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IS 788 [Process] Change Management

IS 788 [Process] Change Management. Lecture: Process Redesign Methodologies. For the next Class: Wednesday. 10/17/09 . Each group should prepare a presentation of work to date on their project High level overview of the project and the organization

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IS 788 [Process] Change Management

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  1. IS 788[Process] Change Management • Lecture: Process Redesign Methodologies IS 788 8.1

  2. For the next Class: Wednesday. 10/17/09 • Each group should prepare a presentation of work to date on their project • High level overview of the project and the organization • Where does this process fit in the (a) value chain • Highlights of what you’ve accomplished to date and what remains IS 788 8.1

  3. Process redesign methodologies • Methodology and method are synonyms • A way of doing process redesign • A process for redesigning processes • What does a formal methodology add to an activity? • The experience of others • Structure • Checklists, forms and other tools IS 788 8.1

  4. Harmon’s methodology (Ch. 9) • Generic • Used for a major redesign of a high-value process • Communication and securing top-level management involvement are as important as the actual design steps in the methodology • Uses lots of committees for communication and buy-in (as did Telecom Eirann) • Will work for ERP unless a company has already purchased software. If so, what then? IS 788 8.1

  5. Consultants • Harmon strongly and repeatedly recommends outside. experienced ‘facilitators’ == process redesign process managers • Why? • Experience not available in the company • 3-6 months vs. 2 years and abandoned • Frequently neutral outsiders can make suggestions that would be inflammatory coming from insiders IS 788 8.1

  6. The players (1) • Executive committee – highest level approval for finished phases and project overall • Project sponsor – high level manager who assures resources and ensures the project aligns with organizational goals • Process redesign steering team: high level representatives of all concerned functional groups IS 788 8.1

  7. Players (2) • Project facilitator – the process redesign project manager • Business process redesign team: activity and (sub)process managers, IT, domain experts, i.e. HR IS 788 8.1

  8. Redesign methodology phases What’s going on here? IS 788 8.1

  9. Planning phase • Refine the scope – is it realistic Review goals – are they aligned • Document project assumptions • This step is difficult and an outside consultant can help – some constraints have been in place for so long they are invisible – can’t do this or must do this or must do it here • Plan, schedule and budget • Define process analysis team IS 788 8.1

  10. Analysis phase (1) • Document current process • Start with a ‘strawman’ diagram and run it by all stakeholders for refinement • Define in “as much detail as necessary” • Reconcile semantic differences: different groups may call the same process, equipment, etc. by different names • Document known problems with current process IS 788 8.1

  11. Analysis phase (2) • Detail all activities – not diagrammatically but with written descriptions • Develop a process management design • Goals for each sub-process • Measures • Corrective actions • Who’s responsible? IS 788 8.1

  12. Analysis phase (3) • Revisit old goals and assumptions – think out of the box • Summarize findings – on new goals, challenged assumptions, directions for the new process design – in a plan document, and • Communicate, communicate, communicate, to gain approval and resources to proceed IS 788 8.1

  13. New process design phase • Challenge past processes and assumptions again • Define the TO-BE process • May create several alternative COULD processes • Design the management process to support the TO-BE process • Measures • Roles (HR) • Responsibilities (HR) IS 788 8.1

  14. New process design phase (2) • Rationalize reporting relationships • This is a critical and difficult step (HR again) and the Executive Committee • Redraw the org chart • Cost out or run simulations on the TO-BE process • Document new activities in detail • Communicate up the committee chain to gain approval and resources for the next step IS 788 8.1

  15. Resources development phase • The new process will need: • Physical plant • Equipment • Job descriptions • Training programs • Management systems (in place) • Software and IT support IS 788 8.1

  16. Resources development phase (2) • Appoint a process manager • Reorient managers currently reporting to functional department heads • Harmon and many of our readings view this as a critical step. • “To redesign a process, and then leave subprocess managers responsible to department heads . . . is a recipe for disaster.” IS 788 8.1

  17. Implementation phase • Many companies have proceeded smoothly through phases 1-4 and failed to implement the changed processes. (Name that case:) • Senior managers resist change • Functional managers resist change • Employees resist change • Salaries and incentive systems remain unchanged IS 788 8.1

  18. Implementation phase (2) • The most important work of the implementation phase – communication and gaining top level support and universal buy-in should already have been accomplished by following the change plan developed in Phase 1! • Meet, communicate, and enlist top management to apply judicious force when necessary IS 788 8.1

  19. Process redesign patterns • Redesign patterns are slight specializations of the generic processredesign methodology to accomplish common types of redesign • Reengineering • Simplification • Value-added analysis • Gaps and disconnects IS 788 8.1

  20. More specialized patterns • Table 10.2 on pp. 238-239 lists 8 more specialized patterns. We will address four of these in later lectures: • Workflow automation • ERP driven redesign • Six Sigma • Design for BP languages IS 788 8.1

  21. A radical redesign success: the redesign pattern • Texas Instruments knew how to inexpensively make huge quantities of chips • With their existing process they were decidedly not-agile and had to ignore fast moving or niche markets • The mission: change the process to be able to manufacture small quantities of chips inexpensively IS 788 8.1

  22. TI continued • Rethinking the process steps would NOT have been effective in itself • New technology conceived expressly for the new process was required • Not new fundamental discoveries, but new application of existing knowledge and new technology i.e. manufacturing equipment. IS 788 8.1

  23. TI continued • The result was spectacular • TI dominated the field for almost a decade • Other companies wishing to compete had to license TI technology IS 788 8.1

  24. The simplification pattern • Redesign of a process with the focus on eliminating redundancy • Assumes most established processes include redundancies and duplicated efforts (what’s the difference?) • Challenge each process – is this step necessary? IS 788 8.1

  25. Another great – and successful – micro-case: Xerox purchasing • 4.3 billion a year on non-production procurement • Three initial steps • Document existing processes – 100’s of different activities • Blue-sky visioning • Surveying other organizations for best practices IS 788 8.1

  26. Xerox, continued • Initially each group insisted they needed their variant processes • Ultimately – with the help of outside consultants who were likely less politically suspect than in house teams – NPP was reduced to three simple activity sequences IS 788 8.1

  27. Xerox – radical simplifications • Issue credit cards and the authority to use them for quick, unanticipated purchases (a species of bean-counter will deny that such a thing should exist ;-) • Eliminate a large chunk of the bureaucracy – simply no longer needed! • Enact worldwide mega-purchasing deals IS 788 8.1

  28. The Value Added pattern • A thorough analysis of key (how determined) existing processes with a 3-criteria focus: • 1. Is the customer willing to pay for this? • 2. Does the process or activity physically transform a product or service • 3. Is the process performed correctly the first time (most of the time) IS 788 8.1

  29. Non-value adding processes(the 80(non)/20 rule applies here) • Involves preparation or setup • Is a control or inspection activity • Simply moves a product • Is a correcting action resulting from upstream errors or delays • These activities may be necessary, but they don’t add value. (see examples, p. 248) IS 788 8.1

  30. The Gaps and Disconnects pattern • Analyze and eliminate the communication or coordination failures between silos. • Look for goal misalignment – to coordinate well teams have to want the same result • Look for shortcomings in the management of process – if its not being measured, its probably not being done well! IS 788 8.1

  31. Gaps and disconnects continued • As Harmon points out regularly – many times a process is fine – it simply isn’t managed well. • Fixing the process management increases throughput by 20+ % • See list of potential disconnects, p. 250 • A good process diagram can help pinpoint handoff’s (p. 252-253) IS 788 8.1

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