Process Ownership Kem Tissiman Managing Director Rethink Management Consulting (Pty) Ltd www.rethink.co.za

1. Process Ownership Kem Tissiman Managing Director Rethink Management Consulting (Pty) Ltd www.rethink.co.za A Key Requirement For Sustainable BPM Success

2. Objectives • Help you to gain an understanding of • What Process Ownership is and its Importance wrt BPM • The Process Owner role • Key implementation requirements and challenges

3. Evolution of Performance Improvement Approaches BPR – late 1900’s BPM - 2000 Evolution of PI methods – early to late 1900’s • Demand based natural evolution • of operational and process • improvement methods, usually • by internal company resources • TQM • Six Sigma • Kanban • Lean BPR “packaged” and widely promoted by consulting companies. Often applied by external consultants and on an intervention basis. Immediate benefits, but not sustained. • New approaches to Performance • Improvement, aimed at delivering • greater benefits and locking • in sustainability: • BPM • E2E Process Ownership • Traditional improvement methods • embraced within these frameworks • Focus on developing internal • capacity/capability to undertake • continuous operational improvement • Quality Circles • 20 Keys • Kaizen

4. Evolution of BPM (and Process Ownership) Evolution of PI methods – early to late 1900’s BPM - 2000 BPR – late 1900’s • Demand based natural evolution • of operational and process • improvement methods, usually • by internal company resources • TQM • Six Sigma • Kanban • Lean • New approaches to Performance • Improvement, aimed at delivering • greater benefits and locking • in sustainability: • BPM • E2E Process Ownership • Traditional improvement methods • embraced within these frameworks • Focus on developing internal • capacity/capability to undertake • continuous operational improvement BPR “packaged” and widely promoted by consulting companies. Often applied by external consultants and on an intervention basis. Immediate benefits, but not sustained. Many companies have eagerly embraced the principles of BPR over the past decade, however, in hindsight it is becoming clear that the results are not quite as positive as they first appeared. Recent studies suggest that BPR success (wrt achieving and sustaining performance improvement) may be as low as 30%, and that benefits are not sustained in the long term. Booz|Allen|Hamilton 2003 • Quality Circles • 20 Keys • Kaizen

5. BPM – what is it? • BPM is a management practice that provides for governance of a business's process environment toward the goal of improving agility and operational performance. • BPM is a structured approach employing methods, policies, metrics, management practices and software tools to manage and continuously optimize an organization's activities and processes.

6. BPM – what is it? Not one-off system implementation, BPR or process improvement project It’s a Strategic approach to delivering ongoing agility and operational improvement via continuous process assessment and improvement

7. What Is Process Ownership? • Process Ownership means assigning end to end responsibility for a process to a single individual, the Process Owner, across functional or department lines. • The Process Owner is the custodian of the process, from end to end, responsible for ongoing changes made to the design of the process. • Process Owners responsible for strategic development and health of core end to end business processes • Process Owner is a permanent internal role

8. Process Ownership vs Management

9. Process Ownership vs Management • Both key to achieving good Process Performance: • Process Owner drives improvements in process design and efficiency • Process Manager manages the workforce to ensure that the current targets are being achieved, identifies potential design issues

10. Claims Process – Silo Structure • Process crosses several silo’s • Manager is both Process Owner and Process Manager • Solo’s focus on own performance • No one accountable for end to end performance Claim Mailroom Mgr Claims Mgr Prep Docs Scan Docs ManagerAuth Mailroom Claims Dept Assess & Load Approve Central Payments Mgr Val<R 10 000 Calc Value Auth Calc Payment/Claim Completed Values Dept 1st Signature 2nd Signature Values Mgr Central Payments

11. Claims Process – Silo Structure • Improvement silo focused • Improvement not coordinated • Inter silo handoff problems remain, difficult to resolve • Common practice across silo’s lacking • Lack of time to focus on improvement Claim Mailroom Mgr Claims Mgr Prep Docs Scan Docs ManagerAuth Mailroom Claims Dept Assess & Load Approve Central Payments Mgr Val<R 10 000 Calc Value Auth Calc Payment/Claim Completed Values Dept 1st Signature 2nd Signature Values Mgr Central Payments

12. E2E Claims Process Claims Process Owner Claim Mailroom P/Mgr Claims P/Mgr • Process Owner looks after e2e design and e2e, silo KPM’s • Process Managers responsible for • staff management and • ensuring departments/silo’s meet their performance KPM’s Prep Docs Scan Docs ManagerAuth Mailroom Claims Dept Assess & Load Approve Central Payments P/Mgr Val<R 10 000 Calc Value Auth Calc Payment/Claim Completed Values Dept 1st Signature 2nd Signature Values P/Mgr Central Payments

13. E2E Claims Process Claims Process Owner Claim Mailroom P/Mgr Claims P/Mgr • Improvement focuses across entire process, ongoing • Inter silo handoff issues resolved, cooperation improved • Common practices across silo’s • Time available to address continuous improvement Prep Docs Scan Docs ManagerAuth Mailroom Claims Dept Assess & Load Approve Central Payments P/Mgr Val<R 10 000 Calc Value Auth Calc Payment/Claim Completed Values Dept 1st Signature 2nd Signature Values P/Mgr Central Payments

14. Process Start and End Point Where should the end to end process start and end? • No simple answer.. • Rule of thumb: • Start point is the earliest point when you as the supplier of the requested service/item, assumes ownership for fulfillment eg receive confirmed notice of a need • End point is that point where the requested service/item has been delivered eg client need satisfied, and all related actions completed

15. Process Start and End Point • Start point is the earliest point when you as the supplier of the requested service/item, assumes ownership for fulfillment eg receive confirmed notice of a need • End point is that point where the requested service/item has been delivered eg client need satisfied, and all related actions completed

16. Process Owner Role 5 main requirements wrt the PO role: 1 Develops Process vision, strategy and objectives 2 Develops and implements process improvement initiatives (50%) 3 Monitors process performance across the organisation 4 Communicates with senior management 5 Develops and Manages policies and procedures governing processes

17. Process Owner Role • Develops Process vision, strategy and objectives • Set vision, strategy and performance objectives for the end to end process • Ensure process strategy enables corporate strategy • Gather and apply best practice to process

18. Process Owner Role 2 Develops and implements process improvement initiatives (50%) • Develops and leads formal process review and improvement cycles, to identify functional and cross BU improvements • Collect improvement ideas from BU staff • Develop and oversee roll-out plans for improvements to be implemented • Ensure appropriate stakeholders part of planning and implementation process • Ensure that Change Management addressed

19. Process Owner Role 3 Monitors process performance across the organisation • Define performance metrics for end to end process and silo process • Reviews process performance and intervenes accordingly • Identifies performance gaps and launches remedial initiatives

20. Process Owner Role 4 Communicates with senior management • Resolves inter silo conflicts • Feeds back to COO on current performance to targets • Feeds back to COO on current and planned initiatives • Meet business unit leaders to get input for strategy and communicate process strategy

21. Process Owner Role 5 Develops and Manages policies and procedures governing processes • Manages all relevant policies and procedures related to process • Refines and develops new policies and procedures on ongoing basis

22. Process Owner Profile Type of individual: • Someone who can positively influence improvement team members • Able to communicate effectively within senior management levels • Aptitude for process thinking and improvement • Strong knowledge of process improvement methods and techniques • Objective, able to do what is best for process performance and hence customers

23. Benefits • Permanent Process Owner Role enables • Sustained improvements due to permanent process custodian role – reversals and process degradation picked up and corrected as soon as they happen • Ongoing incremental improvements • Processes always aligned with corporate strategy • Consistent approach to process improvement across all process in the organisation • Easier replacement when incumbent changes

24. Benefits • End to End focus enables • Greater level of performance improvements • Reduced inter silo handoff issues • Early error detection and correction • Improved compliance • Improved agility • Improved silo process management • Improved overall end to end process management

25. Benefits Sustainable Ongoing Process Performance

26. Implementing Process Ownership • Identify the core end to end processes across the whole organisation • Implement an Organisational Structure to support the end to end Process Owner • Implement Incentives to support new roles and behaviors • Appoint the right people to the new PO positions • Skills, Experience profile, Passion • Empower the Process Owners • Clear roles and responsibilities • Establish trust in the process owners • Establish clear governance and decision making structures • Establish a process culture in the organisation • End-to-end vs Silo process understanding, with customer as focus • Visible process information – process maps, flows, parameters, KPM’s • Establish end to end performance visibility • Timeous performance measures and reporting • Dashboards

27. Implementation Challenges • Lack of senior management commitment • Process Owners not fully empowered, scope curtailed • Process Owner not involved from the beginning • Part time Process Owner • Process Culture not established • Poor selection of Process Owner candidates • Too junior • Inexperienced • Poor communicator • Lacking in credibility • Decision making structures not clear • Silo vs End to End process owner conflicts • Limited career development opportunities

28. Conclusions • Process Ownership does not replace BPR Six Sigma, or other improvement initiatives • Lack of Process Ownership key cause of post-improvement performance degradation • Process Ownership is the part of BPM that ensures ongoing improvement and agility • Implementing Process Ownership in financial services will require a significant mindset change