Abstract
Process improvement has become a number one business priority, and more and more project requests are raised in organizations, seeking approval and resources for process-related projects. Realistically, the total of the requested funds exceeds the allocated budget, the number of projects is higher than the available bandwidth, and only some of these (very often only few) can be supported and most never see any light. Relevant resources are scarce, and correct decisions must be made to make sure that those projects that are of best value are implemented. How can decision makers make the right decision on the following: Which project(s) are to be approved and when to commence work on them? Which projects are most aligned with corporate strategy? How can the project’s value to the business be calculated and explained? How can these decisions be made in a fair, justifiable manner that brings the best results to the company and its stakeholders? This chapter describes a business value scoring (BVS) model that was built, tested, and implemented by a leading financial institution in Australia to address these very questions. The chapter discusses the background and motivations for such an initiative and describes the tool in detail. All components and underlying concepts are explained, together with details on its application. This tool has been successfully implemented in the case organization. The chapter provides practical guidelines for organizations that wish to adopt this approach.
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- 1.
Burlton (2010) presents a methodological framework for implementing business strategies by means of process management. In this framework, the task of prioritizing processes is considered to be a vital step for maintaining effective and efficient process architectures and for keeping such architectures in sync with the strategic guidelines.
- 2.
The Org structure described here was correct as of Sept 09. For further details see http://www.qic.com/.
- 3.
BVS is a comparative rating which will be used to rank and prioritize all requests for change (RFCs) submitted for development/delivery. It is a measure of the value of a change request, relative to its cost. See Fig. 1 for further details.
- 4.
This was designed to filter through a set of processes that QIC was looking to improve, which was designed and implemented to manage the prioritization of high ranged projects. In most cases it helped identify areas for improvement, but it did not equate to the available resources.
“a list came back with 20 and we distilled that down to 10, but we really only had capability to work on 3, 2 or 3, 3 or 4, and so we had to objectively assess, well which 4 is it going to be”
(Operations Strategy Manager, QIC, Personal Comm.,10.07.2008).
- 5.
This time frame was only to fill the tool components. It was assumed that the requester would be intimate enough with the requested project to be able to enter the details into the tool without further investigation.
- 6.
ROA, or Risk and Opportunity Assessment, is a measure of a (requests for change) RFC’s value to the business. It requires a critical assessment of the RFC and its value, either through delivery of a benefit or the mitigation of a risk.
- 7.
To further elaborate, when ‘by not doing’ is chosen, it means the assessor wants to validate the importance of doing the project by depicting the negative impact to the company by not doing the project, hence gaining support for doing the project (arguing “don’t not do it”). The tool is designed to score the outcomes showing how business value is obtained by mitigating against the negative impact.
- 8.
See the Financial and HR dimensions outcome options in Fig. 3, for example. The Financial Dimension has the exact opposite, mirror image for both options, where as Human Resources dimension does not – hence potentially yielding different scores depending on which option was chosen.
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Appendices
Appendix 1: QIC Organizational Chart
Figure 2 depicts the QIC organizational chart after the structural changes conducted in 2008. One of the key changes was the introduction of ORMs. ORMs act as a central point of contact between Operations and the other business areas of QIC. Thus, six new ORMs and an ORM manager were appointed to represent the different business units. Divisions without an ORM have a named Business Unit Representative who fulfills the same interface function between their area and Operations.
QIC organizational chart
Appendix 2: Business Value Score Tool Elements
Summary of the initial business value score tool
Summary of the revised business value score tool
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Bandara, W., Guillemain, A., Coogans, P. (2010). Prioritizing Process Improvement: An Example from the Australian Financial Services Sector. In: vom Brocke, J., Rosemann, M. (eds) Handbook on Business Process Management 2. International Handbooks on Information Systems. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-01982-1_9
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