by Connie Moore

10 steps to business process transformation

May 07, 20125 mins
IT Leadership

Spurred by the recession, CIOs have sharpened their focus on processes, as companies strive for greater efficiency, better operations, a more compelling customer experience, and transformed business models.

CIOs must now standardize processes around the globe, create shared services, deploy business process management (BPM) suites to fill the gaps left by enterprise suites, and integrate collaboration and social with processes.

Forrester believes that CIOs play a pivotal and strategic role in helping the enterprise understand why and how to become process-driven, and to make the shift from isolated projects to a sustainable BPM program.

Transformation Requires A Process-Driven Business Today, few companies have a truly large-scale commitment to business process transformation.

Instead, most companies that have adopted business process improvement have done so only on a limited basis.

Their efforts are typically more project-focused rather than program-driven, perhaps with an isolated Six Sigma effort in one department or the installation of a BPM suite in another department.

More enterprises are now ready to pursue business process transformation, but they are still at an early stage, don’t yet have sufficient resources, and have low maturity and understanding of business process transformation initiatives.

Getting to the process-driven business will not be easy.

This aspiration is actually a tall order and will require an unprecedented level of collaboration between senior business executives, business process change agents, CIOs, CMOs, as well as the leaders reporting to them.

But the choice to do nothing is a stark choice indeed: Rest assured that some competitors will choose transformation and could embrace new business models that completely remake your industry.

Embrace Big Process To Reach Your Transformation Vision Without a strategic focus on business process transformation, Forrester believes that your enterprise will be increasingly marginalized in the marketplace, while relying on:

– Siloed, inward-facing departments – Continuous improvement teams focused primarily on cost reduction – Enterprise suites that only automate systems of record while ignoring systems of engagement that delight customers

To move from this unenviable position today to a process-driven organization by 2020, Forrester recommends ten steps for CIOs:

1. Use the strategic planning process as a vehicle for promoting business process transformation.Although most IT strategic planning is still done separately from business strategy planning efforts, seek to align the two as much as possible.

Use tools like target operating models and business capability mapping to facilitate the strategic planning process while linking the business architecture more closely with BPM technology.

2. Make the case for business transformation with execs using terms like business capabilities and outcomes.C-suite execs quickly tune process talk out, along with excessive discussion of Lean, Six Sigma, process maps, process modeling, and so forth.

Instead, use financial terms and talk about business services, business capabilities, and outcomes to make the business case for process transformation. Use specific process improvements to pay for transformation; assume a 30% productivity savings.

3. Always take an outside-in, customer engagement approach when transforming processes.Business processes must always be transformed from the customer’s viewpoint; otherwise, you will only achieve better-sameness.

Use Lean to tackle big problems within the end-to-end process and use Six Sigma or Lean Six Sigma to focus on specific problem areas that are hard to find and see.

4. Do not drive BPM or process transformation from IT alone or it will ultimately fail.The organization needs a true partnership between the senior-most executives, process executive stakeholders, the business process change executive, the CMO, and the CIO.

At lower levels, BPM teams should reflect a synthesis of those entities, working on the program side-by-side.

5. Avoid the IT modernization trap.Many IT organizations have adopted BPM suites to create a new application process platform for modernization.

These efforts are bold and benefit IT but will miss the mark if process transformation is back-office focused. Companies can transform processes through a top-down focus, a bottom-up approach that starts with shared services or both.

Starting top down is best because it helps put the customer front and center.

6. Team up with senior business process executives and business operations to build BPM centers of excellence.Keep these COEs small and nimble, and replicate them throughout the organization, possibly aligning specific COEs with certain cross-functional processes or distributing them across business units and geographic regions.

Use the BPM COEs to build process skills within the business.

7. Bring data into business process transformation efforts. Recognize the criticality of data in process initiatives.

Align data governance and process governance, and then bring master data management (MDM) into the BPM program. Take an aggressive stance on predictive analytics as the first step toward the integration of big data and big process.

Anticipate a new round of completely new processes coming into existence as the physical world gets more instrumented, intelligent, interconnected, and integrated to support information in motion.

8. Assist the business in recognizing big data opportunities for customer engagement within process transformation.Foster a dialogue about opportunities to extract value from sets of data previously thought too large and cumbersome to handle.

Work with customers and business stakeholders to develop powerful stories using imagineering sessions and business scenarios.

9. Avoid disconnected islands of automation that do not connect the process end-to-end.Isolated opportunities for automation may drive efficiency and lower costs for a specific activity or process, but often leave the customer stranded in blind alleyways without a human to interact with or another option for moving forward in the process.

10. Consider business process transformation and BPM as a career opportunity.Although chief process officers are still a rarity, wearing a CPO hat alongside a CIO hat is an attractive, viable career path for CIOs as business technology becomes more pervasive within the business.

Connie Moore is VP and Principal Analyst at Forrester Research serving CIO professionals. Connie will be one of the speakers at Forrester’s upcoming CIO Forum EMEA 2012 taking place in Paris (June 19-20).