Implement Process Management: A Holistic Approach

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By Mannu Thareja and Neil Glover

Processes are fundamental to any business/organization. Capability and performance of processes are important parameters in defining the success of the business. Process management offers management at different levels of a business with the benefits of:

• Transparency from input to output,
• Providing finer controls of the business processes,
• Acting as an early warning system to detect emerging problems and
• Enhancing the ability of making day-to-day decisions.

Process management is the concept of defining macro- and micro-processes, assigning ownership, and creating responsibilities of the owners; modifying, altering, reshaping, redesigning any business/production process, work method or management style to deliver greater value; and the art of reshaping, an organization and belonging processes to attain optimal result, through continuous improvements within the organization. Process management facilitates strategically aligned bottom-up measures that can be used to provide valuable information to management on functional performance against business goals.

Process management broadly facilitates:

• Understanding of the processes,
• Mitigating and reducing the potential process risks,
• Measuring and monitoring the defined controls or metrics around process risks,
• Having a contingency plan in case risk occurs,
• Ensuring enough information exists to uncover the root cause of a problem and
• Enables fast and accurate decision making by the management.

Building Blocks of Process Management

The building blocks of a successful process management framework, shown in Figure 1, are customer centricity, business drivers, data driven approach and continual improvement.

Figure 1: Process Management  Model

• Customer centricity: The customer is the biggest beneficiary and perhaps the primary stakeholder of the process output. The process should aim not only to meet the customer's requirements but exceed them. Customer centricity enables the business to feel the pulse of customer and empathize on customer needs. This customer empathized approach provides a better process management structure.
• Business drivers: The processes are meant to meet the business requirement(s). The capability and competency of input » process » output drives the business performance and profit. The output from a process is expected to be defect free and meet the timely demand of the business. The business processes can be managed in terms of the volume drivers (input and output) and process parameters of accuracy, speed, timeliness, efficiency, etc.
• Data driven: Management by facts is, in general, a better approach than management by perception or feelings. The data driven approach provides transparency to the business processes. It enhances the management’s decision making process and enables them to take quick and effective business alternatives.
• Continual improvement: Improvement is more of a need than a desire. Continual improvement is the minimum that can be done to sustain and meet the ever-demanding customer. As globalization meets localization, operating margins are squeezed to the limits, directly impacting bottom line profits. Continual improvement looks for opportunities and constantly improves process to extract the best output from the provided inputs.

The improvements can result in either improving the output from the process as per the customer specifications or improving the process to achieve higher efficiency and productivity.

"V" Approach to Process Management

Process management needs to be aligned to management’s objectives better process control. This helps:

1. Traceability between metrics and objectives will verify whether the metrics translate to management and business objectives
2. The process conforms to the customers requirements, which are translated as critical to quality (CTQ) needs
3. Identify the gaps and justify the introduction of any new process metrics
4. Possibly merge or drop a metric

The "V" approach helps keep a company aligned. Figure 2 illustrates a top-down design of the process management strategy coupled with a bottom-up deployment of the process management framework. Quality function deployment (QFD) may be used to drill down from the business strategic objectives to functional objectives, or functional to team objectives and possibly further from team objectives to process metrics. QFD helps align business strategic objectives to the functional objectives, and provide traceability and determine the degree of strategic objectives being met and built in to the process metrics. The QFD prioritizes the process metrics as per the business objectives.

Figure 2: "V" Approach to Process Management

4DM Process Management Methodology

4DM (define, design, develop, deploy, manage), a process management methodology, is a systematic and structured approach to implementing process management. The tools of 4DM are general and flexible enough to be adopted in any organization without a need for large changes.

Define: The define phase consists of defining the project and providing a business case for implementing the process management approach. The objectives and critical success factors should be defined by the process lead, Six Sigma Black Belt and project sponsor, who also establish the team – including the process owner and the process management project’s team members. Define phase outputs should include:

• Establishing business requirements – requires the voice of the business to follow the process management methodology
• Defining objectives – specific, measurable, attainable, realistic and time bound (SMART)
• Determining CTQ process elements
• Estimating potential benefits (quantified if possible)
• Formulating the team charter

Design: In the design phase, the existing process is revealed, hot spots identified and opportunities listed. The design phase tollgate should include:

• Supplier, input, process, output, customer (SIPOC) analysis
• Looking at "as-is" process and value stream mapping
• Identifying hot spots – bottlenecks, delays, constraints, risks (failure modes)
• Identifying the areas where process controls are required
• Listing the opportunities for process improvement

Develop: The develop phase includes failure and risk analyses, metrics and controls identification, data collection and dashboard development. The deliverables/outputs from the develop phase include:

• Conducting failure mode and effect analysis (FMEA) for prioritizing risks
• Analyzing and brainstorming recommendations to mitigate a risk’s severity, occurrence and detectability
• Developing a contingency plan or other process parameters
• Identify controls/metrics in the process along with operational definition (for inputs – volumes in; for the process – accuracy, timeliness, speed, efficiency, effectiveness; for outputs – volumes out)
• Creating a data collection plan that includes the details of metrics categories, metrics names, operational definitions, frequencies, metrics owners, data feeds (manually/automated), etc.
• Developing a dashboard per the data collection plan, using a mixture of graph types to provide the best possible representation for any metric

Deploy: The deploy stage is critical and challenging as the dashboard and metrics are rolled into the process. Middle management can follow a "management by exception" approach or a regular review of the dashboard with the process owner. This approach is followed by management only when there is any deviation from the expected. The deploy phase includes:

• Publishing dashboards to (and at the frequency defined by) middle management
• Tracking metrics in real-time
• Conducting process management meeting to discuss actions on any deviations from the norm – agreed actions are tracked to closure

Manage: The manage phase focuses on the sustainability of the process management work and any additional value that may be added to it. The dashboard continues to be published and monitored. The process risks are managed on a continuous basis. A discovered improvement may be selected as a process improvement project if management decides it may generate a specific business benefit. (Such improvements are then taken through the normal change management process.) The manage phase includes:

• Conducting regular process management meetings focusing on process outputs
• Identifying potential risks and managing them through FMEA
• Identifying opportunities for process improvements
• Creating a process management log of improvement suggestions and tracking its entries
• Conducting root cause analysis on failures/deviations from the norm
• Continually improving and managing the process

Summary

Combining the building blocks of process management around input » process » output gives lends transparency to a process and eases managing day-to-day operations management. Using the "V" approach aligns various organizational levels and delineates checks and balances among them. The addition of the 4DM method completes a structured and systematic approach to implement process management.

Process management enables an organization to have a competitive edge over its competitors by having end-to-end process transparency, improved and proactive decision making, and faster response to exceptions – all reducing overall business risks. A better process management system enables the organization to perform a cleaner process with a reduced business risk, resulting in increased work capacity and improved productivity.

Acknowledgments

We would like to thank Andy Chapman, business manager in an investment bank, for his valuable inputs to this paper. We would also like to thank John Gilbert, who leads process excellence in an investment bank and has led the development of the process management approach.

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