Archive | April, 2007

Why end-to-end process – Volvo example

I can’t verify this example, but I have heard it used multiple times over the years and think it does a great job of making the point about end-to-end process.

At some point in the past, Volvo had apparently manufactured too many green cars.  They were sitting on the dealer lots and not selling.  The dealers decided to offer a special incentive around green painted cars.

It worked and the cars started selling rapidly.  The manufacturing group that was doing planning noticed a spike in sales of green cars and immediately changes the paint orders so that more green cars are produced and sent to the dealers.  Hopefully, you see the problem.

We have all had some instance like this occur.  The problem is that processes have not been historically connected across functions, business units or even companies.  Only an end-to-end process which links planning to inventory to distribution to sales would see the problem.  This is one of the values of BPM and one of the challenges.

Today, I can sub-optimize the whole to make my part better.  In the future, I have to do what’s best for the seo company and the entire process.

Pricing Lifecyle

A key part of the 4Ps of marketing (price, promotion, product, and place) is pricing.  One of the complications with pricing is its lifecycle.  The biggest example that we all see around pricing is with airlines.  You can pay all kinds of different prices based on supply and demand, time or day that you buy the ticket, and other factors.

But, clothes, for example, follow a more traditional lifecycle where they initially are listed at the “list” price.  Over time, you see additional markdowns until either the floor price is hit or the clothes are sold off to the secondary market or sent to outlet stores.

Depending on the company, much of this pricing discounts are very rules based.  In some companies, it is more analysis based looking at what is selling and why.  This would be an easy process to automate.  The rules based discounting process could look for triggers (date, inventory level, etc.) to initiate a pricing discount and then launch a subprocess for updating stores and the system of record.  For analysis based processes, the process could link the analysis and the decision making to either automate the steps or potentially automate the decision making as the analysts make their decision making process more transparent.

Lesson From The Apprentice

As one of my favorite shows, I was glad to see another good lesson in this week’s episode of The Apprentice with Donald Trump.  One of the three teams just completely bombed the assignment because they had no theme.

As you approach process work or BPM, it is critical to make sure you understand your current state metrics; what is important to drive the business; and how to make a difference.  Too many people want to jump right in without understanding the so what (i.e., the theme) of their effort.  Finishing a project that missed the mark is as bad as not finishing the project.

The Agile Get More Agile

Much like the saying that the rich get richer, I have begun to see more small companies using BPM technology to make themselves more agile.  This to me is a good example of Web 2.0.  In the late 90s, big companies initially shunned the Internet or approached it skeptically.  It rapidly became a basic part of their strategy.  Some of the dotcoms became dotbombs because of their business models but not because the fundamental technology was wrong.

I think we are at the same spot.  BPM technology is right.  It takes BPR (business process reengineering) and BPI (business process innovation) and adds technology to it.  The technology enables us to take these new, more agile processes and automate them.  Automation creates many things:

  1. Process consistency
  2. Auditability (who did what when)
  3. BAM (business activity monitoring) … dashboards
  4. Reduces paper and improves quality
  5. Lowers cycle time (less hand-offs)
  6. Creates automatic escalations (e.g., someone is on vacation and the task gets routed around them)
  7. Process oriented document management

So, what I find so interesting is that big companies that typically have big problems are once again slow to move on BPM.  They are investing heavily in Six Sigma, but they haven’t embraced the correlated subject of BPM which automates and manages the Six Sigma improvements.  On the other hand, smaller, lean companies have begun to see how BPM can help them better compete.  It makes their processes better.  It improves their quality.  It allows them to better manage and prioritize.  It reduces human intervention and error.  It saves them cost and time.

So…the smaller more agile companies continue to gain on the bigger companies while once again the bigger companies are going to wait until they see this threat.  (Not all big companies are waiting, but more than you would expect.)

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BPM for Marketing

I have just recently talked with a few clients about using BPM technology in the marketing area.  As one put it, this is the one of the last bastions where companies look at process.

That being said, there are lots of opportunities for process management within marketing:

  1. Most marketing groups are involved with new product development.  One of the most popular product development methodologies is Stage-Gate.  Stage-Gate provides an approach for evaluating products with multiple checkpoints.  This can easily be managed via BPM and the company even licenses the process to BPM vendors.
  2. A lot of marketing groups use internal and external resources to deliver on projects.  This process could use a tool to manage workloads, track status, and share documents.
  3. The advertising process is filled with ongoing dialog and sharing of information.  You can’t always put a process on the creative steps, but you surely can automate and eliminate some of the paper surrounding bidding, creative templates, knowledge sharing, and refinement of the end product.
  4. The entire MRM (Marketing Resource Management) space could be served by BPM.  MRM basically is a project / process management approach for marketing specific tasks.  There are numerous vendors providing COTS (Commercial Off The Shelf Software) for this.

From what I have seen (and my experience in marketing), this has been an area slow to adopt technology and not on the radar for BPM discussions.  So, internally and externally, you may want to engage your CMO (Chief Marketing Officer) and bring them up to speed on BPM.

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