Whereas growth depends on innovative and well-presented products and services, continued success depends on an organization's ability to adapt to change. This post makes the case for a new change management approach using truly integrated business process engineering, and is based on my whitepaper “Driving Organizational Change with Integrated Process Knowledge,” available here.
Change is everywhere – in our day to day work, communication with colleagues and customers, the tools we use, and even our physical workplaces. Working in a large organization can often mean constant switching from one type of change to the next. And whereas some of us may wish for a return to “business as usual,” change has become the new norm, driven by ever-accelerating technological advances, sky-rocketing knowledge availability, and the tide of globalization. It would serve us well to adapt to it, and make it work for us.
As experts in the field of Information Management, Adastra has always thrived on change. When we were focused on technology and data-driven change (data warehouse, BI implementations, data migration projects, and the like) we knew our solutions were affecting the way our clients operated. That was, and remains the point: to improve decision making and business outcomes. Nevertheless, over time, our engagements were causing (or, were an important part of) major shifts across the entire organization. By implementing a reporting solution, we were revolutionizing the way a major retailer’s supply management function worked, or transforming the governance structure of a financial services organization. Intrigued by the nature of this chain reaction, we investigated, resulting in a new way of understanding how organizations function. We call it Integrated Business Process Engineering.
At its core, the concept is simple. We divide the organization into three key functional groups:
- Operations – all functions (including executional, strategic, and planning) that directly contribute to the production of the organization’s product or service, commonly referred to as “the business.”
- Support – functions that support operations by providing the necessary capabilities, tools and facilities for the organization to operate (technology and information, equipment, and facilities).
- Governance – functions that monitor the organization and ensure compliance with internal and external regulations, controlling operational and support functions through policies, audits and other governance mechanisms.
Every functional group can be an originator of change, be impacted by change, or remain untouched. Every change will fall either entirely under one of these categories, or span across them. Cross-organizational change, a.k.a. enterprise-wide change, is by far the most predominant. Here are some examples:
- Operational change – organizational restructuring, mergers and acquisitions, new product offerings or business unit stand-up
- Support-driven change – system implementations, workplace transformations, equipment modernization
- Governance change – regulatory compliance changes, service/product quality initiatives, strategy operationalizations
- Enterprise-wide change – business transformations, operational excellence implementations, lean/cost cutting initiatives
So that’s the theory, but how does it impact the way that we look at organizations?
All organizational functions are integrated and interdependent. Here’s a useful diagram:
Now for an important question: Is there, within your organization, a document or person that can give you an overview of how the three functions interact according to your regular business processes? Can you accurately predict how each of the three components will be impacted if one is changed? We have worked with many Fortune 1000 companies world-wide, and to date, we haven’t had a single client who could us provide us with such an insight.
Nevertheless, organizations make adjustments to these components all the time! And there lies the root cause of the failure of the vast majority of business transformations (70% of which are unsuccessful, according to investigations by Forbes & McKinsey). In the majority of cases, change is executed without sufficient understanding of the organization’s intricate interdependencies. Because there is no single, organization-wide view of how the three components interact and integrate, organizational change is impossible to properly plan. And what’s worse, in addition to a lack of a holistic map of the organization, the key individuals implementing the change don’t even agree on how the business process works.
Without agreement on the basics, how can a complex organizational change be successful?
Adastra’s Integrated Process Modeling begins by modeling the operational business processes. Then, we document the interaction between technical capabilities and business capabilities. After that, we capture information flows, the key information entities (data elements) that each component of the process operates with, and the methods of their transition between processes, people and technology. Lastly, we identify the governance controls and artifacts that exist within the process flow, for a complete picture of the organization.
A traditional business process model that focuses solely on operational activities looks like this:
An integrated business process model of exactly the same process looks like this:
The additional information provided by the integrated model is highly relevant to understanding the particular business process and its components. And, it enables us to identify and track the impact of a change across all three functions.
Integrated Business Process Modeling lies at the heart of our Integrated Business Process Engineering approach. Through it, we establish a single centralized framework for assessing, planning, controlling and monitoring the impact of change on the operational, supporting, and governance functions of an organization. Change can originate from any of these functions, or can be applied to all three through a search for efficiency. An integrated model allows for the identification of the impact of the change throughout the organization, and becomes a mandatory tool in supporting a successful business transformation.
We apply this approach, directly or indirectly, to any engagement that involves a change to any of the three functions of our client’s organization. For example, it can serve as a business discovery tool for technology and data projects, or a process optimization methodology on an operational excellence program. Having a consolidated understanding of the organization goes a long way, no matter how small or big the change is. At the very least, it is excellent at enabling meaningful conversations and establishing collaboration between different groups in the organization.
In future posts, we will elaborate on modeling each of the three organizational components, and explore some tactics behind our business transformation methodology. In the meantime, I encourage you to consider looking at your organization differently. Rather than focusing on each component individually, envision the bigger picture, and see the organization for the symbiotic organism that it truly is.