Time is money. This axiom never truer than during rocky financial periods when the pressure to produce swift revenue results from any investment intensifies. In boom years and recessions alike, IT is expected to facilitate business efficiencies and innovations that yield significant cost reductions and increase profits. But during a downturn, many companies tighten or freeze budgets, expecting IT to do even more with less.

This approach could be a critical error, locking IT into an existing environment that consumes as much as 80 percent of the budget in maintenance costs and reactive fire-fighting. Instead, targeted investments in new technologies and operational disciplines such as Lean Six Sigma (LSS), which aims to achieve results in a short time frame by eliminating process inefficiency and focusing only on activities that increase the value of the final product, can deliver significantly higher returns than simple cost cutting in tough economic times. LSS principles and practices, particularly when combined with BPM technologies and modular service-oriented architectures (SOA), offer at minimum the foundation for greatly increased operational efficiency and flexibility.

Where should an organization start? First, apply lean techniques to IT operations to free up technical resources. Lean concentrates on removing process waste and smoothing workflows. Waste can be found throughout IT, much of it driven by interactions with the business.

McKinsey & Company research finds organizations can cut application development and maintenance costs by as much as 40 percent through LSS by identifying waste in the form of unnecessary functionality, changes in requirements during development, ineffective prioritization of maintenance requests, incomplete information, bug fixing and rework, and maintenance backlogs with many partially completed requests.

Next, businesses should invest in SOA-based BPM technology and use LSS techniques to guide project selection and accelerate ROI. A robust BPM platform includes process modeling, real-time monitoring, integration, human workflow, and business rules capabilities along with repositories to store key assets and support governance and reuse.

Business and IT leaders need to then walk through both the organization’s core and its key supporting processes to determine how they can apply BPM and SOA technologies to improve operational efficiency. Business and IT executives should identify Key Performance Indicators (KPIs) to measure end-to-end performance, with particular attention given to measures in which the process crosses organizational boundaries because that’s where breakdowns often happen.

During this evaluation it’s important for IT to look at the needs of the external customer to determine where they can implement improvements that will satisfy these requirements, looking for opportunities to incorporate continuous change into processes to both respond to events and to differentiate the business in the eyes of the customer. Business rules and policies that are controlled by business users allow the company to change and dynamically assemble its processes more easily.

In addition, adhering to the following guidelines will help organizations successfully marry LSS, BPM and SOA:

• Establish a core team to provide BPM guidance. Include cross-trained representatives from business, IT and LSS groups. Develop an adoption and governance plan, a BPM/SOA roadmap including skills acquisition, and a business case/ROI framework.

• Adopt a BPM/SOA/LSS development methodology and improvement framework. Focus on aligning business and IT efforts (for example, BPM-driven LSS). Emphasize agile, iterative and results-focused initiatives designed to leverage each project.

• Deploy a solution to gather KPI data and guide project selection (such as IBM WebSphere Business Monitor). Provide visibility into the performance of a core process or key sub-processes. Doing so delivers an important side benefit: With visibility, workers often take independent action to improve their own processes, without a formal BPM project.

• Select the right project, begin with the basics, and contain the scope. Start with LSS techniques to eliminate and simplify steps. Use IBM WebSphere Modeler to evaluate improvement alternatives, and use simulation to support the business case. Break large projects into more manageable smaller projects, build a prototype to gain buy-in, and reuse the prototype in production. Abstract process variation into business rules and policies and allow direct control by process owners. Proactively push implemented best practices out into other processes (if services embody best practices, deploy the services).

• Lead with the right people. Use business analysts that understand both the business and the technology Choose people respected by their peers and who will embody best practices.

Bringing the Business Together

The current economic downturn could foster a tighter alliance between business and IT departments, as companies look to reposition for growth. A successful marriage of LSS, BPM and SOA requires IT to strengthen its partnership with the business. Eventually, the economy will recover. When it does, the companies that have freed themselves from inflexible, inefficient, redundant systems and processes will be able to jump ahead of their rivals.

Archive of Articles by Amy Larsen DeCarlo