2 min read

SharePoint as an Enterprise-Level BPM Tool?

By Praecipio Consulting on Apr 13, 2010 11:00:00 AM

As we’ve noted in previous posts, BPM enables businesses to map, analyze, and test business processes in order to make them more predictable, repeatable, and efficient. An enterprise can assume they’ll accomplish those goals by leveraging BPM software from EMC, Lombardi, or Savvion…but with Microsoft SharePoint? Isn’t that for enterprise collaboration and document management?

A recent Forrester report found that 47 percent of 220 IT decision-makers said SharePoint serves as their organization’s “business process management platform” – ahead of competitive products from EMC, Lombardi, Savvion, IBM, and Oracle. That number comes as a surprise to BPM vendors, since Microsoft touts SharePoint as a collaboration tool, not a BPM product.

SharePoint has proven itself as a successful Microsoft product, bringing in $1.3 billion in revenue in 2008 alone. Forrester’s report said that number has grown 25 percent annually. Though their poll indicated that SharePoint is faring decently as a BPM suite, Forrester said SharePoint is better fitted for BPM if augmented with other BPM tools.

That’s not to say SharePoint can’t be leveraged as a BPM tool. Though SharePoint isn’t an out-of-the-box BPM suite, customers may take advantage of SharePoint’s robust, flexible platform by building in a custom BPM suite of their own.

However, most companies don’t have the time or capability to carry out such a project. In this case, they opt for a solution from BPM leaders that’s ready to roll.

The fact that 47 percent of IT leaders are confident in SharePoint as a BPM platform validates the speculation that some have built upon SharePoint’s foundation to make a powerful BPM tool. To be sure, SharePoint can streamline business processes by facilitating process automation with decision-based workflows – and can capture and monitor process metrics from data points placed intentionally throughout business processes. Those capabilities ensure long-term process efficiency, if properly nurtured over time.

We’ve leveraged SharePoint for ourselves and for our clients as both a collaboration tool and BPM suite. Using SharePoint for both is entirely possible – and remarkably powerful. Pulling such a feat off in-house, however, is challenging and sometimes impossible.

Nevertheless, leveraging SharePoint for collaboration and BPM can lead to more consistent decision making across the entire business long-term. It can also promote more accurate and organized data in each department of the enterprise that buys in to the tool.

When it comes to out-of-the-box software vs. foundation software, the software that serves as a concrete slab for a custom home usually wins out long-term due to its flexibility and customizable nature. That makes SharePoint a legitimate contender in the BPM market.

Thirsty for more? Contact us here.

Image courtesy of Patrick Lane Photography.

Topics: blog automation bpm business efficiency enterprise management predicatability process sharepoint value collaboration lifecycle
3 min read

The Cost of Quality

By Praecipio Consulting on Aug 24, 2009 11:00:00 AM

The Cost of Quality (COQ) business model describes a method of increasing profits without increasing revenues.

Here’s how it works: COQ increases profit by shrinking business costs. If your business has a 5% profit margin, for example – and you decrease costs by 5% – you’ve doubled your profits. That’s simple enough, but how do you decrease costs?

COQ identifies the importance of shrinking costs without taking the usual cost-cutting measures like not buying everyone’s favorite pens or not stocking refreshments in the break room — the “let’s avoid morale buzz-kills to save a few bucks” approach to increasing profit. Instead, COQ promotes lessening mistakes and increasing business process efficiency.

Companies adopt and tweak COQ to reflect their business goals and in turn their profitability. The model applies to not-for-profit businesses too: budgets are tight; grants, revenues, or contributions may not increase, but the same valuable services need to be delivered with less and less money, right?

COQ is made up of three elements: conformance costs, non-conformance costs, and opportunity costs. We’ll explain these before we explain the rest of what the graphic illustrates:

Conformance Costs

  • Communicate
  • Review
  • Report
  • Status-Check
  • Inspect
  • Train
  • Validate
  • Benchmark
  • Test
  • Prevent
  • Plan
  • Preinstall
  • Check
  • Audit
  • Appraise
  • Survey
  • Evaluate
  • Proofread

Non-Conformance Costs

  • Fix
  • Repair
  • Rework
  • Retrofit
  • Revisit
  • Overstock
  • Re-do
  • Refer
  • Reorganize
  • Scrap
  • Error
  • Constraint
  • Incorrect
  • Excessive
  • Late

Opportunity Costs

  • Under-utilize
  • Cancel
  • Downgrade

Notice these three cost categories are not associated with the cost of producing the output. Materials needed to assemble a product (labor, supplies, etc) are not included. The three elements merely reflect the costs associated with the business process. As we always say, “the profit’s in the process.” The efficiency of your business processes determines your efficiency as a business. If you’re going to maximize your efficiency and profitability, you need a sound understanding of the cost of quality.

Think about it: process is where value is added and where profit is made. Consumers don’t squeeze oranges to make juice anymore. Okay, maybe on rare occasion, but who cuts down trees and processes timber as a raw material to make paper?

The cost of quality is associated with the cost incurred to ensure process outputs (products and services) meet customer requirements. For example, let’s say Company A manufactures pens, a process that takes ten steps to complete. About half of the time, the process works effectively, and high-quality pens are made. The other half of the time, however, is plagued by faulty manufacturing— lackluster execution in the assembly process. As a result, Company A has to keep half of its pens in its shop for a bit longer for fixing/repairing, incurring non-conformance costs. This leads to a lack of consistency. Ultimately, this waste is passed onto the customer with an increased price per unit and/or inferior product— making it more and more difficult to compete.

That’s why COQ’s biggest cost adjustment occurs in reducing non-conformance costs— tightening the process and ensuring customer requirements are met. This may require spending extra money to do some work over again.

Now, to run through the graphic:

  • Conformance costs are important and help ensure a business’ success and stability. when optimizing your business, conformance costs should stay the same or in many cases increase.
  • Non-conformance costs, as we’ve mentioned, need to drop significantly— though you can never expect to be without them, strive to get rid of them.
  • Opportunity cost is the value of the next best choice. It’s the “what could have been.” If a business is suffering from non-conformance costs, the “what could have been,” is higher in the left portion of the graphic, where non-conformance costs are much higher. If a business is succeeding financially, there is little “what could have been,” therefore reducing the opportunity cost.
  • Operating costs are constant. They’re the costs of a business’ building, utilities, licenses, etc— which fluctuate, but not enough to factor into this model.
  • Profit looks like this: $$$. Reducing non-conformance generates more $$$.

So, how do you reduce non-conformance? Remember: the $$$’s are in the process.

Would you like more from us? Contact us here.

Topics: blog bpm business efficiency library management practices predicatability process services technology value continuous-improvement information infrastructure it itil itsm operations
2 min read

Turn and Face the Change—with ITIL

By Praecipio Consulting on Jul 21, 2009 11:00:00 AM

As with any aspect of business, great processes and infrastructure do not always stay great—new technologies and customer needs arise all the time, and usually require changes to business procedures. The same is true in the context of IT Service Management, as new IT needs and technologies inevitably arise as time goes by—creating the need for the ITIL discipline of “Change Management.”

ITIL defines the goal of Change Management in the context of IT Service Management as “to ensure that standardized methods and procedures are used for efficient and prompt handling of all changes, in order to minimize the impact of change-related incidents upon service quality, and consequently improve the day-to-day operations of the organization.” If the ITIL language sounds a bit daunting to you, the definition more basically means Change Management is meant to ensure standardized methods and processes are used to implement all changes in a timely manner, and to achieve and maintain a healthy balance between the need for change and the potential impacts changes might have on the business processes they affect—ie predictability. Every change to IT infrastructure must of course be managed and controlled systematically, minimizing the impact of IT services delivered to the customer.

The need to change IT infrastructure may result from problems observed in a business process or from external legislation—or merely from the desire to make a business process more efficient and productive. Once a need is identified and proven, a change may be developed. ITIL’s discipline becomes valuable at this point as a change becomes drafted, documented, and implemented.

ITIL V3 prescribes these seven questions to ask when proposing the implementation of a change—titled the Seven “R’s:”

  • Who raised the change?
  • What is the reason for the change?
  • What is the return required from the change?
  • What are the risks involved in the change?
  • What resources are required to deliver the change?
  • Who is responsible for the build, test and implementation of the change?
  • What is the relationship between this change and other changes?

Other relevant questions to ask when proposing a change may be:

  • What is the cost of the change?
  • What is the timeline for implementing the change?

The leadership team at Praecipio Consulting consists of experts whose job is to implement change for companies based on ITIL. We have helped our clients implement valuable changes to their IT infrastructure, and have a great deal of familiarity with defining good and bad processes by leveraging ITIL best practices. Change Management provides a way of managing and controlling the way changes are initiated, assessed, planned for, scheduled and implemented—Praecipio Consulting offers you the intelligence and support you need to not only guide you through implementing IT Service Management Changes, but also to provide you with a proven model and valuable business direction for a future of changes.

Would you like more from us? Contact us here.

Topics: blog library management predicatability services technology change information infrastructure it itil itsm

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