|By Praveen K. Chhangani, RC Chhangani||
|July 1, 2013 08:30 AM EDT||
Organizations have started to see the value in discovering and harnessing the potential of the typically large amounts of information as well as data they generate and consume on a regular basis, all in ways that help their organizational goals and associated business models perform well and execute even better in the market place. Being able to integrate BPM as a strategic approach and discipline towards the enablement and transformation of a company's less efficient current-state process into a more progressive and efficient future-state of operations fosters an environment where the ability to integrate content with core business processes proves significant in progressively maximizing the value of your operational efficiencies while simultaneously minimizing cost, thereby delivering an overall Return on Investment (ROI) for the organization and its customers.
The following are some reasons why continuous process improvement is important
- Developing customer satisfaction and loyalty. Customers can be further broken down into Internal and External customers. Your internal customers are your organizational staff and employees, whereas the external customer is your end customer, who is buying, either indirectly or directly, goods and services from your company. Focusing on satisfying customers' needs should be paramount in the eyes of the organization and its employees. Thinking and developing thought-processes on behalf of the customer will result in increased customer satisfaction and loyalty, which is essential for your organization to be successful in today's highly competitive global market.
- Management by facts. In order to encourage scientific thinking, objective data must be collected, analyzed and presented to management for decision-making. This approach requires formal data gathering and mathematical and statistical analysis of the data by continuous and quality process improvement.
- Respect for people. Quality improvement initiatives assume that all employees have a capacity for self-motivation and for creative thought. Employees are given support and their ideas are solicited in an environment of mutual respect thereby fostering an environment of healthy and more productive collaboration and teams.
- Change Adaptation. Change can be a difficult proposition depending on an organization's culture and history. Some businesses have been conducting their daily operations the same way for the past 10, 20, even 30 years with little or no change, so when changes, especially technological changes, come about, they impact both employer and employees. While most employers want their employees to have a healthy and productive working environment, it's expensive for an employer to have its best workers concerned about their future due to some new change initiative. Employers may sometimes find that the change scenarios may contribute to a decline in employee morale and an increase in stress level runs. Clearly when you start thinking of change from certain organizational perspectives, it can be a challenge to accept, initiate, maintain, and promote it within an organization, therefore this is a key factor to keep in mind when process improvement initiatives are being undertaken.
BPM and Continuous Process Improvement
According to the BPM Institute and the Association of Business Process Management Professionals (ABPMP), Business Process Management (BPM) is a disciplined approach to identify, design, execute, document, monitor, control, and measure both automated and non-automated business processes to achieve consistent, targeted results consistent with an organization's strategic goals. BPM involves the deliberate, collaborative and increasingly technology-aided definition, improvement, innovation, and management of end-to-end business processes that drive business results, create value, and enable an organization to meet its business objectives with more agility.
Plan-Do-Check-Act (PDCA) Cycle
Continuous Process improvement is based on the teachings and philosophy of Edwards Demming. Deming's approach consists of four steps
- (P) Plan - Planning begins with the selection of the problem.
- (D) Do - Implement the solution or process change by collecting data on performance measures and tracking progress against milestones.
- (C) Check - Review and evaluate results of change
- (A) Act - Reflect and act on learning from the experience.
Problem Solving Steps in PDCA Cycle
The main objective of a process improvement initiative is to eliminate or reduce the cause of problems so they don't recur and cause an impact on the overall process. A problem-solving framework and approach that is based on Demming's PDCA cycle is shown below and should aid organizations and business process consultants in solving problems using a systematic sequence of steps in aiming for quality process improvement and productivity.
- Recognizing the problem and establishing priorities
- Forming quality improvement teams
- Defining the problem
- Developing performance measures
- Analyzing problem and process using business process analysis and charts
- Determining possible causes of problems
- Exploring implementation of potential solutions
- Evaluating the solution - the follow-up
- Ensuring permanence and ensuring change institutionalization
- Ongoing continuous process improvement
To several organizations, Six Sigma simply means a measure of quality that strives for near perfection. Six Sigma is a disciplined, data-driven approach and methodology for eliminating defects (driving toward six standard deviations between the mean and the nearest specification limit) in any process - from manufacturing to transactional and from product to service.
The statistical representation of Six Sigma describes quantitatively how a process is performing. To achieve Six Sigma, a process must not produce more than 3.4 defects per million opportunities. A Six Sigma defect is defined as anything outside of customer specifications. A Six Sigma opportunity is then the total quantity of chances for a defect. Process sigma can easily be calculated using a Six Sigma calculator.
The fundamental objective of the Six Sigma methodology is the implementation of a measurement-based strategy that focuses on process improvement and variation reduction through the application of Six Sigma improvement projects. This is accomplished through the use of two Six Sigma sub-methodologies: DMAIC and DMADV. The Six Sigma DMAIC process (define, measure, analyze, improve, control) is an improvement system for existing processes falling below specification and looking for incremental improvement. The Six Sigma DMADV process (define, measure, analyze, design, verify) is an improvement system used to develop new processes or products at Six Sigma quality levels. It can also be employed if a current process requires more than just incremental improvement.
Comparing and Contrasting BPM and Workflow Software
Workflow Software is a simple automation tool for directing documents and tasks to the responsible users for further actions in a business process. It provides information and support for each step of the process and business cycle. Materials and documents pertaining to the process may either be physically transferred from one user to the next, or they may be maintained in a database or server with access given to the appropriate users at the appropriate time. In this system alarms and triggers can also be set to alert executives and process owners when the tasks are overdue. This automated system of operations ensures that work is moved through the system in a timely fashion and is processed correctly by the appropriate users.
BPM Software takes a more structured approach in which workflow automation is only a piece of the puzzle. Using a dashboard interface Business Process Management Software delivers greater visibility and control at a higher level into the process as it integrates the workflow with various applications, technologies, and human-related tasks across vertical and horizontal boundaries. With its roots in workflow software, enterprise application integration (EAI), and document management, Business Process Management Software serves as a solution that can monitor, evaluate, and maintain tasks and processes in real time. Rules give the process owner the ability to set various parameters to manage incidents as needed, while alerts can be enabled to notify the appropriate users when tasks are approaching or overdue. Moreover, a BPM Software Suite is a comprehensive suite that allows you to take your automated workflows to the next level and optimize them to continuously make them stronger and more efficient. It includes a variety of tools to make your business operate smoother and smarter such as:
- Process Defining and Modeling
- Workflow Automation
- Process Management
- Process Optimization
- Business Intelligence
- Activity Monitoring
- Enterprise Application
Lean Services and Just-In-Time
Lean service principles were originally pioneered by Toyota Production system (TPS) with a focus on waste elimination, continuous flow, and customer demand pull and is referred to in manufacturing as Just-In-Time production. The objective of a lean service process is a continuous rapid flow of value-added activities to satisfy customer needs. The lean service philosophy has three guiding principles
- Satisfy the needs of the customer by performing only those activities that add value in the eyes of the customer.
- Define the value stream by flowcharting the process to identify both value-added and non-value added activities
- Eliminate waste in the value stream in any activity for which the customer is not willing to pay.
Application of BPM in Regulatory, Legal and Compliance Related Industries
The 21st century may very well be looked at as the dawn of the age of compliance. A new focus on regulatory compliance, governance and accountability has arisen in the wake of corporate scandals, market volatility and economic downturns. Businesses in every area of the spectrum are under increased scrutiny, challenged not only to follow government regulations and their own internal polices, but also to provide documentation on their compliance on demand. Compliance drives the organizations exposure to risk along a continuous spectrum, and given that with low compliance comes high risk and high compliances comes low risk, the better an organization understands how to manage that risk, the less exposure it will have to litigation, fines and shareholder unrest. As anyone who has undergone a SOX (Sarbanes Oxley) audit can tell you, compliance is, above all, about process. Regulation lays out what an organization is supposed to do, policy describes what it plans to do, but processes are what it actually does. Policy matters but at the end of the day, adherence to policy is both more important and more difficult to demonstrate. Fortunately, the promise of business process management (BPM) solutions can be leveraged to address these issues. Increasingly popular across virtually every public and private sector, BPM has traditionally been deployed as part of an effort to improve efficiency and reduce expense. Now it can also be an important weapon in the fight to overcome the ever-expanding compliance burden weighing down an organization's productivity.
Application of BPM in Legal Areas, i.e., Law Firms
Like many other industries the professional services industry has experienced the effects of the economic downturn, causing law firms to look for ways to reduce administrative tasks and increase time spent on valuable client service and other revenue generating activities.
A recent article from the Society for Computers & Law features Laura Mooney, vice president of corporate communications for Metastorm, discussing how firms such as Allen and Overy; DLA; Duane Morris; Eversheds; Foley & Lardner; Freshfields; Hogan & Hartson; and Jones Day are increasingly implementing business process management (BPM) technology to help drive business efficiencies.
Many firms, prior to implementing a BPM solution, encounter problems that inhibit their overall performance in areas like productivity and revenue, regulatory compliance and customer service. However, with the help of innovative solutions like BPM, practices can strategically automate core processes - like new business intake, for example - which can dramatically reduce time, labor and supply costs across the firm.
Firms can leverage BPM software to achieve regulatory compliance and reduce risk to save hundreds of thousands of pounds on annual liability insurance premiums. Because BPM automates human-centric processes, it ensures repeatability and consistency in processes and enforces business rules and levels of authority in all actions. Every action taken in a process is captured into an online audit trail that can be viewed, analyzed and used during an auditing period, which helps firms maintain regulatory compliance. By leveraging BPM, law firms increase the bandwidth of their attorneys and other teams so they can spend increased time on profit-earning work (legal service provision and business development). In addition, firms can track and repeat successful staffing and matter delivery approaches and pricing models, driving continuous improvement and increased profitability into the enterprise. Increased efficiency supports growth (revenue and profit).
With the functionality created through BPM firms can quickly achieve measurable results such as a decrease in duplicate data entry, errors and omissions and administrative overhead while centralizing reuse of existing data, systems and technologies through seamless integration.
BPM technology helps law firms achieve a competitive advantage by increasing efficiency and reducing costs while enabling superior client service, all of which are critical to success.
The integration of BPM as a holistic management discipline with a scientific data-gathering analysis and problem-solving approach as lean Six Sigma provide a powerful combination for organizations seeking to increase overall efficiencies and decrease operational costs on their core business processes. The foundations of continuous process improvement rest upon Edward Deming's incremental approach to problem solving captured in the PDCA cycle. There is tremendous potential in leveraging the BPM and process improvement using quality tools such as flow charts and business process modeling and simulation tools to help your organization reach its business goals, and get there as efficiently as possible. These tools can be used in the organization to make a contribution to process improvement and also help in adapting business workflow models to market trends, changes in the industry, global economies and regulatory compliance models. However, it's also important that senior management provide the right kind of vision and leadership required to be successful and help in promoting quality improvement programs and initiatives in their respective organizations.
- BPM Institute - www.bpminstitute.org
- Health Care Compliance with BPM, Discovering Process Agility and Significance of regulatory compliance, Praveen K. Chhangani, Ram C. Chhangani, April 2009 Issue of SYSCON Journal - www.sys-con.com
- Minimizing the impact of Change, Effective Business Process Management, Chhangani, May 2007 issue of SYSCON Journal - www.sys-con.com
- Book - Service Management Operations Strategy, Information Technology, 8th Edition, James A. Fitzsimmons, Mona J. Fitzsimmons, Sanjeev K. Bordoloi, McGrawHill
- Book - Service Management Operations Strategy, Information Technology, 8th Edition, James A. Fitzsimmons, Mona J. Fitzsimmons, Sanjeev K. Bordoloi, McGrawHill.
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