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May 12, 2021

iBPM Live - SPEAKER SPOTLIGHT: Measuring Business Processes

Courtesy of Mayo Clinic's Scott Whitmore, below is a transcript of his speaking session on 'Measuring Business Processes' to Build a Thriving Enterprise that took place at iBPM Live Virtual Conference.

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Session Information:

Measuring Business Processes

Measurement is key to understanding the actual and potential performance of business processes. In addition, measurement provides a critical link between process changes and the effects they have on customer experiences and business outcomes. This webcast introduces measurement as a discipline, then dives into common and unique process measures. Participants will learn how to evaluate and create new measures for their unique situations.

- Learn how to link business outcomes to process performance

- Learn the five measures common to all processes

- Learn a more useful form for a business change roadmap

Session Transcript:

Speaker coming directly from Phoenix, Arizona, to our global audience, we have with us today, Scott Whitmire, who is the Vice President of Education for the Association of Business Process Management Professionals, and our Research Supervisor at the Mayo Clinic in Phoenix. Scott, please go ahead and turn on your camera so that the audience can see you. And Scott is a Certified IT architect and an ISR fallow.

Very excited to have you with us, Scott. Very much looking forward to your presentation. Thanks for taking the time to share your insights and expertise with our global audience, today.

Thank you, I'm glad to be here this morning as this morning for me as eight o'clock this morning, and three hours and behind the East Coast now.

And being in Phoenix, Arizona, we don't have daylight savings time, so that changes twice a year. So, it's, it's Kinda just happened in this rather confusing once in a while.

We're going to talk about measuring business processes today.

And it turns out that all processes have five common measures.

But why would you want to measure business processes?

When one of the things you want to do is, is linked to business outcomes, We want to know how to change our business, so that we can achieve business goals. Let's say we want to double revenue in the next five years, Where do we invest first? And why would we do that?

So, we need to link business outcomes to process performance. Because the only thing we can really change as managers are the processes and the people that run them.

And the tools that we use to do that.

Business goals drive strategy, so we set our goals, and that determines our strategy.

So, we want to increase revenue, That means we'll probably have two grow our customers, our current customers, we'll probably have to add new customers, we may have to add new markets, or even a new product line.

And we have to allocate that. And, so, we set goals for each one of those areas, and then, drive that. And then, the people who have to make that happen, to execute that, have to figure that out.

decide whether or not the current processes are adequate.

So, we're looking at the top three perspectives of a strategy map, but I use the strategy bad because it, it very clearly defines the areas of concern and we're looking at the financial, the customer, and the internal process.

The fourth perspective of the strategy, Matt, is what they call learning and growth, Norton and caplin, co learning and growth I call tools and technology because it is the skills, knowledge, and tools that you use to execute your processes. And this is where business capabilities lies on the bottom, bottom to prevent perspective.

So we start with financial goals.

Alice Sell, we say double revenue.

Then in the customer perspective, we say, so what has to happen, whether customers in order to achieve that business goal, what kind of, you know, increase sales, or can we do it organically? Can we just grow organically, or do we need to have new customers?

scottDo we need to steal customers from our competitors because there's a fixed size to the market? Or can we expand the market?

For our internal process perspective, you ask yourself, what do you need to do, what processes need to be in place, and how do they need to be able to perform in terms of capacity and cost structure?

In order to achieve our goals, in the customer perspective, now all we can do here, is enabled them, we can say, our processes are sufficient.

And they perform sufficiently well to achieve that. What we expect to happen in the customer space, but our customers have to co-operate.

And that, so that may not happen in real life.

So, now we look at, what we get out of this, is targets for performance measures. So now, we go into process changes.

We want to focus on structural measures of the process, not the value delivered, because the dye you delivered is dependent upon business activity.

You can have a high performing process that is not currently active because there's no business, and it's not delivering any value at that point, but it still can perform well. So we're talking potential performance, the performance of the structure itself.

It's an inherent ability of a process to deliver value, and depending on how it's exploited.

And the word exploited is, is from Chris Potts. He says that you had these assets, or resources, and processes, and if you don't exploit them, you don't gain anything from them.

So that's the word I use.

You want to select measures that reflect your goals, if your goal is leaning toward productivity, which is input or output oriented use productivity measures, you can, you can then, or you can lean towards efficiency. If you're looking at conservation of uses resources.

Then you always want to measure defects, because that gives you the, it's probably the richest source of information about your processes that you'll ever have.

Now we've been harping on measuring defects for 40 years now and I'm still surprised at how few companies actually measure process defects on a regular basis, want to use the Control Chart to monitor the health of ongoing processes.

Now these differ from operational performance ratios, because an operational performance ratio depends on actual exploitation business activity.

Btog CTASo then any measure that changes because of changes in volume of business is an operational measure.

If it doesn't change because business activity changes, it's probably structural and again a very capable process that isn't used won't generate any measurable values.

So structural performance ratio provides insight into the health and performance of the business organization processes and other structures.

They're based on manageable on an observable characteristics, things you can actually see and touch.

And they focus on inputs or outputs, and our technology, and organizationally agnostic. And this is all from Chris potts's book Recreation. If you've read that trilogy, it's now a four part Villa ..., it's worth the read.

Each one of the three books is probably a four hour read.

And they they go from everything from investing in IT to Enterprise architecture well worth worth the information.

Now business unit leaders are the ones that are ultimately responsible for the processes they use.

Processes are monitored to make sure they stay within performance line.

Parameters and measures depend greatly on the process and the national statistics of the work. Processes generally vary greatly in terms of how long it takes to do something or random variation.

And you can focus on that on the on the non random part and look for trends. And we use a Control Chart to do that.

Here we have a sample of Control Chart, the dash. the dots are the actual observations of process measures, and this happens to be in manufacturing process, where you have the same outcome every time.

And you record the actual result over time, the heavy dashed lines, labeled UCL and L C L, are two standard deviations above and below the mean, which is the Center Line.

Generally, anything that falls within that range, plus or standard deviations, this is random noise, and you don't need to worry about it.

But at that trend line, the dotted line starts to angle up towards one or the other, or down towards the other control limit. Then you may have a change in your process, and you may want to start looking at.

If there's a sudden jump that falls outside that range, you probably want to look at that, too, because that's what's called a, an uncommon or extraordinary cause.

It needs to be looked at.

This is a standard tool that we learned from W Edwards Deming back in the day.

But, again, it's surprising how few people actually use this for everyday business processes.

So let's talk about a sample, like it won't increase net revenue, which is sales minus returned by 20%.

Among other things, we want to increase online orders by 40%, so this is what we expect our customers to do.

We expect them to order more online than they do now.

This requires a 20% increase in our logistics capacity, and we because we know that because of where we're operating now, in terms of current capacity, and a shift in fixed variable cost to lower total cost.

So, we needed to make some changes in how the logistics organization functions, in order to lower its total cost as business increases. And that might mean automation. That's usually what it means, is automation.

So, here are your five common measures, All processes have a capacity, They have an activity cost, or more than one activity costs, typically, They have a cycle time, and the defect rate, and then they have a fixed variable cost mix, or what I call a cost structure.

So, when you hear cost structure, or cost mix, this is typical, we're talking about is the ratio of fixed or variable costs.

Now, we can measure these for every process, no matter what, what it is.

Practical capacity, I take my capacity and activity cost measurements from time driven activity based costing at the back of the envelope method.

Allocating costs to activities, that makes it very easy to analyze processes.

Most processes are executed by people in the end, and people have a fixed capacity for executing, doing work.

Generally, it's, it's measured in minutes per quarter.

You can talk about, wait, there's a standard calculation for that, and there's a maximum sustainable output for other resources.

So if you have a, if you have an automated process, it might be the transactions per minute, in terms of the electronic processing capacity.

Or if you have a manufacturing capability, it's how whatever the bottleneck is in the slowest unit in the manufacturing line, whatever that is, and that is your your capacity.

Variable load can be handled by assigning additional capacity to handle off peak loads or peak load transaction's occasionally.

And we do that kind of thing. All the time. As systems design.

Holliday, retailers do that all the time when they hire people for the holidays.

So we're going to assume a shipping department that employs 28 people, including managers and support staff. These people are the ones that pick and pack and ship load trucks.

They work and average is 20 days per month and are paid 7.5 hours, or $27,000 per quarter.

Each person then spend 75 more minutes per day on breaks, and meetings, on average leaving 49,500 minutes per quarter times 28 people. The department has a capacity of 630,000 minutes per quarter.

Now, minutes per quarter or minutes per month is the normal measure, one of the reasons is, I don't use dollars is because you can change the capacity in dollars by simply changing the budget, which is a manipulation, not an actual change.

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Activity costs.

This is how long it takes to do something.

And we always measure this in minutes, again, because you can change the cost by just changing the budget department without actually changing the process at all.

So, you might have what appears to be an improvement, but you haven't actually changed anything.

And this is the time required to do each activity in the process, and these can be done by direct observation, or you ask a person in the shipping department, how long does it take a packet order, typically?

What are the things that cause it to go longer?

What, what causes variation, things like customs forums or packing fragile items, or hazardous material might take extra time to pack and they can tell you that, so you or you can just observe that directly.

Variations can be handled by estimating the additional time and then adding that up for a particular transaction.

So generating code might add 15 minutes of time process order.

So, if you have to generate a quote on a sales order, for example, that might take extra time, so there's extra paperwork.

And filling out customs forms for an international shipment might take an extra 10 minutes for the order, and then you have add to that, that the 2 or 3 minutes per item that it takes to pick it.

This is an order processing department example. Process, the customer order takes eight minutes.

Customer inquiry takes 44 minutes, and to perform a credit check takes 50 minutes, now, probably no longer valid, because credit checks are pretty much automated these days.

But total customer service time in a period is eight minutes times the number of orders of 44 minutes times the number of inquiries and 50 minutes times the number of credit checks, and these values can be used to estimate resources.

So if you want to know what your capacity for processing orders is, you have a fixed number of minutes.

What's your mix of activities today, and how much, how many orders can you fit into that 630,000 minutes or whatever it is?

To change that, you can say, Well, we're going to do fewer inquiries or we're going to handle fewer credit, do credit checks. Or we're gonna automate credit checks and make that five minutes instead of 50.

So you can change the process to do that and increase your capacity simply by reducing the activity cost of one of the activities.

Cycle time is a classic process measure. It goes back to the days of six Sigma and total quality management.

It's activity time. So the time actually spent working plus wait time, plus delay.

Now, wait time and delay are different.

Wait time is time required for external events, such as drawing, paint, or carrying concrete, or waiting for a regulatory agency to approve something permit maybe or an external customer to provide something.

Delay is: the time spent on the managers and wait for a signature or somebody to somebody else to do an internal approval or the time that the order spends in a queue before it gets tick.

Wait time, Is that something you can manage an unreasonably separate them as because you can manage delay and you can tack delay and try to get work delay out of the system.

Wait time, is that something that you can deal with utter regular basis?

It requires collaboration and co-operation, but it's something that can be managed it just takes longer and it's harder.

Every process creates defects.

The defect rate, which is the Defect instances per opportunities or some power of 10, usually millions of opportunities.

depending on how often the process is executed, is the rate that rate is inherent in the structure of the process in order to change that defect rate, you have to change the process, you have to invest money in the process in order to fix that.

Other attributes of a defect are how much does it cost?

When the end occurs, how much does it cost to fix?

What are the root causes?

one of the things that we do with Effects is do root cause analysis using Pareto charts, where you order the frequency of each root cause by the frequency of occurrence, and attack the the biggest root causes.

The most soon as I was working on a software team, we went from 13 people to 40 people in a period of about a year, trying to reduce R R two week cycle time for change requests.

We got to the point where we're releasing about 100 changes a week. We did a release every week, and we reduced doing about 100 changes a week.

The wait time was still two weeks, because it turned out that I was what people were willing to wait for a change. And the length of the queue just got longer, but it was still two weeks long.

All we discovered was there was a class of error called production incident, which the software crashed, and to the point where it stopped the factor from working until we fixed it.

And we were getting to the point where we were doing about five of those a week.

We looked at root causes of that, we stop everything, and just when did a root cause analysis? Or why are we stopping refactoring?

It turns out that that one change was typically we had cross feed from one program to another.

Screenshot (4)And that when we change one program, often, another program didn't get changed as as necessary.

And we fixed or documentation, and that one change eliminated all of those production problems.

We were down to less than one a month at that point.

And was 50% of the total defects that we're regenerating as a team.

So, one change can have a lot of impact, depending on how frequently it occurs, The defects tell you a lot about your process. We never would have discovered that problem, but it hadn't been for the defect rate.

The number of defects that occur will rise and fall with business activity. So that's an operational measure. The rate, which is per opportunities, is fixed by the process itself.

Now, there are times when the rate will increase as you approach practical capacity, because you start to get stress in the system an error, So, that's a key.

That's a clue that you might be approaching your practical capacity if the rate starts to drift up as you approach a capacity limit.

Again, you can see this on the Control chart it attracted if you track the defect rate, as it was its own control chart.

This gets interesting. This is a fixed variable cost.

Fixed cost are willing to pay to have capacity on hand whether you use it or not you pay the same amount, so that's your, that's the cost of having a factory or the cost of having an IT system.

That automates the process.

They don't change with business activity, variable costs, or what you pay for business activity, and there's total costs are always a mix of the two.

Volume of zero, means you have no variable costs, and all you're paying are fixed costs, but you have some point where as business activity increases, your total costs go up.

Variable costs can be time, services, or materials, so you can have that. You know, how much does it cost to execute a service? For example?

If you're not executing that service at zero, but the fixed costs is having that if you're a plumbing supply or plumbing, or plumbers service, you have to have the plumber on hand. You have to have the tools, you have to have the parks, You have to have the truck, those of your fixed cost.

The variable cost is: how long does it take, and how much time is spent on the call.

The following charts, excuse me. variable cost equals total fixed cost. Total cost minus fixed cost.

So we look at, we plot total cost, and we plot fixed cost. Variable cost is the difference, between lines.

This is the cost model, cost, curve, or cost structure, or other names, for this, so here's a sample cost curve.

And you can see that fixed cost are right around 22 million per year.

As volume increases, variable cost, increase up at it, at a fixed rate, in this case. It's not always a straight line, but it usually is.

If you want to change the cost curve, what you're looking at doing, and this is what I recommend, is a capability roadmap.

You show your current cost curve in the Blue and Green Lines.

And what we're going to say, is we're going to invest X number of dollars to increase the fixed cost, from roughly 24 to roughly 26, or 28, or whatever that number is, but the variable, cost curve is going to be much flatter.

So that, at current capacity, total costs is lower, and as we increase our business, total cost doesn't grow nearly as fast.

one of the long time ago, President at Boeing, ask the question of a senior managers. You know, we pay several hundred million dollars a year for oil and computer service, which at that time was a separate division.

What do we get out of it? And my immediate thought was, well, let's just turn them off and see if we make it through the next payroll.

Well, we also delivered 100,000 planes at your art 400 that year, with 100,000 employees.

The last time they delivered 400 planes, they had 200,000 employees.

So the total cost for the delivery of airplanes was much lower than it was previous the previous time.

And so, by automating more spending more and computing, they were able to lower their variable cost to the point where the total costs were actually less than they had been in the past.

So this is what you talk about when you say changing the cost curve.

And this curve is important when you look at taking on new business.

Another one is, is other capacities. Another one, but you look at the cost curve, you can say, well, you know, how much is it going to cost too?

Operate in that capacity, can we actually afford that.

If we had to hire people to do that, bring on a new factor or something like that.

Can we afford to do that? Whether and is there some other way that we could do that?

So we're looking at change in the cost curve at this point.

Most IT investments, most investments and automation.

Or did you just this, you look at, you invest in automation, which raises your fixed cost, hopefully lowering your variable cost to the point where your total cost drop, or don't go up as fast.

scottAgain, if you start as a business architect, if you start talking in terms of cost curves, and, and capacities, and activity, because people start listening, because this is where they live all the time.

That is the end of my presentation.

I can go back and cover some more details, If that's what you want to have some more, I've got some more slides in here about, some more examples on how to calculate this stuff, but that is the material to cover.

Are there any questions?

Jose, back to you.

Farewells, Scott, Thank you for that deeper dive onto process measurements, and, you know, gaging the health of our processes.

So, unless you want to share other slides, I would ask that you stop sharing the screen to the audience now, and I'll come back on here, and talk about, really, some of the questions that we have from, from the audience.

And let me bring my camera back on and, for those in the audience, some of the questions already have come through.

Keep, keep posting them.

I'm keeping tabs on, on your commentary, and I'll relay the questions, choose Scott, Scott, you know, the, of course, the ultimate, though there are a number of themes that emerged in terms of questions. We have a very, you know, deep audience with Lean six Sigma Master Black Belts, who can probably discuss each one of your slides for the next eight hours and so we're not going to go there. But, you know, one of the overall themes is kinda, you can go back all the way to Albert Einstein that not everything that can be counted counts, and not everything that counts can be counted. And so, when he talks about measurements, you know, not everything that matters can be measured, and, not everything that's measure that. That not everything that we measure matters. So, a lot of process owners, When it comes to determining the health of their processes, They, they own complex processes. It would be awesome to have, you know, on aircraft with a single gage that tells you everything about how the flight is going. Usually, don't have that. You have multiple gages, that you have to be looking at.

And then you have to prioritize. And then there's a cost, you know, between quality cost and schedule, for the multiple gages. For those there's a cost of acquiring that data. I'm curious about, from a practical standpoint, how, how, how do process owners, and in a more complex processes, which most of the business process to these are quite complex multi dimensional? What are some practical suggestions you have for them to narrow down the list of the, the trivial, many things that you can measure versus the critical field? in a way that's cost effective for them?

Well, I'll answer that with a couple of stories.

I was working at T-Mobile when they, when the announcement, the AT&T announced that they were acquiring T-Mobile, and we went to work the day after the announcement. And everybody was, I don't want to work for AT&T, and I don't want to do this. And this is a bad deal. And I said, well, that's not the worst-case scenario. The worst-case scenario is that the merger doesn't go through. And work. I'll lose because our parent company which at that time, was Deutsche Telekom.

And Germany had already said, we're going to kind of loose. We're going to make them independent.

That says, the reason that's the bad news is our cost structure doesn't support that as a company. We generate about $5 billion a year in free cash flow.

That's enough to make a profit, or it's enough to invest in the network, but you can't do both.

So, we would have to make a change, We'd have to invest in how the company was run, inherently run. And in order to improve that, make that profitability to stand alone, as the Division.

Later on at Nordstrom, they had a goal of opening 300 of their discount rack stores every year, and they had the processes in place to acquire the real estate and hire the staff.

What they found was, they couldn't do that, because they couldn't hire managers fast enough and get them trained.

They were using department assistant managers to become department managers in the new stores, and they'd used up all of the assistant managers they had and couldn't replace them fast enough.

So, that was the capacity issue, but it was totally unrelated to what everybody thought was a capacity issue.

So, you can you want to ask yourself in terms of current operations day to day operations.

Are we performing profitably enough? Gooey? Is our cost structure good enough to generate the revenue of the profit that we need right now the gross margin or the net margin?

And if not, what do we need to do to change that?

On to, to take on new business new goals, such as increased revenue, you have to look at, do we have the capacity?

If not, where do we get it? How do we generate that? So, there's some options at this point.

3-Jun-30-2020-08-31-08-88-AM

Um, you might need to, if customer service is, an issue of your customer experience, is that you might want to look at defects, What are you the defects in your In your the processes that deliver your customer experience.

For example, how often do customers have issues?

dealing with you as a company and look at defects there?

So, these are kind of things you can look at that are inherent, a process that you can actually fix as managers.

Because you can say, If you have bad customer experience, well, what can we do to change that?

And how do we make that better, and you look at what's causing those defects and the defects in a customer service, our customer experience would be complaints, and the customer that customer service gets, you might look at those.

When hewlett packard was dealing with the printer division, they, they looked at customer service because that was the richest source of information about the performance of their printers, was, you know, what our customers complaining about or what they're calling about.

Good news is also valuable to good experience that customers have.

So there's always information available to analyze, that you can look at it say, and it's one of these five measures, because these five measures are built into the process in order to change any of them.

You have to invest money in the process to do that.

Good.

In my view, a good, competent process manager would already know all those numbers.

And, and be able to say, right away that, if somebody says, Well, we need to increase capacity, or we need to increase sales, or we want to increase gross margin into right away, whether their process is going to have to change.

And it should just be an instinctive thing.

If not, you know, you look at your business architects because they should have that information.

The people who know this kind of stuff, but the ones who are really valuable in a company.

Very well very well. And Scott, one of the themes that also has a margin on the questions, is that if you can talk a little bit more about the differences between applying these principles and manufacturing versus transactional processes, are their fundamental differences in the way that you would approach a manufacturing process versus a transactional process in IT, for example, or any other transactional process for that matter? Or the fundamentals are the same, and you apply them pretty much the same way.

The fundamentals are the same. The difference is the volume of transactions in a manufacturing process. You do it more often. And so you have more data.

And so it's easier to see trends.

It's easier to make sense of activity costs because you look at it and its activities in this workstation and it requires 20 minutes to do this step of the manufacturing process and move on.

Um, when you look at, say, software development, for example, it's a little more difficult, because you don't repeat it as often.

What does this, what does the productivity of a story point, what's the capacity of your development staff in terms of units? What are the units they produce?

Is it user stories?

Is it features? Is that lines of code? What it, what is your measure of output?

And that's an issue with, with a lot of business processes, that it's hard to agree on what the output is, what is it you're doing? So, we look at activities.

A customer order is a fairly discrete activity.

You can look at, you can follow, forbid you from one end to the other, and say, Well, this takes 10 minutes to do, or it takes 25 minutes to pack an order.

An average of five minutes per item. So, you have the order, plus the number of items, and you can average that out.

The method I use for calculating that, are all back of the envelope calculations, that are very quick.

Very macro.

They're not necessarily inaccurate, but they're not very precise, they're precise enough, because if you start looking at, if you know that you have, say, 650,000 minutes, a quarter of capacity, in terms of staff, you can pretty much layout different mixes and you can rent a spreadsheet that says, What are the alternate changes of various activities to show what your new capacity is?

So, it's pretty easy to do with any kind of process, if you have the right numbers.

That, those are, those are very helpful perspectives, as as we have. I think a very, across, industrial audit or an audience here that lives both in manufacturing in the end, probably even a little more heavily weighted, towards transactional processes. So that's, that's, those are good insights.

We're gonna have a conference coming up, that's going to be a focus on health care. I know you have deep experience in health care working with and for the Mayo Clinic. For for quite some time, I'm curious about how, how, if you, if you have an example or maybe a little bit deeper view on how you apply this process measurements to shoot to healthcare operations and business processes?

I can tell you one of the processes that we looked at in the Neurosurgery Department was the time it takes to get an appointment.

It was, it was running around 35 days.

You called, and you needed a brain operation, or even a console.

The physician, it would take 35 days to get done on the schedule, And they would, they work very hard, too, to reduce that. I think it was 15 days.

They added neurosurgeons.

They added They changed the way they did their clinical hours, with which is where they talk to patients outside of the operating room.

They changed the way they do operations. And so they did a lot of work throughout the department to reduce this time.

And this is a measure of cycle time for the scheduling process. The mail has a fairly unique scheduling system. That is still largely manual.

Screenshot (4)You call a group of people, and they scheduled a specialist team, because they're, they're trying to pull together a team of people from multiple specialties to handle the issue.

And so, we haven't been able to automate data, or haven't spent the afrikaner made that, that, that a lot of companies are, a lot of organizations have.

But the, that's an example of the kind of thing that you'd look at and how you might work that.

Another one would be, Q times for imaging, which is significant. And a lot of institutions, or the time in the ER, the ER is highly measured. Because it's so critical. Time critical.

Healthcare is a very labor intensive business.

And, a lot of reason, for a lot of reasons.

And it's not just because we don't make the effort to automate it, because we still have medical professionals that have to be in a loop time to make decisions and approve diagnosis, and things like that.

For sure, for sure. William Fuller asks a specific question Here: you mentioned early on the Trilogy of the four hour reads. Could you repeat for him? What? what those books, and author and books were about?

Chris Potts is the author PO, TTS.

The first book is called Fruition, and it's about investment in technology, and transforming IT from an internal supplier to the investment managers of the business, in terms of process change.

If you look at your investment portfolio, your process change list, projects list, and your IT. It's a list of process changes or people, you know, changes that people want to make, and you want to make sure that that aligns with the needs of the business.

Not just somebody's wish list of things they want to do, which is what most people have as their investment. The Second book is called Recreation.

And it's about Enterprise architecture.

And there's a newly promoted it.

These are all Novellas, there's the short stories, the cast of characters that go through and you get drawn into the end of the story as well as learning some things.

And he goes through, the CEO hires, this guy on as the Chief Enterprise Architect.

And the first thing that CEO says, I am the Chief Enterprise Architect, it's my job to make sure the enterprises is structured sufficiently the function as a As organization.

And you're helping me out here, So this is what I want you to look at. So, he goes from business to business unit, and they talk about different problems and they troubleshoot.

And he learns about true enterprise architecture from that standpoint.

The next book is called Called.

I don't remember the last name, what the name of, but these are all one word names, But it's a it's another story of the same cast of characters, although one of the characters comes in from the first book.

So, that's bullets the same company, they talk about more about enterprise architecture, but those books are where I get the idea. Structural performance measures. He talks about measuring, you know, architects, managed structures.

So they're interested in how the structure performs regardless of how, how the business is performing.

And so, this is where we get the structural performance measures from.

That's the friction, vessel and de friction is the third book.

Diffraction, OK.

Very well, very well. There we go, William, you you You got You got the trilogy there. If I, might, You made a comment real early on and the questions about.

Some important things can't be measured.

one other resource that I would suggest is Douglas Hubbard's, how to measure anything.

Anything can be measured if it matters.

It can be measured, because it, it has an effect, and can measure the effect if it's even indirectly.

So, my view of that is that, uh, if you can't measure it, it probably doesn't matter, if it matters, there's going to be, there's a way to measure it.

So that's just, we'll go with that very well very well.

To wrap up, what is your best advice for people, leaders, organizations, who are trying to get started on the right path for measuring the health of their business processes?

What would you suggests that they are, how they approach that?

The first step would be to, let's start with defects. What are the defect? What's the defect rate?

And just start charting that don't worry about causes right now. I'll just track the defect rate and see what it is.

You might be shocked as to how high it is or whatever.

You need to pick a reasonable denominator, is it opportunity, million opportunities, thousands of opportunities in the denominator, it gives you a number that's in a single the double digits that you can measure.

3-Jun-30-2020-08-31-08-88-AM

You can manage it, then start measuring capacity and and activity cost. You can start looking at the activities in that process and say, well, how long does it take to do these things?

And started measuring those in minutes.

You'll find that, especially if you started measuring distinguishing delay versus wait time, you can look at that and cycle time comes along with it. So that's not something you set out to measure directly.

But the activity cost is something you can actually change. Now, how much would it cost to reduce this activity from 15 minutes to five, for example.

And then the cost structure is your finance. People already know what your ... director is, and you can get that information.

And I'd start plotting that.

If you have one of those charts on the wall, that shows your cost structure, trajectory it out through, know. various volumes, you can glance at that and say, Well, we want to raise capacity 20%. It's going to cost 40%, Lord. You can, you can look at that right away and see that.

So these are all easy things to start calculating with.

And, and generally, most people already have the data. They just don't have it in the format that they think they do.

Scott, terrific. Thank you so much for taking the time to share your expertise with us today, and this is very important area of measuring business processes, understanding capabilities, measuring success. So we appreciate you taking the time to share your expertise and insights on this subject.

Thank you.

Ladies and gentlemen, that was Scott Whitmire, the vice-president of Education for the Association of Business Process Management Professionals, and the Research Supervisor as at the Mayo Clinic in Phoenix, Arizona. Grateful for for the insights on the Measurement of Business Processes. Now, we're going to take a break, and at the top of the hour, we're we're going to have a terrific session on how to leverage innovation and entrepreneurship in the global space ecosystem.

And we're going to have the Chief Operating Officer for the Space Foundation, sharing with us directly, how that's being done on the leading edge of exploration of technology development. Very excited about that. Very much looking forward to the presentation by Shirley Brunswick, who, again, is the Chief Operating Officer for the Space Foundation. So, I will see you back soon at the top of the hour with Shelley Brunswick.

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About the Author

more - 2021-03-08T184014.649-2Scott Whitmore,
Research Manager, System Architect - Precision Neurotherapeutics Program,
Mayo Clinic.

Scott Whitmire is a senior enterprise architect with over 40 years of system architecture and development experience, including a number of major applications. He has designed and built large applications for several industries, including healthcare, research, aerospace, manufacturing, professional practice management, financial services, wholesale, retail, and telecommunications.

Mr. Whitmire serves on the Boards of Directors for the Association of Business Process Management Professionals International (ABPMP International) and Iasa Global, the association for IT architects. He is an industry thought leader on the practice of business architecture with expertise in troubleshooting and measurement, and has developed both full courses and multiple parts of multiple bodies of knowledge.

Mr. Whitmire is a Senior Member of the IEEE, an Iasa Fellow, and holds the CITA-P and CITA-D certifications. He has mentored many architects and engineers. He has published one book (so far), "Object Oriented Design Measurement," as well as numerous papers, articles, and presentations. He is a frequent speaker at business and IT architecture events. He has written extensively on business and IT architecture at https://scottwhitmire.wordpress.com.

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