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

TURNING OPERATIONAL KNOWLEDGE & COMPLIANCE INTO A COMPETITIVE EDGE

We systemize tacit knowledge into explicit knowledge

Blog Enabling Operational Excellence

Wanted: A New Knowledge Paradigm

ParadigmShift[1]My inner geek gets as excited as the next professional about all the technological innovations adding up to what gurus are calling the digital platform or digital business – or simply digital. This new wave of technological capability features social, mobile, cloud, big data, and more. It promises a host of new capabilities to accelerate innovation including robotics, 3D printing, internet of things, cognitive, and augmented reality. WOW!!

But there’s a little voice inside me counseling caution. When have new platforms or channels ever fixed major business challenges?!

It’s all too easy to get caught up in ChannelMania, a state of virtual panic about introducing the next big thing, keeping up with the Joneses technologically. In the frenzy you can easily lose sight of the hidden business costs.

We should step back, take a deep breath, and ask ourselves some fundamental questions.

  • How well can we really manage yet more channels?
  • Do we deliver consistent business results to our customers?
  • Are we happy with our current lot in managing change?
  • Does the company have any real strategy to address ever-accelerating complexity?
  • With all the new agile methods, is the business actually becoming more agile?

It’s not too hard to envision what real operational excellence would look like.

  • Your customers would get consistent business results through any of many channels.
  • Rolling out business change would be faster and cheaper.
  • You could demonstrate compliance at every turn.
  • You could manage complexity at scale.
  • You’d provide stellar customer experience at inhuman speeds.

The question, of course, is how do we get there? I argue that we need a new knowledge paradigm. I call it Business Knowledge Engineering.

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Read about the new knowledge paradigm: http://www.brcommunity.com/articles.php?id=b900

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Agree/Disagree? Digital Mind Essential for Business Analysts

digital-mind[1]Let’s put you on the hot spot. You are forced to agree or disagree with the following statement, and defend your answer. What would you say?

The most valuable asset of a business analyst is a digital mind.

Here’s how I answer: I agree. How about you?

My reasoning: I almost certainly don’t agree with the statement in the way you think I might. It’s not the business analyst who needs a digital mind. It’s our machines that need the digital minds.

As we increasingly disintermediate customers and company workers, we will no longer have our workers in the loop to convey and apply operational business knowledge at the point of interaction to make things right. Machines will have to do that work. And those machines must be equipped with the knowledge to do so.

The key to launching us successfully into the digital age is setting up deep knowledge reservoirs in the company. Obviously, they will be digital.

The first and most basic step toward treating knowledge as a first-class citizen is true business rules. Business rules represent explicit operational knowledge. By the way, because of the need for compliance and traceability, business rules (think obligations) will never go away.

There are, of course, other ways in which knowledge can be applied to processes, ones where traceability and compliance aren’t so important – for example, machine learning and neural nets. Those technologies can also be used to build digital minds for your organization.

As a professional, how do you future-proof yourself? The secret is to make yourself indispensable both to the business and to machines in the business with digital minds.

Given that insight, what is the most valuable asset of the business analyst in the long term? It’s not agile, it’s not empowerment, it’s not even critical thinking. It’s the ability to communicate deeply and creatively using concise terminology about the problem space. If you’re still speaking in codes and data fields – in ITSpeak – I’m afraid you’re not on the critical path.

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Mark Your Calendar: The annual Building Business Capability (BBC) conference is November 6-10, 2017 at the Loews Royal Pacific Resort, Orlando, FL. The BBC is the place to be for professional excellence!

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Governance, Compliance and Business Rules (Through Young Eyes)

When my older son graduated from college, he worked as an intern for a professional sports team.  At the end of his very first day of work he called me, puzzled.  “I asked them what my responsibilities were,” he related, “and they said, ‘We need you to know what we are supposed to be doing’.”  After a long pause he went on, “I wanted to ask them why they didn’t already know what they were supposed to be doing, but I didn’t think that would be such a great idea my very first day there.” Let’s see whether at some level that situation sounds familiar to you.  It turns out his area of responsibility had to do with ensuring operational compliance with corporate sponsorship agreements.  The sponsorships are quite expensive.  You might think these agreements would be relatively simple, but of course, there’s no such thing as a truly simple business.  A sponsorship contract:
  • Outlines a complex configuration of promotional and other benefits, some automatable and some not, all usually tailored specifically for the individual sponsor.
  • Is loaded with obligations, decision criteria, and computation formula (read ‘business rules’) to govern the sponsorship relationship.
  • Is amended frequently, both formally and informally (via hand-shake), owing to the dynamic nature of the sponsors’ marketing needs.
To continue the story of my son’s first day, they gave him a stack of contracts and amendments, operational schedules, and invoices and told him to see if they all matched.  Of course they didn’t.  Not by a mile. By the end of the first week, my son had become fairly fluent in the organization’s governance problems.  (Ah, young minds!)  The contracts and schedules were all produced by different people at different times.  Some of the schedules were hand-done and some automated.  But even the ones that were automated often didn’t match the contracts.  The invoices were automated, but in many cases they too bore little resemblance to the contracts.  The IT people were not much help either.  “They seem to speak a different language,” my son reported naively.  Bottom line:  A number of the sponsors were becoming quite annoyed — not a good thing for a mediocre team in a mid-sized market. But there was still more.  The sales reps were, shall we say, quite creative in what they offered the sponsors.  Their terminology, which often found its way into the contracts, was highly idiosyncratic.  Yet they were talking about the same shared resources (e.g., banner boards in the stadium) that had to be coordinated real-time across many sponsors.  They seemed oblivious to some of the company’s rules — even though some, quite literally, were dictated by physics (e.g., a banner board can only say one thing at a time; there is only so much time during a game, etc.). By the way, my son went to one of the team’s games his first week at work.  The team lost.  Attendance was poor.  Sponsors were unhappy.  “I think it’s going to be a season,” he said. After a moment of reflection he added, “You know what really worries me is that I am going to figure all this out, then walk right out the door with all that knowledge.  They’ll be right back where they started.  Doesn’t seem to me like a very good way to run a business.” Welcome, my son, to the reality of business rule mismanagement in the 21st century!

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BPM and the Knowledge Economy: White-Collar Work

Make no mistake, the future lies with automation of white-collar work. Fewer and fewer business problems these days focus on manufacturing and production processes, i.e., the nothing-but-widgets category. For all the non-widget-centric business activity in the world – which includes just about all every conceivable form of white-collar work – the following needs become paramount.
  1. Ensuring the quality of meta-data.
  2. Demonstrating compliance based actual rules, rather than the artifacts and effects that IT systems produce.
  3. Retaining, teaching and repurposing intellectual capital.
What would I do to correct the shortcomings of BPM for non-widget-centric business activity? Our answer is to become more why-centric, as opposed to narrowly how-centric.[1] You should focus on business capabilities, not just business processes. That shift has several essential features:
  • Understanding business strategy as something distinct from business processes (and BPM). Business goals and business risks should be drivers of business process design – not the other way around. You need to be strategy-driven, not simply process-driven.
  • Designing core metrics around business goals and business risks – the things that concern C-suite executives the most.
  • Realizing that for white-collar work the 3-D world of widgets has vanished, and that tolerances and quality can be expressed only in terms of business rules.
  • Treating business rules as a first-class citizen, externalized from process models.[2]
  • Identifying operational business decisions (based on encoded business rules) as a crucial focal point in re-engineering business processes.
  • Including a Why Button as part of every business solution. Pressing the Why Button leads immediately to the business rules that produced the results you see from any process.
~~~~~~~ Read more about the future for processes: BPM and the Knowledge Economy: Nothing But Widgets? http://www.brsolutions.com/2015/11/16/bpm-and-the-knowledge-economy-nothing-but-widgets/ What is the Future for Processes? http://www.brsolutions.com/2015/11/09/what-is-the-future-for-processes/ Are Processes and BPM Relevant in the Digital Economy? http://www.brsolutions.com/2015/10/19/are-processes-and-bpm-relevant-in-the-digital-economy/ Measuring Quality and Defects in the Knowledge Economy: http://www.brsolutions.com/2015/10/27/measuring-quality-and-defects-in-the-knowledge-economy/ Quality and Tolerances in the Knowledge Economy: http://www.brsolutions.com/2015/10/29/quality-and-tolerances-in-the-knowledge-economy/ ~~~~~~~~~~~~~~~ www.BRSolutions.com


[1] Refer to: Ronald G. Ross, “The Why Engineer™,” Business Rules Journal, Vol. 14, No. 11 (Nov. 2013), URL:  http://www.BRCommunity.com/a2013/b727.html
[2] Refer to the Business Rules Manifesto, now in almost 20 languages: http://www.businessrulesgroup.org/brmanifesto.htm

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BPM and the Knowledge Economy: Nothing But Widgets?

BPM often overreaches. Understanding, modeling and managing a business capability effectively requires a balanced view of six basic questions, not just one, as given in the table below. I follow Zachman in these matters, so yes, the table is Zachmanesque.

Interrogative

Basic Business Question

Kind of Model

1. What What inventory of things needs to be managed to support business activity? structural model (e.g., concept model[1], data model)
2. How How do transforms of things in business activity need to take place to add value? process model
3. Where Where does business activity occur? network model
4. Who Who collaborates with whom to undertake business activity? interaction model (e.g., organizational chart, use case)
5. When When does business activity take place? temporal model (e.g., schedule, event model, milestone model)
6. Why Why are results of business activity deemed appropriate or not? strategy model (e.g., Policy Charter[2], constraint model)
  If your business does nothing but manufacture or produce physical widgets (forget all the meta-data about those widgets), you will probably emphasize question 2 (i.e., process) above the others. Your overall approach and architecture will reflect that. You will naturally gravitate toward BPM. That tendency has at least three basic risks, even for organizations that do fall into the nothing-but-widgets category:
  • Your metrics will largely focus on process productivity (e.g., throughput, bottlenecks, latency), rather than strategic goals and alerts centered on external risks. E-suite executives tend to be much more focused on the latter.
  • Your mindset will be procedural, rather than declarative, which can cause you to embed business rules in process flows rather than externalize them. As a result your process models will be unnecessarily complex and your overall solutions un-agile.
  • You approach will fall woefully short in addressing the intellectual capital that underlies your processes. Such operation business knowledge ranges from simple meta-data, to the business logic that underlies operational business decisions.
Fewer and fewer business problems these days fall into nothing-but-widgets category. Even for widget-centric businesses, at least three needs are increasingly urgent:
  1. Ensuring the quality of meta-data.
  2. Demonstrating compliance based actual rules, rather than the artifacts and effects that IT systems produce.
  3. Retaining, teaching and repurposing intellectual capital.
These are not strengths of common BPM practices. ~~~~~~~ Read more about the future for processes: What is the Future for Processes? http://www.brsolutions.com/2015/11/09/what-is-the-future-for-processes/ Are Processes and BPM Relevant in the Digital Economy? http://www.brsolutions.com/2015/10/19/are-processes-and-bpm-relevant-in-the-digital-economy/ Measuring Quality and Defects in the Knowledge Economy: http://www.brsolutions.com/2015/10/27/measuring-quality-and-defects-in-the-knowledge-economy/ Quality and Tolerances in the Knowledge Economy: http://www.brsolutions.com/2015/10/29/quality-and-tolerances-in-the-knowledge-economy/ ~~~~~~~~~~~~~~~ www.BRSolutions.com


[1] Refer to Refer to Business Rule Concepts:  Getting to the Point of Knowledge (4th ed), by Ronald G. Ross, 2013, Chapter 1 and Part 2.  http://www.brsolutions.com/b_concepts.php 
[2] Refer to Building Business Solutions:  Business Analysis with Business Rules by Ronald G. Ross and Gladys S.W. Lam, 2nd ed. (Sept, 2015), an IIBA Sponsored Handbook, Chapter 4.  http://www.brsolutions.com/b_building_business_solutions.php 

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What is the Future for Processes?

To understand the future of processes, you must dig a little deeper than many people do. Process thinking goes back well over a 100 years, to the origin of modern iron and automobile production. The raw materials and finished goods of such manufacturing and production processes are literally spatial – 3-dimensional. What can you do to significantly improve productivity in a 3-dimensional world? The answer these days is simple: You build robots. Robotization has literally changed the world during the past 30-40 years. Rather than manufacturing and production processes, however, the world is now increasingly focused on white-collar and digital processes. What 3-dimensional presence do the raw materials and finished goods of these processes have? Well, exactly none. The raw materials and finished goods of these processes aren’t physical and simply have no spatial presence whatsoever (except maybe for paper artifacts). Robots (at least physical ones) aren’t an option. That fact of life makes a huge difference in how you have to think about automation for such processes. Instead, the raw materials and finished goods of such processes are all about your operational business knowledge – your intellectual capital – and your capacity to express and apply it. That capability, in turn, depends directly on your business terminology and business language. For white-collar processes you have no choice – the world is semantic. So you must deal with the subject matter semantically. That takes us in a very different direction than most professionals currently foresee. For one thing it takes us toward natural language and away from diagrams-for-everything. That’s a huge shift in mindset. Imagine having a business conversation with your smart phone about gaps and ambiguities in business policies and in the meanings of the vocabulary you use to talk about subject matter knowledge. Don’t think that’s possible? Have you watched your kids talking to their smart phones lately? Sooner or later businesses will realize that operational business knowledge differentiates their product/services and enables their ever-more-automated processes to function. Capturing, managing and re-using that intellectual capital puts a premium on structured business vocabulary (concept models[1]) and on business rules expressed in structured natural language[2]. Those business rules are the only way you have to ensure quality from white-collar and digital processes. ~~~~~~~ Read more on this topic: Are Processes and BPM Relevant in the Digital Economy? http://www.brsolutions.com/2015/10/19/are-processes-and-bpm-relevant-in-the-digital-economy/ Measuring Quality and Defects in the Knowledge Economy: http://www.brsolutions.com/2015/10/27/measuring-quality-and-defects-in-the-knowledge-economy/ Quality and Tolerances in the Knowledge Economy: http://www.brsolutions.com/2015/10/29/quality-and-tolerances-in-the-knowledge-economy/ ~~~~~~~~~~~~~~~ www.BRSolutions.com
[1] Refer to “What Is a Concept Model?” by Ronald G. Ross,  Business Rules Journal, Vol. 15, No. 10 (Oct. 2014), URL:  http://www.BRCommunity.com/a2014/b779.html
[2] e.g., in RuleSpeak®. Refer to http://www.rulespeak.com/en/

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Measuring Quality and Defects in the Knowledge Economy

Everyone wants high quality from their business processes. But what exactly does quality mean these days? Let me tell you a quick story that recently got me thinking. I like to eat toasted raisin bread in the morning. I even have a favorite brand. Every morning when I’m at home I eat several pieces. Over the years I’ve become so experienced with the brand’s quality that I can spot defects. I know when they’ve laid on the cinnamon a little too heavily, or when the dough didn’t rise quite enough. Every morning I look forward to doing my little AM taste test. But one morning recently I suddenly realized the large majority of client processes we’ve worked with over the last decade are not ones I can perform any taste test for. There’s nothing physical from the process I can taste or hear or touch. There’s nothing whatsoever to directly assess quality by. That’s because some clients simply have no physical products at all – e.g., insurance, finance, taxation, etc. But a good number do – e.g., electrical equipment, trucking, railroads, and so on. For these latter clients the processes of immediate concern didn’t directly involve those physical things however – only just white-collar stuff. So the question becomes how do you assess quality from a business process when there’s no physical product? How do you identify defects when there isn’t any physical result? My conclusion: When there isn’t any physical product from a business process, quality and defects are purely a matter of business rules. If you’re not documenting and managing business rules as part of your BPM or quality management approach (or elsewhere) you’re missing a crucial part of the picture. ~~~~~~~~~~~~~~~ www.BRSolutions.com

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Are Processes and BPM Relevant in the Digital Economy?

I wouldn’t go so far as to say that process and BPM are meaningless across the board in the digital economy. If you’re manufacturing or producing a physical product, you still do need to think in terms of a modeled and managed business process. Other the other hand, if your products are non-physical – for example, money, time, skills, information, meta-data, etc. – you’d better have a major re-think. The old rules of the game simply don’t apply to white-collar work. Nor do they apply if your business model is about digitally leveraging other people’s idle assets – think Uber. You must still consistently satisfy contractual obligations and regulatory constraints in this new digital world of course. But that’s a business rules problem, not a process problem. A major characteristic of the new digital world is that activity is never static in any sense of the word. You simply get no points for hardwiring repetitive behaviors. You must:
  • Continuously make informed operational decisions in the blink of an eye (actually often faster than that).
  • Selectively respond to changing circumstances with subtle adjustments.
  • Be as dynamic as possible, yet still produce outcomes of predictable, consistent quality.
These too are business rule problems, not process problems. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ www.BRSolutions.com

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The Conversation of Three Baseball Umpires and How it Relates to Modeling

OMG released version 1.3 of SBVR (Semantics of Business Vocabulary and Business Rules)[1] last month – comprehensively reorganized for approachability, but not changed.[2] Some thoughts … ~~~~~~~~~~~~~~~~~ Ever hear the conversation that three baseball umpires once had? If you don’t live in a baseball country, it’s an archetypical story, so you’ve probably heard some variant. By the way, in American English a ‘pitch’ is a throw of the ball for the batter to try to hit, not the field of play. Meanings matter!
    • The first umpire says, “Some pitches are balls and some are strikes. I call them as they are.”
    • The second umpire says, “Some pitches are balls and some are strikes. I call them as I see them.”
    • The third umpire says, “Some pitches are balls and some are strikes. But they aren’t nothing till I call them.”
Most modeling techniques primarily focus on modeling the real world as it ‘really is’. They essentially take a first-umpire point of view or maybe second-umpire. I come from that tradition too. My 1987 book Entity Modeling was about doing that … modeling the real world as it ‘really is’. Pretty much all professionals with some IT background come from that world. Working with business people and business rules for the last 25 years, however, has taught me that business is really more of a third-umpire world. Think of laws, regulations, statutes, contracts, agreements, terms & conditions, policies, deals, bids, deeds of sale, warranties, prospectuses, citations, complaints, receipts, notices … and business policies. Even businesses that deal with tangible stuff (e.g., railroads, electrical transmission, infectious diseases, etc.) live in a third-umpire world. And many of the most automated organizations around have no tangible product at all (e.g., finance, insurance, government, etc.). They really exist only in a world of words (between people). It’s humbling to realize that the way the business world ‘really is’ is more directly the product of words exchanged by the players in a conversation game than anything IT professionals can model directly. But why would it be otherwise? Do IT professionals really know better than business owners, business managers, lawyers, engineers, subject matter experts, etc.? Really?! SBVR, in contrast to almost all other standards, doesn’t try to model the way the real world ‘really is’. Instead, its focus is on modeling what is said about the way the world really is. It’s fundamentally a third-umpire standard. You simply have to understand what the words mean – and that’s a human-communication issue. Yes, the SBVR world view is a game changer. It also happens to align closer with some of the most exciting new work in computerization today including cognitive computing and machine learning. I stand accused by peers in the standardization community of wanting to go beyond the ‘capture, exchange and production of information’. Sure, I can live with that. ~~~~~~~~~~ www.BRSolutions.com


[1]For more information on SBVR refer to the SBVR Insider section on www.BRCommunity.com.

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Fundamental Challenges Facing Your Business: #3 – Managing Operational Business Knowledge

Many or most IT methodologies remain essentially in the Dark Ages with respect to knowledge management. They seem to focus blindly on pumping out code faster and faster. We may be living in a knowledge economy, but we’re sure not acting like it. When I say knowledge management I don’t mean what probably comes to mind. I’m not talking about fuzzy text in vast e-mail archives or tacit knowledge in people’s heads. I’m talking about explicit business rules. Business rules (done correctly) represent knowledge – core operational knowledge. Many companies today are in peril of losing or outsourcing that knowledge. Who’s to blame? Business managers for not ‘getting it’ of course. But that’s just where the buck stops. Ultimately practitioners are to blame. They’re not making core operational knowledge tangible to their managers. How you make that kind of knowledge ‘real’? True business-side rulebook management[1] (which is not the kind BRMS offer).[2] That’s no longer optional either. In a knowledge economy your company simply can’t afford to lose its business rules! ~~~~~~~~~~~~~~~~~~~~~~~~~ www.BRSolutions.com


[1] Ronald G. Ross, “What You Need to Know About Rulebook Management,” Business Rules Journal, Vol. 10, No. 9 (Sep. 2009), URL:  http://www.BRCommunity.com/a2009/b500.html
[2] For best-of-class example, see RuleXpress from www.RuleArts.com.

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