One of the great things about my relationship with Ross (full spectrum from friendship to our investment in his company) is that it is definitive proof that two people who disagree on some big things can still be friends and work together. Ross is a liberal Democrat, I am a conservative Republican, Ross believe business process is outdated, I believe that business process is a critical enabler of productivity.
The post he wrote on this goes back to a breakfast meeting last week that Tony Perkins hosted for Irving Wladawsky Berger (I very much recomend that you read his blog, it is super smart and very stimulating). It was a very small group and we ended up talking a lot about how web 2.0, consumer internet, and enterprise were merging.
At some point during the discussion I made the point that pretty much any modern enterprise has no more than 1,500 business processes and less than a couple dozen actually impact revenue. We ended up talking about differentiating processes and Ross comes out of left field and says process is an outdated concept. This stuck with me and I've been noodling on it considering both the wisdom of the statement and my response to it.
I think where we get sidetracked when talking about business process is the perception that it is just another word for workflow. The business process that I would prefer the debate focus on is the nuts-and-bolts of how companies actually build things. For example, let's take the example of a auto manufacturer doing build-on-demand assembly of a portfolio of vehicles from components manufactured all over the world. Is anyone really going to suggest that you could put up an order front end that integrates with production planning, QC, supply chain, logistics, and finance operations without the benefit of defined and rigid business process?
Business process is not workflow, and Ross' point that most workers spend their days handling exceptions to process is exactly the point of having processes to begin with. Why not organize and automate a collection of repetitive business activities so that workers can actually spend their time dealing with the problems and issues rather than putting the same bolt in the same spot a thousand times a day.
Automation of processes is not perfect, certainly, but like democracies it is better than the alternative. There are a great many things in the modern enterprise that will benefit from ad-hoc and freeform collaboration but in no way will these technologies displace the fundamental machinery that companies rely on day in and day out... and that's all process based.
Link: Ross Mayfield's Weblog: The End of Process.
John Seely Brown and John Hagel point out that while 95% of IT investment goes to support business process (to drive down costs), most employee time isn't spent on process -- but exceptions to process. Further, competitive advantage comes from how we innovate in handling exceptions. When something fails, informed and empowered employees turn to their social network. The informal network, or heterarchy, where most business gets done.
I think Web 2.0 solutions which are woven into fabric of business platform are the next genration business platforms.
Posted by: Ramana Kovi | Nov 18, 2005 at 12:48 PM
The notion that “business process is outdated” is laughable on its face. You correctly cite the intricacies of a manufacturing operation as an obvious refutation that process is not necessary. In fact, your friend’s admission that most time is spent on exception handling is actually further corroboration of the point that process is king. Productivity is highest in process- and data-driven companies because time and brainpower is free to ignore the 99% non-exceptional events and to focus on the 1% exceptions. Anyone who has ever worked for a manufacturer knows that informal, ad hoc activity is an enemy that undermines coordination, misaligns resources and wastes money.
The CEO of last software company that I worked for thought that he could mandate an ad hoc, empowered developer approach to software development. He thought that a “couple of bullets on a PowerPoint chart” should be enough of a spec for a good developer. He was, of course, wrong. Work is defined as output and output has prerequisite inputs. You will either obtain the needed inputs in an organized manner or you will obtain them in an unorganized manner. But you WILL obtain them—or fail at producing the needed output.
If every morning I had to spend cycles thinking about whether to shit, shower and shave—or to consider one of the other five permutations—I might be a much more spontaneous fellow but I sure as hell wouldn’t be as productive. Then again, maybe this is why liberals have been crapping in the shower for forty years.
Posted by: PD Quig | Nov 21, 2005 at 03:04 PM
Jeff, process is important...but the best proacess is a light one. Irving represting IBM's interests and you representing SAP's are one POV - more towards the heavy version of process...I happen to think we need to hear the customer's POV. To him./her process is like spell check software. Knows when it has not been used, but it unwilling to pay much for it. From that lens, I think in the west we are overinvesting in process ...see my blog Business Process Angioplasty
http://dealarchitect.typepad.com/deal_architect/2005/11/business_proces.html
Posted by: Vinnie Mirchandani | Nov 22, 2005 at 07:02 AM
Actually, I agree with your statement about light process, I am not a fan of heavy process. However, having said that I also know that even simple processes get complicated pretty quickly in complex manufacturing environments. Take a typical BOM for a product of even moderate complexity as an example of this.
I agree with Ross, and this is one reason why I led the investment in his company, that enabling workers to form groups, collaborate, and solve problems outside of process is of critical importance going forward. In the conversation we had with Irving, I would suggest that his view on this was not opposed to this either, in fact the very topic we started out on was how social software/media is changing the way business does business.
Finally, I disagree with your broad statement about overinvesting in process, but I am probably being a little premature in doing so because I have not yet read your post on this. I will say that when you go into environments like China the fact that there is so little process becomes a major liability for them, and we are likely to see the 2nd wave buildout being focused on process (the first wave being core infrastructure).
As always, thanks for your comment.
Posted by: jeff | Nov 22, 2005 at 07:46 AM