Process and Productivity: The Lost Decade

When you study an organization and try to figure out how to improve the way the sales process works, you may not think of yourself as contributing to the success of the nation.  Ultimately, however, the best way to judge the overall results of process improvement, is by looking at a company or a nation’s productivity.  Productivity is all about doing more for less.  Put a different way, if processes are being better managed and organizations are selling more, at lower prices and making more profits, then productivity will be rising.

In the last decades of last century, many economists worried that computers were not increasing productivity.  The constant need to buy new hardware and software and train new people to use new techniques seemed to result in costs that rose as fast as proported improvements.  Then, in the Nineties that seemed to turn around and suddenly everyone was talking about increases in productivity that seemed to be closely tied to increased automation.  It seemed as if things were all right after all, and that once the transition to large scale automation was in place, companies began to achieve greater productivity.

Recently, alarms have been going off again.  New studies suggest that the US and Europe have both failed to improve their labor productivity in the last decade.  In particular, studies suggest that labor productivity — which measusres the extent to which fewer workers can produce more — is growing at the slowest rate since the 1950s.  Computer specialists point to the slow uptake of new computers in the past few years, and suggest that is the cause.  Those of us involved with business processes should take a more comprehensive view and simply ask why business process improvement is stagnating.

If one looks back a decade, and asks what has happened, one sees several things.

Computing has shifted from PCs to smart phones and digital assistants.  Chips are being embedded in everything from blue jeans to battle tanks, rapidly creating an Internet of Things (IoT).  Computers have become umbiquious and both companies and consumers are trying to figure out how to use them.  New Internet-based business models that attempt to eliminate middlemen and connect users with desired services have begun to proliferate and have resulted in companies like Uber and Airbnb, which are proving very disruptive.  Clearly the computer revolution is not over and the latest round is imposing significant new types of costs.

At the same time, business process analysis has become more complex.  Ten years ago everyone was focused on BPM Software — on software application building tools that would help companies organize processes.  The early BPMS tools rapidly proved too limited and tool vendors began to add new capabilities — better modeling capabilities, business rules to help with decision support, the ability to work with ERP and various workflow paradigms, etc.  Some stepped back further and suggested that it was the nature of business processes, themselves, that needed to be reconsidered.  Too many teams and tools were designed to help redesign business processes that were procedural in nature.  In fact, the new internet software technologies and new flexible business strategies were rapidly making lock-step processes a thing of the past.  Increasingly, companies were struggling to build processes that could be rapidly tailored to individual needs.  Stop thinking of manufacturing production lines, critics suggested, and think, instead, of hospitals where each patient represents a unique case — an individual with a unique body chemistry and health history, who could have any combination of medical problems.

If one thinks that flexible, dynamic processes are indeed the future, then organizations need new process analysis and design methodologies, based on Case-Management approaches and on new notations like CMMN.

In essence, the past decade has not been a rousing success from a business process perspective.  The market has been confused and, although new technologies and tools have proliferated, they have confused rather than help clarify.

And then, too, there was a economic recession and a lot of political confusion.

The past decade has been a disappointing decade.  Innovation and new technology have proliferated, but it hasn’t led to clarity, its led to inertia.  Without any consensus, companies have stumbled about and process improvement hasn’t been anything like process professionals had hoped for.  That in turn, has resulted in low productivity.

Clearly we need some companies to pull it together and achieve some major breakthroughs — with exciting new business processes and sharp increases in labor productivity.  Then we need to get the word out and encourage lots of other companies to do the same thing.  The technologies and the ideas are available — what’s needed are a few good strategies as to how to pull things together to achieve new breakthroughs in productivity.