Part I: Our Insight and Advice on Business Processes: Distinctions and Clarifications

(initially published on EFA on March 31, 2011, as “Our Insight and Advice on Business Processes”, republished here, as the first of a four-part series;  part of the retrospective Above Average: The Best of Escape from Averageness, 2009-2012)

 

Those of you who know me, know that I do not promote the capability or expertise of SAI Consulting on the pages of this weblog.  When it is advice that is being offered, however, that’s different than offering an opinion or viewpoint, and it carries a requirement that whoever is offering the advice actually knows what he is talking about.

In that regard, SAI Consulting is the homebuilding industry’s leading expert, when it comes to the documentation, analysis, measurement, design and redesign, improvement, and management of operating and business processes.  We have done it longer, and we have done more of it, than any other consulting firm.

It is our tour de force.

It is the area for which we are most recognized.  Virtually every consulting engagement we have ever accepted, in-or-out of homebuilding, has dealt – in some way – with how a client should structure itself around its core-critical business processes.  And – we have provided this same insight and advice to others on hundreds of occasions.

There is a reason for the centrality of business processes.  When you talk about an enterprise, whether it is a homebuilding company or a company in some other industry vertical, the most basic proposition of that enterprise – the reason for its existence, the way it makes money – is through the value that it delivers to customers and other stakeholders.  That value is only delivered by the work that the enterprise performs, that work has to be performed in some manner of workflow, and the most common form of that workflow is the work performed in processes.

Those processes exist, whether enterprises are intentional about them or not.  Processes are important.  They are critical.

Start with some distinctions and some clarifications.

First, there is a difference between the methods of workflow – there is a difference between process management, project management, and case management.  In addition to processes, most business enterprises today involve the scheduling and management of projects, to the point that many companies are now becoming project management organizations.  It is a term that is particularly relevant in homebuilding, because jobs are essentially projects.  Homebuilding is essentially multi-project management;  it is project portfolio management with embedded processes.  In companies that have workflow that is less pre-defined (or, more ad-hoc), case management is becoming an alternative to a pure process approach.  Case management also applies to workflow situations that are more document-intense (as opposed to data-intense), that share documents in the same folder, that require real-time collaboration (as opposed to a more defined sequence), and that involve physically separated, remote, and independent resources.

Second, there is a distinction between procedures, processes, and value streams.  They serve different, but related, purposes, and, although there is an ascending order to the relationship between them, they are not interchangeable expressions of workflow.

Third, there is a distinction between processes and areas/functions/departments.  The functional perspective is vertical, a picture of departmental silos, in which everything associated with a department is contained within its own walls.  Processes present a horizontal perspective of work flowing through an enterprise, across areas, departments, and positions.  You do not “map” the accounting function, you “map” the accounting processes.

Finally, processes – like everything else – must fit within a context at the business enterprise level, as part of a business operating model.  That context must be clear, it must be understood, it must be unified.

With that being said, the term “process mapping” encompasses a lot.  It invariably includes the flowcharting of process workflows, but it could go well beyond flowcharting.  A project will typically focus on a specific process approach or method for documenting processes that is aligned with a particular improvement methodology;  Six-Sigma prefers to document processes in SIPOC charts, Lean likes to use value stream maps, etc.  IT has its own quirks.  Consultants often determine the methodology, and the methodology often determines the definition.

At SAI, when we use the term “process mapping”, it includes more than documenting the current workflow of a process.  Most of the time, it also includes redesigning workflows, which invariably leads to other issues.  Because it is so foundational, it is difficult to get around the need to understand and improve – and change – the way work is performed, before starting down the road on other change or improvement initiatives.

 

Next:  Part II:  Process States and Methods