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May 28
8, 2011



m Processs Mappingg and Ma
anagemen nt
By Sue
S Congeer (Busineess Expertt Press)

2011 by Sue Conge

er. All rights resserved.

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The early years of the 21st century brought astounding changes to indus-
try: the dot-com crash, the globalization and widespread outsourcing of
business functions, increased regulatory and standards pressures, and a
peek at a future full of nanotechnology, articial intelligence, and bio-
engineered products that will far surpass human capabilities. All of these
changes have forced organizations to become leaner and meaner to sur-
vive, but being lean and mean alone does not guarantee survival.
A 2004 study by the London School of Economics and the McKinsey
Company1 shows that companies that managed both processes and their
technology deployments to support their business processes experienced
signicant gains over those who did not. Companies that neither had
much technology support for work nor managed their business processes
experienced no gains from business investments relative to other com-
panies. Companies that minimally managed their business processes but
had a high level of technology support experienced a 2% return on their
investments. Companies that actively managed their business processes
but had a low intensity of technology for work support experienced an
8% gain. This shows that simply making no other changes than managing
business processes can lead to higher returns. And companies that both
actively managed business processes and had a high intensity of technol-
ogy support for work experienced, on average, 20% gains in returns on
the investment. These results highlight the importance of both intelligent
process management and strategic, intelligent technology deployment in
supporting business processes.
Thus in the search for survival capabilities, organizations have come
to understand that excess of any sort is costly and should be removed.
The rst step in removing excess is to understand business processes, the
work those processes accomplish, and how that work relates to the orga-
nizations mission. Any process, process step, or process product (e.g.,

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document, e-mail, data, or other product of a process step) that does not
contribute to the organizations mission, or its ability to meet its mission,
is waste.
But just removing excess does not guarantee survival. Processes need
to be not only efcient but also effective. Where efciency is driving out
waste and minimizing costs (or doing things right), effectiveness is doing
the right things to generate revenue. Both efciency and effectiveness
are required for survival. In striving for effectiveness, companies need to
plan and deploy technologies and other aids in order to accomplish the
work that will not only speed the process but also enhance the companys
image, provide new ways to do work, and otherwise improve internal
operations. Further, companies annually spend an increasing amount
on planning, developing, monitoring, improving, and automating their
Automated business processes model some organizational work to a
very detailed level. Such a business process denition is important for the
success of many activities, including the following:

Management is difcult, if not impossible, if the processes

being managed are not completely and explicitly known.
Organizational structuring or restructuring (e.g., changes
accomplished during reengineering efforts) requires knowledge
of the importance and contribution of business processes.
Installation of cross-functional software, such as enterprise
resource planning software (ERP; e.g., SAP), requires intimate
knowledge of business functions and their processes.
Application scoping, denition, and development are unlikely
to be successful if not based on fully dened processes and all
supporting detailed information.
Servitizing of the information technology (IT) function is the
application of process management to IT; therefore, it requires
knowledge not only of IT processes but also of how to manage
those processes across organizational silos.

Business process analysis uses business process maps to determine

the appropriateness of changes relating to restructuring or the introduc-
tion of new business technologies, such as computer applications or new

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manufacturing technology. Sets of process maps are developed to dene

the current business and proposed changes, which may result in one set
of maps per proposed alternative. While other techniques for graphi-
cally depicting an organization have been used, business process maps are
generic and not specically technology driventhey are therefore more
easily accepted by business executives.
This book is about removing waste from organizations by busi-
ness process mapping, analysis, change, measurement, and continuous
improvement. The book is also about optimizing and measuring the
efciency and effectiveness of processes in order to improve the overall
revenue of an organization, thereby improving its chances of survival.
While this is not specically a technology book, we will discuss how to
analyze and select technologies that can optimally support work once the
processes have been streamlined. Keep in mind that without a good pro-
cess foundation, technology is unlikely to obtain the expected gains. An
understanding of process must come rst.
Other ingredients of survival include being innovative, being future
oriented in trying new techniques and technologies, being capable of
continuous change, being able to time changes to optimize the prob-
ability of success, and luck. While luck cannot be guaranteed, the book
does address the future orientation, innovation, and continuous change
aspects of organizational management and timing.

Why Do We Care About Processes?

We cannot say why we care about processes without rst dening what
a process is. A process is the set of activities (repeated steps or tasks) that
accomplishes some business function. In a perfect world, a process con-
sists of the following components (as illustrated in Figure 1.1):

inputthat is, data, information, or materials that are used in

the process
the process steps to transform or otherwise manipulate the input
some outputthat is, a good or service that results from the
feedback in the form of monitoring and metrics on output
quality that are used to regulate and improve the process

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Input Process
Process Output

Figure 1.1. Process = IPO + feedback.

So why do we care about processes? Business processes involve how

work gets done. Process understanding is important because you can-
not manage what you do not know or understand. Further, processes are
the basis of organizational functioning. Therefore, any business improve-
ment involves process analysis and process improvement.
Managing process understanding and conduct ensures process
repeatability. As whole organizations follow standardized processes, the
resulting organizational maturity should improve all aspects of business
conduct, including customer satisfaction. Thus managing processesor
notaffects organizational outcomes, including protability.
Every project of any type that spans organizational boundaries has
some characteristic phases in common. These phases relate to process
improvement projects, which are explained in the next section.

Overview of Project Conduct

Any project follows similar phases of work. These phases are mentioned
here because they are assumed in any process improvement endeavor.
However, the details of these phases are not covered here because they
divert attention from process understanding and improvement, which is
the primary focus of this book.
A generic project ideally includes stages for organization strategy
development, which spawns development of tactical initiatives, which
then spawns development of individual projects. While mature orga-
nizations may develop strategy, tactics, and projects in this way, many
companies are less sophisticated and more ad hoc in their approaches to
management. Such less sophisticated companies may only realize a prob-
lem when it results in lost sales or customer complaints.
Process architecture is an abstraction depicting an overview of an orga-
nization as a set of critical processes, often in the form of a matrix. The

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architecture documents all critical processes for the organization and

includes items such as the date of last improvement, process success, busi-
ness functions that participate in the process, and organizational process
interrelationships and dependencies. As processes are monitored, prob-
lems in work conduct can be identied and process improvement projects
recommended. Thus process architecture is a tool to identify continuous
improvement needs of the organization.
All projects require project management. Project management
includes activities for planning, coordinating, scoping, costing, time esti-
mating, quality assuring, stafng, communicating, procuring, and risk
managing. Project management issues relevant to process improvement
projects are addressed in the next chapter. However, project management
is a signicant topic in its own right and is therefore not covered in detail
in this book.
Similarly, all process improvements are essentially change projects.
Change management has its own requirements, and it is a complex activ-
ity that relates to organizational culture and the radicalness and type of
change. Many ne books are available on this subject, so it is only briey
discussed here in the context of key issues.
Thus the phases of strategizing, architecting, managing, and chang-
ing relate to any project and, as a result, are considered beyond the scope
of this book. This book concentrates on the actual process improvement
activities needed to architect and engineer a well-designed, appropriate
process. The next section describes the key aspects of process improvement
activities and identies the chapters in which these topics are discussed.

Process Improvement Project Conduct

Process improvement projects proceed through their own process in the
steps depicted in Figure 1.2. Process improvement projects begin with an
initiation activity, which results in mapping and documenting the target
process (or processes). Once documented, the target process proceeds
through three types of problem analyses for improvement: leaning the pro-
cess of unneeded tasks, cleaning the process to further improve the remain-
ing process steps, and greening to minimize the environmental impact of
the process. Following analysis, the process is redesigned, a case for change is
developed, and changes are recommended. Once the changes are approved,

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Analysis for Change




Figure 1.2. The process of process improvement.

implementation planning begins, with error-proong used to remove the

potential for problems and to guarantee identication of problems should
they occur. Measures or metrics are developed to monitor the success of the
changes and to take the process into the future.
Initiating a process improvement project begins with a series of inter-
views, the goal of which is to develop sufcient understanding for staff
and to plan the improvement project. In chapter 2, we introduce these
concepts and a call-center case that is used throughout the book to illus-
trate many concepts.
After identifying processes through interviews and determining one
or a small number of processes for further analysis, the processes are
mapped. Process mapping is discussed in both chapters 3 and 4. Process
maps depict roles, tasks, process steps, and all initiating and terminating
events and conditions. Many processes cross organizational boundaries,
and to ensure optimal improvement, all stakeholders should be part of
any improvement project. Chapter 3 develops the technique of process
mapping, dening each icon and its usage and a method for mapping
processes. The chapter also describes alternative techniques sometimes
used for process mapping and the knowledge behind each step required
for optimal improvement.
Chapter 4 expands on mapping techniques and develops techniques
for dealing with time, geography, and other variations that can alter the

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ways in which maps are drawn. In addition, common errors are depicted
with an example of the error and an example of the correct mapping
technique. Process improvement requires knowledge behind process (or
process step) history, purpose, problems, method of conduct, current
metrics, reliance on information from external sources, and so on. Pro-
cess understanding includes all of these and is required for map validation
and documentation, which are also discussed.
When process steps are identied as having problems, techniques for
determining the extent, severity, and impact of the problems are used to
determine the focus of improvement. These techniques include matrices,
checklists, and various graphical forms, which are addressed in chapter 5.
Problem-nding techniques may surface all of the critical needs for
change, but these techniques can sometimes miss historically accepted
process steps or wasted movements that are also unneeded. The next chap-
ters deal with identifying and removing any unnecessary steps. Chapter
6 discusses lean manufacturing methods as applied to process improve-
ment. Lean tenets allow us to nd and remove waste from processes.
Then, in chapter 7, other techniques that lead to process cleaning assist
in improving remaining process steps. Both of these chapters also rely on
Six Sigma concepts to improve process activities and outcomes.
Alternatives for spreading or shifting responsibility for process steps
are evaluated in chapter 8. A key motivation for these alternatives is envi-
ronmental friendliness that reduces paper input, paper use, or production
through a particular process. Thus this step is referred to as an analysis for
greening the process. One alternative is automation. Process automation
not only reduces paper but also increases throughput of a process while
allowing automated tracking of workows through service jobs. Alterna-
tives for automation range from adaptations of off-the-shelf software capa-
bilities, to use of process automation tools, to customized applications that
track workows. Each alternative requires careful analysis and deployment
in order to ensure a positive outcome.
Another alternative for spreading or shifting responsibility is the shift-
ing of activities to customers (or others) as a coproduction initiative.
Coproduction off-loads work to others who add unpaid, value-adding
capabilities to a product. Coproducers can be the public, customers, or
other companies with some stake in the outcome. Since coproduction,

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as discussed here, takes place mostly on the Internet, it, too, can reduce
paper that would otherwise be created to deal with user concerns.
Once a process has been leaned, cleaned, and greened, it is ready to
be reconstructed for optimal performance. Chapter 9 addresses the rede-
sign of the process map, which shows all proposed changes. Redesign
includes the application of ideas from all analyses as well as the evaluation
of innovative approaches for performing the work that might be beyond
those considered in the greening section. The seemingly simple task of
developing a proposed process can spawn many other tasks, for instance,
for outsourcing. Therefore, making a case for change that encompasses all
expected forms of change and spawned projects is important. Chapter 9
describes the types of nancial analysis required for the case for change.
Once changes are approved, process error-proong is performed. Pro-
cess error-proong seeks to identify all possible points of failure (includ-
ing human) and to design the resulting solution to reduce the likelihood,
provide detection, and otherwise manage potential points of failure. The
more complex and automated the process, the greater the possibility that
points of failure will occur and the more critical this step becomes.
Final activities relate to proving that recommendations for change
were successful and developing the case for change in a nal report.
Chapter 10 describes the development of metrics for both daily manage-
ment and customer reporting. Once the redesign and engineering is com-
plete, the process is ready to be implemented. The remainder of chapter
10 denes how to document the process improvement project and its rec-
ommended outcomesorganization and technology changes. Building
on the case for change, the accompanying nancial analysis, which high-
lights the cost-benet analysis for the recommended change, is presented.
As an example, a sample nal project report is presented in appendix A
following chapter 10. The sample report is presented as evidence that all
aspects of work require evaluation, as the presenting problem is often
merely a symptom of other problems.
Finally, many changes in process orientation are actually performed
as precursor activities to the development of a service orientation for the
company. In this book, I often distinguish between immature and mature
servitized organizations. This distinction is important, as the compa-
nies in both camps have clear, relevant differences that constrain or facili-
tate different solutions for process improvement.

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Mature organizations are managed through formal, repeatable, and

secure operational processes.2 Many of these organizationsfor exam-
ple, Proctor & Gamble and Johnson Controlsare the best in their
industries. Through discipline, these companies have mastered cross-
functional management through a service orientation to deliver a quality
customer experience.
Change management for continuous improvement is embedded in
the processes of mature organizations as a normal consequence of any
breakdowns in quality experience delivery. Therefore, process change
initiation, while having more ceremony, is one facet of risk manage-
ment that pays off, leading to nearly 100% successful change efforts in
mature organizations as compared with about 40% success for immature
Contrast this well-oiled machine of an organization with an immature
organization. Immature organizations buy in to Nicholas Carrs notion
that IT doesnt matter,4 treating IT as a necessary evil that drains assets.
Such organizations frequently believe the controlled management of IT
is not possible. Immature organizations frequently throw technology at
a problem because it is cheaper than changing people. These rms are
lucky to get any returns from their IT investments.5
Immature organizations frequently have cultural clashes between
IT and the rest of the company, which works based on adversarial rela-
tionships that rely on last-minute heroics to achieve IT changes. As IT
changes are implemented, little attention, if any, is paid to the people
doing the work that IT supports. Training, if present, is incomplete, and
support is inconsistent.
Most organizations fall somewhere between these two extremes. The
important distinction is that in mature organizations, the ideas in this
book are already embedded in daily work life, while in immature orga-
nizations, this books ideas seem radical, overkill, or even impossible to
Ironically, every organization can become a mature, servitized organi-
zation, but doing so requires great and unwavering management, a com-
mitment to excellence, and an understanding of what servitizing means.
The last chapter both summarizes this book and discusses the path to ser-
vitizing through a discussion of IT service management. The books body

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of knowledge is summarized with expectations for the future of process

management and its role in the servitizing of business.

Businesses have come to understand that to be efcient and effective,
they need to manage their work processes and support good processes
with IT. Process management is important because you cannot manage
what you do not know. Since processes are the basis for all organizational
operations, development of lean, clean, and green processes support orga-
nizational cost savings and quality management goals.

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