Brainwaves, the official e-newsletter of the Business Performance Management (BPM) Forum, is distributed quarterly to Forum members, content requestors and e-newsletter subscribers. Our objectives for Brainwaves are to provide relevant information, stimulate new ideas and help improve your decision-making regarding business performance management initiatives, strategies and execution. Let us know how we can improve this publication to help you achieve your goals.

In this edition of Brainwaves, we’re going to update you on some exciting developments with the Software Economics Council (SECO) initiative fielded by the BPM Forum. Then, we’ll share our two Member Mindset articles, with Pothina Chakravarthy covering his 7 habits for highly effective performance management, followed by Greg Sieber with his recommendations on how to create business performance results using Six Sigma and a process portfolio management point of view.

Don’t forget to take a few minutes to complete the new BPM Forum Pulse Poll and Executive Survey below. The poll will only take seconds and you’ll see immediate results. And the survey gives you an opportunity to contribute to our BPM Forum “Remote Revolution” thought leadership initiative, sponsored by media partners including The Economist, eChannelLine, Executive Decision and Tech Confidential. Enjoy!

Regards,

Erick Mott
Editor
www.bpmforum.org

Software Economics Council (SECO): The BPM Forum announced the SECO Leadership Committee on June 14, 2023 – including innovators and executives from Adobe Systems, Aztec Software, Azul Systems, BEA Systems, Borland Software, BroadVision, Cognizant, Deloitte, Dendrite International, EDS, IBM, Informatica, Leverage Software, Mercury, Novell, Oracle, Salesforce.com, Santéon, SAP, Siebel Systems and Sybase . Learn more about SECO news and developments. 

Best Practices Lens: The 7 Habits of Highly Effective Performance Management

By Pothina Chakravarthy

To ensure your business performance management initiatives drive positive change for your business, it is crucial to have a performance management (PM) solution powered by the right processes and technologies. Based on customer experience, I’ve determined that there are seven core characteristics that drive highly effective performance management –- characteristics that, when combined, are able to rapidly create value-driven solutions capable of allowing companies to make cross-functional decisions that help achieve corporate goals.  It is important to understand how these technologies and processes interrelate in order to achieve the greatest return from your PM initiatives.  This article will examine the relationships between critical enterprise applications, PM and business goals, and share best practices for optimizing PM results while minimizing total cost of ownership.

Habit One: Scalability – Both in Solution Complexity and Data Size
Ensure that your solution scales in terms of data size managed and overall complexity. Sourcing finer grained and larger amounts of data is a start. Building with the right solution platform and architecture is critical. You don’t want to invest in more time, money and people than needed, but you don’t want to replace your applications every third year, or be forced into replacement because the solution won’t handle the math, the relationships or the volumes. This means you can’t invest in a traditional language based platform; you have to invest in platforms that can build iteratively and interactively, with abstract metadata management capabilities to reduce or eliminate the risk of sophistication obsolescence.

As an example, there is a company who wanted to deal with daily and weekly point of sale data, and initially thought a single database and solution was required. After analysis, I helped recommend two databases and two solutions, each of which could be viewed in the same workspace and could, if needed, be combined in a third solution space with no movement of data. This approach avoided very large aggregate processing and enabled the daily analysis to be focused on exactly that, while permitting the weekly trend analysis to continue as before.

Habit Two: Best of Breed Data Management
Use best of breed data management systems, likely relational databases, which will ensure that you can deliver on the scale data volumes and frequencies that are required. Compromising on the data layer won’t provide the appropriate support when needed. If you acquire a data management system from one of the major vendors, you’ll be accessing very large pools of talent in addition to highly productive software. Why is this an important habit? Because so many companies still rely on extracts from a database into a portable data management system, and eventually to spreadsheets. This data processing activity is not an appropriate analyst or end user task, and is best accomplished at scale in a robust relational environment, assuming that the platform deployed enables grain to aggregate analysis within the same solution.

Habit Three: Closed-Loop Decision Management
Ideally, users should be able to read results and take action in the same environment. The solution must serve up business intelligence, which means that the perspective and content are present, as well as the ability to act on such. Integrated write, including inserts and updates, must be enabled, including the ability to write to the operational applications that govern and enable your organization. Some term this capability “closed-loop decision management,” but in effect, it is the combination of OLTP and OLAP in a single integrated environment that makes the overall solution effective. To illustrate this point, there is a company that took a twenty five person organization down to eight, while reducing the cycle time from six weeks to one, and increasing the level of detail managed by a factor of four. This was made possible by a solution that provided all of the required information in a single system where the user could efficiently act on the information.

Habit Four: Code-Free Development Environment
Your solutions have to be able to reuse data and other available applications. In order to achieve this goal, you’ll need to stay away from language-based solutions, and instead move into the composite application capabilities that code-free development environments enable. There is no reason to reinvent when you can reuse as successfully, and no reason at all to code if you can leverage the code built by others. For example, in some solutions there can be a zero investment in language-dependent delivery, with the majority of the code-free solution being built declaratively with reasonably intuitive mathematical relationships. Further, in some solutions existing calculators or third party applications can be seamlessly integrated into the new solution, providing proven capability and a lower cost of ownership with zero latency.

Habit Five: Read, Write and Versioning Capabilities
If your solutions are to serve the people-process-spreadsheet user base, they will need to interactively read and write. In addition, these solutions will need to support unlimited ad-hoc “what-if” scenarios within a versioning system. You can’t accomplish this with separate and unequal systems that pass information from one process to another. The time taken for such exchanges, the duplicate metadata and solution ‘code’ will make the end solution less interactive and usable than required, leading to under-use and a tendency to want to replace the solution since users could be led to believe it isn’t well suited for their needs. On the other hand, you can select a platform that enables you to build a solution that provides unlimited ad-hoc “what-if” analysis across multiple versions, either in a personal or a shared sandbox. When a decision can or should be made, the same environment supports direct writes from the same space that enables reads.

Habit Six : Unlimited Dimensionality with Unlimited Hierarchies
The business is constantly changing. Solutions traditionally take months or years to change. You can alter that mismatch, but to do so you’ll need to have a platform that enables unlimited dimensionality with unlimited numbers of hierarchies (and lists) per dimension. As noted, business requirements change, and the classic death spiral of long delivery times coupled with short requirement lives, leads solutions to be partial answers for old problems, rather than complete answers for new problems. I’ve seen organizations move from requirements through implementation of enterprise solutions within 120 days, making iterative adjustments to the solution as they proceed. The resulting solution better meets their evolving requirements – and in fact they have been able to adaptively change over the solution’s lifecycle.

Habit Seven: Business Rules-Based Architecture, on Demand
Ideally, your solution will be based on business rules. Not just entity attribute relationship rules, but formulaic and relationship rules. To the extent that these rules can be updated on demand in real time, with no compilation, the better, because your solution will enable you to support the changing demands of your users. A solution for a manufacturer, for example, went through three grain level process changes in six weeks, yet the solution was delivered from requirements to go live within 90 days – all because the platform enabled the solution to be iteratively changed. In an appropriate environment, these changes will not require traditional data, then application and then user interface change. In contrast, business rule-based systems can insulate each layer noted from the other layers, permitting changes to occur in parallel or only in the layer impacted.

Three things are clear for solution teams:

1. You can’t afford not to have a flexible development environment that is as code free as possible. Business requirements change too fast for you to invest in any other platform.
2. You can’t afford to rebuild every solution every two to four years. You have to have adaptive solutions, and the only way you can achieve such is by investing in an appropriate platform.
3. You can’t afford to be persistent to anything but the underlying data, and to do this requires a unique solution paradigm: data, process, methods and results should be flexible and instantly available as changes are made.

Finally, what do these seven habits mean for your business? With the right technological foundation powering performance management, organizations can standardize and automate the high-value decision processes that turn corporate goals into reality – even in today’s constantly evolving business climate. Providing a flexible, interoperable and powerful foundation for building cross-functional PM solutions for decision makers at all levels of an organization helps executives and managers closely align planning and execution activities to consistently realize improved operational and financial results.

The Author: Pothina Chakravarthy, Manager of Analytic Modeling at SymphonyRPM, is an active member of the BPM Forum ( www.bpmforum.org). Pothina is primarily responsible for business and data requirements analysis, proof of concept delivery, application design, tuning and relatedactivities.  He also leads field teams that are delivering analytic solutions with/for OEMs and niche application customers, and manages cross functional projects with internal SymphonyRPM sales, business development and information technology departments. Previously, he was a Business Analyst with Cambridge Technology Partners where he focused on consulting in the CRM space. Pothina earned a Masters Degree in Business Administration from the Indian Institute of Management, Bangalore.

Process Lens: Interview with a Six Sigma Guru

BPM Forum: Can you tell us about your business environment and value proposition?

Mr. Sieber: We typically work with director-level people and executives responsible for analyzing organizations, processes, and then implementing improvements. We create solutions in which the organization’s processes are improved systemically and that continuous improvement through process excellence is part of the very fiber of the organization. This is achieved with an intelligent amount of training. We don’t just apply Six Sigma, we are also very aware of the big picture and the importance of process integration and strategic process management.

For our IT-centric customers, we provide a software system that truly improves their organization. This is so unbelievably obvious, that I am amazed there aren’t more software consultancies hiring Six Sigma Black Belts and making them part of the software development process. If there is one thing I think IT organizations need, it is for process experts to be integrated into the software development lifecycle.

BPM Forum: Who are your typical customers and what problems are they trying to solve?

Mr. Sieber: Our customers are typically medium to large enterprises that suspect they have a process-related problem. We have been very successful in telecommunications sectors and have done a lot of work with provisioning process, especially the processes that happen before and after new equipment is physically installed, such as access approval, inspection, and inventory. We also conduct a number of organizational and product assessments for companies that want to know why their product or process is under-performing in the marketplace.

BPM Forum: Describe your Process Portfolio Management (PPM) concept in a business performance management context.

Mr. Sieber: PPM is all about connecting the highest level objectives to the lowest level tactical attributes and the processes are the conduits that tie it all together. PPM is a point of view for defining the system in terms of processes, the attributes of these processes, and the objectives which these processes are supposed to drive. Then turning that model into a data schema and software architecture with monitoring, measuring, alerting, and reporting such that tactical actions are managed with real time knowledge of their strategic impact, and high level decisions that affect tactical elements are done so with the same understanding of their high level realities.

Processes are the center of PPM

Our PPM concept started about five years ago when I observed a lot of CIOs asking for IT portfolio management applications. My perception, at the time, was this is a bad development: a C-level management tool that defines an organization in terms of technology instead of processes – not a good thing.

BPM Forum: How does PPM relate to business performance management?

Mr. Sieber : It makes business performance management something that can now be significant for everyone in the organization. It takes dashboard components and makes them indicators that can be managed in real-time. It makes it such that decisions at all levels can be made with regard to “strategic opportunity cost”. It makes the strategic impact analysis of a business case, a science rather than a creative writing contest.

BPM Forum: Based on your PPM point of view, what know-how can you share with others?

Mr. Sieber: I would say that if you are going to implement some form of business performance management, “be real.” I have seen meaningless scorecards that address things that are not core to an organization’s mission and do not contain the mechanisms for truly measuring the factors.

BPM Forum: Can you describe a recent lesson learned in the context of business performance management?

Mr. Sieber: We are working with a major corporation, discussing the validity of PPM and whether or not it makes sense for this Fortune 500 organization. There is agreement with them that many leading organizations have successfully implemented manual versions of PPM. For example, Marriott and their key processes and numerous of the Baldrige winners. However, there is a wide array of approaches and none of them seem to cover it from top to bottom, and none are automated very well.

In any industry, leaders will implement competitive strategies and solutions for improving business performance. My concern is that in what appears to be a growing economy — management will back-off on efficiency and improvement initiatives. I believe now is the time to start the hard work of implementing true organizational change, for turning companies on their side, defining them in terms of process, and building end-to-end systems that can be used to drive a performance management system. Business improvement should be an ongoing initiative, not a quick fix when the economy is playing havoc on revenues and profitability, or when compliance pressures like Sarbanes-Oxley dictate a response.

BPM Forum : Can you recommend Six Sigma resources?

Mr. Sieber: I like to focus on results-oriented information that can be used as building blocks for meaningful performance management, so I often reference ASQ, ISSSP, and iSixSigma. There is also some useful information on our web site at: http://www.6sigmatech.com .

BPM Forum: What are your parting words of advice?

Mr. Sieber: Consider these tips:

• Have a master plan that is based on reality and defines a clear future for performance management through process excellence.
• Strategic performance management is made real by implementation of process excellence such as Six Sigma. If you are going to run your organization based on some performance dashboard, make sure the information is correct with methods such as Six Sigma.
• Take logical steps, especially in the early stages and don’t create new problems in place of the old ones.
• Prioritize improvement initiatives and make sure they are conducted with eyes on the goals of the master plan.
• Don’t get into buzz words. I find the basic concepts taught by Juran and Deming are 80 percent of what you need. For example, reference Juran’s trilogy in every thing you do; remember PDCA and the Deming Production System.
• Don’t try to cram your functional silos into a performance dashboard.
• Don’t go nuts with expensive training. Most organizations can start with hiring experts either as employees or consultants, training a handful, and then doing some work while defining the methodology and tools that will work for the organization.

Remote Revolution: Take a few minutes to complete our survey and let us know if you would like to receive the final report at no cost. Why? Dependence on remote connectivity and reliable, secure access to enterprise data is essential to business continuity, performance and competitive advantage. Today’s digital workforce is increasingly distributed, broadband-driven, Internet-centric and critically reliant on the integrity and availability of software applications, compute systems, web services, and round-the-clock technical support and troubleshooting.

SoftSummit 2005 marks the debut of the annual Summit Awards ™ which will honor thought leaders, from both software companies and enterprise IT organizations, who are setting new standards in maximizing the lifetime value of their software achieved through software value management strategies including software licensing, pricing, purchasing, updating and management. The event will take place October 10 – 11, 2005 in Santa Clara, CA with participation from BPM Forum members.

We’re pleased to announce media relationships with Executive Decision and Tech Confidential magazines. Both publications provide interesting and relevant content for senior executives in business, finance, operations, marketing, technology and innovation roles. Watch for BPM Forum editorial content, research initiatives and news to appear in these publications as well.

The BPM Forum encourages its members and web site guests to share articles or white papers that relate to current issues and developments in corporate governance, compliance (Sarbanes-Oxley, Six Sigma, etc.) and topics associated with business performance management strategies, execution and results. Approved content will appear on the BPM Forum’s web site and/or will be featured in an upcoming issue of Brainwaves.

If you would like to submit an article or recommend one, please follow these guidelines:

• Business performance management focus: people, process, policy, technology, methodologies, best practices and business innovation
• Pictures, illustrations and charts to support your submission are welcome
• Include a brief biography with relevant credentials
• Maximum 850 words

Email content submissions to: lmiller@globalfluency.com

Email this issue of Brainwaves to senior executives in finance, operations, technology and business innovation roles who are interested in or expert with business performance and sustainability. Subscribe to Brainwaves at: http://www.bpmforum.org/newsletter_form.htm