Starbucks and their process failings

I've written a couple of posts on here over the years highlighting process failings at different institutions (and I have another one brewing about a major high street UK bank). But one thing that always amazes me is the simple things that can be done that will make a huge difference. Last year I mentioned the fact that Starbucks have decided to stop brewing decaffeinated coffee after lunch unless people have specifically ordered it. This simple move has contributed to alleged savings of $400m per year.

However I am currently sitting in a Starbucks sipping a latte and another process issue has arisen which has not been dealt with it. I tweeted about this last week when a similar thing happened. At the moment it is quite early and things are a little quiet. When someone orders some food it gets heated up and brought out. The server has a quick look around and can usually identify who ordered the food. But in about two hours this place will be heaving with people and the same process will not work. A server will wonder out with a freshly grilled sandwich and spend five minutes wondering around calling "Pannini? Anyone order the pannini?"

Surely the simple solution would be adopt the process rivals Costa Coffee use which is to assign each customer ordering food a table marker. They take this table marker to their table and the food order is matched to that marker. Instead of wondering around calling out the food each sever can look for the marker on the table confident that the food order will match that person.

It's simple enough so why not adopt the process? The incremental cost must be minimal and the additional goodwill in customer service (not to mention getting your food when it's still hot) must be worth it.

Any Starbucks employees want to comment?

Friday Review 26th March 2010



Here are some of the links posted over on the Process Cafe Espresso Shots this week1

Wiki Tuesday: Wikis at RBC - Some interesting thoughts and comments from the experience of using wikis at the Royal Bank of Canada. It struck me that a lot of the problems they're having here in adoption are similar to the main BPM adoption problems that occur in businesses.

Some quick thoughts on 'As is' modeling - Details of a conversation I had on Twitter about 'As Is' processing and why you should be doing it

Using IT to enable a lean transformation - McKinsey Quarterly - Business Technology - Organization - A case study on the use of Lean in a large European Bank (Registrarion required)


1 The Process Cafe Espresso Shots is a place for linking to process related articles written by other people that don't merit a full post on the Process Cafe but are still worth your time reading. Sort of an espresso shot of 'The Process Cafe'-eine.

White Space and BPM - The invisible problem

The "White Space" is the gap between business process steps. Or it is the gap between process handovers. It is also the single largest cause of process issues in companies today.

I would like to say that White Space is good. But I can't. I can't even say it's bad. It just 'is'. It exists at the intersections of all the parts of your business processes. It exists where somebody hands a process step off to another person. It exists where a deliverable is passed between two departments, where a message needs to be transferred to somebody else, where control is passed. In fact it exists all around us.

Like the cosmic force 'dark matter', white space cannot be seen, but its affect on the process can be felt. Anytime you create, implement or execute a process you are inherently building in white space. In and of itself that is not a problem. Without the white space there would be no opportunity to implement the process and it might just collapse under it's own weight.

But the mere existence of white space is going to cause potential problems later on in the process. Whilst white space is - by itself - harmless, the effects of white space can be dangerous and far reaching.


Examples of White Space

Imagine I have a process which calls for me to complete a specific document and pass it to a third party for signature. I can complete the document and I can hand it to the third party. However unless that third party physically takes delivery of the document there is a possibility that it will be lost. This document is now in the white space between process steps.

What's more, even if the document gets given to the third party, they receive it and sign off receipt of the document, unless they can then immediately sit and do something with it (i.e. continue their process step) the document is still in white space. It is quite possible that the document will be lost, forgotten, misplaced, tampered with or altered before the next step takes place. That's the white space again

Waiting for input is another way that White Space plays into the process. Imagine your process calls for you to send a survey to your customer and await the completion of that survey. A single survey sent to a single customer is one thing, but if you are now waiting for 200 surveys sent to 200 customers it is important that you can track and manage the status of those surveys.

What will inevitably happen is that some of the surveys will not make it to the right person. Some will make it to the right person and be ignored. Some will make it there and be lost. Others will make it to the right person, be dealt with, but filled in or completed incorrectly, and sent back (sometimes to the wrong address). Each of these is an example of the kind of thing that can go wrong as a result of the white space



Can the White Space problem be solved?



The short answer is that all white space problems can be solved. However in reality the question that needs asking is 'What are we willing to spend to solve the white space issue and will that be enough?
Take the survey example shown above. One possible solution is to make the survey and on-line one. You remove the 'loss' issue, as well as the 'return' issue. By sending constant reminders and adding incentives you can reduce or even eliminate the 'ignore' issue, and this will also reduce the 'wrong person' issue.

If you are willing to spend enough money on implementing a solution like this you can then solve that particular hand-off problem. But the truth is that all you are really doing is moving the problem along to another part of the handover. The best you can really do is analyse your risk and mediate where necessary:

1) Minimise hand-off's
If each hand-off is a potential risk then reducing the number of hand-off's will obviously reduce the risk. Analyse your process and see if there are unnecessary hand offs between roles.

2) Implement feedback loops
Whenever there is a hand-off ensure there is a feedback loop which will clarify the correct receipt of a document or instruction. This can be as simple as a tickler with a follow-up action attached to it, or as complex as an electronic acknowledgment that something has arrived.

3) Clarify expectations
Whenever something is handed off - either between individuals or across functions, ensure that the receiving individual is clear about what should happen with that hand-off. Are the expected to sing it? If so, what is the timeline? Are they expected to process it? If so where and how? Clarity of expectations and actions is paramount.



Summary


Although processes inherently create white-space, the management of this space can be relatively simple. Following the three steps above can help to alleviate any hand-off problems you may have.







Reminder: 'The Perfect Process Project Second Edition' is now available. Don't miss the chance to get this valuable insight into how to make business processes work for you.

Click this link and follow the instructions to get this book.




All information is Copyright (C) G Comerford

See related info below

Friday Review - 19th March 2010



Here are some of the links posted over on the Process Cafe Espresso Shots this week1

Unified Communication will play an important role in BPM (why ignore it?) « Curious Cranium - Some thoughts from Ashish Bhagwat at the Curious Cranium blog about Unified communication and the linkage to Business Processes

Swimlanes: The Tide Is Turning - Sourcing Shangri-La - Oh ho - Is there a revolt brewing? The statement is made. The challenge is thrown do "Get rid of swimlanes'. OK. let's assume I can align with that. What would we replace them with?

BPM Benefits: Myth or Reality? - Tech for Tomorrow - A short but sweet article that pinpoints some of the reasons BPM projects fail: high expectations, lack of support and cultural issues

The Best of BPM -- Why today's BPM is Changing the Game - Terry Schurter's thoughts on BPM and the evolution of the discipline. Pay specific attention to his discussion of Lean BPM

When Exceptions Are the Business Process Rule: ITBusinessEdge.com - Some interesting thoughts on how and why rules management is actually exceptions management.


1 The Process Cafe Espresso Shots is a place for linking to process related articles written by other people that don't merit a full post on the Process Cafe but are still worth your time reading. Sort of an espresso shot of 'The Process Cafe'-eine.

What bottling port taught me about process

(This is the second in an occasional series posts recounting real life process issues I have encountered)

Several years ago I was working with a very well known Port manufacturer in Oporto, Portugal. At the time I was helping them to implement a new financial accounting package. However they were also rolling out a new bottling line in the bodega.

Port is aged in huge barrels which are kept in cool cellars in bodegas on the banks of the Douro River in Oporto. It is a picture postcard scene with steep hills and multi-coloured buildings leading down to the bodegas which usually line the quays along the river bank.

On a beautiful September afternoon we were taken from the offices and toured through the bodega by George the owner of the company. (I could tell you his surname but that would give away the name of the company). Anyway we wandered into a cellar where new pipes had just been fitted into a huge aging barrel along one wall. The pipes ran up the wall, along the ceiling and through a hole in the far wall to an adjacent room. As we followed the pipe we came to a bottling line.

A bottling line is essentially exactly what it sounds like - a processing line where port is placed in bottles. In the more modern manufacturing businesses these bottling lines are huge and the throughput is phenomenal. You've probably all seen the footage of the Budweiser bottling line where hundreds and hundreds of bottles are filled every second. This isn't like that. Although the technology is modern it is very small scale. The throughput is quite small and the prices are quite high. This is how the company maintains quality and profits.

So the bottling line was essentially a single throughput line which processed a full bottle of port from end to end in something like thirty seconds. Quite slow by other standards.

Here's how the process went. Empty bottles are feed into one end of the line from a pallet. They are funneled down a single channel which accepts only one bottle at a time. The bottle meets the port and is filled. A label is added to the front of the bottle. A cork is added to the top of the bottle and finally a customs stamp is place over the cork. For those of you that don't know about this, the customs stamp is proof that duty has been paid on the alcohol to the government. It is essentially a strip of paper that is glued up the neck of the bottle, over the cork and down the opposite side of the neck. Opening the bottle will result in the strip being broken identifying that duty has been paid. (Note: The bottle in this picture does not have a customs stamp on it)

There were two problems with the process which I saw. The first related to adding the label. On beer bottles and a large number of other spirits, the label is just slapped on as the bottle passes a certain point in the line. As long as it goes on straight and level there is no issue. However with a number of spirits (and this one in particular) the bottle had a stamped-in seal on the neck which was created as part of the bottle manufacturing process. The label had to align perfectly underneath it. So how do they ensure that the label is placed in the right area? The answer is quite easy if you think about it but off the top of my head I struggled to find a solution. The bottle is manufactured with the stamped-in seal on one side and - directly behind it - is a little notch at the bottom of the bottle. The bottling line jiggles the bottles around until the notch aligns with a stud on the side of the moving belt and this guarantees that the front is facing the labelling machine. Next time you pick up a bottle of spirit with a glass seal on the front above the label check the back of the bottle near the bottom. You'll find the notch.

The more interesting problem was the customs label. To add this label the blanks are fed into the machine in a long strip. The machine cuts the strip behind each label, positions it over the top of the bottle and a sleeve comes down from above and forces it over the cork and down the sides where the glue would attach it. The problem was that the tolerances for this process are very small. If the sleeve is a fraction of a centimetre misaligned with the bottle it would come down and crack the glass. Indeed as we were watching the engineers were attempting to align this part of the machine and succeeded in smashing three or four bottles of vintage port all over the floor. Each time this happened the machine needed to be stopped, the wreckage cleared, the floor cleaned, the machine realigned and the while thing started again. This was taking quite a bit of time and costing a lot of money. After watching this happen for the fifth time (and starting to get a little high from the alcohol fumes drifting up from the floor) I turned to George and said "Why don't you stop filling the bottles and just use empty ones until the alignment issue is sorted out?"

Ultimately in process modeling it is the small items such as that detailed above which simplify the whole process.

Can you think of something you are doing in a process now which you can stop but which will
Improve the overall flow? I bet you can.





Reminder: 'The Perfect Process Project Second Edition' is now available. Don't miss the chance to get this valuable insight into how to make business processes work for you.

Click this link and follow the instructions to get this book.




All information is Copyright (C) G Comerford

See related info below



The Tao of Shaving or "How companies with beards don't do process management"

It occurred to me recently that for the male of the species at least there is a daily activity we perform which echoes the various issues and questions that beset those companies trying to perform process management to any degree.

Shaving.

That's right, shaving. Think about the various states and activities and follow along with me:

There are those of us who decide that we are not going to shave and we will leave things to develop as they wish. These are the companies who's processes have evolved with no thought for maintenance and control. These processes are unruly and dictate their own agenda to the company.

Next we have those people who trim their beards. They have decided that they want a little bit of control over what is happening. These are the same as the companies who have worked out in their own mind that they need to do something about their processes but have not decided exactly what, or how. They have an attempt at things and seem satisfied when they produce a result of some sort.

Next we have the guys who have taken matters in hand and gone for the full wet shave. There are different ways of doing the wet shave from the old-fashioned cut-throat razor through the safety razor to the more modern high-end "has its own in built lubricant strip and 8 blades" type from well known manufacturers. These are the people who have embraced the ability to control their facial hair in the same way as those companies who have embraced process management and have full control over their processes. They may be using old-fashioned or modern methods but they have achieved the result they want.

But there is a further step or level. There are those guys who have purchased an electric razor and use that regularly. These are the guys who have - for all intents and purposes - automated the shaving process. They can reconfigure their facial hair at will: Small mustache? Sideburns? Goatee? All possible and manageable with the electric razor. Change is dictated by the underlying growth and not by the ability to manage it. These are the companies who have decided to implement a BPMS to automate their processes and the management of them. Sure, it can be a little more expensive. It can also take some time getting used to it, and it may seem 'wrong' if you haven't done things this way before.

The point is that once you take the decision to manage your processes (or indeed your facial hair) there are any number of different ways that it can be done. Simple tools will help you - and indeed most people who do this will opt for fairly simple tools to help them and be very satisfied with it. But there will always be those people who decide that something more automated is needed and will spend the money to do so.

Are you a wet shaver, an electric shaver or a full beard man? What about your company?

(This analogy also applies to women shaving their legs but seemed less 'appropriate' somehow)




Reminder: 'The Perfect Process Project Second Edition' is now available. Don't miss the chance to get this valuable insight into how to make business processes work for you.
Click this link and follow the instructions to get this book.


All information is Copyright (C) G Comerford

See related info below



Friday Review - 12th March 2010



Here are some of the links posted over on the Process Cafe Espresso Shots this week1


Who are the BI Personas? - Some interesting thoughts from Forrester on business intelligence and the fuzzy demarcation lines between producers and consumers.

Dealing with change: are you set up for it? - The article below is a discussion with Marc Andresson about new technology. But what it also does is raise questions about 'old media' and their inability to change with the times. His advice is to follow the example set by the explorer Cortez who - on arriving in the newly discovered country - promptly burned the boats to send the message that there is no going back. This is, of course one of the main issues related to process management. I wonder if there are parallels between this situation and any project you are currently working on? Are your process users resistant to change? Would burning the boats be a solution?

ERP Implementation Strategies – A Guide to ERP Implementation Methodology - Head over to the Software Advice blog and take their quick 4 question survey about ERP implementation. Did you implement BPM in a big bang approach? Or maybe it was a phased rollout? Or what about Parallel adoption? Inquiring minds want to know

1 The Process Cafe Espresso Shots is a place for linking to process related articles written by other people that don't merit a full post on the Process Cafe but are still worth your time reading. Sort of an espresso shot of 'The Process Cafe'-eine.

The BPM Nexus Survey results are out

'We could all do BPM better if we were less resistant to change'. This appears to be the overarching message coming from a recent survey of members of the BPM Nexus

The BPM Nexus recently ran a survey to understand the state of BPM in its member's organisations. The results have just been published.

The survey consisted of ten questions, some of which had predefined answers and some of which were free text. Here's a sample of the results:

When asked ‘If you had 1 wish related to BPM what would it be?’ 44% said ‘Better understanding of BPM by themselves and their organisation’

Associated with this we asked ‘What is the one thing that companies could do now, with their existing resources,  to help them improve, but they don’t?”. The main answer was “Start doing it!’.


The overall impression gained from the results is that there is a general lack of knowledge and awareness of BPM within organisations - especially amongst senior management. This was coupled with 25% of respondents saying that there is no support or enabling for process education in their company.

On the positive side, though, if companies can approach the cultural issues associated with process work (which are often the cultural issues associated with change) a huge barrier for getting process work done in an organisation will be removed. Funding does not seem to be a major issue at the moment.


The results make fascinating reading. If you wish to get a copy of the results head on over to the BPM Nexus and sign up.






Reminder: 'The Perfect Process Project Second Edition' is now available. Don't miss the chance to get this valuable insight into how to make business processes work for you.

Click this link and follow the instructions to get this book.

All information is Copyright (C) G Comerford

See related info below



Why the little things count in BPM

(This is the second in an occasional series posts recounting real life process issues I have encountered)

A number of years ago I was working in the audit department of a major American multi-national.

Every year the department was responsible for auditing the expense accounts of the senior management of the organisation (Chairman of the Board, COO, CEO, CIO etc). This was known as The Corporate Compliance Audit.

I was assigned to this audit one year. It's a really fun piece of work because - apart from getting to go down to the airport and audit the accounts and usage of the corporate jet - I got to go and check the CEO's expense accounts.

Unsurprisingly (to me anyway, knowing the man and having worked for him for a number of years) the CEO was squeaky clean in his expenses. He even remembered to pay for the costs of taking his wife to Europe for a meeting on the corporate jet.

But as you went lower in the organisation this wasn't always the case.

One example in particular stood out to me. It involved an individual (who we'll call 'Eric' - names have been changed to protect the guilty). Eric was the head of a corporate information department and had linkages with a large number of external bodies to get that information.

One day he had invited representatives of these external bodies to a local restaurant for a meal. He had also invited a couple of members of his own department including his secretary - who we'll call 'Cindy'.

Over the course of the meal the attendees had spent almost $4000 on alcohol including 30 bottles of wine, numerous spirits and a round of after-dinner brandies at $98 a shot. The alcohol alone accounted for 48% of the total.

I rang the restaurant to see if the amount being claimed was right. They remembered the party and confirmed the approximate amount of the bill.

We checked the corporate policy regarding 'entertainment' and - whilst the amounts appeared to be excessive - nothing seemed to be out of compliance with the policy. However the policy did state clearly that the person submitting the bill had to write the names of the attendees on the back of the receipt. I checked the back of the receipt and found about nine names on it. When I did the math it appeared that the attendees had spent almost $1000 each on a meal. This seemed a bit excessive so further inquiries were made.

The story that came back to us was that there were 'considerably more' than nine attendees but for ‘security purposes’ the full names and numbers of the attendees could not be divulged.

Right.

Anyway, my next stop was to actually find out who had approved such a large entertainment bill. This is where the story got interesting (and where the link to process would eventually come in).

The policy stated that all expenses have to receive review and approval from a manager or above. We went to Eric's manager and he claimed never to have seen the invoice and would certainly have questioned it. After all if one of the attendees had driven off after drinking their share of $4000 of alcohol, had an accident and blamed the company for providing the booze we could have been in serious trouble.

So who approved the invoice?

Checking back through the paper trail it appeared that in actual fact it was Cindy who had paid for the meal (using the corporate credit card), made an expenses claim using the appropriate process and Eric - her manager - had approved it.

Simple.

So what's wrong with this picture?

Well, in essence you have a duo who were gaming the system (although probably not maliciously). They stuck by the letter of the corporate policy, annotated the attendees (to a point), submitted a claim through the appropriate channels, had it approved as per the policy and voila! one HUGE night out on the company.

Leaving aside the moral questions of such a large bill for such a small number of people (it eventually turned out to be about $400 per head), what was wrong with the process?

One small thing.

In auditing there is a term known as 'segregation of duties'. it is a concept which means that different people have responsibility for different parts of any process involving money. That's why - in a well designed finance process - one person cannot create a supplier, set up the payment details, raise and approve an invoice and write a cheque. Using segregation of duties you need at least two people involved. That way it is harder to create a 'fake' vendor, a 'fake' invoice and a real payment.

By adding the corporate policy statement saying "all expenses have to receive review and approval from a manager or above" the company had attempted to implement the segregation of duties standard but had failed in one small, but key, matter.

The had failed to state that the approver cannot be a part of the event itself. In reality, because Eric was at the restaurant and had partaken of the meal and the alcohol, by getting Cindy to pay he was effectively approving his own meal. This completely removes the 'segregation of duties' part of the policy.

That's why the small thing makes a difference.

How did we close this loophole? Easy. The policy was changed to say 'senior person present must pay'. That way there can be no-one at the table who would be in the position to approve the meal they had just eaten (or alcohol they had just drunk). It would have to be elevated to someone higher who wasn't there. The submitter would then have to pass the red face test and justify the attendees, the cost per person and the overall bill. In times of plenty this is relatively easy. But once belts start to be tightened it becomes a lot harder.

So what is the process implication of this?

Next time you are looking through your own process, consider whether something simple and straightforward such as this would improve the flow of the process with a minimal overhead for the participants.






Reminder: 'The Perfect Process Project Second Edition' is now available. Don't miss the chance to get this valuable insight into how to make business processes work for you.

Click this link and follow the instructions to get this book.





All information is Copyright (C) G Comerford

See related info below



Friday Review - 5th March 2010



Here are some of the links posted over on the Process Cafe Espresso Shots this week1


Knowledge Management (and beyond!) with Metastorm - The importance of knowledge management to the organisation

Ovum Decision Matrix: Selecting a Business Process Management Vendor #BPM - A fifteen page PDF that goes through the information you need to consider.

TravelDealsUK: Heathrow saves £30 million with business process management - The Industry Standard - How the folks at Heathrow airport saved millions with a BPM system from Pega.

McKinsey: Get Ready For Sensor-Driven Business Models - An Interesting report which has implications for processes through the use of data collection and management.

5 Reasons Businesses Still Hate Enterprise Software - From Forrester comes a list of reasons companies don't like e terpeise software. Amongst the reasons: it's too expensive

Chasing Rabbits with BPM « Thoughts on Collaborative Planning - A great little article on how collaboration can help BPM. Actually quite a big article....

Avoid Big Software Glitches, Learn from the Experiences of Others - Some sobering thoughts on the current problem of software glitches when the world runs on software


Coming next week on The Process Cafe:

"Why the little things count in BPM" - A story of corporate wrongdoing and how a small process change could have prevented it all from happening.


1 The Process Cafe Espresso Shots is a place for linking to process related articles written by other people that don't merit a full post on the Process Cafe but are still worth your time reading. Sort of an espresso shot of 'The Process Cafe'-eine.

Why we aren't 'Storming the Bastille' of processes

I read with some interest the recent article from the Forrester Blog entitled 'Storming The Bastille: A Populist Uprising In The BPM World?'. In it the authors, Connie Moore and Clay Richardson, make a very simple statement. They believe that 'business process professionals and business users are in open revolt against IT – pitchforks in hand – demanding greater collaboration and inclusion across all phases of the process lifecycle'.

It's an interesting statement and one that I would like to come back to in a few moments But first let me tell you a short story that happened to me recently.

I am a part of a couple of acting groups here in the UK (If you read my bio it does say "Blogger, author, actor, video editor and business process consultant. Weird eh?"). One of these groups was fortunate enough to have permanent premises for its activities which were provided for them by the local council. Or at least they did have until 2007 when the council tore them down to extend a local school.


This, effectively, left the group without a home. For those of you outside the UK (and those of you who are inside the UK but have had no dealings with drama groups) a huge proportion of these groups do not have permanent facilities. They rent rehearsal space on a show-by-show basis, they store props and sets in containers and they perform in local facilities which are, again, rented. The number of groups that can own up to having their own rehearsal/storage/workshop/performance venue is absolutely minute.


So in 2007 the committee decided that they were going to investigate the possibility of building our own facility for the group. They did the research and decided that a  suitable venue could be built for a sum of £200,000. At the time we had less than £30,000 in the bank and this had been accumulating over about 35 years of work. So we went to the membership and said to them "Would you like a custom built facility for the group?"


Guess what? The answer was a resounding 'Yes!'. With this mandate we went ahead, got planning permission and kicked off the fund-raising activities. We now find ourselves nearly three years later having raised an additional £20,000 pounds. At this rate we will be able to move into our finished premises sometime in the middle of 2033.


However, in the meantime we have been putting on three to four shows a year using temporary rehearsal facilities, rented storage and rented performance venues - exactly like the rest of the drama world does. And guess what? Our productions are every bit as good as they were before we lost our home.


So what has this got to do with Connie, Clay and the Bastille?


Quite simply the situation is almost identical. 

Let me explain.


My drama group were asked the question 'Would you like to have your own facilities?' They answered with a resounding "YES!". The problem was, this was a question that would only be answered with a "Yes". It's almost the same as asking, say, "Would you like to cure cancer?", or "Would you like to be financially independent for the rest of your life?" or "Would you, as a user, like greater collaboration or involvement over the process life cycle?". Of course you would. I don't know anyone who wouldn't like cancer to be cured, or to have enough money to not worry about anything for the rest of their life, or to be involved at all stages of the the process life cycle, or to have bought-and-paid-for facilities for their drama group.


But that's not the right question to ask.


The right question to ask is "Are you prepared to work the long hours and experience the frustration and anger that will be needed to cure cancer?", "Are you prepared to make the lifestyle and attitude adjustments that are needed to become financially independent?", "Are you prepared to create a process capability, staff, train and fund it to the point where your users can become involved at all stages of the process lifecycle, with all the impact that will have on the day-to-day running of your business?" and "Are you prepared to devote the next 3 years of your life to providing an average of £3000 per person to make the dream of owning your own facilities a reality?".


With the question framed as above it then becomes a real decision to be made rather than just a fantastic 'pie-in-the-sky' objective that will almost never become reality.


So when I read comments from Connie and Clay saying how the users want more involvement I don't see a 'Storming of the Bastille' I see a genuine issue with the wrong question being asked.


The article mentions 'Michael' - a typical worker representing 28% of the workforce. He will - when IT can't provide him the resources - take his own processes into the cloud and implement a solution without IT. That's great for Michael - it gives him what he wants and removes the burden from the IT resources who would have done this for him eventually. But at what cost?

We now have a solution which is working for one individual (or, more likely, a group of individuals in one department). This is a solution which will need supporting. It is a solution which might have been better implemented if it were rolled out to a larger group. Instead it is isolated and unintegrated with the rest of the company's IT architecture. This is very reminiscent of the old Excel solutions that were - and still are - rife across organisations. They are generally duplicated everywhere, uncontrolled and probably outside the Enterprise Architecture model that the company has created. I only have to remind you of the Y2K initiatives and all the issues that caused to make you understand the reason we don't want uncontrolled applications making their way into the enterprise.


But what the Forrester article does throw up is a problem which needs to be addressed in a different manner. The underlying question is "Why are users having to go outside IT to find solutions to manage their processes?" Is IT really that bad? Sometimes, unfortunately, it is. But usually the reason is that the organisation is not focused on the things that the users need. IT is focused on larger projects such as ERP, CRM etc, and the day to day needs of the users get left behind in this case (although you do have to ask why the users and IT are working on different things that are note aligned to company priorities?). But the solution to this is really straightforward. You take the 'process' part of things out of the hands of the users and you give it to a process capability within the organisation. 

This organisation can help the users manage their processes. But more importantly it can manage the overall process needs within the organisation. It can identify existing solutions from elsewhere in the company that would serve a different set of users rather than letting them create their own solution. It will provide architecturally approved process solutions which can be supported at minimal cost. It will also make sure that the users do not start automating badly designed or inefficient processes.



The right question to be asked is "Is your organisation ready to make process management a funded and recognised capability that your user base and IT can both benefit from?"

How many organisations are ready to answer 'Yes' to that question?





Reminder: 'The Perfect Process Project Second Edition' is now available. Don't miss the chance to get this valuable insight into how to make business processes work for you.

Click this link and follow the instructions to get this book.


All information is Copyright (C) G Comerford

See related info below



Hot topics last month on The Process Cafe


After checking my visitor logs recently I wanted to let you know what were the 5 most visited pages over the last 28 days (i.e during February) here on the Process Cafe




Be sure also to check out the categories listed on the left and see posts related to my thoughts on BPM, case studies, business rules and the marketplace





All information is Copyright (C) G Comerford

See related info below



Why SaaS pricing will kill BPM in the cloud

Since my post of a couple of weeks about cloud computing there have been a few more entries from within the BPM blogosphere which have complemented it quite nicely. But one which made me think a little more about the concept appeared recently

Connie Moore from Forrester mentioned that the entry price from one of the vendors for BPM in cloud is around 3K/month for a single process.

This has been blogged about over at the Curious Cranium blog by Ashish Bhagwat. He has an interesting take on the whole concept of pricing BPM in the cloud. One of the points he makes is that:
“Every process, no matter how standard, has its own thumb-print in the organization. The benchmark of a simple process will require agreement on the number of steps (human & system steps), number of business rules, the data elements, the integration needs, participant requirements (users/groups/roles), the exceptional conditions, and multitude of other factors – all of which cannot be listed here.”
What is interesting here is that these costs then start to become a large factor in the lifecycle management of the process itself.

Let me explain

If you are dealing with processes internally in your organisation and you have a single owner for each process (As I recommend in my book ‘The Perfect Process Project’) then, logically, on a regular basis you will be reviewing the state of the process to try and understand what is happening to it and whether it is running optimally. At some point during the life cycle of the process you may wish to  look at modifying it. This could be as a result of changing business needs, increased volumes, organisational needs or any one of a dozen other reasons. This is the point at which we need to understand the impact of the factors Ashish lists in the quote I have shown above. Now we are looking at a potentially serious cost impact of changing a process.

In earlier times when a BPM system (or even a BPMS system) was purchased and implemented in-house it was a simple matter to increasing volumes, or add a step or two to a process. The incremental cost of doing so was minor in a large organisation (this was over and above the cost of implementing the tool or system in the first place). However, now that the initial implementation costs has been decreased through BPM in the cloud, the running costs will  come from changing the system during the life cycle of the process.

I contend that something such as this - if handled incorrectly - will cripple the ability of BPM in the cloud to proliferate appropriately.

But this is only if BPM in the cloud is offered in a SaaS model. If we refer back to my post from a few weeks ago I mention that this can all be done cheaper merely by building the components oneself, rather than taking this from a third party SaaS BPM provider. Free software, cheap cloud provision and the use of free social media software could revolutionise the way BPM is placed in an organisation - and all at a fraction of the cost of current solutions.

This cheap alternative should be one of the fundamental reasons why a SaaS bpm in the cloud offering should fail - although in reality we know that the costs of a BPM in the cloud offering will be covered by individual departments in daily operating expenses, whereas the cost of a project to implement BPM is scrutinised as a capital cost and isolated from the daily expenses. This serves to cause the project to be seen with a higher public profile whereas the expenses to be hidden amongst a myriad of other costs produced by a department. (Would you scrutinise a project costing $100,000 a month, more than a global below-the-line operating expense increase of $10,000 a month per department across ten departments? A company I worked at previously certainly would).


Summary

Costing models for BPM in the cloud will need to be carefully scrutinised to ensure that they will not inhibit the future development of the processes themselves. As such the owners will need to understand how the costing is done and what will be the impact of making a change. This will then need to be made transparent and matched against the cost of implementing such a system as an in-house cloud system rather than a purchased SaaS operation






Reminder: 'The Perfect Process Project Second Edition' is now available. Don't miss the chance to get this valuable insight into how to make business processes work for you.

Click this link and follow the instructions to get this book.


All information is Copyright (C) G Comerford

See related info below