BPM System Methodology, Overcoming Traditional Management Shortcomings

A BPM system methodology is available for organizations to enhance their strategic planning process, scorecarding process, and process improvement methodology. This system integrates Business Process Management (BPM) with Enterprise Process Management (EPM) using an Integrated Enterprise Excellence (IEE) approach.  This methodology will be referenced as the IEE BPM/EPM system.

Improving the Strategic Planning Process

Organizations can spend much time creating strategic statements that end up being worded as if we are to be the best of the best or some other high level statement.  These objectives are then often cascaded throughout the enterprise for the purpose of providing organizational direction.  This format for making statements, which are to be acted upon, can lead to differing interpretations for specific actions.  Organizations can create much confusion, wasted effort, and unhealthy behaviors when using techniques such as the Balanced Scorecard and hoshin kanri to cascade these high-level strategic statements throughout the organization.  A BPM system methodology can resolve this issue, as referenced later.

There is nothing wrong with high-level directive statements; however, often these wordings are more vision statements, which should be acted on accordingly.  What organizations need to do is develop strategic statements that are analytically and innovatively determined, and where there is direct alignment with improving the financials when creating these statements.  For example, to improve a company’s financials profit margins, the most targeted effort that might need to be undertaken is to structurally address what can be done to reduce the number of errors or customer returns within the current process.  Typically this type of direction is not a structured byproduct of the traditional strategic planning process.

 

BPM System Methodology Can Improve Strategic Planning
BPM System Methodology Can Improve Strategic Planning

A BPM system methodology is available that addresses this issue by integrating the strategic planning process as part of the EPM process in the overall IEE BPM/EPM methodology.

Improving Scorecards

The statement “Tell me how you will measure me and I will tell you how I will behave” often leads to the use of stoplight or red-yellow-green scorecard where individual or group performance is tracked against goals; however, this approach to tracking can lead to much firefighting and playing games with the number.  A BPM system methodology can address this problem, as referenced later.

Other forms of performance reporting, such as stacked bar charts, pie charts, and tables of numbers, have issues as well.  In all of these cases, the performance measurement reporting does not really view performance measurements as the results of a process.

One needs to keep in mind the relationship Y=f(X).  That is, the output of a process (Y) is a function of the inputs to a process (X) and the executed process itself.  A management by objectives (MBO) approach using red-yellow-green scorecards can be appropriate for the X’s when accomplishing assigned tasks; e.g., the number of sales calls in a day (noting that this might not be a good measure since the effectiveness of the calls was not quantified).  However, MBO on the Y’s of a process can lead to unhealthy, if not destructive, behaviors. 

One could argue that the fall of Enron and other companies around the turn of the century (and the financial crisis about eight years later) were, in part, caused by the creation of unrealistic MBO-type objectives for the overall corporate financials, with the added stimulus that executive compensation was tied to these MBO-type objectives. 

What organizations need is a more effective approach for predictive tracking the output performance of processes so that the tracking leads to the most appropriate behavior, which might be to address an unusual event or target process improvement effort to reduce the amount of common-cause variability.  

BPM System Methodology can Improve Performance Measures Reporting
BPM System Methodology can Improve Performance Measures Reporting

A BPM system methodology is available that addresses this issue by integrating the predictive scorecards in a value chain as part of the EPM process in the overall IEE BPM/EPM methodology.

BPM System Methodology for Improving Traditional Process Improvement Efforts

Everyone knows that organizations need to improve. Because of this, an executive might initiate a process improvement program such as Total Quality Management (TQM), Quality Circles, Six Sigma and/or Lean.  With these initiatives, results of the first few projects can be impressive because the goals were easily achievable, but this type of system is difficult to sustain.

Though management may be satisfied with project execution, there is often a nagging doubt about whether enterprise issues are being addressed. Quite often improvement projects as well as strategy statements show no direct alignment or specific direction to the achievement of corporate financial goals.  The program may report a savings of 100 million dollars but nobody can find the money. A BPM system methodology can be used to resolve this issue, as referenced later.

With traditional process improvement efforts, projects are often “pushed for creation” with an objective to report the amount of money saved.  This sounds appealing; however, often this approach leads to the creation of silo projects that have little, if any, impact on the big picture.  A “push for creation” approach for process improvement deployment typically is not long lasting and is disbanded in time.  When times get tough, leadership and practitioners working in process-improvement programs can be searching for a new job in the company or elsewhere.  

What organizations need is an approach for systematically addressing:

  • What could be objectively done to improve business processes and rules, as a whole, to enhance the overall enterprise financial measurement?
  • What a process owner could do differently at the local operations level to improve a performance measurement output of a process? 

Organizations benefit when they view their enterprise as a system of processes so that decisions are made which benefit the enterprise as a whole. 

 

BPM System Methodology can Improve Improvement Process
BPM System Methodology can Improve Improvement Process

A BPM system methodology is available that addresses this issue by integrating the predictive scorecards in a value chain as part of the EPM process in the overall IEE BPM/EPM methodology.

BPM System Methodology Summary

The implementation of the IEE BPM/EPM system methodology provides an integration of Lean Six Sigma with BPM and EPM so that the enterprise as a whole benefits.  Organizations improve their resource utilization by reducing the amount of firefighting with this BPM System Methodology, which is described in the book, The Business Process Management Guidebook: An Integrated Enterprise Excellence BPM System.