Thinking about White Space

I’ve been thinking a lot recently about all the stuff that happens outside of traditional enterprise applications. Enterprise software (ERP, CRM, etc) has become good at solving most of the structured work needs in organizations. But, many business problems today require work outside of enterprise applications. These ‘white space’ activities involve research, analysis , collaboration, applied knowledge, planning, resource allocation, approvals and many other human activities. Often they get managed today using email. This results in a large portion of the work done in organizations being:

• Undocumented
• Unmanaged
• Unmeasured
• Time Intensive

Alternatively, they are supported with custom development that makes changes and upgrades difficult (often in addition the above issues.)

This need cries out for something that is easy to use like email, but addresses its deficiencies. Adaptive Case Management (ACM) holds out the hope of solving this need, but I’m not sure anyone has yet met the vision and been able to deliver on the promise. I’m not even sure there is agreement on the title (Advanced, Dynamic, or Adaptive) let alone what the promise is.

Forrester recently Waved Dynamic Case Management (DCM). After a long discussion of what DCM is, they evaluate vendors (mostly incumbent BPMS providers) on only six capabilities:

1. Design
2. Development environment
3. Capture, CCM, and ECM support and security
4. Case handling and guidance
5. Case-centric application support
6. Automation and event management

More enlightened definitions, I think, come from practitioners a little closer to the field:

Keith Swenson lists six characteristics of an Adaptive Process:

1. simplified deployment: the case templates do not need to be designed in advance to fit the situation.  You deploy an uncustomized system into the organization, and then it is adapted by the case managers themselves as needed.
2. exercise: The system is not “designed” by a central planner, but instead it is trained by exercising it.  Those parts that get the most use, and have the most need of improvement, will get the most effort.
3. learning: the system as a whole learns how to support the organization.  Instead of designing for a theoretical idealized business case, it learns from the real business cases, with the real people working on them.
4. practice: the training is accomplished by doing the work, and without the need to make an abstract theory about the underlying mechanisms.
5. stability: the system can be extremely stable because it senses and responds to perturbations automatically. The case managers themselves can shift behavior as needed, without waiting for programmers or other specialists.
6. optimized: each part of the organization can optimize use to their particular needs, for their particular part of the business, and their particular employees and skills. This level of optimization can only be achieved through self-modification.

Max Pucher simplifies and then expands these ideas (I encourage all to read the full content of all posts referenced here.) He uses three criteria to define an Adaptive Process:

1. Adaptive Process is a productive system that deploys not only the organization and process structure but through backend interfaces becomes the system of record for the business data entities and content involved. All processes are completely transparent as per access authorization and fully auditable.
2. Adaptive Process enables non-technical business users in virtual organizations to seamlessly create/consolidate structured and unstructured processes from basic predefined business entities, content, social interactions, and business rules to achieve verifiable goals.
3. Adaptive Process moves the process knowledge gathering in the life cycle from the template analysis/modeling/simulation phase into the process execution. The AP system collects actionable knowledge – without intermediate analysis phase – based on process patterns created by business users.

He then goes on to catalogue increasing levels of ACM that deliver these capabilities:

He concludes by emphasizing that, “The ACM platform must allow each business and department to work as they see fit to achieve customer outcomes and avoid the failure demand and increased costs that process standardization would cause.”

Who will deliver on any of these ideas is still up for grabs in my estimation. Some social tools are starting to hit close to these promises, but none have quite hit the mark . Let me know who you think gets close.

How Long Does it Take?

This post continues a series of  blog posts on Measures by exploring Cycle Time.

Cycle Time is one of my favorite measures. It is at the heart of Lean and forms a basis for improvement that is typically at the center of good customer experience and process agility. In my opinion, any process not tracking this measure cannot be meaningfully improved.

Cycle Time is defined as the total duration for a process to complete. This includes all time from a customer’s perspective to transform inputs to outputs including wait, process, transport, inspect, and other value add and non-value add time.

Cycle Time (CT) is easily measured for any process. You could measure it directly by starting a clock when a work item enters a process and timing until the process is completely finished with an end product. Of course, you’d have to allow for different exception paths that may take longer than the happy path on some repetitions of the process. The neat thing however, is that on average, Cycle Time can be calculated using two other readily available metrics. Cycle time is equal to the work in process (WIP = work that has started the process, but is not yet finished) divided by the capacity (Exits = output of the process over a period of time.) That is:

CT = WIP / Exits.

Consider a bank line. There are 10 people in line in front of you for the teller. You notice that one person is finishing on average every 2 minutes. How long will you wait in line – what is your bank line cycle time? WIP = 10 people in line. Exits = 1 person/2 minutes = 0.5 person /minute.

CT = WIP/Exits = 10 person / (0.5 person/ minutes) = 20 minutes

Want cycle time to improve? Reduce the WIP. If 5 people leave the bank line, you’ll wait half as long. Same process, half the CT. Or, improve the process capacity. With a second teller working, the Exits increase to 1 person/minute and again you wait half the time. Best yet, make the single teller twice as productive. Again, Exits double and CT is cut in half.

These same concepts apply easily to processes improvement. Usually, we can control the WIP in a process. Pull or Kanban systems are set up to do just this. Once the established WIP level is reached, no new inventory enters the process until another item exits. Generally, work should stay in its most unprocessed form until there is demand and capacity for it. Why is this important? When WIP is reduced all kinds of good things happen:

1. Reduced Investment. WIP represents an investment that has not yet paid off. Reduce WIP, and you reduce the capital needed to run a process. Or, for service processes, think of reducing the investment in unbillable work “laying” around the office.
2. Less Waiting. WIP that is waiting to be worked on is potentially wasted. Specifications and demand can change and WIP can get damaged and decay causing rework, excess and waste. Even for items that don’t need preserved, it is helpful to think of WIP has rotting any time it is in a queue.
3. Less Storage. If WIP is not in the process, it does not need to be stored on the floor, in warehouses, or in file cabinets and desks.
4. Easier Logistics. Unless you’re a long haul railroad, it is easier to schedule and move smaller loads.
5. More Focus. If work gets stuck in the process, it is much easier to find the bottle neck or constraint and take corrective actions.

In general, WIP should be reduced to just enough to cover the bottle neck activity. Consider our 3 step loan approval process of: Capture, Approve, Fund. If Approve can process only 10 loans a day while Capture and Fund can do 20 per day, marketing should generate demand for only 10 loans per day to meet a 1 day cycle time. Any more, and the cycle time will increase to over 1 day. Want to be able to handle more loans each day at the same CT –  you’ll need to improve capacity (Exits) at the bottleneck. To process 20 loans at 1 day cycle time, you’ll need to double Approval processors or make them twice as efficient (normally using a Lean technique to focus on value add or Six Sigma technique to reduce errors and variability.) The Capture and Fund processors already have that capacity.

Looking at improvement from another perspective, as cycle times are reduced, capacity (Exits) increases proportionally. That is Exits = WIP/CT. A fifty percent reduction in cycle time at the same load means capacity has doubled.

Measure and focus on Cycle Time improvement to maintain customer satisfaction, reduce costs and improve capacity.

How Many?

When setting process measures, there are four key areas where I start:

1. Volume
2. Cycle Time
3. Efficiency
4. Quality

I’ll be exploring these over a series of blog posts on Measures starting with this post on Volume.

Volume seems like a simple measure. At its root, it is concerned with how many. Lets consider a simple a simple loan process and dig in a little deeper.

First, should I measure the number of loans, or the $ value of the loans processed? Is there another weighting factor that affects the process that I should measure?

The loan process has two types of loans. Do I need to measure volume separately for each type or jointly? What if there is different process requirements for each type?

Our process has 3 steps: Capture, Approve, Fund. There is drop-off after each step, so that volume at the first step will be different than subsequent steps. How do I account for this? If there are dependencies, and parallel steps, they may also need to be accounted for. Volume measurement gets more interesting as transactions become longer running. Over what period do I measure? Do I care about:

• The number in each step (how many loans need funded),
• The number that passed through each step (how many loans got approved today and may or may not yet be funded regardless of when we captured the loan), or
• The number that got converted through the process steps (of the loans captured this week, what percent were approved, are funded)

I have multiple processors at each step. Do I want to measure volume separately for each processor, or is jointly OK? What if the processors are more specialized or have different levels of approval authority?

Volume measures can get complex very quickly. So, be sure to understand how volume measures are being used. Depending on what level of visibility is required and how it impacts management or the ability to optimize processing, there can be many dimensions to how volume gets tracked and reported.

CU’s Business Process Management Class

Thanks to Dr. Judy Scott and all the thoughtful University of Colorado students who participated in last night’s engaging class discussion around BPM. Good to know that BPM has grown into a graduate course with good critical thinking around the concepts and applicability.

Here is a link to my presentation materials on the Business Value of BPM. I look forward to follow up discussions in the comments below or on the course discussion forum.

Forrester Waves Dynamic Case Management

“While BPM products tend to focus on repeatable, structured processes, case management applies to more dynamic, unstructured, ad hoc processes.” And so, a new wave is born in Q1 2011. Forrester now separates DCM from traditional BPM with a separate wave. The usual suspects make up most of the leaders. Some interesting up and comers also make the short list of vendors profiled. Their explanation of Dynamic Case Management is worth a read of the full article.

Is Process Improvement Strategically Important?

What a great blog over at HBR. I agree with most everything Brad Power discusses. In a recent installment he tackles a question often overlooked. The title speaks for itself:  When Is Process Improvement Strategically Important? He starts with the assertion that, “Process improvement programs that do not expressly target competitive advantage are doomed to fail.” Agreed. He then goes on to describe when programs have the right target. Among other jewels, he discusses a quad matrix to quantify the importance of process to strategy using  focus (efficiency vs. growth) and time-frame (short-term vs. long-term). Hint: The requirement for a long-term focus may be why some organizations discount the strategic importance. Go read the post, then browse the whole blog.

2010 Gartner BPMS Magic Quadrant

If you missed it, here’s the Gartner BPMS Magic Quadrant for 2010, freshly published October 18^th

And a Link to the full document: Gartner 2010 BPMS Magic Quadrant.pdf

My Love – Hate of Android

I’m a long time BlackBerry user and recently switched to Android. My trackball died, the phone was scratched up, and BB did not offer with my carrier some of the love I wanted, so I looked for an alternative. First let me say I am disappointed that BB has been slow to keep up with a worthy alternative. Second, let me say that I miss my BB. It is the perfect communication device for phone and email. If only I could get some of the Android love inside of a BB phone. Let me rant just a little about my recent experience with a state of the art Android phone. In summary, here’s what I love and hate with my new Samsung Galaxy S:

Love:

• Web browser: There were many sites on my BB that just did not work. With Android, these sites, even heavy Ajax ones, work perfectly. And the option that allows you to zoom on the text sections of a site and have the text wrap is beauty. And, I can now browse while on the phone. Love it.
• Market apps: The app store has many free or cheap, very useful apps. I especially like options like wifi teathering from Barnacle, watching Hulu.com on the Skyfire browser and CBS shows on TV.com. These are awesome pieces of software. Some are just good time killers like Gem Miner and Paper Toss. And the ability to tweak just about everything including loading different keyboards, music players, etc are critical. Because many of the pre-loaded base applications are so sub par, the phone would be unusable without these apps.
• Keyboard: I thought I would miss physical keys. Maybe some, but not as much as I expected. I still cannot decide if Swipe or prediction keyboards are faster. The phone came with Swipe. Currently, I’m using a prediction keyboard from Swiftkey that seems a bit more mistake proof – entry is slower, but I don’t have to start over as often.
• Speed: 3G and wifi seem faster. Web is fast. I’m watching streaming videos and listening to streaming radio like it’s DSL. Nice.
• Screen: Size is a beauty and touch sensitivity is great. Resolution is really good but I think my BB, though smaller, may have been higher resolution. I’d like to see a touch better res on the Galaxy without more drain on the battery.

Hate:

• Setup: This should be as easy as entering my gmail email and password, but no. It took 2 full days of trial and error to get email and calendar and contacts all synced up. My business and personal email accounts are both through gmail, so you would think this is simple with Android. No. I needed client software to sync my Outlook to Google and it doesn’t work if my desk computer is not on. Google supplies a calendar sync client, but not a contact sync. Duplicates were generated when I loaded contacts from Outlook – hundreds of them. And, apparently, I need to load them again if I make changes. Come on! I’m still not sure I have the best email setup.  I could not get a good sync using the phone’s native email app. It reloaded emails most times I opened it causing long delays in viewing them. So, I’m using the Google gmail application. While messages arrive faster, I cannot get a common inbox, emails don’t show on the opening screen and the navigation is a cluggy. Also, no way to sync with Linked-In. Only Facebook, MySpace and Twitter – how’s that decided and why not make it open for all? Limitations in the pre-package software meant more time looking for apps to fill gaps on the calendar, phone dialer and others. This has to get better.
• Calendar: Why don’t events let me click on contents to dial into conference calls or view web pages? No copy either. Seems so obvious, but you can’t get to any text – it’s like looking at a picture of the event invite. If anyone knows an app that fixes this, please share. And the week calendar doesn’t show separation in many time blocks that are open. When I try to see what is scheduled in a block on the weekly calendar, there is no text and there’s no section to display text if an event block is selected. It just takes me to the event detail. So dumb. And I can only sync with my personal gmail calendar. There is no option on my work domain gmail to sync calendar, only email and contacts. I had to sync from Outlook to my personal calendar, then give it access to my work calendar. So now, all my events show twice. What’s with that?
• Dialing: Looking up a contact to dial a number is impossibly difficult. Why doesn’t the dial pad give a full QWERTY keyboard and assume that I might be looking up a contact. Instead, I have to press the contact icon then the search. Even then, for some reason (I think it searches only first names,) it doesn’t always find a match. When it does, there are two or three more clicks to dial a number.
• Battery Life: This is the main reason I sent back my G1 a couple years ago. While the Samsung is improved, I struggle to get through a day with a few phone calls and light browsing. I may use the screen more, but the battery is drained pretty fast. My BB almost never required a mid-day charge. This phone almost never doesn’t. I can’t leave the house without a charger.
• Physical keys: I’m talking here about device control keys. I miss having a single button to go to my messages and one to mute/unmute. On Android: activate screen, unlock screen, drag down phone controls,  press mute. Even the most common tasks are 3 or more steps away. Just give me two physical buttons I can set up to do what I want with a single press.
• PodCasts: There are applications that sync with iTunes and play lists. So it’s third party, but I’m OK with that. Truth is with internet radio, I don’t need my own library that often. But, I’m a heavy podcast listener.  Why can’t the player or any application on this phone remember how much of each podcast I’ve already heard and start there? Hapi Podcast comes close, but does not quite deliver. Just give me this one feature and I’ll be happy. I’d pay extra.
• The App Store: There are lots of apps there, but there are lots not there. Why doesn’t Zynga develop for Android? What about Veggie Samuri – there’s some fruit knock-off instead. Where can you find a good office suite? How hard can it be to create a version for multiple OS. Getting on the Android store is much easier – you’d think developing for them would be a priority.
• Carrier OS Limitations: Why in an open system do I need to root the phone to use it how I want. Keep it open source. Allow me to change the bottom bar. Let me remove pre-loaded apps that I don’t want. Maybe warn me if I’m being dumb, but don’t make it impossible. A lot of investment has happened to allow device makers and carriers to have an inexpensive, open OS. Stop using open software like it is proprietary to your offering.

In the end, ease of use is still lacking in Android after what, almost 3 years of development. My wife has an iPhone and it seems to have done a better job at reconciling my hate issues. I’m hoping BlackBerry 6 will address my needs and finally get a device to my carrier – though their app store is less likely to ever catch up with iPhone or Android. Google develops Android, so they just need to focus on simplifying the user experience – especially, the setup. I hope Android 2.2 fixes many of these issues if it ever does come. If not, my life with an Android may be an expensive, short-lived experiment.

Who’s your CPO?

Good to find out this morning that most organizations have already thought about and reached a conclusion similar to mine that process improvement is an operations responsibility. According to Forrester, only about 22% have process improvement report to IT:

Can Your CIO Also be the CPO

Interesting thoughts from Ann All of IT Business Edge on a topic I’ve been passionate about before: Is the CIO the Right Person to Champion Process Improvement? I support any movement toward process stewardship and appreciate Ann taking on this cause. No doubt, the CIO has a good high-level perspective and organizational clout and is home to some of the skills needed. But, making them the Chief Process Officer (CPO) may be a stretch.

While technology is a key aspect of process improvement, I’m not sure it is the most important. Fundamental skills I see as critical for a CPO role are often not core in them or their organization (lean, six sigma, change management, etc.) They usually lack organizational authority to direct process change that can impact organizational structure and operational rules and procedures. I also see the roles as too broad to be shared. These may all be reasons why, as Ann admits, “Some CIOs shy away from this kind of a role.” Yes, they should be actively involved, but it may just not be within a CIO’s influence and their organization’s capabilities to take on the CPO responsibility.

So, where should that responsibility lie? I would start in an operational role. The COO must first buy into the notion that processes are strategic assets and see value in their explicit management. Once that is internalized and communicated, she should empower an owner for each enterprise process. This owner should have the authority to influence the people, functions, technology, rules, workflow and other resources across the process. The owners would get coordination and deep skills through the CPO who empowers them and coordinates a process center of excellence.

So, can the CIO take on the CPO role? Read Ann’s thoughts and let me know yours.