Risk Management in BPA / BPI Projects

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1 Abstract Risk Management in BPA / BPI Projects Chandra Sekhar Ramaraju and Venugopal Juturu Before embarking on the business process assessment and improvement (BPA & BPI) projects that might lead to multiple BPM implementations, every organization has to understand some of the common risks and ways to avoid them. Most of the pitfalls in BPA and BPI projects emanate from poor planning, which is because many organizations treat BPA / BPI projects like any other IT projects. This article discusses some of the common pitfalls at various stages of BPA & BPI projects and how checks can be placed to avoid them. Problem Context There are typically four phases involved in a typical BPA / BPI initiative: 1. Planning Phase: During this phase, business problem and project objectives are clearly defined. Project objectives are aligned with strategic goals of an organization. Commitment from the top management is obtained to go forward with the project. Also, the candidate business processes and corresponding stakeholders are identified. Project charter and project plan are prepared. Project team and sourcing model are finalized during this phase. 2. Process Discovery and Modeling Phase: During this phase, as-is process related information is discovered through site visits. The process owners, operations team and stakeholders are interviewed to extract the existing process problems as they perceive. Based on the information gathered, as-is business process models are built using a modeling tool. 3. Analysis Phase: In this phase, various analytical techniques are applied to arrive at the root causes for the problem and alternate solutions. Most commonly used techniques are six sigma and lean. Also, lot of projects use the simulation capabilities offered by the modeling tools for doing dynamic analysis on alternate solutions to observe their impact on the problem. 4. Recommendations and Implementation Phase: During this phase, the to-be process design recommendations are reviewed and business case is built to take them forward for implementation. The following diagram shows some of the common pitfalls at each of these phases. Unless proper care is not exercised from the beginning of a process improvement initiative, the extent of damage caused by the gaps at each phase gets compounded in the subsequent phases. Early detection and closure of such gaps dramatically improve the chances of success of the initiative. However, it is important to keep in mind that besides these common pitfalls, there can be other project specific risks as well depending on the specifics of each organization. Such risks have to be assessed from time to time and mitigated as well.

2 Figure 1: Process improvement initiatives Common pitfalls The following paragraphs explain each of these pitfalls shown in the above diagram. 1.0 Risks in Planning Phase: 1.1 Unrealistic project planning: Most often, organizations tag process improvement initiatives with unrealistic goals and very tight budgets and schedules. BPA projects involve gathering information through brainstorming with various stakeholders, digging various sources and formats for accurate data, this requires careful planning. Here are some examples of unrealistic planning: Schedule not having adequate time to meet and discuss with all process stakeholders and tap all possible sources for information. Underestimating the amount of time required for, building process models to the required level, gathering and filtering for relevant data before performing analysis.. Here is the typical distribution of phase-wise efforts and schedule in BPA/BPI projects; but many projects tend to allocate more for the implementation phase and less for others: Planning: 10% - 20% Discovery & Modeling: 30% - 40% Analysis & Recommendations: 20% - 30% Implementation & Monitoring: 20% - 30% Bottom line is that the project plan should be well thought out and realistic based on complexity of the problem, potential benefit that can be derived, number of actors involved and problem distribution. It should allocate sufficient time for each phase and should have adequate buffer to absorb any changes. 1.2 Too much technical emphasis: Many process improvement initiatives tend to tag their process related problems to IT (such as usage of legacy systems, presence of desperate applications etc.). As a result, IT teams are brought-in to solve all process related problems. Due to this, there will be a technical bent in all activities; missing the business viewpoint. 2

3 Instead team should first focus on identifying best possible practical solutions and then think on technology to adopt identified solutions for the business problem. In order to achieve this, it is very important to have a better team composition accordingly. Ideally, the team composition should consist of business process team, operations team, QA team as well as technical team. 1.3 Lack of clear business vision: Since it is not practical to improve several business processes at once, process improvement initiatives are done iteratively by taking few processes at once. As a result, the project keeps its focus on their tactical plan and loses focus on the big picture like business strategy/ vision. In order to ensure that all tactical initiatives are aligned to one another, it is important to have a central process governance team that reviews all new project proposals and approving them. While starting small and making incremental progress is not wrong, it is critical to ensure that the project teams do not loose the sight of big picture. 1.4 Lack of top level support: Lack of top level support often results in lukewarm participation from the project stakeholders. Many a times, this seems to be the most fundamental problem. Before the beginning of any process improvement initiative, it is necessary for top management to communicate to all project stakeholders on the importance, expected benefits out of the project and also allow necessary adjustments in their day-to-day activities to ensure active participation from key stakeholders. 1.5 Ambiguous roles and responsibilities: Due to multiple stakeholders for the same role and/or responsibility and fear of possible change to the business, people either overreact or show lukewarm support for the project. To avoid such effect, it is necessary to define unambiguous roles and responsibilities for the project team and stakeholders. During the planning phase, RASIC chart (Responsible, Approve, Support, Inform and Consult) has to be prepared involving all project stakeholders. At the beginning of the project, it is necessary to define roles and responsibilities of each project member and get formal approval from them. 2.0 Risks in Discovery & Modeling Phase: 2.1 Biased and incomplete Information: Due to tight project timelines and lack of active participation from process owners/ users, often the process improvement team will hear only a part of the full story. As a result, the information gathered can be incomplete and biased. Here is an example of biased / incomplete information : For whatever reason, if the project team fails to consult operations/maintenance team during their process discovery, then the information they had gathered is incomplete. Chances are very high that this missing information can skew the analysis and bias the recommendations. During the discovery phase, the project team has to ensure that information is gathered from all possible sources and no one is left out. It is very much necessary to circulate summary of findings to all stakeholders. This will give another chance for people to validate and correct information that is gathered and/or assumed. 2.2 Incorrect Assumptions: In the absence of adequate participation from process stakeholders, project team tends to make certain assumptions and proceed. Assumptions could be around the process activities, constraints, and other data points. Incorrect assumptions lead to wrong analysis and incorrect recommendations. 3

4 Process owners have to thoroughly review the assumptions and validate their relevance. Team should validate the inputs from historical data any deviations are reviewed for their validity before using them into analysis. 2.3 Unable to thoroughly validate models: Many a times, it so happens that the site visits get cancelled or do not happen productively due to other business priorities. Similarly process owners and stakeholders do not provide enough time for reviews. In such scenarios there is a potential for models make their way into the analysis phase. As most of the current modeling tools facilitate the publication of process models in the form of nice reports, it is recommended that the process owners take advantage of this and thoroughly review their processes offline according to their convenience in the format they are comfortable with. Process owners have to ensure the accuracy and completeness of models. 2.4 Use of wrong modeling tools: Business process models form the foundation for many enterprise wide initiatives such as: BPM roll-out, legacy modernization, large scale business transformations, compliance & audits etc. A wrong modeling tool does not: Allow you to easily capture organization specific information Fit well with the other tools in organization s current IT landscape. BPA tool selection should be done considering the overall IT landscape of the organization and the strategic direction of the initiative. Selection of wrong tool results in unnecessary costs and inability to reuse artifacts generated from it. 2.5 Incorrect notation / semantics: Over a period of time, as the business process repository grows in size with the addition of more and more processes, chances are very high for it become highly inconsistent, if enterprise standards are not strictly enforced. There will be inconsistencies such as, one process model generic and high level; whereas another one is too detailed. Considering the iterative and long term nature of process modeling and improvement initiatives, it is important to ensure that consistent notation, semantics and standards (such as BPMN) are followed across all business process models. 3.0 Risks in Analysis Phase: 3.1 Incorrect use of tools & techniques: It is very important to use right techniques for the problem by choosing the right tool. For example in customer care center process design, where you are required to use dynamic analysis techniques such as process simulation, you cannot use a static analysis technique to arrive at conclusions. One can consider using a simulation tool that supports Erlang algorithms. It is recommended that the internal QA team always take a lead in thoroughly scrutinizing the analysis work and its appropriateness to the specific process scenarios. 3.2 Use of incorrect data in analysis & simulation: It is obvious that if we input wrong data into analysis, we get wrong results. Most often, due to time constraints or other reasons the input data collected for analysis is not thoroughly scrutinized before using it for analysis. All process owners and other practitioners such as operations team are required to carefully review the input data that was fed into the models. Only after everyone is satisfied with the input data and accuracy of models, the results can be trust worthy. 3.3 Incomplete / shallow analysis: Often the to-be process recommendations are not adequately challenged which can make the faulty recommendations to pass to the implementation phase. 4

5 The business viability, customer friendliness and implementation feasibility of recommendations have to be always validated before they are accepted and taken up for implementation. It is also very much necessary to validate candidate recommendations for their alignment with organization s vision and strategy. If they are not aligned, analyze the risks involved before going for final selection. 4.0 Risks in Implementation & Monitoring Phases: 4.1 Poor Change Management Strategy: While implementing the proposed to-be processes, one key aspect that is often overlooked is the change management strategy. This includes carefully strategizing about all the three aspects of the new solution (People, Product / System and Process aspects). It is recommended to establish a dedicated change management team to strategize and implement the change management strategy. 4.2 Failure in gaining acceptance of new processes: One critical aspect that should not be overlooked when implementing new processes is the social acceptance. Even if new processes are implemented well, they are bound to fail, if necessary acceptance is not obtained from the practitioners. During implementation phase, it is recommended for the project team to communicate effectively to all process practitioners about the new processes and gain their acceptance. 4.3 Design time KPIs not effective at runtime: Many times, the process design time KPIs (Key Performance Indicators) may not prove to be effective way of representing process performance at runtime after implementation. If this is the case, then it becomes very difficult to prove that the new processes are any better than the old ones. Post implementation, evaluate the effectiveness of KPIs from time to time and ensure that they truly reflect the process performance. Summary - Critical check points The following paragraphs summarize some important checks that need to be planned well in advance during process improvement projects. Checks for avoiding Planning Risks : Realistic project plan that includes adequate buffer Right composition of team with people from different backgrounds Alignment of project goals with business vision Obtaining top level support and communication to all project stakeholders Checks for avoiding Discovery & Modeling Risks : Active participation and adherence to project charter by all process owners / practitioners Validation of process models from accuracy and completeness perspectives Fitment of the chosen modeling & analysis tools in the enterprise IT product landscape Consistency and standards adherence among process models Checks for avoiding Analysis Risks : Appropriateness of tools and techniques used for analysis Accuracy of input data that was fed into the analysis Completeness of analysis in all possible scenarios Business viability and Implementation feasibility of to-be designs Checks for avoiding Implementation & Monitoring Risks : Effective change management strategy 5

6 Gaining social acceptance of new processes by all practitioners Evaluate the effectiveness of KPIs from time to time Conclusion In order to be successful in process improvement initiatives, it is important to plan carefully to avoid common risks. Risk management plan has to be prepared upfront. Considering the iterative and long term nature of these initiatives, organizations have to think upfront and develop checks and balances to be able to effectively deal with such risks. Organizations have to train their internal process stakeholders and also effectively leverage the expertise of external consultants to ensure that the project has a clear risk mitigation strategy to avoid these common pitfalls. Acknowledgements We would like to thank Dr. Udaya Bhaskar Vemulapati, General Manager, Wipro Technologies for giving us the encouragement and support in creating this article. About the Authors Chandra Sekhar Ramaraju (Chandra), PMP is a Senior Consultant in the BPM Consulting Practice of Wipro Technologies, Hyderabad, India. He holds a Masters degree from IIT Madras and has been working with Wipro Technologies for about 10 years. He can be reached at chandra.ramaraju@wipro.com Venugopal Juturu (Venu) is a Senior Consultant in the BPM Consulting Practice of Wipro Technologies, Hyderabad, India. He holds a Masters degree from Hyderabad Central University and has been working with Wipro Technologies for about 13 years. He can be reached at venugopal.juturu@wipro,com Disclaimer The views expressed in this article/presentation are that of authors and Wipro does not subscribe to the substance, veracity or truthfulness of the said opinion 6