by JMH da Costa · 2006 · Cited by 15 — Introduction. In spite of the fact that business process (BP) change has been present in organizations’ routine, its effective management is far from being

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Vol. 5 nº 1 June 2007 25 Product: Management & Development Proposal of the BPM method for improving NPD processes 1. IntroductionIn spite of the fact that business process (BP) change has been present in organizations™ routine, its effective management is far from being considered as part of the management culture (CAO et al., 2004). This new reality affects technological companies, so they are trying to handle this situation by seeking new management methods. This threatens the strategic survival of companies. BP change management has become a core competence for world class companies and should be evaluated by a strategic and holistic view. Or else, these changes will determine the course of the company, producing negative results, which are dif˜cult to reverse (COUNSELL et al., 2005). A BPM approach is one of the solutions to this evaluation be succeeded and toward to the companies™ strategic plans. The change management methods and process analyzed in COSTA (2006) were considered very generic and none speci˜c. Because of the fact that those methods or processes are very vague, they can be applied in any kind of problem. This characteristic does not contribute with any template or standards that could integrate the change into a BPM approach. Those methods do not deal with NPD speci˜c problems. Therefore, a BPM method that integrates change management techniques toward NPD processes will contribute to the progress of management practices. The objective of this work is to present a new BPM method focusing on NPD. This new method sought to join the best practices of ˜ve classical change methods which are complementary to each other. The next section provides a literature review of BP change management methods. In section three the research method is brie˚y discussed. After that the BPM method and two applications to improve the NPD process of a software company are presented. Finally, the insights resulting from the action-research and suggestions for further research are discussed.Janaina Mascarenhas Hornos da Costa University of São Paulo jcosta@sc.usp.brHenrique Rozenfeld University of São Paulo Abstract: Software development process (SDP) systematization in a NPD process, i.e. the de˜nition of a standard process for software and new product development, is acknowledged as a key factor for the competitive development of technological SMEs, since most of the high tech products consist of software as one of their key elements. The standard process ensures repeatability and quality of project development. The process of SDP systematization is a change project that improves the NPD process. The de˜nition of a development project based on a standard process establishes a working model, as well as supporting tools for the SDP. A change project like this must also be incorporated into the broader context of the company™s change management, because it may affect different areas of the company. This work proposes a change management method and describes a practical experience in de˜ning and institutionalizing an on-demand NPD process in a small enterprise that is integrated in a collaborative network of high tech SMEs. The focus of this implementation is on software development. The proposed method synthesizes the best practices of the following change management methods: SSM (soft systems methodology); IDEAL (initiating, diagnosing, acting, establishing and learning) Model; DMAIC (de˜ne, measure, analyze, and control) of Six Sigma. Two change projects have been carried out and are presented: fiDe˜nition of the on-demand NPD processfl and fiImplementation of the Sale Phasefl. This paper shows the results of these projects and reports on how the collaborators are dealing with the changes. Keywords: change management, NPD process, project management.

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Proposal of the BPM method for improving NPD processes Costa & Rozenfeld 26 2. Literature review2.1. BPM (business process management)BPM is a structured approach to analyze and continually improve fundamental processes such as manufacturing, marketing, communications and other major elements of a company™s operation. BPM focuses on the main aspects in which there is high aggregate value (ZAIRI, 1997). BPM is regarded as one of the best practice management principles to help companies sustain competitive advantage (HUNG, 2006). It promotes the alignment of business operations to strategy priorities. In addition, BPM can be effective in helping companies to avoid falling prey to management fads by incorporating re-engineering, continuous improvement and benchmarking as improvement tools (LEE & DALE, 1998). It is clear that BPM is an all-encompassing approach dependent on strategic elements, operational elements, use of modern tools and techniques, people commitment and, more importantly, on the horizontal focus that will best meet and deliver customer requirements in an optimum and satisfactory way. BPM should comprise a systematic problem-solving methodology that takes into account the integration of organizational functions to achieve better results from change projects (ZAIRI, 1997).2.2. Change managementThe term ‚change™ is related to a transition from one state or situation to another. This transition may involve changes in people™s attitudes, behaviors and abilities to improve their performance (MOITRA, 1998). The term change are very known in the context of engineering change management, but here, in this article, this kind of change are not being considered. The transformations of companies and people™s behaviors are the main issue of this paper. The search for needed changes is as important as having them implemented ef˜ciently. Reports show that companies have been failing to carry out changes, because they do no not adopt adequate transformation processes or change management methods. Indeed, when companies adopt some methods or processes, they usually skip some of the method stages or activities; this produces negative results (KOTTER, 1995). Despite the fact that some predisposition to change is inherent to all companies, the effective management of its implementation cannot be considered intrinsic to its organization management (CAO et al., 2004). Complex and long term changes, to be ef˜ciently managed, should be implemented by means of a model that lead managers to re˚ect on the complexity, uncertainty, ˚exibility and comprehensiveness of future changes that can cause a high impact on the organization™s technological strategy (CAO et al., 2004).The change management method proposed in this article is a systematization of some change management methods; three of them are detailed below. 2.3. Change management methods2.3.1. Soft system methodology – SSMThe SSM methodology evaluates the problem domain in a holist way, instead of a reductionism way, recognizing that the parts of one system are interconnected. Therefore a local change affects other areas of the same subsystem. Systemic thinking recognizes that a problem in one domain can affect other domains, so changes can also affect other systems (CHECKLAND, 1981). SSM differs from other systemic methods because it considers people™s perceptions about the reality, their points of view, and how these perceptions affect the design of future situations (BERGVALL & KAREBORN, 2002). This methodology attributes meaning to human activities, and these attributions are signi˜cant in terms of one particular point of view. 2.3.2. Ideal modelThe activity of improving the software development process (SDP) for all companies that develop software is rather complex, expensive and very challenging (CASEY & RICHARDSON, 2002) The Software Engineering Institute (SEI), at Carnegie Mellon University, developed a model of SDP continuous improvement. This model was named Ideal, and it was published as a guide to improve SDP (MCFEELEY, 1996). The Ideal model is an organizational improvement model that acts as a roadmap for initiating, planning and implementing improvement actions. Ideal stands for the ˜ve phases the model describes: initiating, diagnosing, establishing, acting, and learning. The goals of this model are: a) management of improvement program; and b) establishment of conditions to manage long terms strategies. Ideal was based on total quality management best practices, as well as on SEI´s experiences of projects such as capability maturity model (CMM); software process assessment; software capability evaluation; organization capability development; software process measurement; e software process definition (MCFEELEY, 1996; KAUTS et al., 2000).2.3.3. DMAIC methodologySix Sigma is an organized and systematic method for strategic process improvement and new product and service development that relies on statistical and scienti˜c methods

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Vol. 5 nº 1 June 2007 27 Product: Management & Development to make dramatic reductions in customer de˜ned defect rates (BRADY & ALLEN, 2006). Six Sigma approach is a new way to measure the intern process ef˜ciency. It is a systematic and rigorous methodology that uses statistic tools and methods to measure and improve the operation performance of an organization (BRADY & ALLEN, 2006). Six Sigma is based on DMAIC, a systematic methodology for the analysis of problems and implementation of process improvements. The use of statistic tools and methods are necessary: a) to enable the de˜nition of the problem and the situation; b) to measure this situation; and c) to carry out the improvements; and d) to control the processes that were improved. It creates a cycle of continuous improvement (ROTONDARO, 2002). 3. Research method This work is part of a broader action-research project that is being carried out in a network of high-technology companies. One of the goals of this project is to promote the improvement of NPD processes of technological SMEs. Two Brazilian companies were selected from this network of high tech SMEs. One company develops web solutions and the other, embedded software. To enable the achievement of the project goals the researchers modeled a generic process to sell and develop software on demand, which may serve as the basis to model processes of companies pertaining to this collaborative network. None of these companies had already used a speci˜c BPM method. Indeed, they had not conducted their BP changes as a project. The need of a BPM method aimed at their needs and objectives became explicit. Planning the development of this change management method was based on the principles of action-research and hypothetical deductive method research. The Figure 1 illustrates this planning, showing a schematic view of the research phases.In the ˜rst phase the following topics were studied: BPM, project management and product development process. The ˜st phase feedback appointed to BP change management methods that should be evaluated in the second phase. The third phase was aimed to systematize the BPM method. In the last phase the method was tested by mean of your application, which is described in the practical application of this paper. 4. Proposed BPM method The method was initially developed focusing on software-on-demand development companies. The theoretical study about BPM served as a basis for the deduction of this method, which represents a synthesis of the discussed method. The validation or attempt to refute it was carried out by means of action-research in a technology company (COSTA, 2006). The method is based on the following methods/ processes: SSM – soft system methodology (CHECKLAND, 1981), ideal model (MCFEELEY, 1996), DMAIC (BRADY & ALLEN, 2006), product development process transformation method (ROZENFELD et al., 2006) and transformation methodology – transmeth (RENTES, 2000). It should also be pointed out that the systematization of this method is anchored in PMBOK project management concepts (PMI, 2004). These methods were chosen due to their features: the systemic approach of SSM; the focus on software development process of the Ideal Model; the emphasis on the importance of performance indicators and concrete measurements in DMAIC; the focus on improvement of business processes in Product Development Process Transformation Method; and the strategic outlook of transmeth. Table 1 shows which best practice was select from each method analyzed.Figure 2 represents the phases of the BPM method proposed.The BPM method is cyclic, as are most of the change management methods, and comprises the phases of strategy de˜nition, diagnosis and modeling of current situation, de˜nition of change project portfolios and development of projects. In the ˜rst phase of the method, de˜ning the change, the need for change is evaluated together with the company™s business strategy. Phase 1Literaturereview Phase 3Systematizationof the BPMmethodPhase 4Testing the methodPhase 2Evaluating other changemethodsFigure 1. Phases of research project.

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Proposal of the BPM method for improving NPD processes Costa & Rozenfeld 28 Table 1. Best practices of the proposed method versus best practices of the analyzed methods. BPM methodAnalyzed methodsPhasesBest practicesPDP T.M. Ideal modelSSMDMAICTrans methPMBOKDe˜ning the changeUnderstand the need of the changeXXAnalyze the change versus the business strategy XDiagnosisAnalyze the current situationXXEvaluating the portfolio of change projectsSpecify the change projectsXXAnalyze the portfolio of change projectsXSelect the change projectsXPlanning the changeDe˜ne the project sponsorXXXXXState the product scopeXXState the project scopeXXDevelop WBS (work breakdown structure) XDevelop the project schedule XEvaluate risks XXXDevelop the necessary infrastructure XXXXInvolve and train people XXCommunicate and document the change planningXAnalyzing the current situationDiagnose of the current situation (as-is)XDe˜ne CATWOE (client, actor, transformation, weltanschauung, owner and environment) XRequirements gathering XXXXMeasure the current situation (as-is)XCommunicate and document the changeXDesigning the future situationModel the future situation (to-be)XXXXXCommunicate and document the changeXImplementing the changeTrain the involved people XXRealize the changeXXXXXChange the culture – weltanschauungXCommunicate and document the changeXValidating the changeEvaluate the change XXXCorrect possible alterationsXCompare the measurements of the current versus future situationXCommunicate and document the changeXXXXThe diagnosis phase seeks to understand the problematic situation to be changed. In the following phase, evaluating the portfolio of change projects, the proposed change projects are analyzed and their priorities are evaluated. This phase occurs only if several change projects have been considered, otherwise the next phase may be started. Some minor and simple improvements might be done without a de˜nition of a project. Only medium and major projects, which are of higher priority, go to the next phase. Other projects are kept in the portfolio up to the time they become a priority. Each one of the medium and major change projects triggers the next phase, planning the change. In this phase the product scope, project scope and objectives are de˜ned and re˜ned. In addition, the work breakdown structure (WBS) is developed. Finally the project activities might be de˜ned and a schedule is proposed.In the analyzing the current situation phase a more detailed diagnosis of the situation might be carried out than in the diagnosis phase, depending on the level of detail is needed. The to-be process requirements are developed, and the quantitative e qualitative data of the present situation (as-is) are collected.Subsequently, the designing the future situation phase starts to devise a solution taking into account the initial

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Vol. 5 nº 1 June 2007 29 Product: Management & Development objectives and the project stakeholders™ opinions. As a result, possible resistances are minimized.After the future situation (to-be) has been modeled, each project triggers the implementing the change phase. In this phase the people involved are trained, the improvement is implemented and the stakeholders are communicated about the project situation.The last phase of the method, validating the change, should start after a period of institutionalization of the changed process. It veri˜es whether any of the objectives has drifted away from what was initially planned. Furthermore, it analyzes the initial problem and whether needs have been met. Finally, the end of the change projects is communicated to stakeholders. It is important to highlight that even though the BPM method may be executed periodically, it can also be trigged by the companies™ needs. Furthermore, each BPM project has different project durations and can be stared at different moments.5. Practical applicationSoftware development companies are increasingly challenged to continually improve the quality of their processes and products. A pool of technology companies in Brazil, organized in a network, saw the need to de˜ne a software-on-demand development process as a way to promote the collaborative development of projects of new products, while assuring the quality of the products.Two of these companies have participated in the ˜rst three phases described below. 5.1. De˜ning the changeTo start this phase several meetings with stakeholders were held to elicit what had triggered the change and its importance. The need for the collaborative network companies to understand each other™s NPD processes was considered as a main goal. After these meetings, it was clear that a generic NPD process needed to be modeled so that the companies would have the same generic process as the basis for their own NPD process. The high level of quality that the market imposes on software development companies was another point that highlighted the importance of the companies seeking the improvement of their NPD processes. This need was also present in the strategic plans of these companies. Then, the next phase was started. 5.2. DiagnosisIn this phase the need to evaluate how these companies had been developing their product was defined. Two companies were selected to be references. The ways both companies developed their software were diagnosed through interviews with key employees and modeling techniques. The diagnosis revealed that neither company had standards for documents or a systematic view of their activities, as a result each project development created speci˜c standards for all artifacts and activities. Although it had been expected that the development process of on-demand software would be initiated by the sales team, it was observed that the technical team hardly ever participated in requirements development meetings with the clients. A problematic situation was established at the very beginning of the project because only the sales team gathered the requirements that would later in˚uence the planning of the entire NPD project.In addition, some qualitative data on the software development process performance were collected: Ł high index of extra labor hours due to lack of plan -ning;Ł high number of projects delivered with delay; Ł high number of projects that go over the budget; Ł misunderstandings between sales and technical teams;Ł high index of request for changes in the product; andŁ failure in the management of artifacts. 5.3. Evaluating the portfolio of change projectsThe diagnosis results led to the evaluation of change projects. It became evident that there was the need to elaborate projects that would ful˜ll partially the main objective of the change, which was the modeling of one generic NPD process and the improvement of the companies™ NPD process. Statements of work (SOW™s) of these projects were prepared, which defined the project objectives, PlanningthechangeAnalyzingthe currentsituationDesigningthe futuresituationImplementingthechangeValidating thechange12345Defining the change DiagnosisEvaluating the portfolio of changeprojectsFigure 2. Change management method.

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Proposal of the BPM method for improving NPD processes Costa & Rozenfeld 30 budget, deliverables, main activities, main risks and the implementation duration.The portfolio of change projects was evaluated through a spreadsheet. The following criteria were used in the analysis:Ł project priority: de˜ned by the company™s top execu -tives; Ł project effort: a) technical dif˜culty; b) implemen -tation dif˜culty; c) employee effort needed; and d) risks; andŁ project importance: a) business strategy alignment; b) process weakness elimination; c) impact in the company; and d) capacity to meet clients™ needs. Three change projects have been de˜ned: one for the whole network and two for a speci˜c company. The ˜rst project consisted of de˜ning a generic NPD process for the network. This project would be used as a reference to de˜ne the network members™ speci˜c projects. This paper refers to the two projects related to one speci˜c company. They are: the de˜nition of a reference model (standard process) of one company and the institutionalization of a phase of this NPD process. These two projects are described below. 5.4. De˜nition of a standard NPD process for one companyThis project is based on the aforementioned generic NPD process.5.4.1. Planning the changeThe sponsors of this change project were the executives of the collaborative network and the owner of the company. The project goals were: Ł to increase the software development ef˜ciency and ef˜cacy; Ł to reach CMMi Level 2; Ł to standardize documents; Ł to improve the software development project control; and Ł to increase sales. The change project team comprised three researchers from de EI2 Group (University of São Paulo), one software engineer, one requirement engineer and the company™s owner. 5.4.2. Analyzing the current situationThe current situation (as-is) analysis sought to investigate all the activities linked to the software development process. Therefore, the activities turned to the acquisition of new customers and activities related to the maintenance of the sold products were mapped.The as-is situation was modeled and checked by selected collaborators by means of structured interviews. The existing templates and artifacts were also analyzed. 5.4.3. Designing the future situationThe de˜nition of the future situation (to-be model) was based on the results of the previous phase and the best practices of CMMi Level 2. Two posters were created to organize the information about the new NPD process and to facilitate the team™s understanding of it. The ˜rst poster represented the activity ˚ow and its inputs and outputs. The second showed the relations among the NPD process information pieces. An activity book was made in which every activity was detailed. A second event at the company was carried out to show the new NPD Process to all collaborators. The presentation covered not only the overview of the NPD process, but also all the details of each new phase. The companies™ collaborators made a report containing their criticisms and suggestions about the new NPD Process. This report was analyzed by the change project team and the necessary modi˜cations in the process were performed.5.4.4. ImplementingThe implementation of the new NPD process was planned to be gradual, respecting the company™s maturity level. Therefore the ˜rst phase to be implemented was the sales phase. This happened because of the company™s characteristics. The company sold software on demand, which meant that the requirement phase of a generic NPD process was carried out during the sales process. 5.5. Institutionalization of sales phase of the ˜rst company™s NPD process 5.5.1. Planning the changeThe sponsor of this change project was the owner of the company because this improvement had a major impact on sales. The following goals were de˜ned: sales increase; activities standardization; pricing decision improvement; improvement of communication between sales and technical team; improvement of utilization of CRM (customer relation management) system. The main risk found was the company™s collaborators™ lack of time. The infra-structure established for the project was a CMS (content management system), in which all the activity descriptions, document templates and resources were made available. 5.5.2. Analyzing the current situationThe team was divided into two groups: one to analyze the sales documents and the other to analyze the activities that should be performed by the technical team. The collected performance data indicated: misunderstandings between sales and technical teams; lack of control of proposal status; great number of proposals sent out with delay; high index

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Proposal of the BPM method for improving NPD processes Costa & Rozenfeld 32 method and thus managing its changes instead of being managed by them.Evidently, this method has to be implemented in other contexts so that its general applicability may be assessed. At present this is being done by the authors through the application of the method in question at another SME-with differing characteristics-that wishes to change its CRM system.7. AcknowledgmentsThe authors are grateful to the company for volunteering to take part in this research, to GEI2 colleagues for suggestions and to Capes for the ˜nancial support.8. References BERGVALL-KAREBORN, B. enriching the model- building phase of Soft Systems Methodology. Systems Research and Behavioral Science , v. 19, n. 3, p. 309-330, 2002.BRADY, J. E.; ALLEN, T. T. Six Sigma Literature: a Review and Agenda for Future Research . Quality and Reliability Engineering international , v. 22, n. 3, p. 335-367, 2006. CAO, G.; CLARKE, S.; LEHANEY, B. The need for a systemic approach to change management: a case study. Systemic Practice and Action Research , v. 17, n. 2, p. 103-125, 2004.CASEY, V.; RICHARDSON, I. A Practical Application of the IDEAL Model. In: Product focused software process improvement. In: INTERNATIONAL CONFERENCE, 14., 2002, Finland. Lectures Notes in Computer Science Berlin/Heidelberg: Springer, 2002. p. 172-184. CHECKLAND, P. Systems Thinking, Systems Practice . Chichester: John Wiley, 1981. COSTA, J. M. H. Proposta de uma metodologia de gestão de mudanças em uma empresa desenvolvedora de software . 2006. 208 f.. Dissertação (Mestrado) Œ Escola de Engenharia de São Carlos, Universidade de São Paulo, São Carlos, 2006.COUNSELL, R.; TENNANT, C.; NEAILEY, K. Insights from research. The development of a model to support synchronous change. Measuring Business Excellence , v. 19, n. 3, p. 13-20, 2005. HUNG, R. Y. Business Process Management as competitive advantage: a review and empirical study. Total Quality Management, v. 17, n. 1, p. 21-40, 2006. KAUTS, K.; HANSEM, H. W.; THAYSEN, K. Applying and adjusting a software process improvement model in practice: the use of the IDEAL model in a small software enterprise In: SOFTWARE ENGINEERING, 22., 2000, Limerick, Ireland. Proceedings New York: ACM Press, 2000. p. 626-633.KOTTER, J. P. Leading Change: Why Transformation Efforts Failing. Harvard Business Review , v. 73, n. 2, March-April 1995.LEE, R. G; DALE, B. G. Business process management: a review and evaluation. Business Process Management Journal , v. 4, n. 3, p. 214-225, 1998. MCFEELEY, B. IDEAlsm: A User™s Guide for Software Process Improvement. Pittsburgh: SEI Software Engineering Institute – Carnegie Mellon University., 1996 MOITRA, D. Managing change for software process improvements initiatives: a practical experience-based approach. Software Process Improvements and Practical , v. 4, n. 4, p. 199-207, 1998 PMI – PROJECT MANAGEMENT INSTITUTE. PMBOK Guide. 3. ed. Pensilvania: Project Management Institute, 2004.RENTES, A.F. TransMeth: proposta de uma metodologia para condução de processos de transformação de empresas. Tese (Livre-Docência) Œ Escola de Engenharia de São Carlos, USP. São Carlos, 2000 ROTONDARO, R. G. Seis Sigma: estratégia gerencial para melhoria de processos, produtos e serviços. São Paulo: Atlas, 2002.ROZENFELD, H. et al. Gestão de Desenvolvimento de Produtos: uma referência para a melhoria do processo . São Paulo: Editora Atlas, 2006. ZAIRI, M. Business process management: a boundaryless approach to modern competitiveness. Business Process Management Journal , v. 3, n. 1, p. 64-80, 1997.

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