Developing World Class Process Maps - Chapters Site · Detroit Chapter Developing World Class...

Th I tit t f I t l A ditThe Institute of Internal AuditorsDetroit Chapter

Developing World Class Process Maps

M 22 2013May 22, 2013

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BiosAdam Golden

Co‐Founder and Principal of Keith Fournier, MA, MBA, PMPSenior Management Consultant –

Major Oak Consulting, a boutique Management Consulting firmFormer Internal Auditor at D&B

CIO Advisory ServicesFormer “Transformation” CIOManaged tens of millions of

20+ years Process Excellence CFO Magazine winner of “REACH” award for Outstanding

a aged te s o o s odollars of technology projectsReceived National Recognitions for ERP, Document Managementaward for Outstanding

Reengineering AchievementCo‐Chair of the APA’s Strategic Payroll Leadership Task Force

for ERP, Document Management and Geographic Information Systems implementations20+ years (10 years consulting)Payroll Leadership Task Force

(SPLTF) Best Practices Subcommittee

Process Geek

20+ years (10 years consulting)Specialize in IT strategy, planning, acquisition, and implementationProject Management Geek


Process Geek Project Management Geek

Agenda

Process Mapping – BackgroundProcess Mapping – Background

Enterprise Mapping

Current State Mapping and Analysis

Capability Requirements

Future State Process Mapping

Best Practices / Wrap‐up/ p p

Q&A


What is a Business Process?

Definition: A process is a series of steps or actionsDefinition: A process is a series of steps or actionsperformed to achieve a specific purpose

Processes are the foundation of all businesses, yetnearly all processes within organizations arey p gundocumented


Customers Experience a Company’s Processes, Not its Functions

Processes are what happen when functions come together to perform a taskIt’s normally poorly designed and executed processes that cause inefficiency and ineffectiveness in organizations not functions

Functions

and ineffectiveness in organizations, not functions

Customer Sales / Accounts / Production /

FUNCTIONSNote: If the name doesn’t include a verb, it’s

probably not a processService Dept Marketing Credit Dept Service Delivery

“Receive & Process Account Application”

ROCESSES “Onboard New

Customer”

“Bill & C ll FPR “Bill & Collect From Customers”

“Handle Customer C l i ”


Complaint”

So when do you map your business processes?

Organizations map their process for specific “events” such as:

Reengineering / Improvement programs– Reduce costs, remove waste, increase quality, increase efficiency, improve

employee satisfaction, improve customer satisfaction, etc.

Systems implementationsSystems implementations

Merger & Acquisition (M&A) integrations

Sarbanes‐Oxley / Compliance / internal controls awareness

However, almost anytime is the right time to map your business processes.Process mapping is a useful tool to develop a shared understanding ofissues/problems, build teams, produce brilliant ideas and unlock the potentialin your business.


Polling Question #1

Are you are involved in projects outside of internal audit reviews?audit reviews? A) Yes, Reengineering/Improvement programs

B) Yes Systems implementationsB) Yes, Systems implementations

C) Yes, Merger & Acquisition (M&A) integrations

D) Y S b O l /C li /i t l t lD) Yes, Sarbanes‐Oxley/Compliance/internal controls awareness

E) No


Whymap your business processes?

Mapping processes enables organizations to:

Understand what the process really is…Understand what the process really is…− Detailed information of what is currently happening, who does it, predictability

− Determine “real process” vs “perceived process”

M th ff ti d ffi i f thMeasure the effectiveness and efficiency of the process

Ensure the proper controls are in place

Understand where waste and inefficiency existUnderstand where waste and inefficiency exist− Delays, unnecessary handoffs, duplication of effort, etc

− Impact on the customer or partners

Develop new improved processes− Reduce or eliminate inefficiency

− Improve the customer experience


− Clarify roles and responsibilities

There are many ways to document a process

It seems there are endless ways map a process. The Major Oak methodologyfor process mapping is thorough, complete and valuable to uncover currentt t i d d fi f t t t t itistate issues and define future state opportunities.


Process Mapping Examples

Process mapping involves a series of steps, from confirming process scope to future state designconfirming process scope to future state design

Before beginning the process mapping journey, it is important not toimmediately rush into the detail of process maps. Process mappingtypically takes place across four phasestypically takes place across four phases.

Enterprise Overview

CapabilityRequirements

Current State Mapping

Future State Design

Phase 2 Phase 3 Phase 4Phase 1

qpp g g

Enterprise Process Map

Current State Process

Future State Process

Future Directions

Data Analysis Capability


Data Analysis Capability Requirements

An Enterprise Process Map provides context and scope for your processesfor your processes

An Enterprise Process Map critically provides context (i.e. interfaces withother processes), as well as scope for processes (i.e. where the processes

d d)start and end)Note: Boxes inside the shaded box

represent internal processes and boxesprocesses and boxes outside represent external parties.


Enterprise Process Map (example only)

Polling Question #2

What tool do you use to map processes?A) VisioA) VisioB) PowerPointC) iGrafixC) iGrafixD) Other


Each box on the Enterprise Process Map represents an individual processindividual process

A process map presents the detailed activities of an individual process,who performs them, how they interact and which systems are used

Enterprise Process MapEnterprise Process Map


Process Map

Polling Question #3

Have you ever built an enterprise map before?

A) Yes

B) No


Process mapping involves a series of steps, from confirming process scope to future state designBefore beginning your process mapping journey, it is important not toimmediately rush into the detail of process maps. Process mapping typicallytakes place across four phases

g p p g

Enterprise Overview

CapabilityRequirements


Future State Design

takes place across four phases.

Phase 1 Phase 2 Phase 3 Phase 4

Overview RequirementsMapping Design

Enterprise Process Map Current State Process Future State ProcessFuture Directions




How do you begin mapping the current state?

A current state map focuses on what ACTUALLY happens in a process. Processmapping starts with an understanding of the process details by asking thefollowing questions:

Current State Process Mapping

1. What transactions are part of the process?

2. What are the specific tasks?

3. Who performs each task?

4. Who is the customer(s)?

5. Are there other stakeholders?

6. What are the decision points?

7 Wh t t d?


7. What systems are used?

There are many ways to gather data for the current state process mapTools to capture process information and gain an understanding of the current state include:

E i i d i l l

p pTip: Use a mixture of these techniques

Existing documentation: always leverage any processdocumentation that already exists

Interviews: one‐on‐one interviews with individuals whoare managing, as well as performing the process

Observations / Walkthroughs: watching a process orindividual in action – can be transaction specificindividual in action can be transaction specific

Workshops: targeted working sessions with a group ofpeople involved in performing the process

Conduct Interviews / Observe Processes

DILOs (“Day In The Life Of”): shadowing individuals for afull day to experience first had how they handle theprocess


The process mapping workshop should be a fun and interactive experienceinteractive experience

Goal: To attain a clear, agreed upon depiction of the current state processDuration: Depends on the complexity of the process, but typicallyschedule a half day if under 8 attendees and full day if 8 or moreschedule a half day if under 8 attendees and full day if 8 or moreattendeesAttendees: Include anyone that touches the process in the workshopInputters to the processInputters to the process– Process stakeholders – at least one person per stakeholder group– Individuals managing and performing the detailed process– Receivers of the output of the process (internal customers)Facilitator: The primary role of the facilitator is to engage the attendees toensure everyone is involved. The facilitator should be a skilled facilitatorwith process mapping experience

It’ b t h th f ilit t i t t d t th b i d– It’s best when the facilitator is not connected to the process being mapped –so they remain unbiased by the discussion

In our experience, there is always healthy discussion about


what really happens in the current state

Workshops: Process Mapping is a science, but don’t forget about the artforget about the artProcess mapping is both a science and an art. The science is knowing the make‐up of a process and being able to distill down to each specific task and decision point. The art is the creative process of how to draw the process on paper to make it come to life.


Key Workshop Activities / Post Workshop Activities

Workshop Activities

Have participants describe the process steps

Tip: Write on Post‐its or brown paper:BU differences

Ask the group for clarifications or comments

Highlight areas of discussion

Process exceptionsManual stepsRe‐workWhere errors occur

Ask about the volumes / significance

Wrap up and Post Workshop Activities

Materiality

Thank everyone

Roll up your draft map (brown “butcher” paper)The true goal of the

workshop is to identify all of the process steps –

Capture key takeaways or parking lot items

Start drafting your current state process map

all of the process steps you’ll have time for

validation and quantification later


Follow up on any open items or questions

A process map without swim lanes is like a bike without pedalsIt is extremely difficult, maybe impossible, to improve a process if you don’t know who is responsible for performing the activity. The benefits of swim lanes are:

p

lanes are:You know who is responsible for each step in the processYou can see how many people actually touch the processYou can see back and forths between the same people

Tip: Setup a swimlane for every process participantYou can see back and forths between the same people

You can see the hand‐off points and where things could fall through the cracks

participant


Key elements of your process map should include:

Roles Activities

Sub‐Processes highlighted

Tip: Don’t cross

g g

connector lines that link process

steps

i f

Key NotesPermanent Temporary

Tip: Include multiple views of timeline /

cycle time Timeframescycle time


A current state map is the basis for uncovering process issues and opportunities for improvement Once the current state has been mapped, it’s time to validate, analyze and add supporting detail to the map. Examples of current state analysis include:

l d h h h f l

pp p

Ti R i th d ftValidate the map with the core functional team

Identify manual tasks that can be automated

Identify any task that can be eliminated (non‐value added)

Tip: Review the draft map with core team to validate you got it right

Identify any task that can be eliminated (non value added)

Quantification of activities, tasks and transactions– Cycle times– Volumes– Defects– Handoffs– Wait times– Costs– Timeframes

l / k


– Process loops / rework

Process Analysis can take numerous forms. Here’s a few examples: Activity analysisp y y

ActivitiesTime (hrs) Check

Trans‐port

Opera‐tion Wait Storage

Email request in inbox 4Email request in inbox 4 Prepare quote request 2 Send to manager for review 0.5 Review quote for errors 1

67% of time spent on NVA activities Review quote for errors 1

Take paper back to originator 1 Prepare paperwork for client 2 Follow up client 4 Follow up client 4 Submit order 0.5 Await confirmation of order 1

File confirmation 0 5File confirmation 0.5 No. of tasks 10 1 2 3 3 1

Cycle time (hrs) 16.5 1 1.5 4.5 9 0.5

% 100% 6% 9% 27% 55% 3%


% 100% 6% 9% 27% 55% 3%

Process Analysis Example: Resource variation

Open/View Verification Process Activity End

Associate 1Variance due to:

System navigation & processing techniques

Associate 3

Associate 2

A i t 5

Associate 4

00:00:00 00:02:53 00:05:46 00:08:38 00:11:31

Associate 5


Duration (hh:mm:ss)

Now annotate the map, highlighting issues, opportunities best practices and potential projectsopportunities, best practices and potential projects

Improvement Projects Key Volumes

Ad d T h iAdvanced Technique: Color code activity boxes to highlight activity sub‐characteristics (manual, f l t t )

Issues / OpportunitiesBest Practices

fax, regulatory, etc.)

Issues / Opportunities


Sample Completed Process Map


Sample Process Map


Current State Mapping – Using the Output

Finalize the mapTip: Use the final current state map as a training tool Finalize the map

Identify improvement projects

for new employees

Discuss opportunities with team and management

Prioritize improvement projects and kickoff next steps


Enterprise Overview



Future State Design






Future Directions



Capability Requirements must be determined before mapping your Future State Processesmapping your Future State ProcessesBefore mapping future state processes, it is important to understand the

future direction of the business and obtain consensus from the Managementfuture direction of the business and obtain consensus from the Management

Team regarding their expectations and business capabilities required to

support the business in the future.

Key Questions:

What capabilities do they have today?

What capabilities do they need for the future state?

What process people and technologies are needed?What process, people and technologies are needed?

What are the customer expectations at each key point of interaction with

the business?


Determine expectations at each customer interaction point and the capabilities required to meet thempoint and the capabilities required to meet them

Customer Contact /

Customer E t ti

Customer Contact / Key Interaction Points

1. Process A

Operational Capability

Requirements

Expectations2. Process B3. Process C4. Process D Requirements

Organization’s Expectations

5. ...6. …n. Process ‘n’


Enterprise Overview



Future State Design






Future Directions



Future state mapping transforms from what actuallyhappens to what should happenhappens to what should happen

A future state map focuses on what SHOULD happen in a process byasking the following questions:

Future State Process Mapping

1 Who should perform each task?1. Who should perform each task?

2. What should be the specific tasks?

3 What should be the decision points?3. What should be the decision points?

4. Who is the customer(s)?

5 Who are the stakeholders?5. Who are the stakeholders?

6. How should we resolve the issues with the current process?


p

Future state maps typically begin with the current state but starting with a blank page can be powerfulstate, but starting with a blank page can be powerfulStart your ‘ideal’ state process map with one or all of the followingtechniques:

Use your current state process maps and analysis to identify non‐valueadd steps

Re‐sequence / amend the existing activities to streamline the processConsolidate activities to one role where possible to minimize hand offs– Consolidate activities to one role where possible to minimize hand‐offs

Brainstorm fresh ideas from scratch (sticky notes!)


Identifying non‐value add steps in the current state should involve all the relevant partiesshould involve all the relevant parties

Remove non‐value add stepsadd steps


Ultimately, you’ll have a future state process map

Current State

Key Differences: Removed non value add

F S

Removed non value‐add (NVA) activities

Automated steps Consolidated activitiesFuture State Consolidated activities Work moved to the appropriate role


Wrap Up / Best Practices


Keep these Best Practices in mind when mapping within your organizationwithin your organization1. The people doing the work are the best source of realistic data

– They are the ‘factual’ authorities on that work – treat them with respect To get the ‘real story’ remove “bosses” from room during process mapping– To get the real story , remove bosses from room during process mapping

2. Generalities are the enemy of good process maps ‐ push for specifics

3. Gather data with multiple approaches ‐ explanation and demonstration

4. Quantify as much as possible – quantification = relevance

5. Validate the process map – multiple times if necessary

6. Swim lanes make the map much more relevant

7. Capture process exceptions, but don’t map them

8 Real test is if the process map is vouched for by those doing the work8. Real test is if the process map is vouched for by those doing the work

9. Break the process down into sub‐processes wherever possible

10.The timeline tells a whole story in itself


11.Use flags, notes, colors and other visuals in your process maps

Questions?


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Speaker Information

Thank You!

Adam GoldenPrincipal

Major Oak Consulting, LLC

Keith FournierSenior Management Consultant

Major Oak Consulting, [email protected]

[email protected]

419.344.6504


Developing World Class Process Maps - Chapters Site · Detroit Chapter Developing World Class...

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