A recent research article revealed the greatest concerns for CEOs in 2009. The number one concern is layoffs and restructuring. Number two on the list is the need to “pare the corporate efforts down to those that are central to the company’s short-term survival while not killing off its future.” How well will your IT department fare when the time comes to make adjustments to the budget? The answer can be predicted depending on your response to the following questions:
1. Does your IT department deliver solutions that are critical to the strategic goals of the company?
2. How long does it take to deliver value to the business users? Can you react quickly enough to meet the tactical needs of the business?
For those of you that get a little nervous while answering either one of these questions, this article will introduce you to the delivery methodology utilized by Business Process Management (BPM), a technology that has been shown to reduce costs by 20 percent in the first year and is the number one priority for CEOs in 2009. BPM does this by focusing on processes that are strategically important to the company and putting solutions into the hands of the business side as quickly as possible.
The traditional approach
To kick off traditional IT projects, business analysts will take time from the business users to capture all the details needed to construct the final application. Then, after several months of interviews, the analysts toss a massive requirements document over the wall to the developers. The developers transcribe the requirements and begin building the application. The business is not brought back into the process until the application is close to the final release.
When the application is finally ready for release many months (or even years) later, the organization can only cross its fingers in the hope that the process that was described in the requirements document is still in practice today. At any point before or after the release has been delivered, the business users’ change requests are usually met with frustration from IT because they are departures from the functionality that was agreed upon in the requirements document.
The BPM Approach Explained
The BPM approach explained
BPM delivery is focused on forming a partnership with the business and meeting their needs as quickly and efficiently as possible. Rather than building requirements to kick off the process, the first step is to discover and boost the understanding that all business users, owners and downstream participants have of the process.
With this increased knowledge and understanding, stakeholders can develop a list of well-informed improvements to the processes that are related to strategic business goals (which have been established at the executive level).
Analysts then work with the developers to implement processes that address the highest ones on the list. The developers play back releases to the business users every four to six weeks in order to be certain that the process is meeting their expectations. And as soon as a release meets the minimum requirements, the business can start utilizing the application while more functionality is built into the process.
Working as a team
Rather than pointing back to contracts or signoffs on requirements documents, the business users and IT department are working as a team to build the most valuable application possible. Changes are expected and welcomed. Down the line, after the process has been in production for a while, research can be done using the data that has been collected, as well as simulation and optimization tools, to develop further enhancements to the process.
With a partnership that is formed using this approach, the IT department is able to deliver value to the business immediately and constantly. The process discovery and improvement exercises at the start of the effort give the business users ownership and empowerment in the implementation process. Each new release delivers more value to the business than the one before it.
On the other hand, without such partnership, the business users view the requirements building process as valuable time out of their day, change requests are met with frustration from IT, and everyone has their fingers crossed that the final application will deliver value.
Benefits of the BPM Approach
Benefits of the BPM approach
The benefits of this new kind of delivery approach were recently on display at a large financial services company that implemented several processes in a short timeframe. To start out, the IT department had a list of process requests they had received from the business. The analysts conducted interviews with management to establish the largest challenges that were facing the company in the coming year. Among them was a looming set of compliance standards that they were far from fulfilling efficiently. Meeting these standards was the highest priority for the IT department. As a result, the processed related to these requirements were at the top of the list.
After that, subsequent sessions were conducted with the business users to increase the understanding of the current process. During the sessions, analysts used a collaborative mapping tool to create a model of the current process. Participants with differing perspectives on the same process were able to paint their own pictures of the process, and then come to an agreement about what was actually happening on a day-to-day basis.
From just those sessions, the business users came up with ideas about what should be done to address the current problems. They immediately recognized that the IT department was working for them. The business users looked forward to seeing the new process implemented very soon.
The analysts took the process maps and the lists of improvements to the developers to decide the size and scope of each one. Together, the analysts and developers came up with a delivery road map that laid out which features would be implemented in each release.
Within five weeks of kicking off the discovery of the process, the business users were able to see and click through a working prototype that met their functional needs. As the releases continued, business users gave feedback on how screens should look and also requested changes to the process. Because the partnership had been formed and the goals of IT and business users were aligned, the developers had no problem adjusting their approaches.
Utilizing the BPM delivery approach, the IT department ended up delivering four processes within a six-month timeframe, successfully meeting the business’s pressing need to fulfill regulatory and compliance standards.
So, in light of this example, when CEOs look to pare their efforts and resources, which approach do you think they would be more willing to preserve in tough times?
Andrew Hull is a BPM Analyst at Lombardi Software. Since joining the company, Andrew has facilitated process improvement efforts and trained analyst teams at organizations in higher education, banking, insurance and retail industries. Prior to joining Lombardi, Andrew spent five years developing and implementing lean Six Sigma software solutions in electronics manufacturing facilities around the world. He received a BS in Industrial Engineering from Georgia Tech and an MBA from the Acton School of Business in Austin, TX. He can be reached at [email protected].