developing world class process maps
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The Institute of Internal Auditors Detroit Chapter. Developing World Class Process Maps. May 22, 2013. If You Have Questions…. If you have questions during the webcast: If necessary, exit Full Screen View by pressing the Esc key Submit questions through the “ Ask a Question” button - PowerPoint PPT PresentationTRANSCRIPT
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Developing World Class Process Maps
May 22, 2013
The Institute of Internal AuditorsDetroit Chapter
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If You Have Questions…If you have questions during the webcast:
– If necessary,exit Full Screen Viewby pressing the Esc key
– Submit questionsthrough the“Ask a Question” button
– Questions will be answered after the presentation portion is concluded
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Earning CPE CreditIn order to receive CPE credit for this webcast, participants must: Attend the webcast on individual computers (one person per
computer) Answer polling questions asked throughout the webcast When answering polling questions, select your answer and the click
“Vote” button (next to the “Ask a Question” button) to submit / save your answer.
CPE certificates will be sent to the e-mail address on your BrightTALK account within two weeks of this webinar.
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Please tell us your member status
A) Member Detroit ChapterB) Member Other Michigan chapter (not Detroit)C) Member of other chapter (not Michigan) D) Non memberE) Student
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BiosAdam Golden
Co-Founder and Principal of Major Oak Consulting, a boutique Management Consulting firmFormer Internal Auditor at D&B20+ years Process Excellence CFO Magazine winner of “REACH” award for Outstanding Reengineering AchievementCo-Chair of the APA’s Strategic Payroll Leadership Task Force (SPLTF) Best Practices Subcommittee
Process Geek
Keith Fournier, MA, MBA, PMPSenior Management Consultant – CIO Advisory ServicesFormer “Transformation” CIOManaged tens of millions of dollars of technology projectsReceived National Recognitions for ERP, Document Management and Geographic Information Systems implementations20+ years (10 years consulting)Specialize in IT strategy, planning, acquisition, and implementationProject Management Geek
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Process Mapping – Background
Enterprise Mapping
Current State Mapping and Analysis
Capability Requirements
Future State Process Mapping
Best Practices / Wrap-up
Q&A
Agenda
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Definition: A process is a series of steps or actions performed to achieve a specific purpose
Processes are the foundation of all businesses, yet nearly all processes within organizations are undocumented
What is a Business Process?
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Processes are what happen when functions come together to perform a taskIt’s normally poorly designed and executed processes that cause inefficiency and ineffectiveness in organizations, not functions
Customer Service Dept
Customers Experience a Company’s Processes, Not its Functions
Sales / Marketing
Accounts / Credit Dept
Production / Service Delivery
FUNCTIONS
PRO
CESS
ES
“Receive & Process Account Application”
“Onboard New Customer”
“Bill & Collect From Customers”
“Handle Customer Complaint”
Note: If the name doesn’t include a verb, it’s probably
not a process
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Organizations map their process for specific “events” such as:Reengineering / Improvement programs– Reduce costs, remove waste, increase quality, increase efficiency, improve
employee satisfaction, improve customer satisfaction, etc.
Systems implementations
Merger & Acquisition (M&A) integrations
Sarbanes-Oxley / Compliance / internal controls awareness
However, almost anytime is the right time to map your business processes. Process mapping is a useful tool to develop a shared understanding of issues/problems, build teams, produce brilliant ideas and unlock the potential in your business.
So when do you map your business processes?
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Polling Question #1
Are you are involved in projects outside of internal audit reviews? A) Yes, Reengineering/Improvement programsB) Yes, Systems implementationsC) Yes, Merger & Acquisition (M&A) integrationsD) Yes, Sarbanes-Oxley/Compliance/internal controls awarenessE) No
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Mapping processes enables organizations to:
Understand what the process really is…− Detailed information of what is currently happening, who does it, predictability− Determine “real process” vs “perceived process”
Measure the effectiveness and efficiency of the process
Ensure the proper controls are in place
Understand where waste and inefficiency exist − Delays, unnecessary handoffs, duplication of effort, etc− Impact on the customer or partners
Develop new improved processes − Reduce or eliminate inefficiency− Improve the customer experience− Clarify roles and responsibilities
Why map your business processes?
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It seems there are endless ways map a process. The Major Oak methodology for process mapping is thorough, complete and valuable to uncover current state issues and define future state opportunities.
There are many ways to document a process
Process Mapping Examples
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Process mapping involves a series of steps, from confirming process scope to future state design
Before beginning the process mapping journey, it is important not to immediately rush into the detail of process maps. Process mapping typically takes place across four phases.
Enterprise Process Map
Enterprise Overview
Capability Requirements
Data Analysis
Current State Mapping
Current State Process
Future State Design
Future State Process
Capability Requirements
Future Directions
Phase 2 Phase 3 Phase 4Phase 1
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An Enterprise Process Map provides context and scope for your processes
An Enterprise Process Map critically provides context (i.e. interfaces with other processes), as well as scope for processes (i.e. where the processes start and end)
Note: Boxes inside the shaded box
represent internal processes and boxes
outside represent external parties.
Enterprise Process Map (example only)
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Polling Question #2
What tool do you use to map processes? A) VisioB) PowerPointC) iGrafixD) Other
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Each box on the Enterprise Process Map represents an individual process
A process map presents the detailed activities of an individual process, who performs them, how they interact and which systems are used
Enterprise Process Map
Process Map
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Polling Question #3
Have you ever built an enterprise map before? A) YesB) No
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Enterprise Process Map
Enterprise Overview
Capability Requirements
Data Analysis
Current State Mapping
Current State Process
Future State Design
Future State Process
Capability Requirements
Future Directions
Before beginning your process mapping journey, it is important not to immediately rush into the detail of process maps. Process mapping typically takes place across four phases.
Process mapping involves a series of steps, from confirming process scope to future state design
Phase 1 Phase 2 Phase 3 Phase 4
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A current state map focuses on what ACTUALLY happens in a process. Process mapping starts with an understanding of the process details by asking the following questions:
How do you begin mapping the current state?
Current State Process Mapping
1. What transactions are part of the process?
2. What are the specific tasks?
3. Who performs each task?
4. Who is the customer(s)?
5. Are there other stakeholders?
6. What are the decision points?
7. What systems are used?
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Tools to capture process information and gain an understanding of the current state include:
Existing documentation: always leverage any process documentation that already exists
Interviews: one-on-one interviews with individuals who are managing, as well as performing the process
Observations / Walkthroughs: watching a process or individual in action – can be transaction specific
Workshops: targeted working sessions with a group of people involved in performing the process
DILOs (“Day In The Life Of”): shadowing individuals for a full day to experience first had how they handle the process
There are many ways to gather data for the current state process map
Conduct Interviews / Observe Processes
Tip: Use a mixture of these techniques
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The process mapping workshop should be a fun and interactive experience
Goal: To attain a clear, agreed upon depiction of the current state processDuration: Depends on the complexity of the process, but typically schedule a half day if under 8 attendees and full day if 8 or more attendeesAttendees: Include anyone that touches the process in the workshopInputters to the process– Process stakeholders – at least one person per stakeholder group– Individuals managing and performing the detailed process– Receivers of the output of the process (internal customers)Facilitator: The primary role of the facilitator is to engage the attendees to ensure everyone is involved. The facilitator should be a skilled facilitator with process mapping experience– It’s best when the facilitator is not connected to the process being mapped –
so they remain unbiased by the discussion
In our experience, there is always healthy discussion aboutwhat really happens in the current state
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Workshops: Process Mapping is a science, but don’t forget about the art
Process mapping is both a science and an art. The science is knowing the make-up of a process and being able to distill down to each specific task and decision point. The art is the creative process of how to draw the process on paper to make it come to life.
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Workshop ActivitiesHave participants describe the process steps
Ask the group for clarifications or comments
Highlight areas of discussion
Ask about the volumes / significance
Wrap up and Post Workshop ActivitiesThank everyone
Roll up your draft map (brown “butcher” paper)
Capture key takeaways or parking lot items
Start drafting your current state process map
Follow up on any open items or questions
Key Workshop Activities / Post Workshop Activities
The true goal of the workshop is to identify
all of the process steps – you’ll have time for
validation and quantification later
Tip: Write on Post-its or brown paper:BU differencesProcess exceptionsManual stepsRe-workWhere errors occurMateriality
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It is extremely difficult, maybe impossible, to improve a process if you don’t know who is responsible for performing the activity. The benefits of swim lanes are:
You know who is responsible for each step in the processYou can see how many people actually touch the processYou can see back and forths between the same peopleYou can see the hand-off points and where things could fall through the cracks
A process map without swim lanes is like a bike without pedals
Tip: Setup a swimlane for every process
participant
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Key elements of your process map should include:
Timeframes
Customer Service Team
Roles ActivitiesCall client and
schedule kick off meeting
(within 24 hours)
Key Notes
Tip: Don’t cross connector lines
that link process steps
Permanent Temporary
Sub-Processes highlighted
Tip: Include multiple views of timeline /
cycle time
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Once the current state has been mapped, it’s time to validate, analyze and add supporting detail to the map. Examples of current state analysis include:
Validate the map with the core functional team
Identify manual tasks that can be automated
Identify any task that can be eliminated (non-value added)
Quantification of activities, tasks and transactions– Cycle times– Volumes– Defects– Handoffs– Wait times– Costs– Timeframes– Process loops / rework
A current state map is the basis for uncovering process issues and opportunities for improvement
Tip: Review the draft map with core team to validate you got it right
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Process Analysis can take numerous forms. Here’s a few examples: Activity analysis
ActivitiesTime (hrs) Check
Trans-port
Opera-tion Wait Storage
Email request in inbox 4 Prepare quote request 2 Send to manager for review 0.5 Review quote for errors 1 Take paper back to originator 1 Prepare paperwork for client 2 Follow up client 4 Submit order 0.5 Await confirmation of order 1 File confirmation 0.5
No. of tasks 10 1 2 3 3 1Cycle time (hrs) 16.5 1 1.5 4.5 9 0.5
% 100% 6% 9% 27% 55% 3%
67% of time spent on NVA activities
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Process Analysis Example: Resource variation
Associate 5
Associate 4
Associate 3
Associate 2
Associate 1
00:00:00 00:02:52 00:05:45 00:08:38 00:11:31
Open/View Verification Process Activity End
Duration (hh:mm:ss)
Variance due to:System navigation &
processing techniques
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Now annotate the map, highlighting issues, opportunities, best practices and potential projects
Issues / Opportunities
Improvement Projects
Best Practices
Advanced Technique: Color code activity boxes to highlight activity sub-characteristics (manual,
fax, regulatory, etc.)
Key Volumes
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Sample Completed Process Map
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Sample Process Map
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Sample Process Map
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Current State Mapping – Using the Output
Finalize the map
Identify improvement projects
Discuss opportunities with team and management
Prioritize improvement projects and kickoff next steps
Tip: Use the final current state map as a training tool
for new employees
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Enterprise Process Map
Enterprise Overview
Capability Requirements
Data Analysis
Current State Mapping
Current State Process
Future State Design
Future State Process
Capability Requirements
Future Directions
Phase 2 Phase 3 Phase 4Phase 1
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Capability Requirements must be determined before mapping your Future State Processes
Before mapping future state processes, it is important to understand the
future direction of the business and obtain consensus from the Management
Team regarding their expectations and business capabilities required to
support the business in the future.
Key Questions:
What capabilities do they have today?
What capabilities do they need for the future state?
What process, people and technologies are needed?
What are the customer expectations at each key point of interaction with
the business?
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Determine expectations at each customer interaction point and the capabilities required to meet them
Operational Capability
Requirements
Customer Expectations
Organization’s Expectations
Customer Contact / Key Interaction Points
1. Process A2. Process B3. Process C4. Process D5. ...6. …n. Process ‘n’
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Enterprise Process Map
Enterprise Overview
Capability Requirements
Data Analysis
Current State Mapping
Current State Process
Future State Design
Future State Process
Capability Requirements
Future Directions
Phase 2 Phase 3 Phase 4Phase 1
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Future state mapping transforms from what actually happens to what should happen
A future state map focuses on what SHOULD happen in a process by asking the following questions:
Future State Process Mapping
1. Who should perform each task?2. What should be the specific tasks?3. What should be the decision points?4. Who is the customer(s)?5. Who are the stakeholders?6. How should we resolve the issues with the
current process?
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Future state maps typically begin with the current state, but starting with a blank page can be powerful
Start your ‘ideal’ state process map with one or all of the following techniques:
Use your current state process maps and analysis to identify non-value add steps
Re-sequence / amend the existing activities to streamline the process – Consolidate activities to one role where possible to minimize hand-offs
Brainstorm fresh ideas from scratch (sticky notes!)
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Identifying non-value add steps in the current state should involve all the relevant parties
Remove non-value add steps
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Ultimately, you’ll have a future state process map
Future State
Current State
Key Differences: Removed non value-add
(NVA) activities Automated steps Consolidated activities Work moved to the
appropriate role
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Wrap Up / Best Practices
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Keep these Best Practices in mind when mapping within your organization1. The people doing the work are the best source of realistic data
– They are the ‘factual’ authorities on that work – treat them with respect – To get the ‘real story’, remove “bosses” from room during process mapping
2. Generalities are the enemy of good process maps - push for specifics
3. Gather data with multiple approaches - explanation and demonstration
4. Quantify as much as possible – quantification = relevance
5. Validate the process map – multiple times if necessary
6. Swim lanes make the map much more relevant
7. Capture process exceptions, but don’t map them
8. Real test is if the process map is vouched for by those doing the work
9. Break the process down into sub-processes wherever possible
10.The timeline tells a whole story in itself
11.Use flags, notes, colors and other visuals in your process maps
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Questions?
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Speaker Information
Adam GoldenPrincipal
Major Oak Consulting, [email protected]
973.701.0872
Thank You!
Keith FournierSenior Management Consultant
Major Oak Consulting, [email protected]
419.344.6504