For sure, communication has improved over the past 10 years. The “cold war” has ended, and the two sides are talking. However, this dialog can often be described by one of my son’s tee-shirts, which says: “I can see your lips moving, but all I hear is blah, blah, blah! And almost everywhere we go we see technology not enabling process or enabling bad process. 

Which party is more to blame? IT is the traditional bogeyman, but I believe that’s misplaced. The business side does not have it’s act together here and is all too willing to point fingers at IT without accepting responsibility. I’ve written two articles on this topic that present my reasoning. You can bypadd the qualification step on our side (which is optional) and go straight to them if interested:

http://www.h-ym.com/articles/Presenting%20Process%20Support%20Requirements%20to%20IT.pdf

The latest McKinsey Quarterly reports new data that should upset those designing organizations and managing operations in O/S (office/service) settings. While manufacturing managed to reduce its expense-to-sales ratio by 2.7% over the past year, despite 90& 0f cost-cutting initiatives failing to last beyond 3 years, the SG&A (sales, general % administration – which is basically front and back offices) remained flat.  And these outcomes defy reason, because office “bloat” is virtually endemic to business and is rarely addressed, while most manufacturing operations had already been streamlined to some degree by year 2000, the starting line for data aggregating.

A quick and spurious retort might be, “Hey, we’re just taking better care of customers.” Wrong. When redesigning office organizations and process Outside-In (starting with customer needs), we routinely find clients can – and should – reduce overall office FTE count by 20%, and often more. All these extra people are standing in the way of delivering what customers want most, second only to quality products backed by quality service – dealing with well-trained, empowered employees. Also, the more hands touching work without adding value the greater the number of “fumbles.”

But those are just the facts (and the McKinsey data is corroborated by heaps of empirical evidence). Whose responsibility is it to streamline O/S workplaces? And considering at least some efforts are underway, why aren’t they improving the overall numbers, which empirical evidence also supports?

The first question back from most will be: “How do you define BPM?” True to my proclivity for defining terms including “BPM” by their real world use, rather than aspirational musings by thought leaders, I define BPM as:“The totality of formal, structured business process design/management methods developed for use by trained process professionals.”

If that’s how we define “BPM,” does O-I process fit under this umbrella? No, it does not. While O-I process approaches including Visual Workflow, the CEMM Method and Human Process fit the first part of the description, when we get to “developed for use by trained process professionals,” that’s inaccurate. None of the primary O-I approaches requires employee training except for initiative facilitators/leaders―and some of these folks find Visual Workflow, for example, so intuitive they can pick it up on the fly.

Outside-In practitioners don’t need belts to hold up their process pants.

Not needing heavy training in process techniques, process-speak, process-symbology and the like makes O-I process very accessible to a broad spectrum of employees, which is critical to O-I’s success. O-I process focuses on work directly or indirectly affecting the customer experience―which is another way of saying front/back office and service work, much of it performed by knowledge workers. Knowledge workers don’t “just do what they’re told.” Nor do they have the time and inclination to go off and attend process classes. Process approaches for the O/S (office/service) either heavily involve knowledge workers without prior process training or they don’t work. That’s why LSS, Six Sigma and Lean, when applied in the O/S, suffer from a much higher relapse rate than diet programs.

So no, Outside-In process stands apart from BPM, IMHO. It’s “process to the people,” instead of process for professionals.

Other opinions?

 I’ll be uncharacteristically direct expressing my opinion.

Here’s an example of why you can’t. A new financial services client had invested lots of effort improving process one function at a time. But the whole place was running out of sync with high defect quotients they wanted us to fix…one function at a time. So we had to explain to them “one function at a time” was actually causing the problems. Here’s the gist of what we said.

O/S flows are highly interdependent. Change one and you readily create unintended consequences affecting downstream flows – plus often you can’t change what needs changing without going upstream. Manufacturing process does experience some of the same issues, but nowhere nearly as many as in the O/S.

They got that part, so we went to work. However, despite our pleadings to not “fix” anything until we’d redesigned the entire flow structure, after every meeting they insisted on going out and “taking care of” issues we’d just unearthed in cross-functional team meetings. When we’d finished and prepared our comprehensive recommendation, complete with comprehensive change management approach, the devil in me made me ask our sponsor, “How many of those ‘quick fixes’ you folks made right after meetings stuck?” She admitted, “Less than half.”

Tons of wasted time and effort, not to mention pointless burning of “change capital,” resulting from their irrepressible impatience.

Do you agree?

Companies are accustomed and even comfortable keeping internal process opaque to customers―and often to co-workers as well. “Lack of cost-effective technology” has served as a convenient excuse for shutting out customers and blocking communication across silo boundaries – although we know “technology” is just an excuse.

All that’s about to change. A new technology named CBPA (communication-based process automation) is about to tear away the fig-leaf excuses. CBPA will track typically opaque internal processes including: mortgage and loan processing; insurance claim processing; technology support beyond one-call resolution; special orders; back orders; custom fabrication; incident research; and a host of other high-frequency events – each of which generates high volumes of expensive-to-handle customer calls and e-mail, not to mention endless internal e-mail and even face-to-face conversations.

Because it’s all IP-based and outside corporate firewalls, companies will now be able to let customers access CBPA for self-service – and let internal folks track progress across silo walls as well. Gazillions of dollars could be saved, IF individual companies are ready to “bare their process.”

Several industries have already developed vertical fixes resembling CBPA. You no longer have to call Fed-X or UPS to track a package, just hit the web. Likewise for medical test results. But business-at-large continues to spend gazillions of dollars on people and communication infrastructure to handle customers’ “Where is it?” questions and similar internal queries.

Because it’s IP-based, companies will now be able to let customers access work-in-process data themselves – and let internal folks track progress across silo walls as well. Gazillions of dollars could be saved, IF individual companies are ready to “bare their process.”

I’m excited about this because it’s classic Outside-In. Think of a solution to customers aren’t yet asking for; create customer delight; and grab a lead on competitors. But I’ll admit, it’s also Outside-In because implementing this solution will require organizational redesign, staff redeployment and shedding the traditional “protect ourselves from customers” perspective. Well-led, forward-thinking companies can effect these changes. But many others can’t and will suffer customer consequences as a result.

To be fully transparent myself, I got so excited by CBPA’s potential that I’ve partnered with the software developer’s largest partner to launch a process/technology partnership we’re calling “Enterprise Collaboration.” And I’m presenting a free Avtex-sponsored webinar on March 23^rd from 10:00 to 11:00 Central Time (that’s GMT minus 6 hours). You can register @ http://tinyurl.com/yfunttu.

Acceptance is growing for the need to fuse customer-centric planning with subsequent process design to assure complete alignment. Plus, acceptance is already widespread for the importance of melding process and systems design (both systems architecture and application selection and configuration) to assure seamless process-technology alignment.

 Does this imply that senior customer strategists should be cross-trained in customer as well as technology planning to create complete alignment around customers? I believe it does, and in a very strong way.

If you step back and look at the failure of CRM to become “the road to customer-centricity,” inability to align strategy, process and technology around customers – or disinterest in doing so – was probably the second most important factor, after technology addiction.

Among the primary benefits of implementing CRM, SCM, Field Service and other back and front office automation applications has long been raising the level of internal collaboration–and more recently enabling collaboration with customers and suppliers. But we’ve had significant difficulty moving past impediments such as: overstuffed e-mail channels; unmonitored voice mail; inability to share multiple-party communication in a consolidated, multi-channel log; multiple step tasks disappearing from visibility into “black holes” until complete; unmonitored tasks not completed or taking far too long; etc.

Thankfully, relief is on the way. Interactive Intelligence Inc. (i3) will soon launch a new software application dedicated to supporting external and internal collaboration. Once companies redesign process to leverage the new capabilities and then implement the properly configured software, they can:

-Intelligently reroute customer calls to the best qualified people available if the primary recipient is not.

-“Hot transfer” triage calls to qualified and available staff.

-Provide an integrated communication log across all media to call/message recipients.

-Track both internal and external, multi-step processes to keep them moving–and escalate processes that get off track.

-Provide real time visibility into multi-step tasks (such as repair tickets).

-Track presence (whether someone’s at their desk and their status).

-Queue tasks and automatically route work assignments to available staff.

-Monitor, measure and report on communication and tasks.

Taking advantage of these new capabilities will give some companies difficult to overcome competitive advantages. And adopting them will provide all companies deploying correctly (first process, then technology) opportunities for major streamlining. This is powerful stuff–potentially. But how it’s handled in the marketplace will determine whether what we’re calling “Enterprise Collaboration” will realize its potential. I still remember an excellent desktop operating system called “C/PM” losing out to a much inferior system–DOS.

To fully understand Outside-In Process, commonly called “Outside-In” or “OI,” you first have to step outside your current perception of the process discipline. OI takes many secondary elements of traditional process and pushes them to the forefront–and adds new elements at the front and back ends of process design.

Shattering the traditional process model

Traditional process design, which includes approaches such as Six Sigma, Lean, TOC and TQM) works “inside-out.” Traditional approaches focus on what’s happening internally, and the primary goals are typically internal measures. In recent years, process professionals driving design have started paying much more attention to customer needs. Despite this enhanced sensitivity to customer needs, however, customer considerations influence process design as a conditioner rather than drive process design, as with Outside-In.

Scope leap

Outside-In brings “scope leap,” rather than scope creep, to process design. OI starts by developing customer vision. We often call this “finding your inner customer.” By seeing through customer eyes, we can much more readily appreciate customer concerns–and we can often identify unarticulated needs subconsciously waiting for business to discover how to fulfill them. An excellent example of an unarticulated need is customers accepting low service electronics retailing as the price for paying less than at boutique stores–until Best Buy transformed itself into a low price, high service and demographically sensitive seller. Best Buy broke the electronics retailing mold to deliver what customers thought they couldn’t have–but BB understood they yearned for.

But why do we call such customer vision “process?” Because business concepts by themselves deliver no customer value. The implementation of concepts–the work designed to make them the reality–delivers the value. And designing work is pure process, or should be. Which makes developing customer-centric business strategies the first step that drives the rest of OI.

New focus

In most settings, traditional, inside-out process approaches focus 90% of process attention on how work is performed, which is natural because traditional process started in manufacturing, where how work happens is the dominant variable affecting both quality and efficiency. However, while manufacturing certainly does play a role in delivering customer value, discovering new ways to please customers–and implementing the appropriate activities–starts with front and back office functions or in service areas. And OI excels at designing office/serviced (O/S) process.

Once customer strategies are determined, Outside-In designs:

• What work will implement the strategies
• Who would best perform this work (functionally)
• How work should be accomplished
• Technology support required to enable and facilitate the work

All but how fall outside the traditional purview of business process.

Transformational change

Traditional process design delivers incremental change. But putting the customer in the driver’s seat may require transformational change. When called for, OI will redefine work, redraw functional boundaries, reroute workflow and information flow and recalibrate the technology environment. However much change you decide to make, OI is up to the task.

The process world is entering a period of disruptive change. Companies have tapped out most of the major process improvement opportunities in manufacturing. And in the U.S., less than 10% of employees still work in manufacturing. Accordingly, process attention is shifting towards office/service (O/S), where opportunities abound. Tough to change focus so radically, but even tougher because 90%+ of process professionals practice either Lean or Six Sigma, both inside-out, manufacturing-based process approaches.

Can practitioners take a crowbar to one or both to make them O/S-ready? They’ve tried, with only limited success with Lean, and less with Six Sigma? Why? Because manufacturing process has only one dimension – “how” work is performed. Production engineers determine “what” work is done and “who” does it before process engages. But in the O/S, not only must process design determine “what” work gets done and “who” does it, but process design also determines the enabling technology required. Both Lean and SS lack the requisite tools for determining two of the three dimensions, and the most important two in the O/S. Automation technology is determining more and more of the “how.” And neither Lean nor SS can deliver up comprehensive technology requirements.

Clearly, we need to start adopting 3-dimensional process approaches. That’s well within the realm of the possible using outside-in, but it’s well nigh impossible with inside-out. If you’re part of the 90+% practicing inside-out process with Lean or Six Sigma, what’s your next move–fight or switch?

[This is the type content we’re discussing in the new, Outside-In Process subgroup of the BP Group. Please join. http://www.linkedin.com/groups?gid=2057992 ]

Postscript:  afrer long and stimulating Linkedin discussion thread started by this post in several groups, we’ve decided to elevate “technology” to a “fourth dimension.” Lots of folks believe that failure to integrate process and technology is responsible for many of the shortcomings of inside-out process.

I confess–over many years designing office/service (O/S) process, I’ve never once introduced a client to free-standing BPM technology. Too expensive, especially for SMEs, but often in large company settings as well. Too hard to implement, complicated by increased IT outsourcing. But most of all, in O/S settings BPM technology is largely redundant and often irrelevant. Everything BPM systems do that’s appropriate for the O/S space, we provide using alternative methods–especially process management facilities embedded in more and more application software.

For example, SAP’s application layer workflow engine obviates using “bolt-on” BPM systems. And when ERP systems don’t offer BPM functionality, for O/S purposes we typically look to very extensible and configurable CRM systems for process management and measurement. That works especially well because HYM designs O/S process from the customer in, so we’re already enabling customer-company interactions with CRM software. And in the back office, supply chain management systems including SCOR, which is based on “outside-in” process principles, provides more granular process management support than generic BPM technology.

And speaking of granularity, a new wave of “communication-based process” applications embedded in telephony systems will soon appear, offering very granular management of unified communication across the enterprise. Still less need for freestanding BPM in the O/S space.

Because office/service environments are so highly collaborative and interconnected, the exact opposite of manufacturing, content management tools including SharePoint (used by Microsoft as part of XRM) pitch in and carry part of the load. Project-heavy companies are adopting workflow managing project management applications, which again drill down much deeper than free-standing BPM systems. often much more robust than PM capabilities in freestanding BPM systems.
Add it all up and we have “bolt-on” BPM technology that most SME’s can’t cost-justify; that’s not specific enough to support much of O/S process; and that replicates application-level functionality already at work in many O/S settings. And ERP-based applications increasing have the manufacturing space covered.

Not exactly a rosy picture, when vendors are still stumbling over themselves to introduce new, “bolt-on” BPM systems.