How do you manage urgency in your projects?…

I just finished reading the book “a sense of urgency” by John P. Kotter published by the Harvard Business Review, which describes urgency as an asset that every organization should create and manage to facilitate organizational change. As a project manager I found this fundamental to administrate motivation and to maintaining the emotion required to move every project. However, I have seen many projects with a true sense of determination to move and succeed, while in others people keep busy even if they are focused on low value activities. Help me to understand the sense of urgency in your project.

 

Alignment: Is your implementation of BPM really contributing to reach your business objectives?

There are several different ways to start BPM projects. Some companies develop a long term strategy to improve all of their processes, while others start by automating one particular process like sales, customer service or procurement. In some cases, organizations get involved in BPM initiatives when upgrading or buying products that incorporate modeling and workflow functionalities. In all cases a BPM initiative demands financial investment and involves the organization in a path of process changes, systems integrations and cultural transformations. How does a company make sure those changes are coherently implemented in a way that generates competitive advantages?

How to align strategy and process? Strategy alignment is a term used to refer to the coherency between strategy, processes and technologies when implementing process improvement by applying BPM disciplines. In fact, what the companies are really looking for when implementing BPM is a direct effect in its competitiveness in the market through innovation and operational efficiency.

From the BPM perspective, the process architecture is the key point to focus on when reaching the fist level of alignment. In this way the set of architectural views that represent business processes should be organized in such a way that they support the business objectives. For example, in the same way that the architecture of a building designed for a hotel is different than the architecture of a parking garage, the process architecture varies depending on the business objective. Even if there are some similarities in the BPM approach, the process architecture for a company in the financial industry will be different than the process architecture of a company in the health care industry.

The first level of alignment of the BPM initiative assures coherency between the strategy objectives and the process architecture that are defined to support the company operations. The architectural models will consider the manual activities, policies, business rules and integration of information to gain operational efficiency along with improvements that generate revenue based on innovations.

From the operational efficiency standpoint, the architecture includes the application of architectural patterns available in the industry or a set of measures that will monitor essential business variables like time of response, level of services, etc. For example, improving processes in the customer services areas is not a new problem; you will find previous experiences that describe how to increase efficiency based on integration of the BPM system and legacy systems. For instance, Paul Harmon defines an architectural pattern when implementing BPM in customer centric processes.

From the innovation side, the architecture would provide new information that the customers are willing to purchase. For example, a company in the financial industry that receives income for each check processed could analyze more information in these documents and discover payment habits or patterns in the movement of money associated to a particular customer, etc. Do you think that the bank would be willing to pay for that type of detailed information? Probably, yes. BPM technologies can package enormous amounts of available information into the process that just needs to be offered as a ”value added service” that the customers are willing to puchase.

Now that your process is aligned with the strategy and is coherently represented by the process architecture, it should be modeled using BPM technologies appropriately.

How to align BPM initiative through its implementation? I have seen many cases where strategies are well defined however, their implementation does not run smoothly. Some of the symptoms of poor implementations are BPMN diagrams that look really complex, workflows that have many dependencies resulting in difficulties when making changes, activities that could be executed in parallel are modeled in sequence, web services that reduce the BPM suite performance, etc. Another example of deficient implementations is a set of indicators that does not measure the key business variables defined in the architecture just because a particular department is “used to” monitoring it. The measures in the company BPM dashboard should reflect performance indicators associated to financial benefits and key indicators that are valuable for customers and help to focus the company resources in increased loyalty, frequency of consumption and attracting new customers.

Finally, a reasonable implementation would also show a “rolling wave” plan, gradually approaching the complexity of modeling the process in the BPM suite; instead of trying to model several processes at the same time.

Alignment plays a critical role when implementing BPM projects and improvement programs to assure that there is “traceability” (cause and effect relationship) between the modeled processes, process architecture and business objectives that will provide visibility, governance and help the company to focus its resources in generating new value while increasing operational efficiency. Future discussions will cover tools and techniques to align process improvements applying BPM discipline. For now, let me ask you about your own experience. Do you find alignment at the BPM implementation in your company? Is there coherency between business objectives, process architecture and models automated in the BPM suite at your organization?

All your comments are more than welcome! Good luck with your BPM implementation!

 

Cost of delay on projects: Long term business performance.

This post is in regard to “Establishing metrics for new product realization process measures”, a topic posted by Tom Holland on LinkedIn; a discussion about how to measure the cost of delay on projects. It is a great discussion and hopefully more project practitioners can participate; so Tom here are some ideas.

How to measure projects performance?

There are several ways to measure the impact of delays on projects. Earned Value (EV), for example, presents a set of indexes to measure the cost performance of the project. However, as the project is a temporal effort, these measures may not be enough for someone interested in monitoring its long-term results, even after the project has finished. Roger Burlton approached this topic and described business improvements considering not just the project life cycle, but also the product life cycle. Even if this approach is not focused on establishing cost performance measures, it provides a sufficient idea to further define project delay measures.

Burlton’s approach is based on the concept that companies start projects to develop business initiatives that will generate value in the long term. When a company begins a new initiative they expect some costs for project implementation and operational costs when the products become part of the process. These costs are represented by the Total Cost curve in the Figure No 1 below. The Time to Market (TM) is the period from the time the project starts to the time the product is integrated into the normal operation. At this point the company expects to start receiving financial contribution that will eventually reach a point when the investment is recovered (represented by Contribution Curve in the Figure No.1). That period of time is described as Time to ROI (TROI). From that point on all benefits will be received until the Product Life is complete. (See Figure No. 1)

Figure No. 1

Now, what is the effect of delays on projects?

Time delay in a project will have short term and long term effects. It usually impacts the cost of resources involved (team, infrastructure, etc), for example, a project team may need to work longer hours in order to complete the project. On the other hand, if the product is not ready by the time planned the company will not start receiving any contribution, so these lost benefits are part of the financial impact. In the same way, the Time to Market (TM) and the Time to ROI (TROI) will be effected (from ROI1 to ROI2); in the end, the final ROI will be reduced (represented by the green area). (See Figure No. 2)

Figure No. 2

The red zone represents the financial impact of delays on projects.

How are these costs measured?

There is a broad spectrum of indexes and indicators established to measure projects in different areas and industries. However, a good characteristic of an indicator is that it is relevant to the audience that will use it. For example, measures related with the Earned Value (EV) technique like Cost Performance Index (CPI) are used to measure the project performance from the initiation to the Time to Market (TM) and will be relevant for the project manager. From the perspective of a Chief Financial Officer (CFO) this measure may not be enough when interested in measuring the big picture of company investments. Measures of cost from this perspective will relate to time, contribution, and ROI; an example variable to be monitored would be the impact of 1 day of delay in the project on the expected ROI.

Now, in the same way that the Costs Performance Index (CPI) represents the relationship between the actual costs incurred in the project and the value of the work performed, and is used before the project is done; it could be possible to formulate an index that represents the relationship between the time incurred in a delay and the ROI expected in the product life cycle. This approach could relate time of delay (TD) with time to ROI (TROI) or time of delay (TD) and expected ROI that would track on a daily basis the long term impact associated to delays in the projects.

If someone else has more ideas they are more than welcome to post on the PMI Nebraska group in LinkedIn. Visit:
Establishing metrics for new product realization process measures.

Tom, this is a great topic, thanks for bringing that up!

 

BPM: Aligning business strategy, process and information technology

The objective at this time is to describe the process and identify elements that provides coherency between strategy, processes and technologies when planning and executing BPM initiatives. The topic is approached by selecting strategy maps as a methodology to visualize relations between strategy objectives; complemented with an exploration of the Balanced Score Card to deploy strategies through the organization. Re-engineering frameworks were evaluated to identify coherency when deploying strategic objectives to process. A critical analysis was conducted to identify the process and elements of alignment between strategy, process and BPM technology.

The most significant finding in this analysis is a logical relation between elements of the strategy, process and BPM technology to facilitate the alignment and coherence when implementing BPM initiatives. It appears to be a wide focus on BPM suites capabilities, organizational frameworks to implement this initiatives and methodological aspects related with process improvements based on BPM initiatives. In addition some strategic areas that affect the BPM approach are described as a general topic related with BPM initiatives; however there appears to be not focused on basic elements that provide coherency and alignment when developing a BPM strategy.

There is a need to focus new BPM product developments in helping organizations in the alignment of strategy, processes and technologies; more than just process design, modeling, monitoring and deployment. All providers of BPM technologies will find these results as a reference to include new functionalities to facilitate strategy alignment of the business processes. Even if some BPM suites provide functionalities to support modeling and gathering of process requirements; their capabilities in terms of alignment are limited to define elements to monitor Key Performance Indicators. The alignment analysis of business process these suites is not part of this product’s functionalities.

The article presents a simple and coherent compilation of different points of view on how to align business process management initiatives, focusing its attention in the concept of coherency to provides to senior management, process architect and process excellence leaders with a practical overview of the key aspects to considering when aligning and deploying BPM initiatives.

 

Welcome BPM & PMI project readers!

If you recognize these acronyms, then you are in the right place! A place to share ideas about Business process management and project management as well and how combine practices in both fields to provide business agility to the organizations.