Business Process Improvement

From Tactical Focus to Competitive Strategy

By John Makulowich

When Col. Edward Vigen became deputy director of the International Cooperative Programs Activity at the Army Materiel Command three years ago, his superior put special stress on one directive: Fix the process.

For Vigen, that meant reducing the time it took his unit to complete government-to-government pacts that support U.S. national security and foreign policy. Such pacts had been dragging on from two to three years.

While admitting the evidence is still largely anecdotal, there have been impressive gains, he says. Using Lotus Notes to create the International Agreements Tracking System, with support from William Remmert, an enterprise consultant with Entex Information Services of Ryebrook, N.Y., and a few other improvements, Vigen has nipped the time to four-and-one-half to seven months.

With an 18-person staff, the International Cooperative Programs Activity, headquartered in Arlington, Va., works on agreements, including those spanning cooperative research and development efforts between the United States and other nations. Vigen early on recognized the need to redesign and streamline the process so an integrated system could be used to capture, track and monitor the agreements.

As many as 50 agreements valued at over $400 million are in process at any given time worldwide and involve nearly 400 civilian and military personnel, many part-time. With so many players in the process, agreements could easily slip through the approval cracks. The new tracking system offers visibility and accountability as well as an ability to answer within seconds questions about any given agreement.

Vigen's problems multiplied when the Office of the Secretary of Defense starting making agreements with more and more countries that allow international research and development. In fact, that office has been adding two to three countries annually for the last several years.

Steve Rohleder

At the same time, in a now-familiar scene repeated at domestic public and private sector organizations, reductions in staff were occurring. Thus, Vigen found himself with fewer and fewer people to handle an ever-increasing workload.

"There were other dilemmas," admits Vigen. "First, I didn't own the entire process, just a piece of it. Second, we were geographically dispersed with 14 sites in the United States and several offices overseas, all of which had players in the process. Third, everyone involved in international cooperation agreed that the process took too long."

For example, he says, one type of arrangement called a data or information exchange agreement, covering topics such as chemical agent decontamination, proving ground techniques, rocket propellant and propulsion and mobile shelters, was taking so long that by the time it was consummated, "the technology covered in it was obsolete.

"Process improvement was not a luxury, it was an imperative," Vigen says. "We tried to attack this thing on multiple fronts, one of which was automation."

The results? Three years ago Vigen had 44 data exchange agreements in the process for 12 months or longer. He is now down to only 15 agreements. And he plans to reduce that number to single digits in a month or so. Since last October, Vigen has completed a handful of data exchange agreements in as little as four-and-a-half to seven months.

Process Improvements

Alongside the use of Lotus Notes were other process improvements Vigen has set up. These include permitting specific signature authority at the level of the command's principal deputy for technology, creating letters of instruction on how to conduct the organization's business, and forming integrated process teams that were tasked with particular assignments.

Setting up Lotus Notes was relatively easy, since the command's director for information management had already selected the application for headquarters and was in the process of supplying servers and seat licenses for subordinate commands here and overseas.

Working with Entex's Remmert, Vigen fashioned a process flow plan from information already in the letters of instruction as free text.

"We set stretch goals to six months. The first cut revealed a nine-month process. But we discovered that 20 percent of the time was taken in mailing documents back and forth. Once that bottleneck was removed, we were able to get the process down to less than six months," explains Vigen.

The first version of the coordinated process was put online in an in-house system a year ago. Major subordinate commands were connected last October through January.

"In truth, Congress should be the first place to be re-engineered." -Susan Stalick

Practices and Demands

On Remmert's side of the fence, as a Notes developer, process translates into understanding clearly customer practices and demands.

"As an example, we looked at document routing - that is, phases of readiness to proceed to the next office. On paper there was a signature page as well as a level of expectation that when it went to a particular department, such as legal or translation, staff there should turn it around in a standard number of days. I coded to that model," says Remmert.

What Vigen and Remmert found was that each department had its own expected turnaround. The user community admitted that it didn't always send the document or approval agreement to a specific department to do a particular thing. The colonel and the consultant realized they needed to create a level playing field, an action time frame that allowed a fair window for each task.

They innovated by creating a color-coded scheme for easier recognition of process phases, using green for the early phase, amber for two-thirds of the due date and red for due or past due. For Remmert, the jewel formed from the process was the design of a generic worksheet covering all international agreements that allows staff to track ownership of the specific approval process.

Vigen's successful efforts sit at one end of the spectrum from the focus of Andersen Consulting - which is process excellence. In the company's words, process excellence is a "strategy of achieving sustainable competitive advantage through continually developing outstanding business processes."

Two years ago, the Chicago-based firm worked with the Economist Intelligence Unit to produce two related publications, an executive briefing and lessons from the leaders, and combined them under the title, "Building Process Excellence," or BPE.

Steve Rohleder, Andersen's managing partner for North America Federal Practice, views BPE as different from business process improvement, the approach taken by individuals like Vigen who seek to make better the processes of specific operations. BPE amounts to a different focus on the value of an organization's operations.

"BPE takes all other concepts, such as TQM (Total Quality Management) and BPR (Business Process Re-engineering), two or three steps further and moves the bar up. It asks the basic questions, such as what value are the business processes providing your customers. It demands you take a step back and look at all the processes to improve the value of your organization to your customers. BPE is more of a holistic approach, a blueprint for business transformation," explains Rohleder.

Among the critical elements for success are strong leadership, a belief that the process is going to work, and patience to work through all the steps. Rohleder cautions that this is not a process to get you to the end, but an ongoing initiative and an ongoing direction. The challenge is to raise the bar on value.

"Another key factor is measuring people on their results. When you believe your job and your well-being are evaluated on the achievement of results, you get a different mind-set. You perform based on measurements. Where I have seen BPE fail is where key performance indicators are not aligned with BPI," notes Rohleder.

The insurance industry, financial services firms and the government are among those who could adopt this approach most effectively, given their high customer contact and measurement potential.

Ultimate Customer Organization

"While BPE applies to any organization, the government does present a different set of challenges. The government is the ultimate customer-facing organization. All their products support the general public. Their mission-critical support has its focus as the general public. It applies more to them than anyone else," stresses Rohleder.

What that amounts to in his view of "citizen-centered services," a term Rohleder coined, is to look carefully at the services they are providing to the citizenry, to focus on customer values such as instantaneous service, and to ask what processes must be in place to meet those needs.

"The current government effort in BPE, generally, is where the private sector was three to four years ago, for example, looking at the human resources department and focusing on internal transformation," says Rohleder.

The interest in government BPE stems in large part from the Government Performance and Results Act passed by Congress in 1993, as well as from the recently renamed National Performance Review. That administration initiative, a task force on reinventing the federal government, was recently renamed by its new director, Morley Winograd. He now calls it the National Partnership for Reinventing Government.

The purpose of the performance and results act is to strengthen the government's program management, make objective evaluations of performance and set measurable goals for future performance.

The General Accounting Office, a nonpartisan congressional agency that audits federal programs, noted in a report on the Government Performance and Results Act: "... federal agencies often fail to appropriately manage their finances, identify clearly what they intend to accomplish, or get the job done effectively and with a minimum of waste. After decades of seeing these problems recur in agency after agency, Congress moved to address this endemic situation on a governmentwide basis. Major statutes now in their first years of implementation hold substantial promise for creating a more accountable and effective federal government."

Policy and Politics

Another consultant with first-hand experience about government process performance is Susan Stalick, president of Canal Bridge Consulting in Potomac, Md. She has worked with government agencies in implementing process improvement since 1991 when the FBI sought to re-engineer itself.

"Process improvement was not a luxury, it was an imperative." -Col. Edward Vigen

"What you find is tremendous enthusiasm in government for change at both the middle management and lower levels. In many cases, though, after coming up with a wonderful design, suddenly someone calls a stop to something like all IT purchases. Policy and politics get in the way.

"Another hurdle is going through the layers of stakeholders. In truth, Congress should be the first place to be re-engineered," says Stalick.

A firm believer in empowerment, Stalick feels that, ultimately, the individual must change herself or himself, that once you go through the process with the help of a consultant, you gain a sense of what it means to manage your environment.

The steps required are straightforward. First, she says, eliminate dependency on the consultant by transferring skills and knowledge that are needed to move forward. These skills range from the basics of how to conduct a meeting to helping form policy. Second, develop leadership and executive support.

"In many cases, the biggest difficulty is finding out who is in charge. So you move to a grass-roots leadership approach. Once momentum begins for change, it does not stop. However, it may not go in the direction you planned. You begin to realize it takes time to create that momentum. You don't reinvent the government in the six weeks," says Stalick.

One of her first questions to government staff in workshops that she holds is: why are you here?

"We press the question, is there any point in what you are doing? Why do it if it is not providing value to your customers? Then the question arises, who are your customers? Surprisingly, many give the answer of suppliers and vendors. That reveals a tremendous amount of confusion," notes Stalick.

Those workshops, carefully planned and structured, are where momentum begins. They often involve 30 to 50 people over a period of 12 months.

In some cases, they last three to four days every other week for two to three months.

"The sessions help articulate conflicts and allow politics to be played out," explains Stalick. "In essence, we create a lab to experiment with change, to build a microcosm of the world they live in. We try to model behavior they don't see normally and enable people to practice new team behaviors."

The Front Lines

In the strictly IT world, the perception of executives like those from Arlington, Va.-based CACI International Inc. is instructive. Both Ron Ross, president and chief operating officer, and Joe DeFee, vice president of the Advanced Systems Division, are on the front line with clients, helping install the processes affecting competitive change.

CACI's contract with the Navy requires data re-engineering services for the Navy's personnel assignment application and migrating the system to the World Wide Web.

The large-scale project involves cleaning up data, combining several systems into one, producing an integrated relational database across two applications and then re-thinking how the data is disseminated, accessed and used when rebuilt on the Web.

Not only is the Navy modernizing an old, very large and complex application, they are changing how the information will be used throughout its operations and who will have access to it.

Ross has been involved in such projects for the last few years, and found that many fell apart right after the process improvement review.

Participants were walking out of planning sessions without addressing the critical enabling technology issues.

"Among the hard lessons is that it does no good to re-engineer a system without putting together new architecture," notes Ross. "The bad news is that technology turns around pretty quickly, but that is good news, too. It offers an opportunity to re-architecture."

Ross and DeFee are clear that there's likely to be continuing turmoil in the IT shop as administrators are called upon to do more and get more leverage from the information and from the technical infrastructure.

DeFee, whose experience includes delivering projects involving large legacy, mission-critical operations, thrives on breaking down business logic, re-engineering processes and re-architecting systems. For him, the Web is just another application for the client-server.

"The demands on companies like ours are becoming more rigorous, because all the fun and easy stuff has been done - that is, the static Web pages and relational databases tied to a customer services type approach," says DeFee.

"It is easy compared to taking mission-critical operations that drive the business and moving them to the Web," he says.

The questions raised now are: Can you get transactions through the system quicker? Can you get them out to the consumer?

And these, DeFee points out, involve problems in synchronization and integrity of data - or systems problems.

"In a very real sense, Web technology is struggling to catch up. You can write a lot more Java [applications] than you can use," says DeFee. "You have to deal with a lot more than the interface, with such issues as performance on the network.

"The big question is how to implement workflows and work processes with the technology of how to transform business logic to new technologies."