Process management

Are you on a path into a process wilderness? (part I)

business process implementation

By on 04/12/2013

If Business Process Management is failing then what does the path to failure look like? Business Process Management successes are widely promoted, its failures are hidden. Often we learn more from a failure than a success. This is a story about a company that did everything right in their business process implementation and still ended up failing. Read it and consider where your company’s path of business process implementation leads to.

This is about Nordic Market. Nordic is a Scandinavian supermarket chain. It doesn’t exist. It’s a summary of 12 real cases from industries such as transportation, shipping, manufacturing, beverages and engineering. Some have followed the same path of processes as Nordic Market and have realised that they have been chasing a Fata Morgana. Others are well underway deep into the desert. They are accompanied by their eager local guides in the form of well-meaning consultants. I know their stories, their aspirations and their worries because I talk with their executives, their managers and their front-line people every week.

First four months: Setting up the project

Nordic Market’s business process implementation journey started three years ago. The Board of Management (BoM) of Nordic introduced new management tools once in a while. They usually came with a new executive who had experience with the tool from a previous company, or who had attended a conference. Sometimes the new thinking was embedded into Nordic’s ways of working and created some value. Other times this didn’t happen. Business Process Management was introduced when Nordic decided to introduce a common ERP system. Now all the chain’s supermarkets and central functions should use the same system for managing operations. Nordic started out with an assessment of the company’s readiness. The result was discouraging. Hardly any business processes were documented. Different functions had documented a few critical processes here and there but there was no common standard. No common perspective.

Nordic’s BoM solicited advice from external experts. On the basis of their recommendations, they decided to start a Business Process Management project. A project team was set up. The project leader then hired a well-known consulting company to assist with the project. They placed 10 full-time consultants on the project. The consultants recommended that Nordic should buy a tool to help design the processes and the business process implementation. Nordic then bought an advanced process modelling tool from a leading vendor that was right up there in the left-hand corner of Gartner’s quadrant. The team made a project plan that was approved by the BoM.

During four months the team would interview managers and subject matter experts in all of Nordic’s business functions and regions. With this knowledge, they would select and map all the company’s primary business processes which were to become part of the ERP system. The team picked BPMN as their modelling language. This standard was already used by the ERP software vendor and according to Gartner and Forrester, it was the most widely used language. Everything was done just by the book.

Then the team started creating an especially intense and busy period. Interviews were conducted through some personal visits to stores and some were done by telephone. The conversations resulted in detailed notes that became the starting points for process modelling. In most cases, so-called “industry prints” from the consulting company were used as a basis for this. After each process was modelled the consultants checked with the interview respondents to ensure that they agreed.

Eight months into the journey: Processes are mapped and presented

After four intense months, the project team was ready as planned. They had now modelled more than 500 business processes implementation within Finance, Supply Chain and HR. Each functional area had been divided into some main, high-level processes with a number of lower-level processes. For instance, HR operations were mapped through 15 main processes. Recruitment was one of them. It consisted of 10 detailed processes that specified work down to a very detailed level. This was required for the ERP platform to be set up – a clear and comprehensive enterprise architecture.

The next step was to present the work to Nordic’s board of management. Before the presentation to the board, they presented the main functional processes to each of the functional heads. The SVP for HR reviewed the 15 main processes and took a few tours into specific subprocesses to understand the quality of the work. The CFO and the SVP for Supply Chain did the same with their functional areas. After the functional reviews, the full enterprise architecture was presented to the Board of Management. At this point, it was mostly a formality. Each senior executive knew that this was based on the best practices from one of the world’s leading consultancies and one of the world’s leading ERP vendors. The consultants had done this many times before for other premium brands. The thinking looked sound and the processes were approved.

After the board approval, the team and the consultancy started to set up and configure the new ERP platform. It was set up to support and help the business process implementation of 500 processes. Some activities were happening inside the ERP system and others were to be done manually be employees. The notation language indicated this very clearly with green and blue boxes. This work took another six months.

14 months into the journey: The ERP system is ready to be rolled out

Once the ERP platform was configured and tested the consulting company and the people from the ERP vendor started with User Acceptance Testing (UAT). Again leaders and subject matter experts were summoned to the project. This started a phase where they, assisted by the consultants, verified that each business process was implemented correctly and that it could be executed through the ERP system as specified. During this phase, some employees encountered processes that were very far from the day-to-day operational work that they knew so well. They had approved it already and besides, the new processes were based on international best practices, so other people probably knew better. The ERP system was approved and the UAT completed.

After 17 months: The change program is being prepared

Now it was time to roll out the new ERP system to all the employees of Nordic. Often the change effort is forgotten and Nordic’s BoM didn’t want to make this mistake, so the consultancy’s change management experts were brought in. They introduced a world-class change methodology called “ADKAR”. It was a process to bring all employees through the following phases of change: Awareness, Desire, Knowledge, Ability and Reinforcement.

Let’s stop for now and take a moment to pause at this summit in Nordic’s project and reflect. Nordic Market had mapped all their key processes and “implemented” an ERP platform on schedule. This only happens to 16% all major IT projects. Already quite an achievement. Even their most senior executives were involved. In other words, this was “anchored at board level”. This is something that everyone considers to be a critical success factor in any large transformation effort. I’m sure that the board of management, the project team and the consultants were as confident as ever.

Where are you on your journey? Just starting out or already well underway? The story of Nordic Market continues before X-mas. Will Nordic fail when they reach the valley of despair (like 75% of change projects do) or will they succeed? I have already revealed that it may not end up like your ordinary X-mas fairy tale.

The second part of this story is now live here.

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