APQC Get Real Work Done Report Nimbus Final[1]

Using Process Frameworks and Reference Models to Get Real Work Done

Contents Project Personnel and Copyright

4

Research Champions Champions

6

Sponsor and Partner Organizations Organizations

6

Introduction

7

Chapter 1: Getting Started

24

Chapter 2: Adoption, Governance, Governance, and Oversight

43

Chapter 3: Leveraging Tools

60

Chapter 4: The Framework Implementation Implementation Journey

75

Case Study: Cisco Systems, Inc.

86

Case Study: ING Life Japan

97

Case Study: Pitney Bowes

111

Case Study: UPS

118

Case Study: The Williams Williams Companies, Inc.

129

Nimbus Comment: Why Management or Governance Is a Key Enabler of Continuous Process Improvement

141


Project Personnel PROJECT TEAM

John Tesmer, senior project manager, APQC Shaina Bielaz, analyst, APQC Travis Colton, senior project manager, APQC SUBJECT MATTER EXPERTISE

Dr. Mathias Kirchmer, executive director, business process management, Accenture Dennis Pikop, manager of process architecture, Northrop Grumman Corporation, aerospace systems sector Chris Taylor, vice president of consulting, Americas, Nimbus John Tesmer, senior project manager, APQC Jeff Varney, senior adviser, APQC EDITOR

Susan Elliott Blashka

Using Process Frameworks and Reference Models to Get Real Work Done MEMBERSHIP INFORMATION

For information about how to become a member of APQC and to receive publications and other benefits, call 800-776-9676 or +1-713-681-4020 or visit our Web site at www.apqc.org . COPYRIGHT

©2011 APQC, 123 North Post Oak Lane, Third Floor, Houston, Texas 77024-7797 USA. This report cannot be reproduced or transmitted in any form or by any means electronic or mechanical, including photocopying, faxing, recording, or information storage and retrieval. Additional copies of the report may be purchased from APQC by calling 800-7769676 (U.S.) or +1-713-681-4020 or online at www.apqc.org. Quantity discounts are available. ISBN 13-978-1-60197-167-8 • ISBN 10-1-60197-167-2 STATEMENT OF PURPOSE

The purpose of publishing this report is to provide a reference point for an insight into the processes and practices associated with certain issues. It should be used as an educational learning tool and is not a “recipe” or step-by-step procedure to be copied or duplicated in any way. This report may not represent current organizational processes, policies, or practices because changes may have occurred since the completion of this study.


Research Champions Accenture Nimbus

Sponsor Organizations Alyeska Pipeline Service Company BOC Group plc Broadridge Financial Solutions, Inc. Bush Brothers & Company CEMEX Research Group AG Champion Technologies, Inc. El Paso Energy Corporation Entergy Corporation General Dynamics Corporation Harley-Davidson, Inc. Hewlett-Packard Company Horizon Wind Energy, EDP Hospira, Inc. IMS Health Intel Corporation Medrad, Inc.

National Bank of Canada Naval Sea Systems Command Northrop Grumman Corporation Office of the Comptroller of the Currency, U.S. Department of the Treasury Panduit Corporation Perdue Farms Inc. Philips Healthcare Sandia National Laboratories Shell Oil Company Sunflower Electric Power Corporation TD Assurance U.S. Army USAA

Partner Organizations Cisco Systems, Inc. ING Life Japan Pitney Bowes Inc. Sandvik ** ThyssenKrupp Steel USA ** UPS The Williams Companies, Inc.

** These two organizations participated as “lite” site visit partners. “Lite” site visit partners did not participate in the full best-practice partner interview process.


Introduction APQC has long known that the Process Classification Framework SM (PCF) is a widely used tool in business. Since 1992, the framework has been downloaded from our Web site well over 100,000 times; translated into Japanese, Mandarin, Spanish, Polish, and Portuguese; referenced in business books; and incorporated into numerous consulting methodologies for process improvement and re-engineering. We have worked directly with organizations throughout the world to help them understand the history of the PCF and how they can use it. APQC has also has worked with a number of other organizations promoting their own process frameworks and reference models, including Accenture, Supply Chain Council, the Telecommunications Management Forum, and the Value Chain Group. Until 2010, however, we did not spend a lot of time tracking individual uses of the PCF or other frameworks within organizations, nor did we really understand how widespread the use of frameworks is. In the summer of 2010, we became acquainted with Dennis Pearce, enterprise knowledge architect at Lexmark International, through a post he made on Twitter. Dennis presented at EMC World about how his organization uses APQC‟s PCF to help organize internal collaboration spaces. While not a stretch — organizing content is a natural application for most process-based frameworks — this was a unique usage that we hadn‟t yet seen in practice outside of APQC. We asked Dennis if we could document his experiences in a case study.

“APQC ( The American Productivity & Quality Center) has a

generic process classification framework that covers the basic processes needed by companies in order to operate. We can use their highest-level processes as a starting point for designing collaboration spaces that maximize coverage of our information space.” — Dennis Pearce, Lexmark In typical APQC fashion, however, we were not satisfied — we quickly began researching and investigating other organizations that were using frameworks to get real work done. The results were overwhelming at first — with only a minimum of outreach, we were able to identify nearly 100 organizations using a framework to achieve a wide variety of ends. Many of these organizations were also interested in learning how others were using frameworks, and thus this research was born. The frameworks team quickly assembled and developed the core hypothesis of the study: Organizations use process frameworks to get real work done. We set out to find out the details and confirm our hypothesis, using a modified version of APQC‟s tried and-true collaborative benchmarking methodology.

Using Process Frameworks and Reference Models to Get Real Work Done This report summarizes the findings of our research, which, if you include Lexmark ‟s involvement, dates back to June of 2010. If you consider our experience in developing and managing business frameworks, however, this report‟s findings go back decades and include literally thousands of hours of expertise. The findings in this report were reviewed and enhanced with the support of our two research champions, Accenture and Nimbus. Both organizations contributed countless hours in attending site visit presentations, facilitating discussions, and reviewing and contributing to documents and findings. HIGHLIGHTS OF FINDINGS

The following findings were developed from a variety of sources: qualitative findings from our partners, quantitative analysis of survey responses, discussions with research champions, and feedback from our internal subject matter experts. It is important to note here that these findings are not considered inclusive of all frameworks research or best practices. Our goal is to provide analysis related to the data captured during this particular project and ultimately add to the body of knowledge associated with process frameworks. Accelerate: Accelerate improvement projects by applying process frameworks in three key areas: benchmarking, content management, and business process definition.

Nearly all uses of frameworks APQC has identified can be organized into these high-level areas: benchmarking, content management, and business process definition. The framework is really just a tool to accomplish these tasks; it is not an end in itself. Therefore, when determining whether or not to implement a framework, the most important question to ask is not necessarily what benefits the framework could provide, but instead, what the cost of not using this tool would be. In business process definition, frameworks and reference models help support process analysis, design, and modeling activities. Starting with a process framework or reference model accelerates these activities by giving professionals a basis on which to build. At best-practice organizations, the adopted framework is generally well reviewed and supported by a consulting firm, standards body, or industry association such as APQC (the PCF), Supply Chain Council (the SCOR® model), or the Telecommunications Forum (eTOM). The cost of not using a process framework is the time it would take the process definition team to develop their own process model and obtain consensus from the various stakeholders about the processes included within it. As was seen in the all but the Cisco site visit (since Cisco focused only on benchmarking), organizations adopting process frameworks for process definition can quickly move beyond highlevel process definition and modeling discussions into detailed discussions and

Using Process Frameworks and Reference Models to Get Real Work Done working sessions about the merit of the chosen framework and how to adapt it to meet the organization‟s needs. Benchmarking and process measurement activities are generally too costly to perform without the use of a process framework or reference model. Internally, organizations need a common way to describe the work they do so that it can be consistently and repeatedly measured. Externally, organizations normalize their internal processes against the process framework or reference model and depend on the objective, standard definitions in the framework to enable the comparison of processes across organizational boundaries. The process framework or reference model becomes the Rosetta Stone for organizations benchmarking with others. Using a process framework or reference model as a common language reduces the effort required to begin benchmarking activities. A framework establishes a common language from the start. Organizations reduce the time spent mapping their specific activities to the activities of other organizations because everyone participating in the benchmarking has the same, single process framework or reference model to map all processes to. What is the cost, then, of not using a process framework in benchmarking activities? Consider a situation in which an organization must map its processes to the processes of each of its benchmarking partners. In a situation with five benchmarking partners, each partner must map to each of its four partners. Compare this to a situation in which the partners agree to adopt a process framework or reference model. With the centralized framework, each partner needs to map only once to the centralized model to ensure an accurate comparison. The process framework enables each distinct set of processes to be mapped into a common language that each entity can understand. Using a framework to overcome this cost is one the factors that enables external benchmarking for Cisco Systems. Content management activities rely on common taxonomies. Using a process framework or reference model as the basis for a content management taxonomy helps knowledge managers quickly build consensus among various stakeholders even when the structure of the reference model doesn‟t precisely map to existing enterprise process model. The process framework or reference model acts as an interface between the way the content is organized and the way work is performed. It reduces rework imposed upon a knowledge manager when the organization changes the way work is done. Again, the cost associated with not adopting a process framework lies in the collaboration with stakeholders. Consider the example of the Williams Companies. Williams‟ initial adoption of the PCF organized enterprise-wide financial content according to a single consistent, objective model. Mapping that taxonomy to the way work is done within the organization created an extensible and robust repository of content that can survive future changes to the ways Williams works. Use of the framework also eliminates costly retagging and reorganization when changes occur.

Using Process Frameworks and Reference Models to Get Real Work Done The use of a process framework effectively reduces the time needed to develop consensus among stakeholders. Not adopting the process framework extends cycle times for projects in these areas. Locate: Adopt a framework or reference model at any level of the organization; even localized implementations yield value.

Centralized, enterprise-wide adoption of a process framework is not the only way to realize value. Many of the best-practice partners in this study saw value in adopting the process framework for one or more uses at department and division levels. ING Life Japan adopted the PCF in its policy operations department. The adoption was not enterprise-wide or even division-wide, but rather occurred to help a single department become more efficient in its operations. Similarly, Pitney Bowes‟ adoption of its process framework in the Mailing Solutions Management division was initially limited to a cross-functional billing transformation process. The level of adoption within the organization in that case was relatively low, compared with an organization such as ThyssenKrupp Steel USA, which performed an enterprise-wide adoption. Each partner adopted the framework at a different level, yet each of them realized benefits. Centralize: Centralize ownership and protect the integrity of the adopted frameworks to ensure one version of the truth.

No matter where a framework or reference model is deployed within an organization, centralized ownership and management of that framework is essential. Organizations should set up governance structures to foster the consistent adoption of the framework within the organization. These structures must be harmonized with the culture of the organization, while maintaining strict control over the implementation and management of the framework. This control as maintained by the centralized governance structure ensures consistency and enables the framework to contribute to the long-term value of the organization. From a business process definition point of view, the framework itself should be centrally managed and maintained, but ownership of the processes defined by the framework should be distributed as widely as possible. Wide distribution of ownership of whatever is managed through the framework facilitates stakeholder buy-in of the adopted framework. Stakeholders are even more agreeable to framework adoption when they learn that they are not required to actively manage and maintain the structure of the framework, but rather contribute their expertise to the centralized management body. Consider UPS‟ program management group, which developed a center of excellence to support both project management and process management. This program

Using Process Frameworks and Reference Models to Get Real Work Done management group was the single, centralized group responsible for the maintenance of the adopted UPS-wide process framework. A similar situation exists in content management adoptions. The centralized group does not own the documents stored in the taxonomy, but rather the management and maintenance of the framework itself. Similar to business process definition adoption, content managers participate in oversight and management through the centralized governance function. For example, the group at Williams that owns the Sarbanes-Oxley compliance framework is not responsible for managing the processes organized by the taxonomy. Process management is the job of individual process owners in their respective units. Adopt: Adopt a framework before adapting it.

Process frameworks and reference models are typically built based on deep organizational understanding or wide experience across a variety of organizations. An organization that chooses a framework and immediately begins making adaptations to fit its existing business risks losing the value inherent in the framework: the deep organizational understanding or the wide experience brought by the framework‟s authors. Furthermore, some adaptations can severely limit the adapting organization‟s ability to use benchmarking to compare performance in an objective manner. Cisco, for example, relies on the contextual definitions of processes in the PCF to act as a common language to support benchmarking. Without a consistent mapping of processes to the adopted (not adapted) framework, Cisco would have to map its processes to each of its benchmarking partners. The cost may be manageable when dealing with a few benchmarking partners, but when comparing to a wide sample of companies, the cost quickly becomes more than the value obtained from performing the benchmarking exercise. Furthermore, ING Life Japan began its improvement project by completely adopting its process framework. Only after the complete adoption did they adapt the framework to meet their unique organizational needs. The overall changes were less than 10 percent of the framework‟s total activities. This strict adoption was not without cost, however. Initially, middle and line managers tasked with performing the adoption work pushed back on the process transformation team and questioned the ability of the business to withstand the changes required by the framework adoption. Strong central leadership was essential to overcoming the initial resistance. The central leadership required and supported the complete re-engineering of the department to align with the framework. UPS‟ adoption of its custom-designed framework similarly encountered resistance from the groups that were affected by the adoption. The cost of the changes from a re-engineering perspective was too much for UPS to bear. The program management group at UPS sought a different approach to adoption and ultimately adopted an overlayment strategy. They overlaid the framework atop their existing

Using Process Frameworks and Reference Models to Get Real Work Done organizational structures rather than re-engineering their entire organization. They built consensus for the new operating models by mapping the adopted framework to the existing organizational structures and demonstrating the value of the new framework in defining business processes, organizing content, and benchmarking. Overlaying the framework to the existing structure and mapping the organization to the framework eliminated the need to change the framework‟s definition. Tool Up: Adopt appropriate tools to reduce complexity and increase the long-term value of a framework.

Process framework adoption activities do not require significant up-front investment in custom-developed or specialized package-software tooling. Most surveyed partners began exercises with simple tools already available to them, including whiteboards and common office productivity tools such as spreadsheets and word processing programs. Most partners envisioned formal process management tools in their future plans, whether custom-developed or packaged software, but they did not have to start there. By implementing appropriate tools when they were needed, the partners streamlined the use of their frameworks and built a strong foundation for future improvements and process integration. They key was finding the best tool for the organization and its needs as the framework implementation took place. Partners such as UPS, Sandvik, and ThyssenKrupp adopted formal packaged software business process management tools to support their use of process frameworks and reference models. UPS‟ adoption of a packaged software process modeling tool helped them to ensure consistency in the models based upon the overall framework. The tool also enabled simple benchmarking capabilities around the adopted framework by automatically rolling up cost and FTE allocations at each successive level of the organization. UPS defined standards for the use of the tools within the organization and ultimately trained individuals in process mapping activities using the tools, widely distributing the expertise necessary to adopt the framework throughout the organization. For Sandvik, the enterprise‟s scope was a driving factor in adopting a tool to help with its business process definition, content management, and benchmarking activities. With over 130 production units worldwide and five distinct ERP system implementations, Sandvik struggled to ensure consistency in process implementation and capabilities. Adopting tools to help manage the wide variety of organizational involvement reduced the complexity inherent in managing the widespread adoption and ultimately enabled their organization to benefit from the process framework. ThyssenKrupp Steel USA did not have to struggle with organic growth for nearly a century as Sandvik did. Its new steel plant in Alabama was envisioned to be as efficient and effective as possible not only in steel production but also in productivity of its office workers. This goal could not have been met without a tool

Using Process Frameworks and Reference Models to Get Real Work Done to facilitate the adoption of the process framework and its various uses throughout the organization. ThyssenKrupp Steel USA was able to define its processes using the process framework as the basis and map additional frameworks atop the core processes. This overlayment of multiple process frameworks is one of the ways in which ThyssenKrupp Steel USA plans to quickly achieve ISO compliance. Measure: View framework implementation according to a five-step model to better assess the implementation’s maturity and the value it provides.

Based upon the observations made during the study, a number of criteria surfaced that suggest a step-by-step journey organizations take on their way to realizing the full value of a process framework. The journey is divided into five core steps, or phases: establish, reference, deploy, measure, and operate. Organizations may choose not to proceed through all five steps. Since value is realized at each stop in the journey, an organization must determine if the value of proceeding on the journey is greater than the cost to move to the next step. Also — some steps may be taken out of order depending upon the long-term goals of the organization; for example, an organization may proceed to measure after reference and skip deploy entirely. Set Goals: Evaluate framework use regularly to determine which actions to take to increase its value and maturity.

Using an implementation model to measure the effectiveness and progress of a framework initiative allows organizations to set reasonable goals for framework use. This also enables the organization to completely envision the eventual benefits and to create individual and organizational commitments to the business community‟s goals. Lacking this sort of vision, a framework is less likely to initiate change or bring value to the organization. A number of criteria are presented to help set goals, including organizational readiness, disruption to the business, maturity of the organization, and executive support.


Research Champion Perspective Nimbus Nimbus has been single-mindedly focused on process management and performance improvement since the first release of our Control software in 1997. Since then, we have worked with hundreds of clients, across virtually every industry and in more than 40 countries. Each organization has unique business drivers, but they share a common vision: to manage business better, to achieve operational excellence, and to embed a culture of continuous improvement. Often, clients express it as “moving an organization up the process maturity curve.” They all recognize that excellence in business process management is foundational to achieving their goals. It was, thus, an easy decision to accept APQC‟s invitation to serve as a research champion on this study. Connecting process management with real work is fundamental to success, and as a partner to our clients, we continually seek and provide greater insight into how to make that connection. Many kinds of process frameworks are widely used. Some are highly technical and intended for IT audiences; some are functional frameworks — ITIL and SCOR, for example. And some, such as APQC‟s Process Classification Framework (PCF) , address an entire enterprise. Because of their widespread popularity, Nimbus offers our clients complete process maps developed from various process frameworks, including one based on APQC‟s PCF. In our experience, process frameworks can significantly accelerate process discovery and alignment, providing organizations with a high-level (though, to some degree, generic) view of the processes they may be considering for a business process improvement program. A best practices process framework gives an organization confidence that all process areas are considered and that the interconnections between each area are proven and understood. But to progress with real business process improvement, user adoption is critical. To achieve adoption, business process content has to be complete, accurate, readily understood, and integrated with documents, key performance indicator (KPI) metrics, and training. Ultimately, the framework must be accessible to every employee as a personalized intelligent operations manual — the simplest way to find, understand, and give feedback about “the way we do things here.”


Process frameworks alone cannot deliver adoption. They must be adapted to make sense for each organization and to reflect its unique operational reality. Many organizations develop a hybrid process architecture, blending several process frameworks that deliver best practices for different business areas — for example, combining APQC‟s PCF, SCOR and ITIL. Managing the interrelationship of such content and cross referencing the real operating model against multiple frameworks is a challenge we help clients with on a day-to-day basis. Our mission at Nimbus is to make work easier, faster, and more valuable for millions of people. Process frameworks frequently accelerate our clients‟ process discovery and standardization efforts, so we are delighted to have been able to contribute to this study. We hope that the best practices identified here, together with the commentaries in each chapter, will illuminate your own organization‟s search for operational excellence and process maturity. — Chris Taylor, vice president consulting, Americas, Nimbus


ORGANIZATION OF THE REPORT Chapter 1: Getting Started

Organizations that have successfully implemented a process framework all had a specific need or problem to solve. Taking a few conscientious steps at the beginning provided an opportunity to accelerate the project — regardless of the level at which the framework was adopted or the tools used. This chapter identifies projects that benefit from framework adoption and the best place to locate them within the organization. Chapter 2: Adoption, Governance, and Oversight

Centralized governance structures, processes, and toolkits make long-term benefits through framework adoption possible. Centralized governance of the framework does not imply that the processes defined by the framework, the content managed by the framework, or the benchmarking capabilities enabled by the framework are all centralized. On the contrary; centralization of the framework‟s maintenance and management enables a widely distributed ownership of those adopted pieces. Managing an adopted framework without centralized oversight can prove costly because, as the business changes, it is difficult for every part of the organization to stay aligned with the framework. This chapter provides an overview of two main best practices: centralize ownership of the framework and adopt before adapt. Chapter 3: Leveraging Tools

Business process management tools help organizations automate governance, reduce complexity, increase flexibility, and manage content using process frameworks. Some organizations develop homegrown tools while others buy tools designed to meet their specific needs. This chapter focuses on the findings related to tools: when to use them, issues to watch out for, and how tools can help. Chapter 4: The Framework Implementation Journey

A process framework enables an organization to rapidly get on the same “process page” and drive consistency across performance initiatives. It is widely accepted that frameworks bring value to organizations in measurable ways and increase their fundamental ability to perform. But not every organization is ready to fully exploit a framework. Assessing the readiness for use of a framework sets a baseline, helps set targets for the organization, and enables benefits to be mapped against a road map of increasing value.

Using Process Frameworks and Reference Models to Get Real Work Done STUDY METHODOLOGY

The APQC consortium benchmarking methodology was developed in 1993 and serves as one of the premier methods for successful benchmarking in the world. It was recognized by the European Center for Total Quality Management in 1995 as first among 10 leading benchmarking organizations‟ models. It is an extremely powerful tool for identifying best and innovative practices and for facilitating the transfer of these practices. The Best Practices for Using Process Frameworks to Get Real Work Done project team adapted APQC‟s methodology to reduce demands on sponsor and partner time while maintaining the high-quality deliverables that the process is known to produce. Plan

The planning phase of the study began in summer 2010. During this phase, APQC performed primary and secondary research to determine leading practices and identify innovative organizations to participate as best-practice organizations (the partners). In addition to this research, APQC staff members identified potential partners based on firsthand experience, research, and sponsor recommendations. The APQC team identified a first-pass list of 16 organization. Each of these organizations was invited to participate in a screening process. Based on the results of the screening process, as well as organizational capacity and willingness to participate in the study, five partners made the final list: Cisco Systems (Cisco), ING Life Japan (INGLJ), Pitney Bowes (PB), UPS, and The Williams Companies (Williams). The project team scheduled two additional virtual site visits with organizations that demonstrated exceptional capabilities. These “lite” site visits were shorter (limited to one hour) and relied on the partner to present off-the-shelf material — not a presentation customized to the project‟s needs. The two organizations selected by the APQC project team and research champions as lite partners were ThyssenKrupp Steel USA and Sandvik. The APQC team and the research champions then finalized the data collection tools and began the “collect” phase of work. Collect

The collect phase of this project entailed collecting qualitative information about the ways in which the partner organizations get work done using their process frameworks or reference models. APQC and the research champions jointly developed three tools to collect information for this study: 1. Screening questionnaire — a set of qualitative and quantitative questions designed to identify best practices within the partner organizations

Using Process Frameworks and Reference Models to Get Real Work Done 2. Detailed questionnaire — a set of qualitative and quantitative questions designed to collect objective data about the use of frameworks within an organization 3. Site visit guide — a set of qualitative questions designed to facilitate structured discussion between partners and sponsors at the site visits Each partner organization (except the lite site visit partners) was asked to prepare and deliver a four-hour site visit covering the subjects identified in the site visit guide. Some partner organizations chose to present their material in shorter sessions. APQC staff members worked with the partners to prepare and review their presentations before the site visits. The partner organizations determined if they wanted to host a site visit virtually or in person. Only UPS committed to an inperson site visit. Williams and Pitney Bowes were asked to hold their site visits at the project kickoff meeting, held in November 2010. After each site visit, the APQC project team prepared a written report (site visit summary) and submitted it to the partner organization for elaboration and approval. The process frameworks project did not include detailed quantitative benchmarking at a level sufficient to understand cost and FTE allocations of process framework adoption projects. Analyze

The APQC project team analyzed both the qualitative and quantitative information gained from the data collection tools. The analysis concentrated on examining the practices of each partner organization. This analysis, as well as examples from the site visits, is contained in this report. The number of companies participating in the detailed questionnaire was insufficient to analyze project participants (partners and sponsors) as an independent sample. The sample from the project was combined with a similar sample from a previous data collection effort (where possible) to develop the sample that was ultimately utilized for further analysis and presentation in this report. Adapt

Adaptation and improvement, stemming from identified best practices, occur after the sponsors apply key findings to their own operations. APQC staff members are available to help organizations create appropriate action plans based on the results of the study.

Using Process Frameworks and Reference Models to Get Real Work Done RESEARCH CHAMPIONS

Our research champions, Accenture and Nimbus, are experts in the field of reference models and process frameworks and are supporting the study with thought leadership, subject matter expertise, research, and funding. Accenture

Accenture is a global management consulting, technology services, and outsourcing company, with approximately 204,000 people serving clients in more than 120 countries. Combining unparalleled experience, comprehensive capabilities across all industries and business functions, and extensive research on the world‟s most successful companies, Accenture collaborates with clients to help them become high-performance businesses and governments. Accenture has a large BPM practice with numerous assets, including a BPM reference model repository with over 20,000 models describing over 70 industries. Its home page is www.accenture.com. Nimbus

Nimbus is a global software company with offices in San Francisco, London, Beijing, and 10 countries. Nimbus Control software enables organizations to capture and deploy their operational processes, business controls, and supporting information to all of their people, across the Web, or to a mobile device. It provides an enterprise-wide collaborative framework that underpins effective process management and sustainable performance improvement. Founded in 1997, Nimbus has worked with over 700 organizations including AstraZeneca, Barclays, Chevron, Cisco, HSBC, JP Morgan, Nestlé, RBS, Sara Lee, Sony, ThyssenKrupp, and Toyota. Nimbus is a Microsoft Gold Certified Partner (ISV), an SAP Software Partner, an Oracle Partner, and a Salesforce.com Partner. The Nimbus Web site is located at www.nimbuspartners.com. SUBJECT MATTER EXPERTS Dr. Mathias Kirchmer

Dr. Mathias Kirchmer is executive director for business process management (BPM) at Accenture. He leads the global BPM-Lifecycle practice, as well as the program for the development of Accenture‟s business process reference models across industries and functional areas. His special field of expertise is to establish BPM capabilities that deliver both immediate benefits and sustainable competitive advantages. Before joining Accenture, Dr. Kirchmer spent 18 years with IDS Scheer, a leading provider of business process excellence solutions, known for its BPM software, the ARIS Platform. He was member of the extended executive board, holding roles of CEO Americas, Japan, and chief innovation and marketing officer. During his professional career Dr. Kirchmer has developed deep knowledge in approaches, methods, tools, and software for the design, implementation, execution,

Using Process Frameworks and Reference Models to Get Real Work Done and controlling of business processes. He has applied this know-how in companies of various sizes and industries around the world. Dr. Kirchmer is an affiliated faculty member of the Program for Organizational Dynamics of the University of Pennsylvania; faculty member of the Business School of Widener University, Philadelphia; and guest professor at the Universidad de Chile, Santiago. In 2004, he won a research fellowship from the Japan Society for the Promotion of Science. He is the author of numerous publications, including five books. The last one is entitled High Performance Through Process Excellence — From Strategy to Operations and was published in December 2008. Dr. Kirchmer holds a Ph.D. degree in information systems from Saarbruecken University (Germany), a master‟s degree in business administration and computer science (“Wirtschaftsingenieur”) from Karlsruhe Technical University (Germany), and a master‟s degree in economics from Paris-IX-Dauphine University (France). Dennis Pikop

Dennis Pikop is Manager of process architecture at Northrop Grumman Corporation, aerospace systems sector. His responsibilities include oversight, administration, and deployment of the sector‟s business process architecture framework and facilitation of its process management control board. He also serves as project implementation lead for the adoption of a corporate-wide process architecture framework. Key to this was his creation of a ruleset for generation/revision of process framework elements in addition to a configuration management process. His experience with business process management is vast, extending back to the early 1980s. He has served as executive mentor in related process and quality principles through initiatives such as process re-engineering, value stream management, quality assessment, measurement, lean manufacturing, and statistics. He has facilitated several executive strategic process planning and teambuilding conferences within industry, across most corporate elements, and has provided similar support to numerous nonprofit organizations. He views it as an honor to serve, coach, and mentor people in their quest for process excellence — especially in the area of leadership. He works well within any discipline internal or external to his industry. Chris Taylor

Chris Taylor joined Nimbus in 2009 and is now vice president consulting, Americas, where he is responsible for making Nimbus Control the enterprise standard for meaningful business process management across their largest customers around the world. Focusing on compliance and process frameworks to make governance, deployment and end-user adoption the mantra at Nestlé, Cisco, Northrop Grumman, and many others, he is a leading voice in methods and applications for

Using Process Frameworks and Reference Models to Get Real Work Done unlocking the full value of BPM. He offers this expertise online at www.bpmforreal.wordpress.com. His coming to Nimbus was strongly influenced by his years of experience delivering transformational capabilities directly into the hands of business experts. With ILOG (now IBM), Chris led consulting for the Americas in its mission to create powerful business-facing rules, optimization, and visualization solutions for industries, which include finance, manufacturing, transportation, and health care. His years spent breaking through IT/business silos and liberating executives, managers, and endusers to have direct control of their world paved the way for much of the perspective he brought to Nimbus and his enthusiasm for next-generation solutions that combine the concepts of automation, simplicity, and social media. In his early career, Chris managed aircrew and flight operations while flying for the U.S. Navy before transitioning to consulting roles with both Perot Systems and Accenture. He is an avid skier, hiker and sailor and spends much of his off time exploring the mountains and coasts near his home in Southern California and the rest of the world. John G. Tesmer

John joined APQC in March of 2006 from IBM‟s Business Consulting Services (BCS). At IBM, John was responsible for managing custom software development projects and for providing around-the-clock support for business-critical benchmarking software in a globally distributed environment and with globally distributed teams. Prior to IBM, John worked as a management consultant for PricewaterhouseCoopers‟ Management Consulting Services in the energy and utilities industry. At APQC, John works with senior management to:  manage the regular operations of APQC‟s Open Standards Benchmarking

business, including managing subcontractors, revenue and expense forecasting, and personnel;  re-engineer benchmarking systems, processes, and tools to reduce operational expenses through more efficient operations;  introduce new products and services in cooperation with respected leaders and subject matter experts. John also is responsible for the management and development of APQC‟s Process Classification Framework , including the introduction of 10 industry-specific frameworks in partnership with corporate sponsors such as IBM.

Using Process Frameworks and Reference Models to Get Real Work Done Jeff Varney

Jeff Varney is a senior adviser for APQC‟s delivery services group. He is responsible for the implementation of business process management and process improvement projects, content management, custom benchmarking, performance measurement, and performance improvement activities. As the process improvement practice lead within APQC, Jeff coordinates research and applied research projects for business process management and process improvement (Lean, Six Sigma, etc.) spanning all industries and disciplines. Jeff is also an instructor for many of APQC‟s training courses, including Process Management, Building and Sustaining Communities of Practice, Strategies and Tactics for Content management, and Applying Benchmarking Skills in Your Organization. Jeff has extensive experience with enterprise projects across multiple industries, including software development, banking, insurance, military, and space. In each instance, he has been a catalyst for process improvement and innovation, leading PMI certification efforts, driving SEI CMM and ISO 9001 adoption, driving Six Sigma initiatives, establishing balanced scorecard reporting, and nurturing strong, effective teams. He has achieved this through a blending of process, technology, and training. Prior to joining APQC, Jeff worked with CSC as its banking PMO director, establishing a project management office that merged three disparate cultures (due to acquisitions) into a single, cohesive project management and reporting practice. He also established and maintained several communities of practice and helped create CSC‟s opportunity management approach, which resulted in a structured sales process. He was an active member of the CSC project management steering committee and led its best practices capture team. Jeff has successfully participated in and led technology projects with CSC, Raytheon, and McDonnell Douglas. These included custom call center solutions, military command and control applications, and the International Space Station. With a degree in aerospace engineering, Jeff has a strong technical background that complements his experience in management, process improvement, and content management. A P Q C ’ S P R O C E S S C L A S S IFICATION FRAMEWORK

As APQC‟s membership grew along with global attention to best practices, it became clear that there was no common language to describe organizational processes. With dozens of ways to reference functions and processes, measurement and benchmarking were impossible to do in a systematic fashion. APQC set out to solve this problem and, in collaboration with expert and practitioner panels, introduced the Process Classification Framework SM (PCF) in 1992.

Using Process Frameworks and Reference Models to Get Real Work Done APQC‟s Process Classification Framework was originally envisioned as a taxonomy of business processes and a common language through which APQC member organizations could benchmark their processes. The initial design involved APQC and more than 80 organizations with strong interest in advancing the use of benchmarking in the United States and worldwide. Since its inception in 1992, the PCF has seen updates to most of its content. These updates keep the framework current with the ways that organizations do business around the world. In 2008, APQC and IBM worked together to enhance the cross-industry PCF and to develop a number of industry-specific process frameworks. In 2009, APQC worked with the Council of Supply Chain Management Professionals (CSCMP) to update the PCF to support the cross-mapping of CSCMP‟s process standards to the PCF.


Chapter 1 Getting Started Best practices in this chapter: Accelerate: Accelerate improvement projects by applying process frameworks in three key areas: benchmarking, content management, and business process definition. Locate: Adopt a framework or reference model at any level of the organization; even localized implementations yield value. Beginning any project at an organization requires dedication and commitment. Frameworks adoption projects often require even more up-front effort than other projects to address issues of location within the organization, centralization and governance, and tool usage. Making smart decisions at the beginning of a frameworks project can reduce rework, broaden cultural acceptance, and speed the adoption of the framework, both within and outside of the framework‟s initial home. Successful process framework adoption allows organizations to accomplish real work more efficiently than organizations that haven‟t adopted process frameworks or reference models. Many of the best-practice partners remember a time before the adoption of their framework where employees struggled to find job aids, managers were unclear how their work related to other parts of the organization, and performance comparison across organizations was too costly to consider. Once the framework was adopted and later adapted to fit the needs and goals of the business, these issues diminished. ACCELERATE Accelerate improvement projects by applying process frameworks in three key areas: benchmarking, content management, and business process definition.

As a part of the research into using process frameworks, APQC surveyed a number of organizations about how they use these frameworks (Figure 1).


Findin gs from APQC’s 2010 Frameworks Survey

What Business Issue or Need Led Your Entity to Investigate Using a Process Framework? (Select all that apply.)

Data Table Answer

Findings: Distribution

Performance management and metrics

61%

Definition of key processes requiring c rossfunctional owners

45%

Content ma nagement system/knowledge management

30%

Reorganiza tion/reengineering project, merger, divestiture, etc.

29%

Enterprise process taxonomy— basis for enterprise operations (i.e., embedded in enterprise-wide technology and/or tools)

25%

Compliance with an external standard (e.g., ISO9001)

17%

Accounting —management a ccounting system or activity-based costing approach

14%

Not using a framework

12%

Other

20%







The three main process framework uses are: benchmarking, business process management, and content management. Twenty-five percent of respondents use frameworks in tooling. Only 17 percent use it due to a compliance event.

N=76

Figure 1

APQC identified a number of popular uses of frameworks, which we grouped into three main categories: benchmarking, content management, and business process definition. More than 60 percent of respondents use frameworks to guide “performance management and metrics,” which is essentially benchmarking. Clearly, process frameworks can effectively support such efforts. Two core components of business process definition —“definition of key processes requiring cross-functional owners” and “reorganization/re-engineering project, merger, divestiture, etc.”— are also commonly used, at 45 percent and 29 percent, respectively. Rounding out the main uses for frameworks is content management, at 30 percent. The diversity of these uses is the reason that frameworks and reference models have developed and evolved over time. Modern frameworks and reference models include not only simple functional compositions but also valuable content, such as chains of cross-functional processes organized into value streams, key performance indicators/associated benchmarking data, and in some cases, best practices related

Using Process Frameworks and Reference Models to Get Real Work Done to functional compositions and top performance. One example is Supply Chain Council‟s SCOR framework, which includes all of these features. Overlaps Define Business Process Management

Content Management

Benchmarking B P M

Business Process Definition

Figure 2

As shown in Figure 2, overlaps occur in the main uses of frameworks within an organization. The term “business process management” (BPM) typically captures the majority of these overlaps. Although this term can be associated with various concepts, for the purposes of this study, it conveys the overlap among business process definition, content management, and benchmarking. Consider the content management and business process definition uses. In an organization that uses a process framework to define how work is done, that same framework can easily becomes a mechanism for managing content related to the work. An organization can, however, manage content without also using the framework to manage the definition of the business processes. Williams Exploration and Petroleum, a subdivision of the Williams Companies, is an example of this: Its content related to Sarbanes-Oxley (SOX) compliance is organized according to a process framework that is not used to define business processes. The extent of overlapping usage depends on the organization.

Using Process Frameworks and Reference Models to Get Real Work Done Frameworks used for other purposes can also be leveraged to facilitate benchmarking. Organizations using a framework to define business processes are generally able to use that same framework to measure the execution of these processes. Once the measurements exist based upon a common framework, it becomes simpler to benchmark internally or externally with organizations using similar frameworks. The most effective organizations are those that leverage a process framework for all three uses: benchmarking, business process definition, and content management. The ability to clearly and efficiently understand what work is done by identifying processes and functions (business process definition), how it is done (organizing content using the framework or reference model as a taxonomy), and how effectively it is being done (benchmarking) is a clear competitive advantage. Benchmarking

To put it simply, a process framework allows tasks to be grouped into standardized buckets of activity that can then be objectively compared. Developing this common language typically consumes a large portion of an organization‟s time. A process framework or reference model accelerates this process and increases the speed and depth at which an organization can study internal and external practices and processes. Benchmarking in this sense includes not just the benchmarking activities occurring between organizations but also process measurement and performance management that occurs within an organization. Accurate external benchmarking can be resource intensive, mainly due to the costs associated with creating common definitions upon which all partners can agree. Without common definitions, internal benchmarking is also a costly exercise. The cost is even greater when more than one organization is involved. A process framework accelerates benchmarking activities by reducing the effort required to define a common language. Consider an example where five organizations wish to compare the performance of their processes and capabilities (Figure 3). In a world without a common framework or reference model, each organization must map its processes to its four partners‟ processes. Assuming perfect sharing of information, a minimum of 10 distinct mapping transactions are required to ensure that each partner can accurately map its process to the other benchmarking partners‟.


Process Mapping When Benchmarking With and Without a Framework With Framework (5 mappings)

Without Framework (10 mappings)

A

E

A

B

FRAMEWORK

D

C

E

B

D

C

Figure 3

Incorporating a process framework or reference model in support of benchmarking reduces the number of mapping transactions from 10 to five. Furthermore, as benchmarking partners are added or removed from the exercise, additional mapping is required only for the new entrants. The framework becomes the common language through which all benchmarking participants compare their performance. As shown in Figure 4, Cisco uses APQC‟s PCF to simplify the translation process and facilitate the exchange of information and best practices, both in one-on-one and group benchmarking projects. Cisco provides a unique example of how it adopted a standard process framework and realized benefits throughout the entire enterprise. The use of a standard framework created enormous value by enabling Cisco to compare its internal processes with other organizations without mapping its internal processes to each benchmarking partner. Working with a standard language allowed Cisco to communicate with other organizations about how they handle certain processes Cisco wanted to improve.


How Cisco Uses APQC’s PCF for Benchmarking

Figure 4

ING Life Japan‟s creation and adoption of its Management Operating Methodology demonstrates how a framework enables internal benchmarking. INGLJ‟s methodology is completely driven by measures associated with the process framework (see Figure 5). Each morning, management representing key processes as defined by the framew ork meets to discuss the day‟s workload and ensure proper resource allocation. Central to this workload balancing activity is INGLJ‟s process framework. The framework enables consistent definition of the items being measured and therefore enables the regular workload balancing meetings. One of the key components of success across all the partner organizations that have focused on integrating their framework with other core functions is the use of quality and performance measures throughout all processes included in the framework. Measurement is not solely focused on outcomes but includes in-process measures that provide data about how the process itself is working. Liam Ward, business transformation manager at ING Life Japan, made this point clear: “We could map, design, and create new processes, but if we didn‟t understand the impact [on outcomes], it is difficult to justify the costs associated with the change.” Typically, the activity of measuring performance is a separate function located in

Using Process Frameworks and Reference Models to Get Real Work Done Quality or Performance Management departments, but at INGLJ, it has become an integral part of the process framework system. This type of integration provides real-time data about process results that can be used to adjust workflow and to forecast, with reasonable accuracy, what the results and value will be. ING Life Japan’s Daily Schedule

Figure 5

Another benefit of integrating performance and process management is that performance data (both qualitative and quantitative) gathered during quality control activities can be used to find quick wins for process improvement initiatives. These can be either minor adjustments, completed with relatively no cost, or more involved adjustments that can be replicated across multiple processes and thus realize huge benefits based solely on the sheer number of impacted processes. Understanding how these measurements affect processes helps managers to understand potential cost-benefit ratios for improvement efforts. Content Management

Content management encompasses the processes and technologies that support the collection, management, and publishing of information in any form or medium. As

Using Process Frameworks and Reference Models to Get Real Work Done seen in the Venn diagram in Figure 2, content management can have significant overlap with other uses of frameworks within an organization. Organizations with significant overlap between the definition of business processes and content management typically have specific tools built to manage process content — be they SharePoint document libraries, Lotus Notes databases, or even formal BPM tools that include document management functionality. Organizations in which content management processes do not significantly overlap process definition or benchmarking processes still typically use a framework to structure content so it can be easily accessed. In many cases, organizations are not using comprehensive packaged content management solutions, but rather homegrown tools built on available technology. This tends to be the case regardless of whether the business uses the content management framework to define work processes or not. Process frameworks still offer value, even when business processes and business process content are defined and organized separately. As long as a framework is used for one or the other, a simple map is usually sufficient to relate content to existing business processes. By 2003, Williams needed to quickly demonstrate compliance with Sarbanes-Oxley regulations. When initially planning a solution to this problem, Williams discovered inconsistent internal language to describe work done within the organization. Rather than attempt to build a model from the existing business unit input, Williams adopted APQC‟s Process Classification Framework (PCF) and mapped existing enterprise content and processes to the hierarchical structure of the PCF. Within a year, Williams had completely adopted the PCF to document all compliance-related processes. With the foundation of the PCF in place, Williams Exploration and Production (E&P) was able to use the framework as the basis for projects to realign their entire organization around a process-focused mentality. Williams E&P began mov ing beyond simple “content management” use to a more holistic “business process management” use, integrating both content management and business process definition. This evolution is shown in Figure 6.


Williams E&P Process Management History

Figure 6

ThyssenKrupp Steel USA also used a process framework to organize its enterprise content, process flows, and models. This organization differed from Williams, though, in that it originally intended to use the adopted framework in all three areas, not just for content management. In other words, the actual work processes were defined to match the framework from the beginning, rather than back-fitted and mapped into the existing organizational structure. ThyssenKrupp Steel USA (TK) manages four levels of content against its adopted process framework, as shown in Figure 7. For each process defined against the framework, these four levels of documentation exist and are managed by their tool. These four levels cover a variety of detail, from the overall “why,” to the supporting “what,” and ultimately “how .” Supporting documentation that helps employees get real work done.


ThyssenKrupp Steel USA Levels of Documentation

Figure 7

ThyssenKrupp Steel USA is able to manage these various levels of documentation using a business process management tool that allows the documents to be not only stored but also managed through their entire life cycle, including content reviews and checkpoints. At the center of this model is the process owner. As with benchmarking, content management is enabled and accelerated when it is based on a process framework. Business Process Definition

For the purposes of this study, business process definition incorporates two distinct activities:  using a process framework to define cross-functional processes, and  using a process framework to create or define existing processes within

functions.

Using Process Frameworks and Reference Models to Get Real Work Done All of the partners in the study except Cisco used the framework for business process definition activities (Figure 8). Definition-related Activities that Incorporate a Framework Best-Practice Partner

Definition-related Activities

Location

Cisco

Not used for definition

N/A

ING Life Japan

Redefine business processes within functions

Departmental

Pitney Bowes

Define cross-functional processes

Division

Sandvik

Define cross-functional processes (capabilities)

Enterprise

ThyssenKrupp

Redefine business processes within functions Define cross-functional processes

Enterprise

UPS

Redefine business processes within functions Define cross-functional processes

Enterprise

Williams E&P

Define cross-functional processes

Division

Figure 8

The two main approaches to business process definition using the framework — redefine business processes within functions and define cross-functional processes — are vastly different in their implementation. As one best-practice partner described it, defining cross-functional processes is like “building tunnels through silos.” Organizations try to look at their businesses from a new perspective— horizontally — and need a common language to define and relate daily functional work to specific processes and individuals. Again, each partner had its own approach to doing so, but ultimately, a few core practices stood out:  centralize ownership regardless of adoption location within the organization,  adopt a framework before adapting it, and  use tools after building a solid foundation of process expertise and capability.

These practices are explored in detail in chapters 2 and 3 of this report. Redefinition requires a different approach, which often includes a larger vision of transformation above and beyond definition. Redefinition activities using the process framework result in a new organizational structure built around the process framework, typically with complete adoption of the three main uses (content management, benchmarking, and business process definition).

Using Process Frameworks and Reference Models to Get Real Work Done Realizing Value

Leveraging a framework for more than one use (i.e., overlapping framework usage as illustrated in Figure 2) drives greater value and benefits for an organization. Each time the framework is reused, it multiplies the value of the process framework adoption as a whole. Organizations using a process framework or reference model for just one of the three main uses realize value. Williams did with its single-use implementation for SOX compliance. Pitney Bowes did with its use for business process definition. And Cisco did for benchmarking. However, in cases where organizations employ a framework for more than one use, breakthrough value can reasonably be expected. Consider the situation at ThyssenKrupp: The organization uses a framework for both business process definition and content management. Because process-related content coincides with the appropriate process definitions, employees better understand how to do their work, manage their processes, and store/share content. The entire organization has an improved knowledge of where work and documentation is located. Because Williams found sufficient value at the enterprise level with using a framework solely for content management, the Williams E&P division adopted the same framework as the basis for its division-specific process definition work. Again, this reuse of the framework not only accelerated the business process definition work being done at Williams E&P, but it also brought the E&P organization closer to the core corporate organization and reduced friction and confusion when dealing with content or process definitions. Framework adoption also links employee and customer values to the work being done. Connecting customer feedback and characteristics to a business framework ensures that work processes are providing outputs that customers desire. It also highlights the activities that directly translate into a positive or negative customer experience, allowing the organization to know exactly which processes to measure or change to increase customer satisfaction. Using a framework to link employees to the business (through feedback, work definitions, or training) significantly enhances employee engagement. By increasing consistency in the way work is performed and reducing rework, standard frameworks reduce employee frustration. Also, when employees participate in the management of the framework or execute work defined by the framework, they feel more connected to the organization and know that they have a say in how business is performed. Employee Values at ING Life Japan

At INGLJ, aligning the framework with employee values was not simple or intuitive, but in the end it proved to be one of the defining elements of the overall success of the framework implementation. Much of the difficulty stemmed from the fact that adoption of a framework and its associated processes often involves some degree of

Using Process Frameworks and Reference Models to Get Real Work Done fighting against the existing cultural inertia — the mentality that the status quo is okay and no change is really needed. A change-resistant culture hinders the opportunities for value to be created by the framework, simply because the people doing the work every day are not actively engaged. The critical factor, then, is creating a meaningful link between employee work values and the framework. During INGLJ‟s framework implementation, cultural resistance lessened after a few months as performance improved and frontline employees saw their day-to-day workloads decrease (an important employee value). The staff became much more engaged, and the culture began to shift, as people discovered how much INGLJ‟s process framework system improved work-life factors (see INGLJ‟s case study for details). Engaging and Recognizing Employees at Pitney Bowes

At Pitney Bowes, the team responsible for the framework has learned that engaging employees in the framework itself should be coupled with recognizing and celebrating victories, no matter how big or small. Global process leaders send messages to their department when one of their global process owners completes a framework implementation task. This helps build awareness throughout the organization about the value created by utilizing the framework. In turn, these messages reduced the need to convince employees to participate in frameworkrelated projects. Because employees had seen past successes, they already had a strong inclination to join the effort. Pitney Bowes has also recognized that since the team began regularly recognizing and celebrating successes, team members are more dedicated and less prone to give passive-aggressive feedback. Customer Values at UPS

Customer relationship management and product management, two of UPS‟ core processes, are a main source of structured inputs into continuous improvement activities. Every interaction with a customer results in feedback — feedback that tells UPS what it is doing but not doing well, or what products it should be offering. Many of the requirements for new product development ultimately come from the organization‟s customer relationship management area. Customer feedback ideas arrive continually and embraced as part of the culture at UPS. Employees are empowered to be “constructively dissatisfied.” LOCATE Adopt a framework or reference model at any level of the organization; even localized implementations yield value.

Throughout conversations with the partner organizations, it quickly became apparent that framework adoption success is not contingent upon the entire

Using Process Frameworks and Reference Models to Get Real Work Done organization participating or even supporting the work. More value can be realized by applying a framework to the largest number of processes, but wide-scale adoption comes at a cost. This leads to a recurring theme that was expressed by every partner organization: The most critical element to success is simply getting started on a framework project — no matter how small, how many people are involved, or where within the organization the work begins. The study did not identify any particular correlation between the location of the adoption within the organization and the particular use (benchmarking, content management, or business process definition) associated with the adoption. Enterprise-wide Adoption

UPS defined a framework consisting of four core and five supporting processes crossing through the various functions within the organization, such as accounts payable, and human resources (Figure 9). The trigger for UPS‟ creation and adoption of the process framework was the identification of a performance issue in its main line of business. Since the entire enterprise was affected by the changes in its marketplace, UPS needed to locate the adoption of the framework as high up in the organization as possible. UPS defined a set of core processes and set about attempting to re-engineer the organization to match its structure. As in many re-engineering projects, UPS found that trying to completely re-engineer the organization to match this structure cost too much in terms of the change required. After reevaluating the situation, the program management group determined that a strict reorganization would not be feasible. To ultimately effect the changes required to solve the organization‟s performance problem, the program management group determined that an overlayment strategy would be more successful. They then effectively layered the framework atop existing functions.

Using Process Frameworks and Reference Models to Get Real Work Done UPS ’ Core Processes

Figure 9

UPS‟ framework adoption led to tangible benefits: a reduction in complexity and a common, clear, and consistent way to discuss the business and the impact of strategy on how work is performed within the organization. The cost of applying this framework across the entire UPS organization is substantial, but makes sense relative to the scale of the adoption. UPS employs 25 full-time equivalents (FTEs) in its program management group to manage and maintain its process framework. This is a relatively small proportion of its work force. Division-level Adoption

Compare UPS‟ adoption to that of Williams E&P, which adopted APQC‟s PCF within the division after its parent organization used the PCF to organize enterprise wide financial content for SOX compliance.


Williams’ High-Level Process Framework

Figure 10

As shown in Figure 10, Williams E&P has identified not only its own high-level processes, but also processes that are managed outside of the scope of Williams E&P, at the higher Williams Companies level. Even though the parent company does not yet use the PCF for all processes identified in the E&P process framework, the relationship between the two entities can be clearly identified. This is another benefit of framework adoption: the clear allocation of process ownership. While the UPS and Williams E&P models are similar in structure, the scope is entirely different. The core processes identified in the Williams example are specific to its exploration and production capabilities, while the core processes in the UPS example span the entire enterprise, not just one specific division. Both organizations, however, used a process framework to define business processes. Like UPS, the approximately seven FTEs that manage and maintain the Williams E&P framework are a relatively small contingent of the entire work force. The scope and number of processes each organization identified is similar — UPS has five core processes, while Williams has four core processes. UPS has five supporting processes; Williams defined eight enabling processes. Both organizations want to manage their business horizontally. But Williams is focused on one division, and

Using Process Frameworks and Reference Models to Get Real Work Done UPS‟ vision is enterprise-wide. Williams‟ seven FTEs ultimately manage the same general volume of processes, but for a much narrower organizational scope. Even though UPS and Williams adopted frameworks at different locations within the organization, both organizations built centralized structures to manage and maintain their frameworks. UPS had the program management group, centrally located at the enterprise level and reporting to the vice president of strategy. Williams had the E&P Process Group, which reports to the vice president of commercial operations and gas management. These two groups represent another of the best practices identified in this study — that centralizing the ownership and management of the framework is essential to its success. Adoption of the process framework at other partner organizations followed a pattern similar to that of Williams and UPS: Although the adoption could occur at the departmental, divisional, or enterprise-wide level, the corresponding support structures were centralized within the area of adoption. QUESTIONS TO CONSIDER

1. Which use of a framework is most relevant to the needs of your organization? 2. Which location could benefit the most from framework adoption? 3. Can your organization use the framework in more than one area or for more than one purpose?


Research Champion Perspective Nimbus The first best practice described in this chapter — Accelerate — fits fits broadly with our experience, although the real world is rarely this straightforward. Our clients who use process frameworks see them as an accelerator, a way to hit the ground running. At its best, a framework might be an 80 percent fit with their business reality; at the very least, it is a useful checklist and common vocabulary for operations and improvement. Organizations often need to adopt multiple frameworks — for for example, blending APQC‟s APQC‟s PCF with ITIL, SCOR, or the Nimbus HR Accelerator — — because because different frameworks address different areas of need more appropriately or to a deeper level of detail. Even mash-ups mash-ups of multiple frameworks aren‟t usually enough in themselves to get real work done. A process framework only delivers its real potential when all stakeholders embrace it. And to achieve that, the framework must be customized to the operational realities of the business. UPS‟ experience matches our clients‟ experience: that enterprise-wide adoption, facilitated by tooling that makes access and feedback both easy and robust, makes continuous improvement easier and more effective. Specifically, UPS manages the work of over 400,000 employees through a custom framework that directly groups their operational reality under the strategic goals and metrics that drive the enterprise. The second best practice described — — Locate Locate — also also fits with our experience. In reality, few organizations set out on day one of a process improvement program with intention of fixing the whole organization. Rather, they focus on a specific high-priority area. That said, an enterprise-wide framework offers huge value as a starting point, even if the initial area of focus is only a single department or process. Establishing an enterprise process framework as early as possible in the process improvement voyage provides a map that links individual process improvement initiatives together, improves cross-functional alignment, and lessens the risk of different initiatives working in silos. The benefits this approach provides are illustrated at UPS and ThyssenKrupp, which both started with, or rapidly adopted, an enterprise-wide mindset. They understood the high value of collaboration across functional areas to break down silos and also recognized that compliance is an enterprise-wide endeavor. They wanted a single, joined-up view of their business.


This fits with our experience in another way: Organizations may start with one of the three use cases described here, but they rapidly progress to a search for a single architecture. They may start out with a content management problem or a benchmarking challenge, challenge, but they invariably move on to search for a holistic way of describing the enterprise and collaborating on performance improvement. That search leads them to business process management and to the understanding that end-to-end process management provides the best universal foundation to help people get real work done and enable enterprise-wide collaboration on continuous improvement and strategy.


Chapter 2 Adoption, Governance, and Oversight Best practices in this chapter: Centralize: Centralize ownership and protect the integrity of the adopted frameworks to ensure one version of the truth. Adopt: Adopt Adopt: Adopt a framework before adapting it.

Centralized governance structures, processes, and toolkits make long-term benefits through framework adoption possible. Centralized governance of the framework does not imply that the processes defined by the framework, the content managed by the framework, or the benchmarking capabilities enabled by the framework are all centralized. On the contrary; the centralization of the framework‟s maintenance and management enables the distribution of the ownership for those adopted pieces. Managing an adopted framework without centralized oversight can prove costly, as it is difficult to change the framework to reflect changes in the way business is performed. This chapter provides an overview of two main best practices: centralize ownership of the framework and adopt before adapt. CENTRALIZE Centralize ownership and protect the integrity of the adopted frameworks to ensure one version of the truth.

No matter where the framework is deployed within the organization or how it is used (for benchmarking, content management, or process definition), centralized ownership and management of the adopted framework is essential. Governance structures should coordinate with the culture of the organization to ensure the maximum utility of the framework while maintaining a baseline set of controls to ensure consistency. This baseline set of controls and governance can be combined in a single management system. “System” is the best way to describe how many of the partner organizations manage their adopted frameworks to maximize long-term value. A process framework

Using Process Frameworks and Reference Models to Get Real Work Done management system creates an explicit link between a set of independent but interrelated functions to create a whole that is greater than the sum of its parts. Not only did the partner organizations realize benefits after implementation, but their framework management systems became almost self-perpetuating. One of the outputs from the use of a process framework within an organization is a continual stream of data that can be used to identify even more opportunities for value to be created within the framework. Two main practices are associated with successful centralized framework management systems: 1. build a center of excellence; and 2. develop clear standards for process maps, documentation, and implementation guidance. Build a Center of Excellence

A process frameworks center of excellence (CoE) is a team of individuals focused on maintaining and managing the adopted process framework to maximize its longterm value and utility. The center of excellence should not be responsible for actually managing the content of the framework; that is best left to business owners with relevant subject matter expertise. The center of excellence should support each of the uses for which the framework is adopted. The center of excellence manages the framework and its various applications/uses, and the process/business owners and other employees perform the work within the framework. All of the center of excellence team activities should be based on adopted industry best practices in managing process frameworks and centers of excellence. In many cases, a center of excellence for managing the process framework may actually just be a portion of a larger BPM center of excellence. The decision to collocate the framework‟s center of excellence within the BPM center of excellence is generally related to the uses for the framework within the organization. Organizations using the framework in more than one area should push the overall framework ownership and maintenance to a single group for all uses. The configuration of a center of excellence does not depend on the location of the framework‟s adoption (one is needed wherever the frame work is adopted) or the type of adoption (overlayment or re-engineering). When building a center of excellence, a good rule of thumb is to create the center of excellence in the area of the organization driving the adoption of the framework. If multiple frameworks are adopted within an organization (i.e., one in finance and another in supply chain), or if each division of an organization has its own process framework, then there should be a center of excellence for each instance of a framework. An organization with a number of centers of excellence (corresponding to a number of frameworks) will realize benefit from coordinating this federation of centers of excellence to ensure consistent behavior. If multiple areas adopt a single framework, however, one center of excellence will best coordinate efforts.

Using Process Frameworks and Reference Models to Get Real Work Done A center of excellence should be sized based on its function and location within the organization rather than the scope of the processes under its management. Consider the Williams E&P example: Williams adopted its process framework for process definition use at the division level and manages its entire framework of 12 process categories with only seven FTEs. Those FTEs are not expected to train individual Williams‟ employees on the process modeling and process mapping activities, so their involvement is relatively less than that of UPS ‟ center of excellence team members. UPS‟ adopted framework of nine process categories is managed with nearly 25 FTEs, but those FTEs perform more activities and actively train other UPS employees (Figure 11). Williams E&P and UPS Framework Adoption Comparison Williams

UPS

Scope of adoption

Division

Enterprise

Number of FTEs in CoE

7

25

Number of employees in organization

Approximately 5,000

Approximately 400,000

Types of services offered

Process documentation aligned with the framework

Training Facilitation Process documentation aligned with the framework

Figure 11

The Williams E&P Process Group is made up of three analysts, one technical writer, two support staff members, and one rotational analyst. The analysts are assigned to a specific function or process group. This creates a center of excellence for a particular process. The CoE is responsible for the maintenance of the adopted framework, but the ownership of the process and related content is delegated to a specific process owner. Maintaining the framework and the value it creates is not an easy endeavor for UPS. It requires a significant resource investment in:  process management and  the associated program and project management activities that actually

implement change. Linking these two management activities creates a synergy between the work that gets done every day and the process framework itself. This integration is achieved

Using Process Frameworks and Reference Models to Get Real Work Done through twin centers of excellence (Figure 12). These two CoEs are responsible for supporting the staff engaged in all program and process management activities throughout the entire organization. Staff members are exposed to the fundamentals of each management discipline through internal and external training and toolsets. In both the functional and cross-functional areas, the CoEs provide support to teams working on projects. UPS’ Twin Framework Centers of Excellence

Figure 12

Since their inception, the CoEs have contributed tremendous value to UPS. Project management costs have decreased by roughly 40 percent and delivery-to-plannedscope increased from 20 to 50 percent. The program management group believes that with continued refinement and training, the organization can derive additional value from the framework.

Using Process Frameworks and Reference Models to Get Real Work Done Early in the implementation stage of its process framework, ING Life Japan realized that the greatest opportunity for creating value was by integrating several key management components that had been historically separate. INGLJ‟s Transformer Program was developed to formally tie these components into a framework management system that provides governance, continuous improvement, and quality assurance to the organization that has adopted the framework. INGLJ‟s Transformer Program effectively became its center of excellence (Figure 13). ING Life Japan’s Transformer Program Relationships

Figure 13

Two unique aspects of INGLJ‟s program are key to the value the organization has been able to create: (1) linking work to the process framework and (2) engaging people in the program. Linking work that is done “in the trenches” with the overall process framework gives the entire organization a daily view of how the business is running and what needs to be improved to gain the most benefit. Managing this feedback effectively is the responsibility of the Transformer Program members. Second, the Transformer Program‟s success depends heavily on the level of engagement people have throughout the process. To facilitate this, INGLJ provides numerous opportunities for staff members, from all levels within the organization, to be involved in key decision making activities. This directly links staff, and their own work values, to the process framework by involving them in overall management and governance. The Transformer Program, acting as a center of excellence, enables this staff engagement.

Using Process Frameworks and Reference Models to Get Real Work Done Williams, INGLJ, and UPS all provide strong examples of how a center of excellence can drive framework-based improvement and quality. As an organization becomes more process focused, it must listen to feedback about processes, set priorities, and learn where to make changes or enhance communication and training. Process Maps, Documentation, and Implementation Guidance

Clear, concise, and consistent documentation of the adopted framework and the tools used to maintain and support it keeps all process framework stakeholders focused on what is important: the actual work defined by the process framework. Beyond the information about the framework, documents and templates about processes defined in the framework must be standardized, clear, and consistent. All best-practice partners in the frameworks study developed clear standards for documenting processes identified in the framework, defined core work product types, and made models and templates. UPS developed clear guidelines for creating process maps. Its rules are enforced with all process owners throughout the organization. All process maps are written from left to right with at least 70 percent of the steps written on the horizontal path, representing the process under normal conditions. All exceptions to the typical process are written as vertical tangents, moving downward from the main left-toright process flow (Figure 14). The vertical tangents or exceptions to the process should not represent more than 30 percent of the process map. UPS Standards for Leveling Work Force Activities to Tasks: Processes Subprocesses Activities

Tasks

UPS – Program Management Group – Process Center of Excellence UPS Confidential and Proprietary Information Do Not Copy or Distribute

Figure 14

28

Using Process Frameworks and Reference Models to Get Real Work Done Not only did UPS define standards for left-to-right flows, but it also went a step further and defined a standard for how processes should be modeled, using specific features of its modeling tool (Figure 15). Because process framework responsibilities are split between UPS‟ program management group (which handles the core maintenance of the process framework) and individual process owners (who perform much of the actual framework implementation work), a standard reference is essential. Having a single point of reference lessens the need for constant backand-forth between program management and process owners, reducing rework and cycle time. The standard reference also enables speedier training of new resources. UPS Process Modeling Tool Standard

Figure 15

Williams E&P requires that its framework have a consistently documented and common set of information about the processes it includes. The division‟s knowledge repository brings together goals, policies, procedures, process maps, process measures, service level agreements (SLAs), informational team updates, and tools in a single location (Figure 16). Without a consistent definition for these types of content, the content for each process would be unorganized and difficult to sift through.


Williams E&P Knowledge Repository

Figure 16

Pitney Bowes also adopted common templates, tools, and document types in its center of excellence. Its framework focuses on three core types of documents: policies, process flow diagrams, and training. The Global Process Management team facilitates the work with the process owners, answering questions and providing guidance as necessary. Material is never taken straight from documentation and dropped into the adopted enterprise process framework (EPF); it is first reviewed and modified as needed to ensure it fits with the rest of the EPF. Pitney Bowes‟ Global Process Management team also developed relationship grids and key performance indicators (KPIs) at the functional level. Within a particular process, the team developed a relationship grid identifying the interdependencies among the various functional members of the team. For each function within the process, the team reviews any KPIs that may already exist and develops new ones as needed. ThyssenKrupp Steel USA consolidates content management and process definition within its tool, Nimbus Control (Figure 17). The tool allows consistent management of the documents, including version control and document storage features, all integrated with the processes defined according to the adopted framework.


ThyssenKrupp Steel USA’s Document Management within Nimbus Control

Figure 17

Creating and managing these various tools from a central location helped the bestpractice partners minimize the amount of time spent managing the process framework — allowing the organizations to ultimately get more real work done instead of spending needless time ironing out the framework and process definitions. ADOPT Adopt a framework before adapting it.

At first, adopting the framework before adapting it sounds like one of the most counterintuitive findings in the study. The idea that an organization should blindly bring in a foreign framework of processes and begin benchmarking, managing content, or defining processes is troubling and, in some cases, seems impossible. However, the best-practice organizations‟ experience validates this approach.

Using Process Frameworks and Reference Models to Get Real Work Done The scope of the initial adoption should be reasonable and attainable. The larger the impact of the adoption, the more difficult it is to coordinate and fully implement. If an organization plans to adopt a framework across the entire enterprise, the work required may seem unreasonable. Even if the end goal is to implement a framework enterprise-wide, it may be wiser to limit the initial scope to a single process. A smaller breadth of implementation makes the decision to adopt a framework seem more reasonable. The scope should also be determined by reviewing the proposed use of the adopted framework. If the use is benchmarking and is limited to a specific process, then the effort required for adoption is less significant than if an organization decided to roll out the framework to the entire organization for use in content management, benchmarking, and process definition. Even if the use is solely process definition across the enterprise, the implementation team should take time to decide how many resources and how much effort will be required for that implementation. The scope may need to be reduced to a single process or unit to gain more initial momentum. When adopting a process framework, an organization must consider scope, use, and the location of centralization. Understanding exactly which part of the organization will be affected (i.e., the extent or scope), what the framework will be used for, and how that adopted framework will be managed are all essential components to understand before attempting to perform the implementation. Adoption plans can be made once the team fully determines the scope, use, and governance aspects of the implementation. APQC has identified two different types of adoption plans: 1. Overlayment — applying the process framework atop existing organizational structures and functions with a mapping layer between 2. Reengineering — moving the organization to the target framework by replacing the existing organizational structures and functions with those specified in the framework Overlayment is a relatively simple mechanism to bring a process framework into an organization without significant changes to the underlying organizational structure. Overlayment adoption plans work best used when an implementation has a large scope, and where re-engineering would result in incredibly significant changes to the organization‟s structure. In this case, change management for re-engineering would be so immense that overlayment is the better choice. Overlayment is well suited to content management and benchmarking implementations. Overlayment of a process framework for process definition purposes can lead to confusion but may successfully be used as an interim step to achieve cultural acceptance for re-engineering of existing processes. UPS and Williams E&P used an overlayment adoption approach. Fundamentally changing UPS‟ four core and five supporting processes would ultimately require too

Using Process Frameworks and Reference Models to Get Real Work Done great a change for the employees of UPS to adopt immediately. Rather than lose the projected benefits of adopting the new process framework, the UPS program management group decided to map the existing enterprise processes to the newly defined framework. This mapping became the “glue” that allowed UPS to overlay the new framework atop the existing UPS organization without applying the thensignificant changes to the organization. Through the mapping, employees could begin to see their roles relative to the new framework and how exactly they would participate in getting real work done, without having to give up their existing roles, tenure, and expertise. The overlayment also puts the organization in a better position to fully re-engineer its structure in the future. Similarly, Williams (the larger Williams Companies, not the Exploration and Production division) used the overlayment technique when it first adopted the PCF as a mechanism to organize SOX compliance content. It was unnecessary to reorganize the business around the SOX compliance activities to demonstrate compliance. All that was ultimately required was the adoption of the framework and a consistent mapping between existing enterprise processes and the newly adopted framework. The cost associated with an overlayment is calculated based on the time and resources required to develop and maintain the mapping between the adopted process framework and the existing organization. This cost is difficult to quantify, but most best-practice organizations relate it to the cost of operating the framework‟s center of excellence, since the center of excellence should work closely with process owners to manage the mapping to existing organizational processes. One way to avoid high ongoing costs is to re-engineer the organization to match the adopted framework. However, the decision to reorganize is not without cost either. Re-engineering is closely related to the “don‟t automate, obliterate” philosophy. I t requires a sometimes massive amount of change and potentially causes disruptions to work. Implementation plans should account for these shifts and for the resources necessary to manage the change throughout the work force. ING Life Japan used a re-engineering approach to adopt its framework and also chose not to make changes to the framework before implementing it. After investigating the alternatives, Liam Ward, business transformation manager for ING Life Japan, determined that adapting the framework would reduce or eliminate the benefits of adopting the process framework. The adaptation would move the company further away from the best practice models and expertise other organizations had already contributed to the framework. With strong central leadership, INGLJ was able to completely adopt the process framework without significant prior adaptation. At the beginning of the implementation, some middle and line managers resisted this approach. Over subsequent months, however, the resistance waned as performance results improved and frontline employees began to find their day-to-day workloads decreasing.

Using Process Frameworks and Reference Models to Get Real Work Done Ultimately, less than 10 percent of the adopted framework was changed through adaptation. The main cost associated with full re-engineering is change management. Like any transformational project, the success of INGLJ‟s Transformer Program hinged on the engagement of the organization‟s people. In particular, INGLJ focused on getting input from employees at all levels when making important decisions. Other potential re-engineering costs include lost productivity until all stakeholders understand the new structure and any actual downtime or delays required for reorganization. Strong communication is essential to facilitate re-engineering activities. ING Life Japan realized that it was important to use different ways in which to communicate with all employees. To ensure the appropriate level of engagement in the implementation of the Transformer Program, Liam Ward created a number of vehicles for communication:  Transformer action teams (groups dispersed throughout the organization to

gather feedback and give support),  Transformer Times (a quarterly newsletter), and  the Transformer communications plan (a series of visual aids, like posters and leaflets, used in COO communications to the organization). UPS also identified consistent communication as a key method for reducing the cost of framework adoption and change management activities. When rolling out its initial framework, the program management group created a variety of vehicles to communicate the changes, from screen savers to posters in break rooms and hallways. Another solid, but sometimes confusing, approach to framework implementation is a combination of overlayment and re-engineering. These projects may be multiphased, with overlayment coming first, leading gradually to full reegineering. Organizations may choose overlayment in certain areas of the business but fully reengineer others. If re-engineering is the goal, but the effort and resource commitment is too intensive to proceed, a combination approach may be the best option. After a framework is chosen and adopted in the business, the next step is to adapt the framework to fit the business‟s needs and ultimately integra te the framework into employees‟ everyday work. The framework should ultimately give employees a better of understanding of their role in the business, above and beyond the core uses identified in the frameworks project.

Using Process Frameworks and Reference Models to Get Real Work Done Avoid Premature Optimization

Organizations naturally progress from adopting a framework to adapting it to the specifics of the business, but performing this adaptation too quickly can lead to later rework, a lesson commonly cited by the best-practice partners. The partners learned to avoid premature optimization by taking small, calculated steps in the adaptation process. For example, UPS learned that process changes that span functions or business units generally provide the most benefit but are the hardest to execute. The organization recommends breaking up these efforts into manageable pieces. Linda McCain of UPS suggests that organizations start framework implementations in an individual function, but then have a plan to evolve. The Williams Companies had a similar approach in that it documented only the processes that were required under the SOX act and then addressed new processes as business needs arose. INGLJ recognized that about 96 percent of the annual transactional volume within its paying out and paying in process categories came from only 34 percent of the 132 transactional processes it had identified. Ultimately, INGLJ realized that it needed to address only a small number of sub-processes to make a huge impact on the efficiency of an entire process category. Adoption as a Tool

Taking a big step back and looking at the question of why organizations should be adopting frameworks allows us to consider an important idea: The framework is really just a tool to help accomplish other objectives and tasks. Considering frameworks in that light, what activities does the framework enable or accelerate, and what is the cost of doing those activities without the framework to help? Each of the partners in this study adopted frameworks for one reason: they accelerated the organization‟s journey to achieve its objectives. UPS identified a need to re-engineer the organization, and the framework helped the company achieve value faster. Had UPS not adopted its framework, could it have achieved the same objective? Probably. Could it have done it as quickly or as efficiently as it did? Probably not. The Williams Companies‟ framework helped the organization achieve SOX compliance sooner. Williams had a pressing deadline that demanded immediate attention. Without the adoption of the framework, the effort required to secure buyin from the various stakeholders was immense. The framework made connections between work activities, compliance requirements, and points of accountability explicit. The effort expended to achieve the same end without the framework would have been significantly greater, especially since the scope of the adoption addressed all financial processes across the entire organization — all business units included.

Using Process Frameworks and Reference Models to Get Real Work Done QUESTIONS TO CONSIDER

1. What are the organization‟s business goals? 2. What resources can participate in the center of excellence? 3. What will the framework be used for? 4. What standards must be developed to support framework adoption? 5. What kind of adoption will fit best with the organization‟s cult ure? 6. How can the center of excellence use communication to reduce change management issues? 7. What frameworks will be adopted, and how will they interrelate?


Research Champion Perspective Nimbus The first best practice described in this chapter — Centralize — is a necessary step toward process maturity. Without it, different initiatives — which should reference a common framework — risk creating duplication and contradiction as well as wasting effort. The result would most likely be an ungovernable mess. Maintaining a trusted “single version of the truth” with a centrally governed process framework is critical. Inconsistent implementations discredit the initiative and drastically decrease adoption by the work force. Ownership at each level needs to be clear. This includes design standards, end-user experience, access controls, and governance. The center of excellence (CoE) concept proposed in this chapter is invaluable in ensuring this integrity. CoEs enable the organization to achieve its process framework-dependent goals — typically, continuous improvement of business performance. Our own methodology — the Nimbus Control Implementation Approach (NCIA) — pulls together learning from hundreds of client projects over many years. NCIA is a complete toolkit for those charged with setting up and managing a CoE in conjunction with the use of Nimbus Control. Overview of the Nimbus Control Implementation Approach (NCIA)


The NCIA includes documents, templates, and examples covering every aspect of the work of a CoE including: content governance, skills management, application management, program and project support, and process community development. It also has pre-built best-practice processes known as “accelerators” and toolkits for methodologies such as Lean SixSigma. The development of a CoE follows a common trajectory. Initially, content governance and skills management are typically the CoE‟s highest priorities. As organizational capabilities mature, a federated governance model becomes possible, increasing the importance of other aspects such as process community development. This chapter‟s second best practice— Adopt — is, as explained in the text, counterintuitive. We agree with this finding in one context and disagree with it in another. The particulars of an adoption plan really depend on the intended use of the process framework. Where we agree: If the process framework is being used as a reference model, to

cross-reference the real operating model of the business (described in the report as “overlayment”), by all means, keep it generic. It serves as a reference against which to compare how you actually operate. Many Nimbus clients commonly use generic frameworks to cross-reference the organization‟s operating model. But such frameworks are not normally process decompositions or definitions. Instead, clients use multiple frameworks to document quite different things to their operating model — regulatory compliance requirements, for example — where it clearly serves to have a robust list of compliance requirement statements linked to organizational work, not a deviant version of a framework which an auditor or regulator would see as contributing to compliance blind spots and failure. We agree with the observation in the report that “overlayment” is more likely to be appropriate if the use of the framework is limited to benchmarking or content management. Further, we agree with the report‟s finding that the overlayment of a process framework for process definition purposes can lead to confusion. Where we disagree: In the field of business process improvement, most

organizations use process frameworks as accelerators for developing their own process operating models. This type of framework, which we call “The Intelligent Operations Manual” for all employees, should not be adopted before some adaptation occurs.


This type of framework starts to deliver value when employees adopt it as their operations manual — when it becomes the trusted and simplest way to find and understand “the way we do things here.” The benefits includ e faster staff training, process standardization, higher compliance, higher quality, greater agility, and so forth. A generic process framework can never achieve that. If the organization wants the framework to be applied as an intelligent operations manual, adaptation and enrichment of the content has to happen before deployment, or employees will find it incomplete and inaccurate. It will not make their work easier, faster, or more valuable. In summary, without adaptation, there will be no adoption and no prospect of continuous improvement. An intelligent operations manual acts as a line-of-sight connection between the organization‟s strategy and its operational reality. Ultimately, this sort of framework should include performance metrics in addition to process descriptions, so that the organization can tie performance deficiencies to process areas and prioritize process improvement efforts where they will deliver the greatest benefits. The UPS case study illustrates that process adoption across the enterprise critically depends on the adaptation of a process framework. Once a framework reflects the operational reality of the business, it can be deployed and become a trusted collaborative platform for continuous process improvement and compliance. As described in Chapter 1, this effort can occur in a single, specific process or department. The entire organization does not have to be modeled before such benefits can be achieved.


Chapter 3 Leveraging Tools Best practice in this chapter: Tool Up: Adopt appropriate tools to reduce complexity and increase the long-term value of a framework. Business process management tools help organizations automate governance, reduce complexity, increase flexibility, and manage content according to process frameworks. Some organizations develop homegrown tools while others buy tools designed to meet their specific needs. Deciding when to adopt the tool is also a critical decision. Some of the partners in the study devised and built homegrown tools that evolved as the organizations matured, switching to packaged software only after fully leveraging organic growth. Others were content to manage using homegrown tools, whereas one organization adopted a highly sophisticated, off-theshelf tool from the initial opening of its business. This chapter focuses on the study‟s findings related to tools: when to use them, issues to watch out for, and how the tools can help. TOOLS, DEFINED

One of the study sponsors clearly summarized the decision process regarding tool adoption: “A tool is meant to make something easier to do; an aid. In framework adoption, another way of looking at this is asking oneself, „What am I trying to make easier through the adoption of this tool?‟ If one can‟t clearly answer the question, don‟t implement the tool.” A wide variety of tools are available to automate work related to process framework ownership, maintenance, and overall governance. Many of these tools are focused on a specific use (such as business process modeling tools), while others are capable of supporting not only business process modeling but also content management or benchmarking activities. These tools typically perform one or more of the following functions:  model, organize, and disseminate information;  manage governance workflows and processes; and  measure and report organizational performance.

These functions combine with other extant functions within an organization (such as identity management or core file storage) as a kind of toolkit. Organizations then

Using Process Frameworks and Reference Models to Get Real Work Done build other tools to add to the toolkit, including document templates, workflow patterns, document repositories, and tools to capture measurements. Even more tools are available that specifically handle business process management, including workflow execution tools and tools related to managing and implementing business rules. For the purposes of this study, business process management tools are tools that perform the three core functions defined on the preceding page. Figure 18 summarizes the tools used at the different best-practice organizations participating in this study. Process Framework Tools Type of Tool

Homegrown

Packaged Software

Comments

Benchmarking

Excel, Word, PowerPoint, shared folders, Web-based data collection tools, SharePoint or Lotus Notes collaboration and groupware.

Integration with other BPM software such as Aris, MetaStorm, and Nimbus Control. No specific benchmarkingonly software exists.

UPS uses a proprietary tool called IS/Modeler that allows an organization to measure performance at various levels within the framework.

Observed at UPS. Observed at Cisco and ING Life Japan. Content management

Custom Web-based tools, shared folders, SharePoint, Lotus Notes. Observed at Williams E&P, Pitney Bowes, ING Life Japan, and UPS.

Documentum, Alfresco, OpenText, etc., or a hybrid BPM/content management tool, such as Nimbus Control‟s Document Registry.

There are a variety of best practices; many depend upon organizational culture.

Observed at ThyssenKrupp. Business process definition

Excel, PowerPoint, Visio, Word, shared folders, SharePoint, Lotus Notes. Observed at Williams E&P, Pitney Bowes, ING Life Japan, UPS.

Figure 18

Aris, Corel, MetaStorm, Nimbus Control, etc.

Tools are plentiful in this space.

Observed at UPS, Sandvik and ThyssenKrupp.

UPS‟ adoption can be considered a hybrid, since the organization uses a formal tool (IS/Modeler) but also has developed its own tools to support the definition.

Using Process Frameworks and Reference Models to Get Real Work Done Homegrown Tools

Homegrown tools support the core functions of process framework adoption for most of the best-practice partners. Some homegrown tools were built using simple and widely available office productivity tools, such as spreadsheets, presentations, documents, and diagrams. Others were built upon an existing IT infrastructure to enable more in-depth automation of processes. Yet another class of homegrown tools was developed using existing groupware platforms, such as SharePoint or Lotus Notes. Each of these classes of tools was observed in the process frameworks project from one or more of the partners. (See Figure 18 for more information.) The spectrum of adoption among partner organizations varied. Some organizations adopted more than one of the tools, while others had not adopted any and were still dealing with paper filing cabinets and whiteboards. The maturity of the process partners and sponsors was thus inconsistent, making identification of a singular and allencompassing best practice difficult. However, this suggests that the best course of action is to focus on the type, amount, and scope of technology that will work best for an organization‟s particular needs. Organizations generally clustered around the low end of the tool-adoption spectrum. Pitney Bowes

Among the organizations participating in the process frameworks project, Pitney Bowes has one of the lowest amounts of automation or formality in tools. All of its tools are homegrown and based on best practices as identified in APQC training materials. At the core of its framework adoption lies a series of documents that model and map the organization. Tools Used at Pitney Bowes Function

Finding

Model, organize, and disseminate information

Pitney Bowes uses Microsoft Office-based process modeling and documentation. Shared folders serve as the repository, organized according to the PCF. Development of SharePoint-based tools to further integrate into an existing intranet is the vision.

Measure organizational performance according to the framework and report on results

n/a — Pitney Bowes does not measure organizational performance against the adopted framework at this time.

Manage governance workflows and processes

These are managed using manual document reviews, manual tracking mechanisms, and e-mail distribution.

Figure 19

Using Process Frameworks and Reference Models to Get Real Work Done Pitney Bowes performs these management functions using a variety of roles, including process managers, business analysts, and project managers. Williams Exploration and Production

Williams E&P uses a number of homegrown tools to address its implementations of core frameworks management functions: Tools Used at Williams E&P Function

Finding


Williams E&P uses Excel-based process modeling and documentation. Shared folders serve as the basis, organized according to the PCF. Development of SharePoint-based tools to further integrate into an existing intranet is planned.


n/a — Williams E&P does not measure organizational performance against the adopted framework at this time, although this is planned as it shifts to a process-focused organization.



Figure 20

The Williams E&P team manages all framework-related processes using seven FTEs: three analysts, one technical writer, two support staff members, and one rotational analyst. ING Life Japan

INGLJ also manages its process framework using a series of homegrown tools.

Using Process Frameworks and Reference Models to Get Real Work Done Tools Used at ING Life Japan Function

Finding


INGLJ uses a SharePoint-based process library, containing as-is process maps, to-be process maps, and training materials. Process maps were developed in Visio as well as scanned from hand-drawn images.


INGLJ‟s Management Operating Methodology allows rapid changes to resource allocations based on measurements of framework processes.



Figure 21

UPS

Similar to Williams E&P, INGLJ, and Pitney Bowes, the UPS program management group uses a number of homegrown tools to manage its process framework. UPS, however, has adopted a formal process management tool called IS/Modeler in addition to its homegrown software. Tools Used at UPS Function

Finding


UPS uses IS/Modeler for process modeling and documentation, as well as a Lotus Notes-based repository application.


Proprietary IS/Modeler functionality allows for measuring of cycle time, cost, and FTE allocations.


These are managed using manual document reviews (including “on the wall” sessions), manual tracking mechanisms, and e-mail distribution.

Figure 22

The UPS toolkit is a hybrid toolkit in that a single modeling tool performs all or a portion of two distinct functions: benchmarking and process modeling. The process modeling tool, however, does not include capabilities to manage governance workflows, so resultant process maps are stored in a proprietary format and later

Using Process Frameworks and Reference Models to Get Real Work Done housed in a Lotus Notes repository. The Lotus Notes repository is developed and managed by the program management group. Packaged Software Tools

Packaged software tools provide value to organizations because they reduce the amount of effort expended on work related to process framework ownership, maintenance, and overall governance. Effectively, packaged software tools automate the main framework ‟s functions by combining many tools into a single package or suite that partially or completely automates core process framework functions. The process frameworks project observed only three instances of organizations using packaged software tools to automate process framework processes:  UPS used IS/Modeler to map and measure processes (described above).  ThyssenKrupp used Nimbus Control for its end-to-end process frameworks

oversight and management.  Sandvik used Aris for its documentation tasks. ThyssenKrupp

Adopting a packaged software tool to automate work supporting process framework ownership, maintenance, and overall governance helped ThyssenKrupp realize value and get real work done. Initially charged with taking a greenfield business and applying a consistent management approach, ThyssenKrupp adopted APQC‟s PCF and Nimbus Control software to quickly identify organizational processes and activities, incorporate those identifications into an enterprise process model, and automate the management of that model. ThyssenKrupp realized four core benefits from using Nimbus Control and the PCF. This combination allowed the organization to:  provide business process accountability, control, and oversight;  drive best practices throughout the organization;  align business needs with IT solutions (specifically SAP); and  drive ISO/TS certification.

In addition to these core benefits, APQC‟s PCF gave ThyssenKrupp a starting point from which to define key business functions. The organization began by adopting the PCF at the category level and assigning ownership to high-level functions within the business. These categorizations and assignments drove further decomposition of the framework into detailed operational processes and activities, all defined and managed by individual process owners (Figure 23).


High-Level ThyssenKrupp Process Map

Figure 23

ThyssenKrupp‟s initial goals for continual process improvement could be achieved only with significant automation, which it found was attainable only through automation of the core processes. Tools Used at ThyssenKrupp Function

Finding


Nimbus Control is used to document the process flows and definitions and to disseminate process information.


Nimbus Control integrates KPI metrics visually into the process content against relevant activities.


Nimbus Control is used to achieve change control and manage process-related collaboration.

Figure 24

Using Process Frameworks and Reference Models to Get Real Work Done One of the core drivers for ThyssenKrupp‟s adoption of the tool was the need to quickly get up to speed with a minimal amount of resources and project documentation. Using the process framework and the tool allowed ThyssenKrupp to achieve its tight timeline objectives, as well as to conveniently incorporate additional models (such as iTIL) and overlay ISO standards requirements above the processes with a minimal amount of effort. Sandvik

Sandvik also adopted a packaged software tool to manage the model of its business processes. Use of the Aris Design Platform allows the organization to quickly model enterprise-level processes and develop “business capability maps.” These maps are based on the PCF and link business objectives to processes, organizational charts, and enterprise master data (Figure 25). Sandvik’s Process Models Relat ionship Diagram

Figure 25

Sandvik decided to adopt a tool because it planned to implement its framework and define processes enterprise-wide. The broad scope of the implementation required

Using Process Frameworks and Reference Models to Get Real Work Done additional support, which a sophisticated tool could provide. With revenue from over 130 production units worldwide, ensuring process consistency is critical for Sandvik. Relying upon manual processes at this level of complexity and scope was impractical. Sandvik‟s stated approach to its process work is to “… let our business organization do the documentation. Then we have to minimize the complexity and the cost for using a tool.” The organization had to work with Aris to determine how to adopt the tool in a way that would meet its needs. Tools Used at Sandvik Function

Finding


Sandvik uses Aris Design Platform (including its design and publishing components).

Measure organizational Tools from Microsoft currently provide support. performance according to Sandvik is investigating Aris Strategy Platform for the the framework and report future. on results Manage governance workflows and processes

Sandvik is investigating Aris Design Platform, which includes a component to manage governance, for this purpose.

Figure 26 Conclusion

Most of the organizations participating in the frameworks study did not adopt formal tools to automate work related to process framework ownership, maintenance, and overall governance. They leveraged what they had and learned to use existing technologies to their advantage. The organizations that have adopted formal tools — including ThyssenKrupp, Sandvik, and UPS — depended on these tools and realized value from their adoption and continued use. The implementations involving formal tools had enterprise-wide scopes and were highly centralized, indicating that advanced tools may best serve a broad implementation driven from a central location. IDENTIFYING THE RIGHT TIME FOR TOOLS

Organizations generally adopt tools according to one of three methods: 1. during initial adoption of the framework, 2. as a gradual switch, or 3. as a wholesale change.

Using Process Frameworks and Reference Models to Get Real Work Done Initial Adoption

The objectives of ThyssenKrupp‟s project required the project team to quickly define, assign responsibility for, and design enterprise-wide processes. The new ThyssenKrupp Steel USA plant depended on a greenfield, enterprise-wide application of the process framework. The parent company provided clear objectives at the beginning of the project that were eventually achieved using the process framework and a selection of tools that included packaged software. Based on the project team‟s experience, manually performing the tasks required to succeed would quickly sink the project, due to the effort required to maintain the framework and keep it viable. It was therefore evident that adopting the toolkit and the process framework simultaneously would cost more than performing the adoption and accelerating business process management aspects of work without the tools in place. The initial adoption approach works best in conjunction with the “locate” and “centralize” best practices identified elsewhere in this report. Framework adoption should not take place until the organization determines the scope of the processes to be addressed by the framework and at least conceptualizes some level of centralized governance. Once the organization finalizes assumptions regarding location and governance, the team can quickly move into the tool adoption practice in preparation for actual framework adoption. At this point, there are typically few cultural or business barriers to the tool‟s adoption. The decision to adopt a tool, then, can be based on a simple cost-benefit computation, where the cost of implementing the tool is just the time it will take to adopt it. Gradual Switch

A gradual switch occurs when an organization begins with a homegrown set of tools and slowly migrates to a packaged software implementation. UPS‟ approach exemplifies a successful gradual switch. The UPS team initially began with simple homegrown tools and later began process mapping activities using its IS/Modeler tools. This gradual switch approach was compatible with the “overlayment” approach to process framework adoption UPS took. Gradual switch best serves organizations that have performed some work in the process space prior to deciding to adopt a particular process framework. This approach takes the most time but is most suitable for continual improvement. It takes longer because the change scope includes not only process changes, but also issues related to the process/content management tool. This approach could be compared to “changing the tire while the truck is driving down the road,” but even this risk can be mitigated with proper management. Wholesale Change

Wholesale change is a method designed to drastically change an organization‟s behavior in a short time. Typically, organizations implement a wholesale change

Using Process Frameworks and Reference Models to Get Real Work Done when a new business or organization is acquired or divested and the enterprise must quickly react to the newly available tooling (adopting, adapting, or removing it). APQC does not recommend a wholesale change approach except in cases of acquisition or divestiture, and only then with sufficient training and explanation to those charged with the success of the framework and its tools. The process frameworks project didn‟t identify any instances of wholesale change within the project partners. QUESTIONS TO CONSIDER

1. What work has been done to date? 2. What work should be automated, and how would a tool help? 3. When is the right time for a tool?


Research Champion Perspective Nimbus As a vendor of a business process management application, you might expect Nimbus to be fully supportive of this chapter‟s best practice recommendation— Tool Up. But before considering tools, we need to be clear what is meant by longterm value. In other words: “How are you going to use process frameworks in your organization?” For our clients such as ThyssenKrupp (featured in this report), the end goal is operational excellence — where business processes, related documents and measures are treated as crucial assets for the organization. TREAT PROCESSES AS ASSETS

A process, just like any physical asset, must be looked after and kept current. To achieve this, it is essential to nominate someone as the owner of each asset (or process). Those that need to contribute to or manage the asset may need training to use it efficiently, safely, and according to any rules for its correct use. The performance of the asset should be monitored, and if necessary, it must be repaired or improved. WHO’S INVOLVED END-TO-END?

Nearly all end-to-end processes involve a mixture of manual and automated steps, carried out by different people in different roles at different points in the process flow. Often, those steps involve employees performing activities or transactions enabled by a software application. THE QUEST FOR CONTINUOUS IMPROVEMENT

Operational excellence involves process owners, end users, and all other stakeholders sharing a commitment to continuous improvement of business processes. This is where appropriate process management tools can help. In our experience, organizations are looking for a process management tool that meets four criteria:  It uses the language of process. It is intuitive and readily understood by

process owners, stakeholders, and end users across the enterprise. It engages the enterprise by using the language of end-to-end process, not an IT or other specialized language.  It is holistic. It is comprehensive and enables a complete 360-degree view of the enterprise. At its heart is an integrated hierarchical process model of the enterprise. It encompasses every activity, not just the automated parts. It allows multiple views that meet the needs of different stakeholders.


 It is real. The tool is not an artificial construct; it‟s the DNA of the enterprise.

It blends process with documents, key performance indicators (metrics), and training to deliver a personalized intelligent operations manual which helps people get real work done. It becomes “the way we do things here.”  It is governed. It provides governance capabilities that are powerful but easy to use, so that people trust the content as authoritative, approved, and up-to-date. People adopt content that they trust, and will participate in collaborative and continuous improvement activities that have proved useful and consistent. With sound governance, the tool becomes the obvious platform for driving compliance, risk, and control initiatives as well. IDENTIFYING THE RIGHT TIME FOR TOOLS

Regarding the right time for tools, we have the following comments:  Initial Adoption: Very few businesses are greenfield and able to follow the

example of ThyssenKrupp, which implemented a sophisticated process management tool from the very start of their existence. However, this example does show a best-case scenario of where an organization can strive to be, even if not starting from a greenfield situation.  Gradual Switch: We agree with the strategy outlined here to move when appropriate to best-practice process management tools. This switch can happen early (as shown in the ThyssenKrupp example) or soon after the initial capture of processes in widely available tools.  Wholesale Change: Many organizations do not have a complete and integrated process model describing their operations. So, even though the report only envisages a wholesale switch being likely in the case of an acquisition or divestiture, it‟s worth noting that, in reality, what is considered a wholesale change often manifests as a gradual switch. If the status quo is incomplete and out-of-date content, a quick export and import of this content to a new toolset will only replicate the same result in the new tool. However, it‟s possible that the new tool may speed up the transition and lower the ongoing cost of continuous improvement by delivering superior collaboration and governance capabilities.


HOW TO GET STARTED WITH A PROCESS MANAGEMENT TOOL

Whichever of the above scenarios an organization is faced with, the first steps are to gain agreement on an overall process architecture, establish design standards and a content governance approach, anchor the business case, set up a center of excellence, evaluate process frameworks as accelerators, and deliver training for those involved. With basics such as these in place, an organization would then begin process capture. Sometimes, this would involve the repurposing of processes already documented in another tool. Most often, process capture would happen through live workshops with relevant process stakeholders and subject matter experts — to ensure that the captured process is “real” and that all stakeholders have a shared understanding and sense of ownership. The adoption of a new tool needs to be properly structured; it is never simply about migrating data. But, in our experience, it can occur rapidly, provided that there is clear executive support. TOOLS TO SUPPORT THE BUSINESS PROCESS CONTENT LIFECYCLE

This diagram illustrates the Business Process Content Lifecycle, which helps illustrate the need for appropriate tools to manage process frameworks and their associated content. The lifecycle depicts two main phases in the life of every process asset (e.g., diagrams, related documents, and metrics): development and exploitation. This should be seen as an iterative cycle — you need continuous process improvement, not a single turn of the wheel. Business Process Content Lifecycle


Furthermore, these process assets travel independently around the lifecycle; the entire framework does not move from development to exploitation or to an additional round of improvement at the same instant. Instead, individual process diagrams and related content are improved, approved, and deployed on a continuous and gradual basis. These efforts involve different stakeholders for each asset — different process owners, reviewers, approvers, and ultimately, different enduser consumers of the content who need to be informed of the change and will contribute ideas for additional process improvement. This lifecycle is as much knowledge management as it is process management. Specialized business process management applications can provide the tooling needed to facilitate all aspects of this collaborative effort. This includes improvement suggestions, communication/notification, review, approval, content management (including change control and version management), and the training required to ensure that end-users understand the process content and the behavioral changes which are required. Such specialized tooling can help ensure that a process management endeavor doesn‟t sink under the strain of continuous change— a state implied by the quest for continuous process improvement.


Chapter 4 The Framework Implementation Journey Best practices in this chapter: Measure: View framework implementation according to a fivestep model to better assess the implementation’s maturity and the value it provides. Set Goals: Evaluate framework use regularly to determine which actions to take to increase its value and maturity.

A process f ramework enables an organization to rapidly get on the same “process page” and drive consistency across performance initiatives. Frameworks bring value to organizations in measurable ways and increase businesses‟ fundamental ability to perform. But not every organization is ready to fully exploit a framework. Assessing an organization‟s readiness for a framework or its current capability to optimize an existing framework helps improvement teams plan targets and goals for the organization. An organization‟s framework-related preparedness or maturity can be mapped to a standard roadmap (Figure 27), which guides organizations toward everincreasing levels of optimization and value and sets expectations for what is possible at each stage of development. MEASURE View framework implementation according to a five-step model to better assess the implementation’s maturity and the value it provides.

Based upon observations made during the study, a number of criteria surfaced that hint at the journey an organization may take on its way to realizing the full value of a process framework. The journey is divided into five core steps, or phases: 1. 2. 3. 4. 5.

establish, reference, deploy, measure, and operate.

Using Process Frameworks and Reference Models to Get Real Work Done Organizations may choose not to proceed through all five steps. Since value is realized at each stop in the journey, an organization must determine if the value of proceeding on the journey is greater than the cost to move to the next step. Also, some steps may be taken out of order depending on the long-term goals of the organization; for example, an organization may proceed to measure after reference and skip deploy entirely. The Framework Implementation Journey

Figure 27

1. Establish a Framework

At the lowest level, a framework provides a common vocabulary that can be easily adopted by an organization and used to foster enhanced communication among different facets of the business such as IT, production, sales, and marketing. It also creates a common set of terms that facilitate communication with outside organizations. In this sense, adopting a framework has immediate value with little implementation cost. No realignment of the business is necessary, and the organization can continue to conduct business without disruption. All the study partners exhibited this level of maturity.

Using Process Frameworks and Reference Models to Get Real Work Done 2. Reference a Framework

Beyond a common vocabulary, the next level of value comes from cross-referencing or mapping the vocabulary and hierarchy defined by the framework with the organization‟s real operating model/hierarchy and vocabulary. This step brings value by explicitly comparing process activities with actual behavior, regardless of functional structures or organizational silos. Using a framework as a logical reference model allows an organization to identify similar business behaviors throughout the enterprise and reveals optimization opportunities. Much like the use of a framework for a common vocabulary, the reference model use also has value without realignment or disruption of the business, and implementation costs remain low. The cross-reference requires ongoing support and maintenance, but its benefits usually outweigh the cost of the maintenance effort. As more of the organization learns of the cross-reference and the common language established in the first step, additional parts of the organization may wish to also adopt the framework. This happened at Williams Companies after it completed its cross-reference in support of its SOX compliance efforts. Williams‟ Exploration and Production business unit decided to adopt the framework after learning of the success experienced by the core organization. Many organizations build core governance structures around the cross-reference at this stage of the journey, so the cost of this step relative to the first step (establish) is relatively higher. It is possible to proceed without a core governance structure at this point, but changes made to the cross-reference or to the way the business operates require diligent communication amongst all parties using the framework, thereby increasing the cost to a point where it may not make sense to proceed manually. Tools, either packaged software or custom developed, can provide the necessary infrastructure to facilitate this communication, but they also typically require centralized governance. 3. Deploy a Framework

In the third step of the journey, an organization may begin to organize its structure and functions in a way that manages work in an end-to-end fashion, based upon the cross-referenced process framework or reference model. UPS created its own framework around its business needs by adapting APQC‟s PCF. The organization separated operational processes from supporting processes and then deployed the framework enterprise-wide. At this maturity level, continuous improvement efforts become more easily aligned and executed. The location of the adoption of the framework or reference model is a significant driver of cost and value at this step of the journey. Organizations adopting a framework or reference model with a broad scope must have strong centralized governance structures in place. The cost of maintaining the structure in a distributed fashion for a broad-scope adoption is generally too great to accomplish without

Using Process Frameworks and Reference Models to Get Real Work Done centralized governance structures and related tools. Organizations deploying the framework to a relatively narrow part of the organization (a single process, for example) can generally avoid building a centralized governance structure. Because the deployment of a framework potentially suggests revision/realignment of the organization, it is critical to strategically deploy the framework in a way that directly relates to an organization‟s primary or core process value chains. The organization should make clear, using the cross-reference and other tools already developed, how the framework contributes and supports the work being done and the value being created for customers and the organization. Deploying the framework first in limited, high-priority areas of the business and demonstrating success can pave the way to smoother deployments throughout the remainder of the organization. The deployment strategy and the affected portions of the business should be carefully planned and communicated. When an organization deploys a framework in this fashion, adoption becomes a part of “how we do business,” and concerns center less on the investment required to adopt the framework and more on the cost of not adopting it.

4. Measure Against the Framework

Once deployed, a framework provides a valuable way to measure an organization‟s performance. The ability to perform benchmarking and use metrics relies on having a consistent view of the organization — a view that allows functions to be grouped, measured, and compared against historical and external data. This gives managers the ability to track the relative performance of their organization and provides a platform for deeper analysis and continuous improvement or realignment. A manager typically monitors his or her process domain via “lagging” or “postmortem” measures ( e.g., cycle time to perform a particular process). However, if an organization views its process framework from an end-to-end perspective, then one manager‟s lagging metric can be seen as a “leading” or “predictive” metric for the manager involved with the next step. Tying the measures together can yield a view of the performance of the entire end-to-end process. The framework facilitates the consistent measurement of these organizational process components and enables management to rely on these measures to make critical business decisions. This end-to-end perspective has the potential to save or avoid substantial rework costs. Additionally, it can provide a basis to compare industry best practices through benchmarking services such as with APQC‟s Open Standards Benchmarking database. 5. Operate Through Frameworks

Any program to analyze, compare, and improve an organization must also coordinate the effort so that stakeholders understand what is being studied and managed. The deployed process framework gives managers this capability when it is

Using Process Frameworks and Reference Models to Get Real Work Done used in conjunction with mature measurement capabilities and appropriate feedback loops from strategy to actual work performance. Organizations demonstrating significant experience using process frameworks to get real work done have the ability to accurately describe their business and the initiatives going on within it. They can tie those descriptions directly to the frameworks and models they have developed for themselves, whether those frameworks focus on operations, compliance, or other capabilities. The ability to identify and cross-reference multiple frameworks to the organization‟s vision and self-description enables the business to move forward on many fronts simultaneously. By knowing what it is and how it functions, an organization can make more informed and strategic decisions. What begins as a process classification framework becomes an operations manual for the enterprise. The discussion would not be complete without mentioning that the journey does not necessarily culminate with enterprise-wide adoption of a process framework. An organization may be taking a variety of journeys, either in a single area of the organization, in multiple areas, or across the entire enterprise. The same steps of the journey apply whether the benefits are localized or broad, and the organization chooses how far it needs to go to achieve its goals. Strategy Through Frameworks at the Operational Level

UPS aligned its processes with strategy through the work of its program management group. This group focuses heavily on strategy. With only 25 individuals supporting the management of process within an organization of over 400,000 (Figure 12), the program management group must have a clear understanding of strategy and how processes work together to achieve it. These 25 people are able to align the work of 400,000 employees with the strategic goals of the company because of a custom framework, managed by a center of excellence, that makes strategy and related processes highly visible and contextual (Figure 9). Without this framework, UPS would not be able to clearly assign accountability, and that would relegate strategic initiatives to a very high-level, conceptual space within the organization, separating it from the execution of daily work. The framework guides daily work according to the organization‟s ultimate strategic goals. Operating Multiple Frameworks

In the study, each example of the use of frameworks had its own unique elements: UPS created its framework around specific business needs; ThyssenKrupp Steel adopted APQC‟s PCF and mapped it to multiple compliance frameworks; the Williams Companies adopted APQC‟s PCF and mapped its organizational processes in order to demonstrate SOX compliance. Despite many differences, in all cases, the ability to consistently cross-reference multiple frameworks or external requirements proved that an organization had reached step five (operate) of the framework journey. Williams E&P deployed its framework in a segment of the organization,

Using Process Frameworks and Reference Models to Get Real Work Done and ThyssenKrupp Steel‟s was used enterprise-wide. Although both were deployed at different levels of the organization, both implementations reached the “operate” step because they linked and mapped multiple frameworks, increasing the actionability of their frameworks. Figure 28 shows how ThyssenKrupp manages ISO 9001:2008 compliance as a framework overlaid on APQC‟s PCF. The organization‟s capability to operate a business, including all of its internal and external relationships, through a single, consistent language represents a high level of maturity and is a textbook best practice for the operate level. ThyssenKrupp Steel USA Integrates ISO9001 with its Frameworks

Figure 28

Using Process Frameworks and Reference Models to Get Real Work Done Measure: How Good Are You — Really?

Measuring allows an organization to understand the benefits it can expect at its current phase of the journey, as well as the benefits associated with moving to the next step. By measuring a framework‟s implementation, organizations also can see where they need to shore up use of the framework. Measuring and identifying gaps can bring the following strong benefits:  Increased organizational awareness of the framework (or frameworks) and its

value, both realized and potential — The act of measuring is, in itself, a method for increasing awareness of the framework.  Improved alignment between framework stakeholders and other parts of the organization — For example, measuring could identify a compliance framework that isn‟t properly aligned with underlying process activities. —Consistent measurement of the framework‟s  Enhanced decision making adoption and deployment provides objective evidence that enhances an organization‟s decisions on where to put its energy and resources in terms of the framework journey. Measuring a framework can show that the framework needs to be adapted or customized to better represent the reality of the business. UPS, for example, made a conscious decision to adapt APQC‟s PCF to better represent the realities of its business.  Validation of the choice of framework — Not all frameworks are appropriate for all situations. Once a framework is adopted, measuring the value of that framework‟s deployment against expectations either validates that the choice was a correct one or shows that a different or more customized framework would be a more appropriate fit. When an organization chooses a framework, it should put an implementation plan in place that establishes the timeline for its rollout, associated costs, and expected value to the organization. If a framework is already in place, the same is true. Clearly stating cost and benefit expectations sets the stage for measurement that leads to the achievement of specific goals. SET GOALS Evaluate framework use regularly to determine which actions to take to increase its value and maturity.

Using an implementation model and measuring its effectiveness and progress allows organizations to set reasonable goals for framework use. This also enables the organization to completely envision the eventual benefits and to create individual and organizational commitments to the business community‟s goals. Lacking this

Using Process Frameworks and Reference Models to Get Real Work Done sort of vision, a framework is less likely to initiate change or bring value to the organization. Framework implementation involves setting both short- and long-term goals, and each type of goal reflects a key part of an organization‟s strategy. Short-term goals for framework adoption and eventual growth include simple efforts such as organizational awareness. Short-term goals ensure that initiatives are started and that a foundation is laid for higher-value achievements set by long-term goals. The promises of long-term implementation goals greatly outweigh the immediate benefits of the short term. For example, at the fifth level of implementation maturity (operate), an organization is able to map its strategic goals through the adopted and deployed framework directly to the most important metrics and key dependent processes, even though they may be obscured several levels below those strategies. Setting a goal to map processes to strategy supports a vision of a fully aligned organization. This long-term goal guides decisions made earlier on in the framework implementation journey, helping individual employees catch the vision and execute work and framework-related activities accordingly. When setting goals for frameworks implementation, consider the following:  Organizational readiness. How prepared is my organization to accept the idea

that it needs to put an industry-standard or custom framework in place? The groundwork of support needs to be laid before higher-level and longer-term goal setting can be practiced. To gain support, set and achieve a series of shortterm goals targeted at gaining executive buy-in and educating stakeholders about the benefits of frameworks. An organizations must design its framework journey according to what is most practical for the type of framework(s) being implemented and the benefits expected.  Disruption to the business. If a frameworks goal setting exercise is likely to create contention and other disruptions within the work environment, a communication strategy will need to address this challenge. Organization leadership often views frameworks, like compliance, as essential to business continuity and as proof of the quality of operations. Therefore, they are not optional. However, a framework that has the potential to realign business units and governance, can be viewed negatively by people affected by the changes and can create a challenge in goal setting. Carefully looking at potential disruptions and creating proper messaging and communications can help avoid energy-sapping contention and political maneuvering. Gaining executive buy-in can also make this less painful. For instance, ThyssenKrupp Steel‟s first executive directive — when the number of employees was very small and before

Using Process Frameworks and Reference Models to Get Real Work Done most business groups were formed — was to implement APQC‟s PCF in its entirety.  Maturity of the organization. Each organization has its own level of maturity, readiness to accept new ideas, and ways of doing business. Pain is often the best teacher, and organizations feeling pain from a disconnection between goals and execution are often the most ready for frameworks. A successful, relatively painfree organization would perhaps need more foresight into or evidence supporting the benefits of adopting frameworks before embarking on a prescribed journey. Each organization has a pace at which change cannot be successfully implemented; finding and planning around that pace is critical to the successful journey.  Executive support. Without the support of an organization‟s executives, the implementation of a framework risks being “bolted on” versus adding real value, which is “baked in.” A framework that is simply bolted onto existing ways of doing business may be part of the organization‟s vocabulary but not part of its ethos. Operating without a plan for where to take the use of frameworks will likely limit their value and fail to unlock their potential to transform the organization. Setting goals for frameworks and their maturity helps to build organizational readiness and stakeholder support for the new way of aligning and measuring. QUESTIONS TO CONSIDER

1. What are your organizations‟ drivers for choosing and implementing a framework? 2. Can an organizational maturity assessment help secure buy-in for the work required to move along the journey and ultimately realize the benefits of framework adoption? 3. How will you assess your organization‟s journey to operating using a framework? 4. Which approaches and IT applications will you use to lock in the benefits of a framework? 5. How can your organization make sure that a chosen framework will provide the expected benefits? 6. Which stakeholders will eventually benefit from the framework or frameworks you implement at each step along the journey?


Research Champion Perspective Nimbus This chapter explores the lifecycle or implementation journey organizations go through in order to fully exploit a process framework. The five phases — establish, reference, deploy, measure, and operate — perfectly describe the journey taken by many Nimbus clients who have adopted one or more process frameworks (such as APQC‟s PCF or the SCOR model) as an accelerator for managing and improving business process. It‟s from this typical Nimbus customer experience perspective that we comment on the chapter. When implementing a framework for process management and improvement — rather than for performance benchmarking or content management — the five phases are not taken out of sequence, nor are steps skipped completely. If an organization wants to start measuring performance for benchmarking purposes without having first deployed the framework to a wide audience, bypassing a step may make sense. But if the goal is process management and improvement, deployment of processes along with their expected outcomes is a prerequisite of measurement or operation. Our experience tells us that an organization cannot meaningfully measure performance improvement if the work force hasn‟t been involved in and advised of the process change and the new behaviors and activities which are required of them. We see the operate phase as the natural outgrowth of an organization recognizing the need to have its resources work from a single source of organizational truth that is “live” (i.e., continually updated and available to end users in a time and context that helps them do their work). Regardless of their starting point, Nimbus clients mature to operate one or, more often, multiple frameworks as a means of getting real work done. Amongst the case studies, UPS, ThyssenKrupp, and the Williams Companies receive special mention in this chapter for two main reasons: 1. UPS demonstrated a high level of maturity and exemplified how, in the operate phase, corporate strategy effectively cascades into processes and performance measures, which in turn makes it easier for employees to visualize how business strategy effects their work. 2. ThyssenKrupp and Williams are cited as excellent examples of businesses that have adopted and cross-referenced multiple frameworks, so that operational processes link to compliance frameworks such as SOX, ISO 9001:2008, and others. As a consequence, operational staff, quality specialists, and compliance personnel all share a single, agreed view of the organization‟s business processes, and process improvement and compliance initiatives are addressed in unison.


ASSESSING YOUR PROGRESS

Nimbus frequently helps clients assess their BPM maturity against a variety of measures, which fall under six pillars: IT Infrastructure, BPM Application Environment, Content Governance, Skills Management, Community , and Program and Project Support. These six pillars form the basis of the methodology used to drive long term success from Nimbus Control, which we call NCIA — the Nimbus Control Implementation Approach. More details available from www.nimbuspartners.com/services/NCIA-methodology .


Case Study Cisco Systems, Inc. SECTION 1: GENERAL O VERVIEW AND BACKGROUND

Cisco Systems, Inc. is a leading provider of computer products and solutions. Building on its core business of networking systems, the company now produces a wide range of hardware and software for voice and video collaboration, data center operations, wireless applications, and consumer use. Cisco is headquartered in San Jose, California, and has more than 67,000 employees in 75 countries. Revenue for fiscal year 2010 was in excess of $40 billion. Cisco‟s business structure contains:  six business groups,  15 technology groups,  51 business units,  30 worldwide development centers, and  20,000 engineers.

In line with Cisco‟s vision of “balancing innovation with operational excellence,” these diverse groups share processes for determining business strategies, developing products and services, and delivering those products and services to users. Each process is designed to enhance the company‟s performance in diverse and expanding markets while delivering consistent value to its customers. Use of APQC’s Process Classification Framework (PCF)

Cisco uses APQC‟s Process Classification Framework (PCF) to organize its many processes and initiatives (Figure 29). The Cisco Priority Assessment Dashboard (CPAD), the company‟s process for setting corporate direction, falls under PCF category 1.0 Develop Vision and Strategy . The Cisco Product Development Methodology (CPDM) — used to ensure coordinated, quality-driven engineering — is an example of a process found in 2.0 Develop and Manage Products and Services . Category 4.0 Deliver Products and Services houses Cisco‟s Quality Management Operating System (QMOS), while benchmarking — which is how Cisco closes the loop on processes — is a prime example of a 12.0 Manage Knowledge, Improvement, and Change process.


Cisco’s Use of APQC’s Process Classification Framework

Figure 29

Each of these processes will be explored in detail throughout this case study. SECTION 2: APQC CATEGORY 1.0 — C I S C O ’ S S T R A T E G I C PLANNING

Cisco‟s corporate direction at each business level is determined using the organization‟s Vision, Strategy, and Execution (VSE) alignment template. VSE is a formal process that identifies a long-term goal, finds the strategies involved in reaching that goal, and puts forth the supporting programs, actions, and metrics (Figure 30).

“There are three elements that assure quality around the VSE: people, process, and tools.” — David Hsiao, director, corporate quality


Cisco’s VSE Alignment Template

Figure 30

Under VSE, the “vision” is the top level— where the company intends to be in five years for a particular business objective. Based on that vision, corporate councils, boards, and functions define the “strategy”— the priorities necessary to achieve that objective. Finally, VSE requires “execution”— the initiatives, programs, and actions that deliver each strategic priority and a plan for measuring the success of each. While the vision remains consistent, the strategy and execution may change as products and markets evolve. Strategies are commonly adjusted every year, and execution methods may change more frequently, as conditions demand. VSE is applied across Cisco as a common language for all business opportunities. Almost every major program within the company uses VSE to set its direction. Cisco provides numerous resources to ensure that VSE remains an integral part of its approach. The templates and VSE training are available online to all employees, and the process is open to internal and external feedback for continuous improvement.

Using Process Frameworks and Reference Models to Get Real Work Done SECTION 3: APQC CATEGORY 1.0 — THE CISCO PRIORITY ASSESSMENT DASHBOARD

VSE is a central part of Cisco‟s transition to a collaborative, scalable, and repeatable strategic process. The company‟s methods have changed considerably in the past decade. As late as 2005, it set its business objectives using a top- down “command and control” structure. The operating committee established one priority per year for each line of business. Rapid technological change and emerging business opportunities soon required a broader approach. In 2006, the company began using a collaborative “council” process to set corporate direction. With 50 senior executives serving on interrelated business councils, the company expanded its yearly strategy to include emerging markets and the development of new technologies adjacent to its core business. Today, Cisco uses councils, boards, and working groups to create its comprehensive strategy, drawing on up to 2,500 employees to address over 30 market adjacencies per year. The Council Structure

The operating committee and corporate alignment board oversee the interaction of 15 councils. Three broad categories of councils provide specialized and collaborative input into the corporate direction.  Corporate segment councils, by area of customer relevance:

    

Enterprise Commercial Service provider Small business Consumer

 Cross-segment councils, addressing innovation and operational excellence

across business functions:  Emerging solutions  Connected architecture  Emerging countries  Connected business opportunities  Functional councils, organized along Cisco‟s internal structure:

   

Cisco Development Organization (CDO) Sales Cisco Services Operations

Using Process Frameworks and Reference Models to Get Real Work Done  Cisco Marketing Organization (CMO)  Finance

These councils augment the standard functional councils of Cisco‟s business function and help the company manage emerging markets, broaden product lines, and “cross the chasm” in technology development. Crossing the Chasm

The “chasm” principle comes from businessman and author Geoffrey Moore, who identified a consumer gap in the technology adoption life cycle, between the introduction of new technology and its full-scale integration into the business environment. Left unattended, this gap prevents new products from reaching their potential and becoming successful in the marketplace. To overcome the chasm, technology must solve real and diverse problems for users. The Cisco Priority Assessment Dashboard is a management tool for key early-stage priorities, those after a technology product‟s introduction but before mainstream adoption. It augments the VSE by providing a clearly defined assessment framework for the VSE‟s strategies and actions. CPAD allows the company to:  measure market adjacencies and emerging technologies;  identify growth opportunities and expand customer value;  accelerate the company‟s entry into new markets;  enhance its collaboration, problem-solving, and resource allocation;  utilize a scalable, repeatable, and flexible decision-making process; and  track the progress of company priorities.

CPAD uses a phased approach to score these opportunities and technologies (Figure 31). The process takes the priorities and actions from the VSE and subjects them to real-world testing. The vision, strategy, and business model for the product or service are developed during phase one. Phase two involves early product deployment and developing leadership in a narrow market segment. Phase three expands the product or service into a wider market, and phase four integrates it into the traditional operations and functions of the company.


Cisco Priority Assessment Dashboard (CPAD) Phases

Figure 31

The CPAD process is documented and supported by templates, and each phase has defined success measures. SECTION 4: APQC CATEGORY 2.0 —CISCO’S PRODUCT DEVELOPMENT PROCESS

Engineering and product development is managed using the Cisco Product Development Methodology (CPDM). It coordinates the work of the technical and business functions within the company as a product moves from concept to delivery. All technical aspects of product development are divided into the following business layers, or phases:  Concept  Plan  Develop  Validate  Launch

Using Process Frameworks and Reference Models to Get Real Work Done  Sustain  End-of-life

The business layers may include multiple technical layers, each responsible for one aspect of product development. Phase Verification and Approval

When a phase is complete, the product must pass through a “checkpoint” and a “commit gate.” The checkpoint verifies the work and deliverables of each phase, as defined by the technical functional organizations. The commit gate is the final review and management approval before moving to the next phase of development. Six commit gates occur during a product‟s life cycle:  Concept commit  Execution commit  Development commit  First customer shipment readiness review  Global availability commit  End-of-life commit

Each commit gate represents a key decision point in the life of a product. By ensuring the coordination of management and technical functions at these points, CPDM provides:  project accountability,  product quality,  business and technical coordination, and  visibility and control for management.

The process is flexible, well documented, and readily available. All test plans, required specifications, design approval documents, and other templates are stored online and are downloadable. This documentation includes a “flexibility procedure,” which is used to customize the standard CPDM process to fit specific product requirements. The methodology behind CPDM also allows the lessons of prior products to be fed back into the development process (Figure 32). When the end-of-life phase is complete, Cisco analyzes all phases of the product‟s life, reports those findings, and integrates the results into the beginning of the next product development cycle.


Cisco Product Development Methodology Closed Loop Learning

Figure 32

SECTION 5: APQC CATEGORY 4.0 —CISCO’S VALUE CHAIN MANAGEMENT PROCESS

Over the past 20 years, Cisco has moved steadily away from the in-house manufacturing of products. Today, it outsources 95 percent of its production to an “ecosystem” of manufacturing suppliers. In response, the Global Business Operations unit shifted its focus from manufacturing oversight to management of an extensive worldwide value chain. The company views efficient, quality-based value chain management as an essential component of quality, market leadership, and the customer experience. Cisco uses Customer Value Chain Management (CVCM) to control every aspect of product delivery throughout this network and the organization (Figure 33).


Cisco’s Customer Value Chain/End -to-end Customer Experience

Figure 33

CVCM incorporates multiple groups and functions within the company as well as the input of top customers and sales channel partners. Members of the CVCM team are located with, and are part of, the company‟s working teams to represent value chain interests at every level of product delivery. SECTION 6: APQC CATEGORY 4.0 — QUALITY MANAGEMENT AND QMOS

CVCM‟s integration reflects Cisco‟s view that product quality and value chain consistency are the responsibility of every group in the organization. Prior to the implementation of CVCM, a number of independent quality processes were in place, but a lack of coordination prevented optimal results. In 2008, Cisco formed a team to develop a new, cohesive method for managing quality at every level. The result is the Cisco Quality Management Operating System (QMOS), an organization within CVCM designed to bring groups and processes together to drive quality (Figure 34).


Cisco’s QMOS Operating Model and Governance Structure

Figure 34

QMOS is not a stand-alone business group. To ensure consistency and organization- wide implementation, it is composed of members from across Cisco‟s business functions and groups. These members review existing quality processes, establish metrics, and drive the adoption of processes within their working groups.

“[QMOS is] a common environment where we can plan together, act together, and deliver together on common goals and then measure that output as we go forward.” —Giselle Stancic, CVCM market intelligence and benchmarking manager QMOS has its own VSE, expanded to Vision, Strategy, Execution, and Measurement, or VSEM. Internal and external quality measurement is an important part of, and input to, the QMOS process. For example, Cisco collects over 105,000 customer surveys annually, and the results together with internal operational metrics

Using Process Frameworks and Reference Models to Get Real Work Done are considered in the determination of quality processes. Review is also part of the metric process, and each measurement is evaluated and modified for appropriateness, accuracy, usefulness, and customer impact. SECTION 7: APQC CATEGORY 12 — BENCHMARKING WITHIN CISCO

External benchmarking offers Cisco the opportunity to improve its processes by learning how other companies handle similar processes successfully. Throughout its benchmarking initiatives, Cisco has discovered that every organization has its own language, which can make benchmarking a challenge. Cisco uses APQC‟s PCF to simplify the “translation” process. The company has discovered that using the categories — both at the top level and the drill-down levels underneath — facilitates the exchange of information and best practices, both in one-on-one and group benchmarking projects. SECTION 8: SUMMARY

Cisco‟s current practices and processes provide a consistent approach to rapidly changing and expanding technology markets. The company places great value on collaboration and coordination throughout its strategic, development, and delivery processes. This integration allows the company to take advantage of new markets and opportunities in a reasoned and consistent way, while preserving the customer experience and value that has made it a market leader.


Case Study ING Life Japan SECTION 1: GENERAL OVERVIEW

ING Life Japan (INGLJ) is embarking on its second year of transformation. It will be difficult to top the results of the first. The organization has: 1. reduced staffing from 167 to 100 core Operations people while maintaining current volume, 2. decreased call handling time by 25 percent, 3. reduced cycle time for all transactions by 50 percent, 4. been ranked top performer for Contact Center in the entire industry within the country, and 5. accomplished it all at a cost equivalent to four FTEs. And this is only the beginning for ING Life Japan (INGLJ) as the organization begins its second year of transformation. So how does an organization with over 700 people managing 25 billion in assets accomplish such results in a short amount of time? Just two words: process framework. The design and implementation of INGLJ‟s framework is based on four components: process improvement/business process framework, a management operating methodology, quality assurance, and people. These components are described in detail in the remainder of this case study. At the core of INGLJ‟s transformative journey to become one of the highest-performing Operations functions in ING Asia Pacific is the way it harnessed the power of a process framework by linking management activities to the day-to-day work that was occurring. Easy to say … not so easy to do. ING Background

ING Life Japan is part of the ING Global corporation, which includes 107,000 staff members in 40 countries, serving more than 85 million customers. ING‟s core service areas include banking, investments, life insurance, and retirement services, with over 1.1 trillion Euros in assets under management. INGLJ‟s journey began in 2009 in response to the global economic crisis that was having a significant impact on financial institutions — not just in terms of revenue, but also in terms of how organizations operated on day-to-day basis. Increasing governmental oversight and regulations as well as changing customer expectations created a catalyst for transformation. Although INGLJ was not as heavily impacted as some other financial service organizations, its leadership knew that it had to make changes to maintain INGLJ‟s current level of success. This meant improving

Using Process Frameworks and Reference Models to Get Real Work Done services that customers valued to increase brand awareness and reducing costs to maintain profitability. Every function within INGLJ was given targets to reduce unit (transaction) costs within a very short timeframe. With a strong focus on cost reductions, INGLJ leadership turned its attention to the Operations function as one source of potential savings (in most organizations, Operations is not a profit center). Operations at INGLJ consists of four main areas under the direction of the chief operating officer: underwriting, customer service, customer contact, and business engineering. This group initially consisted of 167 core Operations staffers, with 100 interacting directly with customers and accounting for approximately 2.2 million transactions per year (Figure 35). INGLJ’s Operations Structure

Figure 35

The Process Framework Journey Begins

In November of 2008, INGLJ conducted a four week audit of its core operations and concluded that although performance was in the “green,” it was significantly behind other ING regions in terms of service quality, performance, and cost. Although executive leadership felt the external push for improved performance in response to the global economic crisis, it was a tough sell for many middle managers who felt performance was good enough. Leaders saw this as a perfect opportunity to create breakthrough transformation for the organization, so the Transformer Program was established to move the work forward. Liam Ward, business transformation manager, was brought in to lead the effort based on his success in developing a process transformation framework with ING Australia. The goal was to not simply learn from ING Australia‟s best practices but to adopt those practices as holistically as possible. INGLJ‟s chief operating officer at the time felt this would provide the greatest chance for overall success.

Using Process Frameworks and Reference Models to Get Real Work Done During the initial stages of the Transformer Program, it became apparent that INGLJ did not have the operational levers in place to identify, implement, or manage systemic change. The biggest piece of this was the inability to really understand, in a quantitative way, the work that was being done on a day-to-day basis. The impact of this was that nobody knew where to apply improvement methods or what the impact could be. The team responsible for the Transformer Program saw five critical weaknesses that needed to be overcome: 1. Very few processes were formally identified and mapped. 2. The majority of operational knowledge was tacit, held in people‟s heads. 3. There was no common process governance model, which led to large variations in the way processes were managed and ultimately in the types of services and deliverables customers received. 4. Lack of common processes perpetuated uncommon performance measures, making it difficult to track, compare, and monitor process performance across Operations. 5. Lack of visibility into the day-to-day workload made it extremely difficult to provide resource leveling. In response to these challenges, four initiatives were established as the core components of the Transformer Program (Figure 36). These were:  streamlining the complexities of the processes by developing a framework to

govern process improvement ,  implementing a management operating methodology,  introducing a quality assurance program, and people ).  increasing employee engagement ( In the end, INGLJ was recognized as having a best-practice Operations area within the ING Asia Pacific region. The following sections describe the objectives and goals, implementation strategy, success factors, and impacts of each of these initiatives.


Core Elements of ING Life Japan’s Transformer Program

Figure 36

SECTION 2: PROCESS IMPROVEMENT

Liam Ward, manager of the business transformation team that was responsible for the Transformer Program, made it very clear that the first initiative had to be process improvement. The key to this work was to take a step back and get a complete understanding of what work was actually being done. How many people were involved, how long tasks took, the volume of transactions, and the frequency of processes across the entire Operations function were all vital pieces of information. Without this knowledge, there would be no way to evaluate process improvement opportunities, measure change, or evaluate success. The process improvement initiative had five goals that defined success: 1. Improve productivity by 50 percent, reduce head count by 30 percent, and reduce overtime by 14 percent. 2. Create a business process framework for Operations based on APQC‟s Process Classification Framework (PCF). 3. Apply Lean principles to all Operations activities to identify value-add from a customer perspective. The end results were to eliminate waste (resources and capital) and to remove unevenness across service delivery. 4. Enhance transparency of process tasks, workflows, and measures across all levels of management and staff. 5. Move the organizational culture into one focused on process improvement as a key value creator by training and involving all staff members in the work. All

Using Process Frameworks and Reference Models to Get Real Work Done employees, from front-line employees to the COO, should be fully engaged in the process improvement framework and fully immersed in the cultural change that they would be going through. These goals were accomplished by creating the business process framework (BPF) (Figure 37) that aligned core operational processes throughout the entire organization. It is important to note that at this time INGLJ did not have a central repository or governance for any of its processes. Therefore, the development of the BPF was a new and necessary initiative. INGLJ’s Business Process Framework

Figure 37

The BPF included five stages for developing and maintaining processes across INGLJ:  design,  modeling,  execution,  monitoring, and  optimization.

Design

Design work encompassed both the identification of existing and the design of “to be” processes throughout the entire business cycle. It focused on representation of the process flow, the actors within it, alerts and notifications, escalations, standard operating procedures, service-level agreements, and task hand-over mechanisms. Microsoft Visio was used for process mapping, SharePoint for storing and accessing

Using Process Frameworks and Reference Models to Get Real Work Done documentation, and Microsoft Excel to manage the list of process and associated targets and measures. All aspects of the processes, including human-to-human, human-to-system, and system-to-system workflows, were designed or redesigned according to targeted regulatory challenges, market, or competitive challenges faced by the business. Modeling

The bulk of the modeling effort was allocated to mapping the “as-is” state, but there was some discussion about theoretical design. For example: If cost, system capabilities, time, and customer needs were not limitations, what would the ideal process look like? After the as-is mapping was complete, the next step was to develop “what if” scenarios, or process exceptions, to ensure tasks could be completed no matter what happened. During modeling, the team identified specific steps, tasks, and outputs that historically have had high levels of rework, either automated or manual. These data were a critical input to the second initiative, the management operating methodology. Execution

Here the focus was on identifying all non value-added activities or process bottlenecks that were impediments to improving performance goals and removing them from the process. In addition, tasks that had the longest cycle times, not due to any impediments, were highlighted and contextualized to explain why. This phase also included a risk assessment for each process. Monitoring

This step encompassed the tracking of all process steps so metadata (the who, what, when, where, and why) would be current and available, and statistics pertaining to process performance could be provided. Ward made this point clear: “We could map, design, and create new process, but if we didn‟t understand the impact [on outcomes], it [would be] difficult to justify the costs associated with the change.” Process performance measures developed during this phase typically fit into one of three categories: cycle time, defect rate, or productivity. Each was monitored to various extents based on what information the business wanted to evaluate and analyze. Optimization

Performance data (both qualitative and quantitative) gathered during the monitoring phase were reviewed to further identify bottlenecks and potential opportunities for design enhancement. Special attention was paid to tasks that could be automated for “quick wins” or to improvements that would impact multiple processes.

Using Process Frameworks and Reference Models to Get Real Work Done Supporting Tools and Deliverables

In conjunction with the development of the BPF, the team created a set of tools and deliverables that were used to manage the BPF itself as well as the five-steps just described. First was the process matrix, which was a spreadsheet that held all the metadata about each process. For example, Figure 38 shows a portion of the process matrix for set of transactional processes in the paying out and paying in process categories. Data were collected pertaining to service levels, service expectations (expected cycle times to complete the transaction), annual transaction volume, the existence of a map, and whether the process had gone through the optimization phase. The matrix played an integral role in the entire process improvement initiative as it finally gave the team and other staff members a way to visualize the impact of each process, as well as the potential return on investment for improvement activities. ING Life Japan’s Process Matrix

Figure 38

The Transformer team soon realized that that only a small percentage of the 132 processes had to be optimized initially to see a significant return. Thirty-four percent of these processes accounted for 96 percent of the annual transactional volume. This provided crucial data for prioritizing which processes should be focused on first as part of the Transformer Program initiatives. Prioritization was also based on:  critical processes that must be completed,  high transactional volume, and  whether the process was categorized as major or minor (major meaning

transaction volume higher than 100 annually or monies as the transaction medium).

Using Process Frameworks and Reference Models to Get Real Work Done The second tool in the BPF, a process library created on the internal SharePoint portal to provide information for all employees, includes as-is maps, to-be maps, and training materials. The key here is that the information was available to all employees. The last tool was the implementation of two process improvement methodologies: One Touch and Lean Kaizen.  One Touch: Eighteen of the operational processes were selected to go through

the One Touch methodology, which is based on drastically reducing the number of touch points in a process. Essentially these 18 processes were redesigned and optimized to have only two touch points — one to handle the actual work associated with the transaction and one for quality control. Some of these processes had upwards of seven touch points, so redesigning them was a fundamental leap in the way work was completed. It was a simple concept that had a huge impact in terms of efficiency and cost savings.  Lean Kaizen: The main goal of this methodology was to eliminate waste in the

form of waiting time, unnecessary interruptions (avoidable phone calls and staff movements), over-quality (focus on what customers truly value and remove the rest), over-processing, and load-balancing workloads. Employees were beginning to be multi-skilled. Therefore, the number of individuals touching the process could be reduced, and they could work on a broader range of processes. Throughout the implementation of this methodology, INGLJ made a conscious and concerted effort to leverage a more bottom-up approach as Kaizen ideas were solicited from all employees. SECTION 3: MANAGEMENT OPERATING METHODOLOGY

The next step after building the BPF was to figure out how to support the work necessary to complete the processes. The Management Operating Methodology (MOM) was established to support this as a framework within which employees do their work. It was a consistent, reliable, and integrated system for planning, decision making, executing, and reporting on activities. In support of the BPF, MOM also enabled managers to effectively plan and manage day-to-day activities in the most efficient and consistent way by:  Setting standards in which to plan, organize and assign work, and monitor

progress and performance. This provided consistency in the way that activities and performance were communicated, reported, and tracked.  Providing a daily monitoring system to identify variances and the means to correct them quickly.

Using Process Frameworks and Reference Models to Get Real Work Done  Having a clear reporting framework for all management levels. This enabled

follow-up on work assignments and ensured that work was completed on time, to service and quality standards, and conformed to all business requirements.  Clarifying roles and responsibilities for key processes. This ensured that people were held accountable for their work and performance.  Aligning and reinforcing the right behaviors. The MOM was designed to help ING Operations measure what really matters and to enable teams to make sound operational and strategic decisions in a timely manner. It includes tools that facilitate corrective action, develop root cause analysis, and determine the exactly what the organization needs to accomplish its business goals. ING Life Japan’s Management Operating Methodology (MOM)

Figure 39

The following five steps, shown in Figure 39, are the core components of the MOM: 1. Forecast — This step combines historical trends, real-time data, and management judgment to provide a more reliable method of predicting future volumes. A forecast is created for every process on a daily, weekly, monthly, and annual basis.

Using Process Frameworks and Reference Models to Get Real Work Done 2. Plan — This step involves translating the forecast into workload by applying standards and constraints and then assigning resources. In combination with robust forecasting, the plan allows more accurate matching of resource levels to the expected workload. 3. Schedule — In this step, the plans are converted into work that has to be completed to effectively meet plan targets. Each schedule matches the work to be done to the resources required to complete the work, such as labor, equipment, and materials. It also details the service expectation (the amount of time to complete the transaction), ensuring staff members are allocated a fair day‟s work, and tracks actual performance so that teams can detect any variances and remove them from the process. 4. Implement — This step manages actual performance against planned performance in real time to identify and correct variances. This is essentially measuring the health of the process, allowing the team to take timely action to ensure it meets daily business objectives. Many circumstances can impede the delivery of the daily plan, so effective short interval controls are needed. The measure and control activities within implementation are seen as a supportive, which encourages employees to focus on performance-to-standard and to articulate barriers. Review meetings (“huddles,” which are described in more detail later) are a key component of this phase. 5. Report and Evaluate — Reporting is clear, consistent, and timely, showing performance against the plan, and provides the foundation for increasing the accuracy of forecasting, planning, and scheduling. This phase is well-rounded to account for quality, service standards, and cost. Through reporting and evaluation, management is able to identify variance to plan, determine the root cause of the variance, and subsequently determine the corrective action required. Overall, it becomes a systematic approach to permanently remove problems from the business. One of the critical success factors of the MOM implementation was the ability to visualize the business. To provide this ability, INGLJ created four tools to forecast, schedule, and report process results. These tools were the driving force behind the Transformer Program‟s success at exceeding goals for customers, employees, and shareholders. The MOM tools are: 1. Master schedule (MS) — a spreadsheet-based tool that incorporates daily forecasts, daily schedules, and a monthly summary of resources. It translates expected transaction volumes into the resource requirements needed to complete the work to quality, cost, and delivery requirements. The MS uses a measurement called service expectation, which is the number of units of work a competent operator can complete per hour under normal circumstances. 2. Daily reporting — hybrid reports that link transactional data from the mainframe to offline data (process metadata, for example) stored in smaller databases. The

Using Process Frameworks and Reference Models to Get Real Work Done daily report displays the results for the previous day for each administrative team. Data elements in the reports include:  Number of staff members on each team  Total staff members scheduled to be in the office on the day of the report  Available hours minus shrinkage (noncore activities, i.e., meetings and     

training) Forecasted hours, calculated based on case volumes Actual hours received and completed Variance, or the difference between cases forecasted and actually received Outstanding cases not completed for the day Attainment, or completion rate

3. Whiteboards —used to clearly demonstrate each team‟s current workload and highlight the performance of the team relative to the previous day. 4. Daily huddles —used at the start of each day to review the previous day‟s performance and detail any issues that may affect achievement of the current day‟s goals. Each workday begins with one huddle for management and another for managers and their individual teams. Managers also conduct floor walks to see if each team member requires any assistance and to monitor the day‟s overall performance. The daily reporting, whiteboards, and daily huddles all fall under the Active Management umbrella. This proactive approach to the daily management of Operations allowed for early detection of variances to work plans. SECTION 4: QUALITY ASSURANCE MODEL

To ensure the BPF and the MOM provided ongoing tangible benefits, measured in terms of business competitiveness, a Quality Assurance (QA) and Monitoring model was also created and deployed for Operations by the Transformer Team. This model enabled managers to provide constructive feedback to workers and to evaluate the processes themselves through consistent and structured evaluation of activities. The QA work, in conjunction with all the data collected and reported in the MOM, gave an accurate and immediate view of the process environment that could be used to ensure overall quality. The transportation team, as an independent function, provided governance for the QA model. Quality Assurance has four distinct elements, shown in Figure 40: 1. Complaints — reporting, servicing, and action plans to reduce the number of customer complaints received. All complaints are tagged to the process framework by process, which provides extremely valuable data for the optimization process. The processes with the most complaints are good

Using Process Frameworks and Reference Models to Get Real Work Done candidates. The data can also be used in the design or redesign phase for the “to-be” state for processes. 2. Voice of customer — activities focused on gathering value-based data from customers. This is done through the use of customer satisfaction surveys as well as the calculation and reporting of the Net Promoter Score (an industry standard method of evaluating customer satisfaction and loyalty). 3. Quality control — data from all transactions, which are checked by Operations team members. This core set of data is used to identify errors by task, work stream, or the larger process. Management monitors these data to identify specific work tasks that have a significant number of errors. Solutions are additional training for the staff or process optimization/modification. 4. Quality monitoring — random quality control, achieved and rechecked by the monitoring program after a transaction has been completed. This check is used within the contact center once a call is finished. ING Lif e Japan’s Quality Assurance Program

Figure 40

SECTION 4: ENGAGING PEOPLE

Employee engagement was driven by factors based on demographics and perceptions (Figure 41). The factors that were most important, or most valued by employees, were also the motivating factors that drove engagement. This information gave the Transformer Program team insight into which factors to focus on first to improve employee working life. The team realized that many of these factors were directly related to the processes in the BPF and that streamlining these processes through the Process Management steps and balancing resources with workload as indentified by the MOM would increase employee engagement.


INGLJ’s Employee Engagement Model

Figure 41

Improving employee engagement was not as simple as aligning the motivating factors with the process work. It would have been easier, in terms of time and cultural inertia, to simply adapt the best practices from ING Australia into the culture of INGLJ. But it became apparent that adapting would compromise the scope and benefits and ultimately change the practices too much. The COO decided that the only option was to adopt best practices and change the culture to fit the practices. At the beginning, some middle and line managers resisted this approach. This resistance reduced after a few months as performance improved and frontline employees saw their day-to-day workloads decreasing. The staff became much more engaged, and the culture began to shift, as people found that the process framework, MOM, and quality assurance initiatives greatly impacted work-life factors. The continued success of the Transformer Program depends on the level of engagement people have throughout the process. Thus, it is important to provide opportunities for the staff, from all levels within Operations, to be involved in key decision-making activities and to make the whole process (the management of the framework) transparent. This is accomplished through three communication mediums: 1. Transformer action teams — groups of frontline employees working with the business transformation team to provide feedback on all change initiatives in the Operations area. Every team in Operations is represented by a member in a monthly meeting. Transformer action team members work as ambassadors, collaborating with their own teams to receive feedback and communicate changes. Managers are not allowed to be part of this frontline working group. 2. Transformer Times — a quarterly newsletter, much of which is written by employees, is sent to all Operations employees. It includes updates, staff

Using Process Frameworks and Reference Models to Get Real Work Done profiles, an events calendar, and Q&A. The newsletter is placed on the recreational area of SharePoint for easy access. 3. Transformer communications plan — a series of visual aids (posters, leaflets, and e-post e-post cards) is used in the COO‟s communications to the entire organizations, monthly Operations manager meetings, and quarterly town halls. SECTION 5: CONCLUSION

ING Life Japan has moved their Operations function from the middle of the pack to one of the top performing in the entire ING Life corporation — all all within a single year and at a relatively low cost compared to the realized benefits. While the journey has started off with many successes, the Transformer team has a lot of work ahead of it in the coming years, as success breeds higher expectations. The focus for the next phase of implementation implementation is going to be on integrating knowledge management best practices into the framework, implementing ING common process (from a regional perspective), and beginning the work of moving the framework into other functions in the organization. organization.


Case Study Pitney Bowes SECTION 1: GENERAL OVERVIEW

Serving the $250 billion U.S. “Global Mailstream” market, Pitney Bowes has continuously operated since 1920, earning over $5.6 billion USD in revenue in 2009. Pitney Bowes has acquired 83 companies since the year 2000. These acquisitions include high-tech companies involved in customer relationship management, litigation support, and traditional mail services. Pitney Bowes also maintains a robust intellectual property portfolio including more than 3,000 patents worldwide. Pitney Bowes uses their framework to get real work done. Their Mailing Solutions Management line of business defines and manages business processes and organizes its content using the framework. Pitney Bowes is unique in its bottom-up adoption of a process framework, which continues to spread through the business. Although the organ ization‟s use of a framework began as a high-level business transformation project within one of its divisions, the project hasn‟t yet left that single division. The spread of the process framework outside that division of Pitney Bowes can be credited to the work done within that department. Considering the unique way in which Pitney Bowes is using the process framework, it should not be compared to organizations with more centralized or well-funded business process management (BPM) initiatives. Pitney Bowe s‟ excellence comes from the bottom-up way in which the framework was adopted and is currently being adapted. Pitney Bowes lines of businesses include: Mailing Solutions Management (MSM), Pitney Bowes Business Intelligence (PBBI), Pitney Bowes Managed Services (PBMS), and Mail Services. The Global Process Management team is chartered under Mailing Solutions Management and consists of four global process owners and three directors, each responsible for components of process management and business transformation within Mailing Solutions Management. The Customer Operations organization is responsible for managing key customerfacing functions and processes for the Mailing Solutions Management organization. Initial work on the Business Transformation project included the Pitney Bowes Business Transformation team (composed of members of the Customer Operations organization and the Global Process Management team) and a professional services services firm.

Using Process Frameworks and Reference Models to Get Real Work Done SECTION 2: A SHORT HISTORY

In 2007, executives in Pitney Bowes‟ Mailing M ailing Solutions Management recognized the need to modernize and streamline their operations and become a more customercentric organization. The executives initiated a project to review and enhance the policies and processes surrounding their customer billing processes, a core customer-facing customer-facing function within the organization. Objectives for this “billing transformation project” were to reduce billing complexity and cycle time in the endendto-end customer billing process. The work on the billing transformation project caused the project team to realize how many processes across Pitney Bowes depend on the customer billing process. Until this time, a single customer doing business with multiple Pitney Bowes business units could have received a different invoice from each of those units. Within a year, the executives realized that a more thorough business transformation transformation project was in order. The interdependencies between the customer billing process and the rest of the processes in the business were just too great to consider the customer billing process alone. Pitney Bowes chartered a new business transformation team. It consisted of the individuals from the previous billing transformation team and an additional 20 people from across Mailing Solutions Management who lent expertise in related areas that were now within scope. The Global Process Management team also formed at this time. This team would become the key catalyst for the adoption of an enterprise process framework and the further adaption of the framework within the enterprise. SECTION 3: ADOPTING THE FRAMEWORK

The charter for this new business transformation project — project — started started in 2008 near the peak of the global financial crisis — included included a reduction in the complexity of Pitney Bowes‟s Mailing Solutions Management (MSM) operations. The project also focused on a return to the core of what made Pitney Bowes a market-leading company by funneling the results from the Mailing Solutions Management division upward to the results of the project‟ project ‟s efforts. MSM executives challenged the project team to document “What is Pitney Bowes?” with the objective of becoming “totally process driven” and gaining more of a global perspective of all customer -facing functions within this line of business. Gaining this perspective, largely by interacting with functions outside of MSM, was a simple way to reduce operational complexity. Pitney Bowes hired a professional services firm to participate in the business transformation project, and that firm made the initial selection (adoption) of the first enterprise process framework for Pitney Bowes, with little input from the internal project team. During the adoption process, Pitney Bowes asked the professional services firm to “help us define what it means to be Pitney Bowes.”

Using Process Frameworks and Reference Models to Get Real Work Done After the professional services firm recommended a framework, the Pitney Bowes team began the adoption process. First, the team identified critical “business policies,” statements that summarize the operating principles and philosophy of Pitney Bowes. Defining these policies was a labor-intensive task. The combined team spent 10 calendar weeks, eight hours a day, working on this initial policy development activity. The initial team consisted of 35 individuals, including seven process owners and a number of functional managers and business analysts. After identifying the practices and policies that defined the future vision of MSM, the Global Process Management team began the arduous process of backfilling that content into the adopted framework (Figure 42). Pitney Bowes’ Global Processes and Ownership

Figure 42

The strategy adopted by the Global Process Management team to backfill this content was simple: It would adopt the framework as a baseline set of processes that defined what Pitney Bowes accomplished. In certain critical areas, the team would then dive into the details, creating additional policies, procedures, and other necessary documentation. Pitney Bowes was trying to identify the best practices — through the policies that defined the Mailing Solutions Management division — by which to transform their business. It did this by looking not only “back” at the policies and procedures it currently performed, but also “forward” at the policies and procedures it sought to implement. The business policies combined with the

Using Process Frameworks and Reference Models to Get Real Work Done high-level framework defined what MSM at Pitney Bowes does. The defined documents organized into the framework defined how the work was accomplished. The team also recognized the need for long-term governance of the framework. As a result, the Global Process Management team created and implemented a governance strategy for the framework. The governance structure covers two main areas: the framework as a whole and the content managed by the framework. One of the key concepts introduced by the framework is version control over the documents. Documentation is managed in Pitney Bowes‟ SharePoint portal. The overall intent of the governance structure was implemented to provide risk management oversight to this new critical asset. After about 12 months of working on the project, the team reached an intermediate goal, and the business transformation project transitioned to the adaptation phase of the work. One of the most significant deliverables from the business transformation project was Pitney Bowes‟ complete enterprise process framework (EPF), which was ultimately adopted by the Global Process Management team, including Maureen Gervais, program manager. The framework, based on APQC‟s Process Classification Framework (PCF), depicts at a high level the interdependencies among the various parts of Pitney Bowes. The Global Process Management team is responsible for maintaining the EPF and its continued adaptation by the various Pitney Bowes departments and operating divisions. The choice to continue the adoption and ultimate adaptation of the enterprise process framework without formal centralized support and buy-in may seem to be a recipe for rework, but Pitney Bowes has found a unique way to continuously widen the scope of the project: stakeholder management and continuous adaptation. SECTION 4: ADAPTING THE FRAMEWORK AND EXECUTING WORK

The Customer Service & Support process suite, led by its global process owner, is considered a center of excellence for using process frameworks within Pitney Bowes because it has taken the lead in adapting the framework to the actual work being done within the department. The Customer Service & Support process suite handles a significant portion of customer-facing functions and processes in the Global Service organization. The Global Process Management team engaged APQC in 2009 to customize and deliver a training class covering BPM basics. This training helped the entire Global Process Management team craft a common frame of reference for the adaptation process. Once the initial framework was defined, the strategy outlined, and the team trained, the next steps became clear.

Using Process Frameworks and Reference Models to Get Real Work Done One of the first adaptation steps taken by the Global Process Management team was to define the scope of the work it would try to accomplish. The team did this by drawing a line in the sand around the processes that would be included in the initial transformation effort. The initial in-scope processes included:  bill presentment;  bill processing;  customer service — incoming call-handling activities; and  customer handling — on-site service and maintenance, including repairs.

Processes outside this scope but still within the Global Service organization do not have assigned global process owners and are not candidates for review and adaptation until a pressing business need arises. When that happens, the Global Process Management team evaluates the request and determines if the effort required to adapt the process will produce a sufficient benefit. Processes that are not adapted simply continue to exist in their current state. The Global Process Management team began its adaptation activities by assembling the various functional leads and process owners in a room and having them identify the gaps between the adopted framework and the reality of their various processes. This activity identified a number of gaps and helped define the scope the work to be performed by the Customer Operations team. The adaptation process effectively takes any existing documentation and adapts it to fit one of these core content categories:  Policies  Process flow diagrams  Training

If information required to develop the content is not available for the process, the Global Process Management team synthesizes the content. The Global Process Management team facilitates the work, answering questions and providing guidance to the process owners as necessary. Material is never taken straight from as-is documentation and dropped into the adopted EPF; it first is reviewed and modified as needed to ensure it fits with the rest of the EPF. During adaptation, the scope of the Global Process Management team‟s work is managed using a simple parking lot method. If, in the course of adapting the process, a functional owner or the global process owner has a question about the process‟ scope that cannot be answered, the matter is removed to the parking lot where the global process owner can choose to address it at a later time. The Global Process Management team also developed relationship grids and key performance indicators (KPIs) at the functional level. Within a particular process, the team developed a relationship grid identifying the interdependencies among the

Using Process Frameworks and Reference Models to Get Real Work Done various functional members of the team as defined by the adapted framework. For each function within the process, the team reviews any KPIs that already exist and may develop new ones as needed. A number of challenges arose after the adaptation process began. One of the challenges that most affected the Global Process Management team was that the process elements of the adopted EPF are not consistently leveled, meaning that some activities are relatively more detailed than others. Some of the elements in the EPF were more descriptions of “how” to do something rather than descriptions of “what” was to be accomplished. The resulting gaps in the documentation made it difficult for the team to accurately associate the new policies with the process framework and complete the adaptation activities. The Global Process Management team solved this leveling problem by choosing a new target level of detail and performing a gap analysis to identify any process elements requiring remediation. The team then added the missing information based on the scope of adjacent process elements as needed. The team conducted two-day reviews of the adapted processes, during which the members unanimously agreed on the framework. The global process owners signed off on the framework for their pertinent areas, and that version of the framework became the baseline. Adapting a process is not a trivial task. Participation in a process can be very wide, depending upon the process. Also, the state of existing process documentation materials prior to framework adaptation is a good indicator of the effort required to adapt the process. In Pitney Bowes‟ case, many of the Customer Operations documents were not systematically organized or were stored in a variety of formats, including paper copies. In some cases, there were no electronic copies of paper documents. Locating, understanding, and converting these documents into a consistent format was a time-consuming and error-prone process. Reducing the effort required to adapt a process begins with choosing a friendly voice — a process owner or functional owner who has expressed interest in the work. Pitney Bowes‟ Global Process Management team found individuals within the functions and processes who were interested in the process owner role. Because they had inside knowledge, they needed little guidance and were able to begin work quickly. Also, after completing a few minor adaptation tasks with all involved parties, the team made a sort of internal case study available for other process and functional owners to review. Using these case studies as guides helped reduce the effort needed to get new team members on board and fully participating. Another tactic leveraged by the Global Process Management team to reduce the effort required to adapt a process was focusing on the WIIFM (what‟s in it for me?). With the work structured to reflect WIIFM, the members of the Global Process Management team were more apt to participate and produce high-quality work products. Preparing the “pitch” to communicate the value proposition to new and potential teammates was a good investment of time. The initial teams that did not have the pitch prepared didn‟t fare as well as the later teams that were prepared with

Using Process Frameworks and Reference Models to Get Real Work Done this communication tool. Those earlier teams ended up spending more time revisiting initial assumptions and boundaries. Consistent training also helps to reduce the cycle time to adapt a process. Many of the Pitney Bowes‟ team members involved in adaptation did not have a good understanding of the work performed by the Global Process Management team or where the work fit within the organization. Early on, the Global Process Management team developed a six- or seven-slide presentation about the EPF. The global process owners in the Global Process Management team were responsible for taking this base training presentation and customizing it as needed for their team members. Again, this upfront investment in tools helped Pitney Bowes improve the quality of the teams‟ work products. Once a process has been completely adapted to suit the g lobal process owner‟s needs and the Global Process Management team‟s standards, the document is stored in a special SharePoint repository organized by the adapted framework (based on APQC‟s PCF). Another key that Pitney Bowes identified as critical to its success is that it celebrates the small victories. Global Process leadership spends time sending messages to their department when one of their global process owners completes an adaptation task. This helps build awareness and “fans” of the work that the Global Process Management team is doing, simplifying future work. Pitney Bowes has noticed that team members involved in these positive feedback activities are more dedicated and less prone to passive-aggressive feedback. CONCLUSION

To date, Pitney Bowes has completed the adaptation of the bill presentment and bill processing processes within the Customer Operations global process owner realm, commonly referred to as the order-to-cash process. These revised processes have proved the value anticipated by the Global Process Management team, and work continues on subsequent processes in the Customer Operations portfolio.


Case Study UPS SECTION 1: GENERAL OVERVIEW

Almost everyone has either sent or received a package through UPS. Their ubiquitous presence is but a thin veneer over a complex worldwide organization with a dynamic history spanning over 100 years. With humble roots starting in Seattle, Washington, UPS has grown to deliver more than 14 million packages a day. UPS is organized into four main divisions:  U.S. Operations, consisting of Airline, Brokerage, Ground Operations, and

Freight Operations;  International Package Operations;  UPS Contract Logistics; and  Other Non-Package business, including the UPS Store and Mailboxes Etc. mailing services retail chains. The company was founded in 1907 by Jim Casey, and today still exhibits the culture he created. With over 400,000 employees, UPS is the second largest employer in the United States. Many of its managers and supervisors were hired from within.

“The world changed around UPS. If you don’t change your processes, and if you don’t have a framework that keeps you anchored in what you do … you’re going to be in real trouble.” — Dawson Wood, department manager, program management group UPS operates more than 250 aircraft and is among the 10 largest airlines in the world. It also operates more than 88,000 trademark-brown package cars, vans, tractors, and motorcycles. This large fleet is required to handle the daily delivery of over 12 million packages worldwide, collected from over 62,000 retail access points and innumerable homes and businesses. In conjunction with UPS‟ delivery service, UPS information systems handles more than 22 million package tracking requests daily. UPS also generates, processes, and ultimately discards more than 2 terabytes of data daily.

Using Process Frameworks and Reference Models to Get Real Work Done Many of the employees at UPS are trained industrial engineers, and it shows in the company‟s development of mature processes. Dawson Wood, department manager for UPS‟ program management group, summarizes it best: “UPS sells only one thing: the output of its processes.” He goes on to say: “Customers expect consistency and quality: „I need it delivered in three days every time from Houston to New York, and I need it [delivered] without being broken. For that, I‟m willing to pay you a pre-negotiated price.‟” If things don‟t go right within the processes that make that possible, UPS loses money. UPS‟ industrial engineers have carefully developed systems of processes, including a process framework, that help them get this work done. SECTION 2: UNDERSTANDING THE NEED FOR A FRAMEWORK

“... A hard part of management’s problem is to know when to make changes and when to hold fast to what is still good.” — Jim Casey, founder, UPS, 1948 In the early 1990s, UPS had a problem: Results for many key performance indicators (KPIs) were down, and forecasts were not encouraging. This trend had been present for a few years by this time, but by 1996 it caught management‟s attention. A complete explanation for the trend was not readily available, but managers knew they faced external pressures from new competitors in the U.S. small-package delivery marketplace. These new competitors were taking the most profitable customers from this core market segment, and it was affecting UPS‟ overall profitability. Customers like Wal-Mart were demanding more visibility into their own supply chains. As a result, they began to place more demands on UPS. This new breed of customer requested services such as “demand pack” and the pre-determination of the contents of boxes, skids (pallets), and entire package trucks. No longer was the business about making sure that the package arrived on time; the business now had to be as concerned about package information as it was with the package itself. One customer even demanded that package tracking information arrive at least one hour before the package. Management then began to investigate the UPS‟ core processes. Using sophisticated statistical process analysis that leveraged the expertise of its core industrial engineering skill set and in-the-trenches managers, the management team determined that it needed to restructure the core UPS processes. At the time, business process re-engineering as defined by Michael Hammer was in vogue, and a re-engineering project was considered.

Using Process Frameworks and Reference Models to Get Real Work Done Armed with a wealth of popular business process re-engineering information, management convened a team to re-engineer UPS‟ core processes (Figure 43). The team worked for about two years to come up with the “to -be” design of the new process framework. SECTION 3: IDENTIFYING AND ADOPTING A FRAMEWORK

The resulting framework consisted of a set of 11 customer-facing processes, which were eventually reduced to four. The team also defined a set of five support processes. The distinction between the core processes and the support processes was simple: Support processes are not “what the customer comes to UPS for.” For example, customers don‟t come to UPS to participate in the billing process. The billing process is a support process, subordinate to the package management process, but it still must be as effectively and efficiently designed as the package management process. This new process framework also considered customer demands on UPS and emerging trends such as business analytics and the ability to track the individual contents of packages. Because the design of these processes took place during normal operations, UPS‟ next challenge was to apply this new framework of processes without disrupting the business. With over 100 years of history and culture working against it, the core team tried fruitlessly to change the organization of UPS to match the new process framework. Employee feedback on the new framework was negative: In many cases, employees had spent decades following particular functional career paths, only to have those paths disappear in the new model. This left senior employees uncertain as to where they fit. It soon became evident that the change in organizational structure could only succeed if accompanied by a similar change in culture, career pathing, and career progression. This ultimately led to a severe change in thinking about how the organization would adapt the framework.


UPS’ Core Processes

Figure 43

SECTION 4: ADAPTING THE FRAMEWORK AND EXECUTING WORK

After realizing that a complete change in organizational structure was not feasible, management crafted a different plan: assign ownership of core processes to a manager and then overlay the cross-functional processes atop traditional functions with their existing managers. The result was a structure in which a cross-functional process is led by a single cross-functional leader but involves a number of subordinate functional managers. The cross-functional leader interacts with other cross-functional leaders to resolve conflicting demands on functional resources. Implementation of this strategy required a significant amount of effort in training, oversight, and performing the required tasks. To assist with implementation, UPS created the program management group, 25 people under the vice president of strategy supporting the worldwide UPS organization. The group‟s original charter was to act as a governing body, protecting the integrity of the core framework. Its charter secured future growth into training and personnel development. The program management group not only provided guidance to teams performing the process work but also provided individual training to project and process professionals. The program management group‟s approach to training reflects the

Using Process Frameworks and Reference Models to Get Real Work Done open nature of work at UPS. “ This [process work] is not a specialty skill set. Everyone needs this knowledge,” said Dawson Wood, department manager of the program management group. With a defined strategy and a governance and support structure in place, the work of translating this new core process framework and strategy into reality could begin. Adaptation work started on each of the cross-functional processes simultaneously. One example of the adaptation work is the billing process. In UPS, and specifically in the package delivery business, a number of functional areas are involved in the billing process, including sales, drivers, package management, and finance. Example: The Cross-Functional Billing Process

1. A shipping client provides electronic information about the package. (The sales group owns relationships with shipping clients.) 2. Drivers collect data while picking up and delivering packages. (Operations and technology own this.) 3. Information moves ahead of the package to the sender and the recipient. (Package management owns this.) 4. The actual billing processes occur. (Finance owns this.) In this example, the billing process owner must communicate with at least four functional owners. Under the new process framework, the manager of the crossfunctional process became responsible for the results of the defined process as well as the continuous optimization of the various participating functions. The manager also must evaluate any changes initiated within his or her process against the other core processes, to ensure that a change in one function would not reduce the effectiveness of another core process. Process owners coordinated at monthly meetings. Section 5 of this case study provides a good example of how this coordination gets work done. Dealing with Push-Back

Some existing functional owners resisted the changes. Their feedback had common themes, including: “It‟s not how we do things,” “We‟re different,” and “We‟ve always done it this way.” UPS developed four mechanisms to combat push-back, with a goal of approaching process owners in a way that doesn‟t trigger defensive reactions. 1. Appeal to the common good. Appeal to the inherent key KPI measurement objectives and the “we are here to help you” mentality. 2. Consider the customer. Appeal to the notion that it‟s not important how this function performs; it‟s important how the customer perceives the function within UPS as an organization.

Using Process Frameworks and Reference Models to Get Real Work Done 3. Strict process-based review. Analyze how the process works. What are the steps of the adopted process? Where do the data come from? Who needs the data? Why are the data needed? 4. Authoritative change. Take this step, affectionately referred to as “armtwisting,” only when needed. UPS ultimately had to resort to this in a small set of circumstances. Adapting existing functional work into a new cross-functional process framework was not a trivial task. The required effort varied widely: Adaptation of the product management process occurred relatively quickly while other processes, like package management, took nearly 10 years to complete. The time it took to complete each adaptation was determined primarily by the availability of technical infrastructure and components. In 1996, one set of functions within a process needed to move the equivalent of terabytes of data within 2.5 hours to specific operating centers. At the time, the technology didn‟t exist to enable this level of data transfer, so the process had to change. The process owner had to work with the appropriate functional leaders and customers outside of UPS to reconsider the need for the individual fields of data and to reprioritize individual field-level data transfers. When the technology became available, the processes changed again to use the new capabilities, and the performance of the process improved accordingly. Adaptation Decisions and Making Tough Choices

Not all processes in the new process framework received the same attention in the adaptation phase. Support processes were ultimately left with little adaptation because UPS determined that the existing functions were sufficient and that they were not key drivers for filling previously identified KPI gaps. The company would simply react to the need for change as the business case demanded it. As the infrastructure became available and resources became scarce, UPS developed a method of prioritizing and approving project-level adaptation work. The responsibility for this prioritization fell to the business information analysis (BIA) group, a group similar to business intelligence. This group acted as an independent party to evaluate the assumptions that were built into projects. It also attempted to improve estimation efforts among project teams by driving a single methodology for costing and pricing the resources needed to complete projects. The program management group works very closely with the BIA group. After overseeing a number of projects that didn‟t deliver projected value or exceeded cost and time estimates, the program management group began enforcing strict governance rules. One of these rules stated that any project affecting a core process had to proceed through a review process to ensure that its estimates were accurate and that the project was accurately planned. Project results are also included in personnel performance planning and individual scorecards, tying project performance directly to the annual employee review process.

Using Process Frameworks and Reference Models to Get Real Work Done Education, Training, and Communication

Maintaining the integrity of the framework required a significant investment in not only process management and governance but also corresponding program and project management. As a result, the program management group formed two distinct centers of excellence (CoEs): the project management CoE and the process management CoE (Figure 44). The process management CoE and its members do not “own” processes. The process management CoE owns improvement methodologies and tool sets to help process managers do the actual improvement work. UPS’ Program Management Centers of Excellence

Figure 44

These two complementary CoEs represent one of the ways in which UPS protects the integrity of its framework. Individuals at UPS are exposed to the fundamentals of each discipline through internal and external training and tool sets. In both the functional and cross-functional areas, the CoEs provide support to project teams. The close partnership between these two CoEs is one of the tools that enable UPS to get real work done using process frameworks.

Using Process Frameworks and Reference Models to Get Real Work Done The CoEs were not part of the original adaptation plans, but rather emerged as another response to the program management group‟s dissatisfaction with poor project and return-on-investment estimates. After benchmarking large projects, the program management group determined that UPS‟ process-related projects were anywhere from 50 percent to 70 percent over budget (cost and or time) and delivered only approximately 20 percent of the planned results. Since UPS started these CoEs and provided training and oversight to its employees, project results have improved. Projects now deliver approximately 50 percent of planned deliverables, and overages have reduced to about 30 percent over cost and time estimates. The program management group believes that additional improvements are attainable. Another way in which the program management group protects the integrity of the framework is to require certification for employees operating projects in the process space. The certification program was not initially planned but was developed to respond to issues realized after the framework adaptation. Project managers seeking certification in process management work are tested on a process improvement exercise. They have to take a process, map it, and implement changes according to the CoE guidelines. The certification includes a full, in-depth audit of skills and is roughly equivalent to a Six Sigma green belt. Project management skills are typically dependent on the Performance Management Institute‟s Project Management Professional (PMP) certifications. The program management group later sought ways to reduce cycle time to achieve the to-be processes. After reviewing historical projects, the group determined that a reasonable project duration was about one year. Projects initially defined to last longer than one year were not as successful as projects with planned durations of a year or less. Recognizing the need for multi-year projects, the program management group views larger projects as programs and works with the project managers to subdivide them into year-long pieces. SECTION 5: UNDERSTANDING BUSINESS BENEFITS AND CONTINUOUS IMPROVEMENT

“You should come to work every day with the thought that you can do better than you are [doing] today.” — Dawson Wood, department manager, program management group UPS‟ culture is one of continuous improvement. Originating with its founder, the concept of “constructive dissatisfaction” is applied throughout the organization. Constructive dissatisfaction is the principle that employees can do better with constructive changes to the way that work is done. On top of this, UPS has a

Using Process Frameworks and Reference Models to Get Real Work Done promote-from-within mentality, and many of its employees have formal education in industrial engineering, a discipline dealing with the optimization of complex processes. The result is a number of senior-level executives with a deep expertise in the business and a core understanding of the methods to improve it. Managing the flow of feedback is essential for an organization as focused on processes as UPS. All of the business and industrial engineering experience in the world won‟t help an organization that can‟t effectively manage feedback and then use it to prioritize and manage the resulting improvement projects. The program management group serves as a central body for UPS, coordinating improvement projects and the processes used to perform them. Customer relationship management and product management, two of the core processes from the original 1996 framework, are one of the main channels providing structured inputs into continuous improvement activities. Every customer interaction results in feedback that tells UPS what it is not doing, what it is not doing well, or what products it should offer. Many new product development requirements come from the customer relationship management area. These ideas arrive continuously and are the result of the culture at UPS, where employees are empowered to be “constructively dissatisfied.” Senior management works with the program management group to review and prioritize improvement projects, considering the existing enterprise data infrastructure and the overall UPS mission and strategic imperatives for the period. The tools for managing this constant stream of improvement include UPS‟ strategy road map, process pyramid, balanced scorecard, and suite of governance checks and balances. The program management group also works closely with the BIA group to review project fundamentals. One core question the group asks for all projects is: “Are the benefits you claim to seek really available?” The group acts as a reality check against wild project assumptions. This process evolved over time in response to projects that didn‟t meet initial assumptions for cost and deliverables. Long-Term Life with the Framework

“You can’t rest on your laurels; you can’t expect organic growth to carry you where you want to go. You have to be looking at new products and new markets all the time.” — Dawson Wood, department manager, program management group After about 10 years of living with the framework, UPS realized that the processes it had so carefully defined began to look a lot like the functions they were intended to replace. Again, the senior managers at UPS were determined to improve the way it

Using Process Frameworks and Reference Models to Get Real Work Done does business. Around 2004, UPS embarked upon a strategic review of its operations. This review produced four strategic imperatives, a number of corresponding measures and goals, and a series of over 30 critical initiatives. All were initially summarized into a single document called the strategy road map (Figure 45). UPS’ Strategy Road Map

Figure 45

The strategy road map communicated how the mission of the organization related to the projects necessary for achieving its strategic imperatives imperatives — the the things UPS had to do to remain competitive. Although the map was helpful for communicating this interrelationship, it provided little immediately actionable information. Employees needed a way to understand how these projects related to the ways they were already getting work done. To respond to this need, UPS evolved the strategy road map into a single document that identified the strategic imperatives and critical initiatives — initiatives — the projects intended to effect the required change — and and named senior managers to these initiatives. As a result, the program management group was able to better coordinate critical initiatives initiatives such as the “global shared services project,” the “integrated global sales force” project, and the “problem resolution” project. These projects aligned with enterprise strategy, making it easier to secure resources and remain visible among the many concurrent demands placed upon the project teams (Figure 46).


Project, Process, and Strategy Alignment at UPS

Figure 46

CONCLUSION

While not a traditional off-the-shelf off-the-shelf framework, the UPS framework of processes is a good example of how an organization can, through introspection and teamwork, develop a common language under which everyone in the company can operate. UPS‟ business process management activities have become dependent upon the framework, and the core processes remain relevant even after 15 years.


Case Study The Williams Companies SECTION 1: GENERAL O VERVIEW AND BACKGROUND

The Williams Companies, Inc. is the 10th-largest natural gas producer in the United States. A publically traded Fortune 500 company, Williams‟ 2009 revenue exceeded $8 billion. The company employs more than 4,800 individuals in 25 states. Headquartered in Tulsa, Oklahoma, this integrated natural gas provider has major offices in Houston, Denver, and Salt Lake City. Williams also has a significant presence in western and southwestern Colorado, northwest New Mexico, the Gulf Coast, and Pennsylvania. Pennsylvania. Williams has three business units: Exploration & Production (E&P) (the focus of this case study), Midstream, and Gas Pipes. The E&P process group is part of the E&P business unit. It is a shared service across the organization, conducting projects in multiple areas of the business unit. The group consists of three analysts/specialists, one technical writer, two support staff members, and one rotational analyst.

“We are a very lean lean shop; we focus on the use of contractors when needed, whether it’s an optimization optimization effort or a need from the business.” — Matt Foste, senior business process analyst The analysts in the group are aligned with processes, such as procurement or knowledge management, rather than locations. This creates a center of expertise, which is how the group provides value to the business. History of E&P Process Management

Williams E&P launched its process management initiative during 2000 to 2003. The IT group learned about process methodologies in 2001, and as a result, the organization formed its business process management (BPM) practice. In 2002, Williams E&P undertook its first process initiative within its accounting group; the beginning of enterprise SOX (Sarbanes-Oxley) documentation formed the foundation of early process work the following following year.

Using Process Frameworks and Reference Models to Get Real Work Done The next phase in the organization‟s process management journey, which lasted from 2004 to 2007, involved the development of Williams E&P‟s framework and standards. Standards teams were developed to provide governance. In 2005, the company began working with APQC and subsequently established its BPM methodology and Williams process model. Also in 2005, Williams documented the E&P procurement process and created its first process team. Then, in 2006, Williams E&P focused on understanding its core processes, defining and documenting them through its Management Systems Framework project. Since 2007, Williams E&P has concentrated on business unit processes, moving from compliance to optimization. 2007 saw the formation of the E&P common process team, the E&P Business Process Group, and the process support team, as well as the creation of the BPM governance framework. In 2009, the E&P process management group rolled out key performance indicators (KPIs) for major company processes and developed its knowledge and records management strategy. Most recently, in 2010, the group developed and rolled out the SharePoint tool for knowledge and content management. SECTION 2: UNDERSTANDING THE NEED FOR A FRAMEWORK

In the early 2000s, E&P employees were confronting obstacles such as:  difficulty finding documentation about specific processes,  not knowing which document was the most current,  no audit trail of changes in processes or controls, and  too much time spent looking for information.

Still, the need for compliance didn‟t reach its peak until 2002, when Williams, a publically traded company, needed to comply with the new Sarbanes-Oxley Act. All of the business unit processes with financial implications had to be documented enterprise-wide. “The threat of noncompliance was huge, so it drove a need to determine a framework that we could use to start documenting,” explains Sondra Holt, E&P‟s manager of business processes. The general auditor and director of enterprise accounting tasked Holt, who then worked as an internal consultant in the IT group, and the rest of her group with assembling a framework to document the company‟s processes. This top-down approach was atypical for Williams, which usually forms grassroots teams that take time to discuss issues and try to create their own solutions. In this case, however, the solution had to be delivered quickly, and the group conducted research to find a tool it could adapt. That research led to APQC and its Process Classification Framework (PCF).

Using Process Frameworks and Reference Models to Get Real Work Done To capture E&P‟s processes, the group came up with standard templates for mapping, using Excel rather than a specially designed mapping tool. The process owners received brief training on how to complete the documentation so that everyone was working in the same way to create a standardized result. Williams E&P‟s initial framework project was completed within one year and resulted in the base framework that now serves numerous processes. SECTION 3: USING THE FRAMEWORK

Williams‟ framework was created in 2004 and has been refined over the years as the company‟s processes have changed. The framework is a high-level, industry-neutral model focused on energy. It enables Williams‟ departments to see activities from a cross-functional process viewpoint. It is used primarily to catalog and segment process documentation. The business process group is responsible for governance and maintenance of the framework. Based on APQC‟s PCF, Williams also created an eight-point process documentation model to categorize types of documentation that are included in the framework. The divisions are as follows: 1. 2. 3. 4. 5. 6. 7. 8.

Policies Standards Process maps Procedures and tools Supporting documents Process measures Projects Catalogs

This eight-point process model is embedded in the framework. Each process has its own eight-point model underneath it for information storage and cataloging. Williams‟ Business Process Alignment High-Level Framework (Figure 47) includes 12 processes, categorized as either core or enabling, that are documented in the framework. “This isn‟t meant to be everything,” explains Matt Foste, senior business process analyst. “This is just everything we‟ve touched from a compliance perspective or an optimization perspective. We don‟t define additional processes until there‟s a need to do it.”


Williams’ Business Process Alignment High -Level Framework

Figure 47

This framework guides Williams E&P‟s business model, which consists of the following five core processes: 1. 2. 3. 4. 5.

Assess reserve potential Acquire ownership Develop reserves Optimize production and operations Market and sell

Key activities — pre-drill, gather, drill well, complete well, well-head operations, and close/abandon — support those core processes, as do the enabling processes of planning (vision, strategy, and compliance), information technology (IT), human resources (HR), environmental health and safety, finance and accounting, and managing business improvement and change/knowledge management. The next level of the process framework breaks the processes down into subprocesses. Procurement, for instance, is divided into the subprocesses of authorization for expenditure operations, contract administration, bidding, sourcing, and invoice coding and approval. Several of these have subprocesses under them as well.

Using Process Frameworks and Reference Models to Get Real Work Done SECTION 4: ADAPTING THE FRAMEWORK AND EXECUTING WORK

Adaptation of Williams‟ framework occurred in four basic steps: 1. 2. 3. 4.

Identification of targeted groups and departments Identification of targeted processes — those that impact the bottom line Identification of targeted process owners Adaptation of the processes to the framework

With the framework in place, Williams E&P was able to shift the work perspective from a vertical to a horizontal one, focusing on processes across the company rather than the activities of a single location. It also has been able to put more effort into fixing the processes than into fixing the people and to manage the organization more as an adaptive system. The process group turned to Williams E&P‟s definition of process owners as it completed step two. The company defines a process owner as the individual ultimately responsible for process performance. This person coordinates the process management activities, has the authority and the ability to make changes in the process, and manages the process end-to-end to ensure optimal overall performance. While process owners own the processes on the framework and their documentation, the process group is responsible for keeping the framework current and available to the process owners. When Williams rolled out its framework, all departments, functions, and processes with financial implications were included in the adoption. As noted earlier, since that initial rollout, the scope of E&P‟s framework initiative has expanded from compliance to optimization. One way Williams E&P executes its framework is by taking a BPM approach with teams that addresses three levels of performance (Figure 48). At the organization level, it helps ensure strategic alignment with the vision of both the business unit and the company. It also focuses on the strategy for meeting goals and adhering to the applicable policies or standards.


Business Process Management at Williams

Figure 48

The tools employed in this step are a process catalog, which uses numbering corresponding to the framework; a relationship map, which helps set the framework — another important tool; and the policies and standards. E&P documents its processes using a RACI (responsible, accountable, consulted, informed) chart, which helps determine who is accountable for each activity and who needs to be consulted before decisions are finalized, as well as who needs to be informed. Process maps and process measures also are valuable tools at the process level. Supporting documentation used at the individual level includes procedures (which specify the terms of the process), governing documents, templates, forms, and a listing of tasks and who performs them. When working with the teams, the E&P process group emphasizes that documenting a new process is not a one-time event. Although the team would like to get the entire process documented in detail the first time around, the exercise is one of continual improvement. To facilitate this continual improvement, the team‟s technical writer is responsible for keeping track of the documentation. Part of her job is revisiting the documents every two years, with SOX documents being

Using Process Frameworks and Reference Models to Get Real Work Done reviewed more frequently. She asks the process owners if the document details are still current and updates anything that has changed. Process owners are also asked to send changes to the technical writer whenever they occur so she can keep the documents as up to date as possible, even between scheduled reviews. The Process Management Road Map

Williams E&P‟s process management road map consists of nine components, many of which were addressed earlier in this case study:  Identification of processes.  Process support team review. This governing executive team within the process

 

  



group is composed of the executive in charge of operations (who was also the process group‟s initial sponsor ), the optimization director, the human resources director, the IT account manager, and the controller. The process support team helps the process group determine its annual guiding principles and goals. The team and group meet approximately every two months. Identification of the process owner. APQC‟s PCF placement. At the beginning, when new processes were being identified and documented, they needed to be placed on the framework. Because there are fewer new processes today, the framework is mostly used during optimization efforts, where the team drills down and completes additional documentation. Process documentation. Identification of KPIs and metrics. Knowledge management. This step addresses what knowledge the process performers need to do their work and where the group will place it so the performers can find it easily. Records management. A corporate-driven compliance effort involving records management has been combined with the process group‟s efforts in process and knowledge management (Figure 49). The goal of this integration is to have “one source of truth” so that Williams employees aren‟t confused by conflicting information.


Williams’ Consolidated Approach to Managing Processes, Knowledge, and Records

Figure 49

Knowledge Repository and BPM Repository

Williams E&P has two linked repositories that store its process documents: its knowledge repository and its BPM repository. The knowledge repository is the front end and the BPM repository is the back end of this knowledge sharing tool. The knowledge repository, accessible through the company‟s intranet, offers users access to the documents they need. The documents there are categorized by type — such as process maps, procedures, and tools — and assigned headings that closely align with the PCF. Some subprocesses with a lot of related documentation may be split into more than one category or have a special numbering scheme in the knowledge repository, rather than being shown as a subcategory as they are in the PCF. The knowledge repository also offers access to process catalogs — which show every document created under that process, the version number, the date last updated, and anything else a user would need to know about the documents. The BPM repository, stored on a shared drive, serves the entire corporation. Only certain people can access the documents through the BPM repository; most users access them through the knowledge repository instead.

Using Process Frameworks and Reference Models to Get Real Work Done SECTION 5: UNDERSTANDING BUSINESS BENEFITS AND CONTINUOUS IMPROVEMENT Measuring the Impact of Framework Adoption

The Williams E&P process group compiles data annually to track its success. The following measured criteria demonstrate the group‟s worth to the rest of the organization:  Number of processes defined (i.e., maps created)  Centralized coordination of process documentation and common processes  Employee understanding of standards for documentation  Employee understanding of common processes  Metrics identified and measured for most core processes

“Since [the process group has] been in existence, we’ve always saved a lot more annually than we’ve spent for the head count.” — Sondra Holt, manager, business processes Guiding Principles for Adopting a Process Framework

Based on its process management experience, the Williams E&P process group offers the following suggestions to share with other organizations preparing to undertake similar initiatives. Do:  Use existing tools such as APQC‟s PCF as a foundation.  Align your framework with an existing business model.  Apply centralized governance of the framework — particularly for a program like

SOX that has to be managed at the corporate level.  Reinforce usage of the model in all aspects of process management and optimization.  Create a framework that is transparent to the process owners. They don‟t need all the details about it; they simply need to understand the logical process for finding their documents.

Using Process Frameworks and Reference Models to Get Real Work Done Don’t:  Overcomplicate the framework. Make it easy for people to find the documents

they need, and don‟t burden them with more than that.  Create a model that‟s not easily adjustable.  Make the framework a focal point. Holt says: “If you went to [individuals at] Williams E&P and asked, „Do you use APQC‟s Process Classification Framework?‟, they would say, „What?‟ They would not know. If you said to them, „Where do you find your procedures?‟, hopefully they would know that.” In addition, Williams E&P‟s process group operates under the following guiding principles for integrating knowledge management and business process management.  Integrate process and knowledge management efforts consistent with the     

business strategy and process model. Begin with creating and optimizing business processes, and then focus on knowledge management. Treat knowledge management as part of the process and not a separate initiative. Align business processes, records, and knowledge management as a natural progression. Keep it simple — integrate where and when it makes sense. Ensure that the approach is practical, cost-effective, and non-disruptive to normal business operations.

“[Being non-disruptive] is so critical to our people in the field because they don’t have more people than they need, and they’re focused on producing the output that they’re responsible for. So for us to come in and try to give them days of training or lots of explanation … they just want to know what they need to do to get it done.” — Sondra Holt, manager, business processes Future Plans

The process group believes there are local procedures it doesn‟t yet know about and therefore has not documented. It believes it will uncover them during E&P‟s

Using Process Frameworks and Reference Models to Get Real Work Done upcoming rollout of SharePoint. Every time the process group sets up a new SharePoint site, it does an inventory of the documentation that site has. These inventories should help the group detect local procedures it needs to learn about, as well as promote the use of a central repository. SharePoint will be a centralized place where employees, teams, and functions go to work, collaborate, and find all of the documentation they need. SharePoint has two kinds of sites: access team sites — which are location-based — and process sites — which take the concept of the framework one step further. Each process that identified through the framework has a dedicated site where people involved with it can collaborate and work on their daily jobs. SharePoint will be available from the E&P business unit‟s main intranet page. Williams E&P plans to continue its journey toward becoming a more processfocused organization. It uses a chart based on APQC concepts (Figure 50) to show its progress and its destination. When the business unit began its efforts in 2006, it was just slightly beyond the level of a functional-based organization. Today it finds itself within the process-focused section, with some progress still to be made. Process-focused Progression at Williams

Figure 50

The target for Williams E&P is not to be process-based. “Our culture wouldn‟t enable us, we do not believe, to be totally organized by process,” Holt says. That

Using Process Frameworks and Reference Models to Get Real Work Done would require each location to have individuals responsible for each process, rather than having one director or manager responsible for the entire location. Although Williams E&P has leaders in those process areas, it does not have single process owners and does not foresee that changing in the future. This decision demonstrates the importance of choosing an implementation strategy and setting goals based on the specific characteristics and goals of an organization. The experience of Williams E&P illustrates the benefits of committing to process thinking and organizing work using a framework and adoption plan that fits the culture and business needs.

Why Management or Governance is a key enabler of continuous Process improvement

The real world for many organizations is a myriad of process fragments, scattered across the enterprise, many of them out of date, using different notations, only loosely connected and often conflicting. Organizations who want to climb the “process maturity curve” typically require a single process repository, which connects strategy with reality. The content must be authoritative – ‘the way we do things here’ – and it must foster collaboration for continuous improvement. But it must also be accessible and useable by everyone in the workforce. For this to be possible, it’s imperative that the process model is held within a governance framework that is robust but also easy to use. Then you can design and implement change, in lock step with risk and compliance management, a recipe for “Operational Excellence”.

At Nimbus, we see Operational Excellence as a series of interlinked capabilities: •

•

•

•

Flawlessly translate strategy into the reality of operational processes. Engage the entire workforce in collaborative continuous process & performance improvement. Provide all corporate “assets” (systems, metrics, documents) in the context of process. Visualize & manage performance, risks, controls & compliance within one process framework.

A BPM platform with these capabilities puts business process management at the heart of your Operational Excellence program. A platform that underpins enterprise wide, continuous and long-term business performance improvement, rather than a process analysis toolset only used by a few project team specialists.

www.nimbuspartners.com

So why does Nimbus want to put the M back into BPM? Because in our view the need for Management (or if you prefer “Governance”) is all too often neglected. Those responsible for Operational Excellence have always understood the value of engaging the entire enterprise in collaboration, and know that it is the key to delivering continued performance improvement. Leveraging social media methods to foster engagement and collaboration makes sense. SocialBPM brings a new energy to engaging end users with process, and fostering collaboration. But without a governance framework that is robust, easy to use and baked-in to your BPM platform, SocialBPM is unlikely to significantly contribute towards Operational Excellence. The real prize is one trusted and up-to-date process model of the enterprise with different views for different stakeholders, delivered as a “personalized intelligent operations manual”. And that’s simply not possible without a robust and embedded governance framework: the M in BPM.

A pioneer in Social BPM For more than a decade, Nimbus Control has included the features needed to enable effective and sustainable collaboration for process and performance improvement, in a way which engages the entire workforce, while meeting the needs of multiple stakeholders such as Operational Excellence, Governance Risk & Compliance and Systems Implementation teams. Nimbus clients – including...

AstraZeneca, Barclays, Chevron, HSBC, JP Morgan, RBS, Sara Lee, Sony, Toyota and ThyssenKrupp - have adopted Nimbus Control as their BPM platform to support operational excellence and continuous improvement.

www.nimbuspartners.com

APQC Get Real Work Done Report Nimbus Final[1]

Recommend Documents