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Integrating Business Process Architecture Engineering into Business Governance
The output of a process (a function of its inputs and what is done in the process) can be described by this simple relationship: Y=f(x). In the enterprise, the highest-level process Y’s are the result of the pulling together of lower level process Y’s.
How do organizations typically manage operational Y’s. To survive and thrive companies must constantly improve. It seems logical to simply establish and track the performance of their Y’s against goals throughout the organization. We might think that this is an appropriate approach, right? But is it really? Are best behaviors benefitted by this approach?
Let’s consider how enterprise-level goals are often arrived at. Was there an evaluation of the entire organization to determine the important goals for each process so that the total company would benefit financially? Using this form of analysis processes that are NOT organizational constraints may be given the target of only maintaining current performance levels; i.e., , not showing any improvement whatsoever.
This rigor is not typically done in my experience. A more common procedure is that goals are negotiated with the understanding that improvements should be made everywhere. These goals can then be tracked throughout the company using a red-yellow-green scorecard, for example, where red means that a target is not being met and action needs to be taken, while green indicates that the target is being met and no action needs to be taken.
Lloyd Nelson stated, “If you can improve productivity, or sales, or quality, or anything else, by (e.g.,) five percent next year without a rational plan for improvement, then why were you not doing it last year?” I think that this statement says a lot. However, it has been my experience that red-yellow-green deployments do not have a structured plan for improvement. Metrics can toggle between red, yellow, and green, where the metric variabilities are just common cause and no improvements are made. Goal management to the Y’s in this form could be considered management by hope.
In business process architecture timely management to important process x’s can be essential to get the desired Y’s; however, managing to the Y’s can lead to much firefighting. What is needed is an enterprise measure-analyze-improve-control framework that leads to the 3 Rs of business; i.e., everyone doing the Right things, and doing them Right, at the Right time.
To determine where business process architecture improvement efforts should focus (with a roadmap for structurally creating projects that make long-term improvements) an enterprise analysis system is needed. Organizations are now seeing the benefits of an Integrated Enterprise Excellence (IEE) system to fulfill these needs.
In IEE we are careful about how we track and assess whether a goal has been met or not. If we measure success by meeting our quarterly numbers, then this can drive numerous sorts of destructive behaviors at quarter-end. In the case of Enron, this policy created very destrutive behaviors. Using IEE, a 30,000-foot-level operational process metric in a statistical validated time series shift is what should be used as part of determining goal achievement.
“… (Integrated Enterprise Excellence or IEE is) the most complete and effective operational management system available.” Keith Moe, Group Vice-President, 3M (retired). Integrated Enterprise Excellece (IEE) provides an enhanced, unified system approach to business improvement, balanced scorecards and strategic planning.
IEE was developed by Forrest Breyfogle, III. He is a Professional Engineer and ASQ Fellow who founded Smarter Solutions in 1992. As a management thought leader and innovator, he recently completed a four-volume set of books that provides radical management advancements in the utilization and integration of scorecards, strategic planning, and process improvement and business process architecture.
The volume, Integrated Enterprise Excellence – The Integrated Enterprise Excellence System: An Enhanced, Unified Approach to Balanced Scorecards, Strategic Planning, and Business Improvement is an overview of a three volume hardcover set (Integrated Enterprise Excellence, Volumes I-III). It discusses how the application of IEE methods, tools, and techniques can overcome the enterprise management challenges of the twenty-first century and the limitations of traditional business measurement systems. You can also visit www.ieeblackbelt.com for more information.
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