The second article in a new series describes the new business process transformation framework as it applies to a real business process requirement By Rick C. Burris and Robert E. Howard, Oliver Wight Principals, with contribution from Tom Mercer, value chain group model architect Using the dictionary 8 www. bus- ex. com JANUARY 10 I n the first article of this three- part series, we discussed the long list of enterprise resource planning ( ERP) system implementation failures and introduced a new technology framework for accomplishing business process transformation in those implementations. We introduced an efficient and effective, holistic process design approach. This approach ensures balance is maintained throughout the design process among the key drivers of business transformation success: people, process, and tools. Studies on the subject of ERP failures have clearly identified that the primary cause of failure is the difficulty companies, and their people, have in properly and quickly articulating the process design needed for success. They fail because the companies and their people lack the skills, knowledge, and tools required to successfully incorporate best practices, the business needs, and system capabilities into a transformational framework. This article will further describe the new business process transformation framework as it applies to a real business process requirement. We will present a value chain scenario developed in ValueScape ( an enabling modeling tool) from an extensible resource model ( XRM) dictionary that contains integrated best practice process flows, enabling definitions, policies, procedures, and practices with complementary metrics and functional role definitions. The business issue A global company has determined that its master scheduling process has continually failed to produce the anticipated results. It is a cumbersome, costly, and ineffective key process that impacts directly the company's operational performance and business success. It has been a number of years since the initial ERP installation, which included master scheduling functionality. The ERP functionality was selected and configured using the typical " user- defined requirements," which were largely reflective of what was then current practice. That initial design proved to be flawed and, over time, was no longer capable of scheduling according to the business requirements and needs. As a result, the master supply planner has developed many off- line ( outside ERP) spreadsheets and other non-integrated, work- around practices in order to produce a master supply plan and related schedules. Schedule attainment results remain low when measured against actual production. After repeated efforts to " simply use the software as designed," it has become clear that to produce different results, the company needs to take a different approach. This approach includes taking a hard look at how the scheduling process needs to operate to ensure product availability and how the ERP system must be configured to support the needed process attributes.
A key value in utilizing pre- populated process designs in XRM dictionaries is that companies do not have to literally start with a blank sheet of paper when developing the process designs. They can start with the process framework that represents best practices and then ask, " what will we need to change to adapt this process design to our business and planning needs?" The approach of starting with a business process framework enables the process design to be completed in less time. Instead of the company's planners focusing on the administrative tasks involved in documenting the process design on a blank sheet of paper, they can focus on the critical thinking needed to ensure that the process design reflects what is needed to be successful. This critical thinking includes comparing current company practices to the best practice models and challenging the need for deviation. This approach produces a truly transformational design for the company as measured by its goals for process performance. The process of transformational design In developing the process designs, the company tasks internal teams to produce final process designs. In this case, the company has decided to re- engineer the master supply planning process using business process transformation framework ( BPTF) methodology. The company has arranged for outside expert help to guide their use of the BPTF methodology to develop the business process design. This methodology includes conducting redesign workshops, using a modeling tool called ValueScape. ValueScape consists of a pre- defined extensible resource model ( XRM) which contains industry best practices for integrated planning and control. These best practices are based on Oliver Wight's extensive experience over 40 years in developing process designs and on the best practice standards contained in the Oliver Wight Class A Checklist for Business Excellence, Sixth Edition. The process designs include integrated workflows, roles, responsibilities, and performance measurements in what is called an XRM model dictionary. The information in the dictionary is drawn upon as a baseline for the new design and applied to the specific nuances and needs for this company. Figure 1- Example of the extensible reference model ( XRM) dictionary JANUARY 10 www. bus- ex. com 9 Strategic management: The business process transformation framework