Leveraging Process Frameworks to Simplify 2013$APQC.$$ALL$RIGHTS$RESERVED.$ 4 Process Classification Frameworks at APQC IndustryVersions Aerospace$&$Defense$ Automo3ve$ Banking$ Broadcas3ng$

Leveraging Process Frameworks to Simplify Process Management

Jeff Varney Business Excellence Prac3ce Lead APQC

2 ©2013 APQC. ALL RIGHTS RESERVED.

Objectives

Many people inherently sense the value of a process framework but struggle to realize the benefit within their organiza3ons In this presenta3on we will discuss… �  Key principles that make frameworks effec3ve �  Overcoming barriers to end-‐to-‐end process

management �  Aligning to what leaders care about �  Accelera3ng your journey to higher process-‐

based performance


What is a Process Framework?

A process framework is a list of business processes that are: ü mutually exclusive, ü  collec:vely exhaus:ve, and ü hierarchically decomposed


Process Classification Frameworks at APQC

Industry Versions Aerospace & Defense Automo3ve Banking Broadcas3ng Consumer Electronics Consumer Products Educa3on Electric U3li3es Health Insurance Payer Petroleum Downstream Petroleum Upstream Pharmaceu3cal Retail Telecommunica3ons

Best prac:ce organiza:ons blend and tailor these to best represent their businesses


A Look Inside the PCF


Frameworks are Fundamental

�  Organize your structure for process informa3on on the front end!

�  If you don’t… n  Process informa3on will eventually be built in

pieces by dozens of people and projects.

n  You will struggle to integrate process informa3on across your organiza3on.


Primary Uses of Frameworks

Accelerate Governance Iden3fy Process Owners

Manage Content List of all processes Structure

Manage Content Reusable Processes Cross-‐Func3onal Processes

Align to Strategy Evaluate poten3al for improvement

Benchmarking What to measure Aggregate/Drill-‐down


Focus Deployment for Value

�  Strategic alignment of processes n  High-‐value ini3a3ve

n  High-‐value products

n  Processes requiring high integrity (i.e. where mistakes are costly)

�  ‘Size of the crowd’ around any one process n  Number of individuals/teams/processes

using a specific part of the framework

�  Business value is ul3mate purpose of framework


Deployment Approaches �  Reorganize

ALIGN organiza3onal elements to framework n  Costly and difficult—seldom successful approach n  Organized around func3ons in the process framework n  Similar to reengineering approach

(Excep9on – mergers or dives9tures) Ø  At most disrup3ve—restructures the organiza3on

chart to match process framework Ø  At least disrup3ve—changes the organiza3on chart

to resolve gaps or overlaps

�  Overlay MAP exis3ng structures to framework

n  Faster—less opposi9on


Cross-Functional Processes Exist…

... but when they are not managed n  Processes are ad-‐hoc and inconsistent

n  Management is unmonitored and uncontrolled

n  Management is using poor or inappropriate measurements – if measuring at all

n  Process workers have limle insight into upstream and downstream impacts


Defining Cross-Functional Processes

�  Best prac3ce organiza3ons leverage frameworks to define cross-‐func3onal flow

�  Refer to consistently defined and commonly used building blocks n  Defini3on is based upon specific elements

of process framework n  Contextual reference is valuable to iden3fy

process gaps and overlaps

�  Iden3fy each sub-‐process n  Consistent documenta3on n  Accurate defini3on


2.0 Develop & Manage Products & Services

3.0 Market and

Sell Products & Services

4.0 Deliver Products & Services

5.0 Manage Customer Service

1.0 Develop Vision and Strategy

Crucial Cross-Functional Processes Can Often Require Multiple Handoffs

6.0 Develop & Manage Human Capital

7.0 Manage Informa:on Technology

8.0 Manage Financial Resources

9.0 Acquire, Construct, and Manage Property

10.0 Manage Environmental Health and Safety (EHS)

11.0 Manage External Rela:onships

12.0 Manage Knowledge, Improvement, Change

Build New Facility


Cross-Functional Process Strategies

�  Thousands of cross-‐func3onal processes exist in typical organiza3on n  Focus on cri3cal few n  Iden3fy owner early n  Orchestrate components n  Iden3fy first, improve later n  Go only as far as you need to go—

make sure what you are doing is valuable


Cross-Functional Process Governance

�  Each iden3fied cross-‐func3onal process must have an owner n  May not perform the process themselves n  Accountable for process results, integrity,

and improvement n  Open a func3onal or product manager n  Open one of many that rely

on the process Ø  Act as a focal point for

the process Ø  Coordinate and collaborate

to gain buy-‐in


Real World Cross-Functional Example: Order-to-Cash

�  Assump3ons n  Marke3ng is complete n  Organiza3on is ‘build to stock’ rather than ‘build to

order’ n  Offer terms of ‘Net 30’ n  Products are in stock n  No customer order inquiries

Take Orders

Fulfill Orders

Shipping & Logis:cs

Invoicing, Payment & Receipt


Example: OTC – High-Level �  Which process

categories are involved?

§  3.0 Market and Sell Products and Services

§  4.0 Deliver Products and Services

§  8.0 Manage Financial Resources


Example: 3.0 Market& Sell Products/Services (Take Orders & Check Availability)

Take Order

Check Availability


Example: 4.0 Deliver Products/Services (Fulfill Orders, Shipping & Logistics)

Pick, Pack & Ship

Deliver


Example: 8.0 Manage Financial Resources (Invoicing, Payment & Receipt)

Invoicing

Payment & Receipt

Check Credit (part of sale?)


Analyze How Pieces Fit Together

ORDER TO CASH

3.5 Develop and Manage Sales Plans

4.5 Manage Logis:cs and Warehousing

8.2 Perform

Revenue Accoun:ng

8.2.2 Invoice

Customer

8.2.3 Process Accounts

Receivable

4.5.3 Operate

Warehousing

4.5.4 Operate Outbound Transporta:on

8.2.1 Process Customer

Credit

3.5.4 Manage Sales Orders


Example of Cross-Functional Process


Benefits Take Effort to Realize

�  Benefits may be elusive if you don’t monitor and control n  Establish performance targets n  Support roll-‐out and transi3on n  Measure and evaluate effec3veness n  Communicate and collaborate with all players

�  Uncoordinated changes may break con3nuity


Summary �  Key principles that make frameworks effec3ve

n  What, not how

�  Overcoming barriers to end-‐to-‐end process management n  Ownership of both framework elements and cross-‐func3onal

processes n  Focus on cri3cal few

�  Aligning to what leaders care about n  Evaluate elements in framework for impact n  Priori3ze, select and manage improvements

�  Accelera3ng your journey to higher process-‐based performance


123 North Post Oak Lane Houston Texas 77024-‐7797

1-‐713-‐681-‐4020 1-‐800-‐776-‐9676

www.APQC.org

Leveraging Process Frameworks to Simplify 2013$APQC.$$ALL$RIGHTS$RESERVED.$ 4 Process Classification Frameworks at APQC IndustryVersions Aerospace$&$Defense$ Automo3ve$ Banking$ Broadcas3ng$

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