2. PROCESS EXCELLENCE RE-IMAGINED
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3. PROCESS EXCELLENCE RE-IMAGINED
Table of Contents
Introduction 1
Changing the Landscape 2
PI for PEX Initiatives 2
Closing the Execution Gap: The Role of PPM 3
Selecting the Right Tools 4
PEX and IT: Flipping the Paradigm 5
Checklist for Success 6
PPM Supports PEX in the Service Sector 6
Conclusion 7
4. 1 | PROCESS EXCELLENCE RE-IMAGINED
Introduction
Process improvement (PI) and process excellence (PEX) initiatives, stalwarts of the modern
enterprise, are increasingly under the corporate microscope.
Starting in the C-suite, expectations are rising as organizations – facing a challenging economic
climate and growing regulatory burdens – embrace continuous improvement as an essential element
to securing a competitive advantage.
Ultimately, leadership wants to ensure that these initiatives align optimally with and support broader
business strategies, and are flexible enough to adapt to a web of ever-changing regulations. As
important, they want to better predict, measure, and optimize the impact of their PI/PEX initiatives.
Speed is also essential in the age of digital transformation as enterprises seek to accelerate insight,
action, and outcomes.
These competing requirements can be a tall order for many enterprises as they work to achieve a new
level of maturity for their PI/PEX programs. Increasingly, organizations are finding an answer in an
unexpected place – project portfolio management (PPM) – a domain traditionally associated, in many
enterprises, with IT initiatives.
5. 2 | PROJECT EXCELLENCE RE-IMAGINED
Changing the Landscape
The spotlight grows on PI/PEX initiatives as business leaders eye them as the new playing field for business growth
and differentiation.
The numbers tell an interesting story. The 4th
Biennial PEX Network Report, 2015/16, revealed 53% of respondents
(process practitioners) say process improvement is expanding in importance in their organizations. In addition, 39%
indicate that the number of individuals involved with process improvement in their organization will increase.
The landscape is changing in other important ways, as well. As PI/PEX initiatives expand and involve more
individuals and departments, management and coordination requirements also grow. Even more significant,
business units, traditionally charged with identifying and defining areas for improvements, are increasingly expected
to take the lead in executing PI/PEX programs, as well – driving the need for new skill sets and tools.
PI for PEX Initiatives
In some enterprises, the PI function is experiencing notable growing pains. The 4th
Biennial PEX Network Report
reveals that securing and maintaining executive buy-in is, without question, the greatest challenge to PI growth –
nearly doubling as the top challenge since the last biennial report (2013/2014). The second most cited challenge is
“overcoming too much short-term focus” followed by “sustaining change.” It is interesting to note that two of the top
three issues are directly connected to aligning PI/PEX initiatives to strategic, executive-level concerns and priorities.
(See Figure 1.)
Figure 1
Process improvement professionals cite other challenges of growing importance, including cost/budget limitations
and skills shortages. In addition, challenges persist when it comes to aligning PI/PEX initiatives with IT.
Along with the desire to more closely align initiatives to business strategies, many organizations are finding that
legacy ad-hoc processes and tools (such as spreadsheet-based task lists and simple collaboration sites) can no
longer scale to meet the needs of a growing number of initiatives, which are often larger and involve more people
6. 3 | PROJECT EXCELLENCE RE-IMAGINED
than ever before. These tools also are not optimal for tracking outcomes in a unified way and supporting continued
learning across organizations.
In this environment, many organizations are poised to rethink and retool the fundamentals of their PI/PEX initiatives.
Perhaps it’s time to apply the basics of continuous process improvement to the PI/PEX process itself.
Closing the Execution Gap: The Role of PPM
Most organizations do an effective job of articulating their mission, values, vision, and strategy. As supported by
Biennial PEX Network Report findings, many enterprises, however, experience a substantial gap between strategy
and process improvement initiatives – whether leveraging Lean, Six Sigma, Total Quality Control (TQC), or other
methodologies. (See Figure 2.) For example, a manufacturer may seek to reduce operating costs through better
supply chain efficiency, but does not measure against priorities or map the specific actions required to achieve this
goal.
Figure 2
7. 4 | PROJECT EXCELLENCE RE-IMAGINED
Aligning operations with strategy requires processes and changes that span multiple functions, business units, and
even geographies. Yet, many organizations lack a formal process for planning and managing these organization-
wide change initiatives.
PPM offers a path forward. It creates a proven and effective bridge that spans the strategy-execution gap. The
discipline supports development and use of key performance indicators and scorecards to manage performance
against priorities and targets. It also enables the introduction of initiative-planning processes that create a solid
structure for managing activities and resources.
Selecting the Right Tools
Many PI/PEX initiatives are, in fact, complex projects. As such, it’s logical that PPM methodologies and tools can
help to ensure their success.
A McKinsey & Company report found that organizations that actively manage their initiative portfolios can create
significantly more value – up to 30% more. Further, organizations that formally manage their OpEX initiatives as a
portfolio report that projects are always aligned with business strategy 62% of the time.
1
These are promising proof
points for PI practitioners focused on integrating strategy and action.
It’s important to consider that not all PPM solutions are universally suited to all types of initiatives. Many were
designed to support traditional projects, such as capital improvements or IT installations. Line-of-business managers
responsible for PI/PEX initiatives have a distinct and often broader set of requirements. For example, PI/PEX
professionals must not only manage execution of the project, but facilitate its integration with larger enterprise
strategies and goals and then measure its ultimate impact on operations.
In considering solution requirements, it is instructive to map the needs (driven by emerging and perennial
challenges) to specific capabilities and functionality. For example, to overcome resistance and help secure and
maintain executive buy in, PI initiative leaders must provide real-time visibility into costs, performance, and results.
Executive leaders are increasingly accustomed to real-time dashboards to track sales and financial performance.
They expect the same level of interactive intelligence when it comes to PI/PEX initiatives.
Similarly, PI professionals need integrated strategy capture and mapping capabilities as well as portfolio
management solutions as they tackle the challenge of aligning and linking PEX initiatives to top-level business
strategies and work to balance short- and long-term requirements.
As skills shortages escalate and the number of PI initiatives continues to expand, enterprises seek more effective
ways to balance resource demand and optimize allocation. Capabilities that enable PI leaders to track and expand
insight into the full scope of resources and skill sets at their disposal and more effectively manage current and future
allocations are essential for an integrated PPM environment.
Measurement is the final mile as PI professionals seek to sustain change and continually build on success. For
example, can the organization define and measure changes to customer satisfaction – in the short and long term –
as an integrated component of its PPM methodology to support the continuous improvement loop?
1 “Managing OpEX Projects in Alignment with Strategic Objectives,” Process Excellence Network and Integrated Project Management Company, 2016.
8. 5 | PROJECT EXCELLENCE RE-IMAGINED
The chart below maps additional requirements to PPM platform requirements (Figure 3):
Figure 3 – Unique PI challenges/needs drive specific PPM system requirements.
PEX and IT: Flipping the Paradigm
PI and IT have a complicated relationship. Enterprises undertake IT initiatives to improve business performance. In
many cases, however, the technology ends up driving process change – for better or worse. Insufficient alignment
between business and IT is often at the heart of this growing issue.
Increasingly, enterprises are looking to flip this paradigm in two important ways to improve outcomes. First, PI teams
are focusing on “low-hanging fruit” – PI projects that can be initiated and executed independent of IT system
modification/installation and IT team involvement. For example, a financial institution might look at the customer
journey and identify steps where a process change can improve loyalty without touching an IT system, such as
adjusting the number of commercial bankers available at a particular branch during peak hours. The other more
significant shift involves adopting a framework in which all IT projects must be driven by and designed to support
specific PI initiatives.
To achieve this shift, organizations require PPM environments that enable them to map the intersection of IT and PI
as well as assess impact and cost of associated process and IT changes.
9. 6 | PROJECT EXCELLENCE RE-IMAGINED
Checklist for Success
When evaluating PPM solutions for use in PI/PEX initiatives, it is important to consider multiple factors and
requirements as outlined in the checklist below:
PPM Supports PEX in the Service Sector
A large North American bank is facing major challenges due to disruptive innovation, increasing regulations, and
pressure to improve return on equity during an unprecedented era of low interest rates and macro-economic
uncertainty.
To address these challenges, the bank launched a process improvement initiative to reduce costs, improve
customer satisfaction and retention, and minimize costs associated with regulatory change. It recognized that, as the
10. 7 | PROJECT EXCELLENCE RE-IMAGINED
number and complexity of these projects increased, it needed to establish project management best practices and a
uniform way of communicating PI initiative information across the enterprise.
In looking for a tool to support this methodology, the bank wanted a PPM solution that was adaptable to a wide
variety of project methods, including Six Sigma, Define-Measure-Analyze-Improve-Control (DMAIC) and Define-
Measure-Analyze-Design-Verify (DMADV). It also had to capture and quantify the results or benefits of the change
projects. Further, the bank required a system that was easy to use for a large number of line-of-business users
across all of the bank’s North American operations.
Oracle’s Instantis EnterpriseTrack delivered on these requirements and more. The solution helps enterprises, such
as this large North American bank, improve strategy execution and financial performance with more effective work
and resource management. An end-to-end solution, it provides a top-down approach to managing, tracking, and
reporting on enterprise strategies, projects, portfolios, processes, resources, and results.
This bank, since adopting its process improvement initiative, has executed thousands of PI projects, driving millions
of dollars in financial benefits. The firm’s PI methodology and PPM approach are fundamental to its successful
transformation initiative.
Conclusion
The PI/PEX landscape is changing, spurring organizations to turn to PPM methodologies and tools that ensure
success while juggling the balance and intersection of IT and PI. PPM offers a clear and strategic path forward –
enabling PI leaders and professionals to overcome the complex strategy-execution gap of PI/PEX initiatives and
continually sustain change and build on success. PPM solutions, like Oracle’s Instantis EnterpriseTrack, provide
organizations with the tools needed to improve strategy execution and drive successful business transformation
initiatives.
