When a business analyst (BA) evaluates the efficiency and effectiveness of a business process, the BA needs to ensure that the process under study is a value chain, not a sub process of the chain. Why? Because the BA needs to ensure that any process improvements benefit the end-customer – a quicker delivery, higher quality, or a less expensive product/service from the eyes of the customer. But what happens if the BA only evaluates a sub process? Can the end-customer value be harmed (i.e., slower delivery, lower quality, more expensive product or service)?
It is a best practice to follow Michael Porter’s lead on analyzing value chains . As written in the above introduction, the BA needs to ensure that a fair market balance between price vs quality  is maintained (i.e., customer value). If this is a best practice, how can the BA be led astray to only evaluate a sub process? To answer this question, we only need to review the background of organization functions and processes.
Functions and Processes
Functions are silos, branches on an organization chart. In language, the BA uses nouns to name these silos. For example, there is Accounting, Marketing, and the Purchasing department. In the past when problems occurred, management handed them over to departments to be resolved. Processes are interrelated sets of actions on how the organization accomplishes results (i.e., customer value); typically shown on some kind of flowchart. The BA uses verb/nouns to name these sets of actions. For example, there are processes such as submit expenses, call customers, and order equipment. Processes run through departments; see Figure 1. As a result, departments contain sub processes that compose a value chain.
Figure 1. Functions vs. Processes
Unfortunately, some managers run their departments as independent kingdoms, not part of a larger organization. They focus on the efficiency of their sub processes rather than efficiency and effectiveness of the value chain. In fact, some organizations offer financial incentives (bonuses) based on sub process measurements. As a result, some managers lead the BA on a mission to improve sub processes that benefit only their department, but can have a detrimental impact on the value chain. Essentially, the organization in reality consists of separate kingdoms rather than a united company with a set of common goals. Hence, the organizational need for process owners over value chains is vital.
Harming the Customer Value
With this background, let’s address the question posed in the introduction. Can the end-customer value be harmed if the BA limits the process evaluation to a sub process? The answer is yes. By only evaluating and improving sub processes, the result can be a less efficient value chain due to resulting
- duplicate activities
- lack of controls
in downstream sub processes. Customers can then experience longer delivery times, costlier product or services with substandard quality. The modified sub processes are efficient, but the result can be an inefficient and ineffective value chain for the customer. Note the BA process improvement effort may positively impact (lower internal cost) a sub process, but care must be taken on negatively impacting the customer value.
Does the value chain principle apply to the public sector? Sure it does. Processes run through functions no matter the sector. The end-customers in the public sector are the citizens looking for customer value. With the exception of profit, citizens expect government agencies to use resources efficiently and provide an effective product or service for their use. But as in the private sector, the sub processes can take precedence over the value chain.
For example, in the United States citizens elect state representatives to the US Congress to ensure their issues are discussed and resolved as legislation. Legislation is the customer value expected by most citizens. In Washington D. C., representatives call the value chain “making sausage.” Essentially, the representatives gather everyone’s ideas and place them in a meat grinder to produce a consensus or a compromise. This form of government is known as a democratic-republic.
To ensure all citizens are represented, the value chain starts with a trigger event called the census (first sub process) – a population count. Using the census, state officials divide the state into congressional districts (second sub process). The citizens of each district then elect their representative (third sub process). Sausage making resulting in legislation is the final sub process. This value chain has been around a long time and utilized quite successfully, most of the time. But suppose as in the private sector, the districts reflect ownerships of sub processes with uncompromising positions.
Enter the world of gerrymandering where the same state officials can shape districts to guarantee elected representatives with a singular viewpoint that does not allow for consensus or compromise. If enough singular viewpoint representatives are elected, the customer value of the value chain is now subservient to the gerrymander sub processes; the result is no consensus, no compromise, and as a result no legislation. Essentially, no customer value. As in the private sector, the districts are efficient, but the value chain can be neither efficient nor effective for most of the customers (citizens). Note some citizens are satisfied with no legislation (i.e., my way or the highway).
The BA needs to ensure that process improvements address value chains. These value chains exist in both the private and public sectors. Focusing on value chains rather than sub processes ensures that process improvements maintain fair market values in the form of end customer products and services. Perhaps the BA should follow a phrase from the medical field and often associated with the Hippocratic Oath: “Primum non nocere” - first do no harm to the patient (customer value).
Author: Mr. Monteleone holds a B.S. in physics and an M.S. in computing science from Texas A&M University. He is certified as a Project Management Professional (PMP®) by the Project Management Institute (PMI®), a Certified Business Analysis Professional (CBAP®) by the International Institute of Business Analysis (IIBA®), a Certified ScrumMaster (CSM) and Certified Scrum Product Owner (CSPO) by the Scrum Alliance, and certified in BPMN by BPMessentials. He holds an Advanced Master’s Certificate in Project Management (GWCPM®) and a Business Analyst Certification (GWCBA®) from George Washington University School of Business. Mark is also a member of the Association for the Advancement of Cost Engineering (AACE) International and the International Association of Facilitators (IAF).
Mark is the President of Monteleone Consulting, LLC and author of the book, The 20 Minute Business Analyst: a collection of short articles, humorous stories, and quick reference cards for the busy analyst. He can be contacted via – www.baquickref.com.
- Porter, M.E., Competitive Advantage, Free Press, New York, 1985
- Gale, Bradley T., Managing Customer Value: Creating Quality and Service That Customers Can See, Free Press, New York, 1994