5 Process Design
This chapter will discuss the key roles required, preparation for process design, key activities in process design, and key success factors for the initiative.
5.1 What is Process Design
Process design involves the creation of specifications for new and modified business processes within the context of business goals, process performance objectives, workflows, business applications, technology platforms, data resources, financial and operational controls, and integration with other internal and external processes. Both a logical design and a physical design are included as deliverables.
5.2 Why do Process Design?
Since the purpose of business process management is to ensure that an organization’s processes are effective importance of the design stage cannot be understated. During this stage that the plan for the desired state is developed whether it is for a process redesign or the development of a new process. Bypassing this crucial stage of formal design and moving directly into implementation with preconceived assumptions will inevitably lead to problems with the process and force future re-design efforts.
5.3 Process Design Roles
The level of involvement of each role depends on the scope of the process and the degree of the change. Transformational process changes that affect the entire enterprise must have a top-down approach involving everyone within the company and be led by the executive management team. An individual may assume more than a single role in the process improvement initiative. To avoid “re-inventing the wheel” with a bottom-up approach, the project manager should consult with other departments to determine if a similar business process improvement project already has been completed. If true, any lessons learned and approaches undertaken may be considered for this new project.
5.3.1 Executive Leadership
to ensure that the process designed will correctly meet the needs of the organization. The executive leadership must provide support and agree to the design changes before they are implemented.
5.3.2 Process Design Team
A common practice is to select a cross-functional team of individuals. If a cross-functional team is not created and the design work is left to an individual process designer, it is important that the designer validate the design with stakeholders, participants, and customers.
5.3.3 Subject Matter Experts
Since technology is used most often to manage the processes and interact with existing systems, the IT organization must also be engaged early in the initiative to ensure that any processes (or systems to monitor and control those processes) can be achieved through the available technology in the organization.
5.3.4 Participants/Stakeholders
A participant is anyone who participates in or has activities that affect the process. For larger organizations, typically one individual will represent an entire class of stakeholders. Stakeholders also play a critical part in the design process and they work closely with the process owner to ensure their interests in the performance of the new process are sufficiently met.
5.3.5 Customer
As any successful process improvement revolves around customer expectations :
- The customer should be allowed to test the process and comment on its effectiveness,
- The customer during the design stage increases the chances that the goals of
the process,
- The customer’s expected outcome are properly addressed.
5.3.6 Project Manager
If not managing the process improvement directly, the process owner will often assign a project manager to manage the process improvement initiative. This individual is responsible for the schedule and steps involved in achieving the stated goals of the initiative. The project manager is responsible for the schedule, project plan, communication plan, managing scope, and mitigating risk.
5.3.7 Facilitator
The facilitator plays a key role in the design stage of process improvement. This individual (or team of individuals) leads the team through the development of the future design of the processes.
5.3.8 Process Owners
The process owners help ensure that the new design meets the required objectives while remaining within the assigned budget.
5.4 Preparing for Process Design
During the analysis stage, the processes in the organization are listed, weighted and prioritized. This reveals a clear picture of the weaknesses of the current process or processes and helps decide which are to be redesigned and in what order. Once these processes are selected, the degree of the change can be assessed to make either incremental or large scale systemic changes. Sometimes making frequent, small changes can have an equally significant effect on process performance as large radical changes, provided there is a clear and accepted vision of the future state.
5.4.1 Key Activities/Roadmap for Design
There are certain key activities that take place during the design stage of process management. This section will address several of the most common of these key activities:
ü Designing the new process
ü Defining activities within the new process
ü Defining rules that control the activities
ü Defining handoffs of process between functional groups
ü Defining desired metrics in the new process
ü Gap and comparisons to existing analysis
ü Creating the physical design
ü IT infrastructure analysis and design
ü Model simulation, testing and acceptance
ü Creating an implementation plan
5.4.2 Designing the New Process
All of the tools or methods used have their various strengths and weaknesses. The correct tool, methodology, and activity to define the process depend on the project goal, the culture of the organization and the current infrastructure. The importance of process modeling, however, can be found in the discipline it provides the organization in ensuring that the model created matches the expected outcome.
5.4.3 Defining Activities within the New Process
One of the keys to a successful outcome in this task is the focus on the activities, not the actors. Another key to success is to keep the process as simple as possible. The more simple a process the more likely it will be completed without error.
5.4.4 Comparison to Existing Process
A comparison analysis allows a gap analysis to be performed which will show the level and scope of the change. This analysis provides important information that can allow the process improvement team to demonstrate the savings that can be generated by the new process once the process is implemented. This information also helps build the case for the new process which will assist in managing resistance to change.
A comparison analysis also allows the process design team to revisit the existing state and ensures that the new design does, in fact, meet the expected goals and resolve the issues discovered in the analysis stage.
5.4.5 Creating a Physical Design
The physical design determines HOW each activity or task is to be performed—manual or automated means or a combination of each. All the resource categories for people, technology, and facilities must be considered.
The degree of detail to be planned, documented, and evaluated for a physical design is dependent upon the magnitude of the business process change. Small projects may only require a brief, but accurate statement for changing existing processes or activities.
5.4.6 IT Infrastructure Analysis and Design
Involving the IT professionals in the design stage ensures that the process can be automated and that data can flow seamlessly between systems and activities within the process.
When involving the IT organization, here are some key concerns that should be
addressed:
- What software or systems best match the needs of the process?
- Are there limitations in the current infrastructure that limit the design?
- Can the design be implemented quickly?
- What will be the impact to the organization?
- Can a staged approach be employed?
- What will the new implementation cost (including training, technology, etc.)?
- Are there vendors that can assist in the implementation?
5.4.7 Creating an Implementation Plan
Some key issues that might arise during the design stage include: defining change management techniques that ensure employee support of the new process, identifying which existing systems will be affected including how change to these systems should be accomplished (incremental shift or immediate change), and whether the new process is piloted or tested. Once the new process has been designed, the concerns can be reviewed using an implementation plan created to appropriately address those concerns.
5.4.8 Model Simulation and Testing
As a final activity in the design process, the new process should be tested.
There’s three option for tested the new process :
1) Role-playing, during which you send fake inputs through the process to test it, involves assigning relevant process roles to people (not necessarily team members).
2) In a practice run, the new process has been designed, real inputs are used, and the people who will actually be working in the process participate. The practice run is different from role-playing in that a role player might not actually perform that step when the process is enabled.
3) Simulation involves the use of computer software and hardware. The new process flow and key performance metrics are tested under various scenarios to find bottlenecks and other problems.
Roleplaying, practice, and simulation have multiple advantages.
First, there is no risk. The new process can be debugged without any negative consequences.
Second, role-playing, practice, and simulation can demonstrate to people the dependability of the new design.
The next option is to test the design in a pilot. During a pilot, the new design is run for real but the scope of the process is constrained. A pilot is slightly more risky than a role-playing, practice, or simulation because it involves real products, customers, and services. Thus a problem can have negative consequences.
The advantages to a pilot are several.
- First, risk is constrained. Pilots are closely monitored so if a problem does occur, it can be fixed immediately.
- Second, the people working in the pilot can become super-trainers as you introduce to the rest of the organization.
- Third, the pilot is another opportunity for skeptics to visit the pilot location and learn from those working the pilot.
Finally, when testing the new design, it is important that all involved in the process from senior management to all participants be allowed to comment on the new process. This not only provides valuable information as to the effectiveness of the process but also
creates organizational acceptance and enthusiasm for the change.
5.5 Process Design Principles
5.5.1 Design around Customer Interactions
Every customer interaction is an opportunity to enhance the reputation of the organization. The customer experience is the sum of the quality of each customer contact point.
When considering customer interactions during the design stage of process improvement, it is important to consider all the different opportunities where the customer could contact the organization.
The customer experience is dependent upon the primary business processes that directly interact with the customer and the internal support processes that indirectly influence customer experience quality. Thus, serious attention, perhaps with different issues, also must be directed to these support processes.
5.5.2 Design around Value-Adding Activities
Transforming information or material to meet customer requirements creates value-adding activities. In addition, any step the customer is willing to pay for, such as a service, is also value-adding. Study the “as-is” process flowchart and determine exactly where the value-adding activities are performed. Then, extract these activities from the “as-is” process and explore a means to enable the value-adding activities efficiently and effectively.
Combining the activity’s “what” and “who” at this stage will distract the team from developing a creative, unique process solution. After an effective process flow is created, then a discussion can ensue regarding who is responsible for the work required to enable the process. To circumvent this situation, look for valueadding activities to optimize instead. Simply by focusing and optimizing value-adding activities, the non-value-adding activities will Dissolve thereby avoiding any Potential confrontation that may create resistance to the redesign project.
5.5.3 Minimize Handoffs
A “handoff” in business process management occurs when ownership of an activity or information is passed from one individual to another.
A key success factor is to simplify the handoffs and limit handoffs when possible. Automating handoffs through technology will also assist in reducing errors and speed up the activity between individuals and groups.
5.5.4 Work is Performed Where it Makes the Most Sense
Task assignment occurs after an effective process flow is designed. Application of the first design principle may negate some existing work, create new work, and/or may move work from one department to another.
5.5.5 Provide a Single Point of Contact
A common symptom of not having a single point of contact is multiple transfers of customers’ calls. A single point of contact can be a person such as a project manager, process consultant, or customer service representative. In addition, a single point of contact could be a data repository like an intranet.
5.5.6 Create a Separate Process for Each Cluster
Often a single process attempts to handle every variation. However, process inputs and outputs can often vary by complexity, type, size, and so forth. For some variations, the process might work smoothly, but for others it might be cumbersome and slow.
5.5.7 Ensure a Continuous Flow
In a manufacturing process, steps that directly add value to the customer such as delivering supplies, building the product, and shipping it, represent the main sequence. In lean terminology the main sequence is the value stream. In a service process, the steps that make and deliver the service are the main sequence. The customer pays for the output of the value stream. This is a means by which an organization earns revenue.
5.5.8 Reduce Batch Size
Batching causes wait time for items at the end of the batch. Batching causes inventory to build as it moves through your process. As you cut batch sizes, you start creating a smoother flow through the process. Ultimately, a batch size of one or processing transactions in real-time is ideal.
5.5.9 Bring Downstream Information Needs Upstream
There are two ways of implementing a design principle. If the process is routine and not complex, the upstream person should be trained or given a template or check sheet to capture what the downstream person needs. However, this solution will not work when the process is complex and/or changes frequently. For complex processes, the downstream person must be brought upstream during a redesign to receive information directly from the source.
5.5.10 Capture Information Once at the Source and Share It
If a process requires entering the same data more than once, then the design principle is appropriate. Root out data redundancy, re-keying, and reconciliation. Enterprise resource planning (ERP) software is designed to accomplish this principle. However, knowledge of the processes must be clear before installing an ERP system.
5.5.11 Involve as few as possible
There are some advantages to cross-training.
- First, work often doesn’t arrive at an organization in a steady, even flow. Instead there are spikes and bottlenecks in the workload. With more cross-trained workers, bottlenecks can be broken as more workers are qualified to manage them.
- Second, if a person does more of the work, he or she will take increased pride in the outcome. This person can see his or her major contribution to the whole. This pride increases the desire to produce a quality product or service.
5.5.12 Redesign, then Automate
One of the worst things an organization can do is take the “as-is” flowchart and lay information technology on top of it. This is bad for two reasons. First, information technology can be expensive. Second, despite the investment, the problem might not be solved and automating it could magnify the issue. Otherwise, a faster but much more expensive and still ineffective process may result.
5.5.13 Ensure Quality at the Beginning
Quality problems encountered in the first several steps of a process will create exponentially negative effects downstream. There are certain stages in a process where an investment in time and money are warranted and the beginning is one of them. Time and money spent upfront to ensure quality, also emphasized by Lean thinking, pays for itself in preventing reviews and rework later.
5.5.14 Standardize Processes
Sometimes a significant variation in output is caused by five people doing the same process five different ways. This creates three concerns.
- First, with this kind of variation, it’s difficult to improve the process.
- Second, when a problem occurs, it is difficult to determine if it is a process or training problem.
- Third, how can there be process control when there’s no standardization? It’s much easier to find the root cause of a problem when people standardize their work.
5.5.15 Use Co-located or Networked Teams for Complex Issues
Complex problems require people to pour over information and data in real time. If complex problems occur regularly, consider co-locating team members. If co-location doesn’t make sense, then network the team so information can smoothly flow.
5.5.16 Consider Outsourcing Business Processes
Several organizations may decide that the best course of action is to outsource one or more processes to companies that specialize in the performance of that process. Outsourcing certain processes can free up the organization to focus on other more strategic processes that add greater value to the organization. If outsourcing is considered, it should be compared to the costs of designing the process in-house as well as compared to the risks associated with outsourcing.
5.6 Process Rules
Business rules define how or when a particular activity can be performed and help control the flow of the activity. When defining business rules, the tendency for most organizations is to make them complex in order to eliminate confusion and emphasize control. Complexity in a set of business rules that govern an activity creates complexity in the process. The more complex the process is, the more opportunities for the process to fail. As a best practice, business rules should be applied when necessary.
5.7 Process Compliance
Most industries have standards and guidelines relating to the execution of their business processes. Some of these are actual laws and non-compliance can result in stiff penalties or even jail time for company officers. Several examples are listed below:
• ANSI—American National standards Institute
• ISO—International Standards Organization
• HIPPA—Health Insurance Portability and Accountability Act
• SOX–Sarbanes – Oxley
• Others– industry specific
5.8 Considerations
There are several critical factors to consider when creating a successful process design. These success factors, if not considered, can quickly become serious pitfalls during the design stage and can prevent a successful outcome of the new process. Therefore attention to the details of these success factors should be observed throughout the design stage.
5.8.1 Executive Leadership
it is vital that the executive leadership not only agree to the change but is visibly seen as the promoter, leader and champion of such change.
5.8.2 Process Ownership
All too often organizations assign ownership of the process change initiative to a project manager who has little or no authority over the actual process. Those organizations that have successfully implemented process management testify that a process owner manage the change initiative.
Process ownership can take the form of a single individual responsible for the process, a cross-functional team of department directors or other type of management. When the burden of success for the initiative is placed on the process owner there is a much higher probability that the process will meet its stated expectations.
5.8.3 Incentive and Rewards
A successful process management system will have incentive programs built into place and encourage the adoption of the new process and changed roles and behaviors. These incentives should be based on the goals established in the analysis and are most effective when aligned with the customer’s expectations and corporate strategy.
5.8.4 Cross-Functional Teams
The true success in BPM lies in the ability to tie together seamlessly all of the functions to meet the needs of the customer. The success of these efforts depends on the degree of participation from all the functional groups that touch the process.
5.8.5 Continuous Improvement
Continuous improvement implies that small changes that happen frequently can have a powerful cumulative effect. One of the key benefits of a BPM system is the agility it brings to the organization and that agility should be demonstrated within the BPM change process itself.
5.8.6 Commitment to Investment
Although one of the goals of business process management is to reduce cost, there are often initial financial investments that must be made before that reduction is realized. These financial investments are in the form of consultant services, new technology and possibly of additional resources. The organization’s leadership must be committed to make the necessary investment to ensure the process improvement is successful before the return on the investment is achieved.
5.8.7 Alignment with Strategy
Understanding the business strategy and its relationship to the customer is critical in the design of the new process. A successful business strategy is one that is designed around the needs of the customer. Careful design considerations should be made to ensure that all activities in the process work toward the end goal of meeting that customer need and realizing the business strategy.
5.9 Conclusions
The process design stage in a process improvement initiative attempts to define the new process state and outlines the steps necessary to achieve that state. Throughout this chapter the key activities, critical success factors and suggested practices for achieving a successful process design have been discussed. The next step, addressed in the following chapter, is to implement the new design.
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