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BBC 2016: Enabling Operational Excellence


Continuing to blog at Building Business Capability 2016 with Ron Ross talking about operational excellence. [My comments in italics]

He began by talking about the new technology available and its potential while expressing worries that technologies, and technological approaches, might not really change our businesses for the better. In particular he expressed concern that “channel mania” might be dragging companies into unhelpful behavior. That said, he says, perhaps this channel mania is just an evolution of the old problem of organizational silos.

It’s clear to him that moving forward technologically will remove people from the loop when it comes to making things right for the customer. A digital future will mean there’s no-one available to make things work for customers. The substitute for this is going to injecting knowledge into these processes – using business rules (and decisions I would add).

So Ron proposed from basic principles for Channel (or Silo) sanity:

  1. Follow the same basic rules through every channel – make decisions consistently about configuration, interactions etc
  2. Know what your rules are – how do you make these decisions?
  3. Give your rules a good life – manage them and treat them as an asset to looked after.

It’s important not to let the technological tail wag the business dog. Make sure that technology choices are supporting business choices and not the reverse. Replacing brick and mortar stores with apps, automating up-sell and cross-sell, demonstrating compliance – all these require better management of knowledge (decision-making, business rules) once people are out of the loop.

The cheapest way to differentiate your business he argues is to decide differently – apply different business rules.  And if you don’t want to be different, use rules to make decisions consistently.

Ron took a minute to make his usual distinction about business rules:

  • They are what you need to run the business. You would need the rules even if you had no software
  • They are not data or metadata – they are rules
  • They are about business communication – not primarily an IT artifact but a business one (or at least a shared one).

Ron believes that the best approach to this is to capture these rules in a structured, natural language-like form that are outside of any executable format. Here we disagree – I prefer a decision model supported by rules not a rulebook of rules.

Ron then focused on 5 big challenges companies are facing when trying to become more operationally excellent.

  1. Know your customer
    This is particularly hard if you are using multiple channels. You need to manage the rules to ensure that you make consistent customer decisions across channels.
  2. Closing communication gaps
    Project teams worry about this a great deal but in fact this is a general problem across many projects. User stories and other agile approaches can leave too much communication hidden and in particular it can leave out the underlying knowledge that supports your organization. And reinventing this each project is unhelpful.
  3. Knowledge recovery, renewal and retention
    Tribal knowledge is a problem. One company found that 60% or more of the staff who have critical tribal knowledge will retire in the next 3 years. And companies end up putting those with critical knowledge into boxes because they can’t afford not to have access to that knowledge. Plus many of the rules currently embedded in systems are wrong, even when they can be extracted into something more readable than code. It’s critical for companies to manage their knowledge so it is “evergreen” and stays current and timely.
  4. Compliance
    With changing regulations and laws, with contracts and agreements, with warranties offered etc. Being able to demonstrate compliance and trace back to the original source is key. Ron thinks that a written rulebook based on RuleSpeak is a a good way to link regulations to automated rules and that you should manage all your rules in this way.
    I disagree strongly with him on this. Our experience is that a decision model does a much better job of this (see this post). Writing a non executable set of rules and trying to link those rules to the regulations and to the executable rules is much more costly in our experience and a decision model works better for linkage. Don’t write two sets of rules (one executable, one not), it will be expensive.
  5. Business Agility
    If IT costs are too high then even simple course corrections or changes are not made when the business sees the need to change. Fighting fires can keep anyone from focusing on serious problems. Managing rules can reduce the cost of change and so drive more business agility.

Ron concluded with a strong statement with which I agree – no new channels will ever emerge for which you will not need to apply business knowledge. So manage it.  Though I would add that not all knowledge is business rules, an increasing amount is analytic and cognitive and a decision model works for those too.