BPR/M: Tools and Techniques

Hate to start out discussing tools regarding BPR/M right off the bat.  However, it looks like I’ll need to find some of my old BPR/M applications for this latest project.  While the client‘s repository can scale to a large size, the configuration management and analysis tools leave a lot to be desired.  Something to be said about building your own tools for the job you’re doing.  The MS Access Process DB application I’d build years ago and continually modify looks like will have yet another year or two of life.  The last modification was to add ITIL packaging enabling me to box up processes for my FEDE client’s Shared Services organization.

This latest engagement looks to be a reduced set of the same issues, without the built in organizational resistance.  With this engagement the internal clients already are looking for a service.  What’s missing is a solid methodology to move from IT Product Delivery to a Service Delivery paradigm.  I’ll box up all the pieces into a Service Level Package (SLP) this week to demonstrate the concept.  This may help the IT organization’s client’s to visualize what is to be delivered and how the pieces fit to accomplish the results they would like.  I’ll see this afternoon whether I’ll get buy-in from the project team.  Either way I expect to build the SLP to make it easier to create a comprehensive solution.

Advertisements

Structure in Threes: Process Value

About two decades ago I was fortunate enough to collaborate with several brilliant people in IBM working in manufacturing research.  One of them Dr. Arno Schmachpfeffer had coauthored a paper in the IBM Journal of Research call Integrated Manufacturing Modeling System.   One of the key aspects of the paper was a taxonomy of activities in a process.  I was struck by the simplicity of the taxonomy and the ability for it to catalog any process activity into one of four categories: Rest, Move, Make, and Verify.  After working with this taxonomy for a while using it to catalog activities I had previously created in IDEF0 for various BPR engagements I came up with several simple insights:

  1. Most business ventures derive their value through the execution of one of these activities. Example, a Product development firm creates most of its value through the make activity, a Consulting firm typically from verify activities and an Airline from move activities
  2. Extending that insight further one can determine the efficiency of a process by inventorying, classifying and analyzing the rations of the activities in the processes these firms use to create their value.  Thus comparing the ratio of the firm’s primary value creating activity to the quantity of other activities provides one the BPR equivalent to a Asset Efficiency Ratio in Finance

Throughout the years –as a personal research project– I had been inventorying, cataloging and analyzing processes I have been reengineering.  This past few months as I started to look into valuation of services and processes, the question has come up often.  How does one create a valuation for a process.  Initially I was looking for a hard formula based upon standard accounting practices.  However, after considerable applications of such concepts as Activity Based Costing (ABC) I came to the conclusion that the formula may be standardize but the actual value of the parameters would change.  That is one could use the ration of primary value add activities to non-value add activates to determine the allocation of value applied to each process.

While this is a simplistic approach it enables the Process Analyst and the Portfolio Manager to work together to determine the value of services through a hierarchy without having to get too detailed in data collection.  The next aspect of using this relative allocation approach is to add adjustments for non-value add activities that are required or mandated (e.g., safety and regulation compliance).  However a case can be made for calling such activities value add as they enable a firm to fulfill its mission and requirements.  Thus compliance and safety activities are feature requirements of a product or service and without meeting such do not perform as required.

This month’s agenda is to merge my activity ratio spreadsheet with the value portion of the IT Portfolio Management spreadsheet.

Structure in Threes – Resources

This morning got a email from a colleague asking about capacity planning which is not exactly the Candlestick Charting Applied R&D I had scheduled for today, but he has an active engagement I’m helping him on as I have cycles to spare during my search for a new role.  It seems the more things change the more they stay the same.  Maybe this is why I decided to write the book.  I keep on getting asked the same questions about “How-to” –not in not in the academic sense– design an IT Organization or a Marketing Function or Consulting Group, etc.  It seems despite all the literature out there, there appears to be not practical hands on it this arena or if there is its disguised as something else.

His question was “how-to” calculate resources for an IT Organization.  Several years ago I built a calculator that did part of this on a smaller scale; a limited set of services.  I had wanted to scale the methodology up; part of my reason for rejoining Microsoft.  The approach is actually very simple.  Most of the methodology high level design is in my SharePoint Saturday presentations on Slideshare.  The basic approach is a derivative of ITIL/ITSM concepts using the modeling techniques I’ve used for the past 25+ years of engagements reengineering business processes and functions when I get called in to fix failed BPR projects — a lot more than these large corporations would like to admit to.   Usually the failures can be traced back to other issues –which is a post for another time.  However, occasionally the technical design of the function, process or group has been just a fantasy of moving boxes in the org-chart or a swag as to the resources needed.  After it becomes apparent the restructuring hasn’t worked as planned, maybe for the 2nd or 3rd try, management reaches out to find someone like me that has successfully done this multiple time over the decade and doesn’t plan on making this engagement his/her retirement home.  The difference between a corporate raider (Chainsaw Al) and myself is I’m looking at how to reuse and remission resources effectively rather than cut staff to the bare minimum.  I see reduced resource requirements as new capacity to apply to initiatives that were past over during the previous budget cycle because they didn’t have the capacity.  Enough management philosophy.

On the technical design approach, I start out with value streams and business processes which are supported by IT Services.  I use a loose definition of IT Services that are a mixture of People, Processes and Technology, a little bit more that as subscription to a computer transaction capability.  From this root I decompose the activities and transactions down to IT Assets (People, Processes and Technology) needed to support the activities.  With a little modeling, predictive analytics, and simulation a fairly robust set of scenarios [scenarios as in Scenario PlanningRoyal Dutch Shell]  can be created to define the range of capacity needs.  The can be then translated into a capacity model for IT Planning.   I’ve presented concepts before to people who somehow thing this is all academic theory. 🙂  However, had they spent time researching they would have found this has been done for years.  During my days at IBM I create a lot of capacity planning models for customers to forecast mainframe utilization and growth.  The basic logic works and continues to do so.  I’m not sure why the consulting field does not pick up on this perhaps because is more quantitative and the field likes to give more qualitative answers.  Below is a portion of a capacity planning spreadsheet I create several years ago for a SharePoint Shared Services organization.

Service Resource Calculator