Kimberly's Awesome Blog!: So…you can create the model. But can you manage the change?

[This blog post was written by a GSU student after taking a Business Process Modeling class. Its purpose is to provide others with more insight on why process improvement is important and to outline the organizational impacts of process changes.]

Introduction:

As technology improves, our daily tasks and responsibilities change, meaning that our processes must change as well. Processes are simply a series of steps and decisions that are considered when completing a task. They can be anything from driving to school, getting your car serviced or handling a technical support line at work. It is easy to realize the many ways that technology has changed our personal lives; and in the business world, technology has revolutionized almost beyond recognition. Due to advances in communication and information technology, organizations are facing new competition, new markets and more demand from customers than ever before, making it challenging for any business to achieve or sustain a competitive advantage. As the need for organizational efficiency increases, business process reengineering has been one of the key methods of attaining these goals. Below, I will address why business process innovation is important, examples of how companies have improved their processes, and the common reasons why business process change can fail.

BPR Innovation:

When the goal of an organization is to reduce expenses, avoid lay-offs, and improve customer satisfaction, the way in which the organization handles its day to day activities will determine its success. Business process modeling and Business Process Reengineering (BPR) is an organizational method that entails redesigning business processes in order to achieve greater efficiency. BPR involves analyzing a process to find errors and to determine how they can be improved. Business processes must be agile in order to provide the speed and efficiency to be able to adapt to the changing environment in which we live. Though, more important than the current focus on organizational efficiency, is the need for a business to allow for creativity and flexibility within their processes. Process models represent people, technologies, and the interactions between them and each step. [*Click her to see an example process model]. They’re immediately executable and allow employees to view graphical representations of a process within their organization. This gives the employees an opportunity to see what’s happening throughout the entire process as a whole, rather than them only understanding the tasks for which they’re responsible. With this type of process coherence, all the key leaders will become involved in improving the process helping to eliminate redundancies, reduce costs, and reduce customer dissatisfaction. Without the ability to visualize a process, it’s difficult to see where and how they can be improved.

In my opinion, the only way a company can be successful is by staying innovative. However, this often becomes difficult because we’re an outcome based society, concentrating all of our time and energy on achieving results, rather than focusing on the process itself. However, Toyota Co. has the right idea when they say that “improving and managing are one and the same.” Toyota manages its processes and its people from day to day, where many other companies tend to see managing as a separate activity and improvement as something extra added to managing.[1] Like Toyota, in order to achieve our desired results, we must consider and understand the details of our processes; rather than merely focusing on the task at hand.

How Companies Improve Their Processes:

One of my professors used to tell me that having 20 years of work experience is the same as having 5 years of work experience. To me, this meant that as people, it’s our natural tendency become accustomed to our routines, and when we get so used to a particular way of completing a task, we neglect to consider newer ways of doing that task. The same applies to processes, we can improve our processes as a natural part of our routine, or we can wait until disaster strikes. In the case of Taco Bell, the CEO John Martin decided to transform their business processes when they were losing 500 million dollars with negative 16% annual return to a company that has since grown 22% with over 3 billion dollars in sales.[2] In this instance, the executives at Taco Bell waited until the company was in severe distraught by repeating the same routines and didn’t actually manage to salvage their business until they changed their processes. Though they were still able to transform their key business processes in order to save their company, it’s unrealistic to assume that this will always happen and ignorant to wait until the last second to focus on improving your process.

According to an article written by Lowell Greenberg, IBM’s Credit Corporation (who now handles credit insurance), re-engineered their process through a series of activities. IBM’s Credit Corporation was encountering a very common problem; Customers complaining that it takes too long for a credit approval (typically 6 to 2 weeks to complete).So what steps did IBM take to mitigate these complaints? Initially, to fix the process, they put computer terminals on everyone’s desk in order to pass information electronically and then attempted queuing theory and linear programming techniques. Then they instituted performance standards for each employee. In each attempt, their changes did not reduce the credit approval times. Eventually, they decided to work through all steps of the approval process to discover that the actual process only took 90 minutes. They discovered this by making the workers put aside everything they were doing so that they could actually process the requests and once they did that, they noticed that the forms had to have unnecessary transfers from department to department. So after this realization and revision, one person was able to complete the entire approval process from beginning to end.[3] These examples demonstrate that if we consider how our business processes are being handled before jumping to ideas of what might solve the problem, we could save time and money.

The beauty of changing processes is that anyone can be involved. Take a project that my team and I worked on for a company called Wandering Wifi. Wandering Wifi is a leader in providing wireless infrastructure solutions of which technical support is a very critical role in the organization. Wandering Wifi, unlike the previous examples, is a company that is doing excellent but yet, still recognizes that their processes can be improved to provide better customer satisfaction. Essentially, the process focuses on the interactions and separations of duties between the technical support team and the end users. The process was thoroughly analyzed by two technical support Wandering Wifi employees and by me, an external source unfamiliar with the company. This perspective has given us the opportunity to attain a true fundamental understanding of what really goes on within the process, including the happy-path and exceptions flow, and provides for an unbiased view point (since I am not employed at Wandering Wifi). To create their “as-is” model [Model A1 Below], we observed all the participants involved and talked with them about their processes. Just by doing this, we were able to see that Wandering Wifi’s main problems are heavily in accordance with a lack of task separation and an inability to determine the status of in-bound calls. To rectify these major problems, we redesigned [Model A2 Below]the current process to integrate a vertical team management technique and an automated in-bound call system to process call statuses.

[Current Model "As-Is" A1]

[Model "To-Be" A2]

[Please Note, if you would like more information about this project, please see my blog called Wandering Wifi].

As you can see, just like how creating a model helped me understand Wandering Wifi’s process, it even helped my project team members who are currently employed to see not just their responsibilities, but everyone’s as a whole. However, with BPR, a process requires not only restructuring, improving, and innovating the actual process, but it also demands an enormous cultural change and readiness of the organization. BPR is a complex and difficult task and has a high-failure rate. Various surveys and assessments reported as many as 60-80 percent of BPR initiatives having been unsuccessful.[4]

The Oppsy’s Of Process Change:

The idea of changing a business process and implementing management initiatives might seem like a simple task, but many companies make common mistakes while innovating and implementing their new processes. Below is a list of common reasons process change can fail.

-Not Preparing for Change:

One of most common mistakes, in my opinion, is that not enough focus is put onto the fact that people are creatures of habit. Simply redesigning a process and expecting everyone to follow it just does not work. People resist change. For example, if a company is implementing a new system or a new way of doing things, the users will be reluctant to adapt to that new system unless they are comfortable with it. The employees need to be trained on how to use the new system which will more gradually prepare them for the transition to the new system. Providing training for employees might sound like an obvious task, but often when IT workers are focused on changing the process, they can easily forget that some things are not intuitive for others.

-Not Having the Right Team Members:

Depending on the nature of the process, team members might come from differing departments, divisions, or offices. According to an article from, The Handbook for Basic Process Improvement, the key factor in determining BPR success is that the people selected for the team should be closely involved with the process. [5] This is key because people who are concerned with how things are done will be more willing to change the process and be more entitled toward a successful project completion. While this is true, it is also very important that you have members who are natural leaders. Having team members who people look up to and who possess the talent of inspiring others, will ultimately make the transition to the new process easier and will increase the chances of the process change being accepted.

-Not Accessing the Readiness for Change:

Also, it is important that the employees trust their top leaders. If the employees do not trust their leaders or feel as if they have hidden agendas, they will be very reluctant to change. Senior management MUST accept change themselves and if this level of personal commitment is absent, BPR is destined to fail. Since BPR requires such a drastic cultural change, it is essential that the assessment of readiness not only be throughout the organization, but should also start with the top management team.

-Not Having a Team Charter:

Another BPR Oppsy is not having a team charter because it can easily help solve some of the problems listed above. According to The Handbook for Basic Process Improvement, a project charter is critical for teams who are working on a process that crosses departmental lines. A project charter is a document that describes the boundaries expected and the resources that can be used for the process improvement team. It identifies the process to be improved, time constrains, the teams decision making authority, and the resources to be provided. [6] In my opinion, the project charter is the most important component of BPR because it allows for top management support and aids in organizational alignment. Because the charter requires stakeholders and key managers to sign onto the agreement, it helps ensure that organizational goals are aligned with the companies needs. It also provides a mean for establishing top management support. Without top management support, if a hiccup occurs throughout the project (for example, you need additional resources), managers might be reluctant to help. However, if they’re signed onto the project and are aware of its importance, the change will have a higher chance of being completed. Click the link ahead if you would like to see an example of a project charter that I completed for the Hubble Mirror, see my previous blog post.

[Note: Or go here to see a blank project charter worksheet].

Conclusion:

Business process innovation is very important and processes must change in order to keep up with a changing environment. Companies can go about improving their processes in many ways, however, it’s critical that they do not wait until drastic measures have to be take. Instead, companies should always consider their business processes and not just make guesses on what should be improved within the organization. And since process change is inevitable, it is important to keep in mind the simple reasons that process changes can fail so that you will be more prepared to handle a process change. And remember, that in order for any company to keep or attain a competitive advantage, they must always continuously innovate!!

I hope this information has provided you with some insight and help toward any future improvements. To learn more about processes, take a Business Process Modeling Nation or Systems Analysis class! Also, if you have any questions, feel free to leave a comment!