Validation of QUTs Business Process Standardisation framework on the example of an industry project

Contents

1 Abstract

2 Introduction
2.1 Background
2.2 Project objective

3 An understanding of the current literature on BPS

4 Project approach and methodology
4.1 Business Process Management Lifecycle
4.1.1 Process discovery
4.1.2 Process analysis
4.1.3 Process design
4.2 Interviews

5 Research Outcomes and Discussions
5.1 Validation through interviews
5.1.1 Interviews
5.1.2 Analysis of interviews
5.1.3 Findings of interviews
5.2 Validation through the application of the framework
5.2.1 Project cost change control process
5.2.2 Framework application
5.2.3 Master process
5.2.4 Extent of unification of variants against a standard process
5.2.5 Ideas for improvement

6 Conclusion

Abbreviations

References
Appendix A
Appendix B
Appendix C
Appendix D
Appendix E
Appendix F
Appendix G
Appendix H
Appendix I
Appendix J
Appendix K
Appendix L
Appendix M
Appendix N

1 Abstract

This case study report undertook a validation exercise of the QUT Business Process Standardisation (BPS) framework. Standardisation is of great significance to organisations as it enables them to operate more efficiently and therefore to be more competitive in an increasingly challenging environment of globalisation. Using a validated BPS framework provides a higher degree of accuracy and therefore increases successes chances of BPS initiatives. It is critical for companies to use a verified concept to minimise risk of failure. Validation of the framework was sought through two research methods. Firstly, targeted interviews were undertaken and analysed to validate the individual steps of the framework. The second part is the application of the framework by standardising an example process of the industry partner Red Rocks Company. For this component, the first three phases of the Business Process Management Lifecycle were applied: process discovery, process analysis and process design. In the last phase, a written policy was developed following the steps of the BPS framework and distributed to stakeholders. Overall, the QUT Business Process Standardisation framework was validated. Significant learnings have been taken by Red Rocks Company. For example, it was identified that process owners are not always assigned within the organisation which leads to low process management maturity. The work has to be viewed within its limitations of the one example process, the selected interviewees and the perspective of only one organisation. The interviews and practical application validated all steps of the framework and confirmed the significance of BPS within a global corporate environment.

2 Introduction

2.1 Background

Business Process Standardisation (BPS) has gained more relevance over the past years. More organisations are adopting a process-centric view, pressured by increased business challenges caused by the globalisation of entire industries and therefore higher competition. BPS is therefore vital for large organisations to deliver goods and services more efficiently and with consistency. Muenstermann et al (2008, p. 7) define BPS “as a set of logically related tasks performed to achieve a defined business outcome”.

BPS provides significant benefits to organisations of any size and industry. Ganly (2016) confirms that process standardisation provides consistency, increase in quality and business value. Additional benefits if implemented correctly are repeatability, reduced cost and improved performance. Although benefits of BPS seem to be well understood, there appears to be a gap in academic research into this abstract.

Goel and Bandara (2016) found that there is a lack of “evidence based conceptual understanding of BPS”. Goel et al (2018) therefore, created a model that is hereby referred to as the QUT Business Process Standardisation Framework. It was created using existing studies and has measures that can be used to operationalise each of the phases present in the lifecycle. The aim of this project is to validate the model on an industry partner.

The selected industry partner is the Red Rocks Company¹ which is an industry leader in the mining industry. With over 53,000 employees, the Red Rocks Company is one of the largest global mining groups. The organisation created a global Technology function in early 2017 with the aim to leverage synergies and to standardise technology initiatives across the group. Red Rocks Company’s technology vision is “to enable a fully integrated and highly automated business from resource to market” (Red Rocks Company. 2018a). An external capability maturity assessment was undertaken in late 2017 for the Red Rocks Company’s Technology function, which confirmed an overall maturity level 1-2 and indicative of a newly formed function. One of the key findings was that “current processes and Technology services are not optimised to deliver in the global model, and lack ownership to drive standardisation and continuous improvement” (Red Rocks Company. 2017a).

2.2 Project objective

This project aims to validate QUTs Business Process Standardisation framework on an example process of Red Rocks Company, which requires standardisation across a global function. Validation of a theoretical model is very important, as this proves that the model is true and is required for ongoing use. MacKenzie et al (2011, p. 1) state that validation of “a construct is critical to building cumulative knowledge ”. Further, it will increase acceptance within and outside of academia.

There are two research components to validate the framework in this work. Firstly, i nterviews with diverse stakeholders will be conducted at Red Rocks Company to validate the concept and its importance. Secondly, this project will develop a standardised policy for the “Project cost change control process” that is planned to be diffused to a wide range of stakeholders. The project is a combined industry and academic research project with a target audience in both areas.

3 An understanding of the current literature on BPS

A brief literature review was undertaken to support the idea of this project. Goel et al (2016) identified a lack of conceptual understanding of Business Process Standardisation. A subsequent PhD research thesis by Kanika Goel developed the QUT BPS framework which is planned to be published in July 2018. Further validation of this work is required to gain academic and corporate acceptance, which is the goal of this project.

4 Project approach and methodology

4.1 Business Process Management Lifecycle

The project followed the Business Process Management (BPM) Lifecycle as per Dumas (2016) to develop a standardised process. The aim of this model is to improve the performance of the process. The BPM Lifecycle is structured into five phases (see Figure 1 - Business Process Management Lifecycle as per Dumas), and provides an intuitive structure to achieve continuous improvement of business processes. The reason for selecting this model is that it is considered industry best practice (Bernado et al. 2017) and it also aligns with methodologies currently applied at Red Rocks Company.

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Figure 1 - Business Process Management Lifecycle as per Dumas)

For this project, only the first three of the five phases were in scope (see Figure 2 - In scope phases for this project as per BPM lifecycle). This is because the project duration of 12 weeks is too short to develop and implement a new standard within a global and complex organisation like Red Rocks Company. There is scope that the process implementation will be part of a follow-on project.

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Figure 2 - In scope phases for this project as per BPM lifecycle

4.1.1 Process discovery

Process discovery is the first activity of the Business Process Management Lifecycle. The following methods were applied to identify current as-is processes.

4.1.1.1 Business process modelling

Business process modelling was used to document the “Current as-is” and “Recommended to-be” processes in Microsoft Visio using Business Process Modelling Notation (BPMN). It is a graphical representation of processes which provides an intuitive display, due to which it facilitates fast feedback from stakeholders and the identification of potential weaknesses. “Current as-is” and “Recommend to-be” models were developed and presented to stakeholders via email and in face to face presentations. Due to the global and virtual nature of Red Rocks Company, using business process models was a successful method to get high quality and quick feedback. Stakeholders found it easy to read and understand the process. Further, they appreciated the clear depiction that business process modelling provides. In total six variants of the current as-is process and one standardized recommended to-be process were depicted (see Appendix L and Appendix M).

4.1.1.2 Stakeholder engagements

Workshops and meetings were undertaken with key stakeholders to identify “current as-is” processes and to review the “recommended to-be” state for feedback. They were held face to face in Brisbane, via telephone or email conversation. In total 12 stakeholders from all sub-functions across Technology were consulted. Observations and conversations were documented to capture important details and feedback on this process. A detailed stakeholder engagement log can be found in Appendix I.

4.1.2 Process analysis

Process analysis is the second activity of the Business Process Management Lifecycle. The following methods were applied.

4.1.2.1 Process analysis as a method

Process analysis is a form of technical writing and analysis to break down a process into specific steps. It was used to provide insights on weaknesses and their potential impacts on stakeholders, which resulted to be successful in improving the understanding of the process.

The Lean methodology was used to analyse waste and bottlenecks. Voehl et al define waste as unnecessary activities (2014). If these activities are not undertaken then still the same end result will be achieved. They are also often referred to as duplication. The identification and reduction of waste is a way to increase the profitability of an organization.

An extensive analysis was undertaken to compare the six variant processes against the proposed master process (see Appendix J). The steps that were present in the variants but not in the master process were classified into two categories:

- Waste – The activity is duplication or extra work that is not required
- Similar – The activity is somehow aligned and not necessarily waste.

The results were also displayed in the process maps using colour coding (see Appendix N) and reviewed with stakeholders which aided in gaining support for the recommended to-be process.

4.1.2.2 Review of industry literature

Apart from the validation of the BPS framework, a brief literature review was undertaken to find industry best practice recommendations for the “Project Cost Control Change Process”. The QUT online library was initially searched by applying keyword searches using “Project Cost Control Change Process”, “Project Cost Control Change” and “Project Cost Control”. A time range from 2013 to 2018 was selected to ensure relevant publications, which resulted in 225,206 results. The search was further limited to “Engineering” which reduced the number of publications to 12,734. Undertaking a literature review was a successful method to find supporting evidence for the recommended to-be process. Further details on the findings can be found in Appendix H.

4.1.3 Process design

Process design is the third activity of the Business Process Management Lifecycle. Aforementioned methods like Business process modelling and stakeholder engagements were applied to design the new recommended to-be process.

4.2 Interviews

Interviews were held with stakeholders at Red Rocks Company to validate the QUT Business Process Standardisation framework. A pre-established questionnaire was used as per Appendix C based on the standardisation framework, which was refined after the first session to accommodate more detail. In total four interviews were held via phone or face to face in Brisbane and recorded, which allowed capturing the content in great detail. They were later transcribed for research purposes and can be found in Appendix D, Appendix E, Appendix F and Appendix G. Interviews lasted between 6-22min.

5 Research Outcomes and Discussions

There are two research components that need to-be considered for this project. Interviews were undertaken to confirm the validity of the BPS framework with Red Rocks Company staff. Further, the BPS framework was applied to standardise an existing process that presented initially with six variants.

5.1 Validation through interviews

5.1.1 Interviews

Interviews were undertaken to validate the BPS tool. In total four interviews were held between March and April 2018 with different stakeholders of a variety of backgrounds at Red Rocks Company. A questionnaire was developed with targeted questions to validate the components of QUT’s BPS tool. The original questionnaire can be found in Appendix C.

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Table 1 - List of interviewees

5.1.2 Analysis of interviews

The individual responses by question are summarized in below table.

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Table 2 - Analysis of interviews

5.1.3 Findings of interviews

The interviews confirmed that all steps of the QUT BPS tool are important. Everyone agreed that Business Process Standardization has a significant impact on the organisational success if the correct stakeholders are engaged. It was suggested that applying organisational change management practices might be a critical success factor in getting everyone on board to adopt potential changes that arise from a business process standardisation initiative.

Modularity

Modularity was considered important to the majority as it allows for fit for purpose and the ability to provide greater detail.

Isolation of process specificities

Isolation of process specificities was seen as somewhat important if it is well described in sufficient detail.

Agreement

Overall everyone agreed that defined accountability and responsibility was likely to have a profound effect on success. Creating standards is one thing, but enforcing them is another one. The interview outcomes confirmed that if enforcement is not given, then the best written standard will not succeed.

Clarity of process specifications

It was observed that Australian respondents had a stronger focus on communicating responsibilities and accountabilities via documents (i.e. RACI) and a mandate, whereas the Chilean respondent was focused on finding a solution with the group. This might indicate a cultural preference.

5.2 Validation through the application of the framework

5.2.1 Project cost change control process

The Project cost change control process is a key supporting project management process in the Small Projects Management Framework (SPFM) at Red Rocks Company. It has been identified that this process is treated differently across the various delivery functions in Technology. The reason for this is that there is no written policy and different functions have developed their own practices over time, or adopted the policy of their original home asset.

This causes confusion to Delivery Mangers (DMs), Project Managers (PMs) and other stakeholders as it is not clear when a cost change request is required. A clear definition of cost contingency is a key trigger for the change control process. Since this is not defined, it is not possible to establish a single and global cost change control process for Technology. Red Rock Company is now seeking to use the QUT Business Process Standardisation Framework to help standardize this example process and at the same time to validate the academic model.

5.2.2 Framework application

The discovery phase identified six variants of the Project cost change control process across the global Technology function. The subsequent process analysis phase compared the different variants and identified potential waste. By finding supporting evidence in a literature review and engaging stakeholders, a recommended to-be process or master process was defined. As per Business Process Management Lifecycle, the process redesign needs to be undertaken as a next step. The QUT Business Process Standardisation tool (see Appendix B) was used at Red Rocks Company to design the new standardized process.

5.2.3 Master process

One of the two important components of the Business Process Standardisation tool is defining the Master process.

5.2.3.1 Clarity of process specification

5.2.3.1.1 Model

The below steps are outlined in the BPS framework to clarify process specification.

A1: Presence of document for process variant which describes process activities and elements

1.1 Presence of process documentatio n : (i) As models or (ii) in written form

A2: The process documentation should cover all essential details necessary for process awareness and its efficient execution

2.1 Explicit goals for processes are present
2.2 Clearly documented activities
2.2.1 Specification of Mandatory process steps
2.2.2 a Identification of chronological sequence of activities
2.2.2 b Identification of order of activities
2.2.3 Comprehensible activities
2.2.4 Transparent activities
2.3 Clearly documented roles and responsibilities
2.3.1a Presence of Nominated process owner
2.3.1b Responsible person exists
2.3.2 Everyone knows about their responsibilities

5.2.3.1.2 Approach

Two important documents were developed to describe the individual process activities and elements:

- Project cost change control management standard as per Appendix K
- Process model of the recommended to-be process as per Appendix L.

Interviews, a survey and workshops with stakeholders were undertaken to develop the two artefacts. A constant feedback circle was in place to capture misalignments of important process attributes and unsound process activities. In total 10 different stakeholders were consulted in 12 separate sessions. This allowed having various perspectives and lenses to be applied to the process.

Both documents clearly define roles and responsibilities as per BPS tool. The Project cost change control management standard states the explicit goal of the process, documents sequential activities and describes them in a comprehensive manner. Further, it presents a process owner, who is also the responsible person. Process ownership is a new concept to Red Rocks Company. The project sponsor, in this case, volunteered to be the process owner of the example process. Overall, the clarity of process specifications is considered an important component for process standardisation initiatives. All standards are expected to have a clearly defined document. This was confirmed in the interviews in which one interviewee stated that responsibility and accountability are best communicated through a documented standard and a RACI (responsibility, accountability, consult, inform) matrix. Cabanillas et al (2014) also identified that a RACI matrix enables responsibility management information because it specifies the involvement of each human resource has in the process.

5.2.3.1.3 Findings

The suggested attributes of the BPS framework align with current practices at Red Rocks Company for writing standards. However, defining a process owner has been a weak point in the past which was also confirmed in the interviews. It is recommended to Red Rocks Company to establish a process oriented culture that has dedicated process owners.

Further, process models are used in some areas of Red Rocks Company to depict processes and have been found very valuable. Overall the BPS framework is proven to be effective in the component of clarity of process specification.

5.2.3.2 Modularity of business processes

5.2.3.2.1 Model

The below steps are outlined in the BPS framework to confirm modularity of business processes:

A3: Process documentation is structured in a modularised manner with sufficient detail

3.1 Documentation of modularized processes
3.2 Process documentation to-be in sufficient detail

5.2.3.2.2 Approach

Some of the identified current as-is process variants could be considered to have modularised processes. Historically this was caused by different sub-functions within the organisation establishing their own processes. After consultation with a senior management stakeholder, it was decided to stay with one simple and standardised master process. The reason for this is that the example process is a routine governance process and should not present with different modularised processes for example by sub-function. A thorough analysis was undertaken to identify potential modularised processes. There were no modularised structures discovered in the example process. Any potential modules (i.e. Planview projects, non-Planview projects) were able to be resolved as a decision activity in the recommended to-be process.

Three interviews confirmed that modularity is important to a certain degree. However, one interviewee stated it is not important because standardisation should only aim for one process. This leaves an interesting discussion on how well modularisation is understood.

5.2.3.3 Master process

5.2.3.3.1 Model

The below steps are outlined in the BPS framework to confirm the master process:

A4: Derivation of fixed Master Process that is a single point of reference

4.1 Presence of Fixed Procedure
4.2a The process is described only once
4.2b The process has no various alternatives

5.2.3.3.2 Approach

A fixed procedure was developed as part to the Project cost change control management standard as per Appendix K. In this document, the process is described only once and has no other alternatives. The content of the procedure was developed based on the six variant processes, senior stakeholder engagement and an industry literature review for best practice processes on the example process. The master process was reviewed in 10 revision sessions with stakeholders. This helped in validating it and ensuring that there are no major flaws. In almost every session another small update or refinement was identified by the reviewers. This highlights the importance of stakeholder engagement and peer review. The engagements now provide a good basis for the implementation as major stakeholders are across and on board for the upcoming change.

A 50% of interviews confirmed that a documented master process is the best way to communicate accountability and responsibility of a standardised process. One interviewee suggested that this would be best in form of a clearly defined standards document with a RACI matrix.

5.2.3.3.3 Findings

Establishing fixed procedures is a common approach at Red Rocks Company. Further, the interviews confirmed that well-documented steps are critical success factors to implement a new standardized process. This aligns with the principles of the BPS framework.

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¹ Company name has been anonymized due to confidentiality issues.