Thursday, November 02, 2006

Baselining Improvement Efforts: PML

Organizations need a standard form of baseline for process improvement efforts. Kevin McCormack has written extensively about process maturity (see his book written with W.C Johnson, Business Process Orientation: Gaining the E-Business Competitive Advantage from St. Lucie Press, 2001). Other models, including SEI’s CMM designations and IPS Associates’ project management maturity model are also excellent tools for assessing organizational excellence in a particular discipline.

Processes, of course, are the core functional components of an organization’s operations. Given that operational excellence is a key competitive differentiator (e.g., Amazon for online order entry, Dell for inventory control, Progressive for insurance claims management, etc.), having a good handle on where your processes stand (“as-is”) is critical for effective improvement efforts necessary to get them to where they should be.

So I propose here a process maturity model of my own, in order to form a more perfect definition of the state of processes – and by axiom the state of operations – in a particular organization. The numbers following each process maturity level (PML) provide a means to quantify the process state, a baseline for process improvement initiatives. The goal of any such initiative is, of course, to elevate the organization to PML5. The maturity levels are:

PML1: Ad hoc. Organizations at PML1 allow staff to undertake key operational processes almost indiscriminately. The value of documented procedures and uniformity in workflow is not understood. (1.0 – 2.0)

PML2: Mapped. Organizations at PML2 have mapped and documented their processes and associated procedures, however, have not established metrics or attempted to respect the interdependencies of cross-functional processes. (2.0 – 4.0)

PML3: Modeled. In addition to complying with PML2 criteria, organizations at PML3 have established base metrics for each activity step in their processes, including average cycle times and error rates, and have created extensive process documentation, business rules and procedural manuals. Organizations at this maturity level understand the benefits of process uniformity. (4.0 – 6.0)

PML4: Integrated. In addition to complying with PML3 criteria, organizations at PML4 have established clearly-defined interactions between and among parallel and serial processes, regardless of function, department or deliverable. In addition, process improvements are undertaken in a holistic manner that respects the entire organization. Organizations at this maturity level effectively manage the “white space” on their organizational charts. (6.0 – 8.0)

PML5: Aligned. In addition to complying with PML4 criteria, organizations at PML5 understand the relationship of their processes to customer satisfaction, strategic success criteria, employees and employee rewards. Organizations at this highest process maturity level enjoy a workforce that works purposefully, in a uniform manner, toward the fulfillment of the organization’s overall objectives. (8.0 – 10.0)

Where does your organization fit in this model?

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