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Business Process Improvement Using Agile

by Ben Linders on Mar 29, 2013 |

Organizations want to improve their business processes, and today they need to do it faster. Is it possible to use agile methods and techniques for business process improvement?

In the article the next wave of process strategy on Harvard Business Review, Brad Power shares his views on business process improvement approaches. Although much has been achieved in the way that we have improved in the last decades, he sees a continued need for organizations to improve their processes:

(…) there's no time to celebrate yesterday's wins. They won't immunize your organization against this decade's march of ongoing progress. That's because information technology (…) will render even some of today's most proficient business processes obsolete by the end of the decade.

The question for top management is no longer whether your organization's processes need to be improved, but rather which ones, how much, and when.

One of the things that has changed according to Brad is that process improvement needs to be quicker:

Companies today must be able to make process changes in days or weeks, not months or years.

In an follow article by Brad Power called three examples of new process strategy he describes new ways that organizations can improve their processes:

I'm collectively referring to these process improvement approaches as "Process Strategy 2.0". They stand on the shoulders of the methods of "Process Strategy 1.0": Lean, Six Sigma, and Business Reengineering.

Brad states that an agile approach is needed to satisfy the increasing need for speed in process improvement:

To speed operations and improvement, Process Strategy 2.0 will make greater use of quick experiments and more agile management processes.

In the InfoWorld blog adapt agile to build a better business, author Bob Lewis of the Advice Line blogs talks about delivering business change with Scrum. First he makes clear how deploying business change differs from delivering software:

Business change, however, involves more than just dumping a new piece of software into the system and hoping everyone figures out how to use it to improve the business. It involves additional tasks such as designing improvements to business processes and practices, training, communication, making accounting changes, redefining performance metrics, and a bunch of other stuff.

The user stories on the product backlog have to cover everything that is needed to do the business change. The backlog items will “describe how work gets done using the new software”, which is the intent of the business change.

When the time comes to work on a user story, aspects that have:nothing to do with software will be assigned to appropriately qualified business staff, who, in addition to working directly with the developer assigned to the user story, will have responsibilities of their own. For example: "Educate users in the new process and software." This will go into the backlog, managed just like every other user story.

For setting the priorities in business change, Bob suggest to use the Theory of Constraints (TOC) from Goldratt:

TOC works by establishing a clear goal -- for examples, reduce incremental cost; shorten cycle time; increase process capacity. It then identifies the single biggest barrier to achieving that goal. This is the bottleneck -- the constraint. Get rid of it and you're closer to achieving your goal. Next, identify the biggest remaining constraint, and get rid of it.

According to Bob, using Scrum combined with the Theory of Constraints to do business change helps organizations to become an agile enterprise.

(...) what makes an enterprise agile is the ability to design, plan, and achieve intentional change, rapidly and reliably.

In the blog post change management vs process evolution, David Anderson describes his ideas on business process improvement, which he calls change management:

Change management is the discipline of managing change in organizations. Changes to processes or changes in organizational structure the discipline used to bring some control and governance to these activities is called change management.

David explains why the adoption of agile in organizations, which is also a managed change, is sometimes challenging: 

It is ironic that the approach to Agile transitions has been a very non- Agile, big design up-front, make and follow a plan, approach. The fact that many Agile transitions are challenged and underperforming (and I’ve been saying this for at least 5 years now) may be that the approach being used is inappropriate to the domain of the problem. What we need is an Agile approach to change - an approach that incorporates feedback loops and evolves as new information emerges.

Similar to Bob Lewis, David also refers to the Theory of Constraints from Goldratt. He suggest to apply the five focusing steps from TOC as a solution for managing evolutionary change by focusing on the biggest constraint, and eliminating it:

(...) the essence was that small changes were made and the successive changes could not be predicted far in advance - perhaps only the next 2 or 3 steps at best. An entire transition could not be envisaged.

Methods like Kanban and Lean Startup can help you to find the biggest constraints that prevent improvement in the organization:

Kanban offers firms the capability of evolutionary change. (...) With Kanban we use fitness criteria (...) for evaluating our current process and determing how we might guide mutations to produce a fitter evolution of our process.

Similarly, Lean Startup has emerged as Eric Ries’ approach to business model evolution. (...) With Lean Startup the fitness criteria are more directly market related (...) The concept of validating business assumptions, in Lean Startup, is the process of applying a fitness criteria in an evolutionary sense.

In the blog how organizations achieve real process improvement, head of Enterprise BPM at Software AG Joerg Klueckmann describes experiences from organizations with process improvement. One of the organizations is Cable & Wireless:

Process Excellence is at the core of Cable & Wireless’s vision to be the mission-critical communications integrator. They elevated BPM from IT to a more strategic business level in the organization, and shared their experiences going from process infancy to Process Excellence.

Cable & Wireless considers performance improvement to be one of the components of their process excellence strategy:

Performance improvement: A consistent and continuous improvement methodology to prioritize and execute a portfolio of inter- and intra-process improvement projects. 

A best practice from process improvement at Cable & Wireless is their agile process. Joerg states that  agile helps them to change quickly:

Agile Process - is not simply IT Agile Development it is about Rapid (governed) change from the business

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Agile has a quick defect detection and remedy cycle by Ian Fleming

One of the attractions for Agile in Software is that if you are doing a 10 day Sprint there is built in damage control as you discover the defects and remedy them quickly in the short delivery cycle. For other Domains, especially business process improvement, the type of defects (average turn around time, rework, impacts to other processes etc) need to be observed over a longer period before a decision is made as to whether the event (defect) is a random event or tied to the change you are making in the Sprint. In addition, after establishing a defect exists, the remedy (process change) is typically not as obvious as it is with Software production.

The key for me, for Agile suitability, is how quickly can a defect be identified and remedied and this needs to be done within the given Sprint time frame.

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