BPM and the Knowledge Economy by Ronald G. Ross

BPM often simply overreaches.  Understanding, modeling, and managing a business effectively requires a balanced view of six basic questions, not just one, as given in Table 1.  I follow Zachman in these matters so, yes, the table is Zachmanesque.

	Interrogative	Basic Business Question	Kind of Model
1	What	What inventory of things needs to be managed to support business activity?	structural model (e.g., concept model,[1] data model)
2	How	How do transforms of things in business activity need to take place to add value?	process model
3	Where	Where does business activity occur?	network model
4	Who	Whocollaborates with whom to undertake business activity?	interaction model (e.g., organizational chart, use case)
5	When	When does business activity take place?	temporal model (e.g., schedule, event model, milestone model)
6	Why	Why are results of business activity deemed appropriate or not?	strategy model (e.g., Policy Charter,[2]constraint model)

If your business does nothing but manufacture or produce physical widgets (forget all the meta-data about those widgets), you will probably emphasize question 2 (i.e., process) above the others.  Your overall approach and architecture will reflect that.  You will naturally gravitate toward BPM.

That tendency has at least three basic risks, even for organizations that do fall into the nothing-but-widgets category:

• Your metrics will largely focus on process productivity (e.g., throughput, bottlenecks, latency), rather than strategic goals and alerts centered on external risks.  C-suite executives tend to be much more focused on the latter.


• Your mindset will be procedural, rather than declarative, which can cause you to embed business rules in process flows rather than externalize them.  As a result your process models will be unnecessarily complex and your overall solutions un-agile.


• Your approach will fall woefully short in addressing the intellectual capital that underlies your processes.  Such operation business knowledge ranges from simple meta-data, to the business logic that underlies operational business decisions.

Fewer and fewer business problems these days fall into the nothing-but-widgets category.  Even for widget-centric businesses, at least three needs are increasingly urgent:

1. Ensuring the quality of meta-data.


2. Demonstrating compliance-based actual rules, rather than the artifacts and effects that IT systems produce.


3. Retaining, teaching, and repurposing intellectual capital.

These are not strengths of common BPM practices.

For all the non-widget-centric business activity in the world — which includes just about every conceivable form of white-collar work — these needs become paramount.  And make no mistake, the future lies with automation of that white-collar work.

What would I do to correct the shortcomings of BPM?  Our answer is to become more why-centric, as opposed to narrowly how-centric.  That shift has several essential features:

• Understanding business strategy as something distinct from business processes (and BPM).  Business goals and business risks should be drivers of business process design — not the other way around.  You need to be strategy-driven, not simply process-driven.


• Designing core metrics around business goals and business risks — the things that concern C-suite executives the most.


• Realizing that for white-collar work the 3-D world of widgets has vanished, and that tolerances and quality can be expressed only in terms of business rules.


• Treating business rules as a first-class citizen, externalized from process models.^[3]


• Identifying operational business decisions (based on encoded business rules) as a crucial focal point in re-engineering business processes.


• Including a Why Button as part of every business solution.^[4]  Pressing the Why Button leads immediately to the business rules that produced the results you see from any process.

For further information, please visit BRSolutions.com      

References

[1]  Refer to Refer to Business Rule Concepts:   Getting to the Point of Knowledge (4th ed), by Ronald G. Ross, 2013, Chapter 1 and Part 2.   http://www.brsolutions.com/b_concepts.php  

[2]  Refer to Building Business Solutions:   Business Analysis with Business Rules by Ronald G. Ross and Gladys S.W. Lam, 2nd ed. (Sept, 2015), an IIBA Sponsored Handbook, Chapter 4.  http://www.brsolutions.com/b_building_business_solutions.php  

[3]  Refer to the Business Rules Manifesto, now in almost 20 languages:http://www.businessrulesgroup.org/brmanifesto.htm  

[4]  Refer to Ronald G. Ross, "The Why Engineer™," Business Rules Journal, Vol. 14, No. 11 (Nov. 2013), URL:  http://www.BRCommunity.com/a2013/b727.html 

SOURCE: Ronald G. Ross, "BPM and the Knowledge Economy," Business Rules Journal, Vol. 16, No. 11 (Nov. 2015), URL:  http://www.BRCommunity.com/a2015/b835.html  

Create a Process Driven Enterprise

‘Templatize’ for Better Business Process Management (BPM)

If there’s a word I’d like to mainstream, It would certainly be templatize. It’s already
used in the computing world, but I think it has a broader application when it comes
to business processes too. It’s a wonderful synthesis of our digital world’s move toward customization and automation, and it simply makes sense for those of us who spend our
days Googling and WhatsApping. The business template allows us to create our own
processes once and then repeat them over and over again, tweaking and refining along
the way.

Templatizing is an essential part of any company’s business process management, or
BPM. What is BPM? It’s simply the optimizing of your business practices, looking for
ways where you can cut costs, increase revenue, increase efficiency and productivity,
and just make things easier and clearer for your team.

Better BPM is a constant struggle and reward situation for businesses of all shapes
and sizes, whether you’re just at a couple desks in your local coworking center or
in a multinational distributed team. It’s the part that doesn’t focus on what you’re
doing so much as how you do it all. Logically, BPM and workflow templates go
hand-in-hand.
 

What are the benefits of business templates?

A business template is a BPM tool that acts like a workflow diagram that lets you
map out a repeatable process.

1. Templatizing enables ‘hit-by-a-truck’ teamwork

If something unfortunate happened to the most essential member of your team
(or if they simply left your team), would your business fall apart? Business templates
clarify workflow processes and make it easier to run a “hit-by-a-truck” operation that
allows for people to move between teams and roles without disruption. They also let
you run an international business from anywhere and allow remote teams to
collaborate on clearly defined tasks.

2. Templatizing captures the efficiency of best practices

We’re all working toward constant cycles of innovation and improvement, but why
reinvent the wheel? It takes up time and energy that we could be putting into new
mission-critical initiatives. Once you know what’s working for you, allow business
templates to drive repeatable best practices, and then look to experiment in other
parts of your work.

3. Templatizing gets you started

Business templates are simple and elegant BPM and productivity tools. Once you create
them, you can reuse-recycle and dive in to get started right away on any new project.
An added benefit: starting faster also minimizes procrastination and increases your
chances of completing the task at hand.

4. Templatizing reduces errors

Let’s face it, nobody’s perfect. You need to work as a team to create tried-and-true
workflows. By having repeatable steps to follow, you make sure that everyone follows
the same crucial steps, limiting mistakes made and creating a transparent workflow that
teammates around the world can view and follow.

5. Templatizing improves consistency and accountability

Using a template as part of your business process management workflow means that
you and your team are focused on clarity, conciseness, and consistency. It means you
have your you-know-what together. Not only does it help onboard new team members,
it helps give current members assurance that they heading in the right direction. And
this form of workflow automation also helps shine light on the all-important question of whodid what, when.
 

Where can you use templates in your day-to-day
BPM?

There are a lot of places where templatizing is a no-brainer. First and foremost, creating
a repeatable workflow helps increase customer satisfaction. Try using it for tech support
and customer success to follow a common flow of how to help resolve customer issues,
or to help close a deal.

And you can make sure that no matter who answers the phone or accesses the lead that you
get the right information from the start with a systematized client intake
workflow template:

For me, being part of the small 100-percent remote team that runs the online remote
network Happy Melly, the first use case we saw for templates in our highly experimental
org was for onboarding.

When you go from from three to 15 teammates and from about 60 to 400 clients in just
a year, you have to change the way you do business — or you’re sure to miss important
steps in welcoming any new member of your extended work family.

For example, here’s a snapshot of a customizable Redbooth workflow template for
onboarding new team members:

Browse Our Free Workflow Templates

Use our free workflow templates to follow a typical workflow for any given task, or go ahead and customize them to make them your own:

• Design a website
• Set up a Scrum workflow
• Manage project status
• Plan a big event
• Run a weekly meeting

…and many more!

And while templates and defined BPM may seem corporate, they also help startups and up-and-comers too.

In fact, at Redbooth, they first got the idea for creating the workflow templates going through their own Series B funding round, creating a series of legal templates to get them through that arduous yet essential investor paperwork.

But then they couldn’t stop. Now, with just a click of a button, you can open up a new Redbooth workspace that has all the steps laid out for you in common workflow management. Open up a workflow template in your existing Redbooth account, or start a free trial and test-drive as many templates as you want.

There are dozens of workflow templates already, and Redbooth is always interested in ideas for creating more! Email workflow@redbooth.com to find out more about getting custom workflow templates
 created for your business processes.

Explore the Redbooth Workflow Template library >>

BEST PRACTICESPRODUCTIVITYWORKFLOW TEMPLATES

SOURCE: Redbooth

What is BPM in plain English? Explained to Small and Medium Enterprises

What is BPM really? When we think of BPM or business process management, we often think of ‘expensive’, ‘for large companies’, ‘takes up too much management time’ or ‘we are not ready for that yet’. Is that really what lies behind BPM?

All those perceptions are wrong. In fact, a Small or Medium Enterprise should worry the most about its business processes in order to grow faster. No organization should postpone this issue until it’s too late because the solution might not be as simple.

SMEs that want to have a chance in the market should start by managing its business processes;maximize customer satisfaction and its inner efficiency, all of which is crucial to grow.

In a previous post we discussed the main difficulties and fears of a SME when using BPM and we suggested specific solutions to face those issues before they become irreversible.

Now we will present the BPM discipline in a simple and specific SME-oriented language, taking into account their problems and worries, showing why this is such an urgent issue. The sooner you start applying BPM solutions, the better will your company function.

What is a business process?

A business process is a sequence of activities that take place in your company to achieve any of its objectives. Usually a business process involves several people who contribute with a particular task.

Let’s think of the following example: Your company receives queries and products requests via email, telephone, website, call center, or through direct contact with salesmen. In any case, after receiving the request, it is assigned to a vendor, who communicates with customers to better understand their needs and build a business proposal for them. There are standard proposals, which go directly to the customer via mail. And there are complex proposals that require additional approval of commercial managers and then go to the customer. Let’s say that the client can only do three things: buy, reject the proposal or ask for modifications. If they buy, your process continues through the seller, who coordinates the delivery.

Modeling a business process

The previous example could be illustrated with a diagram (or workflow):

Hooray! We have the first version of a workflow for our selling process. Using a diagram helps us to:

• Understand how our process is working and raises questions: Do we want this logic to complete a sale? Or a different one?
• Identify bottlenecks: The Commercial Manager is able to review everything in time to send to the customer?

Process automation

Ok, the workflow is ready, now what? Automate a process using a BPMS (BPM System). That means ‘translating’ the process into a computer system that allows us to automate each process stage.

In our example, once the vendor completed a complex proposal, it is sent directly to the ‘Inbox’ of the Commercial Manager, without having to send physical documents or exchange mails. The BPMS “knows” that after the Seller, if the proposal was marked as complex, it should be delivered to the Manager, who can approve or return it.

The most important concept here is the ‘Inbox’. There the users will find the tasks that have been assigned to them in the previous stage of the process. And once the user completes the task, it will go to the ‘Inbox’ of the next user

In our example, the proposal will reach the ‘Inbox’ of the Commercial Manager, who will have two buttons: ‘Approve’ or ‘Return’. If returned, the proposal will be sent to the ‘Inbox’ of the person who wrote it in the first place. If approved, the proposal will be sent to the client (via email if he has no access to the system).

In addition to managing ‘inboxes’, the process automation allows us to:

• Create new instances of processes in different ways. In our example, create new business applications, regardless of their origin (call center, salesman, etc.).
• For each of these instances, facilitate collaboration and show at which stage is each instance.
• Set deadlines for each stage. In our example, we could make sure that the client gets our quote before a certain time limit.

Plus, all instances of the process (in the example, the commercial proposals) are stored in the system, the history is recorded (who wrote it, when it was approved, etc.) and all related documentation is stored (different versions of the proposal, comments, observations, etc.). Thus, in a single system we have all relevant information of all commercial proposals (instead of having it scattered in countless mails or Excel ® spreadsheets).

Process analysis

After having automated a process with a BPMS, you need to identify:

• How many proposals are at each stage (i.e., how many opportunities at each stage)
• Set alerts with deadlines in each stage (How much does the client have to wait for a quote?)
• Exactly how much work is each person responsible for (Are we really swamped in work or just a few stages are stuck and impact on the entire process?)

Measuring tools in a BPMS allows us to:

• Issue reports that show the number of quotes, the time required at each stage and the productivity of everyone involved in the process.  In our example:
• How many applications I quote the last month?
• For which product?
• How many ended in a closed sale?
• How many belonged to each seller?
• How long did the process take?
• How long did each stage take?
• Is the Commercial Manager a bottleneck?
• How long does the Commercial Manager take to review each proposal?
• How many proposals are pending review?

This is called measuring and analyzing the processes. This way you can know for sure how well each process is working and where there are problems. This is helpful beacause you know where to use your resources and where not to waste your time and money.

Summary

When an SME starts functioning, each process is quite simple. But once you start growing, can you handle everything manually? What will happen when you have 10 processes per week? Or 100? Or 1000?

The answer, although obvious, is not always considered in SMEs: You simply can’t grow if you manage your processes manually. So many SMEs start using tools like the email or Excel spreadsheets. Both are temporary solutions. Excel spreadsheets become unmanageable and useless. Something similar happens with the emails.

The example that was presented in this post shows clearly these effects. But it is important to understand that all other processes in an SME eventually face this reality, regardless if they are production, administrative, or customer-related processes.

When we put it like that, it seems quite clear that it is impossible for an SME to grow beyond a certain size unless its processes are optimized. This is done in four stages, which are the pillars of BPM:

1. Model your processes using a diagram to visualize how they work.
2. Automate processes using Flokzu.
3. Measure time and quantity of work done, to draw objective conclusions about where and what to improve.
4. Introduce improvements and repeat stage one.

SMEs shouldn’t first worry about surviving and competing, and then think of BPM. It should be the other way around: adopt BPM to achieve efficiency grow faster.

If you want to get started in the world of BPM but don’t know where to start, don’t worry. We designed a form that will help you identify the key processes that you must work on and how to start automating them. It also includes an estimation of the required time for each stage of the automation.

SOURCE: FLOKZU

Benefits of Integrating Business Process Management with Lean Six Sigma

Business Process Management and Lean Six Sigma can work very well together. Each system has something great to contribute to an organization, which results in a higher level of power when combined. However, today not all organizations throughout the world either recognize the benefits or have failed to implement the combined initiatives through a system such as Integrated Enterprise Excellence.

In Lean Six Sigma, members and leaders are typically taught that technology is not a vital component in terms of solving process problems. Although BPM involves technology, Lean Six sigma can be enhanced through BPM’s methodologies and capabilities. Similarly, BPM users tend not to have appreciation of Lean Six Sigma strategies and how the techniques of Lean Six Sigma could lead to more effective BPM deployments. BPM and Lean Six Sigma complement each other in many ways possible, but not many are aware about these. Five benefits of integrating these two initiatives are:

1. Process Enforcement and Business Ownership

The integration of BPM and Lean Six Sigma can speed up the real-time execution of processes even when a team is geographically dispersed. With the tools combined, organizations or businesses can offer an orchestration of the essential elements of the techniques, such as the processes, inputs, outputs, failure analysis, documentation, evaluation, statistical analysis and feedback, among others. An effective collaboration of BPM and Lean Six Sigma can result in processes that can be automatically executed through BPM?s automation.

Through this integration, practitioners or business owners can have more control, which is intensified by monitoring and the reporting of predictive process performance metrics. The BPM portion and associated software can provide vital data for implementation and process design. This simply means that all processes can be executed according to their intent with harmony. This minimizes the risks of problems occurring.

2. Agility and Speed

Organizations will experience benefits when the two initiatives (i.e., agility and speed) operate together. For instance, a supplier can improve its competitiveness by reducing the delivery time. Through the use of Lean Six Sigma methods, this organization can determine the value stream map, which highlights the metrics and focus points necessary to reduce total lead time.

In this, the value stream map is broken down from the lower processes up to the point that key areas of waste and failure are addressed. Once improved, it results in delivery time enhancements. A BPM automation initiative can act at this time to deploy the controls and processes throughout the initial key areas, such as waiting order approvals and signatures. Through BPM, there can be automated controls, where all the data for process performance are collected in real time.

3. Better Approach to Problem Solving

Usually, Lean Six Sigma strategies focus on resolving narrow and highly specific issues. With this technique, all the data necessary to eradicate all wasted work can be determined in an efficient manner. Hence, there can be a well-defined set of steps or activities, which will aid in eliminating all the non-value-added work.

However, a traditional Lean Six Sigma deployment by itself often misses the big picture. This is where Business Process Management can be beneficial in the picture. In general, organizations benefit the most when there is a framework that will support the integration of the two techniques so that all angles of the problem solving process will be looked in a more precise manner; e.g., the Integrated Enterprise Excellence business management system described above.

4. Patches the Weaknesses

Lean Six Sigma alone in terms of a deployment involves two major weak points:

• The enhancements obtained from Lean Six Sigma have the tendency to become isolated and less focused, which can lead to problems with the flow of services or products in terms of the bigger context, like in an enterprise.
• A Lean Six Sigma deployment depends upon the collection of resources from competitors and views priorities the same way cooperatives do. Since various business units have their unique priority ratings, reviewing the right priorities normally leads to slow enterprise-wide improvements.

Now, what about BPM? Essentially, BPM is not into statistics — creation of hypothesis test when it comes to identifying areas for improvements like a Lean Six Sigma process improvement roadmap suggests. Yet, BPM within an IEE structure lays the framework required for modification in workflows and processes to allow the implementation of enhanced outputs derived from Lean Six Sigma.

5. Higher Returns

Average companies, which either employ Lean Six Sigma or BPM, are known to generate increased profit when compared to those who do not utilize any initiative. However, those organizations that manage to effectively integrate BPM and Lean Six Sigma successfully achieve the most long-lasting benefits.

Many organizations are deploying both Lean Six Sigma and BPM. Most of these companies are large companies, but smaller ones can also reap the benefits of BPM and Lean Six Sigma, together. Those companies that either utilizes Six Sigma, BPM or both experienced significant improvements on essential performance indicators. Yet, those who performed the integration of the two initiatives gained higher levels of success, particularly in terms of revenues.

Without doubt, the two initiatives have a lot to give to one another since they only have one goal — help organizations optimize and manage their processes more efficiently. While the focus and approach may be different, the combined efforts really help in elimination of waste, improving quality and developing better control.

BPM and Lean Six Sigma integration is promising, but organizations should be clever and alert to achieve continuous improvement throughout the years to come. An Integrated Enterprise Excellence system provides a roadmap for this effective integration.

SOURCE: Quality Magazine

Information as Currency: Business Process Management in the Era of Big Data

Content is frequently referred to as the king of the new digital landscape, but content as currency may be a more accurate descriptor. With cost no longer being a factor, digital information has become essential for growth. Information may not have reached the point of replacement for the dollar, but its value continues to increase as it flows from one network to the next.

With effective management, content can improve customer satisfaction and cost-effectiveness while reducing litigation risk. However, poor content management can result in wastefulness, dissatisfied consumers and significant security risks. The goal of the modern business is to unlock the full potential of the new digital currency -- information -- without becoming vulnerable to its aforementioned pitfalls.

Big Data and Content Strategy

Although big data is currently a hot topic, the concept is by no means new. The volume of collected and analyzed data has been on the rise for decades. However, the recent shift toward a data-centered digital economy has increased the pace of data collection, as well as the development of technology used to interpret and understand big data. This digital transformation spells increased opportunity, but also increased risk. Significant increases in content volume can quickly prove disastrous for businesses lacking the advanced technology and management systems needed to extract value from big data.

If effective management strategies are implemented in conjunction with new technological solutions, huge volumes of data can be used to garner accurate insights into demographic and geographical trends. Ultimately, the goal is to use this data to make accurate predictions based on identified trends.

The Role of Business Process Management

The application of business process management (BPM) strategies to digital information can significantly improve workflow efficiency, thereby increasing an enterprise's likelihood of extracting value from collected data. In keeping with today's greater focus on content strategy, BPM has largely become a content-centric concept, as opposed to one focused solely on processes.

Due to the huge volume of data flowing across networks, knowledge extraction is more complicated than ever. Without the implementation of content-centric BPM strategies, the cost of big data can quickly exceed its purported value. However, if appropriately applied to big data management, BPM can ensure that digital content is interpreted accurately and effectively. The end result is improved decision making and greater customer satisfaction.

SOURCE: Convedo

How to Orchestrate BPM Change

One of the continuing issues that must be resolved to deliver an ability to effectively leverage BPM and BPMS-enabled BPM is related to formal governance. Today, BPM is being used for larger and larger projects and BPMS supported BPM is taking on greater challenges. Many projects are beginning to look at work at a complete process level and recognize that most processes involve work in multiple business units.

This recognition is moving solution development beyond the traditional boundaries of IT/client involvement and opening it to a required collaboration between multiple groups. Likewise, the move to consider customer experience in solutions is adding an extra dimension of design and solution construction to many efforts. Then there is the growing need in many industries to deal with compliance. All of which is increasing complexity, involvement, and a need for controlled collaboration.

 

This type of control is fairly new and requires an ability to orchestrate the involvement of the multiple groups that are involved in the creation and deployment of any improvement that includes application support – in other words, almost every solution. This orchestration includes leveraging the functions supported in licensed application products, such as ERPs, integrated insurance packages, or in the case of healthcare, large Health Information Systems. However, it must be remembered that while these packaged products will help save time and cost, they do not provide a competitive advantage and are important mainly because they can reduce common operational tasks in business workflow. 

 

The BPM CoE should thus be positioned in a company to focus on improving competitive capabilities, with revenue enhancement potential/the customer taking center stage in any new design. Once these goals are met in the design, the designs should then be analyzed for cost reduction opportunities. To control this changing design focus and the involvement of people from multiple business areas and differing ideas on how change should be approached, the BPM CoE will itself need to evolve and develop an ability to do things they may not offer today. The BPM CoE will thus need to identify both current and needed capabilities and then evaluate their level of competency in each of these areas. 

 

The CoE’s managers will need the ability to build collaborative groups with membership as needed and then leverage methodologies and standards to control everyone’s involvement. This has a significant impact on the role of BPM and the CoE in the company. It also has a significant impact on the type of solutions that are delivered.

 

However, given that every company is at a different place in this capability evolution and maturity, it is necessary to start any move to expand the types and levels of service offered by defining the vision that management has for the way BPM will be used. This will give you a target to use in determining how the BPM CoE should evolve and increase its value to the company.

SOURCE: processexcellencenetwork

5 factors to help company growth

1. Dynamism

You should not settle for a rigid business model. The speed of adaptation to change is critical to the success or failure of a company. Competition is increasing and how quickly companies adapt to changes in the business ecosystem will determine the success of their actions as a company.

The use of a BPM system with well defined Business Rules ensures that adaptations to changes are made almost instantly. A change in regulations could be a major headache for paperwork however with a BPMS, such changes are automated.

1. 

2. The Big Picture

All departments should work in unison, not solely focusing on their own work but seeing the bigger picture. The idea is to encourage participation among all members of the company to promote unification and achieve the end results. If everyone works with the same vision it will lead to greater productive development.

3. Technologization and technification

Technological integration is a common factor amongst startup companies. Indeed, the technological evolution is linked to our development and any company which chooses not to adopt new technologies will be left behind and will struggle to remain competitive.

4. Project confidence

It is vital to have a high level of confidence in the company, therefore projecting confidence, the momentum to achieve objectives, sincerity, respect for each and every person involved in the business and belief in their own projects are essential factors in the day-to-day running of every company.

5. Perseverance

Objectives are not always met, but we shouldn’t get disheartened. Indeed, we often learn valuable lessons from failure. Failing should be seen as good training and we should try again. It is all a question of reformulating ideas and insisting on the desired objective.

The adoption of intelligent analytic systems integrated in our business process management system can help us determine what went wrong and thus change these factors.

SOURCE: AuraPortal

Are Your Operations Doing the Right Things, at the Right Time, in the Right Way?

Companies have focused on efficiency for over 15 years now.  But are they making the processes effective?

For this column, let’s consider efficiency to be doing work as quickly as possible with a low error rate.  Then let’s consider effectiveness as eliminating all work that is not really necessary – doing the right things, at the right time, and in the right way.

Too many BPM efforts however, are so narrowly focused on cost takeout that they miss the fundamental question of need – “do we need to do this in the first place?”  Of course, the answer to this question must be backed by the answer to the question “why?”  Anything that falls outside of this need is extra and is a candidate for elimination.  

Not surprisingly, doing this before the team considers efficiency will save a lot of time and cost.  Why improve things you don’t need to do?  But it will also leave holes that will need to be removed.

Effectiveness

Efficiency lives in process – no real news there.  But where does effectiveness live?

I submit that effectiveness lives in fundamental “need”.  What do you really need to do?  The framework for identifying this “need” and thus effectiveness is set by the company’s strategy and given context in the company operating model.  Anything beyond this fundamental or basic need in producing the service or product is extra.   What is left will require specialized support activities to knit together – but that can be managed through careful action and task justification.

So we can find what we need to do to be effective, and we can then make that efficient.  But before we make anything efficient we need to first look at how we can guide work so that the right answers, components, business operations, and assemblies come together to deliver the service or product component.  We need to find a way that guarantees the right logic is considered and the right questions are asked to comply with legislative and operational requirements while constantly being guided to the next step in the work.  

This requirement for guidance is the realm of business, manufacturing, technical, and other rules.  The fact is that rules define the “what” of the business - while process defines the “how”.  If we consider process to be the life blood of the company, carrying the components that are needed to produce something and thus keep the company operating, we can consider rules to be the “brains of the outfit”.  They direct everything and tell us how things need to be done.  Rules thus set the operating framework and are both interpreted and supported by standards to set performance measurement limits on the work.  Taken together, rules and their supporting standards, define how operational effectiveness will be viewed – within the context of company strategy.

Finding rules

Rules are everywhere.  Most are, however, not written and those that are, are seldom up to date.  So where do you start?  The following is one approach – it is not the only one however.  But, it works.  Let’s start with effectiveness in any process, business unit’s work flow, or the applications that support the work.

The first step is the archeological dig through the company dustbins – existing documentation.  Procedure manuals, HR rules, financial rules, sales rules, and compliance rules should be collected and the rules vetted.  That is the foundation – you may very well find rule conflicts, out of date rules, and rules that no one knew existed.  Vetting them is tedious and will probably be resisted.  But it is critical and needs to be done to create a foundation for the operation
.  
These rule collections will first focus on the business operation.  IT should next add its technology related rules – the Do’s and Don’ts that must be considered in any business activity support design.  To make this collection useful, care will need to be taken in finding a rules “engine” or storage application, coding the rules for electronic storage, and defining an indexing structure that will make it easy to find and thus modify, version, or reuse any rule.

With this foundation in place, it will be time to look at the business operation itself.

Any look at what makes a company effective must really start with strategy outcome and work backward.  The outcome description is where you first know how goals will be delivered and where the business model must be changed to support the strategy.  All capabilities will be identified and defined as part of the outcome definition. The capabilities then tie to process and a walk back up the process is a look at what it takes to build the product or services.  

The activity in a business unit represents the work that actually creates the components and does the construction of a solution.  The rules in the company guide every action, every decision, and every step of the work.  But when many teams look at a BPM project, they focus on the activity, not the rules that help identify if the activity is even needed – if the activity is not important or complex enough to require guidance the team really must ask why it exists. Similarly, if the rules do not support the actual work, why do they exist?  The two are partners in a corporate dance that determines what should be done and how it should be done.
Of course, if the rules are overly complex, the team will need to see if they can be streamlined.

In addition to the “easy to find” rules, teams will find other rules (often the most important ones) in the heads of the staff.  They do the work and apply rules constantly – some they make up to control new work.  Many of these unwritten rules are not found anywhere in the “documented” and now vetted rules.  In some cases, these rules may be imbedded in applications that the staff has learned about over time through use.  In other cases, the rules are work-around rules that have had to be informally created to get past changes in the operation, in law, and in application systems.  I call these “white space” rules.  Only the people doing the work of getting around things know these rules. 

The fact is that these rules will tell the team how the activity really works.  Comparing these rules with the ones you have already documented will point out redundancy, differences, conflicts, and erroneous activity.  In some cases I have found old rules that no one knew were still in use had to be changed immediately to comply with current legal requirements.

Rules
As noted rules are everywhere and at many times are the hidden mandate for any activity.

But today we see that many from the BPM world do not pay enough attention to business rules and many from the BPMS world look at rules from a technical perspective – aligning them to the applications in the project or solution.  In both cases, these rules are generally poorly defined and unavailable for general use.  They are also not really adequately shared between the business and IT sides in creating a new business solution.

The need to address this is critical and cannot be underemphasized – you must get a handle on your company’s business, technical, production, customer, compliance, and financial rules.  In healthcare, there are even more rule categories on the clinical side of services.  Without a detailed understanding of applicable rules and immediate access to them, it is difficult to look at change and anticipate impact.  

However, what we should do with rules is a matter of opinion.  The same is true in determining what we need to do.  The fact is that both considerations are often debatable.  Today, I find that rules are often one of the orphans of the modern IT and business operation activities.  Both IT and the business seem to have divided business transformation and IT solution development and in many ways are recreating the divide of the past 50 years.

The problem is that many teams really don’t look closely into the rules in a business or IT operation and ask the probing fundamental questions.  These include:

1.    Is the procedure manual up to date?  How can we bring it up to date?
2.    Do we really know all the rules that guide the work or the creation of IT support?
3.    Are the company rules written down?  Have they been reviewed by business area managers?
4.    Has legal and finance reviewed the rules and vetted them?
5.    Are the rules stored in a rules library?  How are the rules organized?  Are they linked to business activity and are they easy to find in the rules library?
6.    Do we know every place in the business and every application that uses each rule?
7.    Are all compliance related rules defined and aligned to the business activity work? – Are we in compliance with all important state, federal, and international (for the countries we do business with) rules?
8.    Have we been fined for reporting violations in the past?  What did we do about that?

Why is this important?
Compliance, HR, legal, and financial rules represent laws and require that you follow them or risk being fined and maybe go out of business.  Other rules determine how things will be done and provide order out of what would be operational chaos.  The fact is that rules are the logic of the company and project the beliefs and culture that executive management wants to infuse into the workforce.

In the context of this column, rules direct how all work is done and how all decisions are made.  They provide the framework for business activity and they guide workers and managers down a specific path in interacting with customers, building product, and running the business.

The simple fact is that without rules, even if they are not written, everyone in any business would be able to do their work in whatever way they thought right.  Chaos would reign and the company could not compete.  So why are rules important?  They simply guide all work and compliance with appropriate laws.  They keep you in business.

So who owns rules?

Who is responsible for finding them, defining them, and then both managing them and changes to them?  Not a small task.  There are thousands of rules in any mid-sized company and a lot more in a large company.  There are, however, no standards or norms for rule ownership that I am aware of.

There is also seldom anyone who has the authority to, or the responsibility to, collect, vet, index, and store rules.  This is one of the big problems that hampers effective and efficient business operation and slows any type of business improvement or transformation.

But the fact that there are rules everywhere and that there are business activity rules, decision rules, compliance rules, HR rules, finance rules, legal rules, social rules, policy rules, technology rules, data rules and on and on, makes finding, updating, and controlling their use a difficult task.  So who is responsible for rules?  This takes commitment from a person like the COO or the CIO and it must be considered to be a strategic necessity.  If not, it will not be funded.
The fact is that rules are a company asset!  

Rules allow the company to run with some consistency and efficiency – they help make certain work get done the right way.  They support strategy and compliance with laws.  They are the combined intelligent evolution of the company and how it works – gathered over all the years that the company has been in business.  They are one of the big things that provide any company with a competitive edge.

The fact is that whoever can change the fastest with the lowest risk will have a real advantage.  Those who can include access to all relevant information for these rapid changes will have an even greater advantage.  Arguably an advantage that combines rapid improvements to both effectiveness and efficiency offers a timing and cost of change advantage, and builds flexibility into the operation.

Because a company’s rules define and support this competitive differentiation, they should be considered to be undiscovered company assets.  Many will represent trade secrets and some may be based on patents and proprietary thought leadership.  All of which are company assets.

Formal rule definitions are also important in operations and business interruption – Disaster and Recovery.  If they are not known and if known but not formal, a remote hot site for Disaster Recovery is not really much use in many companies.  The computers will work in the hot site, but operations will be hurt.

Note:  A Disaster Recovery hot site is a remote location that has fully operational computers and work space running 365 days a year.

A looming catastrophe

Companies are about to lose many of their senior workers due to aging.  Without a clearly defined set of integrated rules that can be easily found we can expect the millennials who replace these workers to make procedure and execution errors – the infamous human errors that people are writing about. It is easy to predict serious competitive problems for companies that do not take the time or make the investment to create this foundation for understanding the business and how it functions.  This is not only a business problem.  It is also an IT problem, a manufacturing problem, and a problem in every corner of the business.

Tight budgets have caused cutbacks in the way BPM and BPMS groups look at creating solutions and in the move to integrating components into end to end processes for modernization.  But the market is opening and competition is heating up.  Given the changes in technology, business management, and the approaches to business streamlining, it is clear that some will leverage this emerging technology and some will not.  However, for those that do, change will have removed a major anchor that is slowing the company’s ability to adjust and evolve.  

The purpose of this column is to encourage BPM practitioners to increase their emphasis on identifying and defining business rules and in applying the understanding this discovery process will provide to looking at what rules and work are really necessary to start with.  From that point the traditional look at efficiency can provide even better results.

SOURCE: processexcellencenetwork