developing world class process maps

proprietary and confidentialfor more information please visit www.majoroakconsulting.com

Developing World Class Process Maps

May 22, 2013

The Institute of Internal AuditorsDetroit Chapter

2proprietary and confidentialfor more information please visit www.majoroakconsulting.com

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BiosAdam Golden

Co-Founder and Principal of Major Oak Consulting, a boutique Management Consulting firmFormer Internal Auditor at D&B20+ years Process Excellence CFO Magazine winner of “REACH” award for Outstanding Reengineering AchievementCo-Chair of the APA’s Strategic Payroll Leadership Task Force (SPLTF) Best Practices Subcommittee

Process Geek

Keith Fournier, MA, MBA, PMPSenior Management Consultant – CIO Advisory ServicesFormer “Transformation” CIOManaged tens of millions of dollars of technology projectsReceived National Recognitions for ERP, Document Management and Geographic Information Systems implementations20+ years (10 years consulting)Specialize in IT strategy, planning, acquisition, and implementationProject Management Geek


Process Mapping – Background

Enterprise Mapping

Current State Mapping and Analysis

Capability Requirements

Future State Process Mapping

Best Practices / Wrap-up

Q&A

Agenda


Definition: A process is a series of steps or actions performed to achieve a specific purpose

Processes are the foundation of all businesses, yet nearly all processes within organizations are undocumented

What is a Business Process?


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

Customer Service Dept

Customers Experience a Company’s Processes, Not its Functions

Sales / Marketing

Accounts / Credit Dept

Production / Service Delivery

FUNCTIONS

PRO

CESS

ES

“Receive & Process Account Application”

“Onboard New Customer”

“Bill & Collect From Customers”

“Handle Customer Complaint”

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

not a process


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 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 of issues/problems, build teams, produce brilliant ideas and unlock the potential in your business.

So when do you map your business processes?


Polling Question #1

Are you are involved in projects outside of internal audit reviews? A) Yes, Reengineering/Improvement programsB) Yes, Systems implementationsC) Yes, Merger & Acquisition (M&A) integrationsD) Yes, Sarbanes-Oxley/Compliance/internal controls awarenessE) No


Mapping processes enables organizations to:

Understand what the process really is…− Detailed information of what is currently happening, who does it, predictability− Determine “real process” vs “perceived process”

Measure the effectiveness and efficiency of the process

Ensure the proper controls are in place

Understand 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

Why map your business processes?


It seems there are endless ways map a process. The Major Oak methodology for process mapping is thorough, complete and valuable to uncover current state issues and define future state opportunities.

There are many ways to document a process

Process Mapping Examples


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

Before beginning the process mapping journey, it is important not to immediately rush into the detail of process maps. Process mapping typically takes place across four phases.

Enterprise Process Map

Enterprise Overview


Data Analysis

Current State Mapping

Current State Process

Future State Design

Future State Process


Future Directions

Phase 2 Phase 3 Phase 4Phase 1


An Enterprise Process Map provides context and scope for your processes

An Enterprise Process Map critically provides context (i.e. interfaces with other processes), as well as scope for processes (i.e. where the processes start and end)

Note: Boxes inside the shaded box

represent internal processes and boxes

outside represent external parties.

Enterprise Process Map (example only)


Polling Question #2

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


Each box on the Enterprise Process Map represents an individual process

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


Process Map


Polling Question #3

Have you ever built an enterprise map before? A) YesB) No



Enterprise Overview


Data Analysis



Future State Design



Future Directions

Before beginning your process mapping journey, it is important not to immediately rush into the detail of process maps. Process mapping typically takes place across four phases.

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

Phase 1 Phase 2 Phase 3 Phase 4


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

How do you begin mapping the current state?

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. What systems are used?


Tools to capture process information and gain an understanding of the current state include:

Existing documentation: always leverage any process documentation that already exists

Interviews: one-on-one interviews with individuals who are managing, as well as performing the process

Observations / Walkthroughs: watching a process or individual in action – can be transaction specific

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

DILOs (“Day In The Life Of”): shadowing individuals for a full day to experience first had how they handle the process

There are many ways to gather data for the current state process map

Conduct Interviews / Observe Processes

Tip: Use a mixture of these techniques


The process mapping workshop should be a fun and interactive experience

Goal: To attain a clear, agreed upon depiction of the current state processDuration: Depends on the complexity of the process, but typically schedule a half day if under 8 attendees and full day if 8 or more attendeesAttendees: Include anyone that touches the process in the workshopInputters 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 to ensure everyone is involved. The facilitator should be a skilled facilitator with process mapping experience– 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 aboutwhat really happens in the current state


Workshops: Process Mapping is a science, but don’t forget about the art

Process 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.


Workshop ActivitiesHave participants describe the process steps

Ask the group for clarifications or comments

Highlight areas of discussion

Ask about the volumes / significance

Wrap up and Post Workshop ActivitiesThank everyone

Roll up your draft map (brown “butcher” paper)

Capture key takeaways or parking lot items

Start drafting your current state process map

Follow up on any open items or questions

Key Workshop Activities / Post Workshop Activities

The true goal of the workshop is to identify

all of the process steps – you’ll have time for

validation and quantification later

Tip: Write on Post-its or brown paper:BU differencesProcess exceptionsManual stepsRe-workWhere errors occurMateriality


It 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:

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 peopleYou can see the hand-off points and where things could fall through the cracks

A process map without swim lanes is like a bike without pedals

Tip: Setup a swimlane for every process

participant


Key elements of your process map should include:

Timeframes

Customer Service Team

Roles ActivitiesCall client and

schedule kick off meeting

(within 24 hours)

Key Notes

Tip: Don’t cross connector lines

that link process steps

Permanent Temporary

Sub-Processes highlighted

Tip: Include multiple views of timeline /

cycle time


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:

Validate the map with the core functional team

Identify manual tasks that can be automated

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– Process loops / rework

A current state map is the basis for uncovering process issues and opportunities for improvement

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


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

ActivitiesTime (hrs) Check

Trans-port

Opera-tion Wait Storage

Email request in inbox 4 Prepare quote request 2 Send to manager for review 0.5 Review quote for errors 1 Take paper back to originator 1 Prepare paperwork for client 2 Follow up client 4 Submit order 0.5 Await confirmation of order 1 File confirmation 0.5

No. of tasks 10 1 2 3 3 1Cycle time (hrs) 16.5 1 1.5 4.5 9 0.5

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

67% of time spent on NVA activities


Process Analysis Example: Resource variation

Associate 5

Associate 4

Associate 3

Associate 2

Associate 1

00:00:00 00:02:52 00:05:45 00:08:38 00:11:31

Open/View Verification Process Activity End

Duration (hh:mm:ss)

Variance due to:System navigation &

processing techniques


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

Issues / Opportunities

Improvement Projects

Best Practices

Advanced Technique: Color code activity boxes to highlight activity sub-characteristics (manual,

fax, regulatory, etc.)

Key Volumes


Sample Completed Process Map


Sample Process Map


Current State Mapping – Using the Output

Finalize the map

Identify improvement projects

Discuss opportunities with team and management

Prioritize improvement projects and kickoff next steps

Tip: Use the final current state map as a training tool

for new employees



Enterprise Overview


Data Analysis



Future State Design



Future Directions



Capability Requirements must be determined before mapping your Future State Processes

Before mapping future state processes, it is important to understand the

future 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 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 them

Operational Capability

Requirements

Customer Expectations

Organization’s Expectations

Customer Contact / Key Interaction Points

1. Process A2. Process B3. Process C4. Process D5. ...6. …n. Process ‘n’



Enterprise Overview


Data Analysis



Future State Design



Future Directions



Future state mapping transforms from what actually happens to what should happen

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

Future State Process Mapping

1. Who should perform each task?2. What should be the specific tasks?3. What should be the decision points?4. Who is the customer(s)?5. Who are the stakeholders?6. How should we resolve the issues with the

current process?


Future state maps typically begin with the current state, but starting with a blank page can be powerful

Start your ‘ideal’ state process map with one or all of the following techniques:

Use your current state process maps and analysis to identify non-value add steps

Re-sequence / amend the existing activities to streamline the process – 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 parties

Remove non-value add steps


Ultimately, you’ll have a future state process map

Future State

Current State

Key Differences: Removed non value-add

(NVA) activities Automated steps Consolidated activities Work moved to the

appropriate role


Wrap Up / Best Practices


Keep these Best Practices in mind when mapping within 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

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 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

Adam GoldenPrincipal

Major Oak Consulting, [email protected]

973.701.0872

Thank You!

Keith FournierSenior Management Consultant

Major Oak Consulting, [email protected]

419.344.6504

mailto:[email protected]

mailto:[email protected]

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