Last May a journalist named Nick Carr stirred up a ruckus with an article in Harvard Business Review claiming that IT Doesn't Matter. Using the telephone and shipping by rail were great sources of competitive advantage - until every business could afford them. Then they no longer differentiated those who used them. Carr argued that IT is a mature industry, its presence is assumed, and such things as standards will make it even more of a commodity in the future.
Consultants Howard Smith and Peter Fingar shot back a month later with a paperback retort entitled IT Doesn't Matter - Business Processes Do. I ordered a copy the day I met Peter last week, and I read the booklet yesterday evening. In 120 pages, Smith and Fingar skewer Carr, show why IT will matter more than ever, and explain how business process management creates riches.
The big argument is that "Business process management (BPM) systems can, for the first time in the history of business automation, let companies deal directly with business processes: their discovery, design, deployment, change, and optimization." As long as there's innovation, there's room for making processes better. BPM promises to obliterate the "Business-IT Divide."
To optimize a process, the right hand must know what the left is doing. Enterprise Application Integration (EAI), the melding of ERP, SCM, CRM, PLM, and what-not into one all-encompassing application, is a major step forward, but it doesn't link the organization with those outside the firewall such as partners and suppliers. Web Services integrate the enterprise with the outside world, connecting business to business, just as the Web connected consumers to businesses in the last decade.
Does this mean all business is going to be carried out using common processes that embed best practices? Not on your life. "BPM will be used both to differentiate (best-in-class) and to standardize (best-practice)." Count on Amazon, for example, to use best-practice standards for email and credit-checking, and FedEx will deliver your order. Don't expect Amazon to let you peak into proprietary systems such as One-Click Ordering, for that's where their competitive advantage lies.
Nick Carr's screed in HBR attacked data processing as we've known it. Indeed, that's not where to look for big value in the future. Business organizations are moving up the ladder a notch to MetaIT. Instead of one-time automation to save labor, they are establishing structures to continuously improve the way they do things.
Authors Smith and Fingar tell us it's time for the IT tail to stop wagging the Business dog. In their vision of the future, business people will define and own business processes. Instead of doing what-if analyses with numbers on spreadsheets, decision-makers will do what-if analyses of how their business operates or might operate.
As I recently wrote here, it's as if builders could move walls by shifting them on blueprints displayed on their laptops. With a comprehensive business blueprint, an executive can hand off an entire bundle of processes, say payroll, with minimal fuss (and with knowledge of precisely what savings will result.) A manager can experiment with different ways of getting a job done and chose the one with the most profit potential. A worker can fix a glitch in the system that has been irritating customers for once and for all. In the BPM world, business runs the show.
The authors propose a daunting laundry list of other functions the new paradigm can help accomplish, among them "accountability, activity-based costing, business process outsourcing, competitive intelligence, concurrent engineering, crisis management, inter-organizational systems, just-in-time (JIT), key performance indicators, lifetime customer value, pay-for-performance, resource-based strategy, security audit, scenario planning, and supply chain optimization." (Whew.)
My interest in all this is how it improves learning and human performance. Process-oriented environments will impact traditional training just as word processing and social change eliminated most of the nation's secretaries. Process innovation empowers us to create jobs that provide more throughput and greater worker satisfaction, although not through traditional training departments. Imagine the potential of:
For training directors and CLOs, the future holds good news or bad news. It depends on where you're coming from. Training administrators who fail to understand the new dynamics of business as likely to find themselves stripped bare, evaluated by metrics they do not understand, and looking for another line of work. Those who adopt the process mindset take on significant new responsibilities, for everyone knows that the people in the organization are more important than the technology.
After fifty years of waiting for instructions in its corporate cocoon, training is ready to unfold its wings and be recognized as a full-fledged business process.
Wednesday, June 23, 2004
If you walked into the conference I’ve been attending for the last two days cold, you would not have a clue what people were talking about or why you would want any part of it. You might think you’d stepped into a revival for geeks. I’ll bear witness to what transpired.
Speakers fervently describe a Second Coming for IT, an entirely new and hyper-productive way of doing business. In the Promised Land, managers and workers no longer need to turn to IT to get their jobs done. Bankers run the banks and merchants run the stores without relying on CIO’s to satisfy their customers. Silos fall. Everyone makes informed decisions. Converts are on the edge of their pews.
The prophets envision the profits, but
their belief system lacks a name. Some call it Business Process Management.
Other say it’s Web Services. Yet others talk of Service-Oriented Architecture. They
describe the wonders of SOAP and UML, seek blessings from W3C and OASIS, and
tell parables of independent
angels agents doing what’s right. They speak in tongues.
Non-believers sense a sham. The masses have long prayed at the altar of IT for better, faster, cheaper ways of creating value and making the world a better place. The vengeful IT god inevitably punishes the populace with plagues of non-functionality, cost overruns, missed deadlines, administrative catastrophe, scaring away customers, frustration, and demoralization. To every FUD there is a season.
Are those who herald the new order today’s false prophets or are they messengers trumpeting true change? Business people are skeptical. Fool me once, shame on thee. Fool me twice, shame on me.
What does business gain from going to this church? Less lag time between strategy and execution. Faster response time to customers. More agility amid changing conditions. Faster cycles, less lead time, less lag time. Richer innovation and more of it. Focus on core strengths. Everyone singing from the same hymnal. This is not IT; this is business.
Twenty years ago, few executives touched a keyboard. Today, few business people change the process they employ to do their jobs. Tomorrow, workers will contribute to helping their organizations improve the way work is performed. Continuous performance improvement will become everyone’s job.
is lame, religion without
science is blind.”
Epiphany: If you climb up the ladder of abstraction several rungs, you can begin to divine what the prophets are talking about. The patterns we couldn’t see because we were too close begin to come into focus. The grand design becomes obvious.
The day-to-day world of commerce is so far below that the cubicles, silos, firewalls, and boundaries fade away. From up here, people and politics are impossible to discern. We’re looking at the broad flows of value across the global marketplace.
Just as the first image of the earth from space raised our consciousness of living on a tiny sphere in space, looking at the flows of knowledge and value from above brings what’s really important in commerce into sharp relief.
From up above, all business consists of flows of value across networks. As on the Internet, all nodes are connected. Sometimes the route from one node to another is circuitous and inefficient, but somehow it all works together. When synapses in the human brain traverse a meaningful route, the result is a memory. When value flows through an organization, the result is a pattern. When patterns are repeated and refined, they become a process.
Processes can be modeled and mapped. In fact, evangelists recommend that business organizations map current processes simply to get a handle on what they are really doing. Disconnects and gross inefficiencies will become immediately apparent.
A map of a process is a picture of how an organization works. The map tracks a common reality, not a view from within a silo. The map divorces descriptions of how things work from personalities and turf issues. A process map is the logic of business laid bare. No fluff. No politics. Just “Here's how it happens.”
Like a mural interpreting a meeting, a process map enables people to talk about what works and what doesn't without getting personal about it. The map is agnostic. Everyone's goal is to make it better. Furthermore, thanks to smart software, the value of choosing this option instead of that is automatically generated and explicitly stated.
For example, when HP was merging with Compaq, the combined organization had many redundant processes. The staff modeled each HP and Compaq supply chain process whenever they overlapped. They chose whichever process promised the best profit potential. Instead of presenting a list of software apps to debate, the supply chain guys presented a blueprint and financials for an optimal mix of interoperable processes. Now HP has taken this to marketing, sales, and manufacturing. Why shouldn’t all businesses be evaluating the way they do business all the time?
The electronic spreadsheet enthralled business managers with the power of what-if analysis. Process models take what-if analysis to the level of organizational change. In lieu of a spreadsheet’s rows and columns, process maps blueprint the value circuitry underpinning the business. Instead of seeing the effect of a 3% up-tick in sales, management can assess the impact of streamlining a process or outsourcing an entire function.
Time for a miracle. I want to move a few walls in my house to make a leisure room out of two small bedrooms. What if I could tear down the walls and build the new room by doing nothing more than changing the architect’s sketch of my house? Well, of course I can’t do that; I’m going to have to hire a construction crew. However, a process model can accomplish changes. Unlike my house, business is mostly virtual. Software runs the show. Change the process map on the screen, and the system automatically generates and installs revised code!
The seers prophesy a new category of asset: Process Capital. An organization that has its processes rigorously refined should be able to swap entire corporate functions in and out like Lego® blocks. The what-if model shows the bottom-line impact of handing off payroll and benefits administration and applying the resources thus freed up to a core business area. Sufficient Process Capital will enable an organization to focus on what it can do best and to shift that focus as conditions change.
What laid the groundwork for these audacious claims at the altar of process? Like a voice out of the wilderness, the Internet gave us the sign.
In 1991, CERN released the World Wide Web. A year later, the Internet had 1,000,000 hosts. Two years after that, Netscape went public and the Vatican went online. Assisted by Moore’s Law of the loaves and fishes, the Internet becomes the biggest force in the history of commerce, communication, and culture change.
The miracle of the Net gave us faith and guided us in the right direction.
From Babel to interoperability. In Old Testament days, IBM computers did not talk to UNIVAC computers; GE machines did not talk to Honeywells; NCRs did not talk with Burroughs; and RCA tried to talk with IBM but died prematurely. Commercial computing relied on proprietary software to handcuff customers who couldn’t afford to change horses. Software companies upheld the tradition. But the Net provided a lingua franca. TCP/IP succeeded where Esperanto had failed. Open standards enabled any compliant browser to understand anything on the Net. The value of joining the party soon outweighed the rewards of locking in customers, and before you knew it, IBM was spray-painting Linux penguins on the sidewalks of Chicago. Now in-house and commercial systems are adopting Web Standards, and eventually the world will transubstantiate into a single, immense network.
Don’t play God. The Net is a web without a weaver. No master programmer hides behind the curtain. Like Nature herself, the web organizes itself. Start with simple rules; clear the way; don’t get in the way; let it grow. Great and unexpected things arise from complexity if you let them. In IT, this letting-go takes the form of delegating interactions to bots, personas, and software agents.
Demonstration of interoperability among three vendors and two open source initiatives (Fujitsu, Staffware, a client, Handysoft, and another)
ASAP = the Asynchronous Standard Access Protocol. Enter the URLs and the metadata hooks up automatically.
We're watching an interchange of activities on a live flowchart. Then we check the XML code and find that indeed the transaction made its way through the various organizations. Untouched by human hands. This is a virtual replay of pounding in the golden spike.
ASAP can be used today to link systems easily. Next step is to go through OASIS Process, but this is ready to go now.
WfMC is looking to design tool vendors to demo ability to upload and download process definitions using Wf-XML 2.0 in January 2005. Wf-XML 3.0 has "containers" which hold "factories." The URL of the factory automatically calls the details for the "instance" which includes the "activity." The activity contains two blocks of XML Schema: the data and the … The SOAP protocol carries this.
John Pike from Staffware, chair of the WfMC, points out how significant is the demo we have just seen. This was a historic moment.
Things in process are getting less visible, which is a sign of maturity - when things don't get in the way. The business used to be measuring, monitoring, and improving inefficient processes. The new objective is to use processes for innovation.
1. Innovation = application of an invention (something new) that brings benefit.
2. Two key elements are collaboration and knowledge flow.
3. Process innovation = requires a structured approach of experimentation, education....
Some of the panelists offer all-in-one, others focus on only rules or analysis. It's like assembling cars.
"Process Management Tools should be on the desk of every business user" (says Proforma).
Where is the demand for innovation coming from?
" Need a champion of processes and rules together (says a guy who sells both).
" Demand comes from the business that wants improvement in a process.
" Innovation is overwhelmingly making an existing process better rather than creating processes de novo (Fair Isaac)
" Next processes instead of best practices - things that haven't been automated before (SAP)
" No, most of it's new applications (ProForma, which covers only the analysis and planning end of things)
Where is motivating the demand for process innovation? (Jay.) Okay, I asked a bit more.
New paradigm. Higher level, where orgs think of process and rules as assets. Build for change.
Supply side business. We build it and then figure out what to do with it. We back into it.
Fair Isaac actually answered the question.
" Stay out of jail - compliance
" Profitability - cost cuts
" IT - infrastructure cost to high
Bottom up, top down, general awareness…it's pervasive. People are buying into it at different levels.
" Next practices. (says SAP)
" Ad hoc workflow vs. workflow in the silo.
" Seeking competitive advantage (buy, buy, buy says the vendor)
[Uh-oh. The vendors on the panel as jostling for position, only presenting examples that tout the value of their own solutions.]
Tom Dwyer observed that in high tech, we often invent something and later find the use for it. BPM is there. We're reverse-engineering the benefits from the invention.
I can imagine another back-formation from process centricism. When a business manager is confronted with the profit contribution of one way of doing things versus another, won't she want to take the option that's best economically? Will the long-term benefits of lasting processes get American business leaders to think more than one quarter ahead? Eventually, if corporations become truly transparent, market analysts could rate companies not only on earnings but also on whether they're focused on the long term or the short.
Doug Engelbart's name is reverberating in my head. Improve the process. Improve the process of improving the process.
BRP is the logic of business laid bare. No fluff. No politics. Just here's how it happens. It's a roadmap people can understand. Like a mural of a meeting, it enables people to talk about what works and what doesn't without getting personal about it. The map is agnostic. Everyone's goal is to make it better. Furthermore, thanks to smart software, the value of choosing this option instead of that is automatically generated and explicitly stated.
Customer focus. The Internet has had an impact on the awareness of executives. How quick can I get through the seller's website?
Process-Centric Company = A company that is organized, structured, measured and managed in terms of business processes. (Most companies are still function-centric.) This is more in the talking stage than the reality.
Electrocomponents plc, 743 million pounds
Download Annual Report
Chief Process Officer: Richard Butler
CEO, CFO, CPO
Lots of work on alignment in the 90s was horizontal, integrations from supplier to customer. New alignment is vertical: integrated measures, managers, and resources. The vertical lets management conceptualize the business and therefore to change
SEI CMM Process Maturity Levels, used to assess software by DoD but is a good touchstone for assessing process maturity. From ad hoc to process improvement. Most companies are only at about 2.5. They don't have measures that tie to strategic goals.
Strategy and Goals
Business Process Architecture
Six sigma/OMG model-driver architecture
Business Process Outsourcing = how to focus on core
Outsourcers are good prospects for BPM
Different groups want to discuss different pieces of the triangle.
Business Process Frameworks
Aka Reference Models, Templates
High level descriptions of a set of processes, measures, best practices
Provide a package that allows an analyst to treat a given process as an instance of a class of similar processes (they characterize processes at a high level)
1. Supply Chain Council (SCOR). 700 companies. How to link up processes at a high level and how to measure them. (Check their layers of modeling) This is essentially meta-processing mapping. Plan ' Source 'Make ' Deliver. At a one-day meeting, a dozen people from many companies spend the morning learning the terminology and notation; in the afternoon they create and agree upon a global, interoperable supply chain. An independent auditing agency provides benchmark data to other in an industry. The Benchmark enables you to assess your level of profitability if your performance were average. Management Plan and HR Best Practices are part of SCOR.
2. TeleManagement Forum eTOM, implemented in IT as NGOSS, their expanded architecture.
3. HPs Extended SCOR Architecture. In the Compaq merger, they modeled both the HP and the Compaq supply chain where each company had a similar process. Which process provides the best profit opportunity? Instead of a list of software apps, the supply chain guys presented a blueprint and financials. Now HP has taken this to marketing, sales, and manufacturing. It works great at HP, but since it's proprietary, it doesn't facilitate conversing with partners. (Two newly established councils are working on taking this to marketing and sales functions.) See www.supply-chain.com
for the latest; this only happened last week.
BP Frameworks are a major opportunity for companies to significantly improve their business process practices. Nothing else offers BP practitioners the speed.
Gary Chan explained how the City of Walnut Creek implemented BPM, the results received, and the City's vision of the future. This was the first time I've heard the details of a far-ranging deployment that involved all employees and will eventually link all customers (residents) in City projects. Plus, they brought the entire project home for under $100,000 and in less than six months.
BPM is the execution of software, measures, and processes than enable rapid, more accurate, decision making. It makes for fiscal responsibility.
Had a manual system. Nothing real-time. Two-week old reports. Monitor project progress.
Implementation of Metastorm, from signing the contract to generating reports, took place in 5 ½ months. Six weeks for training. Now installing web version. The City no longer uses any other project management software.
Creating paperless environment. Little training required: they pick it up at the push of a button. On-demand reports. Tracks all project communications. Automated processes for approval and to escalate multi-level project changes. Let's public service employees who don't work 8 to 5 communicate with others.
The total tab for the software and some expert advice from the vendor was $85,000. The hold costs down, Walnut Creek did most of the process design in-house.
Walnut Creek is currently putting the app on the Web. They envision opening up the system to citizens. If you've got a pothole in the street in front of your house, you log it on the system and monitor the trouble ticket from there on.
Difficulty implementing is that companies are not organized by process. We don't need to control so much as to do the right thing. How are our haphazard processes doing? Then how can we do them better?
This is all about making business more efficient, not about adding infrastructure.
BPM has an overall architecture for management.
What are our PKIs? How are we doing against those indicators? How could we do better? What's that worth?
Janelle: At the enterprise level, all the PKIs I know of are financial. (Should Workflow Institute help develop the intangible PKIs?)
One view: IT will come under the business managers. Contrarian: We've been there before. IT people think all Business people are idiots; the business people think IT people are idiots. Another contrarian view: When more people can make changes without coding than there are coders, things will change. Right now there is one BP analyst to every ten Java coders. It should be the other way around.
One view: IT vs. the business. IT should be the business.
Are there efforts to establish standards at a higher level, e.g. accounts receivable? There's SCOR. There are also semantics being developed for some 300 industries.
"Information Resource Management" covers everything IT should be doing.
Business Intelligence has demonstrated how coding can be delegated to business people. It's time for BPM to get on board.
From luncheon conversation:
Who's the #1 thought leader in this space? Geary Rummler.
Who do the vendors sell to? It's sort of like the training market. The natural buyers lack budget and clout. Few firms have a Chief Process Officer, so there's no natural prospect at the top level either.
I plan to summarize these reports and attach my consclusions. Then they'll go on the Workflow Institute site.
Brainstorm Group.Tuesday, June 22, 2004. Hyatt Regency, San Francisco Airport
by Janelle Hill, METAGroup
Confusion among the terms: BPM, SOA, On Demand, Adaptive Organization. BPM includes integrating human activities with required data & systems.
True e-Business has yet to happen. Although process management theory is mature, process thinking & use of BPM technology is not.
Adaptability of Business Processes
How much is too much? How often? Don’t do it all; do the processes that need to be adaptable.
To understand the bounds and potential of adaptability, business users must have an appreciation for the technologies.
Standardized top business documents for reusability; standards based, bullet proof
Point to Point one-offs, hard-coded, complex, high cost, specialized skills, single implementation infrastructure (VAN), data interchange only
Brokered architecture encourages reuse, Simpler tools, metadata driven engine, Standaradized application adapters, Transport Choices
High entry cost, Specialized skills, Emphasis on data an message transformation, not process, Not bullet proof
Lowers costs with standards – fewer skills required, commoditization drives down software cost, leverages existing data nd process. E.g., $500K in 2002, $50-250I in 2004. Visual representation (BPMN). Open (XML). Supports multiple levels of process abstraction in the modeloing palette. Change the process and automatically change the code.
The more your applications expose themselves as Web services, the easier they link to existing systems.
A summary of this report will appear at Modeling must become a business discipline – not a creative pastime. Get a real modeling tool, not just a drawing tool like Visio. The model facilitates the conversation between business process and IT. It defines what events – human or system interactions – advance the process. Abstract objects hide implementation details. (It’s software application-agnostic.) This just lets you define where you want business processes to be adaptive. BPM is a Service Oriented Architecture. Interoperable, virtual network. Challenges of BPM… (Business modeler = someone “like a former McKinsey consultant, who really understands the big picture.” I can’t imagine the cost of putting together a team of these guys.) IT culture shock: From Code to Models. Model mindset – not just learning the tool. Willingness to share development responsibility. This is a new game for IT, which has been accustomed to squirreling away during development and returning with a solution. If IT architects don’t buy in, this won’t work. BPM is both a strategy and a set of technologies. It requires business and IT to work with one another. Educate everyone, then assess readiness. Establish notational standards (not just Visio drawing). Peter Fingar, co-author of BPM, The Third Wave and The Real-Time Enterprise Peter is great. He wraps BPM into a package management can buy into. It's a Strategy-Execution Machine. Give your people "Work Processors" so they can get your business aligned. Bravo! Dot-com bust: $3.5 trillion sucked out of market. 300,000 jobs lost. Enough technology already. RTE = real time enterprise; BRM = business process management. Executives are fed up with three-letter acronyms and technology being foisted off on them. They’re reading Nick Carr’s “IT doesn’t matter” in Harvard Business Review. Carr suggests that IT is a commodity. Fingar says IT is nothing but an enabler. Porter taught us that differentiation is the key to competitive advantage. (Don’t read Porter; it’s soporific. Read Max Strategy, a 100 page parable.) FedEx founder wanted to “sell time.” Poo-pooed at first, Fedex IS NOW A $20 billion enterprise. George Stalk’s Competing Against Time is the argument in favor of BPM. We need a better vocabulary than IT’s to get managements excited about this. Toyota and Honda managed structural changes that enabled their operations to execute their processes much faster. Toyota went through a two-year internal M&A. (Now you can do it with BPM.) HBR July 1988. Change has switched from episodic to evolutionary. What was discontinuous is now a flow; the pace of innovation is what’s key. Serial innovators will run circles around the competition. Time-Based Competition Cycle, product design, lead, lag, time to market The most value for the lowest cost in the least amount of time. Cheaper, Better, Faster. Toyota: Empower the people on the line, not just the production line. “Downsizing was the objective of BPR.” Time based competitors: ········· Compress time to mfg and distribution ········· Cut time to develop and introduce new products ········· Cut inventory thru value-delivery system ········· Lever all competitive differences Process maps are not the object. The point is whether that map will execute with my business. We need executable BP models. BPM is not IT Software Development, its an IT tool that enables business people to build and manage processes “Time is the scarcest resource.” – Drucker GE: Digitization of business process was the key. Now it's shifting to managing processes. Time-based competition is not new. But the BPM System is a way to make it real. Look for his new book, differentiating BPM from IT. No one in the corner office has a clue what BPM is. BPM is all about strategy execution. Typical value chain has 22 companies in it. With BPM systems, the tide has shifted--For the 1st 50 years
IT has automated the business, for the next 50 years BPM systems will be used to automate IT. Competition is one end-to-end value chain vs your end-to-end value chain. Peter conceptualizes a Work Processor. It’s the competitive weapon of choice. BPMS inside. What does it do? It squeezes out time. This squeezes out the right kind of costs. NDA… The specs. Doesn’t automate people out of their jobs, but instead amplifies their work by providing human connections, a shared information base, a communal knowledge base, shared design tools, shared problem-solving tools, and a command and control capability over existing IT systems…all without onhe line of code. Underpinning include cognitive science, HCI, AI, pi calculus, M, collaborative filtering, semantic search, etc. Peter told me he is putting the finishing touches on his new book, which takes the Work Processor metaphor forward. Expo break BPM Thought Leader Panel: Creating the Process Oriented Enterprise Q: John’s familiar with the automation of human processes. That market never took off. What’s different now? What’s the trigger to growth? A: BAM, Web Services, etc., are all helping from a technical perspective. Accountability and governance issues raise issues of corporate control. A triggering event is the thought of the CEO going to jail. Q. Greg, senior execs ready to take on process responsibility? A: Yes, there’s a general understanding that processes are vital. Senior managers feel like they can’t understand ownership and execution. They must own the automation of the process. Q. Mark, why do you think outsourcing is the right approach? A: It becomes easier and easier to construct a contract if there’s outsourcing involved. Both parties need to manage their risk. Challenge – example – call center answers in funny accent you can’t understand. A measure might be how long it takes to get a question answered. Either party can game the system. John: Can an outsource guy go to jail? Who owns the process? Who decides? Rachel: customers are just starting to implement Sarbanes-Oxley. There are interesting court cases on the way. How about process insurance? Seems to me companies and their outsourcers need a pre-nup. Q. IBM’s modeling tool for BPM is a way to draw boundaries. What’s your experience? Do customers take ownership of the models? A: The most successful contracts go that way. BPM can enhance teaming, too. IBM is committed to standards. They are the only one with a BPEL runtime engine. Off the shelf processes viable? IBM: I’d call them process templates. RosettaNet and UCCNet involve processes, too. Use the 80/20 rule. It’s similar to packaged ERP. Takeaways from IBM at First Data Train motivated analysts Culture change required Find success everywhere Build confidence in the modeling process through ultra-competency Whatever you do, don’t give the analyst job to anyone in IT. They won’t buy it because they know better. Reading List: Luncheon speech by key sponsor Enron. Worldcom. Power blackouts. Hurricanes. Every one of these is the result of broken processes. Agility is the cure-all. AIIM finds that 44% put BPM on the top of CIO to-do lists. IDC says Managing Business Processes is #1 call in IT. The prime sources of BP value are: BPM is not IT. BPM works by consolidating the white space on the chart, not IT. Gartner looked at 50 BPM projects. 2/3 took less than 6 months to implement. 2/3 were primarily human focused. 2% had no human component. 60% hd no system activity. (Which makes me wonder if this is really BPM.) I asked METAGroup’s Janelle Hill if BPM designers were thinking about the workers’ quality of life that would result from implementing BPM Suites. She told me that process designers were aware that BPM would fail without people. They focus on human systems. I replied that eLearning experts all parroted the mantra that what counts is the people, not the technology. Then they sell and install the technology, and the workers are left to sift through excruciatingly poorly-designed programs. Do BPM folks factor the satisfaction of the worker into the equation? Alas, Janelle told me, no. It’s the old one-quarter-at-a-time thinking. I said we would address the issue at the upcoming Workflow Symposium. No show.
Competing on Time with the Revolutionary Business SEx Machine
Modeling must become a business discipline – not a creative pastime. Get a real modeling tool, not just a drawing tool like Visio. The model facilitates the conversation between business process and IT. It defines what events – human or system interactions – advance the process. Abstract objects hide implementation details. (It’s software application-agnostic.) This just lets you define where you want business processes to be adaptive.
BPM is a Service Oriented Architecture. Interoperable, virtual network.
Challenges of BPM…
(Business modeler = someone “like a former McKinsey consultant, who really understands the big picture.” I can’t imagine the cost of putting together a team of these guys.)
IT culture shock: From Code to Models. Model mindset – not just learning the tool. Willingness to share development responsibility. This is a new game for IT, which has been accustomed to squirreling away during development and returning with a solution. If IT architects don’t buy in, this won’t work.
BPM is both a strategy and a set of technologies. It requires business and IT to work with one another. Educate everyone, then assess readiness. Establish notational standards (not just Visio drawing).
Peter Fingar, co-author of BPM, The Third Wave and The Real-Time Enterprise
Peter is great. He wraps BPM into a package management can buy into. It's a Strategy-Execution Machine. Give your people "Work Processors" so they can get your business aligned. Bravo!
Dot-com bust: $3.5 trillion sucked out of market. 300,000 jobs lost. Enough technology already.
RTE = real time enterprise; BRM = business process management. Executives are fed up with three-letter acronyms and technology being foisted off on them. They’re reading Nick Carr’s “IT doesn’t matter” in Harvard Business Review. Carr suggests that IT is a commodity. Fingar says IT is nothing but an enabler. Porter taught us that differentiation is the key to competitive advantage. (Don’t read Porter; it’s soporific. Read Max Strategy, a 100 page parable.)
FedEx founder wanted to “sell time.” Poo-pooed at first, Fedex IS NOW A $20 billion enterprise.
George Stalk’s Competing Against Time is the argument in favor of BPM. We need a better vocabulary than IT’s to get managements excited about this.
Toyota and Honda managed structural changes that enabled their operations to execute their processes much faster. Toyota went through a two-year internal M&A. (Now you can do it with BPM.) HBR July 1988.
Change has switched from episodic to evolutionary. What was discontinuous is now a flow; the pace of innovation is what’s key. Serial innovators will run circles around the competition.
Cycle, product design, lead, lag, time to market
The most value for the lowest cost in the least amount of time. Cheaper, Better, Faster.
Toyota: Empower the people on the line, not just the production line.
“Downsizing was the objective of BPR.”
Time based competitors:
········· Compress time to mfg and distribution
········· Cut time to develop and introduce new products
········· Cut inventory thru value-delivery system
········· Lever all competitive differences
Process maps are not the object. The point is whether that map will execute with my business. We need executable BP models. BPM is not IT Software Development, its an IT tool that enables business people to build and manage processes
“Time is the scarcest resource.” – Drucker
GE: Digitization of business process was the key. Now it's shifting to managing processes.
Time-based competition is not new. But the BPM System is a way to make it real. Look for his new book, differentiating BPM from IT.
No one in the corner office has a clue what BPM is.
BPM is all about strategy execution.
Typical value chain has 22 companies in it.
With BPM systems, the tide has shifted--For the 1st 50 years IT has automated the business, for the next 50 years BPM systems will be used to automate IT.
Competition is one end-to-end value chain vs your end-to-end value chain.
Peter conceptualizes a Work Processor. It’s the competitive weapon of choice. BPMS inside. What does it do? It squeezes out time. This squeezes out the right kind of costs.
The specs. Doesn’t automate people out of their jobs, but instead amplifies their work by providing human connections, a shared information base, a communal knowledge base, shared design tools, shared problem-solving tools, and a command and control capability over existing IT systems…all without onhe line of code.
Underpinning include cognitive science, HCI, AI, pi calculus, M, collaborative filtering, semantic search, etc.
Peter told me he is putting the finishing touches on his new book, which takes the Work Processor metaphor forward.
BPM Thought Leader Panel: Creating the Process Oriented Enterprise
Q: John’s familiar with the automation of human processes. That market never took off. What’s different now? What’s the trigger to growth?
A: BAM, Web Services, etc., are all helping from a technical perspective. Accountability and governance issues raise issues of corporate control. A triggering event is the thought of the CEO going to jail.
Q. Greg, senior execs ready to take on process responsibility?
A: Yes, there’s a general understanding that processes are vital. Senior managers feel like they can’t understand ownership and execution. They must own the automation of the process.
Q. Mark, why do you think outsourcing is the right approach?
A: It becomes easier and easier to construct a contract if there’s outsourcing involved. Both parties need to manage their risk. Challenge – example – call center answers in funny accent you can’t understand. A measure might be how long it takes to get a question answered. Either party can game the system.
John: Can an outsource guy go to jail? Who owns the process? Who decides? Rachel: customers are just starting to implement Sarbanes-Oxley. There are interesting court cases on the way. How about process insurance? Seems to me companies and their outsourcers need a pre-nup.
Q. IBM’s modeling tool for BPM is a way to draw boundaries. What’s your experience? Do customers take ownership of the models?
A: The most successful contracts go that way. BPM can enhance teaming, too.
IBM is committed to standards. They are the only one with a BPEL runtime engine.
Off the shelf processes viable? IBM: I’d call them process templates. RosettaNet and UCCNet involve processes, too. Use the 80/20 rule. It’s similar to packaged ERP.
Takeaways from IBM at First Data
Train motivated analysts
Culture change required
Find success everywhere
Build confidence in the modeling process through ultra-competency
Whatever you do, don’t give the analyst job to anyone in IT. They won’t buy it because they know better.
Luncheon speech by key sponsor
Enron. Worldcom. Power blackouts. Hurricanes. Every one of these is the result of broken processes. Agility is the cure-all.
AIIM finds that 44% put BPM on the top of CIO to-do lists.
IDC says Managing Business Processes is #1 call in IT.
The prime sources of BP value are:
BPM is not IT. BPM works by consolidating the white space on the chart, not IT.
Gartner looked at 50 BPM projects. 2/3 took less than 6 months to implement. 2/3 were primarily human focused. 2% had no human component. 60% hd no system activity. (Which makes me wonder if this is really BPM.)
I asked METAGroup’s Janelle Hill if BPM designers were thinking about the workers’ quality of life that would result from implementing BPM Suites.
She told me that process designers were aware that BPM would fail without people. They focus on human systems. I replied that eLearning experts all parroted the mantra that what counts is the people, not the technology. Then they sell and install the technology, and the workers are left to sift through excruciatingly poorly-designed programs.
Do BPM folks factor the satisfaction of the worker into the equation? Alas, Janelle told me, no. It’s the old one-quarter-at-a-time thinking. I said we would address the issue at the upcoming Workflow Symposium.
This Tuesday and Wednesday, I'll be attending the Business Process Management Conference down the Peninsula. Why? I'm learning as much as I can about BPM because it underpins the revolution I foresee in business, computing, and learning.
Besides that, the Workflow Institute is conducting a conference on Workflow Learning in October, and I'm one of the ringmasters. It's always a good idea to know what you're talking about.
Workflow is the convergence of work+flow to achieve an optimal balance of work results and individual fulfillment. Business culture is breaking free of the industrial-age mindset that bottom-line results and worker happiness are natural enemies. Work can be among life’s greatest joys; flow drives a loyal, over-achieving workforce. Workflow research investigates how work and flow can converge to replace an unproductive either/or situation with a mutually beneficial worldview of both/and.
The Work I deal with is knowledge work, usually in an environment of next-generation computing which embraces Web Services, agent-based software, enterprise interoperability, extreme adaptability, and many lessons from the Internet. The goal of work is production and accomplishment.
Flow is the trickier piece of the puzzle. I am thinking of Flow in the psychological sense, as Mihaly Csizentmihalyi describes it.
People in flow are fully enjoying their work because they are so engaged in tackling difficult and worthwhile tasks. Channeling flow into work draws on meta-learning, appreciative inquiry, worker empowerment, instructional design, emotional intelligence, and a new concept of the nature of work. Flow is vital because drudgery is avoidable.
Mihaly's writing is uplifting, for example:
He says that instead of One-Minute Managers, we need hundred-year managers. The author is quite pragmatic about business taking a long-term view. Happy people do better work. They have higher morale; they are less likely to jump ship.
We've had opportunities to improve working conditions again and again. The peasant's lifestyle was impoverished and hard, but the early factory hand or coal miner working 12-hours days in wretched conditions certainly had it worse. People were not treated as machines. Foremen didn't beat machines. Supervisors didn't yell at and berate machines. Plant managers didn't abuse machines to the breaking point. No, the industrial workplace treated people worse than machines, as if they were throw-away tools.
We've come a long way, you think. Out of sight out of mind. But sweatshots, slave labor, stoop labor, lost limbs, and the working poor are all there if you look. Not to mention McJobs.
At least you can see the McJobs. I fear something nearly invisible: the working environment we are creating for knowledge workers.
Twenty-five years ago, the common wisdom was that by the time we reached the 21st century, our biggest dilemma would be figuring out what to do with all our leisure time. Even scooting around in your personal helicopter gets boring after a while.
Instead, we've got a world where nearly everyone has to work. Nobody feels they have enough time. Uncertainty reigns. Cancer, ulcers, and stress are leading us to premature graves. Our institutions are a shambles. Fewer and fewer people take pride in their work. Work encroaches on family time. Labor-saving technology merely raises the bar on what's expected. One in five American workers do nothing on their jobs but show up. The mass of knowledge workers lead lives of quiet desperation. We're rats in a maze.
I am optimistic about the future. Breakthrough technologies are poised to shower us with many gifts. We have in our grasp the ability to create jobs that challenge the worker and grow with her. We can provide clear goals, immediate feedback, and a balance between opportunity and capacity, the very things that define Flow. We can leverage the coming networks and interoperable, smart software to pull ourselves out of our ruts. Or we can engineer the most mind-numbing, rote, awful jobs the world has ever seen.
At the Workflow Symposium, I'd like to get these issues out in the open. How can we learning professionals make the future world of work a more enjoyable and, therefore, productive place? How can we apply our knowledge of learning and behavior to humanize the workplace? How can we ourselves attain flow in our work by performing in an enlightened manner?
I hope you'll join me in taking the higher ground.
The San Francisco Bay Area has been blessed with great weather for a few days, and nature is ripping me away from my computer to go for walks. This morning I wandered down the hill to join the Saturday ramble of the path wanderers. Along the way, I plucked ripe purple and yellow plums from the trees overhanging the sidewalks. Then a season first brought a smile to my face: the first blackberries of the season. Yum. I'll be nibbling as I hike for the next couple of months! Picking wild berries as I walk is one of life's greatest joys, right up there with discovering cool shells on the beach.
The best back-to-nature walks around here are in Tilden Park, about a mile from here. When I started out yesterday, a buck was standing at the end of the block. (Today a small specimen raced past us on a busy shopping street down the hill, startling drivers and pedestrians alike.) Tilden is hilly and rugged. The grass is already brown but flowers and the red leaves of the poison oak punctuate every vista with color.
Tromping up the hill, a fellow with a dog passed me. "This is the cardiovascular section," he said. I told him that's why I was here.
Health was only one justification for my tromp. I'm hatching a new concept of what's going on in the world, and nature's a great place for quiet contemplation. It blows my mind that I can see San Francisco from the East Bay hills. It's jam-packed with people. Yet the guy and his dog are the only creatures I see during an hour of hiking.
This morning, when I awoke, I wrote: "We are at the dawn of an era that will change the structure of business, the nature of work, our view of the world, and our impressions of ourselves. Our culture and institutions are stretched to the breaking point. After a quarter-millennium of the Industrial Age, humankind is poised to rewrite the rules, abolish modern slavery, stop plundering the earth’s resources, and focus on using our time wisely.
In 1848, France, Germany, Italy, Romania, Denmark, Croatia, Serbia, Hungary, and others revolted against heavy-handed, absolutist rulers. In 2004, workers and business leaders are rejecting inflexible, top-down, Industrial-Age holdovers out of step with today’s fast-paced, networked, egalitarian world.
Business leaders are confused. Strategy is a luxury. A sea of information washes over us. Entropy replaces purposeful behavior. The future is a crap-shoot. People dread their jobs. Executives feel they’ve lost control. Corporations destroy the environment. Politicians destroy the economy. All is chaos. Chaos creates stress, and stress fosters cancer, heart disease, stoke, adult-onset diabetes, and mental collapse. Change is preferable to continuing the charade that nothing’s wrong.
The model for the future is biological. Nature doesn’t have executives, managers, supervisors, or bosses. No one’s in control. Living things interact with one another and their surroundings. They adapt. They grow. It’s not planned; it just happens. There are no hidden agendas, no shadow organizations. In business, complex interactions will spontaneously create organizations without bosses, software without programmers, webs without weavers, and learning without instructors.
Imagine the opportunities of businesses that are distributed, decentralized, collaborative, and adaptive. Everything flows. Slack evaporates. Cooperation replaces competition. Learning and work merge into a single stream.
I'm refining the mission of the Workflow Institute. We want to make the world a better place. Luckily, I've got some great advice to draw upon.
"The dogmas of the quiet past are inadequate to the stormy present. The occasion is piled high with difficulty, and we must rise with the occasion. As our case is new, so we must think anew and act anew."
Since the lack of Wi-Fi access in the conference center here has put the kabosh on my plans to blog this event in real time, I'm going to experiment with another format. This entry reports on a session that's not on the program and will take place right on center stage before the afternoon keynote address about four hours from now.
"The fellow who invented local area networks once said that no matter how much you hyped the power of the Internet, it wasn't enough. That's the way I feel about the Future of Learning that IBM has been describing. But it's not just IBM. It's all of us. It's the convergence of learning and work."
Instructional design and business process design are becoming one and the same. Our role will be to facilitate the flow of work rather than dispensing contentl. It's an exciting new world.
Talking with some of you here reminds me of Napoleon saying to one of his field marshals, "We must plant trees along every major road in France to protect our soldiers from wind and cold when they march off to new conquests." "But, mon emporeur, it will take decades for them to grow." "Alors, better start right away."
So today we're forming a community of practice around workflow learning. You don't build a CoP step by step. It's more like lighting a match and fanning the flames.
I don't know what shape this will take. I'll volunteer the WorkflowInstitute site to host the discussion. VNU has established a conference within a conference on workflow learning at Training West to be held in SF this October. If you want to be in on something big, join the community. Help me fan the flames. Let's talk at the reception immediatey following the zebra guy.
I reply: “That’s something you won’t have to ask five years from now, for by then Web Services and the integrated, real-time enterprise will be commonplace. Learning will have become a core business process. It’s what will connect humans to their work.
Now, we call it workflow learning because it’s a different animal from the workshops, reference manuals, computer-based training, and courses that have been the staple of corporate training departments. The goal of workflow learning is to optimize business performance. It employs “smart” software to guide, inform, and assist workers to do their jobs better. When appropriate, it will put the worker in touch with the right expert or mentor or help desk, someone who’s both knowledgeable and available.
You've heard about the promise of Service-Oriented Architecture? XML? It's finally happening. Intelligent software agents tackle the Mickey Mouse work, freeing workers to serve customers, make judgment calls, generate innovations, and accelerate the pace of the business. IBM calls it “on demand;” at HP it’s the Adaptive Enterprise. This will spark a sea change in the way the world conducts business.
Finally, we’re shrugging off the practices we inherited from the industrial era and entering the knowledge economy. Workflow learning is the people part of that.”
Describing workflow learning invokes the corollary to Murphy’s Law: “You can never do just one thing.” In this case, you can’t appreciate workflow learning without understanding its context. Critics and reactionaries write off the workflow vision as futuristic and not yet relevant. To me, it’s more what William Gibson meant when he said, “The future has already arrived. It’s just not evenly distributed yet.” Companies are modeling workflow now. Workflow engines are at the heart of IBM, Microsoft, Oracle, BEA, SAP, and PeopleSoft.
Competition is driving business cycles to occur faster and faster until “soon” is replaced by “right now.” In a zero-latency enterprise, planning collapses into action. Successful organizations identify and demolish obstacles in the path of slack-free workflow. Frills and inefficiencies such as studying for the test instead of the job, going through the motions thoughtlessly, and fighting the last war largely disappear.
Rigidity, discipline, narrow focus, and top-down control improve efficiency when change is rare. This logical formula worked so well in producing physical goods that it became gospel, seared into our thinking as the one best way to do things no matter what. But the world that created the Industrial Age is long gone. The vestigial worldview of the old era is wholly inappropriate for our current situation.
Today the goods are largely intangible; innovation trumps obedience; flexibility is the only way to survive; and control is being delegated to the workers themselves. In fact, in a business ecology, the workers are in charge, and most organizations are bossless.
Technology, communication, information, world population, and interconnectedness are advancing exponentially. In the face of such volatility, long-range planners are on permanent leave of absence. In some quarters, “long-range” means “next month.”
Christopher Meyer and Stan Davis (2003) support the notion of workers being in control in their book It's Alive: The Coming Convergence of Information, Biology, and Business. They point out that “The past fifty years have shown conclusively that distributed decision-making does a better job of satisfying demand than a centralized approach. Nonetheless, many of our businesses retain a surprisingly ‘Soviet’ management style, using approaches developed in an assembly-line era that have more in common with a top-down mentality than with a bottom-up one.”
In a workflow learning ecology, each worker has an instant picture of his or her slice of the workflow on the screen 24/7. Assuming the right permissions, the worker can also realign the process, correct error situations, receive a chunk of simulation-based learning, or be connected with another person. The “dashboard” has become the “cockpit.” As network computing becomes pervasive, the cockpit may reside on a handheld, a head mounted display, or a wi-fi bodysuit.
Skeptical? You’re witnessing bottom-up decision-making in the swift turn of a school of fish but we’re not used to seeing it in business. MIT Professor Tom Malone equipped an audience with hand-held paddles whose position could be read by a computer. On the screen up front, he projected a flight simulator. A hundred people jointly took the controls of the plane and, against all expectation, flew the plane without a pilot and without a crash
When I attended business school—admittedly that was soon after the Dark Ages—I took separate courses in marketing, accounting, finance, organizational behavior, international business, and so forth. Then I joined a corporation that had a marketing department, an accounting department, a finance department, etc. These separate entities competed for senior management attention when they should have been optimizing corporate performance. Had this outfit lived in nature, it would not have survived its first day. A business ecosystem must adapt to fit its circumstances; the elements of a business ecology communicate through Web Standards. In addition, a business ecology doesn’t have a boss; it grows through the collective effort of its workers.
In the past, if a business wanted to automate, it had to pretend its organization operated like a machine. Now however—for the first time—IT is sufficiently flexible to conform to the shape of the business it serves. Under the hood of the future computer you’ll find a bevy of snippets of agent software working out solutions—without the heavy hand of a programmer to hardwire them together. Since the software agents are “loosely coupled,” they enjoy the flexibility to reconfigure themselves for best fit.
Another integral factor in business is intangibles. Forty-percent of the workers in America are knowledge workers, and their numbers are growing. They don’t make anything that classic accounting considers an asset, yet corporations keep paying them high salaries. One definition of intangible is “assets that are saleable but not material.” A second definition is: “lacking substance or reality; incapable of being touched or seen.” Finally, another definition is “not having physical substance or intrinsic productive value.” Whoa. That sounds close to worthless. More than 25 percent of the net worth of American public companies is intangible. Don’t tell me that it’s worthless.
The Coca-Cola Company has a market value of $164 billion. Its tangible assets are worth $7 billion. The other $157 billion is intangible. It’s the brand, the social capital, and know-how that Coke has built up over the years that are really valuable. Similarly, all but $20 billion of IBM’s value is intangible; reputation is intangible. Microsoft has only $1 in tangible assets for every $3.75 reflected in its capitalization; code is intangible. This is not just some financial anomaly. Clearly, intangibles have a tangible impact.
The discipline of Business Process Management (BPM) provided a dominant gene in the DNA of workflow learning. BPM is all about manipulating intangibles. It is inevitably a cohort of workflow learning. Paul Harmon, author of Business Process Change: A Manager's Guide to Improving, Redesigning, and Automating Processes, defines BPM as “aligning processes with the organization's strategic goals, designing and implementing process architectures, establishing process measurement systems that align with organizational goals, and educating and organizing managers so that they will manage processes effectively.” In other words, you draw a chart of the flow of work though the organization. Now for the magic: Resequence or redraw something on the diagram, and the system rewrites the underlying code. Thus, you manipulate the symbols and you change the process on the factory floor. At the same time, you can imbed information for the worker who later gets stuck at this point. Or you can ask the software to generate a simulation of the ways things should operate.
For some, the work of the future will resemble an elaborate, personalized video game front-end that’s connected to the physical operations of their company.
Life will be simpler five years from now. We’ll be comfortable living in a world of organizations without bosses, computing without programmers, and webs without weavers.
Next time, if a corporate titan comes into my elevator and asks me about workflow learning, I’ll simply tell her that workflow learning is how workers improve performance in a business ecosystem.
Jay Cross is Managing Director of Workflow Institute, CEO of Emergent Learning Forum, and founder of Internet Time Group LLC. He co-authored the book, Implementing eLearning. You may reach him at [email protected]
Paul Horn, svp and head honcho of IBM Research, posited the question, “What does work mean in today’s world?” Paul’s main point was “Differentiate or die.” To be on the high-margin end of the food chain, IBM must out-innovate. Innovation is the intersection of invention (which IBM does well) and insight. Services is the up-and-comer; if IBM can’t differentiate that, it lets down half the business.
MIT’s Tom Malone shared the essence of his new book, The Future of Work, saying that:
Throughout most of history, humans organized themselves into small, decentralized, unconnected groups (“bands”). Then came kingdoms, with a central authority. In the last two centuries, democracy replaced the kingdoms. (1776, 1789, power to the people.) This evolution rides on the falling cost of communication, hastened along with the invention of writing, the printing press, and the net.
Consider how falling communication costs have changed the structure of business organizations in the 20th century.
When I was growing up in Hope, Arkansas, business was locally owned and operated. Mr. Cox filled our prescriptions at Cox’s Drugstore. The Lagrones sold nails at Lagrone Hardware. The Citizens Bank of Hope had but one location.
At the same time, the “centralized mindset” had taken hold. Bigger was better. People respected General Motors. ITT’s Harold Gineen bragged that he could run hotels, insurance companies, and manufacturers solely by running the numbers. Jimmy Ling built a conglomerate that made airplanes, smelted steel, and played the market. This “progress” made its way to Hope; Mr. Cox and the Lagrones were no match for Wal*Mart.
New organizations are akin to a bag of components that take on different shapes to meet immediate needs. Their goal is to optimize their value chain, some of which they own, other parts they receive from partners, and yet other components they outsource to someone who specializes in that particular function. As in a democracy, decision-making is decentralized. This “no-boss” network is akin to geese flying in a V-formation; the goose in front is not the leader. Rather, each bird flies in relationship to all the other birds.
|For a fascinating simulation of leaderless groups, check out Boids (Flocks, Herds, and Schools)|
Malone’s narrative reminds me of Stewart Brand’s wonderful book, How Buildings Learn. When you look at a group of buildings, they appear solid and unchanging. If you looked at a time-lapse movie of those buildings over a century, you’d see continual change. In time, every front porch sprouts walls and becomes a front room. Land-use patterns change. Upscale neighborhoods turn into derelict war zones. Bad neighborhoods are gentrified. When you take a long-term perspective, new patterns emerge.
Toward the end of the day, Irving Wladawsky-Berger, IBM’s VP of technology and strategy, took the stage to describe the On Demand enterprise. “On Demand” is IBM’s flavor of what other companies call “organic IT” or “adaptive enterprise.” Many players recognize this model of computing as an inflection point. This is precisely what gave rise to the Workflow Institute; our goal is to optimize the contributions of people in this new environment.
Mind-blowing advances in technology and our evolution to a knowledge-based society are driving the move to On Demand. The Internet showed us the value of connected, integrated technology. An open standards culture plugs all the pieces together. (Consider Web Services, XML, Linux, WSDL, grid computing, services architecture, and valuing interoperability more highly than efficient but unconnected processes.)
What does On Demand get us? Flexible business solutions. The ability to grow organically. The capacity to respond to change in real time. A dynamic business and technical environment. A model that applies to all layers of the stack: systems, apps, and business. Shared processes. Loose coupling. Business objects. More intelligent businesses. Like a fractal patter, the model works at any scale: departmental, enterprise, or ecosystem.
I asked Irving if the evolution of this new computing model were not directly parallel to the model of human organizations Tom Malone had begun the morning with. He replied that we were looking at precisely the same thing.
IBM has been a factor in my life since college days, when I struggled to write Fortran IV programs to run on Princeton’s IBM 7094 mod 2. When I was with NCR and later UNIVAC, IBM was the competition. They were haughty. After all, “No one ever got fired for choosing IBM.” In fact, one guy I sold an NCR mainframe to got fired for not choosing IBM. THINK. Hubris. FUD. IBM knew more than the customer would ever fathom. IBM always had the answer.
At the Almaden Institute, I met friends from numerous other companies. IBM no longer claims to have all the answers. Jim Spohrer, Paul Horn, Irving Wladawsky-Berger, Robert Morris, and a bevy of other IBMers shared their concepts generously and invited us to build on them. Entering an era when “coordinate and cultivate” takes precedence over “command and control,” IBM is eating their own cooking.
This is but the tip of the iceberg. We talked about all manner of things throughout the day. As Arnold says, “I’ll be back.”Excerpt from The Future of Work in HBS Working Knowledge Other takes on the day:
Deep Fun looks like a site worth coming back to.
A summary page on flow
Jay Cross, Founder, Internet Time Group, and CEO, Emergent Learning Forum
Sam Adkins, Chief Analyst and Director of Research, Workflow Institute
Offered: Feb 5th (Event Sold Out)
Most training fails. This session looks at what succeeds.
A recent post on the Learning Circuits Blog ("We Are the Problem: We Are Selling Snake Oil") raised quite a stir. Amazingly, few people disagreed with its assertions that "training doesn't work," "knowledge management doesn't work," and "e-learning doesn't work." Old-time, industrial models such as packaged courses, top-down KM, and traditional workshops no longer deliver on expectations.
The Workflow Institute recently isolated the common features of whatis working. Building on their research of workflow learning, Jay Cross and Sam Adkins discuss the characteristics that make real-time learning, storytelling, simulation, and contextual collaboration so effective.
Sold out, perhaps worth a try. I think the coordinates are:
audio:1 (800) 200-2285 Conf: 8226549
(You'll probably have to push your own slides.)
We'll post a recording of the event some time tomorrow.
|Customarily, the Workflow Institute distributes reports and updates only to members. This one's on us, to celebrate our debut. This is our abbreviated forecast. For the full version, go here|
1. Listen to Sam's presentation on Workflow Learning.
3. Download free reports.
4. Drop by and bookmark the Workflow Learning Institute.
Take our brief survey on the value of personalization.
Four people will win a copy of one of Sam Adkins' reports on Workflow-Based Learning, a $250 value.
Winners will be announced during our online conversation on Personalized Learning midday on August 26. You are welcome to join us (it's free) but you need not be present to win.
Web Services Manifesto
By Sam S. Adkins
Why Web Services and XML matter.
"The intent is to leverage Web services to embed e-learning functionality into business applications such as CRM and ERP. With the foundation of an open architecture in place, the door is opening to Web services"and the related capability to surface e-learning as events within other applications. As e-learning platforms and content evolve toward open standards, the capability to surface learning seamlessly within the context of enterprise applications and business processes is almost within reach."
Presentation at FLUID, April 2003
The Danish Association of Flexible Learning
The advent of Web Services has altered the learning technology landscape completely, and there"s no turning back. As Web Services proliferate and forever alter the landscape of enterprise technology, they also alter the landscape of learning technology, content, and services.
As Mark Resmer, CTO of eCollege stated, "Web Services are probably the most important technological step forward since the advent of the Web." Kendall Grant Clark concurred in a May 2003 XML.com article, "Much of the value of web services will come from their ability to be combined in novel, complex ways."
It"s these so-called novel and complex combinations that have changed learning technology forever. The radical change is the migration away from an emphasis on learning objects that learners must access to learning services that are experienced as contextual events in the real-time workflow.
Indeed, Web Services and XML matter to learning technology because they
This new primary learning experience is deeply fused with the real-time work experience. Consequently, it captures and integrates the various forms of the contextual on-the-job informal learning that account for 90 percent of how people really learn in the enterprise. This fusion of work and contextual informal learning is the result of Web Services.
It"s cost-effective and efficient, and has begun to cannibalize the budgets previously spent on classroom and courseware-based products"whether online or not. Referring to Web Services, vice president of development at Element K Paul Krause said, "While it provides an elegant solution for system integration and system collaboration, what it really comes down to is a simple and more cost-effective way for our customers to accomplish their e-learning goals."
Here are some of the links I promised in today's webinar. Within 24 hours I'll post the presentation (with narration) as well. If you have questions, post them as a comment below and I'll answer them here.
There's information on blogs here, although I also recommend you simply poke around on this blog and visit some of the others I showed:
Unlike many bloggers, I think it's okay to go back to add additional material. That's because I view blogs as nifty content management systems more than as diaries. For example, here's an excellent article on blogging from journalist/entrepreneur Jeff Jarvis.
Request your copy of the eLearning Implementation & Action Plan Template here.
The unexpurgated "director's cut" of Lance's and my book is here
Jay's notes on Living on the Faultline (core vs. context)
Jay's white paper on Informal Learning.
My thoughts on the parallels between networking and learning first appeared here. This is a work in progress. If you'd like to be notified of new developments in this and the other topics I track, sign up here.
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Today I'm handing the blogging duties to my friend Sam Adkins. Sam is a leading eLearning business analyst and product researcher. He built the world’s first commercial online learning business (The Microsoft Online Institute), and he has specialized in electronic training for his entire career and prior to Microsoft worked for Authorware, United Airlines and AT&T. More recently, he wrote the 2003 series of reports entitled, “Simulation in the Enterprise: The Convergence of eLearning, Simulation and Enterprise Application Suites.”
Sam and I share a vision of the real-time enterprise where simulation and reality converge, and learning becomes a core business process. Today's entry ties workflow-based learning™ to the bottom line. Visit the Center to Enterprise eLearning Excellence for more information on this topic.
The economic imperative to define and optimize precise workflows for particular workers is being driven by the need to increase productivity. As noted by Kenneth Berryman, in the presence of a finite work week and a shrinking workforce, productivity is the only metric that can be modified to increase profits. Optimizing the workflow is the only way to increase productivity. Workflow is not a passing trend.
According to the U.S. Bureau of Labor Statistics, productivity is “measured by comparing the amount of goods and services produced with the inputs which were used in production. Labor productivity is the ratio of the output of goods and services to the labor hours devoted to the production of that output.” The goal of all performance technology, particularly Workflow-based eLearning™, is to increase productivity.
Learning for its own sake is a predilection of the academic world. As the old adage goes, “education is broad, training is narrow”. Beyond education or training, Workflow-based eLearning is targeted directly on real-time productivity metrics.
To illustrate the fundamental difference between conventional training and Workflow-based eLearning, the metrics of Workforce Analytics are not couched in learning outcomes but rather in Key Performance Indicators, or KPIs. Workflow-based products are targeted at workers and productivity, not students and learning.
There are five major ways that workflow Workflow-based eLearning optimizes productivity. It does this by:
§ Optimizing and automating task analysis.
§ Targeting the 80/20 performance ratios.
§ Capturing “informal” and organizational performance.
§ Reducing the lag time in business process flows
§ Increasing the workforce alignment with enterprise technology and strategy.
Due to the presence of bottom-up task modeling tools, it is now possible to rapidly optimize and automate the task analysis phase of any continuous performance improvement process. These tools are designed for process specialists and workers participating in the business process.
These Business Process Modeling (BPM) tools allow task analysis to be distributed across the enterprise. One key benefit of this distributed task analysis is the capture of so-called informal learning and organizational learning. They are exceptionally efficient at identifying the infamous 80/20 rules that emerge in any business process.
The 80/20 rule states that 80% of productivity problems are caused by just 20% of the performance behavior in the workflow. In contrast, 80% of productivity increases can be attributed to 20% of that performance behavior. BPM process modeling and simulation can readily identify both kinds of behavior. Behavior that reduces productivity can be removed and behavior that increases productivity can be enhanced.
Jay Cross and others have estimated that up to 90% of all workplace learning occurs in non-formal venues. All the customers that have adopted these new embedded performance technologies have commented that true organizational knowledge is being captured. The workarounds, the shortcuts and the complete avoidance of official procedure are captured when workers on the job model their own tasks in a process.
IBM has flipped the definition of formal and informal learning on end. They now define collaboration (or work) using workflow technologies as the formal learning process. Conversely, they redefine traditional classroom or conventional learning as informal. Hence collaboration management and workflow analytics are beginning to capture the 90% of learning that occurs in the context of the social work day.
In the U.S., over $65 billion is spent on formal workplace education and training. Less than 6-7% of that is now technology-based expenditures. The majority of that technology-based expenditure is in conventional elearning content that is modeled on formal training concepts, i.e. courseware. In other words, although intended to be “taken” in informal settings, the products are still completely formal by design. They still require a secondary and subsequent learning transfer to the job.
The irony is that this $65 billion is targeted on just 10% of the way people really learn in the workplace. The inefficiencies of that formal training are now being recognized. IBM’s Tony O’Driscoll cites a Robinson and Robinson study that claims, “less than 30 percent of what people learn is actually transferred to the job in a way that enhances performance”. There is no learning transfer phase in Workflow-based eLearning. Learning is coterminous with workflow.
Formal education and training is already being reduced by the use of these products. Customers of workflow-based performance technology all cite the reduction in the need for training once these technologies are deployed. Formal training is both seen as an expense and an “offline” secondary activity that decreases immediate productivity and increases lag time.
It is well known now that achieving productivity gains by streamlining processes is getting harder and harder to achieve. Smaller and smaller increments of improvement are garnered even with the most sophisticated automation technology. This has influenced vendors to focus more heavily on the lag time. Most BPM and workflow technologies achieve small gains in actual task output but they achieve large gains by reducing lag time.
According to the Ultimus, reducing lag time is the only way to significantly increase productivity. They claim that even if task time is reduced by 50% it will only have an overall impact of 5% on the actual process time. However, if the lag time is reduced by 50%, the overall process time is reduced by 45%.
Source: Ultimus, 2003
One of the primary ways they reduce lag time is by dramatically shrinking the training time needed to get up to speed on tasks. The other way lag time is reduced is by sophisticated task routing, workload balancing, exception handling and embedded task support.
According to Ultimus , it is believed that 90% of the time required to do work is “lag time”. Only 10% is actual task time. According to Ultimus, productivity application software reduces the task time and workflow automation and optimization software reduces the lag time.
As noted in the first two reports in this series, workforce alignment is a major productivity problem in the enterprise. Large studies by FranklinCovey and Gallup Management Journal have identified large segments of the workforce that misunderstand the business goals for their company. Many are unaware or are actively disinterested in the corporate strategy.
Corresponding again to the 80/20 phenomenon, about 20% are fully engaged and “on board” with the corporate vision. Likewise, about 20% are actively disengaged. All this is reflected in productivity metrics that are now being analyzed in executive dashboards. A new type of emotional assessment is now being deployed in the enterprise to mitigate this problem.
Reduction of Training Time Reduces Lag Time
The AWD/Knowledge Enabler is a task management modeling tool that “automatically guides a user through a series of pre-defined steps necessary to process an item of work—reducing keystrokes and training requirements”.
Teamplate’s customers routinely cite the dramatic reduction of developer training time and costs by virtue of using the Teamplate Integrated Development Environment (IDE).
All of these new workflow optimization products and task management tools are designed to reduce the need for training. The products from Ultimus , Lombardi , XStream , Knowledge Products , Teamplate , Knowledge Impact , Nobilis , and Hyperwave are examples of workflow-based products that enable the design, development and delivery of Workflow-based eLearning.
The DreamFactory technology is a tool used to create composite applications in the browser. Since granular business processes are “wrapped” as granular Web Services , they can be assembled, mixed and matched, and reassembled as work changes.
Any process wrapped or published as a Web Services has embedded code as well and tools that assemble Web Services into composite applications generate composite code as well. The rich client software from DreamFactory allows users to assemble Web Service-based business processes into composite applications.
Microsoft’s new InfoPath product is a very similar product but leverages the familiar Office interface instead of the browser. InfoPath allows users to assemble components from a wide variety of applications and was designed to be the front-end to all enterprise applications.
Workflow -based eLearning can be designed at the same time as the workflow itself is designed or added later as simulation and analysis tools discover performance gaps. It can also be designed on top of existing workflow diagrams. In that case, the performance nodes are clearly recognizable. The task analysis has already been done.
Workflow-based eLearning is created with the same tools that create workflow. The two most widely used stand-alone tools are Microsoft’s Visio and Corel’s iGrafx. Workflow diagrams created with these tools will clearly identify the discrete tasks that may or may not require intervention or remediation.
Up until very recently, workflows created with these stand-alone tools had to be imported into a Business Process Management or Workflow Management platform. Now Microsoft’s Visio 2003 has robust XML and Web Services support. Visio can be the front-end into business other applications or it can be embedded in other applications.
Visio has eight million users and now has native XML, SVG (Scalable Vector Graphics) and BPM support. At a recent presentation highlighting the combined XML, SVG and BPM features of Visio 2003, Richard See, Lead Program Manager in Microsoft’s Visio Product Unit said, “SVG is used as the visual representation layer of a much richer XML data set exchanged between multiple applications in support of business process management (BPM). In this example, we will demonstrate the ease with which users can associate process information with shapes in the Visio diagram through a BPM solution running in Visio. This BPM information is then made available to other applications by mapping it to elements in a BPM schema/namespace carried in the SVG and associated with graphic SVG elements at the visualization level. This information can then be used by analysis and line of business applications”.
It should now be obvious that traditional application training or even business process training cannot meet the training needs of a worker who uses a composite interface comprised of several different functions from several different applications. Workflow is the only constant and now becomes the foundation and context for training. In that sense, workflow becomes the carrier wave of learning.