Forrester recently interviewed 164 IT Architects – some of the results follow…

13% said that they had no plans for implementing BPM. The primary reasons were: high project costs; lack of proven benefits; lack of technical resources; and the complexity of the project.

The 87% that are implementing BPM expected: increased productivity for process workers; real time visibility into key processes; consistent process execution across business units; and optimization of their business processes.

As a result of their interviews, Forrester noticed a strong correlation between a BPM Center of Excellence and BPM project success. The premise – if senior management is willing to support a BPM Center of Excellence, then they are definitely supporting this BPM effort.

Our Thoughts…

Regarding those not implementing BPM – I have talked with many companies that have reflected those same findings. I have seen project costs and lack of technical resources as the biggest obstacles.

Regarding expectations – I see these expectations as the reasons companies buy into BPM to begin with. If you didn’t believe your process cycles take too long, you wouldn’t be looking into BPM. The 2 biggest elements of shortening cycle times are to control how long process steps take and to have visibility into the process to see that it is on time. If the process is late, you will be able to quickly see that fact and make resource adjustments.

A key requirement for the success of any large enterprise solution is management support. I am not convinced that a BPM Center of Excellence is the way to go, but I am convinced that you need management support. So, you know your company – choose a path that will garner management support.

Your Thoughts…

Most people would expect BPM software to shorten cycle times. And, it is easy to show hard dollar savings from shortened cycle times. There are other benefits to using BPM software that are much more difficult to put into hard dollars.

Forrester has identified a very important one – Increased Productivity. They reviewed more than 50 BPM related customer case studies. They determined that these companies achieved increased productivity by:

• Automation of tasks
• Auto-invocation of business rules
• Orchestration of mass changes
  

How did they know they were successful? Fewer resources were required to achieve their business objectives.

Our Thoughts...

Increased Productivity, as explained above, will provide a ‘time to market’ advantage and can reduce costly ‘mistakes’.

Simple logic says that if you can automate tasks and auto-invocate business rules, the result should be fewer mistakes. And, mistakes can be costly.

Most people don’t really understand ‘time to market’. Let’s look at a couple of examples of the importance of ‘time to market’.

Amazon was the first company to sell books on-line. Their competition didn’t really believe in selling books on-line, so they waited to get into that market. By the time they got there, it was too late. Amazon knew how to market their books. They knew where and when to stock inventory. They knew how to ship and had relationships in place. It will be a long time before anyone supplants them as #1 bookseller.

Apple was the first company to see that a better idea for a ‘walkman’ was to use flash memory. They came up with ‘sexy’ packaging – the iPod. They saw an opportunity to be your music store. They put it all together and got to market before competitors could respond. They made it difficult to compete by making sure songs bought at the Apple store would only run on an iPod. There are others out their now, but can they are far behind?

Apple is also an example of being late – they were late with the iPhone. They have to go the extra mile with deals, features, etc. to get people to stop using a phone that they just purchased and spend big bucks for this new fancy phone. Think how much easier this would have been had they been first.

The moral of the story – it is much easier if you are first. And, the first one to market can make a lot more money.

Your Thoughts...

More from a white paper about contract manufacturers

Since everything they manufacture is a custom product, they have issues that are unique to them. However, some of their issues may exist in your company as well.

Their primary challenge is achieving effective communications between departments which traditionally function independently – sales with engineering and engineering with manufacturing.

This week, let’s examine engineering issues.

• Clashes between sales and engineering – sales sells a product that engineering has determined can’t be built
• Re-engaging the customer during the design process due to post-order discoveries made by engineering
• Time pressures don’t allow for enough engineering time for the best design
• Engineering budget is mostly consumed by sales-related or order-engineering tasks leaving little money for new product innovation and development work
  

Our Thoughts…

These issues must look familiar to most of you. I am sure that these issues are taking up potential profit dollars.

I see a couple of key observations that can be made: There is a business process that is not working well [or processes]; and, when these processes cross departmental boundaries they are very disruptive [difficult to manage].

Let’s define a process as a collection of related, structured activities [a chain of events] that produce a service or product. Even before you think about software, you can map out your collection of related, structured activities and manage them to completion. When you are attempting to map out the activities across departments, you will learn what disruptive means…

It would be interesting to see what your real costs are surrounding these issues. I bet you would be surprised.

Your Thoughts…

Recently, I was reading a white paper about contract manufacturers. Since everything they manufacture is a custom product, they have issues that are unique to them. However, some of their issues may exist in your company as well.

Their primary challenge is achieving effective communications between departments which traditionally function independently – sales with engineering and engineering with manufacturing.

This week, let’s examine sales issues. I pick this one first because I see lots of room for improvement.

• The quote process is so lengthy that it keeps the bid success rate low
• Sacrificing accuracy/completeness of customer requirements in an effort to shorten the quote process causes way more problems than it solves
• The inability to know the margin on an order at the time of the quote – will your company actually make a profit on this order
• Lengthy approval process for drawings and 3D models
• Frequently going back to the customer to re-price an order due to ‘late stage’ discoveries
  

Our Thoughts…

I believe that most companies understand their change process and I believe that they know that this is the most complex and expensive process in their organization.

I also believe that most companies understand there are problems surrounding their sales and quote process. And, I believe that most companies have no idea how much this is costing them in their relationships with their customers and in shear time [dollars]. Think of the [daily/monthly] frustrations that you and your employees must endure.

My take – On one hand, I see many companies facing these issues regularly and on the other, I don’t see much attention [$] being paid to resolve them.

Your Thoughts…

Example of Efficiency…

About 20 years ago, I was a salesperson for a large computer company. I wasn’t a participant in this story, I was just an observer.

I heard that the president of the company mandated that all divisions cut costs by an order of magnitude in a single fiscal year. I remember thinking at the time that a ten fold decrease in costs was impossible.

At the end of their fiscal year, they put out the word that they had been successful. I would imagine that some divisions did well and others did not. I did uncover their strategy and here is how they did it…

They followed these 5 steps to shorten their process cycle times:

• Document the process – Each division documented their processes.
• Prove that you have the correct process – Each division had to try to run the defined process to prove that they had the definitions correct.
• Run the process – They ran their proven processes.
• Measure – They measured how long each process was taking.
• Improve the process – They attempted to improve the process.

They ran the new process and measured the difference. This allowed them to either roll back or move forward.

Remember, this was 20 years ago and processes weren’t very efficient to begin with. Of course, there were other cost cuts that added to that number.

Our thoughts…

I believe that this is a sound strategy and I still recommend it to our new customers.

I see Process Optimization as having 2 key components – There is a Manual component that you can continue to improve to shorten process cycle times and there is an Automation component that allows software to perform mundane tasks within your processes to further shorten your process cycle times. In addition, the automation software provides control over how long steps will take, provides process metrics and provides visibility into the status of your processes.
Results – Your Company is more Efficient.

Your Thoughts…