Performance improvement methodology

Performance Improvement by Process Change-The simplified
methodology

Dr. Maher Salam
2013-2-23

Kepler Consulting ®
2013 Dr. Maher Salam Confidential- all rights reserved

Agenda

Section Pages
1 Introduction
2 Performance improvement methodology
3 Outcomes and recommendations of each stage
Appendix
1 Performance improvement approaches
2 Business process maturity levels
3 Process change methodology
4 Organization Diagram

Kepler Consulting ® 2013 Dr. Maher Salam Confidential- all rights reserved 1

Section- 1

Introduction

Kepler Consulting ® 2

Background
Since the evolutionary step made by Henry Ford & Alfred Sloan early 20th
century. The subject of process change went through several waves (BPM
the Third wave Howard Smith and Peter Fingar- 2003),
 First wave: early 20th century until 1995 the Business Process Re-
engineering start to crash because of its high risk.
In 1995 Davenport observed the following: the most profound lesson of reengineering was never the
reengineering, but the process. Any company that ignores them or fails to improve them risks its future
In 2002 J. Hagel & J . Seely invented the process renewal term and the lossly coupled architecture that
comes with process based architecture

 Second wave: In 2004 ERP starts to crash because of its tightly coupled
architecture, Davenport prefer continues improvement over
reengineering for government and utility service. Reengineering only for
companies responding to extreme competitive pressure
 Third wave: In 2005 BPMS started to track attention, one platform for
all phases, all participants, and all projects with in the organization


Introduction

 Several process change approaches were discovered to accomplish performance
improvement , these approaches are but not limited to
1. Total Quality Management (TQM) W. E. Deming, Joseph M. Juran, and Armand V.
Feigenbaum.
2. Incremental Business Process Improvement –Davenport- 1995
3. Business Process Abstraction
4. Business Process Reengineering - Hammer and Champy – 1992
5. Business Process Outsourcing
 Researches identified a relationship between these approaches “Index 2” and the real world
experience confirmed that selecting a specific approach(s) to accomplish performance
improvement is related to the current state and future requirements of the business
processes and related key performance indicators.


Section- 2

Performance Improvement Methodology


According to the 1995 observation by Davenport reengineering is risky process change approach.


According to Davenport , Hammar and Champy observation business process reengineering is risky.

The methodology in a nutshell
Methodology principles
 adopt one or more process change approach for a whole organization
 It is impossible to reach organization wide performance improvement by going through one project
 Any process change approach must take the three components 1) processes, 2) people and 3)supporting
systems into consideration
 Adopt a BPMS , such as jBPM, for business process modeling, implementation and monitoring
 The project should adopt an Agile approach go through the
four stages iteratively and incrementally, each iteration should 1
include A small set of Key Performance Indicator (KPI) and
the related business processes Inception

Methodology four stages
1. Inception: Scope, Categorize and Allocation 4 2
2. Plan: categorize process and develop execution plan Roll-out &
Plan
Control
3. Design and Implement
4. Roll-out and control
3
Design
&
Implement

The four stages for each iteration


Section- 3

Outcomes and recommendations for each stage


Stage I: Inception (Scope, categorize and allocate)
Select certain Determine
Develop and Capture KPIs current Select related
KPIs to be the process
understand the state and future proceeses
improved change
Org. Diagam requirements "Process backlog"
"KPI backlog" appraoch
Start End

Requirements, Inception stage activities
External expert(s), Process owners, change management expert(s), and senior management should involved
Outcomes,
1. Current state process maturity level as depicted in Appendix II,
2. Determine KPI backlogs and determine the baseline and threshold of high priority KPI.
3. Deficiency in business process management components (Processes, people and systems) in KPIs has to be
prioritized and categorized to determine the backlog for each iteration.
4. Develop the Organization Diagram as in Appendix IV
Recommendations,
1. This stage has to be done iteratively and incrementally, each iteration analyze certain KPIs
2. Start with the most important KPI specially the ones that can be improved
3. The team has to be from the organization employees, which outsiders can be consultants only
4. Adopt a problem solving and decision making techniques
5. Get the senior management and stockholders sponsorship
6. This stage can be closed once a certain performance improvement achieved
7. Process backlog should include interrelated processes
8. Determine the communication channels and establish your team

Kepler Consulting ® 2013 Dr. Maher Salam Confidential- all rights reserved

Stage II: Plan
Process outsourcing assess
outsourcing some
processes

IT systems Assess improving
current IT
systems

Categorize Incremental
Stages Improvement Quality of activities Assess activities Develop
according to effectiveness and execution
possible eficiancy plans
Planning Stage Start appraoch End of planing stage
Activities sequence Assess the
sequence of
process activities

Assess the value
Process reengineering
of conducting
process
reengineering

assess the
Process abstraction and structuring abstract
unstructured
processes

Planning stage activities


Stage II: Plan- continue

Requirements,
Process change experts has to understand the details of each process backlog to be able to
determine a proper process change approach and the execution plan
Outcomes,
1. Appropriate process change approach(s) for each process
2. Execution plan for each approach.
Recommendations,
1. A single project with fixed time and budget is possible.
2. Set a conference room logistics.
3. Rotate teams across all project to have a change to work on different approaches.
4. Start with internal core team and one project and later use the them as champions to spread the
knowledge across all projects.
5. Plan to get a success story ASAP.


Stage III: Design and Implement (Model and Improve)

Objectives and outcomes
Design future state business processes to allow the required performance improvement.
Design the required measures and controls to be able to capture process deficiency ASAP
Recommendations,
1. Develop the business processes models via standard notations, e.g. Business Process modeling
notation (BPMN) , via BPMS modeling a tool such as iGrafx, jBPM, TIBCO, and Metastorm
etc...
2. once you reach the final business process model include the BPMN Core Notations as depicted
in Appendix V.
3. Mange resistance according as depicted in Appendix VI
4. Adopt you train your team on analysis technique such as fishbone Diagram and Kanban cards
etc...
5. Don’t under estimate the complexity of the project and develop a framework that companies
methods and tools as depicted in Appendix VII
6. Develop process measures and controls and include them within the process models.
7. try to convert lagging measures to leading measures.


Stage IV: Monitor and Control

Objectives
1. Measure the KPIs and audit the process implemented controls.
2. Evaluate the effectiveness of the measures and controls.
Outcomes
1. Process performance and deficiency points.
Recommendations,
1. Monitor KPIs as early APSP to develop a success story.
2. Don’t underestimate the complexity of the implementing controls on a process.
3. Evaluate the design and the implementation of the process controls.


Section-4

Appendices


Appendix I: process change approaches relationship
Direction
Strategic

-----------------------High
Business

Business
Reengineering
Products/Markets
Scope in value chain
Core Competencies
Partners/Linkages
Process
--------Change Impact-----

Reengineering
Processes
Improvement

People
Continuous

Process Organization
Improvement IT
Tasks/Flows/Tools Policies
Techniques
Measures
Skills
Quality
Team
Group
Low------------

Issues
Roadblocks
Remove

Problems Processes Major Processes Entire Business
Small-------------------- -----------Change Scope--------------- -------------Large


Appendix II- Process Maturity Levels


Appendix III- Process change methodology
Enterprise Level

Understand Model enterprise Define Define Align Mange
enterprise processes Performance Process Architecture Enterprise
Context & Measures Governance Processes
Strategy,
pain points
Define the type of change “improvement vs. engineering ” Define & Prioritize Projects
Process Level

Monitor
Performance
Understand Analyze Business Redesign Implement Roll-out
Project Processes Business Processes Processes
Processes

Enterprise group might start Execute
Implementation Level

another project via another Processes
methodology e.g. Six Sigma or
ISO compliancy .
Day-to-Day
If significant IT/HR work Process Managemen
Various IT & HR
needed, then process redesign projects, etc.
team establish new IT project
Page 60-F 3.1

Kepler Consulting ® Adopted from The BPTrends Change Methodology 17

Appendix IV- Organization diagram with major processes
General environmental influencer:
Local and global economics Information
& dividends Shareholders
Labor Markets People Company XYZ value chain
Request for new product
Create New
Product
Capital Market Capital marketing contract Markets

Market & Sell sales contract Customer s
Products
Research
Technology order
Community

Make & Deliver
Vendor Materials Products Product and services

support request

Competition

Page 83-F 3.1

Kepler Consulting ® Adopted from P. Harmon, Business Process Change Second Edition 18

Appendix V: Core BPMN notation


Appendix VI: Overcoming the three NOTS of resistance
Set goals, measure, provide
coaching and feedback,
reward and recognize
Not
Willing

Educate and
train in new skills
Not Able

Communicate the
what, why, how,
when, who,... Not Aware


Appendix VII: A Framework of Integrating Methods & Tools
cost data Analyze the activity
costs of the process cost and
performance
data
compared to
performance data
Analyze the the baseline
dynamics of the
process

information semi-formal Target information
Elicit model Construct/ system generated
of a process Final model Construct formal IS
semi-formal Revise
process and models & generate
business process
data models information systems
models
MS-Office & Sticky notes
(Eclipse-jBPM) Jboss-jbpm, DBMS, Drools

Structural model
Behavior Modeling
semi-formal data model Construct & revise business domain
and database models Cost & Performance
Analysis
(Eclipse UML)


For more information you can contact us

LinkedIn profile ( Dr. Maher Salam)
Kepler Consulting
Email: m.salam@Keplers.net


Performance improvement methodology

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