Business Process Management 101 In 1873 Adolph Coors founded Coors Brewing Co. in Golden, Colo. Since 1993, W. Leo Kiely III has been its president and chief executive officer, the first non-family member to lead the company. Coors employs approximately 8,500 people worldwide and produces roughly 32.7 million barrels of product, which translates into around $4 billion in annual net sales. Coors products are sold in more than 40 countries. The company is the third largest brewer in the United States and is among the top 10 brewers in net sales in the world. Currently, Coors has two business units, one in the United Kingdom and one in the United States.25 Coors shareholders approved a merger with Molson Inc. February 1, 2005, which will likely create the Molson Coors Brewing Co. The new company would have combined revenues of $6 billion and control three well-known brands: Coors Light, Carling, and Molson Canadian. The goal of the merger would be to find and leverage $175 million in synergies. Business process management would have a role in both identifying the synergies and integrating one company with the other. BPM Strategy, Structure, and Funding “When we began this journey three years ago, I would not have imagined that we would be identified in a best-practice study.” —Mara Swan, chief people officer Historically, Coors has not been process-oriented. Before CEO Kiely arrived, business was conducted ad hoc and when employees left, they took the institutional knowledge with them. In 2002 Coors streamlined IT and implemented SAP because it believed that positive change could come through good IT business process management. However, it realized that the human component was important to change. Even with technology in place, mistakes occur when employees do not adapt their behaviors to the technology. Management charged HR with implementing BPM and Chief People Officer Mara Swan with focusing on the human component of BPM. Swan’s philosophy is to concentrate on the outcomes and the human component rather than on the tools 25 When the following case study refers to “the enterprise,” it is referring to the United States only. In 2005 the company will be exporting BPM under a module for a global HR system. Coors Brewing Co. Coors Brewing Co. 102 Business Process Management of BPM. Coors hires team members who often have experience working in consulting firms such as Andersen and Accenture Ltd. They are often experts in process and change management and act in the role of internal consultants. The BPM team leader reports directly to the chief people officer. Projects that the team currently participates in include ViPER (supply chain procurement), world-class operations (WCO), enduring focus (SAP implementation), and greyhound (HR System Implementation). These projects are supported by ARISTM, IDS Scheer’s business modeling tool. Corporate leaders envision the BPM team as a feeder organization. The team hires talented individuals from the outside who model business practices. As part of their career plans, team members often transfer into other areas of responsibility in the organization within two or three years. The BPM team supplements its work force with consultants that are contract employees. Coors trains them under the tutelage of one of the seasoned employees. BPM Team Mission The mission of the BPM team is: to develop and implement an evolutionary, high-performance (flexible and responsive) process structure, aligned with Coors’ program/business goals, that facilitates the use of knowledge assets by our stakeholders for leveraging competitive advantage and innovation potential. BPM at Coors Brewing Company is essential for achieving process clarity and capability across the enterprise to enable and ensure the delivery of 4th generation expectations of quality to our distributors, retailers, and consumers. This architecture is the blueprint for systematically and completely defining and documenting the organization’s current (baseline) and desired (target) environment. Relationship Between IT and HR in Implementing BPM In its role of driving human performance, HR is serving as a bridge between IT and the organization. The power of the role is that it can act independently to do what is best for the enterprise; it is not beholden to either side. An example of the HR role concerns the Cornerstone Project, a supply chain initiative that went live in 2003. HR successfully negotiated between the entrenched positions of the managers of both supply chain and IT, convinced them to change, and contributed to the success of the project overall. Coors’ Vision Coors’ vision statement includes “To win long-term in the beer business, we must be an agile, high performance company that is great at those things that are key to winning in beer.” To be great, the company must: • delight beer drinkers with great, drinkable beers; • build great brands with each new generation; • build big, high-share markets; • attack costs and invest in growth; and • engage and inspire its people. Swan said that BPM is key to achieving the last two points: attacking costs and investing in growth and engaging and inspiring people. “When people know what is expected of them and what Coors Brewing Co. Business Process Management 103 the path to success is, they know how to win. Often a disconnect exists between what management thinks ‘great’ looks like and what employees think ‘great’ looks like,” she said. BPM has helped Coors understand how many people are needed to do a job and how individuals should be recruited and trained for jobs. Having BPM in HR has allowed the organization to tie the performance systems with the work done. Before SAP systems are implemented, Bonacci is able to prevent walls being built between process management (“the work”) and performance management (“the rewards”). The ultimate goal is less organizational waste. Business Process Management Vision Figure 31 is a diagram created cooperatively by Coors and IDS Scheer, Coors’ BPM tool supplier, to help people visualize the primary components of BPM. Coors is currently on Step II, business process engineering, but it is transitioning into both steps III and IV, business process execution and monitoring. Figure 31 The Route to BPM at Coors Where we are now I Business Process Engineering Process Development (not architectured) • Visio • PowerPoint • Word Drawing II III IV V Business Process Execution Business Process Monitoring Business Process Analysis Where we want to go ARIS • Toolset • Easy Design • Web Design • Web Publisher • NetWeaver • ARIS PPM • SAP NetWeaver (PPM) • Simulation • Process Cost Analyzer • ARIS Toolset (Charting, Reporting, Animation) Coors Brewing Co. In September 2004 the team successfully piloted ARISTM PPM (process performance manager). The PPM software measures transactions within SAP or any other system in order to monitor the process. The pilot identified discrepancies between the way the work was supposed to be done and the way that repairs and work orders were actually being executed. This technology allows Coors to know when employees enter the system, how they conduct transactions screen by screen, and 104 Business Process Management how long it takes for them to complete the task. The intent is not that “big brother is watching,” but rather to drive human performance, determine whether the right person is doing the job, and provide information for the hiring process. (For more information on this pilot, see “Controlling Implementation Example—Breakdown Maintenance,” page 115.) Currently Coors does not measure offline activity and work done through manual systems. However, in 2005 the company’s intent is to implement a work flow component through NetWeaverTM that will begin to address work performed manually. Engagement Model Between 2003 and the present, the BPM team faced and solved three challenges as they engaged the business units (Figure 32). Problem Manifestation Solution BPM team members had different backgrounds and used various languages and terminologies. They used Visio in different ways. The team could not effectively mesh information from the business units; it discovered differences in definitions and leveling. The team standardized terms and adopted a common methodology for conducting process and change work. It moved to a common system for modeling (ARIS). The BPM team did not know what the clients’ expectations were. The clients did not know how to measure success. The team developed an engagement contract process that outlined what the client needed to know and established the expectations for the project. The organization was functional, and the leaders did not have systems thinking. Leaders of some of the business units did not know how they fit into the organization. They were unaware of how changes in their processes affected other units’ processes. The team developed an enterprise framework model that outlined the company’s five core processes and the subprocesses that supported the core processes. It determined who has process ownership for each of the areas. Any time the team has an engagement, it introduces the enterprise model and helps the client understand which of the processes that the project will affect. Figure 32: BPM Challenges in Enterprise-wide Engagement at Coors Coors Brewing Co. Tools and Methodology Coors has selected IDS Scheer’s ARIS software for modeling and managing its business processes. The ARIS toolset supports the xBML™ methodology and Coors’ approach to business modeling. The tool was in place before the BPM team began to transition away from using Visio. The company is currently using ARIS Version 6.2. The Gartner Group (the leading provider of research and analysis in the global IT industry, according to Bonacci), in surveys several years running, has rated ARIS as a recognized market leader in business modeling tools. Business Process Management 105 ARIS is aimed at modeling all aspects of complex business and can model processes, data, organizations, systems, information, products, knowledge, business objectives, and information flows. • ARIS 6.2 Web Designer allows enterprise-wide and cross-company design of business processes online. • The ARIS Toolset allows process analysis and reporting, simulations of resource utilization, and activity-based cost calculations. • ARIS Web Publisher allows quick communication of process models globally via the Internet and intranet. Although most of the businesses have transitioned from using Visio to ARIS, occasionally, the BPM team receives a Visio diagram that describes a process. It tells the business that the process needs to be in ARIS as soon as possible so that it is integrated with the enterprise. The businesses themselves actually own the models, but the BPM team is responsible for the integrity of the models because it must be able to use them in its reports. The BPM team owns the modeling software and skill, and although material exists in various locations throughout the company, it will all eventually be anchored under the BPM team umbrella. The BPM team has been focusing on the businesses and is just beginning to focus on the technology. In its models, it routinely identifies the applications that the businesses use to support their activities. The IT function has different views of managing processes than the other business units do. Coors is pursuing the purchase of IDS Scheer’s IT City Planning, and ARIS supports it. IT City Planning provides various views: one applicable for IS personnel, one applicable for data managers, one applicable to IT personnel, etc. Using it, groups can understand from a systems perspective what is being done. The BPM team examines the applications that businesses are using and asks “what IT processes is this application supporting?” The ARIS graphics have an object that identifies the IT process. The BPM team can associate the IT process to the business process by connecting the two. Then it can determine in which server and area the application resides. It can model the information flow between the applications. The BPM team acts as a bridge between the IT function and the other business units. IT has business partners in each of the business areas and has been a great advocate of the BPM team, according to Bonacci. Currently, the BPM consultants are working with IT to develop a strategy to resolve helpdesk tickets for Level 1, Level 2, and Level 3 support issues. When the business initiates a helpdesk ticket, the goal is for IT to be able to access the appropriate process model and pinpoint where the problem is. By having the entire IT linkage sitting under the business process, IT can drill down, follow the flow, and isolate the problem. The BPM team recognizes that this capability is far from perfect, but Coors is using training resources to make the pinpointing effective. The Cornerstone project was a $50 million supply chain SAP implementation project. The company had processes everywhere—in people’s heads and in every format imaginable. Business people brought their processes into the workshops that trained them to model. Because the xBML language is so business-friendly, facilitators could use it to ask the simple questions: who, what, when, and where. Coors Brewing Co. 106 Business Process Management Coors is currently significantly project-focused. The business units and groups that have not had a project recently may have not been touched by the BPM group. However, eventually the group will work with all Coors employees as they strive to become more process-focused. BPM Design Enterprise Model Coors BPM is a top-down methodology. Figure 33 is the current Coors enterprise model. The left column of the model is “Level 0” (the highest strategic level), and it contains the five core business processes: manage the beer business, create customer demand, generate revenue, execute the supply chain, and support the beer business. Coors Brewing Co. Figure 33 Coors U.S. Business Enterprise Model–2005 Manage Beer Business Create Consumer Demand Generate Revenue Execute Supply Chain Support Beer Business Establish Business Direction Manage Public Policy Environment Sustain Corporate Entity Provide Enterprise Excellence Manage Corporate Assets Understand Comments Develop Brand Plans Execute Brand Plans Manage Product/ Package Life Cycle Manage Key Accounts Manage Wholesalers Perform Order Management Provide Customer Support Manage Sales Performance Plan Supply Chain Source Materials and Services Manufacture Product Deliver Product Return Goods Leverage Human Capital Manage Safety, Health, and Environment Ensure IT Excellence Ensure Legal Adherence Ensure Financial Excellence Manage Support Services Level 1 lists the business areas that support each core process. For the job of managing the beer business, Coors must: establish the business direction, manage the public policy environment, sustain the corporate entity (trademarks and brands), provide enterprise excellence (quality), and manage corporate assets. Coors began developing its enterprise model in 2003. The first rendition lacked an enterprise perspective and focused on projects. It lacked key areas of the Coors business. Business Process Management 107 Evolution to the current enterprise model was facilitated by industry benchmarking. The team incorporated Deloitte’s industry print enterprise model, SAP reference models, Coors end-to-end process structure, and SCOR (Supply Chain Operations Reference) models. These well-established models provided credibility when the team presented the model to senior management. As the enterprise model was evolving, Bonacci met with the CEO monthly to give him a strategic overview of the business management process. The CEO focuses on initiatives that have an impact on the business and how they affect business results. Because the CEO did not have time to concentrate on all of the details of modeling, Bonacci gave him short examples of how business process management work was affecting the ongoing projects such as Cornerstone. In one instance in that project, BPM efforts saved three positions on the verge of elimination—three jobs in which the employees’ knowledge was critical to business process and results. Once the CEO fully understood modeling, he directed that it be done in all business units. Bonacci notes that during the time that process modeling was evolving the team found more process overlaps than gaps in processes. Many times, two areas are involved in the same process. When overlaps exist, the executives work to resolve the problems. Process Ownership The processes are owned by the businesses. The architecture and models are controlled by the BPM team. The models are dynamic due to ongoing process work. Levels include: • “0”—core business processes, • “1”—processes owned by senior vice presidents, • “2”—processes owned by vice presidents or directors, • “3”—processes owned by directors or managers, and • “4”—processes owned by anyone (manager, team, or individual). Some Level 1 processes are owned by two senior vice presidents. The BPM team made a conscious decision not to assign a name to Level 0 because it wanted buy-in from everyone involved. Diagram icons on the desktop version of the model indicate that the user can drill down further into the process to find additional information. The first six months that the BPM team embarked on enterprise modeling, the team kept a low profile. Bonacci said, “We ran silent and deep; we did not surface until we could show a small victory.” However, Cornerstone was so massive that it had its own momentum. The team had so much work to do to catch up on the project, and working on it provided needed credibility for the team. As it ran multiple projects, it further recognized the need to build the enterprise model. Coors has a highly tenured work force with many individuals due to retire within the next five years. Top management understood this issue, but until the work of the BPM team, were unable to understand how to prevent the loss of knowledge. With the use of the Coors enterprise process framework, employees can drill down into processes to access subprocesses. Business areas within the enterprise model have been color coded to show the progress of process documentation: • red for undocumented processes, • yellow for processes being documented, and • green for well-documented processes. Coors Brewing Co. 108 Business Process Management Figure 34 demonstrates the color coding. Because the BPM team worked so comprehensively on the supply chain in order to cut the cost per barrel of beer, the processes to execute the supply chain are green with one exception. Processes to manage the beer business are mostly red because process documentation is less mature. Coors Brewing Co. Figure 34 Color Coding for Process Documentation at Coors Manage Beer Business Create Consumer Demand Generate Revenue Execute Supply Chain Support Beer Business Establish Business Direction Manage Public Policy Environment Sustain Corporate Entity Provide Enterprise Excellence Manage Corporate Assets Understand Comments Develop Brand Plans Execute Brand Plans Manage Product/ Package Life Cycle Manage Key Accounts Manage Wholesalers Perform Order Management Provide Customer Support Manage Sales Performance Plan Supply Chain Source Materials and Services Manufacture Product Deliver Product Return Goods Leverage Human Capital Manage Safety, Health, and Environment Ensure IT Excellence Ensure Legal Adherence Ensure Financial Excellence Manage Support Services Undocumented Processes Process Documentation in Progress Process Well Documented KEY BPM Players Many in Coors are involved in the enterprise model. • Internal BPM consultants lead process modeling workshops and provide training and guidance on modeling methods and standards. • A business architect provides training and guidance on modeling methods and standards and ensures models are compliant with the company’s business modeling standards. He or she integrates project-developed models into the Coors enterprise model. • The process owner works in the business and acts as a subject matter expert. • Subject matter experts provide process expertise and actively participate in process modeling workshops. Business Process Management 109 • ARIS process stewards are selected from the business units and trained by the BPM consultants to use the ARIS tool. The stewards are custodians of the models and provide process support for continuous improvement once the project team disbands. In the future, the role of the process steward will increase; the stewards will be trained to do much of the modeling work. However, Coors does not plan to decentralize to the extent that stewards will be able to place changes directly into the ARIS model. • An ARIS administrator resides in IT and keeps the system upgraded and running. He or she establishes the project database structure, performs Web publishing activities, and handles ARIS software technical issues. • Coors has a tight partnership with customers and suppliers and solicits their feedback on how to do activities better. In Cornerstone, Coors involved its distributors because the supply chain process design affected them. Coors provides its customers and suppliers with process training when applicable, and they are involved in business roll-out activities. If project teams want to work with the models, then they are allowed to take an extract and make changes on a separate database. If businesses would like to make permanent process changes, then the changes go back through the BPM consultant to ensure that they are compliant with standards before they are merged into the enterprise model. Coors does develop duplicate information, but these cases are caught as the BPM team marries the process. Bonacci says that most companies design their organizational charts based on the best knowledge of where the organization should be in the future. Using its models, Coors is able to do organizational design based on processes. The Modeling Procedure Business process modeling depicts Coors process DNA, so to speak. It describes process information about the organization explicitly in terms of: • what it does—modeling begins by determining the activity and its purpose in order provide the stability necessary to go forward with the modeling procedure; • when it is done—time frame; • where it is done—location; • who does it—person; • which information is generated or needed; and • how, which depicts the process flow. Based on the activities already identified, this model demonstrates how the activities fit together and depend on one another. After the process flow is depicted, the team moves on to identify who is responsible, what applications are used, and where the work is done. Debra Boykin, business architect, said, “We are painting a picture, a story of their business. They do not have to understand the diagramming mechanics to actually own the process.” When the team was newly established, it was successful in a few businesses that were open to the process. These areas became champions, and the BPM team gained successes through them. The core modeling competency sits with the BPM team, and the group works with the subject matter experts. Boykin recommends this approach because the group can handle changes and Coors Brewing Co. 110 Business Process Management upgrades in modeling. She believes that business modeling requires a special skill set, and it is better to have knowledgeable BPM consultants facilitating the business process management activities. Another advantage to having the modeling skills concentrated in the BPM team is that precise reporting can be done only if the models themselves have integrity (the leveling is correct, there is apples-to-apples comparison, etc). The team has quality standards, and it filters the modeling work that businesses submit to it. Coors does have the process stewards in the businesses so that the businesses do not have to return to the consultants to make process updates. Coors began stabilizing the model in 2003 and is currently moving into the control phase. Pilot programs have validated PPM and NetWeaver (to some extent). The BPM team has a track record of successful projects, which are detailed in Figure 35. Its list of current projects is detailed in Figure 36. The next step is to use the reports produced by the tools in Six Sigma-like initiatives and move toward total control of the processes. Rules of Engagement Business process owners have the responsibility to understand, target, measure, benchmark, envision, and report out on the process. They also approve process changes. The extent to which the businesses hold employees accountable for managing processes varies. The operations unit and asset care unit do an excellent job, according to Bonacci, and supply chain is making significant progress toward tying processes into performance measures. HR should be supporting and training the businesses to hold employees accountable but is not able to fully do so yet. Executives are not currently held accountable for processes; the highest management is involved in mergers and acquisitions. However, the vice presidents and directors, especially those in operations, are definitely involved in holding people accountable for process management. Purpose Number of Process Methods Cornerstone SAP implementation for the supply chain 136 Molson Joint Venture To help Coors distribute Molson in the United States 25 LIMS Laboratory Information Management System Implementation 6 Asset Care To define these robust processes 98 Figure 35: Coors BPM Team’s Completed Projects Coors Brewing Co. Business Process Management 111 Coors Brewing Co. Purpose Number of Process Methods Greyhound This is an implementation of a HR worldwide system. 43 ViPER This is the purchase-to-pay system implementation. ~50 Enduring Focus This is a financial SAP implementation. 50 Jefferson This is the Shenandoah build-out. Currently, Coors does not brew beer in its Shenandoah Virginia facility; it ships it incomplete from Golden and blends and packages it there. Shenandoah will become a complete brewery in late 2005. 82 Sarbanes-Oxley26 Process modeling enabled this project. Auditors used the process models to expedite the findings of how Coors is doing business. Figure 36: Coors BPM Team’s Current (2005) Projects In 2005 the company will try to get process management on performance reviews and have employees’ job descriptions updated based on process. Bonacci said, “Everyone’s job has changed because of SAP; everyone has more analytics in their work. And surprisingly, accountability is bottom-up as well as top-down.” BPM’s Role in Enabling Sarbanes-Oxley ARIS process documentation allows for the enterprise-wide reporting of Sarbanes-Oxley control activities by activity owner and executor. Process reusability ensures that Sarbanes-Oxley documentation remains current. In the past, when the BPM staff was not available to facilitate, teams did their work in Visio. However, most of the work has now been moved into the ARIS model. When Deloitte was helping implement a Sarbanes-Oxley reporting structure at Coors, it did most of the process documentation work in Visio because the BPM team did not have the staff to provide ARIS expertise. However, in supply chain and operations, where the Cornerstone project modeling was already done, the teams reused the ARIS models. Deloitte’s risk control tracking system tool currently contains the SarbanesOxley testing information, but Bonacci says said that the BPM team would like to move to IDS Sheer’s Sarbanes-Oxley audit management tool, which would tie in perfectly to ARIS. Prioritization Coors rolls up projects enterprise-wide so that groups such as the BPM team have a clear line of sight and know what is important. Coors has an annual capital planning cycle; in May of each year, strategists receive input from all organizations concerning what capital projects need to be done. They 26 The Sarbanes-Oxley Act of 2002 prescribes how public companies should be audited. 112 Business Process Management present the projects to management, and the chief people officer has a seat at the table. The selected projects are sent to the CEO, who prioritizes them in November based on marketing and sales issues. IT has its budget and funds the capital projects based on the list. In June of each year, IT tells the BPM team leader what projects it is recommending so that he can plan to staff the projects. Bonacci asks whether the projects are chargeable. If the answer is yes and there are not enough full-time BPM consultants available to perform the work, then he is able to arrange to hire contractors. If the contractors prove their capability and fit in with the culture, then he may hire them permanently after approximately six months on the job. If they do not fit in, they leave. The BPM team has more work than it can handle. It prioritizes by judging what is best for the company. The BPM team considers SAP implementations a high priority, and although the team is tied to large-scale implementations, callers do ask for advice or for services on smaller projects. Although most of the BPM team’s work is project driven, these callers ask for help in determining how to improve their processes. Bonacci said, “We try to help everybody, because it is better for the company.” The caller may be given parameters or guidelines; for example, a caller may be offered 10 hours of consultant time for four months. The Budget of the BPM Team The BPM team charges 80 percent of its time out to the businesses on capital projects. Employee vacations and benefits come from the HR budget. Some of the team’s tasks, recognized as “missionary work,” is not charged out. Institutionalizing Process Excellence Coors has institutionalized process excellence by leveraging the following. • A common business modeling methodology called BusinessGenetics® xBML has created a consistent, focused business modeling effort. • Business modeling standards promote a single, consistent, and reusable process format. • A business modeling standards council defines and promotes consistent business modeling practices within the enterprise, and a business process modeling handbook serves as a quick reference guide. Executive leadership is accountable for process excellence and continued improvement. Senior process owners (director level and above) develop process improvement and process performance framework for their business areas. Each executive leadership team member is establishing a process excellence board for his or her business. Executive leadership and senior process owners leverage the investment in xBML and ARIS by continuing to promote their use for all process improvement initiatives, re-engineering efforts, and system development projects. Coors is in the process of implementing a process excellence governance board, which acts as strategic advisers for BPM. When the company makes process changes at the lowest level, people who are affected meet to understand how it will have an impact on both downstream and upstream work. Those affected by the work are then contacted so that they understand the change. Another job of the board is to prioritize change. Before the board was in operation, someone would have a bright idea and make a change not understanding how others would be affected. “Ideas Coors Brewing Co. Business Process Management 113 are vital, but they must be looked at from a systems perspective,” said Bonacci. The governance board also prevents duplicate efforts. Currently, according to Bonacci, the board is not as successful as it could be because it is pushed from the ground up rather than from the top down. Bonacci would like have Level 1 process owners to assess the effectiveness of the processes, but their participation has been limited, even though they buy in to the concept. The company is on the verge of linking processes to its overall performance scorecard. Before it is successful in the task, it must smooth out some turf battles and identify the pieces of the processes that are on the scorecard. Measuring Maturity Coors measures maturity using the following stair-step model, adopted from Paul Harmon of BPTrends. • Initiate—This process is ad hoc. Few activities are explicitly defined. Success depends on individual efforts. The stage is prevalent in entrepreneurial organizations and new divisions that do things any way they can to get started. • Replicate—Basic project management processes are established to track costs and stay on schedule. The necessary discipline is in place to repeat earlier successes. As organizations become more mature, they begin to conceptualize business processes and seek to organize them, repeat successes, and measure results. • Define—The process for both management and development is documented, standardized, and integrated by an organization methodology. • Manage—Detailed measures of the process and product quality are collected. Both the process and products are quantitatively understood and controlled. • Optimize—Continuous process improvement is enabled by quantitative feedback for the process and from piloting innovative new ideals and technologies. In most of the models, the company is in either the replication or definition stage. Implementing and Sustaining BPM “Before initiatives are rolled out to the entire company, they are proved in key areas. Coors works the mistakes out before universal acceptance. The culture is not accepting of the idea that ‘this is the next new program and it is going to save us all.’ Programs must have a winning track record.” —Mara Swan, chief people officer Marketing and Communicating BPM Swan advocates marketing business process management. “Most business people are not processoriented. They are experience-oriented. They do the same thing over and over, even repeating bad experiences. Marketing means putting BPM into a language that everyone can understand.” In the beginning, some employees in the business units were somewhat resistant to using ARIS because they did not fully understand the BPM method. As a result, the team realized the need for a more user-friendly vernacular, and the members of the BPM team made a point to explain all aspects Coors Brewing Co. 114 Business Process Management of the technology carefully and simply. Debra Boykin said that now they speak to the business units in a language that is friendly. Boykin believes it is important to put the models together in a way that the business people understand what they are doing. The BPM team is most successful when it is brought in early in a project so it understands from the beginning what the business unit needs to do and what IT solutions will be required. The team interfaces with the subject matter expert frequently so he/she is not working in isolation. Additionally, it is important to note that the composition of the project teams may vary based upon project purpose. Analysis Implementation Example—Project Jefferson Coors leverages its enterprise process model to drive job design, training and development, and headcount analysis. Project Jefferson is the Shenandoah, Va., expansion that will increase the company’s brewing capacity; the BPM team successfully completed an analysis project at the location. The Shenandoah build-out process modeling initiative had a top-down approach. The business requested help from the BPM team to define the scope of the build-out using the enterprise model. The team concluded that the scope involved executing the supply chain at Level 0 and then sourcing material and services and manufacturing products at Level 1. The Golden, Colo. facility had developed some of the manufacturing processes that were reused, but many processes were developed from scratch. The BPM team helped the business identify the scope. The project involved modeling 42 process areas. Step 1 was to develop a process model that captured (as function attributes in ARIS) task responsibility, system, type (brewing, raw material, or utility), time, and frequency. The BPM consultant and the subject matter expert worked on the models part time over a period of six months. They periodically reviewed them with the process’ core team, a group that included engineers, operations, and brewing experts. (Because the subject matter expert had the bulk of process knowledge and the BPM consultant had the ARIS experience, most of the work was done by the two individuals rather than in a team setting.) Step 2 was to create a custom ARIS report in Microsoft Excel to show activity by role and function attributes. Step 3 was to analyze the data. ARIS process documentation defined the operator requirements for the new brewery with 736 tasks modeled and the total number of hours necessary to do each task determined. In some cases, the hours necessary are estimated. Businesses are always challenged to properly estimate the time they spend in problem solving. The task is difficult because no one can identify the problems that will occur in advance. The team used the information to determine how many operators it would need to hire to run the plant. The next step of the project will be organizational design. Shenandoah will also plan training based on process models, and the work instructions and directions will come directly from the process models. The plant will brew its first beer in November 2006. Already, the BPM team can demonstrate that it has provided value in Project Jefferson. Its future-state process models for new operations have been used as inputs to plant, process, and people design. The engineers used the models in their design reviews to ensure that they had not missed procuring needed equipment. IT requires the system design to write the plant automation software and code. The work of the team enabled Shenandoah to have a common language that is aligned to strategic business models and standards. Coors Brewing Co. Business Process Management 115 Controlling Implementation Example—Breakdown Maintenance Business process controlling means aggressively managing the efficiency of running business processes. Coors leadership believes that business processes that cannot be measured cannot be improved. Industry research shows that business process metrics are vital to the success of the business. To achieve process optimization, Coors must clearly understand what it is doing. Coors conducted a pilot on a small, self-contained asset care process called “perform breakdown maintenance.” The breakdown work order process is critical for Coors to identify reactive, instead of preemptive, maintenance activities. Without accurate information, Coors has no idea how plants are performing. The process had 20 activities. A small dedicated staff in the business conducted the pilot. The executive for asset care identified key performance indicators to focus on: • number of breakdowns in a certain time frame, • cycle times from malfunction start to end, • whether equipment history is recorded, and • costs (labor, material, and outside services). The pilot used SAP-RQ1 data, work orders (ZBRK), and notifications (M2) from January 1, 2004 to July 29, 2004. The pilot team used a dashboard of production data as an entry point or window into the organization. Figure 37 is an example from the breakdown maintenance dashboard, which is the front end to the PPM tool. Technology is currently available in the United Kingdom to transmit dashboard data to a Blackberry or cell phone by alerting the process manager of his process status. This particular technology will soon be available in the United States. PPM will be the monitoring component of Coors Brewing Co. Figure 37 Coors Breakdown Maintenance Quality Dashboard Example Equipment history Equipment history recorded properly? Ratio history is recorded (%) 50 80 90 100 93.814 Recording back to production? Equipment recorded back to production? Ratio equipment recorded back to production (%) 50 99 100 58.575 Notification accuracy Notification entered accurately? Ratio notification is entered accurately (%) 50 80 90 100 54.992 Work order confirmation Work orders confirmed? Ratio work orders confirmed (%) 50 90 100 95.1 116 Business Process Management SAP’s NetWeaver application. Through the pilot, the team was able to determine that one of its plants had an extremely long turnaround time that it could improve. The team could view data down to the work-center and customer levels. Additional dashboard graphics include such dimensions as average downtime, turnaround time, and lag time. The ARIS PPM technology captures the actual process flow and (based on time stamps) graphically produces that flow. The team can analyze the actual flow against the designed flow to determine process compliance. This technology also has the capability of identifying the person who performed the activity. The information helps managers determine whether an employee has the proper skill set for the task being performed and if the employee needs training. In the close examination of the 20 activities, the pilot team found inefficiencies that, when corrected, would save the company money. The team found that the accuracy of monthly metrics was compromised when required information was not entered properly on breakdown work orders. It discovered that the SAP tool, in which Coors had invested, was not being fully utilized. Breakdown work orders were left open for days after the work had been completed. Significant savings were realized by closing work orders properly. Although the PPM pilot only used SAP data, it is important to note that it can also incorporate other data sources (anything that captures time stamps). Process Analysis Example—Retention and Strategic Staffing In 2004 the company was laying employees off as it was implementing SAP. HR and the business were conducting this large redesign in a silo. The BPM team manager learned of the layoffs in a staff meeting. Because modeling had been done, he was able to find the job titles and the roles of those about to be laid off. He informed HR and the business that if they let three of the people go, they would not have anyone else in the company capable of executing certain task necessary to take SAP live: Modeling allowed for the discovery that they were needed. On the other hand, the company was able to let some employees in Memphis go because modeling showed that others in the organization shared their skills. Regarding Six Sigma Six Sigma does not currently play a role in BPM at Coors. Bonacci said that, whereas Six Sigma is strong in specific endeavors, the business process management group handles large-scale change projects that impact a majority of the Coors Brewing Company. Six Sigma is not as effective in handling the large-scale projects. Part of Six Sigma is measuring results. Even though they do not call their activities Six Sigma, the BPM team works with business units after projects have been implemented to help them determine how they are going to measure the human performance component of the initiative. For example, after SAP implementations, members helped business units mine data so they could understand which people were using SAP well. Coors Brewing Co. Business Process Management 117 Evaluation and Results Measurement of Employee Engagement HR should be able to explain how employees add value to the company, how to increase their productivity, and what information they need to do their jobs. Employee engagement springs from these factors. Employment process–focused Kenexa recently replaced Gallup as Coors’ vendor for this measurement. Monitoring Processes—The Benefits of PPM Controlling processes based on process performance indicators leads to cost reduction. PPM has an early warning system for deviations from planned values, and the deviations can be communicated to management through Blackberry and mobile phone technology. PPM leads to improvements in internal and external customer satisfaction and facilitates benchmarking of internal and external process performance. Process owners see how long various processes are taking and can recognize opportunities for improvement. PPM provides visualization of not only the designed process but also the executed process. Process owners no longer have to guess what is happening. Financial Benefit The BPM team’s budget is approximately $1.1 million annually. It estimates that it has saved Coors more than $3 million on the Cornerstone project alone by simply catching situations through modeling that would have remained unidentified. It discovered $2 million in reverse logistics. Much of the labor of the team is capitalized and can be seen in the capital return on investment of specific projects. The BPM team’s role is not only in modeling but also in re-engineering the processes that need to become more efficient. The LIMS project dragged on for four years, said Boykin, and had three different project leads. The BPM team took it over and was able to complete it in three months. The company recognized the savings. Stage-gate Process Any IT-funded or capital project must go through a stage-gate process. The BPM director signs off on whether the process documentation work has been performed. If the work is not complete, then the BPM director and the BPM team assess the hours required to document the processes. If an in-house BPM resource is not available, then an external BPM resource will be contracted. Most members of the BPM team are directly charged to capital projects. In some cases, the team’s work results in the project not going forward because it does not make sense to spend the money. Value of the Enterprise Model The Coors enterprise model: • allows the company to build upon existing knowledge, • facilitates representation of process integration, • is reusable for new projects, and • enables Sarbanes-Oxley compliance. Coors Brewing Co. 118 Business Process Management ARIS process documentation allows enterprise-wide reporting of Sarbanes-Oxley control activities by activity owner and executor. Accuracy of Modeling An after-action report, produced in January 2004 following the SAP implementation, enabled BPM to achieve credibility with top management (i.e., senior vice presidents of operations, supply chain, and IT). Before implementation, it had developed 98 models in a three-month period. After implementation, the models were reviewed by businesses and subject matter experts and found to be 90 percent accurate. Without the models and their schematics, the organization would have been guessing whether problems were due to people, process, or technology issues. Anecdotal Evidence of the Value of Modeling Bonacci related a story that occurred during a modeling meeting three months before the implementation of SAP. The purpose of the meeting was to understand the supply chain. During an interaction between the planning group and the plant planners a surprising fact was revealed. A member of the planning group spent 30 hours a week producing a single report that he routinely handed to the plant planners to guide their production of beer. The plant planners said they do not even look at the report. They base their level of production on a different report. It was a report that the member of the planning group spent 30 minutes a week preparing. The incidental adjusting of the expectation of the two siloed businesses saved the company money. Lessons Learned “We manage change successfully because we use modeling to understand who individually is feeling the impact of a change. We roll up the individual models to the team level, the division level, and so on.” —Bob Bonacci, BPM leader BPM and the BPM team evolved internally to: • maximize the return on investment of IT (SAP) implementations, • develop enterprise-wide process integration and alignment, • shorten the business cycle, • remove process complexities and eliminate process overlaps and ineffectiveness, • drive human performance (roles, responsibilities, and job descriptions), • be able to describe process information in explicit terms (common organizational vocabulary), • provide the business with a reusable asset for impact analysis and decision making, • support organization redesign, • facilitate a successful change management approach, and • feed the knowledge management system. The BPM team leader had the responsibility of achieving buy-in from the business. “BPM would fail without management buy in,” said Bonacci. “We would have many models and no place to store them.” Coors Brewing Co. Business Process Management 119 The BPM team needs to go further to drive human performance, says Bonacci. If the Molson acquisition occurs, then the team will support the organization in its re-design and change management. Change management teams make a mistake when they do not hold company leaders themselves accountable for change. Bonacci said, “The only change management mistake our team made was to do too good of a job. We took the responsibility away from director- and vice presidential–level leaders.” Key Success Factors Coors BPM shared many key success factors. • It has worked quickly. The BPM team formed in November 2002, and currently, BPM predominates in the company in the United States. Swan hopes to see it implemented throughout the world before long. • The location of the BPM team in HR allows the team to concentrate on changes in human behavior as well as on systems. • The BPM team connects its work to strategy. Swan believes that companies make a mistake when they undergo change management as it relates to HR and adopt BPM without understanding its connection to the business strategy. • The BPM team has an excellent working relationship with IT. • The BPM team created an enterprise model as an umbrella over all process work. It developed a common language that helps not only process owners but also consultants that come in from outside Coors. • The BPM team uses a contract to prepare businesses to begin projects. With the contract in place, all parties agree on what their expectations of one another are. Key Findings—Tools and Methodology Before BPM, Coors had systems implementation failures with SAP, and it had some shortcomings in the implementation of laboratory information management systems. This systems implementation had been in progress for four years before the BPM team became involved. The team piloted its modeling methodology and ARIS tool on the project. It was effective in modeling but not in change management. The experience demonstrated a need for a more structured approach to managing change. Post-BPM project successes have demonstrated the need for a top-down, structured approach. The BPM team has been heavily involved in Cornerstone’s after-action work. It identified what was and was not effective from a BPM approach. Since 2003, Coors has invested to take control of its business processes. According to Bonacci, its Visio world was chaotic. Bonacci said that Visio is adequate for the moment in time that the work is being done, but if the author of the Visio leaves, the tool loses effectiveness. He noted that the BPM team truly knows the business better than the business owners do. However, because of the modeling tools, information repositories, and the fact that the team has pushed the ownership of the models off to the businesses, any member of the BPM team or any subject matter expert can leave tomorrow with no effect on the processes. ARIS has been a key enabler to Coors’ BPM success. Coors Brewing Co. 120 Business Process Management Suggestions for Success The BPM team has a few suggestions that may help others on the road to managing processes well. • Begin with an enterprise model. Determine best practices by examining existing industry models (SAP, Deloitte Industry Print, SCOR, etc.). Create a baseline model for the organization, and validate the model with the business. Socialize it throughout the company. • Ensure that the business enterprise model incorporates industry standards and best practices. • Sell the enterprise model. Bonacci worked for a year to socialize the enterprise model to the Coors executives. He then concentrated on the third, fourth, and fifth levels of the company: the vice presidents, directors, and managers. • Have a top-down modeling approach. Bottom-up approaches create unintegrated process fragments. • To avoid turf wars, communicate carefully with process owners. Some process boundaries are blurred. The BPM team would not advise new process managers to begin by concentrating on clarifying process boundaries. However, the decision depends on the culture of each company. “Pick your battles,” Bonacci said. In Coors, “Many people think they own many processes. Marketing bleeds into sales, sales bleeds into marketing. Because the work was immature, the team determined not to fight the fight, because that would kill process management faster than anything. And that is not the intent of the work; the intent of the work is to make Coors a better place to work and to lower the cost per barrel.” • Have an enterprise-wide approach. Plan to eventually encompass all areas of the business and link all process models and stores in one enterprise database. Analytics can be run on the enterprise data or be project-specific, and enterprise models can be published on the intranet for enterprisewide access. • Have the methodology that supports BPM. The methodology facilitates transition from design to executable work flow. • Set up a governance board (a process council). Coors remains a company organized by function and does process work within the context of the functional organization. The team found that certain organizations belong in different units. The planning group, for example, is currently in the supply chain, but it is responsible for reporting to the plant planners and should be in operations, according to Bonacci. Goals and Plans HR’s vision is for Coors to become a company where: • processes are central to the overall management, • management is organized to ensure business processes run efficiently and deliver value to customers, • processes are aligned to corporate strategies and business objectives, • metrics are created to monitor and optimize business process performance, • processes are accessible worldwide via the Internet, and • quality control programs are integrated and relied upon to improve the efficiency and consistency of processes. Coors Brewing Co. Business Process Management 121 According to Bonacci, the power of the information that the BPM consultant generates with the businesses should be attractive to the HR generalists. The generalists should want to know if the right people are in the right job. The BPM consulting group will seek to have the HR generalist much more involved than they are currently. HR is currently more reactive; BPM could make HR more proactive. According to Bonacci, “It is impossible to outsource properly unless the BPM work has been done.” The outsource provider needs the details and the rules of engagement. Coors recently outsourced some of its benefits processes and is now in the process of outsourcing other HR duties. Bonacci said, “The modeling has been done; it’s easy now.” Because of internal changes, top management may be more involved with BPM in the near future. Coors is transitioning to a corporate center concept. It will be moving the executives and vice presidents out of the building in Golden, Colo. to downtown Denver. Their jobs are changing; their operational duties will give way to strategic improvement and charting the direction of the organization. Accountability will be driven down into the organization. After the transition, they will be able to think about things such as insourcing, outsourcing, core competencies, and process. They will be able to support the BPM initiatives better. Due to its success, the BPM team is busier than ever and in demand. In 2005 Coors hopes to integrate SAP NetWeaver (a BPM system for monitoring, configuring and control, and business process execution) into its BPM practice. The plans of Coors and the BPM team include helping with mergers and acquisitions. (For legal reasons, Coors is not able to begin work documenting processes until merger finalization.) However, in the case of the Molson merger, it has already identified its counterparts in the other company and knows that Molson processes are documented in Visio or are undocumented and in the heads of the employees. Therefore, the BPM team will be meeting with individuals at fairly low levels (levels 3 and 4) to define the terminology of the work done at Molson. Coors Brewing Co.
- Assignment status: Already Solved By Our Experts
- (USA, AUS, UK & CA PhD. Writers)
- CLICK HERE TO GET A PROFESSIONAL WRITER TO WORK ON THIS PAPER AND OTHER SIMILAR PAPERS, GET A NON PLAGIARIZED PAPER FROM OUR EXPERTS