Sunday, November 12, 2006

Business Process Transformation

Yes ... I use my blog to store away training notes :-)


The 3 key PRINCIPLES of BPT :

1) Customer Oriented Strategy
2) Process Focus
3) Data based decision making

Any business has to focus on the "customer". We are in business to make money which the customer pays us for meeting his needs. For a business to be successful we need to have the right "business model" and "processes" to support the model. Finally we need to be "data based" to measure if we are meeting customer need and also to identify the root causes / points of failure in case we are not.

The entire supply chain to meet Customer Needs --> SIPOC ( Suppliers, Inputs, Processes, Output, Critical Customer Requirement or CCR )

For any Process Measure we need to consider both its "Mean" and "Variation". Incremental improvements using present technology and processes are usually enough to reduce "Variation" ... but to improve the "Mean" usually necessitates new process or technology.


What : Often there is a disconnect between the perceived notion of customer wants and what she actually needs.

How :
1) Identify the Customer --> Sometimes its not easy to identify the "real" customer. Also its important to "prioritize" the bigger customer if you have multiple customers.
2) Listen to the VOC ( Voice of Customer ) --> Once the customer has been identified its necessary to listen to her ... structured around these 5 dimensions :
Corporate Responsibility
3) Translate VOC to CCR --> Customers may not always be able to articulate their needs in precise measurable terms. Thats why its important to keep drilling for details and mutually align the customer needs in measurable terms. This is an iterative process. A sharp CCR needs to have the following dimensions :
Product or Service Characteristic that needs focus / improvement
Target Value
Permissible Tolerance Limits
Allowable Defect Rates

This approach helps us to work on the "right things first" instead of jumping to concusions about customer needs and execution of wrong solutions.

CTQ : Critical To Quality is also a term used interchangeably with CCR.


Organizations often work in Functional Silos. But the Customer should be transparent to this and organizations thus need to have "Customer Driven" processes. Services and Products are not created by functions but by "Processes" which tend to transcend functional lines.
FDM ( Functional Deployment Mapping ) is a tool to depict the processes. This can be done at various "levels" of detail.

The SIPOC approach : FDM details the "Process" ... do note that each process, at whatever level of detail has Suppliers, Inputs, Outputs and Customers. Define the start and end points before working on the FDM.

The above approach helps us to clearly visualise the present process and thus work on improvements.

TIP : Adopt a Top down approach -->Its always better to start at a Level 1 "Core Process" to get the complete picture. At this level the CCR is clearly visible. Then drill down to Level 2 and Level 3 at increasing level of detail to identify exactly which sub-processes are contributing to the problem.


Why : More objectivity since data gives us the reality.
Again, looking in terms of SIPOC there are Input measures, In-Process measures and Output measures.
From customer's standpoint CTQ measures ( Critical to Quality ) are key whereas the company also needs to focus on CTP measures ( Critical to Process ). Often CTPs & CTQs are in conflict ... higher cost may deliver higher quality ( CTQ ) but the company has a CTP measure to lower costs.

Fishbone diagrams are often used to identify root causes of problems.
Pareto Analysis of the causes identified helps us to attack the key issues.

This brings us to the end of the Basic concepts in Business Process Transformation.

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