Making sense of process excellence in a digital era: Interview with IBM’s Sean Reilley (transcript)

The collision of the digital and physical creating new opportunities for process improvement

PEX Network: People often think that software providers and management consultancies are disconnected from the reality of actually implementing what they propose their clients to do. But, you’re in an internal-facing role in IBM where you’re putting new ways of doing business into practice. Can you tell me more about your role?

Sean Reilley: I’ve actually been fortunate to be on both sides - consulting and internal – where I’ve gained a broad perspective of IBM. I started my career by spending about ten years in operations and process consultant roles with external clients. About six years ago I switched to the internal side of IBM in a role managing IBM’s internal transformation. In my current role, I have the privilege of taking both what I’ve learned from these experiences to apply the thinking to help transform processes within IBM.

As vice-president of Enterprise Process Simplification, I’m responsible for driving a process focus across all of IBM. We do this in a couple of ways. First, by executing a disciplined governance around process with strong executive support and strong enterprise process ownership. Secondly, we’ve been driving thought leadership and education on process-based methods such as Lean Six Sigma and business process management, ensuring that we’re educating the transformation population across IBM. Finally, we actually support process transformation projects across the company.

It is really a great role and requires me to put the thinking into practice or - as I like to tell my team: "to eat our own cooking".

PEX Network: IBM is using a term called Smarter Process. What exactly does "Smarter Process" mean to you?

Sean Reilley: As you know, the concept of process improvement has been around for many years in one form or another - from assembly lines to Six Sigma. Often the focus of these improvements is cost reduction or the elimination of physical steps. All this remains important, but there’s a new approach to reinvent business operations, using new enablers such as social, mobile, big data and cloud, to drive a greater customer-centric view, and a smarter process is really bringing all this together.

So what do we mean by a customer-centric view? Customers - whether they’re external customers or internal consumers of enterprise services or processes - want their experiences to be instant, seamless, and personalised. It means being targeted and relevant to them as individuals.

In the banking industry, for instance, the traditional account-opening process used to require paper, manual processing, various approvals, and could take days and hours to complete. It also often required a phone call or that people needed to go into a branch. A "smarter process" now has automated that workflow, built-in business rules – that run on the cloud and can be accessed from a mobile device - and can achieve the same objective in minutes rather than days – regardless of where the person is.

But it doesn’t stop there. The user experience and, therefore, the process that goes with it, is extended beyond the account-opening process. The customer can get personalised offers based on, for instance, what they’re saying in social chat or other analytics. There are many great examples of how these smarter processes are being built into the consumer phase.

To me, "Smarter Process" is about redefining processes as a series of interactions and then looking at these interactions and seeing two key things: a) what is required to change based on these new enablers, like social and mobile, big data and cloud; and b) what is possible to change now, based on information that wasn’t previously available.

To build these smarter processes requires knowledge of the industry and the customers as well as new software technology and governance. I’ve mentioned that we manage this governance as part of our role. On the technology side, for us, we use IBM’s technology from our smarter process solutions portfolio to bring that intelligence into the processes.

PEX Network: Isn’t there also an aspect of this that the fact that more and more processes are combining both physical and digital elements? What kind of trends have you seen in this regard?

Sean Reilley: As we’ve just discussed, the digital elements, such as social, mobile, big data and cloud, are increasingly interacting with physical elements, and vice versa, which creates a new perspective and a new set of data that helps how we look at and how we improve processes.

Let me explain it a little bit more clearly: the physical influences the digital, which then influences the physical. For example, physical interactions, such as people walking, driving, working, are increasingly getting captured as digital data (e.g. people are wearing bracelets that track your activity and your heart rate or using GPS-enabled traffic apps).

Thus, we now have enterprise social applications that are digitising the physical world in ways that did not previously exist. That digital data is then taken into systems and used to change the way things work; for instance, maybe I’d eat a little less if I was not active enough in a given day or I’d take a different road if there is heavy traffic. It’s important for businesses to think about how this trend can impact their enterprise processes.

A second trend is about the amount of data and how it’s growing every second and taking on more forms - both structured and unstructured. This big data phenomenon is also happening within companies. From an operations perspective, machine-generated data is becoming a greater percentage of all data, and all this machine-generated data holds valuable insight that can transform the business. So how enterprises use this data becomes increasingly more important.

The question is what do you do with all this data? How do you incorporate these trends? How does all this change our processes, and how quickly will it all happen?

As I mentioned before, I think along two lines. First, based on this integration of physical and digital, what process changes ought to happen? And second, what changes are possible today that weren’t before?

My perspective is that we need to start small, experimenting with how we take information from the digital world and use it to transform or replace physical processes.

PEX Network: So what’s the business benefit of all of this?

Sean Reilley: I see the business benefit of this manifesting in three different ways. First, organisations will be able to use the data to make decisions differently. Just having a lot of data is not very exciting, but using the data to help make more competent decisions or using it to make changes to your process – now, that’s more exciting.

The second benefit it drives is greater transparency into the process for all users. Now users can see what’s happening in the process allowing them to better interact and react with that process. For example, after placing an order, it’s easier to find out where the order is in terms of fulfilment of delivery. You can plan that into your process and that information is really powerful.

The third area is that it gives people more control of their processes, so as processes get more instrumented as the digital and physical worlds come together, process owners are able to better understand, manage and control their processes.

PEX Network: Getting back to your earlier point about "eating your own cooking," how are you putting some of these principles into practice at IBM?

Sean Reilley: The way I look at transformation in IBM is as a continuous improvement. We’re constantly reviewing and challenging our business processes to be simpler, through elimination, standardisation and automation. The concepts of Lean Six Sigma and process reengineering don’t go away; we have people focused on these areas. We’ve also been expanding our perspective to introduce these new principles and this new thing we’re talking about here.

Bringing it back to the concept of smarter process - I mentioned account opening as an example. But you can also see smarter processes in other experiences, like taking a picture of a cheque to deposit it, or the traffic app I mentioned where you take aggregated social information to make data more accurate and relevant. This is what consumers are getting used to.

From my perspective, internally, these consumers are also employees, so now they’re bringing these consumer experiences to work and are asking why our internal processes cannot work the same way. We use that model as inspiration to challenge ourselves to continuously improve.

Another way that we’re applying it is to the use of smarter process tooling. We’re increasing the instrumentation of our processes using business process management tools and methods to put the business user more into the driving seat of the transformation, giving them the tools and information they need. This allows us to shift the conversation from: how are you going to transform me, to how can I transform myself?

Finally, another example which illustrates changes that are possible today that weren’t as possible before is looking at how we can use social as a step in the process. For example, traditional process improvement efforts might require a process expert to interview 20 or 30 people to understand where pain-points and waste are and what improvements need to be made.

However, the more that people are interacting socially, the more that some of that base information is already available. So newer enterprise social technologies – we use IBM Connections internally – is constantly creating information that can be harvested for process improvement and for simplification. Similar to any social interactions, someone can post a status update to their Connections page, which contains a comment on an internal process, whether it’s working well or otherwise, and then we can apply these smarter principles that we’re talking about, to take advantage of this information. We use social data mining tools to extract major themes and trending ideas and then we take this information and input it into our process transformation effort. We’re really getting real-time, real user feedback on how our enterprise processes are operating. Those are just a couple of areas where we’ve been taking advantage of some of these principles and trends.

PEX Network: I can imagine that none of this is ever easy. What have been your big lessons learned with regard to process innovation, to really achieve those meaningful business results?

Sean Reilley: A lot of what you would see and many of the lessons that we have learned probably aren’t very surprising but nonetheless are very important.

First, I always emphasise the importance of disciplined governance and executive alignment, especially when you’re talking about process transformation at the enterprise level. For example, at IBM we’ve created an enterprise process framework, and this has 15 Level One enterprise processes, and each one of those has an enterprise process owner that’s responsible. Those owners are senior executives who are responsible for driving the cross-enterprise process improvement and simplification across IBM. That governance and that discipline is a big part of how we are able to continue to drive our improvement.

Second, we recognise that process innovation, or any type of transformation, really, is a continuous journey, so we’re looking constantly to refine our methods and our approaches to process innovation, to apply the newest thinking, not standing still. While we have processes starting then, we emphasise that the transformation and innovation really don’t end: how do you look for new ways to transform? How do you look for new ways of driving process improvement? Those things are constant, so we really try to instil a culture of continuous improvement.

Finally, we think that we should just be creative and start to experiment. In new trending areas such as we’re talking about here, it’s often difficult to know where to start, how to get moving, and sometimes you get stuck. We’ve learnt that just picking a small area, trying out a new tool or a new approach, and seeing how it turns out is important; so try it out, learn from what worked well and, probably more importantly, what didn’t work so well, and keep moving.