Enabling Operational Excellence
Enabling Operational Excellence
Enabling Operational Excellence
Enabling Operational Excellence

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Basics for Business Architecture: #2 – Business Processes & Business Rules

Professionals should always focus on business solutions first, then and only then on designing systems. Not just lip service, I mean applying the power techniques of true business architecture[1]. The first of these techniques is structured business strategy. See: http://www.brsolutions.com/2015/05/31/basics-for-business-architecture-1-structured-business-strategy/. The second technique is business processes and business rules. Effective business solutions require architecting both the following:
                  • What is done to create value-add (business processes).
                  • What ensures value-add is created correctly (business rules).
Many professionals are unclear about the respective roles of business processes vs. business rules. At the risk of stating the obvious, let me make the following points.
    1. Business processes and business rules are different. They serve very different purposes: A business process is about doing the right things; business rules are about doing things right.
    2. There is no conflict whatsoever between business rules and business processes. In fact, they are highly complementary. Each makes the other better. If they don’t fit hand-in-glove, somebody is simply doing something wrong.
    3. You need both. Neither can substitute for the other. Period.
~~~~~~~~~~~~~~~~~~~~~~~~~ www.BRSolutions.com


[1] Refer to the second edition of Building Business Solutions: Business Analysis with Business Rules, an IIBA Sponsored Handbook, by Ronald G. Ross with Gladys S.W. Lam (to be published mid-2015). http://www.brsolutions.com/b_building_business_solutions.php

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No, ‘Process’ is Not a Dirty Word – Just Not the Right Word

Jim Sinur recently wrote a short, readable and deeply thoughtful opinion piece on www.BRCommunity.com entitled “Is Process a Dirty Word?”. See http://www.brcommunity.com/b812.php. Jim’s basic point is this, “… people frown on the word process these days … [based on] the outdated view that process implies a rigid and inflexible approach to work actions that support a static business model.” I think Jim is right about that … and wrong too. Where Jim is Right. The main point Jim makes is right. Compared to traditional, static process models, processes are becoming highly dynamic. They can “not only can act, they can sense and decide new courses of action, leveraging a combination of pattern recognition and decision features based on events, cases, process instances, and data (big data or not; cloud based or not).” At the extreme, they essentially cease to exist as models “carved in stone”. Jim puts it this way: “In the future the process model will more represent the audit trail of what the process did and the decisions it made.” (Of course I think one can legitimately question whether a process model exists at all if it manifests only as facts about what each execution/performance of the process has actually done, but let’s let that go.) Where Jim is Wrong. Jim points out that “Processes are becoming more goal-seeking in their design and can change in near real time … processes will more commonly seek conflicting goals [and go about] balancing them.” When processes become ‘goal-seeking’ or ‘goal-balancing’, they address the question of ‘why’ (strategy), no longer just ‘how’ (transform). The resulting solution is a system, not just a process. Process is merely one component of such a system. By the way, I’m using system in the general dictionary sense, not in any particular technical sense: a complex unity formed of many often diverse parts subject to a common plan or serving a common purpose.[1] Jim astutely points out that such processes can use “… pattern recognition [to analyze] the audit trails of past executions [and] identify what has worked best in the past under [the same] circumstances.” But surely audit trails (besides being data) are features of systems, not processes. And you’d always want to verify the results against business goals (which may conflict), and business policy (which may have changed). Should we call such processes intelligent? I wouldn’t. They’re just highly flexible. It’s the system that becomes intelligent. So these days I think we should be talking talk about FlexProcess and IntelligentSystem. By the way, can you do FlexProcesses and IntelligentSystems without business rules? Sure. Can you do them well? In your dreams. ~~~~~~~~~~~~~~~~~~~~~~ www.BRSolutions.com


[1] Merriam-Webster Unabridged Dictionary, 1a.

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The Governance Process Is What It Is – And That’s Way More Than Meta!

It’s a shame to have to resort to a ‘meta’ discussion to have what should be a direct conversation about governance process(es). After all, what’s more fundamental to an organization than those?! Does the BPM space ‘get’ it? Recent discussion in social media makes me doubt it. So back to ‘meta’ we go.[1] Here’s a recent wrong-headed post in social media that got my attention.

“I don’t see the appropriateness of labeling governance processes (e.g., business planning process, inventory policy process) as ‘meta’. They’re on a par with all the other business processes (i.e., request for proposal process, hiring process, product commercialization process, etc.). The process management process, on the other hand, is a meta process in that it stands above every one of the other processes, both governance and non-governance.”

My goodness! The process management process stands above governance processes? In what conceivable universe?! From a business perspective something is fundamentally flawed about a BPM approach that fails to recognize governance processes as above all others. Let’s think about it a bit. Some definitions …
  • I define ‘governance process’ as ‘process that governs other processes’. It’s ‘meta’ because both subject and predicate are the same kind of thing. (Merriam-Webster Unabridged Dictionary 3b.)
  • I define ‘meta-process’ as ‘process that transforms other processes’. Since ‘governs’ is a specialization of ‘transforms’, that makes governance process a specialization of meta-process. I recognize there can be other kinds (specializations) of meta-process.
In other words there is a governance variety of meta-process that is the class of all processes that govern other processes. One example or instance of that class is THE governance process (singular) that governs the organization as a whole.

Aside: I can’t believe I had to prove in theory that an organization has a governance process!

To take the analysis further, you could specialize governance meta-process beyond THE governance process (singular) for an organization as a whole to suit governance of individual business areas or processes. The results (outputs) of all other specializations, however, should be consistent with the results (outputs) of THE governance process (singular). That’s a fancy way of saying you want to ensure business alignment. In social media, I wanted to initiate a discussion of what form the results (outputs) from all governance processes should take. If you want to talk about process improvement for governance processes, wouldn’t that be a foremost question?! No luck. These BPM participants wouldn’t go there. It leads me to believe they don’t really ‘get’ that governance is always about setting business policies. Indeed, if you want to improve the governance process sooner or later you’ll have to come to grips with business rules. Instead, they seemed satisfied to conclude the conversation with simply “a process is a process is a process”. I’m afraid not! ~~~~~~~~ www.BRSolutions.com

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Are All Processes Really Like Manufacturing/Production Processes?

If you examine process thinking, you find it is deeply rooted in 20th century blue-collar manufacturing/production processes, starting with Federick W. Taylor (pig iron), Henry Ford (autos), Toyota Production System (autos), Six Sigma (Motorola and General Electric), Lean, and offshoots. In every case, the focus is on tangible products. But what if your products are intangible? You’d be excused for thinking that the carry-over from the manufacturing/production world is not all that it should be. To those who dissent, I say prove me wrong. In the 21st century, processes of interest are increasingly white-collar and knowledge-intensive. There’s a product, of course, but it generally has more to do with some transition in the state of a significant resource (not infrequently money) than the assembly of something new from physical parts. Rather than efficiency, machines and inventory, their operational focus is consistency, compliance and decisions.  Typical examples include …
  • Finance: Accepting and funding a mortgage.
  • Insurance: Extending coverages and adjudicating resulting claims.
  • Taxation:  Evaluating financial records and assessing taxes.
I call such processes commitment/dispersal processes. (See basis definitions below.) Commitment/dispersal processes are always about:
  • Making commitments and managing dispersals of resources (money, time, people, etc.).
  • Satisfying obligations (often contractual or regulatory), making informed decisions, and responding continuously to changed circumstances.
For such processes you must know what the rules are; otherwise, you cannot identify appropriate inputs. In short, such processes take you directly to best practices for business rules and decision engineering as a basis for process renewal and innovation. What’s in between manufacturing/production processes and commitment/dispersal processes? I suspect there’s a wide spectrum of processes – and that many of them are often not much like manufacturing/production processes either. ~~~~~~~ Basis definitions from Merriam-Webster Unabridged Dictionary … [commitment]  3a(2): an engagement by contract or purchase order to assume a financial obligation (as to accept goods at an agreed price, to pay for subscribed stock, or to make a mortgage loan upon the completion of a building) [disperse]  2a: to spread abroad from a center of supply or control : DISSEMINATE ~~~~~~~ www.BRSolutions.com

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Commentary on “A 10,000-foot View of the Business Process Space”: Guest Post

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-correct-is-it-complete/. In the guest post below, Brett Champlin shares his evaluation of the matrix. ~~~~~~~~~~ There are many things wrong with the matrix. 
  • Lean and Six Sigma are both process improvement methodologies and are frequently combined as Lean Six Sigma. So they can all be subsumed into a category of process improvement methods.
  • The matrix leaves out classic process redesign methods which are very commonly used. These methods go beyond improvement methods to respond to things like automation, new products, M&A, etc. where the basic process is modified or extended to accommodate some new situation.
  • Process improvement and redesign methods along with reegineering (aka process transformation and/or innovation and/or reinvention) are all process change methods. Change management should certainly accompany them all.
  • The matrix also leaves out Business Process Management as an all-encompassing discipline that deals with all types of process change as well as strategy, monitoring and measurement, and process portfolio management.
  • It also leaves out Customer Experience Design, which over the last several years has been incorporated into many BPM toolkits as a precursor to any process change effort.
The dimensions mapped in the matrix are really those that are the core focus of the two improvement methods: Six Sigma focuses on defects and variation, while Lean focuses on waste and flow. In those terms, the diagram is more or less accurate, but it hardly covers the Business Process space in its entirety. I have used the matrices in Figures 1 and 2 (below) for that purpose.  Jeston & Nelis presented several 2×2 grids mapping different process change methods relative to time and cost and degree of change. These grids give a different perspective and are more complete, but still don’t cover the entire business process space. See Figures 3 and 4 (also below). Most of these types of analyses are continuations of industrial engineering perspectives. They are fine if that aligns to your needs, but today many businesses are looking beyond ‘faster, better, cheaper’ as the only way to measure their processes. These days many businesses take control of quality, waste and flow as a ‘given’. They are looking at other things such as customer attraction/engagement/retention, business agility (not IT agility), strategic positioning, etc. All of these perspectives are not easily represented in a simple 2×2 grid. Figure 1.                     Figure 2.                       Figure 3.                         Figure 4.

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A 10,000-foot View of the Business Process Space: Is It Correct? Is it Complete?

                      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.

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How Do Business Rules Apply to Service Workers vs. White-Collar Workers vs. Gold-Collar Workers?

There are two fundamental kinds of business rules: behavioral rules and decision rules.[1] Behavioral rules are rules people can violate; decision rules are rules that shape knowledge or information. Decision rules cannot be violated – knowledge or information just is what it is defined to be. Common to all business rules, no matter which category, is that you want them directly traceable for compliance and other purposes. How do  behavioral rules and decision rules apply differentially to service workers vs. white-collar workers vs. gold-collar workers? Service workers are primarily subject to obeying behavioral rules, or are charged with applying them. Examples:
  • A counter attendant must not accept a credit card for a purchase under $10.
  • A flight attendant must ensure passengers have buckled their seat belts for each take-off and landing.
Service workers are subject to operational business decisions made by white-collar workers, but do not play a significant role in making such decisions themselves. White-collar workers are typically involved in business processes where operational business decisions are made. Examples:
  • Should this loan applicant be given a mortgage?
  • What flight crew should be assigned to this flight?
White-collar workers generally do not define decision rules themselves – that’s typically work for gold-collar workers. Where such rules are incomplete, unspecified or contradictory, however, white-collar workers generally rely on personal heuristics and experience to make decisions. This approach puts the main goals for white-collar work – consistency and traceability – at jeopardy. White-collar workers, like all workers, are subject to behavioral rules. Examples:
  • A loan officer must not handle a loan application placed by a family member
  • The website description for a new product must be approved by two senior managers.

Gold-collar workers (for explanation see http://www.brsolutions.com/2014/08/11/is-%e2%80%9cknowledge-worker%e2%80%9d-the-best-term-for-decision-engineering/)[2] are responsible for non-routine, knowledge-intensive work. The primary goals for such work is that it be insightful (e.g., as in the case of medical diagnosis that fits the available data better) or creative (e.g., as in the case of a new marketing strategy). This type of work is generally beyond the scope of decision rules. Although gold-collar workers often conduct their work in relatively independent fashion, the work is generally subject to “very close normative control from organizations they work for” [Wikipedia]. Think medical malpractice or following generally accepted principles of accounting. These normative controls, since they can be violated, are sets of behavioral rules. www.BRSolutions.com


[1]Based on the OMG standard SBVR (Semantics of Business Vocabulary and Business Rules). For more on SBVR see the SBVR Insider section on www.BRCommunity.com.
[2]And follow-up posts everyday last week.

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How Do Service Workers (Pink-Collar) Fit with White-Collar and Gold-Collar Workers?

Pink-collar worker is a term sometimes used (in the U.S. at least) to refer to a job in the service industry. Many people find the term off-putting because it traditionally referred to jobs relegated to women. I avoid the term for several other reasons. The category includes:    
    • Such people as nurses and teachers, who are clearly gold-collar. (For explanation of gold-collar work, see http://www.brsolutions.com/2014/08/11/is-%e2%80%9cknowledge-worker%e2%80%9d-the-best-term-for-decision-engineering/)
    • Such roles as buyers, loan interviewers, dieticians, administrative assistants, etc., whose work at the high-end should be considered white-collar.
    • Many workers providing personal services on an individual basis, rather than business services in the usual sense. Examples include midwives; hairdressers and barbers; baby sitters and nannies; personal shoppers and fashion stylists; etc.
Clearly many businesses do have extensive staff that is neither white-collar nor gold-collar working to deliver services. Examples include retail workers, sales staff, flight attendants, hotel housekeepers, counter attendants, receptionists, etc. I just call them service workers since they don’t have any traditional uniform color – white, blue or otherwise. Are service workers subject to business rules? Absolutely. Generally these rules are behavioral rules rather than decision rules, however, since their jobs do not focus on operational business decisions. More about that in my next post. www.BRSolutions.com

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Can You Differentiate ‘Knowledge Workers’ by How Much Improvising or Innovating is Desired?

Some people argue that a knowledge worker is someone who gets paid to improvise or innovate, a factor distinct from the amount of training the worker receives. By this criterion even blue-collar workers can be considered knowledge workers if they constantly improvise or innovate. I don’t find the notion helpful. In my mind, a blue-collar worker who is constantly improvising or innovating, for example, has become an engineer – which is gold-collar, not blue-collar. (For explanation of gold-collar work, see http://www.brsolutions.com/2014/08/11/is-%e2%80%9cknowledge-worker%e2%80%9d-the-best-term-for-decision-engineering/) With respect to white-collar work, what I see in many organizations is white-collar entropy, all resulting from continuous and counterproductive ‘improvising’. A vacuum of coordination filled with too much information simply does not translate into a more productive organization. The more likely result is inconsistency, the enemy of good customer experience. The improvise-and-innovate argument also holds that knowledge workers don’t just apply rules – they invent rules. Hang on a minute. To take a real-life example, do we really want police officers (officers on the beat) inventing rules?! I think not. Their job is to apply rules (laws), not invent them. Otherwise we’d be living in a police state. In a well-run organization, just as in society, above all you want consistency at the operational level. If I call my bank ten different times, I should get the same answer ten different times. If I apply for a mortgage from the same bank at ten different branches, I should get the same result ten different times. In my experience, that’s hardly the norm. Why? If staff works in an environment where many of the rules are tacit, contradictory, ambiguous, poorly implemented, inaccessible, and/or unintelligible, of course the staff will improvise. Contrary to what some believe, well-defined rules do not lessen creativity (space to improvise and innovate about how to get desired results). That’s not the way it works. Absence of rules is literally anarchy – and only the bad guys look clever in that context. www.BRSolutions.com

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Can You Differentiate Between White-Collar Work and Gold-Collar Work by Whether It Can Be Automated?

In my most recent post, I distinguished between white-collar and 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/ Can you differentiate between white-collar work and gold-collar work by whether it can be automated? In a day and age when IBM Watson can win at Jeopardy, I think it’s probably foolish to try. But I don’t think that’s the right question. Instead, I would ask whether the problem spaces are sufficiently distinct that they require different approaches. The answer to that question is definitely yes. That’s one reason I think it’s important not to say simply “knowledge worker” in process models. Companies pay gold-collar workers for their professional insight, creativity, and ability to digest huge amounts of knowledge on a continuous basis. Novel, unexpected results that fit the data better are at a premium. That’s not what companies pay white-collar workers for – or at least it shouldn’t be. Instead, they should pay white-collar workers to produce consistent results on decisions reached through directly traceable logic – that is, business rules. Unexpected results represent a failure – of an individual worker, a training regimen, or the rules themselves. More often than not, I think the problem actually lies with the rules. In many companies, we ask humans to make operational business decisions in a fog of byzantine rules – rules often far more complex than reasonable (or profitable). In addition, the ‘real’ rules are frequently more tacit or inaccessible than anyone cares to admit. In my view we simply have never been serious about defining, organizing and managing the rules in white-collar decision-making in a reasonable, scalable manner. And we certainly haven’t yet harnessed the power of computers to help with the business-side problem of rule management. www.BRSolutions.com

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