Ideas that Might be Ingenious

scleveland@ingenuus.com (Scott Cleveland) — Fri, 02 Oct 2009 13:05:00 +0000

To BPM or not to BPM?

Ever wondered whether your company should address their business processes? Many of you believe that managing business processes is a good idea, but it is too expensive. So, let’s look at some reasons to address your business processes.

My Thoughts…

Looking to contain costs?

The ‘ax man’ approach is likely to leave gaping holes in your business processes. BPM provides the management disciplines and the tools to surgically target problem processes and put them on the path to recovery. Improve your business processes and cut costs at the same time.

Looking to improve customer relationships?

Everyday we interact with companies – we give them the opportunity to meet or exceed expectations. Our experience with a company determines whether we will buy from them again or whether this will be a one time sale. Customer expectations management is a process that BPM is well suited to manage.

Looking for more visibility into your company processes?

Do your managers complain about the lack of visibility into their processes and projects? Do you have trouble identifying who or what is impeding your processes? Does it take hours to determine the status of a process? Have you hired a program manager to solve this problem? BPM software provides visibility.

Looking for more control of your business processes?

Are the cycle times of some of your high value processes taking too long? Are the people involved in the process spending too much time looking for information; looking for the descriptions of their next activity; determining the next person in the process; etc? BPM software brings control to your business processes.

Looking for improved agility?

Do you fear that your processes are not adapting to changing business requirements because ‘this is the way they have always been done’? Using BPM, a company is better equipped to switch gears and respond to its changing business environment – faster than its competitors.

Need to prove Compliance?

Facing regulatory requirements like PCI DSS, 21 CFR Part 11, OMB A-123, etc.? Facing audits from ISO, the DoD, etc.? Implementing internal practices like Lean Six Sigma? BPM software provides discipline and an audit trail.

Your Thoughts…

What would you change or add to the list?

Process Management – Keeping it Real!

scleveland@ingenuus.com (Scott Cleveland) — Fri, 02 Oct 2009 01:53:00 +0000

BPM Creates Value

From a Ziff Davis Media Survey…

BPM provides a solid return on investment by decreasing costs, increasing revenue and improving agility.

Organizations across all market sectors are utilizing BPM as a technology to orchestrate and integrate end users, applications and data defined business processes. Companies are also using BPM as a management practice to support the continuous process improvement needed to drive market advantage, reduce cost and friction across all facets of the business.

More and more organizational leaders are realizing that business process management creates significant competitive advantage. Gartner states that BPM is one of the fastest growing segments in software and it is forecast to remain so during the next five years. Many organizations are now focused on making BPM a program, not just a project.

My Thoughts…

In previous blogs, I have defined a company as a collection of processes. The 80/20 rule applies here – 20% of your processes will provide 80% of the value. Since these 20% are key to your company, their inefficiencies will have a direct impact on your bottom line.

Without software, you can accomplish plenty.

Identify the key Processes – Document – Test [be sure you have documented them correctly] – Measure [before measurements] – Improve – Measure [after measurements].

Process management activities have a much smaller chance of success without management involvement. Many company leaders are realizing that business process management creates a significant competitive advantage.

With Software, you can do more – BPM Software provides control, visibility & agility.

Control – dictate how the process works; who performs what activities; how long do they have; what information do they need; what information will they create; etc.

Visibility – Quickly see the status of a process; where is it now; what has been done; what needs to be done; build reports; etc.

Agility – Change is constant. You must be able to quickly and easily change the process to meet current needs.

BPM Results – A solid return on investment by decreasing costs, increasing revenue and improving agility.

Your Thoughts…

Has your company identified their [20%] key processes?

Process Management – Keeping it Real…

scleveland@ingenuus.com (Scott Cleveland) — Fri, 14 Aug 2009 15:00:00 +0000

BPM Project Success

In earlier blogs I have covered many topics. Some of them are key components of successful projects. In this blog, I will put them together as tips for BPM Project Success.

Most successful BPM Projects will likely include the following:

1) The 80/20 Rule – If you really could identify all of the processes in your company, it is most likely that 20% of them bring the highest value to your company. So, the first process to manage will be from the 20% group.

2) A Project Manager with enthusiasm, energy and empathy…

3) A Team to analyze, improve and test your solution. Make sure to get the ‘nay-sayers’ from your company involved so that they have some ownership of the solution.

4) A Champion with enthusiasm, energy and empathy to be the internal sales person for this project… This doesn’t have to be by title, it could be by respect.

5) Manage Complexity – Scope creep is a project killer. Just say no…

6) Manage Change – The Champion should lead this charge. Proceed with a campaign that says ‘change is good’ for you and the company.

7) Management Support – Most often management support guarantees success. If you proceed without it, you likelihood of success is severely limited.

8) Manage Politics – There is politics in most companies. Understand the political climate and attempt to work within that infrastructure.

9) Identify Success – How do you define success? What are the critical success factors? How will you be measured? What must you achieve in this project phase in order to roll it out to other processes?

Measure – Measure the current environment. After you have rolled out the new solution, measure that environment. You are looking for an improvement. This step is often overlooked because no one has the time to do it. Not only is it important to do this for this project, it will help you get approval for others.

10) Review – What did we do right? What did we do wrong? What should we change for the next project?

Your Thoughts…

This list isn’t intended to be exhaustive, just representative. From your experiences, what would you add?

BPM – Keeping it Real…

scleveland@ingenuus.com (Scott Cleveland) — Wed, 05 Aug 2009 14:54:00 +0000

Change

From the All Business Website – 10 tips on Managing Change…

Change is a small word that can strike fear in the hearts of many. Yet life is full of change, especially in the business world. While those affected may not always get to decide when change happens, they can learn to manage it.

1. Don’t resist
2. Find the positive
3. Create a list
4. Familiarize quickly
5. Consider others
6. Focus on one change at a time
7. Exercise patience with yourself
8. Ask productive questions
9. Take control
10. Don’t get too comfortable

Managing change with peace and confidence is entirely possible. Keep these tips in mind, and you'll be well-equipped to work through any change that life may throw at you, in both your professional and personal lives.

http://www.allbusiness.com/management/change-management/11336-1.html

My Thoughts…

Most people don’t like change. It threatens their sense of control. It provokes fear of the unknown.

Like death and taxes, change is constant. Since it is inevitable, it is best to learn to accept it. Face these new challenges head-on. Focus on how you can make it work for you. You will feel empowered by your renewed sense of control when you stop allowing change to overcome you, and instead make it work for you.
How does change impact your company?

If your company isn’t growing, it is getting smaller. Change is the driver in each direction. If you are growing, you are getting more and more customers. Growth fuels changes in most of your departments – Sales, Marketing, Finance, Customer Support, etc. And, most important is keeping your customers happy.

If you are getting smaller, what are the changes that are allowing that to happen? What can you do to fix the problem? How will you face this new challenge head-on? How can you turn around this change? How can you turn it into a positive?

Your Thoughts…

What has been your experience with managing change?

scleveland@ingenuus.com (Scott Cleveland) — Thu, 16 Jul 2009 20:07:00 +0000

Workflow vs. BPM

There seems to be some confusion between Workflow and BPM [Business Process Management]. They are not the same thing, so let me provide some simple clarification.

Workflow

Workflow has no logic. If a workflow product sends a task to me, when I am finished it goes to the next person designated in the workflow chart. It is a simple routing tool.

Workflow has no concept of logic/business rules.

Business Process Management [BPM]

BPM has logic. You may create if/then/else logic tables that will determine the next step. The next step could be routing, send an Email, run a program, etc. If I am working on a task, the next step may be defined by the actions that I take.
Basically, you may define the business rules that you would like your business processes to follow. Business rules allow you to: Determine who will perform an activity; What activity they will perform; How long they have to perform the activity; Who will receive escalation notifications; What steps they can add to the process; What information they have access to; Define what information is to be required; Etc.

My Thoughts…

Each has its place. If you are looking for a routing tool, then a simple workflow solution should get the job done. If you wish to manage your business processes and would like your company’s business rules followed, then look in the BPM arena for a solution.

[9kticw3sxp]

scleveland@ingenuus.com (Scott Cleveland) — Mon, 06 Jul 2009 20:35:00 +0000

Technology vs. Problem

Chicken & Egg - Which comes first?

Problem First

Typically, a company spends money to solve some kind of problem. They buy a new computer because they are short of compute power; They buy additional disks because they are out of storage space; They buy new software because either they need more for a new employee or there is an application that they don’t have but need; etc.

Following this logic, the Problem comes first.

Technology First

Let’s say that I am a big believer in SOA [service oriented architecture] software. I will be looking to use SOA wherever possible. My answer to any and every problem is going to involve some kind of SOA solution.

There is an old adage that if the only tool in your toolbox is a hammer, then everything looks like a nail. With a technology first approach, you are walking around with a hammer ready to pound on anything. You could run across a Philips head screw – you have the option of pounding it in with a hammer or you could look at other technology, like a Philips head screwdriver.

My Thoughts…

I can’t stress enough that you must really understand the problem before thinking about technology. Reviewing problems with a technology approach will put you in a position to make compromises in your solution. And, a technology approach won’t allow you to really look at a problem from all angles - Angles where other technologies might comprise a better solution.

Many companies have adopted the tried and true ADCI process. ADCI stands for analysis, design, construction and implementation. Analysis should be done without regard for technology. In the Design phase, it is appropriate to look at alternative technologies to create your solution. Still, it would be wise to look at all technologies to see if a better solution is possible. Construction – build the solution. And, Implementation – Implement the solution…

Your Thoughts...

[9kticw3sxp]

scleveland@ingenuus.com (Scott Cleveland) — Wed, 01 Jul 2009 18:29:00 +0000

BPM Delivers...

From a Gartner Article titled “Justifying BPM Projects”…

• Organizations had more than 90% success rates on their BPM projects
• Successful projects had no less than 10% internal rate of return
• 78% had more than 15% [a few ‘wild numbers’ exceeded 100%]
• 77% of the projects had returns greater than $100k per project
• 55% of the projects had returns in the $100k - $500k range
• 80% of the respondents felt an increase in competitive advantage

They point to 3 categories of results:

Efficiency – Eliminate manual data entry; Reduce process cycle times; and Reduce manual analysis and routing

Effectiveness – Handle exceptions faster and better; Make better decisions; and Consistent execution

Agility – Faster regulatory compliance; and Support new business models

My Thoughts…

The results of their survey aren’t surprising. I have actually seen a couple of the ‘wild numbers’ that they talk about.

Regarding the competitive advantage – I wrote an article on business process management a few years ago pointing out that your company’s business processes could be your competitive advantage. My expectations are that any improvements to high value processes could be your competitive advantage.

To me, all three categories above are pointing to increased employee productivity. If a company is more efficient, they should produce more goods/services with fewer resources. And, increased productivity can contribute to lower costs and higher revenues.

I know of at least one company where their sales people will bring in their prospects to show them how efficient their processes are. They use their efficiency as a customer benefit.

You can too…

Your Thoughts…

scleveland@ingenuus.com (Scott Cleveland) — Tue, 23 Jun 2009 15:19:00 +0000

Expectations from BPM…

Another look at cost cutting from a Dennis Byron Article…

A BPM vendor surveyed their customer base recently. In the survey, they asked how their customers expected BPM to help them survive the current recession.

- Increase employee productivity
- Gain greater control and visibility
- Lower costs
- Reduce risk
- Identify underutilized overhead
- Be more agile and positioned for market rebound

The first 2 answers were given by more than half of the respondents and the rest were identified by less than half.

My Thoughts…

These companies are looking to BPM to cut costs rather than just arbitrarily ‘laying off’ employees.

Increasing Employee Productivity

- Business processes usually contain non-value added activities. Removing these activities allow employees to perform more of the value added activities each day.

- Analysis of your business processes can show that there are more efficient ways to perform these value added activities. Some of these may even be performed by software. Again, employees can perform more of the value added activities each day.

Gain Greater Control and Visibility

- BPM software should provide rules for escalation. This allows business line managers to dictate how long a process should take [control]. If steps are not completed on time, escalation Emails will be sent.

- BPM software should provide visibility. Employees should be able to track activities within a process with the click of a mouse. You should always know the status of any process. If one appears to be late, you have the opportunity to throw more resources at it to get it back on schedule.

I see Process Management [improvement] as the best place to look to cut costs. I believe that this discipline should be followed in good times as well as bad times.

I see all of the ‘fat and happy’ companies falling on hard times and wonder – ‘If they were more efficient [and disciplined to be efficient], would they be hurting as bad now?

Your Thoughts…

scleveland@ingenuus.com (Scott Cleveland) — Tue, 23 Jun 2009 15:17:00 +0000

Survival Actions…
Use BPM to Drive Out Costs

From a Gartner Article…

Depending on which economist you want to believe, this recession will last a few quarters or perhaps longer. The typical reaction of most companies is to cut costs.

The ‘ax man’ approach is likely to leave gaping holes in your business processes. So, how can you fight the ills of the economy without killing your business?
A company is a collection of processes. The key process [highest value] in any company is their ‘Quote to Cash’ process. And, the other processes exist in support of that process.

So, as Gartner points out, the ‘ax man’ approach could disable one of these supporting processes or the ‘quote to cash’ process itself. Neither outcome is desirable.

My Thoughts…

What you don’t know about your processes may be costing you money. Gaining visibility into your processes can help you see where money is being spent, the consequences of work activities and dependent actions.

Addressing all of your processes doesn’t make sense. I believe there is an 80/20 rule. Managing the 20% of your processes [the processes that are most important to creating value] will get you the greatest [80%] benefit.

Cutting costs within processes involves removing non-value added activities and finding better ways to perform activities. Business process management provides the management disciplines to surgically target problem processes and put them on the path to recovery. You will see that making these cuts would make sense whether the economy is good or bad.

Survival Actions…
- Identify the [20%] the processes that are most important to creating value for your company
- Target one of these processes for your first [or next] BPM project
- Measure this process as is [before]
- Remove non-value added activities [being careful of supporting processes]
- Look for ways [innovate] to have make this process more efficient
- Implement changes
- Measure – Making sure that your changes were actually improvements

Gartner sees BPM as one of the strategic management disciplines. They see companies moving from using BPM to survive to helping their organization to thrive.

I see Process Management [improvement] as the best place to look to cut costs rather than just arbitrarily ‘laying off’ employees.

Your Thoughts…

scleveland@ingenuus.com (Scott Cleveland) — Tue, 23 Jun 2009 15:16:00 +0000

It’s a Matter of Survival
Use BPM to Drive Out Costs

From a Gartner Article…

Depending on which economist you want to believe, this recession will last a few quarters or perhaps longer. The typical reaction of most companies is to cut costs. A CFO looks at the earning targets for the upcoming quarter, projects lower revenues, and then figures out how much cost cutting is needed to make the original earnings target…

The ‘ax man’ approach is likely to leave gaping holes in your business processes. So, how can you fight the ills of the economy without killing your business? Gartner believes that one of the methods to do this is to look to BPM. BPM provides the management disciplines and the tools to surgically target problem processes and put them on the path to recovery. Importantly, this is done in the context of the organization as a whole.

My Thoughts…

In one of my previous blogs, I pointed out that your ‘quote to cash’ process is likely to be your highest value process. And that your other processes exist to allow your ‘quote to cash’ process to function properly…

So, as Gartner points out, the ‘ax man’ approach could disable one of these supporting processes or the ‘quote to cash’ process itself. Neither outcome is desirable.

Cutting costs within processes involves removing non-value added activities and finding better ways to perform activities. Business process management provides the management disciplines to surgically target problem processes and put them on the path to recovery. You will see that making these cuts would make sense whether the economy is good or bad.

It just seems clear to me that process improvement is the best place to look to cut costs rather than just arbitrarily ‘laying off’ employees. Let me know what you think…

Your Processes can be your competitive advantage…

scleveland@ingenuus.com (Scott Cleveland) — Mon, 08 Jun 2009 18:11:00 +0000

Managing Documents – It is About the Process…

Document management solutions span from protected/shared directories to full enterprise solutions like Documentum, FileNet, etc.

I worked for one of the early document management companies some time ago. The president always used to tout that we would get the ‘right’ information to the ‘right’ person at the ‘right’ time. I have decided that he was ahead of his time.

Let’s examine what he meant…

You could just go to a protected/shared directory and pull out a document. However, before you can use that document, you must be sure that it is the ‘latest’ version of that document. If you should use an old document that has since been revised, you may make a costly error. So back to the protected/shared directory – how do you know you have the right document? Even with something like SharePoint, how do you know?

My Thoughts…

The lifecycle of a document includes creation, storage, changes, storage, changes, etc., storage and at some point in the future ‘end of life’. All documents go through some kind of lifecycle. That lifecycle is a Process.

The document is all about the process. I must know where this document resides within its lifecycle. Unless I am changing the document, I really want the ‘latest’ version of the document – the one that everyone has approved. It minimizes my risk [my risk of making an error, a potentially expensive error].

If the document is a legal contract, you could legally obligate your company for something that could cause great legal difficulty in the future.
If the document includes a parts list that is in error, you could create an expensive mistake on the factory floor.

If the document is a data sheet, you could make a promise that your company could not keep. And, that could throw your company into a court battle.

I think you get the point. It is not about the document, it is whether the document is the ’right’ document. It is about the document within its lifecycle process.

And yes, it is about getting the ‘right’ document to the ‘right’ person at the ‘right’ time.

Your Processes can be your competitive advantage…

scleveland@ingenuus.com (Scott Cleveland) — Mon, 08 Jun 2009 18:05:00 +0000

Business Processes – A Growing Corporate Priority

From a Robert Half Management survey of CFO’s in 2007.

Today’s global climate demands a constant drive to out-perform and out-innovate the competition. Leaders from government, nonprofits, small businesses and enterprises are asking the tough questions:

- How can our organization improve customer service levels and enhance productivity without incurring costs?
- How can we manage risk and compliance without losing business advantage?
- How can we empower every employee to innovate – to discover new products, find new markets or develop more-efficient ways to execute?

This quest is not unique to our time – performance management initiatives such as total quality management and business process re-engineering date from the 1950’s.

For many CFO’s the value of process improvement is likely seen in reduced costs – less redundant work leads to more efficiency, which then provides greater profits.

A recent Economist article sums it up best – they state that competition and innovation [not information technology alone] led to the extraordinary productivity gains seen in the 1990’s. Those innovations in technology, products and business processes boosted productivity. As productivity rose, competition intensified bringing fresh waves of innovation.

My Thoughts…

I have been making the case that a company is a collection of processes. I have provided many examples not the least of which is the ‘Quote to Cash’ process. If you are with me so far, then it is not difficult to see that managing your business processes should be a priority.

The tough questions listed above all deal with processes.

- Customer service is a process and improving customer relationships is key to improving profits. Enhanced productivity is a direct result of process improvement.
- Compliance is all about process. Sarbanes-Oxley, ISO and Aegis require audits that prove you have a process and that you follow that process.
- Innovation isn’t just about new product development; it can also be about the processes within your company.

Remember the 80/20 rule – 20% of your processes provide 80% of the value to your company. These processes should be your target – improving these will provide the biggest bang.

It is all about Process.

Your Processes can be your competitive advantage…

scleveland@ingenuus.com (Scott Cleveland) — Mon, 08 Jun 2009 18:00:00 +0000

Further Exploration of the Quote to Cash Process

Last week I pointed out that a company is a collection of processes. And, these processes exist in support of a company’s ‘Quote to Cash’ process.

I stated that there were three views to your ‘Quote to Cash’ process: A cash flow perspective; A human activities perspective; and the Customer’s perspective.

A couple of weeks ago, I covered the Cash Flow perspective – this week the Human Activities perspective and then the Customer’s perspective.

Human Activities perspective

Within any process, including the ‘Quote to Cash’ process, there are activities that workers perform that make it all happen. What are the non-value added activities that can be eliminated? Are the hand-offs from one human performing an activity to another [break points] working properly?

Each company has its own ‘business rules’ governing processes and activities. Are those business rules optimum? Is there a better way to perform those activities? Often, activities are still performed like they were years ago and there may be new and better ways to perform them.

There are always some tangential processes that support a ‘Quote to Cash’ process. Do they add value to the process or impede its progress?

Metrics - It is extremely difficult to measure success if you don’t have a starting point so you can compare ‘what was’ with ‘what is’.

Change – A known constant for business today is that there will always be change. This makes business process management more important and an ongoing activity.

Your Thoughts…

scleveland@ingenuus.com (Scott Cleveland) — Thu, 04 Jun 2009 16:06:00 +0000

Exploring the Quote to Cash Process

A company is a collection of processes. And, these processes exist in support of a company’s ‘Quote to Cash’ process.

A few days ago, Terry Schurter and I were having coffee discussing the ‘Quote to Cash’ process. He pointed out that you can look at the ‘Quote to Cash’ process from 3 different points of view – from a cash flow perspective; from the human activities perspective; and from the customer’s perspective.

My Thoughts…

I do think that he hit on something important. If you intend to ‘improve’ or even ‘manage’ your ‘Quote to Cash’ process, I think you must look at the process from each of these points of view.

Cash Flow perspective - Last week, I looked at the ‘Quote to Cash’ process from the cash flow perspective. I quoted a national leader in Receivables Cycle Management. Certainly, their view was all about cash flow.

Human Activities perspective - Within any process, including the ‘Quote to Cash’ process, there are activities that workers perform that make it all happen. This is where you may identify non-value added activities that can be eliminated. This is where you begin to recognize other processes that add value to your ‘Quote to Cash’ process.

Customer’s perspective – Your customers do interact with your ‘Quote to Cash’ process. At a minimum, they start the order and receive the goods or services. If it is not easy to do business with your company, you may not keep this customer. And, there have been many studies showing that it is easier to do business with an existing customer than to find a new customer.

Your Thoughts…

Have you diagrammed your ‘Quote to Cash’ process? Are your receivables longer than 45 days old? Are all of the human activities clearly defined so that the process runs smoothly? Can you identify the processes that add value to the ‘Quote to Cash’ process? What do your customer’s think of your process?

scleveland@ingenuus.com (Scott Cleveland) — Thu, 04 Jun 2009 15:21:00 +0000

The Quote to Cash Process

I have written before that a company is a collection of processes. And, it is pretty easy to see that these processes exist in support of a company’s ‘Quote to Cash’ process.

Regarding the ‘Quote to Cash’ process, a national leader in Receivables Cycle Management for Parson Consulting wrote:

The ‘Quote to Cash’ process includes all of the steps from the initial quote through order processing, order fulfillment and finally the receipt of cash.

- Did you know that receivables ranked among the top 3 tangible assets for 75% of the Fortune 100 companies?
- Did you know that the staff who perform this process have more frequent customer contact than anyone in your company [including sales]?

Improvements in your ‘Quote to Cash’ process can be a prolific source of profit and cash benefits.

My Thoughts…

Over the years of my career, I have mapped out many ‘quote to cash’ diagrams for companies. I have been involved in many conversations about how to improve this process. I have also seen that, since it crosses departmental boundaries, it is difficult to make any wholesale changes to the process. Tweaks – yes…

The real story here is that one of their clients redesigned their ‘Quote to Cash’ process including staff skills and management culture. Over the next year and a half, they saw a huge increase in their stock price and they saw an increase in cash on hand equivalent to 4 months of sales.

There are many processes that support the ‘Quote to Cash’ process. Some of these processes are key to adding value to the ‘Quote to Cash’ process. They might be processes like: Manage quotes; Manage legal contracts; Manage product changes; Manage purchasing items; Manage collections; Manage customer support; etc.

When is the last time you really looked at your ‘Quote to Cash’ process? Do you have any documentation on it? Can you identify the processes that add value to the ‘Quote to Cash’ process?

Your Thoughts…

scleveland@ingenuus.com (Scott Cleveland) — Thu, 04 Jun 2009 15:10:00 +0000

Reinventing Your Business Model

A current article in the Harvard Business Review talks about reinventing your business model. They see a business model having four interlocking elements that, taken together, create and deliver value.

- Customer value proposition – Create value for customers
- Profit formula – Creates value for itself while providing value to the customer
- Key resources – Assets such as the people, technology, products, facilities, equipment, channels and brand required to deliver the value proposition to the targeted customer
- Key processes – Deliver value in a way that a company can successfully repeat and increase in scale

My Thoughts…

This article caught my attention because the Harvard Business Review [HBR] sees processes as one of 4 key elements of a business model.

There is no doubt that companies are always looking to create value for their customers. And, they can’t stay in business without making a profit. A great deal of effort is aimed at assembling the key resources to deliver value to their customer. However, I will argue that managing key processes is treated lightly by comparison.

Even HBR is talking only of the processes that deliver value to the customer.

In reality, a company is a collection of processes that support a ‘quote to cash’ process. All companies will quote a price, deliver their goods and/or services and receive cash [and provide support]. The ‘quote to cash’ process is the backbone that keeps a company alive.

In the past, processes were analyzed with a focus on efficiency. Today, companies are beginning to look at these processes not only to increase efficiency but with a sharp eye for creating customer value.

Your Thoughts…

scleveland@ingenuus.com (Scott Cleveland) — Tue, 26 May 2009 14:39:00 +0000

Did you know that receivables ranked among the top 3 tangible assets for 75% of the Fortune 100 companies?
Did you know that the staff who perform this process have more frequent customer contact than anyone in your company [including sales]?

Improvements in your ‘Quote to Cash’ process can be a prolific source of profit and cash benefits.

My Thoughts…

Over the years of my career, I have mapped out many ‘quote to cash’ diagrams for companies. I have been involved in many conversations about how to improve this process. I have also seen that, since it crosses departmental boundaries, it is difficult to make any wholesale changes to the process. Tweaks – yes…

The real story here is that one of their clients redesigned their ‘Quote to Cash’ process including staff skills and management culture. Over the next year and a half, they saw a huge increase in their stock price and they saw an increase in cash on hand equivalent to 4 months of sales.

There are many processes that support the ‘Quote to Cash’ process. Some of these processes are key to adding value to the ‘Quote to Cash’ process. They might be processes like: Manage quotes; Manage legal contracts; Manage product changes; Manage purchasing items; Manage collections; Manage customer support; etc.

When is the last time you really looked at your ‘Quote to Cash’ process? Do you have any documentation on it? Can you identify the processes that add value to the ‘Quote to Cash’ process?

Your Thoughts…

scleveland@ingenuus.com (Scott Cleveland) — Tue, 26 May 2009 14:33:00 +0000

Customer value proposition – Create value for customers
Profit formula – Creates value for itself while providing value to the customer
Key resources – Assets such as the people, technology, products, facilities, equipment, channels and brand required to deliver the value proposition to the targeted customer
Key processes – Deliver value in a way that a company can successfully repeat and increase in scale

My Thoughts…

This article caught my attention because the Harvard Business Review [HBR] sees processes as one of 4 key elements of a business model.

There is no doubt that companies are always looking to create value for their customers. And, they can’t stay in business without making a profit. A great deal of effort is aimed at assembling the key resources to deliver value to their customer. However, I will argue that managing key processes is treated lightly by comparison.

Even HBR is talking only of the processes that deliver value to the customer.

In reality, a company is a collection of processes that support a ‘quote to cash’ process. All companies will quote a price, deliver their goods and/or services and receive cash [and provide support]. The ‘quote to cash’ process is the backbone that keeps a company alive.

In the past, processes were analyzed with a focus on efficiency. Today, companies are beginning to look at these processes not only to increase efficiency but with a sharp eye for creating customer value.

Your Thoughts…

scleveland@ingenuus.com (Scott Cleveland) — Mon, 18 May 2009 20:44:00 +0000

More from the ‘Evolved Technologist’…

Process is the focus because it is the most effective way to express what everyone in an organization should be doing in a way that connects the highest-level strategy to the actions of each individual. Well-defined processes that are communicated widely in an organization require less management. Individual decision-making takes place in the context of what is coming before and what will happen afterward.

Departments purchase software that meets their needs and creates silos of information – finance has their ERP, Sales has their CRM, and Engineering has their PLM. The need for integration and optimization quickly became evident.

The change in mindset looks like this…
- From application focus to Process focus
- From business intelligence to Process intelligence
- From performance metrics to Performance Management
- From support organization to Service organization

Our Thoughts…

The transformation from application focus to process focus reminds me of engineers that are used to designing in 2 dimensions that now have to think in 3 dimensions.

Document management people, for example, are used to managing documents. Some have told me that they just manage the document. But, when you think about it – they are really managing the results of a process. A document is the latest released document because it passed through a process to get that designation. Managing a document isn’t about the document management software; it is about the process the document passed through.

Moving up to the 50,000 foot level…

If a process is a collection of related, structured activities [a chain of events] that produce a service or product. AND, a company is a collection of processes that encompass all of a company’s activities between the time they quote a price until they deliver and receive cash. THEN, a company’s processes should be the center of their focus.

Your Thoughts…

scleveland@ingenuus.com (Scott Cleveland) — Mon, 18 May 2009 20:42:00 +0000

I received a whitepaper from www.EvolvedTechnologist.com and with input from SAP, they wrote…

Sometimes it sounds as if proponents of BPM are suggesting that every activity of a corporation should be described our automated using formal business process models [documented]. Even the most enthusiastic proponents do not suggest that adoption of BPM go this far. Rather, the targets for BPM are the processes that are most important to creating value, those that will yield tremendous benefits if optimized, those that most need to rapidly change and evolve to keep pace with competitive markets.

They have listed what they believe is the business value of BPM and below is a partial list:
- Increased transparency – Management knows what everyone is doing and how they should be doing it.
- Increased traceability – It is possible to find out what happened and what is going to happen with respect to operational processes.
- Improved responsiveness and flexibility – Change can be effected more rapidly and precisely because the as-is state is documented and understood.
- Continuous business optimization – As BPM implementation matures at a company, everything needed to understand performance falls into place.

Our Thoughts…

We concur with the text above. We believe that companies are a collection of processes. These processes fall into the 80/20 rule. Managing the 20% of your processes [the processes that are most important to creating value] will get you the most [80%] benefit. The difficult task is identifying those processes that make up that 20%.

Missing business values from the white paper…
- Increased control over process cycle times - Using BPM [execution] software, companies are able to establish how long a process should take. Making use of escalations and visibility into process status, they are able to make sure that a process is completed in a specified amount of time.
- Decreased costs – Reduced costs will come from removing non-value added activities and adding efficiency to a process.
- Increased revenue - Reducing costs and providing more goods/services with fewer people helps drive increased revenues.
- Increased customer satisfaction - When we talk about creating value, isn’t it the customer that determines the value? Processes that touch the customer should be given the highest priority.

Certainly in this economy, we are all interested in reducing costs and increasing revenues. Improving interactions with your customers is a key ingredient to increasing revenues. We refer to all 3 of these as the ‘Triple Crown’ of business and who wouldn’t like to win the ‘Triple Crown’ of business?

Your Thoughts…

scleveland@ingenuus.com (Scott Cleveland) — Mon, 18 May 2009 20:38:00 +0000

There has been a lot of discussion on the Internet about the definition of business process management. So…

What is business Process Management?

Terry Schurter of IPAPI says that while BPM stands for “Business Process Management” the definitions of Business Process Management in use in the marketplace have dramatic differences in their meanings. The definition comes from the person or organization using the term as they place “BPM” within the context that they care about.

The biggest disparity exists between the commercial software market and the business pundits who define BPM in completely different ways. On a historical note, BPM did indeed start as a management practice, coming directly out of the more experienced practitioners of Business Process Reengineering. From these people, Business Process Management was originally conceived of as a way to better manage the business operations of large commercial entities.

Our Thoughts…

In its simplest form, BPM the art or science of managing business processes. Like Terry says – BPM started as a management practice.

If you think about it, most business processes come into being almost by accident. A new company that wants to produce goods or services will come up with a plan to accomplish that feat. That plan will likely identify the steps of a process. Over time, those involved in the production of goods and services will modify the plan – change, add or remove steps.

The objective of managing your business processes is to be efficient as possible. A company tries to provide goods or services in as few steps as possible. They want all of the steps to add value to the goods or services. They want low costs so that they can achieve larger profits. And, it is in their best interest to provide the most positive interaction with their customers.

I see three different levels of solutions.

Manage Business Processes - Document your process and improve that process by removing the non value added steps, improving steps or activities, and improving customer touch points. This is an oversimplification, but you can easily make process improvements without the use of software.

Manage Business Processes with Software – Adding software to the mix provides control and visibility. It can add a time discipline to the process. It provides visibility into the state of a process. Add these together and you can really shorten process turnaround times. And, you can reduce human errors.

Business Process Automation – Allow the software to perform mundane manual tasks that it is able to perform. This will further shorten cycle times and give you back cycle times for some employees.

In today’s economy, we are all looking at ways to cut costs. So even if you can’t get capital for software – It is the right time to manage your business processes to reduce costs.
The road to the ‘Triple Crown’ of business is paved with reduced costs, increased revenues and improved customer interactions.

scleveland@ingenuus.com (Scott Cleveland) — Wed, 11 Mar 2009 15:24:00 +0000

Bob Evans of InformationWeek recently wrote an article -
‘CIO as Chief Cost Cutter’.

He states that with the IT organization’s unique opportunity to see the web of business processes that run across the entire organization, CIO’s are in a great position to attack inefficient systems and processes to liberate precious cash.

He goes on to say that cost cutting is not enough. When the economies turnaround and businesses start to grow, will your customers be satisfied with the capabilities your company had in late 2008? Will competitors that have cut not only costs but also product development time and customer engagement cycles box your sales team out of opportunities?

He concludes that right now is an excellent time to pull together a plan for innovation during cost cutting. Your main objective as CIO is to help drive greater business value and customer value.

Our Thoughts…

Bob is writing to the CIO, but he is telling my story - The economic downturn provides an excellent time to drive for ‘greater business value and customer value’.

Over the last several weeks, I have been talking profitability in this new economy. I have stated that the road to profitability is paved by the Triple Crown of Business [lower costs, increase revenues and improve customer interactions].

In 2009, the challenge for all companies is to emerge from the downturn in a stronger position than going in.

Now is the time to review your ‘web of business processes’ that run across your organization. There is likely an 80/20 rule on these processes – 20% of the processes should account for 80% of the costs. So, review the ‘20’ to remove non-value added activities. But don’t just think cost cutting, this is a good time for innovation. Look to cut costs while improving customer interactions.

If you don’t do anything, you could get left on the side of the road. Now is the time to strive for the Triple Crown of Business so that your company can be a leader coming out of the economic downturn.

Your Thoughts…

scleveland@ingenuus.com (Scott Cleveland) — Wed, 11 Mar 2009 15:23:00 +0000

Recently, I read that in today’s economic climate, business managers are in the front line of driving operational efficiency and performance to new levels. Despite huge advances over several decades of business computing, there are still too many aspects of everyday office life that involve time-consuming, error-prone manual processes.

So, how are companies going to address this?

Gartner surveyed more than 1,500 CIO’s to see what their top ten business priorities were.

1) Business Process Improvement

2) Reducing Enterprise Costs

3) Improving Enterprise Workforce Effectiveness

4) Attracting and Retaining New Customers

5) Increasing the Use of Information/Analytics

6) Creating New Products or Services [innovation]

7) Targeting Customers and Markets More Effectively

8) Managing Change Initiatives

9) Expanding Current Customer Relationships

10) Expanding into New Markets and Geographies

Our Thoughts…

It should be a given that all companies are looking for ways to improve their profitability. Most look at reducing costs and increasing revenues as steps that will get them there. I believe that there is a third leg to that stool – improving customer relationships. I am calling these 3 legs the Triple Crown of Business. Each of the ten items on the list is focused on achieving the Triple Crown of Business.

A Couple of Approaches to Profitability

1) Charge your sales people to bring in more business. This may not be likely in today’s economic climate.

2) Work on the Triple Crown of Business - reduce costs, increase revenues and improve customer relationships.

Start with Business Process Improvement - this will address the time-consuming, error-prone manual processes. Your company is made up of many processes and you can probably apply an 80/20 rule to them. Improving the 20% will get you the biggest bang for your buck. If you could identify that 20% and really improve them, I believe that you could have quite a positive impact on the other 9 business priorities listed above.

Reducing costs, increasing revenues and improving customer relationships will work regardless of the economic conditions. It is analogous to a basketball team playing solid defense [efficiency] even when their shots [revenue] are not falling. This strategy can keep them in the game – just look at last year’s Boston Celtics.

As I have said before, in today’s economic climate some companies will fail, some will just get by and a few will do really well – where will your company finish?

Your Thoughts…

scleveland@ingenuus.com (Scott Cleveland) — Tue, 10 Mar 2009 15:49:00 +0000

BP Group recently published a ‘Moments of Truth’ toolkit. In it, they identify the five steps to winning the Triple Crown [reduced costs, increased revenues and improved customer interactions].

Step 1) Identify your goal. They point out that the overall goal is to improve customer satisfaction.

Step 2) Identify your target area. The target is the area that we are seeking to improve.

Step 3) Identify your moments of truth. Moments of truth happen when your internal processes touch the customer.

Step 4) Blink your analysis. I am interpreting this as a brain dump of all of your ideas.

Step 5) Describe your actions. Identify the actions that you need to take to achieve your stated goal.

Their conclusion: Although companies have been investing record amounts of money in traditional process improvement approaches, such as Six Sigma and Lean and in general service quality improvements, most of these initiatives end in disappointment. What’s regularly missing, in our experience, is the ‘outside-in’ perspective that sparks between the customer and frontline staff members – the spark that helps transform wary or skeptical people into strong and committed customers.

Utilizing moments of truth to identify and reengineer all customer interactions produces immediate and sustainable benefits for all – the customer, the staff and the shareholders.

Our Thoughts…

Several articles have pointed out that satisfied customers are not going to be enough – they claim that you need ecstatic customers. Their thinking is that a satisfied customer will not necessarily be touting your company to others, but an ecstatic customer will. A satisfied customer might be taken away from you, but an ecstatic customer will not. So, how do you create ecstatic customers?

Let’s look at an example we all know - NetFlix. Blockbuster owned the DVD rental business. NetFlix decided to provide DVD’s by mail [eventually over the internet]. They paid attention to customer satisfaction – the customer came first. While Blockbuster is bigger, they got into that market late. To this day, they still charge late fees. Today, NetFlix is the leader because they really know how to take care of their customer. Blockbuster will have a difficult time overtaking NetFlix and likely never will.

Many companies look to improve their internal processes, but how many focus on the processes that interact with their customer? If one of your goals is to have ecstatic customers, then these processes need some attention.

From the IQPC Customer Experience Summit later this month - ‘A customer experience is an interaction between an organization and a customer’. It is a blend of an organization’s physical performance (product, price, delivery), the emotions evoked, each intuitively measured against customer expectations across all moments of contact… Over 50% of a customer experience is how you feel. It’s not just about the what, it’s the how’.

In summary, the challenge we all face in today’s economic climate is that some companies will fail, some will just get by and a few will do really well – Where will your company and mine end up?

Your Thoughts…

scleveland@ingenuus.com (Scott Cleveland) — Wed, 25 Feb 2009 20:08:00 +0000

Business Process Improvement

So, how are companies going to address this?

Gartner surveyed more than 1,500 CIO’s to see what their top ten business priorities were.

1) Business Process Improvement

2) Reducing Enterprise Costs

3) Improving Enterprise Workforce Effectiveness

4) Attracting and Retaining New Customers

5) Increasing the Use of Information/Analytics

6) Creating New Products or Services [innovation]

7) Targeting Customers and Markets More Effectively

8) Managing Change Initiatives

9) Expanding Current Customer Relationships

10) Expanding into New Markets and Geographies

Our Thoughts…

A Couple of Approaches to Profitability

1) Charge your sales people to bring in more business. This may not be likely in today’s economic climate.

2) Work on the Triple Crown of Business - reduce costs, increase revenues and improve customer relationships.

As I have said before, in today’s economic climate some companies will fail, some will just get by and a few will do really well – where will your company finish?

Your Thoughts…