Managing Business Process & Change

From the Outside In: A Consulting perspective

October 2011

Grant Thornton Australia Limited is a member firm within Grant Thornton International Ltd. Grant Thornton International Ltd and the member firms are not a worldwide partnership. Grant Thornton Australia Limited, together with its subsidiaries and related entities, delivers its services independently in Australia. Liability limited by a scheme approved under Professional Standards Legislation.

About GT and Me
Grant Thornton
Grant Thornton is one of the world's leading organisations of independently owned and managed accounting and consulting firms. We provide transformation, assurance, tax and specialist advisory services to privately held businesses, major corporations and public interest entities. Grant Thornton International Operates in 113 countries worldwide Offices in 521 locations Over 28,000 professionals Global revenue of US $3.5 billion Grant Thornton Australia Our team of professionals comprises of 100 Directors and over 800 staff We have offices located in Sydney, Melbourne, Brisbane, Perth, and Adelaide

Nick Latham Senior Manager, Business Transformation

During his six year career with Grant Thornton, Nick has developed an extensive range of consulting, business analysis and process improvement skills, providing advisory services to a range of organisations across various corporate and non-corporate sectors. Prior to Grant Thornton, Nick worked for GM Holden, with a focus on manufacturing process improvement in his latter time there. He has also spent time working in New York on process improvements within the Advertising industry. Nick's clients have been across a number of industries, including automotive, telecommunications / media, not-forprofit, and government. He has been trained in Lean and Six Sigma methodologies, and has been an integral part of building Grant Thornton's process improvement capability.

Page 2

Overview

The need for a change in approach

Using Process Maturity Assessment to provide high-level assessment

Using a Responsibility Matrix to improve process, and instill ownership

How do you engage executives in the improvement process?

Page 3

Everybody loves a process map ... So did we, until recently.

At GT, we used to engage in traditional process analysis projects.

Our learnings have led us to a different approach, focusing on a top down approach.

Our approach now focuses on: High level process assessment, and Ownership.

Page 4

The process type was a major driver of our change of approach.

Process Type

Process Example

Managerial Processes Need variation, flexibility to be built into processes, which is not always possible in a map
Multiple decision options Output driven

Business Development Client Management Report Writing (including Reviews)

Operational / Procedural Processes Target low variation, high efficiency Most process improvement focuses on the operational aspects
Binary decision points Single path of completion, process driven

Manufacturing Process Transactional Services

Page 5

For a recent client, the focus on Managerial Processes led us to look at processes from a high level and assigned responsibilities
Operating Model
Date: 1/10/2011
/HYH O

Responsibility Matrix
Role Matrix (RACI)

Community Services Senior Manager

Product Offering 1 Team Manager

/H O YH

Building Committee

Finance Committee

Board of Directors

Executive Assistant

Stream 1 Lead

Stream 2 Lead

Stream 3 Lead

Stream 4 Lead

1.0 1.1

Define and Manage Strategy

Define Strategy
AR AR C I I I A A A A A I R R A CI ARCI ARCI A A R AR AR AR

1.1.1 Develop strategic plan

/HY HO

1.1.2 Develop annual plan 1.2 1.3 Develop Business Plans Manage Performance Reporting 1.2.1 Develop operational plan 1.3.1 Collate data 1.3.2 Coordinate org performance reporting 1.4 Manage Special Projects 1.4.1 Manage program of work 1.4.2 Complete post project review 1.5 Manage Quality and Risk 1.5.1 Manage quality audits 1.5.2 Develop business continuity plan

Documented Process Architecture Core and Non-Core processes maturity assessment

Reviewed assigned responsibilities for each process Reviewed current organisational structure against operating model

Page 6

Stream 5 Lead

CEO

Overview

The need for a change in approach

Using Process Maturity Assessment to provide high-level assessment

Using a Responsibility Matrix to improve process, and instill ownership

How do you engage executives in the improvement process?

Page 7

The Process Architecture can be used as a base for a Maturity Matrix, which helps direct focus to areas of greatest need.

The processes were assessed for maturity, according to the following scale:
Non-existent

Immature / underperforming

/ HY HO

Well established

/ HYHO

/ HY HO

Page 8

Project Challenge: A key step is to gain a common understanding workshop approach rather than interviews
Approach Grant Thornton prefers to use workshops involving all relevant people to extract information For our project, we investigated end-to-end processes at a high level rather than diving into detail
This approach needed all relevant people to communicate with each other

Client Input Direction on how to prepare for workshops Clearly articulated goals and expected outcomes, for project and workshop Be mindful of availability and effective use of time.

With tension between some stakeholders, it was essential to have the appropriate leadership in workshops to maintain focus.
Page 9

The Process Maturity exercise helped to prioritise resources for an improvement program, and highlighted the need for clear responsibilities.
Maturity Findings Due to the growth of the organisation, a number of processes were now seen as immature Previously processes were informal but adequate Core Processes Largely mature, due to:
Funding sources Nature of the organisation

Next Steps Non-existent Assign responsibility for creation and management Prioritise roll-out to avoid over-extension of resources Immature / Under-performing Assess criticality of improvement Prioritise key areas and assign resources Well established Place on long term improved plan Promote continuous improvement where possible Empower employees to streamline

Non-Core Processes Lacked maturity and needed focus to meet the needs of a growing organisation

Page 10

We have also used a SIPOC approach to improve understanding of a client's Core Processes

Mapping processes in this manner demonstrates the flow and all parties involved

De-brand

Gaps can be identified at a high level All processes can be checked to ensure they are necessary, i.e. There is a useful output

Page 11

Overview

The need for a change in approach

Using Process Maturity Assessment to provide high-level assessment

Using a Responsibility Matrix to improve process, and instill ownership

How do you engage executives in the improvement process?

Page 12

Using a Responsibility Matrix to drive improvement is often more effective than detailed process mapping.
Client Impact In workshops with our client, it became clear that there were issues around the 'who' area of process improvement The roles and responsibilities of the SLT are unclear The Approach At Grant Thornton, we typically use RACI on client engagements
Accountable
The person who will be held to account for the results. The person responsible for the doing. A person who should have input into the process. A person who needs to be informed of the outcome.

Responsible Consulted Informed

Is the board is a board of management or a board of governance?

Overlap in roles and responsibilities of some SLT members

There are a number of alternative methods which can be used on process projects.
RASIC (Responsible, Accountable, Support, Inform, Consult)

Page 13

The RACI for our Client shows overloading of workers, unclear accountabilities and responsibilities, and a lack of transparency. Roles
Personal Support Program Manager Quality & Improvement Coordinator Corporate Services Senior Manager Product Offering 6 Team Manager

Projects and Liaison Manager

Human Resources Officer

Significant work load attributed to a small number of roles

Legal Advisers (external) Finance Officer

Network Manager

Project Officer

Team Leader 1

Team Leader 2

Team Leader 3

Team Leader 4

Team Leader 5

Team Leader 6

Team Leader 7

Receptionist

2.4 Manage Finance 2.4.1 Manage accounts payable 2.4.2 Manage accounts receivable 2.4.3 Perform management accounting 2.4.4 Manage budgets 2.4.5 Manage financial accounting and reporting 2.4.6 Manage investment strategy 2.4.7 Manage fixed assets 2.4.8 Manage payroll 2.4.9 Manage acquittal reporting 2.5 Manage Suppliers and Contracts 2.5.1 Define supplier strategy 2.5.2 Manage contracts 2.5.3 Manage vendors (day to day) 2.5.4 Manage supplier reporting 2.5.5 Provide contractual advice 2.5.6 Manage ad hoc and contractual procurement 2.6 Manage Tenders 2.6.1 Identify funding opportunities 2.6.2 Prepare tenders 2.6.3 Prepare funding reporting 2.7 Manage Legal 2.7.1 Provide contractual advice 2.7.2 Provide ad hoc legal advice
AR AR R R R R

A A A A R R R

Processes

Spread responsibility, and lack of Consulted and Informed

A A A A

IT Officer

R R R R

A AR AR AR AR AR AR IC IC IC IC R

Significant overlap in the responsibility and accountability for specific processes

RACI RACI

Page 14

No clear internal accountability for specific processes

Evaluation of results can focus both on a process basis or a role basis, both of which needed action at our client.
Analyse by Process Accountable More than one person was accountable Accountability was not always accompanied by authority Responsible Some processes with many responsible, e.g. procurement Consulted / Informed Many processes, such as HR, lacked consultation But, careful not to introduce too much, as it overloads Analyse by Role / Person Analyse the workload of each person through the amount of Accountable and Responsible activities The client's staff varied between under- and overloaded.

Page 15

Overview

The need for a change in approach

Using Process Maturity Assessment to provide high-level assessment

Using a Responsibility Matrix to improve process, and instill ownership

How do you engage executives in the improvement process?

Page 16

Executive Engagement and Project Ownership often comes from targeting the individual, over the organisation.
Enhancing Ownership Executive Engagement

The Responsibility Matrix can be used to enhance ownership greatly Tip: Introduce names, instead of roles The method of validation has a great impact.
Ceremonial 'signing' of a document

Spend time to understand true goals / drivers For our client, this driver was
To improve the functionality of the Executive team To improve efficiency of the organisation

All projects are completed with a Roadmap Offers pathway to sustainable continuous improvement, in manageable chunks

Keep things simple ? High Level

Page 17

For our client, the proposed roadmap generated the most executive discussion.

The client knows there is a problem, hence the project! Always work with the solution in mind, and present a clear path to improvement.
Recommended Solution Recommended Solution
Quick Wins Fix the Foundations Long Term Viability

Quickly take action to get the ball rolling

Fix the outstanding 'structural' gaps

Strive for sustainability through a strategic approach

Assess identified RACI issues

Update Job Description documentation Hire additional resource to distribute workload

Periodically assess Organisation Structure in light of changing environment

Page 18

In Summary

The need for a change in approach

The client was happy! Major Benefits: Clear accountabilities led to a 'get things done' culture Immature processes were identified and assigned resources Organisation is now operating at a sufficient level leading to further expansion

Using Process Maturity Assessment to provide high-level assessment

Using a Responsibility Matrix to improve process, and instill ownership

How do you engage executives in the improvement process?

Learnings: A high level approach is best for Management / Executive level Roles and Responsibilities are usually the biggest issue in Managerial Processes Be prepared to make the hard decisions

Page 19

... and over to you!

Questions?

Thank you for your time and participation

Page 20