Entries by Peter Franz

Stability in a Volatile Business Environment

Stability in a Volatile Business Environment

Managing a stable and reliable business in a volatile business environment requires a new set of skills. Confucius once said, “Only the wisest and stupidest of men never change.” In a volatile environment, it takes a wise man, to understand what areas of business NOT to change thus making it easier to change where it’s really needed. Business conditions are continually changing increasing the risk of highly unpredictable performance. These collectively create complexity, which describe’s a business environment where CHANGE is the new normal.

Stability in a Volatile Business Environment

To do well in this very dynamic environment needs a combination of agility and compliance. The marketing director likes agility or the ability to adapt to the changing market driving responsiveness, differentiation and growth! A business also needs compliance with words that the Finance Director likes – Reliable, Standard, Efficient and Low Cost. These two objectives tend to be in conflict – an environment that is always changing could become chaotic and inefficient. Through a good understanding of the business processes this conflict can be minimised and better managed.

Stability in a Volatile Business Environment

Where is Adaptability Critical?

Now, more than ever before, processes are at the centre of the new organisation. We need to identify those processes that change less frequently and are routine. These need to be rationalised and harmonised. If there are fewer variations of processes, changing them is a whole lot easier. This also allows us to build out those differentiating, new and adaptable capabilities, where we are more dynamic developing new ways to innovate. We also need a process management discipline to move good ideas into action fast. 

Identifying your Differentiators

This intent is easy to understand. The challenge is getting agreement on which processes fit into each category. To work through this we need a shared understanding of which processes drive our differentiation and are thus close to delivering the brand promise to the customer and which processes are more routine and thus in the background from a customer perspective. We also need clarity on how different a process is. Is it the same regardless of the context or does it have a high level of variation to meet localised requirements? It is those 20% of processes that are closer to the customer and our brand where we need innovation and change. The balance can be simplified and standardised where possible. This understanding enables us to establish the most appropriate management strategy.

Categorising Process and Variation

Attempts to categorise processes like this will demonstrate the challenge of validating the reasons for variation. When does it make business sense to have a different process and when is it just the whim of someone not wanting to change? To clarify the impact these issues have on the process we group them into three levels of severity.  Through analysing all processes in this way, many of the reasons for variation will be discounted as having no impact on the process, while legitimate variations can be dealt with properly.

Empower Change

Through the proper leadership, representative team and enabling framework we empower the organisation to simplify and standardise most processes across the business. This provides the core building blocks that, alongside other process improvement enablers create a positive environment for change.

Process Management enables Change

This technique is part of the broader management discipline of Business Process Management (BPM-D®). An essential set of practices to help organisations deal with an environment of change moving good ideas into action faster and more reliably.

Digital Twin – Myth or Reality?

Digital Twins – Myth or Reality?

There’s much talk about Digital Twin at the moment, but what is it really?  And can it actually help your business?  Now, more than ever, we’re looking for ways to improve our productivity, so can the Digital Twin be the solution we’re looking for to achieve that?

The Digital Twin – Taking Control Without the Risk

An easy way to explain the Digital Twin it is to think of a flight simulator. Instead of a real-life aircraft, you’ve got a replica, where a trainee pilot has the opportunity to learn and test how to use all of the equipment – and without destroying a 737 in the process. Even experienced pilots use it to sharpen their skills and practice handling difficult situations. If they run into difficulty, they can push the reset button quickly and start again – all without any risk. I once watched simulator being thrown about by an engineer (I hope they never get into a real aircraft) and the barrel roll and landing without undercarriage surely challenged the equipment but he got out unscathed. And this is what having a digital twin realistically means for your business. It’s a tool that enables you to replicate processes and test out new concepts, in your business in a safe environment.

Digital Twin – Myth or Reality?

Why Now?

Having a digital twin is simple concept that’s great to apply to any business. It’s a chance to try things out. Look at different approaches. All without resulting in significant challenges to your organisation. Aside from the COVID-19 pandemic, there are so many issues that are affecting businesses worldwide. And the customer experience is more important than ever. Digital loyalty to brands is certainly being challenged right now. Customers want their products fast, and in a consumer environment, if businesses can’t keep up with their customers’ needs, they’ll quickly go elsewhere; meaning that market share soon will rapidly disappear. Consequently, the organisations that are able to get their products and ideas to market quicker are the ones that will be more successful. Its less about coming up with good ideas and a business strategy and much more about your ability to translate this strategy into action, fast and a lower risk.

Sharing is Caring

So how do you get your ideas shared quickly across your organisation? This is where having a digital twin and making a replica of your business can make a massive difference between success and failure. In the past, we’ve had the time to install new business models, but this is no longer the case. Many of the older techniques, that were traditionally effective, just simply won’t have the same results in the new world. To meet the needs of our customers, we need to react faster, act more dynamically, and be more customer-centric. Supply chains are being disrupted. Brexit’s effects are being seen on supply. Plus, with the pandemic’s new remote workforce, there needs to be a way of understanding how end-to-end activity will work with colleagues.

Talking Processes and Tools

Go to any conference, well in a non-COVID situation anyhow, and you’ll find so many tools and approaches to digitalise the process of process management – helping you create the Digital Twin of your business. Having a set of procedures in Word or Visio is no longer sufficient. There needs to be a central repository which is easily accessible from all areas of your organisation, and that can also be constantly updated. Then simulation tools to test procedures; see how they work and what impact they’ll have on cost and time for your organisation. Having a digital twin means that you can easily simulate and analyse different scenarios. Use process mining to understand what is happening in reality or task mining tools for more detailed discovery creating, replicas of detailed operating scripts for potential automation. Work-flow tools describe the interaction between functions and can be translated into new ways of more interactive working. There are also a plethora of emerging low-code tools to generate more automation directly from the models in your digital twin. All of these (and there are many more) help you put tools in place which create elements of your Digital Twin to trial the best way to work; mirroring your organisation safely.

It’s Not Worth Doing if it’s Not Done Properly

There’s no doubt that putting this into action is not a job to be dealt with lightly. It takes a huge effort to put this in place and keep it maintained. All procedures need to be documented and to the right level of detail. And if you’re putting in such a vast amount of time and effort, you need to make sure it’s done properly. Every element of detail that you capture in the Digital Twin needs to be captured and then maintained. Vast amounts of unnecessary detail translate into unnecessary maintenance or, even worse, the information is not kept current and thus looses its relevance and the investment is wasted. It’s essential that you make sure that the processes you choose are cost justifiable and that a balanced approach is taken to make it work. Realistically, you can’t create a digital copy of everything, and some processes you may choose not to copy. You’ll need to decide how much detail is required to be captured so that you can be most effective.

Action Planning

So where do you start? It’s essential that you don’t think of your problem as an engineer but as an end user. All content should be built around well considered usage scenarios. What will you use your digital twin for? You’ll need to make sure that you build it so that it’s relevant for its usage. There needs to be a good balance of information and the benefit that will be achieved. Make sure you have a vision of what your parallel world will look like. Build a continual picture of your organisation in the form of a skeleton, and slowly add the ‘muscles and limbs’ on the back of specific improvement initiatives – such as fixing your supply chain or improving the digitalisation of your customer experience. All done while using the level of detail that’s necessary. This way you’ll effectively create a digital twin of your organisation that’s appropriate for your actual needs. However each initiative, rather than being done independently, should always be adding substance to your Twin.

Meeting Standards and Not Complete Design

When you’re looking at the best tools for the job, it’s not possible to design the complete Digital Twin that meets all your future business needs and usage scenarios. It’s more important that you recognise the technology standards adopted by most vendors ensuring that they can interact with each other. You should be able to build in some resilience through a plug-and-play ability as your needs and the tools develop. Make sure you don’t spend too much time assessing the tools, as tools can change incredibly quickly. By the time you get to implement parts of the infrastructure the tool and vendor environment will more than likely have changed. It’s more important to create a high level blueprint and then build the core infrastructure and then adapt it as your business needs dictate.

Starting Your Digital Twin Journey

Overall, digital twins are both a myth and reality. A complete twin of every detailed element of the business is typically just not justified (a myth). However, at the right level of detail it is of significant benefit and essebtial (a reality). If you’re planning on discovering their benefits, you need to be absolutely clear on what your organisation needs and is actually able to implement. So, can it happen? Yes, in a staged and practical, outcome-oriented manner. And wherever you are on your process improvement journey, don’t go too crazy. Make your digital twin’s goals realistic and appropriate for your company’s needs.

An Examination of Associations Between Business Process Management Capabilities and the Benefits of Digitalization: All Capabilities Are Not Equal

While organizations have learned to understand the importance of developing business process management (BPM) capabilities, digitalization now transforms business processes, and introduces new challenges. Extending prior research examining the value of BPM capabilities in organizations, this study examines the associations of BPM capabilities across direct and indirect digitalization benefits.

Value-Driven Process and Project Prioritization – Basis for Focused Digital Transformation and Business Continuity Planning

Process prioritization enables organizations to ensure that the projects and initiatives they invest into are aligned with their organization goals. This enables a value-driven focus of digital transformation and business continuity initiatives, based on the strategy of the organization. The paper describes how the business strategy can be operationalized to serve as the foundation to identify processes with a high impact on the strategy. High impact, low maturity processes are best targets for digital transformation and business continuity initiatives. Projects focused on those deliver most value to the organization. The continuous adjustment of priorities and related project portfolios requires an appropriate digital tool support to enable “what-if”analysis. The prioritization approach is illustrated through case examples.

Value-Driven Digital Transformation: Performance through Process in IM + io Journal

Businesses have in general a solid management discipline around their products and an understanding of their people and information technology management. However, often the discipline around their business processes is missing or at a low maturity level. This is a significant challenge since new or enhanced processes deliver at the end the value of a transformation

Digitalization for Agile Business Process Management: The BPM-D Application

More and more organizations recognize that Business Process Management (BPM) has become a key management discipline that translates strategy into people and technology based execution. It helps organizations to realize the full potential of their digitalization initiatives. BPM is implemented through the “process of process management” (PoPM). To assure agility and continuous improvements of the PoPM an appropriate digitalization approach for the PoPM itself is essential. However, many companies are failing to recognise the importance of an integrated digitalization of the PoPM. As a result, their management approach is missing the necessary agility required in a digital world. This paper presents a successful approach for the digitalization of the PoPM to enable the discipline of agile BPM. It includes experiences from a first pilot implementation of the developed prototype, the BPM-D Application.

Business Process Trends

Mark von Rosing, August-Wilhelm Scheer, Henrik von Scheel, Mathias Krichmer, Peter Franz  and others: Business Process Trends.In book: The Complete Business Process Handbook, Volume 1, Publisher: Elsevier – Morgan Kaufmann, pp.187-216