IS 788 [Process] Change Management

1. IS 788[Process] Change Management • Wednesday, September 5 • Current event – Lisa Anderson • Lecture • How Process Enterprises Work presentation and discussion IS 788 2.2

2. From Functions to Processes • Process orientation driven by the same factors that earlier drove ‘information integration’ in IT • Faster development times • Faster production times • Greater customer and marketing input to processes • Lessen the dependence on IT • Many of you folks are IT personnel. What is the significance of ‘bypassing’ IT? IS 788 2.2

3. Breaking down ‘silos’ • IT based information integration overcame information silos • Sneaker-net • Over the wall reports w/ reentry into isolated systems • Process thinking is a means of eliminating work product silos (inter- departmental or inter-organizational bottlenecks) IS 788 2.2

4. Drivers for process organizations • Include most of the drivers for process change or reengineering • Competitiveness (better & cheaper) • Agility (faster) • Some initiatives of proven value demand process focus • Supply chain management • Effective outsourcing • Just being a player in the ‘new regime’ – when all your customers and suppliers are process organizations you have no choice but to be able to “plug in”. (Resistance is futile – you will be assimilated.) IS 788 2.2

5. Some beneficial side effects of process orientation • Focus on cycle time (an end-to-end measure which virtually requires a process focus) uncovers many cost and quality problems. The inverse is not true. • Identification of core processes (for improvement) and non-core processes (for outsourcing) and the ability to seamlessly orchestrate them IS 788 2.2

6. More process orientation benefits • Core processes especially constitute a valuable corporate asset. When processes are identified, documented and understood they become a portfolio that may constitute the primary value of the organization • Documented, understood processes are less vulnerable to personnel changes IS 788 2.2

7. Still more process orientation benefits • Processes always exist, but in a functional environment calls for improvement can be locally optimal, globally suboptimal (anticipating “Everything you know is wrong”?) • Goals for processes are different from and produce better results for the organization than functional goals. IS 788 2.2

8. And even more process orientation benefits • Explicitly identifying processes at the business level ‘liberates’ them from IT applications • That is, frequently the only documentation on cross-organizational processes is embedded in legacy IT applications. For all intents and purposes this is inaccessible and resistant to improvement • http://www.processdriven.org/process_driven_organization.html IS 788 2.2

9. Cross-organization process automation • Once an organization has become process-centric internally it is in a position to link its processes into the web-based ‘global process marketplace’ • Even in the absence of commoditized standard processes, language standards for describing workflows and for process ‘choreographing’ between organizations anywhere on the web them have emerged: • http://en.wikipedia.org/wiki/BPEL IS 788 2.2

10. Back to the future • Most of the benefits and problems with “process” organizations were explored years ago under the guise of “matrix” organizational structure • Much can be gained from looking at the lessons learned from matrix management • But first, “How Process Enterprises Really Work” IS 788 2.2

11. The Matrix Reloaded • Much of this information is from a whitepaper from the consulting group Boox, Allen, Hamilton entitled “The Matrix Reloaded” • http://www.boozallen.com/media/file/The_Matrix_Reloaded.pdf IS 788 2.2

12. DEC – sorely missed and one of the first real matrix organizations • In a matrix organization, departmental groups are kept in place – for training, morale (identity), HR and the benefits of old-fashioned traditional reporting relationships • BUT – most work takes place on “projects” (i.e. processes) which span multiple functional groups IS 788 2.2

13. Benefits • All the skills necessary for large, complex projects are brought together without departmental communications barriers • IT people at DEC, for example, would be assigned, frequently with manufacturing and accounting people, to a new system development. IS 788 2.2

14. Questions • What is the incentive structure? • Morale issues • The ‘traditional’ supervisor has greatly lessened authority • The team knows from the outset that its life is temporary • Is it any surprise that 20%+ of an organizations management quits during the transition to a process based organization? IS 788 2.2

15. Drawbacks - managment • In the prior DEC example, every project would have a manager to which team members would report – the de facto day to day “supervisor” • BUT – everyone would still be a member of their department and would have a “traditional” supervisor there, to whom they would revert when the project ended. IS 788 2.2

16. A quick comparison of significant differences: matrix vs. functional • Booz, Allen, Hamilton report, page 5 • http://www.boozallen.com/media/file/The_Matrix_Reloaded.pdf IS 788 2.2