I love this nifty diagram I first saw recently by John Mansfield of Fidelity Investments. A quality vs. waste matrix seems to nicely position the major approaches in the BPM space – Continuous Improvement, Six Sigma, Lean, and Re- engineering. As useful as the diagram seems, it raises a plethora of questions, including the following:
Is it Correct? Does it oversimplify? Does it mis-position any of the major players? If so, how?
Is it Complete? Does it leave any important players out? If so, which ones? Is a two-axis view sufficient for covering the space? If not, why not?
My current view is that a two-axis view of the space is probably not sufficient for covering the space. It’s difficult to put my finger on what exactly is missing, but I suspect it’s a big deal. I’ve put the question on my list to explore for 2015 and beyond. At least I now have a tentative platform for a deep dive.
Ron Ross, Principal and Co-Founder of Business Rules Solutions, LLC, is internationally acknowledged as the “father of business rules.” Recognizing early on the importance of independently managed business rules for business operations and architecture, he has pioneered innovative techniques and standards since the mid-1980s. He wrote the industry’s first book on business rules in 1994.
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I like the idea, a very interesting concept that I am fully engaged with. I agree there is a something missing. I expect it comes down to the clearly identifying the strategic objectives for process optimisation (or RIGID). Generally we measure waste (LEAN), performance capability (6S), process change impact, the business process maturity curve, etc.
I am not entirely convinced that reengineering is waste. I see it as a design opportunity to wipe the slate clean and transform the business.
I am keen to see what you uncover in 2015.
Ronald G. Ross
Thx! Me too!
Do keep us all posted! Happy to be a sounding board and contribute where possible.
It seems like the diagram is not quite self-explanatory. As I interpret it, if you have overall low waste and a low cost per defect, then you simply embark on continuous improvement, as you’ve got things mostly under control. If you have low waste, but a high cost of defects, then you need to use 6 Sigma techniques to eliminate defects. This seems to make sense as the defects are your biggest problem, not waste.
On the other side if you have high waste, and a low cost per defect, it behooves you to use lean technqiues to reduce waste, as that is your biggest problem. If you have both high waste and a high cost of defects, then you need to get in there and re-engineer your entire business!
If this is the correct interpretation, then the drawing is OK if we can accept problems are limited to either waste or defects. I think that might be a bold assumption. Like any model, you need to ask yourself if this one is useful or not. It might be too simple for some people and some applications, but great at 10,000 feet.
Ronald G. Ross
Eric, I think your interpretation is correct. The real question is, DO we “accept problems are limited to either waste or defects”? That was the purpose of the post.
I suspect many many business problems can be usefully described in terms of defects and waste, especially when taking a relatively linear view of an organization. I don’t know if the idea is as useful when considering organizations from a non-linear/complex systems view. It may be possible to describe a recursive and self-reinforcing social mechanism – such as a corporate culture – in terms of waste, but that wouldn’t be a very useful way to approach altering that pervasive system.
The other part that is missing are the other categories of needs. (This is the Business Analysis Core Concept Model (BACCM) view, which defines a need as “a problem, opportunity, or constraint, with value to a stakeholder.”) Problems are one kind of need that can often be addressed (at least in part) by decreasing low quality or by decreasing waste. Problems can also be caused by external or uncontrollable factors; these are often addressed by rebuilding, repairing, or reinventing.
As you note in your commentary on this post improvements are also a kind of need (http://www.brsolutions.com/2014/12/16/commentary-on-a-10000-foot-view-of-the-business-process-space-guest-post/). The BACCM calls these opportunities and achieving them is a change agent’s work too. That model goes on to include constraints are also needs because we need to adapt to them to avoid losing something, or make use of them as a solid foundation for something.
Ronald G. Ross
Julian. Good points.
Bo Ebro Christensen
For me – working in the Finance sector – the most important part is automation – which naturally can be part of at least 3 of your quadrants. Admitteddly, it seems to be a different dimension than the ones you have. ( A layer of means to achieve the goals ?)
Also, I find BP Reengineering to be relatively poorly defined – compared to the other 3 quadrants.
Finally, I think many enterprises have a long way to go before they should focus on 6S – as long as processes are not aligned, pretty adHoc in execution, and not harmonized eg across countries or even branch offices, 6S is just a statstical exercise – a high level of maturity and process “state of mind” must be in place for 6S to be useful.
But nice way to present the initiatives.
Ronald G. Ross
Bo, Yes, I think ‘automation’ is just one (of many) means to an end (goals). Good point about Six Sigma.
Perhaps you could create an even simpler picture: HH – Six Sigma – DFSS; LL – Lean? But I don’t this that’s what you are looking for.
To me process on its own is always too simplistic and missing other aspects, I would like to see an overlay of business capability and that’s I think were there could be a link to strategy.
Ronald G. Ross
Ewan, I certainly agree (strongly) with “process on its own is always too simplistic and missing other aspects”. For example, ‘strategy’ as you say. But not a fan of “business capability”. Don’t know what it is or how I go about finding/identifying one.
Two cents of business capabilities based on how I have used them myself.
When I define a process architecture I start to create a systems view of an organization, showing what the organization does. This kind of model shows where and when stuff moves through the system and how the system moves as a whole. A process architecture of a car might show combustion, conversion of heat to motion, steering, getting in and out, and much more.
When I define a capability architecture I start to create a systems view of an organization, showing what the organization could be used for. This kind of model shows what kinds of abilities the system can do without considering sequence (such as time). A capability architecture of a car might show cruisin (Ocean Drive in Miami Beach), moving to college, running another vehicle off the road, and much more.
You could use processes to describe those capabilities, of course, and if you want to execute on them you’re likely going to need to figure out the sequences. (You could use capabilities to describe those processes too, I suppose.) As a view, capabilities can help with the divergent, creative, inventive side of understanding the organization – and processes can help with the convergent, practical, executing side of understanding the organization.
Ronald G. Ross
Julian, I’d say both processes and capabilities miss the mark because neither really comes to grip with the key business question, how should we position your solution strategically.
* You say, “capabilities can help with the divergent, creative, inventive side of understanding the organization” … Yes, but how do you determine when enough is enough, when you’ve strayed too far out of the box?
* You say, “processes can help with the convergent, practical, executing side of understanding the organization” … Yes, but how do you determine when not enough is not enough, when you haven’t strayed far enough outside the box?
Strategy is about …
* Understanding what goals the business solution should meet, and which ones it does *not* need to meet.
* Which risks are true constraints, and which ones are *not* true constraints.
* Which opportunities are worth pursuing and which ones are *not worth pursuing.
* Which kinds of innovation can provide sustainable value and which ones can *not*.
* How far can you go in one way, without sacrificing too much in another way (aka making tradeoffs).
In other words, strategy is about making hard choices. (Otherwise, you just better be lucky.)
Too many people confuse BPM with strategy. Not the same, not even close. And too many people are simply confused about capabilities. (What is a capability. Well basically, it’s anything you say it could be, almost by definition. That’s useful?! How exactly?)
I’ll stick with strategy, plain and simple, as the answer to the question. I think Sun Tzu was probably right (3,000 years ago). Additional points.
* You should use strategy thinking no matter *what* your scope it, even for ‘projects’.
* Establishing trade-offs and mitigating risks, mean setting business policies, which are business-rules-in-the-making. Sooner or later people are going to get this.
* If you like, sure, use “capabilities” as an adornment, to help you think outside the box. And sure, use processes if you like, to help keep you grounded in reality. (I think ‘systems thinking’ might actually help you do both better.) But IAC, the main event is strategy thinking.
It may be a semantic thing, but “human-centered” process design, sometimes referred to as “Design Thinking/Design Research,” should, in my view, be part of the business process ecosystem. Understanding what people are really doing vs. what they *say* they are doing or what managers *think* they’re doing will potentially illustrate any number of needs: 1) training 2) process change 3) tool/IT interface improvement 4) corporate culture alignment 5) workplace design strategy, and so on. Then there is the question of how to engage workers in seemingly inefficient “innovation” processes? Quantifying and optimizing the R&D/innovation spend related to “introspective” and ethnography-driven business process transformation could be an interesting story in 2015.
Ronald G. Ross
Douglass, You said:
–> “human-centered” process design, sometimes referred to as “Design Thinking/Design Research,” should, in my view, be part of the business process ecosystem.”
Excellent point. But what goal is it addressing if not “quality” or “waste”? Not disagreeing, but need a one-worder.
–> “engage workers in seemingly inefficient ‘innovation’ processes”
Is “innovation” really a process? Did you specifically mean ‘innovation processes’ … or did you mean processes in which innovation results are ineffective or deficient? Also, if a process improves quality, and/or reduces waste, isn’t it “innovating”? Or does innovation involve some qualitative (not quantitative change) from a business-result perspective? Your point is a good one, but it raises more questions(!).
–> “Quantifying and optimizing the R&D/innovation spend related to ‘introspective’ and ethnography-driven business process transformation could be an interesting story in 2015.”
Intriguing thought. (I like the anthropological view of “what believe say they are doing vs. what they are actually doing. However, I might change “say” to “believe”.)
Is “innovation” really a process? Did you specifically mean ‘innovation processes’ … or did you mean processes in which innovation results are ineffective or deficient?
Innovation is definitely something that can be processes-ized, if innovation is a combination of invention and implementation. Quirky is one example that covers both aspects, but there are many other businesses that do similar work. The challenge with innovation is the invention part. Creating something new is inherently unpredictable, often expensive, and rarely profitable. Civilizations fund art and science – the first and last words in invention – because businesses can rarely do so on their own and remain profitable.
Quite a thought provoking blog you started here.
Ronald G. Ross
Innovation (I mean the inventive part, not the implementation part) is gold-collar-work. Can you really process-ize gold-collar work? I’m doubtful. By the way, a series of milestones or gateways monitored by business rules is not a process in any classic sense of the term. (Thx)
P.S. For more on gold-collar workers, see http://www.brsolutions.com/2014/08/11/is-%e2%80%9cknowledge-worker%e2%80%9d-the-best-term-for-decision-engineering/ (and a couple of posts after that one too).
Doug, have you looked into Evidence Based Management? One of the orgs involved in trying to solve for the business problems that spawn from the difference between what humans are and what we think we are. I’ve recently been talking to http://CEMBa.org about what they’re working on.
Is this four quadrant Figure highlights application of process improvement methodology for a specific combination? Good simplified really 10000 feet’s view. Good guidelines. There will be always more parameters that can be considered while zeroing down on one.
Ronald G. Ross
Yes, I believe that’s what the diagram does. However, I wouldn’t say ‘process improvement’ (since that might suggest ‘continuous improvement), rather just ‘process approach’.
Commentary on “A 10,000-foot View of the Business Process Space”: Guest Post — Ron Ross on Business Rules
[…] My December 8 blog post about classifying business process approaches generated an avalanche of responses. See the 2×2 matrix itself (from John Mansfield of Fidelity Investments) and the stream of Comments about it on http://www.brsolutions.com/2014/12/08/a-10000-foot-view-of-the-business-process-space-is-it-correc…. […]
Ronald G. Ross
See Brett Champlin’s response (guest post) on: http://www.brsolutions.com/2014/12/16/commentary-on-a-10000-foot-view-of-the-business-process-space-guest-post/
Putcha V. Narasimham
I find a fundamental flaw in the name and implication of x-axis parameter. “Forms of Waste” can only be discrete which differ in “kind” or “type” and cannot be described in Low or High. Perhaps the intension is to name x-asix as “waste” which can be expressed in a common unit ranging from low to high. For this to make sense, the x and y parameters should be independent (orthogonal). That is, “cost of poor quality” and “waste” should not have any correlation which has to be ascertained.
I think the question “DO we “accept problems are limited to either waste or defects”?” may indicate a certain bias. It is perhaps better to ask ” DO we “accept problems are limited to a COMBINATION of waste or defects”? With this question a reasonable approach might be to identify any gaps beween Business Process Engineering on the one hand and Six Sigma and Lean combined on the other. In industry Six Sigma & Lean are often used together