Process Standardization and Harmonization
Enabling Agile Customer Service in a Digital World
Complex market conditions combined with digitally empowered consumers present a challenging commercial environment. Most business leaders understand that the answer is innovation and agility but the question is how this is achieved. Creating a Next Generation Enterprise suited to this new “normal” is about understanding and managing processes. When processes are aligned and good practices are applied, efficiencies are created freeing people to innovate. This generates a nimbler organization, which is able to adapt to evolving market conditions more quickly.
Much has been written about the importance of standardization and harmonization in achieving this alignment and efficiency of business processes. They consistently highlight the human dimension of process as being the key challenge. In our experience, applying five key enablers of Business Process Management (BPM) can have a dramatic impact in improving the effectiveness of standardization and harmonization in process change programmes.
Process Governance: Using segmentation of business processes to understand their characteristics and provide the basis for choosing the most appropriate responsibility (and empowerment) to standardize and harmonize the processes appropriately.
Process Knowledge Management: Establishing a process repository, which is both accessible and driven by users, is crucial in breaking down the barriers, which so often exist between process management teams and the rest of an organization. It makes standardization and harmonization tangible.
People Engagement: Creating a shared sense of ownership for the business processes and their results and engaging the whole stakeholder community in sharing the responsibility for standardization and harmonization.
Tools and Technology: Leveraging Technology as a powerful driver of standardization with the automation of parts of the business process. Using tools that have been used very successfully to improve the pace and effectiveness of people engagement within the organization.
Metrics and Monitoring: Finally, measuring success of standardization and harmonization initiatives is important but needs to be tightly linked to the business strategy with the most relevant metrics being defined to focus behavioral change and make it more manageable.
These BPM enablers have been shown to have a profound impact on achieving standardization and harmonization as elaborated in this article.
What we’ll cover here:
- Business Conditions: the perfect storm
- The Process Implementation Challenge
- Adopting Standard Business Processes — Fast at low risk
- Process Governance — Enable appropriate empowerment
- Process Knowledge Management — Enable suitable transparency
- People Engagement — Enable joint success
- Tools and Technology — Enable speed and effectiveness
- Metrics and Monitoring — Enable actionable feedback
- The Way Forward
Businesses are currently facing a perfect storm of, amongst others, rapid digital change, empowered customers and globalization. Digitalization means most organizations need to operate in virtual and real worlds and if we are to believe Gartner (Hill, 2014) these two worlds will merge in the near future. People, things and business will soon become so interconnected that it will be hard to tell where one ends and the other begins.
Organizations are in global competition — whether they intend it or not — as consumers use the internet to access, compare and purchase from businesses all over the world. Armed with the power of social media, customers are quick to react if a product or service fails to meet expectations. As a consequence, organizations need to respond more nimbly than ever to avoid an individual complaint turning into a global crisis.
Meanwhile, game-changing digitalization is shifting the information technology landscape. Consumer demands, swift technological development and unprecedented internet growth are stimulating further proliferation of digitalization. Currently there are around 10 billion people, processes and things connected to the internet but the proliferation of mobile technology is expected to increase that to 50 billion by 2020. The cloud will be at the heart of the growth of this “Internet of Everything”.
While this impending commercial metamorphosis sounds alarming, there’s no need to panic. Although the questions may be around global digitalization, the answer is about process. To thrive in this gale force wind of change, business leaders need to acquire a better understanding of the processes within their organizations so that they can identify priorities and make more informed decisions. They need to create agility where it matters by rapidly adopting new practices in some areas while aligning routine processes to improve efficiency and compliance in others.
In a recent research project, the relationship between digitalization and BPM was investigated. 63% of respondents who are engaged in more mature digitalization have improved their BPM capability alongside this in the past two years. This is another indicator of the importance of process management as an enabler of this dynamic and fast moving environment.
In this dynamic world it is not enough to merely improve processes. The BPM-Discipline also needs to deliver standardization and harmonization to enable consistent, innovative and agile customer service around the world. In the next section we recognize the importance of standardization and harmonization as one of the prerequisites to delivering change fast and effectively. In the later sections we show how using key elements of the Business Process Management Discipline (BPM-D) has been shown to significantly enhance the effectiveness and pace of achieving standardization and harmonization.
2. The Process Implementation Challenge
We have worked with many organizations and often find that they know what they should be doing; it’s the approach of getting these ideas in to action, which provides the greatest challenge. The challenge is strategy execution; building a management discipline which will not just implement the strategy but will sustain it in the short and long term as well.
3. Adopting Standardized Processes — fast at lower risk
There are many factors that influence the adoption of standardized business processes. Much research has been conducted and papers written on change management in general and how this can enhance the adoption of business processes during improvement initiatives. Our experience shows that, in the fast moving digital environment, change management should be integrated into the day-to-day business of people. It needs to become a component of the overarching BPM-Discipline which provides different enablers of standardization and harmonization.
Any action to improve business process adoption should properly address key people oriented factors to be successful. This is where traditional process engineering and change management need close alignment in a very practical way to address the people engagement needs. Effective process management combines these two approaches focusing on delivering the expected value outcomes. This is shown schematically in figure 1 below:
The ingredients to success of process adoption lie in an understanding of how good process management can feed and enable a collaborative approach to change management.
4. Process Governance — Enable appropriate empowerment
In our fast moving digital environment, understanding who is responsible for and thus empowered to change business processes, is now more than ever a critical prerequisite for standardization and harmonization success. We refer to this in the BPM-Discipline framework as Process Governance.
In a world, which is constantly changing, knowing what doesn’t need to change is helpful. Extensive research has proved that an organization competes through less than 20 per cent of its business processes. This leaves 80 per cent for which it is sufficient to achieve an industry average. The 20 percent tend to be the ones which offer more opportunity to drive innovation, increase agility and adapt to the needs of particular customers. The remaining 80 per cent are usually made up of routine processes which operate using a common industry practice e.g. payment processes, payroll, procurement of office material or credit checks.
An organization may have hundreds of sub-processes. Sorting them, understanding their characteristics and finally segmenting them into the 80/20 structure can be a daunting prospect. In the authors’ experience, this is therefore usually not given the attention it deserves. Process management — using the BPM-Discipline Framework — systematically enables the strategy-based analysis of processes, which in turn allows them to be prioritized and segmented.
The essence of the approach starts by drawing the link between business strategy and the high impact/ low maturity business processes using a Process Impact Assessment Matrix (PIAM). It then looks at the high impact sub-processes from two dimensions:
These are shown in the matrix in Figure 3 below. Some processes neatly fit into one of the four quadrants as the examples show in each of these.
The titles (colored in red) in each quadrant suggest the most appropriate management approach typically assigned to processes in each quadrant. For the purposes of this article, those items higher on this chart require the most strategic agility.
The less strategic or even commodity processes should not be forgotten though. While a process might be routine it may need significant variation to accommodate the specific requirements of: the products or services (what); the market (where); the customer (who); and the time (when). Understanding and minimizing related variations based on real business need, is essential to achieving the goal of harmonization and standardization. Unwillingness to change and vested interests can often cloud well thought-through analysis but a well-structured approach helps to align conflicting points of view.
Segmentation is the starting point for making it absolutely clear who is empowered to change business processes and/or adapt them to their specific needs. This provides the basis for a refined process governance required to establish and maintain the right level of standardization and harmonization of the business processes. As an example, this would be by establishing the empowered global and local process owners as one of the elements of this approach.
5. Process Knowledge Management — Enabling the right transparency
Information about process knowledge may range from simple Power Point visuals and SharePoint folders to more sophisticated management of information models using software from vendors such as Tallyfy.
Too often these repositories are created and managed by the company’s business process experts who design and store thousands of models which are incomprehensible and inaccessible to the people who need to use them. The content, format and governance are driven by the process management experts and not by the expected outcomes. The intent is good but the process engineers behind the models frequently fail to recognize that information models are only as good as the outcomes that they trigger.
6. People Engagement — Enable joint success
While the organization focuses on creating and adapting the process standard the stakeholder community needs to be engaged as broadly as possible to contribute their best practice thinking. The standard process should not be owned by any specific individual but rather by the whole relevant process community.
Community management is the key part of the process of process management to ensure good stakeholder engagement. In our private lives we are increasingly exposed to a series of physical and virtual groups and communities that we use for input, support and guidance. Using the same principle in a business context encourages engagement in the improvement of the standard process through an active exchange in experiences. This is not one wise old owl (typically the process owner) decreeing what the standard should be and then imposing it but rather the enriched input from the whole process community establishing a jointly accepted standard that includes all of their best practice. The role of the process owner in this context is to facilitate the active working of this community and to deftly manage the process design decisions that lead to a common standard.
Success of any community management program is significantly enhanced through making this a normal part of the day job rather than a parallel and sometimes cumbersome activities. Learning should be delivered in a very personalized way linked to their normal desktop activities. Providing feedback should similarly be accessible through the desktop as closely aligned to the normal business process as possible. As someone experiences difficulty while attempting to perform their normal work, they should be able to capture the issue and recommendation without attempting to navigate to a new and different environment. Make it easy and it is much more likely to happen.
We have repeatedly seen that if community management is done well and very collaboratively that the acceptance of the process improves significantly. As part of the engagement of people on the processes there needs to be a parallel avenue for them to raise their organizational and personal concerns and have these addressed. Harmonization is achieved when each individual accepts the quality of the common standard and then overcomes main concerns related to the impact of the new process on them personally.
Engagement of stakeholders in the community should not slow down the process design. During the implementation of the new standard processes there needs to be an active channel for continuing input to enhancing the standard process design and its implementation. They need to feel part of adapting the processes to resolve errors or omissions.
7. Tools and Technology — enable speed and effectiveness
As described at the beginning of this article, technology plays an important role in standardizing business processes. With the ever increasing digitalization many processes are automated through standard application systems. These systems encapsulate parts of the standard process and enforces those process components.
However, when looking at any larger organization it has a diversity of business units and/or regional operations. For many reasons the application portfolio will have become vast with many applications supporting the same business function in different parts of the organization. This diversification tends to be increasing due to the availability of cloud-based application solutions. The business leadership finds it easier to source their application support directly through cloud-based point solutions rather than attempting to have these implemented into the legacy portfolio by IT.
Standardization and harmonization is therefore only achieved with the parallel optimization and rationalization of the application portfolio. Many of the reasons for this proliferation are more people oriented. In the same way that people choose which process standards to adopt and where to do things their own thought to be better way, they also make decisions about which applications to use. Therefore, the answer to portfolio reduction and the associated standardization lies in combining this technology optimization with the enablers mentioned in the previous 4 sections of this article.
The appropriate use of newer technologies can also enhance the speed and effectiveness of the each of the other four enablers (described in the previous sections). Newer research tells us that change management practices need to “start catching up”. Many companies have made great progress in digitalizing their customer-facing businesses. The application of digital tools has untapped potential to promote and accelerate internal change. The research paper further identifies that digitalizing five key areas in particular make internal change efforts more effective and enduring: Provide just-in-time feedback; Personalize the experience; Sidestep hierarchy; Build empathy, community and shared purpose; and Demonstrate progress.
These areas are aligned with our experience. As an example, social media tools are an effective way to break down the barriers between process management decision makers and the people within an organization. Linking people via internet and cloudbased tools creates transparency and encourages communication across organizational boundaries. This use of social media to enable many of the BPM processes, we refer to as “Social BPM” and is likely to increase as social media tools like online communities, the cloud, subscription feeds and tagging grow more common-place. All of these enable individual, role-based engagement of people and the sharing of process related information.
Technology is therefore both an enabler of standardization and harmonization and a key contributor to adding pace and certainty to the internal change efforts described in the other sections of this article.
8. Metrics and Monitoring — enable actionable feedback
“What gets measured gets done” is the accepted approach and this is the case in enabling the standardization and harmonization of business processes. However, we caution against an over reliance on metrics and the inevitable proliferation of performance reporting. Clearly there is a need for some metrics and KPIs to gauge process performance, but doing too much clouds the focus and is therefore not actionable.
Standardization of business processes should therefore be combined with a parallel standardization of the performance metrics. By describing this prioritized set of processes in terms of their relationship with the business value-drivers the most important leading measures can be identified.
The lagging measures, are those formulated to describe the outcomes expected through achieving each of the key value drivers. This produces a standardized set of metrics that are aligned to the business strategy and the most important standard processes that are required to deliver the strategy. A further useful addition to this set of metrics is a “Standardization Index” which needs to be carefully constructed to identify how various parts of the organization are delivering on the promise of both standardization and harmonization.
9. The way forward
The difficulty in achieving process standardization and harmonization is convincing people to adopt them in a consistent way and to remove unnecessary variability. In this article we have identified five of the BPM components that have been shown most important to accelerate this business process standardization and harmonization. This in turn enables agile customer service in a digital world. It highlights how important it is to implement a pragmatic BPM-Discipline addressing both the ’science’ of robust process management AND the ‘art’ of engaging and motivating people to change their behavior.
