Social Business Process Reengineering

From Taylor to Drucker. In a famous quote, Clay Shirky, lecturer at New York University and author of Here Comes Everybody, wrote “Process is an embedded reaction to a prior stupidity” [1]. In other words, a process is nothing more than the coding of a lesson learnt in the past, transformed into a standard by a group of experts and established as a mandatory flow those who must effectively carry out the work. Joking aside, one of the themes that never seems to be missing from the agendas of top management, even more so in times of economic crisis, is that of efficiency, of doing more with fewer resources, of optimising flows, of improving work processes of individuals and entire departments. This is the field of BPM (Business Process Management), a domain worth many millions of dollars [2] at the centre of thousands of reengineering projects. These initiatives often have a considerable impact, with returns in 77% of cases higher than 15% of the investment [3] and in any case positive 2 years on from the project for 72% of interviewees [4]. Among the areas that fall under the protection of process auditing projects are the automation of repetitive tasks, the reduction of resources and time necessary for the completion of activities, compliance, the monitoring and management of performance, the increase of the productivity of employees, the greater consistency of the client’s experience.

What have we really optimised with these initiatives? The most fashionable approach over the last decades with regard to the optimisation of how a company works has been to formalise and control, starting from the assumption that the work to be carried out was mostly theoretically predictable, describable in simple, measureable and improvable terms, concentrating itself in a surgical manner on individual steps. Unfortunately these sorts of concepts, deriving from the scientific management and industrial society of Frederick Taylor’s time, are unlikely to combine with a post-industrial economy ever more based on creativity, on the sense of belonging, on a global communication amplified by social media, and on the rebalancing of power between brands and clients’ communities.

The inadequacy of today’s organization in dealing with a world based on knowledge, unpredictability and constant change is shown, for example, by the following figures:

  • Whilst 95% of IT investments are today still focused on the automation of business processes from the point of view of cutting costs, a good part of employees’ working time is not spent on the process, but on the exception to the process [5].
  • Despite the countless past optimization initiatives, in knowledge intensive sectors there still remains a performance gap of 9 times that of sectors centred instead on production and transactions [6].
  • Only 5% of companies have provided practically all (more than 90%) of their own knowledge workers with technological support [7].
  • It is estimated that between 20% and 50% of collaborative work is inefficient or entirely wasted [8].

As these figures imply, what our organizations have learnt to identify, codify and automize perfectly over the years are the “easily repeatable” [9] work flows, oriented towards the large volume of transactions that are repeated with precision in time. Information systems and management mindsets have on the other hand still not been able to fully protect the “barely repeatable” processes, i.e. those that include human beings within fluid, unstructured practices, typically based on email exchanges, meetings at the coffee machine and a wide discretion of behaviour by the parties involved.

A mandatory approach, of description prior to the flows, is ever more in crisis against the increase of the uncertainty and volatility of the market, of intensified competition, of the need to differentiate oneself, and of the reduced capacity of control companies have when dealing with the social customer. With the potential hidden in easily repeatable processes having been exhausted, the current challenge is moving towards the optimization of increasingly difficult sizes to be automized as innovation, knowledge, and reactivity to change; from the “one best way” of Frederick Taylor to the knowledge workers of Peter Drucker [10]. 

The seeds of collaboration in processes

How can we evolve our current approach of pure automation of processes by including co-creation, bottom-up exchanges, and participation from all individuals within and often outside of the organization?

According to a recent study on the evolution of the organization [11], in the next 3-5 years the introduction of collaboration within traditional processes will be so disruptive that it won’t stop at making the work more efficient, but will rather cause a much more profound change to some of the fundamental meanings that the business is based on:

  • 35% of interviewees think that the line between employees, suppliers and clients will vanish.
  • 32% think that teams will be able to organize themselves and decisions will be based on the most complete availability of data rather than on personal opinions.
  • 27% think that the organizational hierarchy will level out or large organizations will disappear altogether.
  • According to other interviewees, the allocation of resources, the strategic priorities, the choice of individual tasks and the assessment of performances will come directly from their own peers.

In order to spot in very small steps such a long-term transformation, organizations have already started employing approaches and collaborative tools, recovering a bottom-up contribution within a multitude of business processes. As many as 43 use cases with which the market is making comparisons (Figure 1) emerged from a study by Constellation Research [12].

Going through the roles directed both within and outside of the company, the areas in which collaboration is moving the fastest are:

  • Customer Service and Sales, with 6 use cases oeach among the top 20 most voted.
  • Human Capital Management (3 use cases).
  • Marketing and PR (2 use cases).
  • Project Management.

Along with topics that are already mature, some other more recent ones have emerged from them in the areas of product innovation and development (PLM), in the introduction of social business to auditing (Finance) and in relations with suppliers (Supply Chain).

What benefits are the companies that launched themselves into socializing processes on the hunt for? In the search for an organization more centred on the needs of the individuals and connections in network methods, combining structure and bottom-up participation allows us to:

  • Recover and pool the wealth of tacit knowledge, and of non-codified knowledge, locked in drawers and in the minds of individuals but so indispensable to how the business works. This is a universe of competencies, experiences and complex notions that requires a relational context of trust and high commitment in order to be shared voluntarily.
  • Acquire flexibility when faced with exceptions. According to approximately 50% of the work force [13], the processes on which the company has so far spent a good part of its budget, in addition to not covering knowledge work, often impose excessive inflexibilities, resistance to adoption and time wasting which paradoxically prevents the achievement of the very business objectives that they were codified to reach.
  • Respond to change. The volatility and globalisation of the market are drastically undermining the stability of processes with changes that in 66% of cases become necessary in the space of weeks or months. In addition to balancing the rigidity artificially imposed by the process, collaboration adds unclear margins of freedom to work individually or in a team.
  • Make collaboration measurable. The difficulty of measuring intangible exchanges exactly has always represented a large barrier to the recognition of the value of collaboration by senior management [14]. Immersing collaboration in a work flow a priori allows us to easily measure the difference between before and after, making tangible the improvement contribution brought by employees and clients.
  • Transfer autonomy and responsibility to line workers. Relaxing the process ultimately means allowing operators that directly interact with the client, or employees that, in whatever hierarchical position, intercept a problem, to timely take the actions necessary to deal with the emergency. This autonomy not only makes the whole organization more agile and receptive of signals (including unexpected ones) arriving from the outside, but above all contributes to motivating and making aware of their responsibilities all members of the organization who feel more able to do what is right for the client and company.

It is precisely in order to respond to the changing market needs that the world of BPM is tending towards more flexible, emerging and adaptive practices such as Dynamic BPM and Adaptive Case Management [15].

Socializing the extended value chain

How can collaboration, circulation of information and active participation of all stakeholders be applied in a precise, coordinated and integrated manner within the whole value creation chain? There are 4 stages of maturity for the socialization of the value chain originally proposed by Michael Porter [16] (Figure 2):

  1. Isolated communities outside of the flow. This is the starting point for every company when they begin to test the participation of clients, employees and other actors within the ecosystem through bottom-up communities or in any case communities free from the pre-existing work flows. The initial investment is low, as there is no integration, but the project struggles more to reach a critical mass of adoption and the tangible returns are very difficult to measure.
  2. Communities outside of the flow supporting a traditional process. The next step consists in recognising the complementarity of communities and processes by supporting a work flow (which remains unchanged) with social tools able to capture exceptions to the process, uncoded exchanges, and the tacit knowledge necessary to make the process itself work better. Structured and unstructured work are not yet integrated, but only supported. The returns become more tangible because it is possible to measure the benefits along the process, but the users experience the inconvenience of having to change context in order to carry out their work (traditional process) and collaborate (community outside of the flow). Adoption is at risk.
  3. Socialized process. To guarantee adoption by the users, the traditional process and collaboration need to be brought together by offering a single place in which all activities are carried out. Comments, posts, status updates, and documents are finally placed in the work flow, simply as an additional facility of the old system that becomes social and possibly integrates into the internal and external communities of interest (e.g. online support communities for customer care, CRM product communities). The processes, as socialized as they may be, remain closed silos, supported by technological solutions that do not speak to each other. We will have a vendor for Social CRM, a vendor for Social PLM, a vendor for HR 2.0, etc.
  4. Integration of socialized processes. Much more can obviously be done than creating a multitude of separate processes, even if enriched by collaboration. The starting point consists in pooling a series of services necessary for all processes like collaboration, unified identity management, business intelligence, activity stream updated by all systems. By doing this, not only does the participation occur in the context of the process, where it can affect and guarantee more consistent returns, but all processes begin to produce updates (status updates) that come together in one flow, similar to what happens in Facebook profiles. Through these streams individuals can stay up-to-date in real time on everything happening in the company [17], but above all they can collaborate at the same time on those events (e.g. by commenting on them, adding information, starting a video call) and provide feedback to the process (e.g. from the stream the state of a commercial opportunity can be changed in the Sales Force Automation system).

Currently many organizations and technology suppliers are still locked into a vision of communities and participation that is disconnected from the nervous system of the business (Stage 1). Cleverer organizations have instead already completed projects in which collaboration is considered an accelerator of work flows (Stage 2), in some cases replacing the automation of the process with more dynamic and open approaches (Stage 3). However, it will only be over the next few years that information systems and management practices will start to look at business socialization in a holistic manner (Stage 4), no longer settling for acting with a local perspective on opportunities to improve the individual department or flow, and instead systematically rethinking all of the mechanisms of value generation in a framework in which collaboration is the glue and enabler of sharing [18]

In the following paragraph we will see two projects whose maturity is in Stages 2 and 3.

Rethinking the processes in practice

In this paragraph we will show concretely how it is possible to involve the whole organization in improving a process thanks to the introduction of more transparent, participative and contribution emerging methods, aiming not to break up, but to evolve the paradigms of value creation which are today more widespread and to bring aboard both collaborative exchanges and exchanges which are more strictly transactional.

The business context. Systematizing previous experiences with the tools of Web 2.0, Lago (a rapidly growing furniture company from North-East Italy) intended to design a consistent strategy for product development socialization, firstly involving employees and at a later stage also resellers and clients. In contrast, a leading international organization active in the manufacturing sector wished to improve its project management activities by applying a lean methodology and guaranteeing an emerging interaction in real time between distribution teams on continents far away from each other.

Business objectives. Although different in size and complexity, both interventions were aimed at an overall maturation of the business on the organizational, cultural and technological plan. In the first case the greatest challenge was extending the active participation in the collaborative exchanges to all the members of the business, management first of all, making a single solution available that was simple to use and able to direct all of the available contributions and competencies into the product development path. In the second project the biggest barrier was instead cultural, looking to extend the organizational context to one effectively able to include sensitivity, needs, know-how and documentation relating to distant teams and sites. In both initiatives, technology, organization and the planning path jointly contributed to making emerge not only a new process, but also a new way of working.

Intervention methods. By using a planning and collaborative approach, inspired by listening to the needs, to the facilitation and co-creation of a shared solution, socialization has followed the following path:

  1. Definition of objectives and business priorities without omitting any fears, resistances and cultural obstacles to be considered.
  2. A group of friends (composed of approximately 30 stakeholders and final recipients of the product system) were involved in a co-design activity in order to map the current process and imagine its enrichment through bottom-up contributions, collaborative spaces, greater responsibility of individuals, and greater transparency.
  3. The indications collected gave rise to a socialized process supported by an appropriately configured community environment filled with contents.
  4. A closed pilot was created as a result, which all departments affected by the process were invited to (e.g. Technical Office, Purchasing, Sales Network, Post Sales, Call Centre, Marketing, etc.).
  5. Through a daily activity of communication, cultivation, creation of new contents and facilitation of horizontal exchanges, participants began to understand the value and adopt new work methods which replaced the old process.
  6. Based on the feedback collected during the pilot and with the help of the word of mouth generated by the group of friends, the project was extended to the whole organization.
  7. Thanks to a business case for management, the same method was autonomously repeated on other processes.

Results obtained and project metrics. As has already been mentioned, applying collaboration to improving a process facilitates the measurement of results that are tangible and that can be communicated to management. For Lago the results included:

  • Greater speed with a reduction of 70% in the time taken to reach decisions on product development;
  • Greater reactivity to market signals with a reduction of 40% in the time taken to activate the points of reference necessary to implement technical changes;
  • Greater efficiency thanks to a cut of 90% in operational and alignment meetings;
  • Greater quality with an improvement of 40% in the accuracy of business decisions.

Beyond formal metrics, both projects brought a long list of benefits which were perhaps less tangible, but certainly just as important, such as:

  • The reduction of misalignments between departments (e.g. Technical Office and Purchasing);
  • Greater ability to quickly identify the correct internal points of reference;
  • Creating a mechanism for learning and professional growth that is always up-to-date and free of charge;
  • A greater awareness of the role, experience and possible contribution of each individual, in any part of the world;
  • A constant alignment on the state of progress, partial products and final outputs of projects;
  • The reduction of the quantity of e-mails and effort necessary to coordinate teams;
  • A more transparent recognition from a meritocratic and future reuse perspective of individual efforts and unexpected results emerging from collaboration;
  • The possibility to rebuild at any time the whole story of the interactions around any project through a single environment.

Future Directions

The introduction of collaboration, knowledge exchange, and the collection of feedback within work flows is changing on various levels the way in which companies operate and generate value for their clients.

For some realities it is simply a case of making available community environments that support the process. For others it is the same processes that change, including mechanisms able to guarantee not only the fluid completion of transactions, but also a broader contribution by users. Finally, in more advanced projects, what is being created is a strategic design in which social elements are the key to reducing silos and systematically putting data, people and all the processes involved in the operational contest in communication.

Whatever the approach chosen and the level of maturity reached, the convergence between horizontal participation and traditional work management paradigms, between hierarchy and bottom-up communities, between mechanisms structured by the coding of activities and making the individuals more responsible for the success of the business, are long-term trends that will continue to push for a thorough review of the fundamental meanings of management, leadership and governance of any company.

We believe that the concepts presented in this chapter, although preliminary, provide a glimpse of a concrete movement of organizational evolution that is indispensible for responding more effectively to both the challenges coming from the market and the need for motivation from those who operate inside the company.


The importance of collaborative business processes
Interview with Sameer Patel

Why is connecting social elements to business processes so important for organizations?

Connecting people to other people has always been of fundamental value to social/collaborative approaches and tools. The reality however is that most users of social applications are still forced to jump continuously between environments free from engagement (the communities), record management and e-mail. Whilst we work we encounter exceptions [19] every day that are not adequately supported by systems for managing available transactions, whereas social tools are still too abstract to support the traditional flow of incoming and outgoing activity. The two worlds are not communicating with each other. When we stop looking at Social Business as a final aim, but rather as a means to a production objective, we will begin to see how business processes need collaborative methods to manage these exceptions: at a basic level, by helping people to find the best colleagues who provide help and, in its optimum form, by enabling not only colleagues, but also the best practices to emerge and by applying a business intelligence capable of accelerating the company results. I consider the latter as a second version of Social Business. We are currently in the initial stages of this version.

Can you give me some examples of areas in which this socialization of business processes is happening and the benefits that it introduces?

We are only at the beginning, but organizations are starting to understand the need to enable collaboration to emerge in the context, right where the work occurs. In SAP, our company applications have fed critical processes for transactional management for decades and we are now discovering that these processes are the most efficient points of contact to ensure that the social and collaborative approaches produce company results. For example, the planning of Sales and Operations (S&OP) is a fundamental activity for almost all large organizations; it must satisfy the demand based on production forecasts and its result amounts to millions of dollars of commitment in expenses and returns. During this activity a cross-functional group of users must gather to give input. What could appear as an exclusively transactional process is in reality highly collaborative and subjective. We need the right type of collaborative metaphors in order to reduce the risks, and our clients are asking for a better solution to make this process more accurate. The same applies to the management of Governance, Risk and Compliance or for the management of relations with suppliers and many other processes. Shutting collaboration in its own silos by merely connecting people does not respond to similar highly critical company processes.

What is the biggest barrier to incorporating collaboration into daily activity flows?

The biggest obstacle is looking at this process as an “incorporation of collaboration”. The first wave of business applications trying to make the most of social approaches have incorporated feeds and separately linked collaboration to each functional unit. The reality is that when we look at the “day in the life of…” scenario for each kind of user, we begin to understand what is really needed to make all of this useful. Let’s take for example the scenario of a salesperson: the person needs to use CRM to manage leads, unstructured systems for the access to and creation of documents, an order-to-cash system to launch products and to be paid, and much more. We need to understand objectively how collaboration can play a role in this scenario – from the qualification of the leads to the verification of the commissions. This is the strictness and the understanding of the domain that is needed from the point of view of both the business and technological process in order to direct the socialization of work into the organization’s key scenarios.

What will our organizations be like in 5-10 years if processes become social?

In 5-10 years we will have realised that the elements of ad hoc work for each business activity have always taken up a large chunk of our time.

Starting from here we will achieve the right mix of processes and “social”. For many business activities, if we look at how each hour of work is spent, most will be outside of the system for managing transactions and more and more will be in the systems of engagement. The mix between the process and social elements in business systems will provide support to this reality. We will always need our transaction management systems because these are what provide the final record, certifying what has been done and by whom, but in the next 5-10 years our technology and our work will truly reflect collaboration with the appropriate processes, data, contents, people and a context that up to now have been missing from the conversation on Social Business.

[1] See Process is an embedded reaction to a prior stupidity.

[2] Data from Forrester and Gartner taken from BPM Adoption and Delivered Value/ROI.

[3] Data from Gartner taken from BPM and ROI.

[4] From Business Process Management: Are we making the most of content-driven processes, AIIM.

[5] See John Seely Brown and John Hagel in The Power of Pull.

[6] From Business Process Management: Are we making the most of content-driven processes, AIIM.

[7] See John Seely Brown and John Hagel in The Power of Pull.

[8] For further details on the relationship between collaboration and efficiency please see Migliorare la collaborazione tra tecnologia e cultura.

[9] From posts by Sigurd Rinde ASAP Influencer Summit #3 – SAP missing the biggest opportunity ever?

[10] For a more complete description see Da Taylor a Drucker. Ottimizzare per la conoscenza.

[11] See How social technologies are extending the organization, p. 5.

[12] See I semi della collaborazione nei processi and Lessons Learned From 100 Early Social Business Adopters.

[13] From Knowledge worker empowerment is vital to success by Forrester and Isis Papyrus.

[14] Also see The Big Failure of Enterprise 2.0 Social Business by Laurie Buczek.

[15] For a description of how to apply and make use of feedback from clients in the evolution of business processes please see Dai clienti ai processi. Unire Social CRM e Adaptive Case Management.

[17] Both with regard to events generated by other individuals, and outputs produced automatically by the available applications.

[18] For further details see Socializzare la catena estesa del valore.

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