There are multiple ways to improve business processes, and everyone has their personal favorites. In my opinion,...
the No. 1 best practice to improve business processes is value stream mapping.
Value stream mapping tools (VSM) are a key part of the Lean manufacturing process that's been adopted by IT organizations as Lean IT. VSM allows an organization to analyze its current state in order to identify value loss in the form of waste, variability or inflexibility and overburden. Once the current-state VSM is completed -- with value loss and improvement opportunities clearly identified -- then a future-state VSM can be done.
Twofold documentation using value stream mapping tools
Two tools are useful when doing a VSM: a SIPOC (suppliers, inputs, process, outputs, customers) diagram, or a visual representation of the business process from start to finish, and a voice-of-the-customer (VOC) document.
Organizations can create a SIPOC diagram by identifying the following:
- suppliers who provide input;
- input required to execute process steps;
- process steps;
- output of the process; and
- customers of the output.
Creating a SIPOC allows for continuous improvement and updates by examining the columns to identify which contribute to longer lead times.
The benefit of conducting a VOC using value stream mapping tools is twofold: It provides insight into the requirements of each customer and shows how your process currently enables the outcomes the customer wants to achieve. This helps an organization identify improvement opportunities for its processes.
Use process metrics to identify improvements
While value stream mapping tools can improve business processes, barriers to the method's success emerge in kind.
To maximize the worth of this technique, each process should have defined metrics and key performance indicators (KPIs) that provide information on the health of a process. These metrics should be reviewed to identify positive or negative trends that then lead to identifying process improvement opportunities.
A key metric for VSM is called process cycle efficiency, which provides the percentage of value-add activities to the lead time. As noted, the lead time is the time between the customer request, or process trigger -- e.g., the recording of an incident -- and its completion when the request has been fulfilled or the incident resolved.
Another key metric derived from value stream mapping tools is the process duration time, which is the actual time it takes to execute a process activity, plus the wait time between each process step. To derive the PCE, divide the process duration by the lead time. This percentage is often 25% or lower, which shows there are plenty of opportunities to improve the process flow. And these improvements often are found in reducing the wait time and removing nonvalue-add activities.
CSI model: Six steps
Used either independently or in addition to a VSM, a Continual Service Improvement (CSI) model seeks to set, track and monitor achievable improvement goals. The following model was developed to provide the key steps to CSI:
Step 1: What is the vision?
CSI is all about the business. So, when looking at the CSI model, the first step is to clearly understand the business vision, strategy, goals and objectives. It is also important to understand IT's strategy, goals and objectives and ensure they reflect and support the business vision.
Step 2: Where are we now?
Answering this question is about performing an initial assessment or measurement in order to create a baseline upon which improvement effort success can be measured. An assessment can be done on availability and performance of IT services. They can also be done around processes such as a process maturity assessment. If you don't have basic measurements or metrics, you may need to collect them for three to six months and then reach an agreement with IT and the business on a baseline number.
Step 3: Where do we want to be?
Set realistic targets for the improvement initiative. This may require setting short-term, midterm and long-term targets. These can include targets for the availability of IT services or for attaining a higher maturity level for processes.
Keep in mind that setting targets should be based on business requirements, and not on business wishes. If a customer wants 99.999% availability, be sure this is what they actually need to support their desired business outcomes.
For process maturity, the key is to understand the value of a process to the business; some processes will deliver more value to the business than others. The target should not be to have all processes at a level-five maturity, as you may find that being at a level three delivers value.
Create a framework for measuring KPIs so you can track your progress on meeting these targets and improving business processes.
Step 4: How do we get there?
This step includes all the process improvement projects you've identified, agreed on and funded. Senior management often does not have the luxury of long projects and is interested in getting quick improvements, so don't overlook smaller projects for improving business processes and IT services. Quick wins can be found for processes, people, tools, metrics and more.
Step 5: Did we get there?
Use the KPIs defined in step No. 3 to continue to monitor, measure and report on your achievements.
Step 6: How do we keep the momentum going?
Market your successes to senior management, as well as the rest of the organization, to gain more buy-in for additional improvement initiatives.
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