Tuesday, October 26, 2010

Process projects Part 1

If you're running a project to do process design and implement wide sweeping change, you might run into the same issues I have:

Show me the money!
Companies are run vertically. Processes are horizontal. The impact is that all the P&L results, bonus', and external [and usually internal] certifications are in the vertical dimension. Rarely does such exists for the horizontal process dimension. Impact? There's no constituency 'paid' on process success per se! So, there's little political support for the process dimension.

Interfaces?
Another impact is that if you create a process breakdown structure [PBS], what you find is that most processes, insofar as they are formally defined at all, do not interface well across the vertical boundaries. It's like railroad tracks that don't meet or they have different gauges as they transition across the verticals.

One thing that does work is to write formal ICD's [interface control document] for each horizontal intersection with a vertical. ICD's define not only workflow across the boundary, what data was passed, management authorities that flow across boundaries, timing, and error conditions/responses.

TRUSTED data
P&L's are 'validated' [a term of art in the IT world] in the vertical organization, thereby TRUSTED for pay purposes. There no such trusted definition or data model for processes. Pay..bonus'...etc follow the P&L, not the process. So, the process can be violated at will so long as the P&L is not.

Data definitions?
All business run on data, but few business' have a formal data model or any means to maintain configuration and definition. Data is primarily organized [and defined] in each vertical to serve the P&L and business certification requirements. As such, the same data item may not mean the same thing in every vertical. Thus, when you try to apply data throughout a horizontal, the data doesn't match or even make sense in many cases.

Customer?
A good ice breaker on the data issue is have the process design "As Is" analysts define 'customer'. For most companies, there will be a half dozen definitions, all different. The sales customer, the service customer, the A/R customer, and so forth. And customer is often location [address] and sometimes entity [company]. Some companies separate customer from user; others dont'.

Process P&L
One thing that will drive a process project nuts [and is very expensive to do] is after doing the [horizontal] process maps, try to find the cost of the process and compare that to the cost of the [vertical] "As Is" business. This is an exercise in rationalizing horizontal and vertical sums. This activity is almost never successful in the timeframe of a project. See other comments above.

I wish this were the end of it, but no: there's more in subsequent postings.


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