Tools & techniques to manage business processes
by Alex Roan on Jun 4, 2015
Business Process - Tools & Techniques To Help Your Business
Working on improving business processes is popular, but sometimes organisations do the wrong things at the wrong time; spending money on process related projects which underdeliver on benefits. Often times the actual value of process work is hidden behind various technical sounding methods, tools, techniques and software. The first step to choosing the right process improvement approach is to understand some of the terminology out there. Here is a run down of various process terms, methods, tools and software followed up with some thoughts on choosing the right approach.
Business Process Management - BPM
What is it?
An encompassing and general term that describes a business or situation where you put emphasis on Process. 'Management' in this context could mean several things; clearly understanding your processes, working on improving processes, measuring processes etc.
A little more detail
It's a term that may mean different things to different people, I generally consider it to apply to any business or work that is focussed on process. Which brings up the question, what exactly do we mean by process? Note that you can find BPM life cycles out there which describe a structured approach to look at process. As with other life cycles commen in the project would these simply look at analysis, measurement, improvement kind of activities.
Business Process
What is it?
One or more tasks or activities that convert some kind of input into an output, normally with some added value. The output can be a product or service to a customer or simply an intermediate stage output consumed in another process.
Business Process Re-engineering
What is it?
radical redesign of process from a blank slate.
A little more detail
This term also may mean different things to different people, however it was considered to be fairly radical redesign from the original definition. Source - Michael Hammer
Business Process Optimisation
What is it?
I don't see this as a formal method or technique, it seems to be a general term used to describe various efforts to improve processes.
Business Process Modelling - BPM
What is it?
The activity of creating business process models. Business process models can be considered as a graphical representations of business processes.
A little mored detail
Originated with flowcharting to show inputs, tasks/activities and outputs of a process. However it has evolved into something more formal and now specific notations exists to ensure clear and unambiguous understanding of business process diagrams. The most widespread notations in use are BPMN (business process model and notation) and EPC (even-driven process chains). Note people will refer to a business process map, that could be considered the diagram of one process, bringing together multiple covering part / all of a business could be considered a business process model.
My thoughts
- An excellent way to gain a clear and unambiguous understanding of what a business does
- Can be a little technical, but if done well should be understandable by business
- Does not go to keystroke / user instruction detail
Total Quality Management - TQM
What is it?
Total quality management is an approach with focus on customer needs and developing products and solutions to meet them.
A little more detail
They key thing is there is a strong approach on zero defect processes.
My thoughts
TQM and Lean and Six Sigma are often interconnected and it can be confusing to know what specific tools and techniques people are referring to
Lean
What is it?
A set of tools and techniques to reduce waste in processes
A bit more detail
The focus is really on analysing a process for waste - any activity not required, by removing that you improve cycle time, effort etc.
My thoughts
You're going to learn some Japanese!
- Very easy to apply, predefined waste categories are useful
- transportation
- inventory
- motion
- waiting
- over processing
- under processing
- defects - can be applied to both manufacturing and service work (e.g. accounting)
Source: Toyota Production System
Six sigma
What is it?
A set of tools and techniques to reduce defects in processes
A bit more detail
The approach is aimed towards ensuring processes are highly effective with a specific target of a certain number of defects. six sigma brings a staged approach of analysis that starts with ensuring that current processes are understood and measured before moving onto analysis, improvement and control
My thoughts
- Highly structured approach
- Good for working with existing processes by analysing, measuring and then planning improvements
- I love that it starts with a focus on understanding what exist vs. jumping into a new design (so you can learn from your experience better?)
Source: Motorola
Continuous Improvement - CI
What is it?
The idea behind continuous improvement is to make ongoing small incremental changes to processes to optimise / keep them optimised over time
A little more detail
it comes from the Japanese Kaizen
My thoughts
As opposed to thinking of it as a specific technique or tool or project you can consider it more as a cultural mindset to install in a business at all levels. This then empowers your whole organisation to make positive changes. I like this
Enterprise Resource Planning - ERP
What is it?
Software used in the day to day processing of business transactions
A litle more detail
ERP originated from software to track manufacturing, warehousing and financial transactions (e.g. moving stock, posting an invoice), but evolved over the years to include much wider and more complex scope of processes and reporting. ERP is a major part of process management as your ERP software will often define parts of your process works.
My thoughts
ERP software from a respected vendor is worthwhile, but can be extremely expensive to implement and maintain.Don’t be fooled to think you have to do ERP to fix process. A lot of process problems are in the steps outside of the enforced systems activities or possibly due to incorrect use of systems.
Source
Read up on the history of SAP!
Business Process Management Suites (BPMS)
What is it?
Suites of software that help with business process management. Common functionalities may include
- Design and documentation of processes
- Management and execution of processes (connected to ERP systems)
- Monitoring of processes
A little more detail
This is a huge and complex area, with many software companies providing various different services, as an example - consider on of the leading enterprise software providers - SAP. From their website
"Business process management (BPM), as a management discipline, helps companies optimize operational processes. SAP NetWeaver Business Process Management enables business and IT professionals to compose processes jointly using a single, directly executable process model."
Did you understand that? Note that in addition to suites, there are specialist software providers that focus on individual areas. For example leading suppliers of modelling software exist such as Aris.
So Many Things? But What Should I Do?
With all these process related appraoches / tools / techniques / systems to manage and improve business process, where do you start? It all comes down to the benefit you want / need and the cost, time and effort you can afford to spend on it. To illustrate my thinking, some simplistic business scenarios
I have plenty of time, plenty of money, no burning problems, my processes and systems are falling over!
- Implement ERP, but use business process modelling to ensure the design involves system and off system process steps and is efficient, but primarily standardised and stable.
I don’t have any time or money, lot’s or priorities, my processes and systems are a mess
- Phew! - I’m glad I don’t work here, anyhow - why not start by implementing a continuous improvement mindset and empowering your employees to make small, cheap improvements where they can, prioritise proposed mini projects by simple cost / benefit
I have got pretty good systems and processes, but I want to be better and support the business more
- Do you understand your processes well? If so good, if not consider working on your enterprise process model to get a better baseline understanding across your organisation of what is going on
- You can dive into total quality management / lean / six sigma kind of initiatives to focus on improving what you do in different parts of the business with a focus on customer / outcomes and targeting waste and defects
It's not this simple in reality, but thinking across your business about your main objectives / goals / risks / issues etc. and coming up with a co-ordinated way to use the different tools available will help deliver more benefit, with less wasted project work that doesn't deliver. There are three factors that are critical to understand about any process project / tool / system before going ahead with it
- Cost, effort and time to implement / utilise
- Kind and magnitude of benefit this can deliver
- The type of scenario this tool is proven to deliver benefits in
- Did I miss any terms or tools that you have found useful? do you disagree with my definitions or thoughts? please let me know.