The concern with business process improvement is a perennial concen that has been with us since Frederick Winslow Taylor urged companies to simplify work and identify the one best way of performing tasks in the early years of the 20th Century. In good times, companies rely on process practitioners to create new processes and expand organizational capabilities. In bad times, companies focus on eliminating unnecessary activities and on saving money.
In the past 50 years, there have been three broad traditions that have contributed techniques and methodologies to the battle for process improvement. There is the management tradition, represented by people like Rummler, Hammer, Haskett, Burlton, and Porter that have proposed ways to think about processes broadly. They have focused on how large scale processes generate value for customers and support corporate strategies.
A second tradition, derived from the work simplification and quality control tradition, has focused on assuring that specific processes are executed as efficiently as possible and that products and services are as nearly flawless as possible.
The third tradition has been developed by computer and software analysts and focuses on how information technology systems can be used to automate processes. This approach reduces costs and allows for larger and more rapid production capabilities. (See Figure 1)
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Figure 1. The Broad Traditions Contributing to Process Improvement. Today, each of these traditions is supported by specific methodologies and championed by enthusiastic groups of practitioners.
The work simplification/quality control tradition is championed by Six Sigma and Lean advocates. These two approaches can be considered separately, although they are increasingly being merged into a single approach. They share strong roots in manufacturing, a heavy emphasis on measurement and statistical techniques, a focus on specific processes or activities and a major emphasis on saving money by improving the specific activities that workers perform. Figure 2 uses the BPTrends pyramid to suggest the emphasis of Six Sigma, while Figure 3 provides a similar overview of Lean.
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Figure 2. The Focus of Six Sigma Six Sigma focuses on identifying specific processes that can be improved. The objective is to save money. The approach was developed at Motorola in the late 80's and combines an emphasis on statistical quality control with process analysis techniques. Over the years, Six Sigma has been extended to other areas, including new product design and process redesign, but it is still mainly a collection of analysis tools and an approach for using statistics to analyze processes and identify areas of possible improvements.
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Figure 3. The Focus of Lean Lean focuses on improving the overall efficiency of a production line. The approach originated at Toyota in the 50's-60's and was originally called the Toyota Production System. In fact, at Toyota, Lean is integral to the Toyota culture, but in most US organizations, Lean is simply a set of specific techniques that groups use to improve existing processes. The main technique most US companies focus on is the elimination of waste - what an earlier generation would have simply called work simplification. Lean practitioners focus on eliminating seven (or eight) specific types of non-value adding activities. The approach focuses primarily on improving existing core manufacturing processes. Waste elimination is often complemented by A3 - a project management technique developed at Toyota - and by Value Stream analysis, which provides an enterprise overview of an organization's core production activities.
Figure 4 suggests how the current interest in BPMS maps to the BPTrends pyramid. In essence, Business Process Management Suites represent an improved set of software tools that combine workflow, enterprise application integration techniques (including SOA) and monitoring and decision support techniques.
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Figure 4. The Focus of BPMS BPMS combines a number of software tools that were developed over the course of the last twenty years with new techniques derived from the Internet and the Web. BPMS software products can be used simply to automate existing processes and many companies have successfully used them that way. BPMS software products can also be used to organize and manage on-going processes as they are executed, and provide managers with information about the processes. As this second capability is emphasized, companies will increasingly depend on defining major processes in BPMS and then using the resulting information to guide corporate decision making in something approaching real-time. In addition, the ability of BPMS tools to facilitate rapid changes will make it possible for managers to change business rules or processes rapidly to accommodate new developments in the business environment.
Most companies are just beginning to explore the use of BPMS products. Early users have often used BPMS to simply automate relatively small-scale processes, or to make existing ERP applications more flexible. As time passes, however, we expect to see BPMS products used to create worldwide supply chain management systems that will significantly increase the ability of senior managers to control the flow and efficiency of their supply chains.
Figure 5 illustrates the approach of those currently working in the Business Process Management tradition. This tradition, in its current form, places a significant emphasis on creating a business process architecture that structures an enterprise-wide approach to process measurement, management, alignment, and change. This approach is very much in keeping with the popular books written by Rummler and Hammer in the 90's and, most recently, by Burlton and Harmon. Similarly, the Supply Chain Council's SCOR framework and Kaplan and Norton's Balanced Scorecard techniques are very much in the BPM tradition.
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Figure 5. The Focus of Business Process Management In addition to its emphasis on complete value chains, customers, process management, and strategic alignment, BPM has always emphasized both major business process redesign projects and continuous improvement. And, it has usually emphasized a holistic approach to process change that uses an enterprise overview to align and prioritize all process efforts and to balance the emphasis on process redesign, continuous improvement, and the use of automation and human performance techniques.
When BPM practitioners approach specific process improvement projects, they frequently rely on specific Lean and Six Sigma techniques. They are also likely to rely on business rules and specific human performance techniques to improve the overall functioning of processes and are as likely to examine management and support processes as core processes. Their top down, cross functional approach is designed to guarantee that all specific changes are aligned to assure that they continue to contribute to the overall success of the complete value chain containing the processes.
It is too early to suggest that the three traditions are about to disappear and that a comprehensive business process change methodology has emerged, but there are signs that a more comprehensive approach is emerging.
Lean and Six Sigma have already largely combined, and there is a growing emphasis within the Lean Six Sigma community on the importance of architecture and management. Similarly, the BPMS software tool vendors are increasingly stressing that companies need a broader overview of process redesign and improvement before they are ready to use BPMS techniques to manage or automate processes.
As companies struggle to deal with a difficult economic environment, there will be a tendency on the part of some to fall back on one set of specific techniques to generate rapid cost savings and efficiencies. If we have learned anything over the past decade, however, it's that any specific approach to process change, taken in isolation, ignores lots of opportunities for improvement. The challenge of the next couple of years will be for companies to maintain an integrated business process management approach that maintains a broad overview of the potential changes and chooses change techniques that are right for each specific situation. In some cases, outsourcing will be better than Lean. In other cases, automation will be better than Six Sigma, or vice versa. In all cases, resources will be limited and ought to be applied according to an overall roadmap designed to improve the overall efficiency and effectiveness of the organization. Companies that do this will emerge from the downturn stronger and more competitive.
Till next time,
Paul Harmon
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