“As-Is” Process Assessment

Description

• 
  Graphical representations of current processes to be redesigned, depicting:
• Key activities performed as part of the process
• “Who” (person or unit) performs each key activity
• Inputs and outputs of each activity (indicating interdependencies)
• Information/data stores (e.g. in databases or paper files)
• External players or “stakeholders” who influence or form part of the process
• Major decision points within the process.
• Analysis of the current performance of selected processes, identifying problem areas (as indicated by rework, multiple approvals, delays, etc.), potential performance improvement, and related constraints/risks associated with implementing suggested solutions.

Business Value

• This documentation provides the knowledge and foundation upon which all process design, improvement, or redesign decisions are based.  It allows the design team to visually represent how a particular process is executed, so that it is uniformly understood by the project team and the Organisation, and key analytical questions are accurately addressed.  The process mapping serves three major purposes:
• To help employees visualise how their work duties contribute to a larger, “end-to-end” business process (that typically crosses over internal organisational boundaries)
• To identify major problems and potential opportunities by examining in a systematic fashion the work that is “actually” being done by employees (often not known or documented)
• To establish “baseline” performance measures (often estimated by staff) against which the future performance improvements of the BPI exercise can be assessed
• If this deliverable is not completed, a situation may arise whereby:
• Current processes are not adequately understood to perform meaningful redesign.
• Redesigned processes do not address key problems that exist with current processes
• Required interdependencies between processes are not identified
• Understanding and “arousing” is not pervasive throughout the team members and management (e.g. because the current performance baseline is not viewed as credible).

Approach

The Focus Areas selected are now documented in greater detail. The team members decompose (down to the step level) each activity in the process, and analyse the results and present the findings to the sponsor. Throughout this activity, the team members draw upon information gathered during the Internal Organisational Overview or gather additional information, as required.

Processes are usually depicted in high-level process models or data-flow diagrams.  Particular problem areas on these models are “drilled down” an appropriate level of detail to provide a basic understanding of the key activities (and the underlying opportunities for improvement they present).

1. Determine the type of process model required (Process Mapping)
1. Define process-modeling requirements
2. Select modeling tool
2. Develop “As-Is” process models
1. Gather information, as required, on the current process
2. Conduct process modeling workshops and/or interviews
3. Document the process as currently performed.  Identify:
1. Activity worksteps
2. Position (or unit) responsible for each activity step
3. External customers and stakeholders (e.g. suppliers)
4. Information (and, where appropriate, raw material) inputs, outputs, stores
5. Sub-processes (if appropriate)
6. Major decision points within the process (if appropriate).
4. Develop initial model and review/revise with it design team
3. Measure the current performance levels of processes
1. Coordinate efforts to assess current process performance with the parallel “As-Is” I/T Assessment and the “As-Is” HR Assessment
2. Determine the specific minimum set of performance measurement data required to create a meaningful picture of the current “baseline” performance of the process.
1. To obtain a meaningful picture of the performance of the processes being studied, the data collected must align well with the scope and activities reflected in the process flow diagrams.
3. Develop, as required, data collection templates to ensure consistent data gathering.
1. The process of gathering internal information on current process performance typically includes:
1. Reviewing previously-gathered information on performance levels
2. Determining additional performance information needed for analysis
3. Developing survey templates, logs or other methods for collecting     additional information
4. Defining frameworks for summarising the information (e.g. basic charts, scatter diagrams, etc.)
2. Common process performance measures include:
1. Speed—“applied” and “elapsed” time to complete all or a portion of the process; processing versus delay time
2. Volumes—e.g. number of applications processed per day; inventory levels; number of boxes shipped
3. Total numbers—e.g. total number of approvals, process steps, handoffs between departments, etc.
4. Percentages—e.g. percentage of value-added time
5. Output quality—e.g. error rates, rejection rate, frequency of returns and rework, accuracy of billing, etc.
6. Trend data—e.g. strong seasonal variations based on historical periods of the past 2-3 years or more.
4. Collect and compile any additional current performance data from internal sources
1. It is often useful to attach “applied time” and “elapsed time” estimates directly to the process maps (during process mapping workshops or interviews.)
4. Gather relevant external benchmark data to determine (or refine) the size of performance gaps with other comparable organisations (Benchmarking)
1. Gather comparative quantitative information from external sources on the particular aspects of the processes, technology and organization under review.
2. Utilise customer input (Requirements of Process Customers, Customer Profiling) to validate the size of the gaps between current and desired performance.
5. Analyse and compile findings from all assessments to assist in the identification of Priority Opportunities and Quick Wins.
6. Review with the appropriate client authorities for validity/accuracy.

Guidelines

Problems/Solutions

• Do not create process models that are too complex or difficult to use.  Even if the process it represents is complex, the maps should be easily explained to others.  The objective is not to map how the organisation handles every “exceptional” situation encountered.
• When measuring process performance, it is often helpful to request employees to allocate (estimate) the percentage of time they spend per year on each major process step identified in the process map.  (Such an exercise might be compared to a mini version of Activity Based Costing).  The roll-up of these numbers typically provides a revealing picture of the activities to which employees dedicate large portions of their time.  However, care must be taken to explain to employees how this information will and will not be used.  Otherwise certain employees may intentionally exaggerate their participation in some activities (e.g. if they feel that management favours one kind or activity over another).

Tactics/Helpful Hints

• Throughout this entire exercise, the level of detail must be balanced with speed.  Map only to the minimum appropriate level of detail (e.g. “what happens in 80% of the cases”)—just far enough to estimate current performance, identify problems, and propose potential opportunities—and no further.
• Employ an iterative approach when developing process maps. As a team, document and review the high-level flow diagrams of the processes. Repeat this one or more times until the team is satisfied that it has a general understanding of the “end-to-end” steps of the process, and that the major problems and opportunities have been identified.
• When asking interview or workshop participants to suggest preliminary improvement opportunities, insist that they provide at the same time their best estimate of the benefits and costs associated with each idea they put forward.
• One tactic to communicate the nature of process problems to key decision-makers is to simulate the static process models (e.g. using simulation software).  Be aware, however that developing simulation model can be time-consuming and thus their creation should therefore be cost-justifiable.
• Remember that since multiple variations of the same process may exist in different locations, multiple process maps may need to be completed (or a single generic map, with local variations documented in plain text).
• Use random observations and sampling techniques to collect data that may not be readily available.
• Create a “parking lot” on a flipchart for ideas that are unrelated to the process being analysed, especially if workshop participants express concerns that their ideas will not be addressed.

Resources/Timing

• To create a sense of ownership, allow team members to take a major role in driving the creation of the process maps and performance measurements.  The use of client team members enables organisations to transfer knowledge and ownership of the project so that client personnel will be prepared to take on the implementation at the end of this phase. Client participation in the team is important for organisations that are interested in skills transfer as a means of building internal change capability.
• Ensure that the appropriate management team has been assembled for this phase.  There should be representatives from all the major functions/areas.  Customers and suppliers may also be included if deemed appropriate.
• Regular checkpoints with the team and consultants should be established to ensure that data collection efforts are underway and to work out any problems.  Data collection is an excellent opportunity to use extended client team members who are involved in the process and may know how and where to locate information.  An extended client team member from the finance/accounting function may be very helpful for information access and analysis.
• Vary the timeframe for this activity according to the complexity of the processes.  Factors influencing the duration of this activity include:
• Availability of information required for “As-Is” process documentation
• Number of processes being documented simultaneously, which impact the resources available to complete the activity
• Complexity of process being documented Geographic dispersion of design team participants required to conduct the necessary workshops.

Requirements of Process Customers

Description

• A confirmation of process customers’ needs with respect to “how” selected processes in a Focus Area are performed.  This deliverable validates that the performance-level objectives for each process reflect the true needs of the direct “customers” of that process. The customers may be internal or external to the organisation, depending on the process being redesigned.

Business Value

• This deliverable serves as a “reality check” to validate the Critical Success Factors and confirms that the redesign efforts within each of the Focus Areas reflect the actual needs of their specific process-customers. This input ensures that redesign efforts are centred primarily on process customer requirements.
• Without this validation, the Project team cannot ensure that the processes that they are designing will satisfy the requirements of process customers, which will affect the ability of the organisation to achieve its (Confirmed) Business Vision.

Approach

To determine if a process is producing the quality products or services demanded by its customers, the output of the pro­cess must be measured relative to the customer's expectations.  Customer views of the process can be ob­tained through interviews, focus groups, etc.

1. Determine the best approach to evaluation and analysis (i.e. information required, data collection method, presentation format)(Customer Profiling)
2. Determine customer groupings
1. External customer groups chosen may include any of  the following:
1. Direct users of goods and services (the most common kind of customer).
2. Marketing channel partners (retailers, agents, brokers, and dealers).
3. Service partners who market their own goods and services in combination with those of the organisation.
4. Key stakeholders (regulators, consultants, and others who have an influence over the mar­ket).
2. “Internal customers” are those individuals inside an organisation who utilise the output of steps within business processes who are typically the primary customers when “support” processes (versus “core” processes) are being redesigned.
3. Representatives from internal units having direct daily communication with end-customers (e.g. sales, customer service and after-sales servicing staff) may also be excellent sources of information when validating the requirements of external process customers.
3. Schedule and conduct interviews and/or focus groups
4. Synthesize results
1. Pertinent factors for customer assessments include:
1. Customer satisfaction level and perception by process output or characteristic
2. Customer expectations of process output or characteristic
3. Customer requirements of the process
4. Customer definition of value in regard to the process
5. Gap analysis of customer satisfaction versus expectations
6. Internal process characteristics compared to similar process in other organisations.
5. Review results with senior management

Guidelines

Problems/Solutions

• Management may be uncomfortable with the need to talk to and/or meet with customers (claiming, for example, that they already know what their customers want).  The BPI Team  should reinforce the critical requirement for direct external input to provide a real-world flavour to the process.  If direct access to customers is not feasible, the team members may identify other sources of informa­tion already in-house, such as customer surveys, complaint logs, interviews, etc.
• Direct all team members not to let biases influence them nor to let current day-to-day business remain the focus.  The ultimate aim is to obtain the customer’s perspective regarding trends in the coming five years and to find ways to improve the link between the organisation’s value chain (see also Holistic Business Model) and the customer’s own value chain.
• It is often assumed that the external customer's needs and expectations are well-known.  Let the customers tell you their requirements in their own words.  If not done properly, this can result in incorrect expectations with the ultimate result that inap­propriate measures will be developed for redesigned processes.

Tactics/Helpful Hints

• Assessing customer needs—by illustrating the gap between current performance and customer expectations—is a change management tactic to increase management's “pain level” or awareness about the current situation.  This task can also be very effective when only “internal” customers are present, especially when comparisons are made to external organisa­tions providing the same service or product on a fee basis.
• If possible, allow BPI team members to experience parts of the pro­cess di­rectly through “behind the counter” sessions.  This may include directly observing process ac­tivities (e.g. a sales call), taking on a job in the process for a brief period, or otherwise observing the process firsthand.  This can be particularly beneficial for team mem­bers who have little contact with parts of the process or with customers, and need to get a first-hand view of the customer interface.

Focus Areas

Description

• The selection of “high-payback” business processes for analysis and redesign to narrow the scope of the BPI program to concentrate on “high-potential” processes. Priority processes are selected based on their “business impact”—the degree to which they support the Critical Success Factors—unless other external factors (identified as part of a Process Characteristics Analysis) constrain or influence this choice.

Client Value

• This selection allows the project team to focus resources and time  on changing those processes that will yield the maximum benefit to the organisation.  Narrowing the project scope in this manner will also eliminate pro­cesses from redesign that are not strategically important or are considered “low-payback” in terms of the stated BPI objectives.  For example, the Holistic Business Model may identify processes which are strategically important, but which are highly-regulated, already highly-automated, or have other attributes that make them less attractive candidates for major reform.
• Not taking the time to identify Focus Areas properly often results in a “guesswork” approach to selecting processes for redesign. Unless the project scope is narrowed through  Focus Areas, the BPI exercise runs an increased likelihood of cost overruns, a failed redesign or the redesign of processes that do not significantly contribute to the client’s Confirmed Business Vision.

Approach

Depending on the size and nature of the Organisation, the selection of Focus Areas typically ranges from “management intuition” to “analytical deduction”. The processes to be evaluated are based on the Holistic Business Model discussed in a previous Blog.  The selection of Focus Areas is based primarily on “the degree of impact each business processes has on Critical Success Factors”.   Before a final selection is made, however, other characteristics that may influence the viability of these “shortlisted”, high-impact process (e.g. known legal and regulatory constraints) are examined to ensure basic feasibility.

One basic approach to selecting Focus Areas involves scoring each process based on its impact on Critical Success Factors, followed by a qualitative ranking of its priority, based on the external influencing characteristics.  Once this analysis has been completed, the highest-payback processes are selected, validated with senior management and scheduled for subsequent assessment and redesign.

1. Develop an approach and framework to analyse the potential contribution of each process to BPI objectives and confirm with senior management to ensure up-front “buy-in”. (Process Impact Analysis)
1. The complexity of the framework for analysing the contribution of each process is influenced by the number of processes to be evaluated, and the nature of the audience
2. Make a preliminary assessment of the contribution of each high level process to be evaluated.
1. This assessment can best be made jointly with a selected group of senior client representatives.
3. Take into consideration other pertinent “process attributes” or risk factors that might influence the selection i.e Process Characteristics Analysis.
1. The analysis of process characteristics is usually limited to those that have a     significant impact upon the Critical Success Factors.  (As a starting point, refer to any preliminary listings made of the attributes of each process.)
4. Select the “highest-payback” processes for redesign.
1. In certain circumstances, competitive surveys and customer input alone will point to the necessity to improve certain processes.
5. Determine the schedule (sequencing) to assess and redesign the high-payback Focus Areas (often groups of interconnected processes).
1. Selection and sequencing of BPI efforts can be performed in various ways, depending on the accessibility and availability of sponsors and executive management.  In some cases, the consul­tant, together with the client team, will develop a draft to review with the sponsor.  It is also possible to apply selection and sequencing criteria and develop a plan in a workshop environ­ment.
2. When sequencing Focus Areas for redesign, the following factors must be taken into consideration:
1. An area’s past track record with change and change risk factors.
2. Focus Area’s degree of sponsorship (defined by Role Map Analysis).
3. Organisational or technical issues that apply to individual processes.
4. “Upstream or downstream” relationships between processes.
5. Potential overlap of project sponsors or design team members.
6. Ratio between risk of change versus reward of improvement.
6. Document and communicate results.

Guidelines

Problems/Solutions

• n  Be sure that the Holistic Business Model is accurate and sufficiently to provide the information required to describe and define the candidate processes.  If not, additional work may be needed to refine the Holistic Business Model to the appropriate level of detail.
• n  Remember that the analysis of business impact and the comparison with the process characteristics needs to be easily understood.  The consultant should emphasize that the analysis tool is a way to help people think and sort out information and not a strict decision-making mechanism.
• n  Be careful of choosing processes as early targets  that will require significant up-front technology investments, which are costly and which delay both tangible change and measurable benefits.
• n  Be aware that unexpected, “hot” organizational issues may cause the executive team to shift its focus to processes that do not have a significant business impact. The use of the Process Impact Analysis can help to refocus the executive team.
• n  Where many processes are being considered, it may be necessary to assign weights to the Critical Success Factors, so that a quantitative rating of processes will not produce many “ties” and so that the relative importance of Critical Success Factors is considered (see technique Process Impact Analysis).

Tactics/Helpful Hints

• Characteristics can overlap significantly with Critical Success Factors.  For example, if one of the Critical Success Factors is to improve customer service, then the characteristic “customer service impact” should not be evaluated to eliminate the redundancy.  In most cases, a relatively short list of characteristics (four to six) will result.  These can be evaluated intuitively creating a “first cut” selection with input from process participants or managers.
• The sequencing should consider actions required to address organisational or technical issues that have an impact on the ability to design or implement new processes.  Actions that may need to be included in the overall BPI program plan are as follows:
• Changes to performance evaluation and/or compensation plans to accommodate group or process performance measures.
• Improvements to existing technology infrastructure and/or information systems delivery capabilities.
• Evaluation and potential changes to hiring, transfer, force reduction, or other human re­source policies.
• Changes in career path, training programmes, and performance reviews to allow for “pay for skills” or other organisational learning capabilities.
• This initial project effort should have the potential to provide significant business benefits and to improve the value provided to customers. Otherwise there is a risk that, although the first project will result in improved pro­cess performance, there will be no significant business benefits. Subsequent efforts may consequently be jeopar­dised.  The initial effort should  also be in a business area that has had successful experi­ence with major change and can provide highly motivated staff for the design team.

Resources/Timing

• It is important to have considerable workshop facilitation skills and experi­ence in redesigning a variety of processes.
• The length of time involved in this phase is dependent on the number of processes identified in the business model and on the extent of previous work to understand these processes.

Shared Values & Guiding Principles

Description

• 
  Declaration by senior management of the values and principles that will define the future organisational culture (“how things will be done around here”).  These address which cultural values the organisation must maintain intact, change or adopt for the BPI program to succeed.
• Shared Values and Guiding Principles are initially articulated in high-level behavioural terms that address the entire organisation.  Later, as part of the development of Design Charters, these values are re-expressed from the perspective of specific Focus Areas, as “Guiding Principles” for design teams.

Client Value

• This deliverable clarifies for the organisation what otherwise may appear to be intangible issues associated with human behavioural change. Shared Values and Guiding Principles directly link the stated business objectives to the organisational culture changes achieving these objectives will require (e.g. work lifestyle, customer-orientation, etc.).
• BPI project teams refer back to these directional statements—established up-front by management—many times during the BPI program to guide them in coming up with business solutions that are in line with senior management’s vision and way of thinking.
• The communication of the values and principles, and the resultant dialogue that opens up about them, helps employees to gain a clearer understanding of the nature and degree of change at hand.  It helps them comprehend the general kinds of work behaviours expected in the future, and ultimately, will help them to choose whether or not they wish to continue working for the organisation.
• The Shared Values and Guiding Principles complete the picture of the shared future vision for the organisation and highlight the challenges in achieving that vision.  They subsequently help the project team in the development and fine-tuning of project management, organisational change and human resource deliverables.

Approach

There are numerous way of approaching the implementation of this deliverable.  The following steps need to be included in any approach taken because they ensure that the Shared Values and Guiding Principles are firmly anchored in the business issues and aspirations of the organisation.  There are, however, many alternative techniques for each stage.

1. Review the Case for Change, Readiness for Change Assessment and Confirmed Business Vision and identify key themes.
2. Interview the leadership team to explore their views on the critical underpinning values and principles for the future business.
3. Conduct focus groups or workshops with representative groups to validate the gap in expectations between the stated values of senior management and those of employees.
1. This “reality check” should identify “current values” and “ideal” and should identify values, beliefs and behaviours in respect of key themes, different sub-cultures and how they fit with the current and ideal profiles.
4. Develop a succinct report on Shared Values and Guiding Principles and present it to the leadership team.
5. Conduct two-way feedback sessions with participants of the focus groups to present the report and seek further input on its potential.

Guidelines

Problems/Solutions

• Values and principles are frequently written in highly-idealistic or unclear language and are thus not considered credible in the eyes of employees.  The implications of vague notions such as “empowerment” should thus be spelled out in subsequent descriptive sentences.

Tactics/Helpful Hints

• Use the findings of the Readiness for Change Assessment to support the focus on values and principles.  In most cases cultural issues relating to leadership style, inward orientation, poor conflict management, passivity and related issues are the identified reasons for the failure of past change efforts.  For there to be a turnaround in these areas, new values and principles need to be adopted and translated into meaningful action.
• Provide a succinct culture model to structure dialogue and debate. .
• Often, the values and principles stated in internal company documents do not reflect the true cultural values of the organisation.  In such cases, a mix of analytical and creative processes may be required to uncover the underlying values to which employees can actually relate.  
• Cultural change frequently involves a paradox.  If you want people to adopt a new frame of reference, first you must recognise and accept that their current frame of reference is valid in their eyes (and in their current environment) and not discount it as irrelevant.
• Senior management must become a “living example” of the future corporate values before they will be accepted and adopted by employees.