement may not help you face the competition effectively, in the marketplace!

This article Business Intelligence Adds to Process Reengineering talks about this very eloquently. The authors make the point that relevant KPI performance data needs to be collected consistently all the time.

They make the point that sometimes all this data may be spread in many places and need to be collected in one single set of data tables using Extract, Transform and Load (ETL) functions. Analysis in terms of dashboards and alerts can then be of use in process improvement.

This is the classic problem many business processes have. They are all run end-to-end with multiple heterogeneous software systems in the background. If the process is outsourced or parts of the process is outsourced, then data gets dispersed between multiple companies. This makes it very hard to assemble ALL of the relevant KPI data in one place.

For example, let’s say in an Order to Cash process, the collections part of the process is outsourced to an external vendor. This company has all the data upstream and downstream, but in between for the collections process, the data is in the vendors’ systems somwhere else.

This is where measurement is usually done with whatever is available, rather than what is needed for meaningful analysis and improvement!

Business process improvement is not possible without the collection of the right data at the right time and making it available in the right form to the right people. Easier said than done! Legacy considerations and history of processes within companies still support a Functional View of operations (Finance, Marketing, Manufacturing, etc) rather than a Process View. WIth increasing automation and shortening process cycles, this is becoming somewhat easier!

The best performance improvement is the transition from the non-working state to the working state - Anonymous

Value Innovations are a very useful concept pioneered by people in Competitive Product and Services Positioning. Analyzing the various of dimensions of Value of products or services as perceived by customers leads to competitive positioning that can lead to success.

McDonalds restaurants always sold very inexpensive coffee. However they wanted to compete with Starbucks in the Coffee department. They have introduced a new line of coffee products, somewhat more expensive than the ones they offerred before but less expensive than the ones at Starbucks. Starbucks was not serving the segment that was unhappy with the McDonalds coffee but did not want to pay Starbucks prices. They found innovation in Value. This can be value in the sense of Price, Quality, Speed of Service etc.

The same Value Innovations are applicable in Business Processes when it comes to Process Improvement. Customers are very used to paying different prices for Package Delivery all the way from Next Day to 3-Day to Ground Delivery. Their expectations are all the Value they want out of the delivery process. They fully expect to pay different prices for the different levels of service.

Credit Card companies have started authorizing applications instantly online, sometimes allowing them to apply in the context of an online purchase, allowing them to charge that purchase with the online authorization that happened just seconds ago.

Technlogy in the form of Business Rules Engines, Workflow Solutions, Online Credit Reports, Online Databases of various kinds, etc allow business processes to be designed to allow a number of Value Innovations to be added to the business process.

Business Process Improvement stands to benefit a great deal when combined with technology and Value Innovations. It offers the company to effect competitive strategy when it comes to products and services.

Something to think about when pondering process improvement!

To innovate is not to reform - Anonymous

Mizen Boushi is a Japanese term (Used in Toyota Product Development Systems and others in Japan) for Mistake Prevention or "designing in quality". It seems to be a cousin of Poke Yoke which is on a smaller scale, "mistake proofing", on physical things. The notch in your Mobile Telephone SIM card is a Poke Yoke method to make sure that you can put it inside the mobile phone in only one way!

Mizen Boushi in Product Design is making sure that manufacturing mistakes or assembly mistakes cannot be made by altering the product design itself in such a way that mistakes are not possible. For example, car platforms and subsystems like chassis, drive trains, engine assemblies are standardized and tested in so many models that by now you have a very good idea of how reliable they are and how easily manufacturable they are without making quality mistakes.

Then each year for a major automobile model redesign or minor redesign for that model year you just redesign the external appearances, body, etc leaving the component systems the same. This way you are reducing the total number of mistakes that can be made in the whole design and manufacture of the car.

Mistake proofing or Mizen Boushi is just as applicable to business processes or service processes just the same way they are for product design and manufacturing.

People, Process and Tools can be addressed systematically for mistake proofing business processes.

Mistakes are made with people with respect to capacity or capability. In a business process if there are not enough people with the right skillsets at the right time to meet demand at that time, capacity mistakes are made. If enough people with the right skills are not available in a business process or service process, then capability mistakes are made. Multiskilling of people is a very effective way of addressing both problems. The more the breadth of skills of people involved in a business process, the more the organization and the individual get out of it. For the organization, they can leverage people in other business processes that do not have enough to do in those that have peak demand. For the individual, being useful in multiple parts of the organization, and needed, results in higher morale!

Process mistakes can be avoided by initial and ongoing training and extensive on the job training with periodic skill upgrades. Extensive documentation of the process as well as easy and ready access to these while doing the job (like online PDF documents, for example) can all be good ways to reduce process mistakes.

Mizen Boushi can be implemented extensively in Tools. Most business processes use software applications or products as tools. Extensive onscreen validation of what is being typed in, as well as clever mistake proofing can go a long way. For example, instead of asking for the city and then the zip code, have the person type in the zip code, the system pulls up the city and is verified. Mistakes made in typing in the city wrongly can be avoided. They can all be simple things by themselves, but together, they add up to more prevention of mistakes! Monitoring of system availability, usability studies, monitoring of system response time, monitoring of network availability can all be other mistake proofing techniques.

Mizen Boushi can just as easily be applied to business processes and services!

It’s always helpful to learn from your mistakes because then your mistakes seem worthwhile! - Garry Marshall