Friday, 31 August 2007

India Week – IT Service Companies Chasing Each Other to the Bottom of the Pile

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Of all the articles published this week, this is bound to be the one that causes the most controversy and I am going to make no apologies for that. Sometimes even when we don't want to see or hear it we must. One of my former bosses once described me as a "suppository" - one of things that you don't want to take, gut you know it will actually be good for you! So here goes.

From what I have seen both inside and outside India SWITCH as it has been given to me (Satyam, Wipro, Infosys, TCS, Cognizant and HCL), seem along with the other such companies that we will now consider members of SWITCH, appear to be still chasing each other to the bottom of the pile in terms of price cutting. After all much of the Indian IT sector has been predicated on cost. But although cost was the driver 5 or 10 years ago I am not so sure it is now. Even if it was then surely the work that India had done will simply move on to China? In today's world surely value and customer experience are more important? In which case why are we not seeing more of them competing based on these tenets?

The above is one of the reasons that I believe they would do well to consider undertaking some serious BPM thinking for themselves. In some cases it may already be too difficult, the sheer size of the employee base is causing them to act like an oil supertanker. But then, this should be no surprise, as generals through the ages have learned you have to break your forces down into smaller units with good leaders in order to remain agile and flexible, to try and run based on control and policies will not enable that flexibility. Oops, surely not having to deal with the thorny issue of actual organisational change!

Of course most of the SWITCH players will tell you that they have a strategy to move of the value chain, providing more added value services and business consulting services – which I happen to think is the right place for them to go, but for the most part they appear to be trying to get there with the same management approach as a bodyshop contractor – which is not going to work. The salary structure, motivational needs, training and investment needs for running a truly successful consulting practice are different, if you want o succeed then you need to break free from the existing model – remember retain values and rewrite the rules – it applies to us as well as them.

Of those that are doing better there is another question, are they really doing business consulting? From what I hear when they do they are still only looking at the business front end of an IT project with the aim of shipping the IT implementation work back to base. (Please don't write to me with the exceptions, I know there are some out there – we can't have rules if we don't have exceptionsJ)

Some SWITCH players have clearly stated that they are not interested in solving business problems, merely wanting to solve IT problems. On one level this is fine and admirable, on another level why would I want to buy from someone who does not know what business problem I have and can't elaborate how they can help solve it for me?

Clients increasingly want to buy solutions to problems; they don't want to have to separate the pieces and to deal with the politics of multiple suppliers. We either have to grow up and recognise this or forever be a sub-contractor for someone else.

All of the thoughts contained here are my own, but I can tell you that they are based on literally hundreds of interactions with staff in SWITCH at many different levels of the organisation over a period of more than two years. The examples may not happen every day, but they don't have to happen that often to have a serious negative impact.

This point is bound to raise some controversy, but in my interactions with SWITCH over the past few months I have not yet heard many example of how they used or are doing BPM to improve their own business. Which is a shame, because from my perspective they just might find that BPM offers them their best chance for long term survival? because we as they know that price won't. So the question to SWITCH is this – if you don't believe or practice BPM to help your organisation, then why should I believe that you can do it for mine?

SWITCH as a group has phenomenal intellectual power available to them, it is going to be fascinating to see whether they actually unleash that talent on the market, for now, to me it seems that are still content to hold that talent on a short leash and in some cases that leash is actually causing people to stop believing in both their companies and themselves – definitely a sad state of affairs.

My final thought is aimed at only one or two you and you will know who you are. If you want to survive and to continue to prosper then perhaps a quick look at the ethics of the way you conduct some parts of your business might be in order, honesty and integrity are pretty vital traits for the long term success of any business. Unfortunately I have had firsthand experience of the negative side of this and the excuse that we are a large company is simply not good enough. Just think how many people might tell the other side of the story to other people and what effect that could have on business in the long term.

Thoughts for the Day

  1. Are you still focussed on the lowest price in a value based world?
  2. Are you making best use of the talent you have?
  3. If you won't do BPM in your organisation, then why should I let you do it in mine?

Thursday, 30 August 2007

India Week – Indian Hospitality at its Worst and Best

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As you might imagine, visiting 5 cities in 10 during days in India means a lot of travel and a lot of hotels! But it also means you get to meet and interact with a lot of people.

Such travel also provides great insight into the area of Indian hospitality and the Indian travel and hospitality market sectors. In case you are wondering, there is absolutely no relationship between the two and any experiences you have had of the latter will certainly give you a wrong impression of the former

To start with I want to use my regular example of hotels to illustrate a contrast in styles and management thinking. The hotels we will use are the TAJ President in Mumbai and the Rain Tree Hotel in Chennai, because I am very fortunate, these are both 5 star hotels that I have used during this trip. As we will see, one of them is actually more like a 3 star hotel, just at a 5 star price.

The difference between the customer experiences at these two hotels was truly remarkable. In the TAJ I received phenomenal service, far above what anyone might have had the right to expect. The staff went out of their way to provide help and support not just in matters of food and lodging, but also in acquiring phone SIM cards and photocopying – all of which was organised with no fuss and a warm smile and the added convenience of putting it all on my room bill – I did not even need to step out of the hotel, they did it all for me and without charging a mark up on the goods or services. When I did want to leave the hotel on a shopping trip everything was organised for me and this led to a totally relaxing and pleasurable experience.

It was very apparent that the only Business Processes that mattered to them were the ones that delivered on serving the customer better – I might also add that within checking in all the staff were addressing me by name – now imagine how good that would feel.

From time to time in my travels when encountering good or bad service I invite managers from the organisations I interact with to send a couple of their staff along to the seminars I am running, free of charge by way of either a thank you or a wakeup call and a way of helping them improve (far more effective I think than filling those never ending guest comment cards you get in India). The TAJ President, becomes the first hotel in the world to actually take me up on that offer and for the whole of my seminar in Mumbai had two of their people attending, their desire to learn how even if they are good they can get better. This is truly the attitude of a successful organisation and inspired management. (Of course it also means that the other attendees can be sure that the catering service will be top notch J )

Unfortunately such kind actions, deeds and words cannot be used to describe the Rain Tree hotel in Chennai, where the service was nothing short of diabolical, everything was a real effort and even getting a cup of coffee or a good night's sleep seemed a challenge. I even took the time out to chat with one of the senior managers and this still had no noticeable effect on the quality of service – amazing.

As I sat down and reflected on how it could be so different I came to a realisation that the difference could be summed up in just one word – Fear! The staff at the Rain Tree serve guests out of fear, fear of management, fear of losing their jobs, fear of not being able to feed their families. Now, I do not know about you, but I am not convinced that is a good idea to have people live by fear alone and then expect them to deliver good service. The resultant lack of smiling and warmth is instantly transmitted around the hotel. I can assure you that I was very glad when it came time to leave.

I also then realised that the opposite was true of the staff at the TAJ President, they were warm friendly and genuinely seemed to be enjoying their work. While I am sure that they share many of the same worries as their counterparts at the Rain Tree, it was very apparent that they were not motivated by fear but by success, an altogether much more positive emotion and one which we as the customer can sense.

So the key lesson here is to make sure that we motivate by success to ensure that we both get the best from our staff and give the best to our customers.

So if service in the hospitality market sector is mixed, what then can we make of Indian hospitality in general. Well, the first thing I have to say is that I do not know about in general, but I can tell you for my part that along with people I have met in Sudan they are among the most generous and most hospitable in the world. For me Indian people in life and in work have gone out of their way to make me welcome, to share their lives with me and to make sure that I understand much about what constitutes the success that India is today. People I do not even know and who had never met me agreed to meet and spend time with me, patiently teaching me things that I never even realised could be so. Now where else in the world could you go and be offered two days of personal one to one teaching in one of the holiest cities in the country from a total stranger?

I said at the beginning of the first article, I love the place and the people that are India. My comments, observations and questions are aimed at helping people inside and outside of India to do better business in India and to learn from the mistakes of others – this is far cheaper than having to keep making the mistakes ourselves.

Thoughts for the Day

  1. Are your Business Processes centred on delivering outstanding customer service?
  2. How else could you improve the service through the eyes of the customer?
  3. Are your staff stricken with fear or motivated by success?

Wednesday, 29 August 2007

India Week – The Dabawalas of Mumbai

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Thanks to numerous TV and film documentaries people all over the world have heard of the Dabawalas of Mumbai, and I am sure that most like me were amazed at the staying power and creativity of the business. They are also an inspiration for anyone looking at doing BPM without technology. For anyone that is not aware of them the following is a (very) quick explanation of them and what they do.

The Dabawalas collect and deliver home cooked food from your home and deliver it to your office in time for lunch, then after lunch they collect the empty lunch box or "Tiffin" as they are called and return it to your home. So they are merely a delivery service, operating a simple business – or so you thought! – Consider the numbers, the Dabalwalas collect deliver 200,000 such lunches every day to people within a 60km radius within a 3 hour time period, because they collect and return the empty boxes too, this amounts to around 400,000 transactions per day. For their delivery method they use people powered hand carts and the public railway system. All of this being carried out by around 5,000 semi literate, but totally dedicated staff. By any stretch of the imagination this simple business is actually extremely complicated indeed.

In such a business quality counts for almost everything, what many people may not have realised is that in fact if the Dabawalas of Mumbai only operated at Six Sigma then they would multiply the number of errors or mistakes they made by 54! You see they operate at an error rate of only 1 in 16 million (or 6.79 Sigma for those that are numerically inclined). So what kind of systems, quality checks, automation and IT must they be using to do so well – of course the answer is none! They are the very epitome of the principle that quality should just be the way of things and of empowering people to manage themselves.

Unlike Richard Branson of Virgin, I have not yet had the pleasure of spending a day with the Dabawalas and experiencing first hand just how they not only do it, but do it with a smile and a happy heart. To hear firsthand how a business created over 100 years ago in a very different world has stood the test of time and has in fact grown over the years, to hear firsthand how their customers have been customers through generations and how they have generated so much goodwill that most new business comes from recommendations alone. This surely has to be very close to the perfect model of business, with perhaps for many business people, one small twist – the issue of profit.

Certainly the Dabawalas make a profit, they need to to support the charitable work that they do in the villages from where there people come from. What makes them different is the way that they think about and calculate profit, in simple terms their formula is cost plus a little bit. They understand only too well that if they just keep pushing up the prices to a level beyond what the majority of customers could afford they would quickly lose business. They also find that by operating this way when they do need to increase prices that the customer understands and accepts it – how many of your clients are so understanding when you increase their prices?

In the space available here it is not possible to list all of the lessons that can be extrapolated from the way they do business, but one that sticks in the mind and is a salutary lesson to us all would be the following. There are always simple solutions to complex problems, but man has this innate ability to create complex solutions to even the simplest of problems. More often than not it is not the simplicity or complexity of the problem, but man himself that creates the complexity, aided and abetted by an education system which seems dedicated to teaching people to look for and create complexity at almost every turn.

The story of the Dabawalas is one of the best examples I have come across of the power and effectiveness of BPM as a thinking process and a philospophy.

Of course as with any business the future has to be uncertain for the Dabawalas, but I for one would hope that they can continue to survive and prosper, if ever there was a business that deserves to then this is it. It would be nice to think that of the many businesses all around the world who have benefited from learning lessons from the Dabawalas, some at least will have made sizable donations, at least as big as they would have made the management consulting forms that they might have hired to hear the same story  So, if anyone should be reading this to a Dabawala, then please praise and thank them on my behalf and to tell them that I look forward to one day being able to spend some time with them personally.

Thoughts for the day

  1. What simple processes has your organisation made unnecessarily complicated and how can you remove that complexity now?
  2. Do you give all that you could to those that could benefit? Don't wait for others, do your bit now and feel better. Sometimes you will find that time and knowledge is more appreciated than money.
  3. What are you doing to make quality and service a way of life, instead of hiding behind a standard or so called badge of honour?

Tuesday, 28 August 2007

India Week – Why BPM Does Not Resonate in India (Yet!)

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During the past 3 months I have had the opportunity and pleasure of working with, presenting to or training over 1,000 people from literally hundreds of organisations in India. My experience to date shows that BPM faces a real uphill struggle to show itself to be relevant.

Just as elsewhere in the world there is the perception that BPM equals BPMS, and we all know that BPMS's mean automation. Well if BPM is all about automation and the elimination of much work, then why would a country that is more focussed on the need to create jobs have any interest in it?

Let me give you an example. Just last night I needed some photocopying done and so went down to one of the many Xerox shops here in Chennai to get it done. I had around 50 pages and I required them to be printed double sided. The whole job took no more than 10 to 15 minutes and cost very little, but the experience said so much. Firstly, the copy shop made no use of auto sheet feeding on the copy machine, it was all done manually by the operator – the shopkeeper told me that he would have to do literally years worth of double sided work to justify sheet feeders and duplex units, far cheaper to pay operators to do the work, and besides it creates employment. Secondly, we also see that quality is something that is talked of but not always delivered. The same copy shop had posters everywhere that were motivational, inspirational and assuring the customer that they cared. However, when my copies came they were of an extremely poor quality, despite complaining it was stated that it did not matter if I did not like the output, they had done the work and so I had to pay – Hmm... behaviour follows reward, they are rewarding themselves for the work not for success, the probability is that this particular copy shop may not last too long.

So if we are to make BPM interesting to the Indian market, then we have to show it to be relevant to the market, which it most certainly is. Indian businesses, just like any other need to work smarter, need to acquire new customers faster, need to control costs, need to increase revenues, need to generate profits and most of all need to keep customers happy. Well the good news is that BPM is done properly can help them achieve all those things and more. I would also add that there is another imperative for BPM and Business Transformation here in India, one of scalability. This is a vast country with many different cultures and unique challenges, not least of which is transport and distribution.

Unfortunately, to date it seems that too few people talk about BPM this way in India, to date most of the people talking about and promoting BPM are Indian IT companies, and as we shall see in a later article these companies are not well suited to looking after the interests of the Indian people and do not necessarily have a particularly bright future. Indeed many of these companies actively state that they are not wanting to get involved in the business aspects of change and are not interested in the Indian market –a question I have is if you do not care about India and the Indian market then why should India or the Indian market care about you?

BPM if applied as a philosophy will help to unlock some of the massive potential that exists here in India, but it will require forward thinking, better training and most of all action – it is not something to be talked about be too be acted upon. Whether the actions take place at the board level doing full blown BPM or whether they take place at a lower level in the guise of some flavour of continual process improvement it does not really matter as long as it is about processes, always doing better and focussing from the outside in.

If it is taken on board then it can help to address not just some of the business challenges of India Inc. But some of the social challenges too.

A final thought would be that if Indian businesses don't work fast to address this, then there will be plenty of opportunity for international players to enter the Indian market and then as we all know customers will vote with their wallets (but staff will vote also, with their wage packets!)

Thoughts for the Day

  1. If you are not going to be Customer Centric then why should your business survive?
  2. How man the products or services you provide be applied to a wider market in India?
  3. Do you reward the behaviour you desire or just pay for work?

Monday, 27 August 2007

India Week – A Week of Thoughts, Ideas and Observations About India

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Given that I have spent the last week and will be spending the next week in India, I thought it might be useful to you if I shared some of my thoughts and observations. I think you will see and feel that the observations are pretty universal, although of course with a local twist.

We will look at why BPM does not resonate in India, some of the issues around creativity and innovation, some of the problems with Indian Management style and philosophy, why there are bad times ahead for the Indian IT Industry and more importantly why it is not too late, why there are great opportunities and here about some of the many successes that there are here in India.

As anyone who has spent time with me here in India or heard me talking about my experiences in India will know – I love the place! I especially love the people and truly appreciate their great personal qualities and their individual strengths. As we will see later in the week it is just a shame that this same love of individuals is not always shared my Indian Managers and CEO's. They would do well to remember better the lessons of their teachers and of the deep cultural and spiritual heritage.

The thoughts I am sharing are not shared as a criticism, but are shared so that people can see the effect of many of their actions and to think about how it feels to receive the results of some of those actions. The thoughts are also shared in order that I hope I can help or persuade more businesses to focus on doing business in India. I would especially love to see more of the Indian companies focus a lot more on their home market.

Whenever you speak with people here about why they do not try to generate more business locally and to use the local market to learn about business and how business actually works (not how it is taught in the thousands of Indian Business Schools), you almost always get the same answer – "Mark, you don't understand the market is not big enough and there is not enough money." Well I have news for you all, this is just a joke and people are just kidding themselves. Let's consider a few facts about India.

Yes, we know the population is around 1 Billion and growing at the rate of around 50,000 people per day. We know that there are many poor people and that there is great poverty in the country. But, consider also the following numbers – India can be divided up into three main groups or categories of people a) The Consuming Group – India 1 b) The Serving Group –India 2 and c) The Rest – India 3. Would it surprise you to know that the Consuming Group is said to account for 14% of the population, or around 140 million people – a consuming class that is around 2 ½ times the entire population of the UK – sounds like one heck of a local market opportunity – and these are considered the group with money to spend on cars, houses and all the rest of the trappings of the west. Then we come to the Serving Group, said to make up 55% of the population or around 550 million people, who while they certainly do not have as much money to spend are still spending in ever increasing amounts and seem like a growing market sector opportunity. Finally we have The Rest – these people are vital to consider too, for they number around 310 million, although they do not yet have the money or resources to be seen as much of a market, they will actually be the ones that control the fate of India Inc. For either the other 69% of the population will work harder to help them and to improve their lives, or the entire democracy is likely to come under threat – it sounds like an exaggeration but how many democracies do you know – bearing in mind it is about the government of the people, by the people, with the will of the people – that could survive with 31% of the population feeling disenfranchised?

So we know that there is a large number of potential consumers we can sell to, but can they afford to spend? Yes they can! Another habit that is plain to see in India is two tiers of pricing – one price for Indians, say 30 or 40 rupees and another for non-Indians, say 50 or 100 rupees. At a simple glance this sounds fair India 3 or even India two does not have the money and many of us from elsewhere in the world do. But, India 1 as we can call them are earning salaries on a par with many people around the world doing similar work and can afford the higher prices too. A recent study in a business magazine here on the equivalent spending power of managers showed that a senior Indian managers is actually greater than their counterparts in the UK, Canada, Denmark and many other so called developed nations. We also know that there are many very successful large international companies coming out of India, and we know these too do have the spending power. So there can be no issues that the money is there in the market to buy, use and consume. So it must be something else that holds things back.

Based on my (limited) experience, it is not just one thing that is holding back market India, but many things, as we go through the week I will attempt to peel back some of the petals of the lotus flower and we will see if we can get closer to the jewel that we know lies within.

Thoughts for the day

  1. Are you really making the most of the opportunity that is India?
  2. If you can't demonstrate how you can help transform an Indian business then why I should I believe that you have the skills and knowledge to help transform a non-Indian business?
  3. Do you really not have the money to but the knowledge and skills you need or are you just stuck using the same old mantra in the same old way and just pretending?


Friday, 17 August 2007

Process Driven Enterprise Architecture

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The goal of achieving an "Enterprise Architecture" has proved elusive for many years. In fact for many people it is seen as something which is pie in the sky and just plain unachievable. Largely this is because it has been seen as a technology issue, not a business issue and of course this also means explanations around it have been highly technical in nature and unintelligible to most business managers.

As someone who has spent most of the last 15 years working with people in both the technical and business arenas, I can certainly relate to the fact that that it is one area where people have failed consistently to get the messages across. The challenge is that we have to find ways; in its simplest form Enterprise Architecture is about nothing more than ensuring that all the parts of your business – People, Processes, Plant, Premises, Stakeholders and Technology are all aligned and working in concert. In today's increasingly complex world this is something that we must achieve if we are to remain competitive and agile in order to survive. It is a business imperative.

Over recent years, most of the debate in the Enterprise Architecture arena has revolved around debating the merits or not of the Zachman Framework and the work has been data focused. But, now much has changed and it is business rules and process that are responsible for changing the perceptions.

The Zachman Framework, developed by Jon A. Zachman in the early 70s has come in for a lot of undue criticism: it is said to be too IT centric, without enough rigor, and without meta-model or method. Such comments are largely very unfair. It is true that John himself worked at IBM and was heavily into Data Management at the time he conceived the framework, but it is not true that it is IT centric. It is true that there might not be the rigor that would allow anyone to programmatically apply the framework, but then you can't program the classification scheme in a library either! As to meta-model and method, it is fair to say that more work could have been done sooner in this area, but certainly there is a lot of good work going on now.

However much work goes into researching the area, we need to get back, though, to the purpose behind it – to deliver tangible business benefits that business leaders can easily assimilate. It is here that Process Driven approaches are finding favor. However good our data and technical architecture might be, it does not catch the imagination of a business like process does. Process based approaches go to the very heart of an organization and can deliver immediate and highly visible benefits.

At a recent Enterprise Architecture conference I attended in Phoenix, USA, we heard presenter after presenter share real world experiences of how Enterprise Architecture had been delivering real results. Companies like Volkswagen of America, Bank of America shared how they had been able to build Enterprise Architectures, where the businesses, instead of saying "why, are we spending all this money on this!" were saying "If we spent a little more, how much more could we achieve!". This contrasted greatly with the delegates round the coffee tables bemoaning the fact that they could not get buy in at their companies.

When we look at the successes and contrast them with the "Would be failures" we see a number of things in common. Whereas in the case of the "Would be failures" technical people presented lots of information using jargon like Framework and Architecture focused on IT and technical benefits, and of course asked for budget, but not connected to a business initiative. In the successes, very few people used pictures of frameworks or talked explicitly of Enterprise Architecture; they talked of using slides with no more than 3 bullet points on them! (One delegate even shared that their CEO had said if you present with more than that I will not even listen to your presentation!) The people driving the initiatives were very much business oriented and they focused on small quick wins that were highly beneficial to, and highly visible within their organizations. It comes as no surprise, I am sure, to learn that they also focused on understanding Processes and People first and everything else second.

Around 2004, many observers started lambasting Enterprise Architectures, The Zachman Framework and other related initiatives. They were wrong! Enterprise Architecture can, will and must be made to work. The Zachman Framework as a classification scheme is as good as any other, and why do we need to reinvent for the sake of it anyway? The work going on within the Open Group on their TOGAF method for Enterprise Architecture will slowly see a practical method evolving.

On the down side, many US agencies are now mandating Enterprise Architecture and have their own frameworks, based on Zachman (FEAF, TEAD and DoDAF) – so why downside? Well, I hear that as with any such initiative involving Civil Servants around the world, they don't want to deal with people and process issues (they might have to risk downsizing their own jobs!) and instead will just focus on the technology aspects.

The one good lesson to come out of the US Government programs though, is that people are doing it – why? Because they have had their incentive program changed to alter their habits – no Enterprise Architecture, no budget! Another great example of the key lesson from Six Sigma, if you change people's reward systems to suit your desired outcome, then you can change their habits and behaviors far more easily.

To summarize, Enterprise Architecture will become more important, those who succeed will recognize this and build out from People, Process and Organization issues and will remain focused on delivering solid business benefits. In the main these will be delivered one small piece at a time, with the result that the business itself will ask for more to be done and will be happy to fund such work. Lastly, of course, those same people will communicate their needs and ideas in business terms to business people in a succinct manner.

In a short article such as this it is not possible to provide the depth of coverage on some of the topics mentioned. If you would like to know more about the Zachman Framework, why not visit or for the Open Group TOGAF initiative

Friday, 10 August 2007

The Top 10 Reasons Why BPM Will Fail

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For too long, people have spent all their energy espousing the benefits of BPM. No-one is really looking at the downside (and it is considerable!) and making people aware of the pitfalls and issues they will face. In this article I will try to explode some of the myths that have built up around BPM and reveal why for most companies BPM will fail to deliver.

Having been writing and promoting the business benefits of BP and BPM for over 10 years, to produce an article entitled why it will fail will surely seem like heresy in many quarters. My hope is that people reading this will do so with an open mind and will take on board the problems discussed. For only by understanding the real motivations of our companies, our clients and our staff, can we possibly begin to develop systems and techniques to help them.

Before we even get into the top 10 reasons we should remember that organizations have built themselves by function for many years. Executives are only just getting comfortable with trying to manage their entire business as one entity using functional approaches. Managers and executives have spent years, both in on the job training and through management training centers, learning how to become better specialists.

The very idea that a few so called "gurus" could suggest that they should turn their organizations on their side and manage the business through processes instead, seems more than a little amusing to them. To many these "gurus" should spend more time in "real" companies, understanding what really happens, instead of causing problems by converting some of their middle and senior managers to a new way of thinking.

It is this apparent lack of understanding of the people issues, by those in the BPM community that will ultimately stall any momentum built. Too many messages speak to the mythical "Company", "Customer" or "Organization" and don't take into account the "Me" factor. This may seem rather strange for an approach which talks of empowering people and promises greater freedom for people. By way of an example, a quick look at the exhibitors at a conference some insight; not one of the exhibitor panels talked of what was in it for "me" e.g. "Why should I engage with your company? You might have the best products, but they all say that, you might be able to save my company money, they all say that, but as a result of engaging with you what will I get out of it? Will you make my life easier? Will buying your product mean I work fewer hours? Will dealing with your company increase my chances of a salary raise or maybe a promotion?"

It may be the fault of marketers, but whether in the vendor or end user community the same lessons holds true. If we want to get people to do something, then in addition to appealing to the corporate issues we need to address the personal ones too. Companies and markets are actually just collections of individual people.

Having said that, we are still left with cultural issues and here, as we see, BPM does not come out particularly well. As we look at the top ten reasons why BPM will fail, we will see that the industry just simply does not understand the culture of either people or indeed organizations. The reasons given below provide a greater insight into our culture and the rationale as to why "BPM might be right for other companies but is not right for us".

As with any other solution, BPM must address itself to the real problems people and companies face and not the mythical ones. So far, the reasons for taking on BPM are not compelling enough to make it worthwhile getting into this brave new world.

So let's take a look at these top 10 reasons:-

Reason 1.    BPM is all about promoting professional change.

"Business Process Management is all about promoting professional change, promoting the idea that we have to move from where we are, to some greener pasture elsewhere. Whereas, in fact we actually quite like being where we are, thank you! We do not see a need for our company to move with all these new fangled ideas. We have been in business since way before you were born and have always served our customers well. The idea that we might not have customers later is just too preposterous for words.

Besides, there is already too much change in society and our customers and staff just won't stand for any more, it is our duty, just like a bank, to always stand firm and be somewhere and someone you can depend on!"

Reason 2.    BPM removes islands of information and silo thinking.

"Business Process Management helps to eliminate islands of information and silo thinking from within organizations. Such things of course may well be a problem in someone else's organization but it is not a problem here. I meet regularly with my peers and can get access to any information I require from them; sure, some of it might be a little out of date, or difficult to track down, but we have people who can sort that out and it does not really add to our costs.

As to silo thinking, we have been all through that debate many times. We cannot see any purpose in giving people visibility outside the areas they are working in. We take great pride that our engineers provide the best components and our marketers know how to market our products as well as anyone could."

Reason 3.     BPM promotes and encourages communication.

"Business Process Management promotes and encourages communication, which is all very well if you want to do that. But, in this organization we have management and it is their job to communicate what is needed, to the people that need to know. And to be honest we probably already have more communication than we need. It is far easier to manage our people, if we only drip feed the information to them. They are probably not capable of dealing with much more anyway.

Here in the emergency services, we really do understand communication. It is not as if you dial 999 and get the police instead of an ambulance. When special arrangements are made, everybody who needs to know about them does."

Reason 4.     BPM focuses on managing by measurement.

"Business Process Management focuses on managing by measurement, which is all very well but we have all the measures we need. What I don't need are more measures. What you don't understand is that measures mean accountability and I quite like the fact that I can fudge the numbers in the current system. The idea of greater accountability fills me with dread and the fact that they might all be linked up in a cohesive manner, will sound great to the bosses but down here we don't want that.

In any case, I am not aware of anyone who has found themselves earning more money or getting promotion as a direct result of managing more measures, especially here in areas like quality."

Reason 5.     BPM is about moving away from a Command & Control Structure.

"Business Process Management is all about moving away from a command and control structure, which makes it simply unworkable in our organization. Our very strength and indeed that of our competitors lies in organizational structure. We have spent years creating and honing it to perfection and it is the very heart of our company. People rely on it to know their status within the organization and what is expected in their role. It is also vital in establishing pay grades, salary structures, benefits and bonuses, such things would just not work in a flat organization.

In our business, tomato products, it would be just ridiculous to imagine someone flattening the organization. No one would know what to do or what was expected of them, if they had no formal structure."

Reason 6.     BPM is not all about technology.

"Business Process Management is not all about technology. However, we have had numerous presentations from many vendors who say just the opposite. In fact we like the idea of a pure technology solution. As an IT group we know how to handle such projects and have the knowledge and capabilities, built up over many years, to implement them. The last thing we need is a concept that requires us to further engage with the business. The idea that technology is just an enabler for business is not something we believe round here.

I work in the automotive industry. I know of no-one who has reduced costs, by allowing the business to get more involved in technology requirements. In fact usually they only increase costs because they never know what they want."

Reason 7.    BPM is not Rocket Science.

"Business Process Management is not rocket science, so it is not really adding anything to our existing knowledge base. We have a highly experienced executive team and numerous MBA's within our senior and middle management teams; these people know how to go looking for solutions. We have invested in them, to enable them to seek the solutions and many of them could deal with rocket science. If it were that straightforward we could just train our existing people and empower them to make the changes we need. No, it can't be that simple or straightforward.

The software industry is full of very bright people. And it is not very likely that any significant market player developed with a simple idea from mere graduates. It might work for small companies, but not one with wealth larger than most countries."

Reason 8.    BPM requires investment in training and education.

"Business Process Management requires investment in training and education. Here in our company we can't be spending money on training in this stuff. If we do that they will all want training. Besides if everyone was trained in it, they would all be asking questions all the time and we can't have that. The managers and executives won't know the answers, which would lead to anarchy. Anarchy, because we won't be able to spare the time of managers and executives in education, they are too important for that.

I just can't imagine any multinational tobacco company putting together a plan for even three days training for employees and managers, never mind 6 or 7 days on this stuff. It is too difficult to organize on a worldwide basis."

Reason 9.    BPM promotes common sense.

"Business Process Management is all about common sense, understanding what you have, where you want to go and developing a plan to help you get there. This all sounds very well in theory. However, if business was just about common sense then everyone would be doing it, wouldn't they? We have worked very hard to create something very special and complexity just adds to our competitive advantage.

After all people will always want books and our search and indexing systems combined with our local store network gives us the edge, sure the website is a little complex to use, but our customers have to understand the system is vast, to have a simple one-click system might sound like common sense but it does not apply in our business."

Reason 10.    BPM is a boardroom issue.

"Business Process Management is a boardroom issue, perhaps you don't understand but we have a very full agenda here in the executive suite. We are with trying to figure out strategies for growth and corporate direction. We don't have time to waste on new-fangled ideas that have yet to be proven. We employ people in our technology division to look at these sorts of things, if they are any good, we will soon hear about it from them.

Besides last time I looked it was all about process, people and technology. We focus on bigger things up here, real numbers and real strategies. Here in the airline business, I can't imagine anyone improving their bottom line significantly with this stuff."

Okay, so if you are still reading this then you have realized that perhaps it is a little tongue in cheek. But it serves to highlight the real issues faced by any and all of us in the BP or BPM fields. Largely we are offering help and solutions to problems people don't perceive they have. The challenge we all face collectively is how to ensure that our clients, our companies or our executives understand that these are the real problems they face. And that BP really is an ideal way for them to start tackling them. Certainly it does not solve all the problems of the world, but then what new management paradigm can?

For anyone who is not totally convinced, let's reconsider the examples in mind when writing the answers above. I fully accept that they are not all directly related to Business Process, but they do serve to illustrate the types of thinking we come up against, almost on a daily basis.

In example 1 we heard from what might be a typical banking executive. The news for them is that banks are not the reliable stalwarts they used to be. Competition is fierce and a lack of on-line or telephone services means customers will leave them in droves. The cost of not changing from a branch based model is far greater than the cost of doing so.

The second example would be fairly typical of an engineering company (especially one which has adopted Six Sigma). We see that engineers build great components, but no matter how good Marketing is, if Engineering are making something that the market does not want or at a quality the market will not pay for then we are just wasting money again. So much easier to remove the silos and have them engage much earlier in the process and continue to do so throughout.

Next we took the example of the UK emergency services, all three of which (Fire, Police and Ambulance) while managed separately, spend a significant amount of their time working together. However, recently when the Countess of Wessex needed to get to hospital urgently for the birth of her baby, it was a policeman that arrived and not an ambulance. It turns out that everyone thought someone else was sorting the ambulance and so a well thought out plan fails in execution, due to the lack of communication. Luckily enough for all concerned, this potentially life threatening situation had a happy ending.

In our fourth example I had in mind the positive side of Six Sigma and companies like General Electric and Motorola. In these companies significant amounts of executive and management pay, are directly linked to their achieving the requisite measures set by the company.

For the fifth example, I considered the "Morning Star" company and their highly unusual flat structure. More of which you can read about in my friend Doug Kirkpatrick's article "The Flat Organization" which appears on the website. Through a set of contracts and service level agreements Morning Star have created the world's leading tomato product company.

Sixth in our list of examples is the Volkswagen car company in America, who outsourced their IT to a newly created subsidiary, GEDAS. Meanwhile inside the company they continued to examine the structure of their business and the IT required to support it. As a result of the work done they were able to go back to GEDAS and significantly reduce the costs for their service provision.

The seventh example, if you did not already guess was Microsoft. In the early days they were just a couple of graduates who saw an opportunity and with a couple of quick moves created the beginning of what is now a monster company. Of note though is that, while many see Microsoft as a software or technology company, the key to Microsoft's strength lies not with the "Rocket Scientists" in their lab but with their smart use of marketing, for me Microsoft are a marketing company who happen to deliver software.

The strength for our eighth example, British American Tobacco, according to recent presentations given by the company, lies not with the extensive program. Or indeed with the executive buy-in to the 7 strategic imperatives or with the management buy-in to the resulting 160+ strategic initiatives underway (many of which are business process driven). Instead, they attribute most of their success to the inclusive training programs they have put in place. When rolling out their Business Process and Enterprise Architecture initiatives, the company took a great deal of time and trouble to put in place a training and education program. This has enabled managers, process engineers and line managers to all learn the same approaches, tools and techniques. This has resulted in extraordinary buy-in from the business.

For the ninth example, I imagined the sort of conversations that might have been taking place in companies like Waterstones or Borders, while Amazon marched on. I wonder now how they feel about the decisions they made at that time. And also how many other retailers will ultimately go to the wall. Before realizing the world has changed and they need to change too, and fast.

Finally for the tenth reason, I had no specific example in mind. However, if we take the sum of all the previous examples, as well as many other published case study examples, it is simply not possible to ignore the business benefits. However, the language used in the case studies may not yet be right for the boardroom. Indeed, the media too may be inappropriate. Perhaps when such stories are regularly carried in publications such as the Harvard Business Review, as was the case with stories such as GE and Motorola years ago, then we can hope to win the hearts and minds of the boardroom.

In closing, I hope you can see it is not a matter of doom and gloom at all, but significant work needs to occur. To change the language we use, to focus on the people issues and to destroy the plethora of myths that are building up around the BPM industry. Such myths are being built in both the vendor community and within end user organizations.

Book Review – Process Mapping, Process Improvement and Process Management

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Process Mapping, Process Improvement and Process Management


by Dan Madison

Edition: Paperback

Price: $26.95


At first glance this would appear to be another "me too" title, and while in some ways that may be true. However there are a couple of things that set this book apart and mean that it can be of value to those experienced in process improvement as well as those new to the subject.

For anyone new to the subject I would say that reading as many books as you can, even if they appear at first glance to overlap is a good thing. You will need to find an angle and perspective that works for you and it is only through distilling the thoughts from a number of sources that you can achieve this.

From a reading perspective this book is well written and easy to digest. It is also very applicable to any type of process related improvement project and so should have broad appeal. The book proposes a 10 step method for improvement which I can't really comment on (s within the BPMG we have an eight stage approach that we suggest to people)

For me the most important part of this book is the 38 design principles that Dan lists in the appendix. These provide great value and can act as a great check list on any project to ensure you get the maximum value from a project. Checklists are something else I found useful in the book, Dan provides a great many work sheets and check lists, all of which can be put to use quickly with the aid of the clear explanations he provides. In my opinion the check lists, work sheets and design principles alone will justify the cost of purchasing the book.

Particularly useful is the section on the "lenses of analysis" - this helps the user to remind themselves of what problem they are actually trying to solve. A great way of ensuring that analysts remain focused on the business problem at hand. (Of course it may just be that I am biased, based on the fact that we teach some similar principles within BPMG courses)

It has to be said that there were a couple of things that I did not like in the book (and have already communicated these thoughts to the author personally). I did not feel that the chapters provided by the guest authors really added to the good work in earlier chapters written by Dan himself. Although the chapter on organizational issues talks of an important aspect of change and provides some useful information, I felt the style was just different. In particular the chapter on simulation is too much geared around one particular modeling tool vendor and I did not think it did the complex subject of simulation justice - I would much have preferred to have seen a tool neutral discussion on the relative merits (and costs) of undertaking simulation, and of the different approaches to simulation. Simulation is a much misunderstood topic and one which would well have benefited from a proper airing in this context.

As with all books on process that I review I suggest that the reader puts aside the particular notation suggested by an author (the issue of notation is too emotional) and instead focuses on the ideas presented and uses them to enhance whatever approach they currently use.

In summary I would suggest that this is a good book for anyone involved in any kind of process improvement project. It will provide a good introduction for those new to the discipline of analysis and design. While acting as a useful refresher for those with more experience.

Friday, 3 August 2007

Innovation – A Key Attribute in Next Practice

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In the book "In Search of BPM Excellence" the concept of "Next Practice" was introduced and discussed as the way of the future for organizations. This article explores one of the key attributes of a "Next Practice" organization, that of Innovation.

The subject of innovation is becoming an increasingly hot topic as organizations all over the world seek to gain competitive advantage. It is a topic, rather like BPM that can be viewed in two ways – to some it can be seen as nothing more than yet another management buzzword or paradigm with little or no value, to others it offers a way out of the current malaise they find themselves in.

But, why is innovation such a key attribute and why do organizations need to innovate more?

Innovation Pays

As we all know the cost of invention can be extremely high and the risks associated can be really off putting. But with innovation we are taking either proven or half formed ideas and learning how to adapt them in order to generate revenue and profit. A quick scan through the history books shows that innovation pays.

The American, Thomas Edison is frequently attributed with developing the light bulb, whereas in fact it was originally invented by the Englishman, Sir Joseph Swann in Sunderland. However, what Edison and his team did was to understand the application of the design and to refine the invention such that it was both applicable and commercially viable and hence it was Edison that made the money and got the association. As a side issue this was just one of the many "inventions" attributed to Edison, where in fact what the Edison Company had done was to perfect other people's ideas to a point where they were able to make money with them.

Depending on how you look at it Irishman, John Boyd Dunlop or American, Harvey Firestone are credited with inventing the pneumatic tire. In fact neither of these gentlemen did, it was in fact invented by a Scotsman, Robert William Thompson. But in the true tradition of innovation it was Firestone and Dunlop who took the invention, developed it further and identified the "Killer Applications" of the day – that of Bicycles and Cars – and it was this innovation that led to Firestone and Dunlop making significant commercial success. (We shall come back to Harvey Firestone in a later article as he was innovative in other areas that differentiate "Next Practice" organizations as well.)

Of course a look at history and innovation would not be complete without a mention of Henry Ford and how he can to innovate around the automobile, but like Firestone his areas of innovation are best covered in other areas of "Next Practice". What is worth noting, given the current dire situation of the Ford Motor Company is that the company that built itself from nowhere on the strength of innovation appears to have forgotten its roots and forgotten what it took to become number one.

Finally for those seeking more current examples of how innovation pays we can look to the technology sector, where organizations such as Google and Microsoft are now household names. Yet in both cases their success did not come through invention but by innovation. Google was seen by many observers late into what was a relatively crowded market, search engines, yet through innovation it has grown to become the number one player in its chosen market. While Microsoft did not invent the PC operating system, what it did was identify a need (IBM's) and created a solution to solve the problem, the rest as they say is history – but not quite, for Microsoft have continued this trend of looking at other peoples inventions and then working out how to perfect them and apply them in such a way that they can generate revenues from them far in excess of what the inventors may have foreseen.

Of course there are countless other examples, too many too mention here, but suffice to say that history has proven that in order to prosper and grow you need to innovate. The concept of innovation brings out some major cultural issues, both with organizations and across national boundaries.

The Cultural Divide: Internationally

The issue of cultural divide is very frightening for forward looking business people in Europe, for as will be seen Europe still lags a long way behind the rest of the world when it comes to accepting, adapting and applying new thinking in business.

In terms of geography we can look at the world as four regions – Asia, The Far East, The Americas and Europe. They are listed in the order of their acceptance of and application of innovation. What is also worth noting is that the reverse order is also true if we were to rank them in terms of their rankings in terms of historical inventions. (Unless of course we were to dig deeper into the history of ancient civilisations.)

The Asian economy is by most accounts still booming, fuelled very much by their export capabilities. As such at a very basic level they are still chasing the faster, cheaper model and doing it very well. But in fact underneath that they are looking at how "innovation" can be applied to the ways they work rather than purely at the products they produce. In countries like Singapore, Malaysia and North Korea they committed very early to the idea of broadband internet, even to the extent of the governments building the infrastructure for the "New Economy". This can also be seen in the way that their managers don't just study the products and services produced elsewhere in the world, but study the way that the rest of the world organizes around that work. Their view is very simple they don't want to simply copy the goods and services we make, they want to find new and better ways of managing work. They want to take the management practices the rest of the world invented and then work out how to apply those practices in new and innovative ways. They are creating a culture where it is normal to keep challenging the way things are done.

It can reasonably argued, that it while the "faster, cheaper" model was perfected in the Far East, it was the Japanese that then added to it by doing it "better" too. The Japanese and now the Chinese have stopped merely copying the goods we produce and have started to improve them, whilst giving us new and innovative devices, especially in the consumer goods market where perhaps the pace of innovation is outstripping our ability to consume the devices and technology! However, as can be witnessed by the recent economic problems in Japan, they have had problems dealing with the innovation required in terms of how they do and organize work.

The America's on the other hand appear to be embracing the idea of innovation with both hands. It is being seen as a key factor in their ability to breathe new life into tired product ranges and to fight back against those "faster, cheaper, better" imports from Asia and the Far East. In the Americas innovation is playing a vital part in helping to reinvent whole organizations, those once giants of Wall Street who are now failing to impress with their less then interesting financial results. Innovation now lies at the heart of so many other initiatives. Forward looking executives have realized that if they can create a culture where change is accepted as the norm and where everyone is encouraged to innovate then they can not only leap frog the competition, but create a position that is far more sustainable than the position they found themselves in during the 60's and 70's and one that is harder to copy. Of course the Americans in particular have an edge in that they have long recognized the power of the customer, they perhaps have just taken a little too long to build on that recognition.

Then we come to Europe, mother of so many of the base inventions we take for granted today, everything from radio and television, to electricity and engines. Where it would appear that management spends more time driving business by looking in the rear view mirror than watching the road ahead! For some reason in Europe we manage to fund an invention but stop short of funding the innovation required to make money from it. In the UK this situation is causing immeasurable damage to the economy as company after company falls prey to buyers from other countries. It has been suggested that if organizations in the Times Top 100 today don't start innovating and fast! Then over half of those companies will find themselves owned by non-UK corporations in less than 5 years, and this applies across all industry sectors. Whether one is talking about innovation, the application of technology or any of the other initiatives underway in organizations around the globe, it seems that European Business is lagging behind. Many observers suggest that the situation is so bad it can only be resolved when the occupants of those corner offices and boardrooms actually die! It seems that Europe is still basking in those glory days of Empire and failing to recognise not just that the world is changing but that it is changing fast.

The Cultural Divide: Internally

Having suggested that there appear to be differences across national borders when it comes to innovation this is nothing compared to the issues faced internally within an organization.

At risk of making a sweeping generalization, it appears that the organizations most likely to innovate are those that are less than 25 years old and in general have fewer than 5,000 employees. It also appears that innovative organizations tend to have strong leadership from charismatic leaders. Of course these rules do not apply in every case buy seem to be the norm.

An example of a larger organization dedicated to innovation appears to be Home Depot in the USA, where they are striving hard to be innovative in everything they do. Their driver is a simple one and one that could explain many of the issues facing retailers in the UK. They have understood that the average life of a retailer in the US is 25 years, from studies they have undertaken they realized that after 25 years the original ideas and concepts behind the starting of the retailer are tired and no longer work. They have realized that in over the period of 25 years retailers get stuck into a certain way of doing things that they can't get out of. Of course, it is no co-incidence that this drive to reinvent themselves through innovation occurred as the company neared its 25th Birthday. But as revenues and profits show this is certainly paying dividends for them as they continue to outpace the market in terms of both sales and income growth. Proof again that innovation pays.

At another level within an organization we can look at the age of innovators. A recent study of 2,000 employees by Vodafone Group in the UK yielded some surprising results. It found that over 29% workers came up with at least one new idea per week, although 25% or workers say those ideas stayed in their head, not surprising really when the survey also found that 67% of people said that management did not listen to their ideas. Of those ideas over half were being generated by staff over 55 years of age. It seems that younger people (16-25) generated the most ideas, but that management did not share the viability of those ideas in the same way.

It would appear that organizations are conditioning staff early about those new ideas until they stop generating them (25-55) before being willing to listen to those wise old heads (55+). This may explain by companies that prosper from innovation are those younger companies with fewer staff, the people willing to listen to those 16-55 year olds before someone else gets the ideas to the market first.

The other factor that decides how innovative a company is likely to be is the reward structure. If we look at organizations in the Healthcare, Utilities, Manufacturing and Engineering fields we would struggle to find many organizations who would be held up to be innovators, whereas in the Retail, Financial and Insurance sectors there are good examples. The difference in these two groups is the likely reward for innovation, in the former there is little or no reward for people coming up with new ideas where in the latter there appears to be a willingness to reward employees who come up with good ideas.

It is also true that in terms of reward we see very little to incentivize staff in the public sector, in fact staff in this sector can be likened to that of many of the manual workers in the Vodafone survey. This group as whole felt that new ideas were not good as it probably meant reducing staff numbers and therefore meant risking their own job security/ An issue of communication for all such organizations on the basis that putting ones head in the sand is hardly a recipe for continued employment.

In order to ensure that innovations works in an organization it must, learn to listen to the ideas from all staff in the organization, find ways to reward staff for ideas that are put into practice, communicate that the ideas used came from staff and finally to encourage people to innovate. Over time it will be interesting to watch as "idea generation" becomes a factor in promotion rather than years served.

Innovation Is For All

The need to innovate applies to all sizes and shapes of organizations. It applies equally to Charities, Local and Central Government Departments, Not-for-Profit Organizations and Commercial Entities. It applies to all sizes of organizations from single person organizations right up to the very largest employer. The concepts and needs for innovation are too strong to be ignored by anyone.

The rationale for this is very simple EVERY organization of whatever kind relies on income from somewhere (and is having to compete harder to get it) and is required to do more and more with les and less (having to keep costs down to a minimum).

To just keep doing the same old things the same old way will only end in failure. To keep doing things a little better does no more than prolong the agony that little bit longer. Only innovation will enable us to serve our customers/citizens better and to ensure our survival in the long term.

As a recent study into the demise of the Rover Car Company in the UK highlighted the company had been doomed for over 40 years. The failure of every team of managers in that time to innovate meant that it was not a question of whether it would fail but when it would fail and who was at the helm when it eventually did.

Note: This article first appeared on Mark McGregor's series of articles on

Thursday, 2 August 2007

Book Review – Detail Process Charting

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Detail Process Charting: Speaking the Language of Process


by Ben B. Graham
Edition: Hardcover

Price: $70.52



The Graham family has been involved in work-flow and work-simplification for 3 generations. This book brings together the work of Ben, his father and his grandfather, in an easy to follow text that explains both their approach to flowcharting and why it has been so successful.

Other readers, like me, may be a little unsure about the notation suggested or indeed the level of detail prescribed by Ben. However, putting such reservations to one side, the book is of great value to anyone involved in flowcharting, process modeling and especially work-flow automation.

I particularly liked the sections covering the setting up of a process team, which nicely addressed the roles and responsibilities, and the one looking at the structure and phases of a project.

The final chapter in the book is given over to detailing the experiences of practitioners in applying the technique and of the value created within their organizations as a result. This chapter alone more than justifies both the cost of the book and the time it takes to read it. We can all learn and understand more from hearing from what people have actually done.

In summary, I am not sure how viable the Graham notation is for those who have not already invested in it, but none the less the book presents an excellent case for process modeling or flowcharting and can help anyone who might be looking to justify a business case, whatever notation they finally settle on. Finally the book is a must read for anyone looking to undertake a work-flow automation project, on these projects the ideas in this small book will pay for themselves many times over.