Modeling and Implementing Business Processes: Pinnacle West Analysis - Assignment Example

Pinnacle West Case Study Analysis Changes made by Brown and the Major Challenges he faced Brown made several changes in developing process-oriented organisation. In the process, he faced various challenges. Some of the changes made by Brown include: 36 separate processes were identified and divided into four broad areas – strategic processes, development processes, operations processes and support processes. This enabled the management to monitor and control activities in each process effectively. Information services initiatives were developed to support business transformation and the business in general. These initiatives included professional development initiatives and key projects initiatives. Professional development initiatives enabled the development of skills and training for employees. Changing from the functional model to the process model – transforming IT to include processes. Continuous process improvement through Process Engineering Services (PES). This consisted of 600 employees who changed information services from functional to process model. Center for Process Excellence was formed to promote the institutionalization of process transformation knowledge in order to enhance service redesign in the information service organisation. Another change was development of a predictive maintenance culture. This involved placing diagnostic tools in various stations. Brown also encouraged maintenance process improvements and the reduction of reactive work orders. Change of planning and execution through the identification of process owners for each process milestone. Team members were also assigned to each group. Standards were also created for work orders and eventually automated through a customized work management system. Simplification of process metrics. This reduced number of the open work orders. Another change was the development of a steering committee to oversee process changes in Palo Verde Nuclear Plant. Change of organisational culture to a more collaborative orientation. Qualitative improvements to maintenance process – leaders and crews of the overtime and nighttime calls handled fewer calls. Development of the Transformer Oil Analysis and Notification (TOAN) which helped in monitoring transformer data in order to prevent failures. During the process improvement and changes, Brown also faced a lot of challenges. Some of the challenges are: Fire broke out in one of the company’s work stations in Phoenix, causing damage to several transformers and affecting several customers. The second challenge was lack of dedicated planners and schedulers (Raghu, 2010). This slowed down the planning and execution process in the process change initiative. The process change process was also a tedious process because there were no standard procedures for work orders. Lack of skills and training also made the change process slower because teams had to be trained in order to develop the required skills. The change was also challenged by the traditional functional model which was already in place, and some traditional rigidity slowed down the process changes. 2. Requirements for implementing a process culture within an organisation One of the requirements for implementing a process culture within an organisation is to appoint the best managers to become the process owners (Hammer and Stanton, 1999). Giving managers the right to won the process encourages higher responsibility. The manager should be give absolute authority over the process. Secondly, the process culture should focus on goals. This entails reengineering processes to achieve specific goals. It enables the organisation to work towards achieving common process goals; hence enabling staff to work together as a team within the given processes. The third requirement is focus on process performance. The process culture implementation team needs to work towards achieving higher performance in each process (Hammer and Stanton, 1999). Each process should give higher results. Training should also be provided throughout the whole process in order to develop the skills of those implementing the process culture. Training also ensures that the process performance is enhanced while at the same time focusing on the goals of the processes and the overall objectives of the organisation. Another requirement is the enhancement of teamwork and collaboration. This breaks down organisational barriers and encourages process-oriented culture throughout the organisation. Collaboration and teamwork also enables all team members to provide effective customer experience, and breaks down traditional functional models of the organisation (Hammer and Stanton, 1999). Lastly, the process should be customer-focused. The process change should be aligned to the customer experience needs of the organisation. Processes should be mastered throughout the organisation from a customer-oriented perspective. This should focus on value-addition for the customer. Fulfilling customer needs and promoting customer satisfaction is an important way of achieving an effective process culture in the organisation. Pinnacle West addressed some of these requirements. For instance, the process ownership is given to Brown. He has absolute authority to implement the process culture within the organisation. He is also allowed to make all the changes that he thinks might bring impact on the process culture. Furthermore, the requirement of process performance was the major focus of Pinnacle West. The process culture implementation was intended to improve process performance. For instance, the number of work orders was reduced from 80% to 20% (Raghu, 2010). The organisation also focused on achieving the process goals by developing a planning and execution initiative to develop the milestones and goals for the change process. Brown also considered the requirements of implementing a process culture by providing training to develop skills needed in the process. There are also some of the requirements that have not been considered in the organisation. For example, the company failed to use a customer-focused approach. Brown focuses mainly on the process of production rather than focusing on the needs of the customer out of the processes. 3. Should process transformation always occur in response to major events and/or failures? Process transformation should not just occur when there are major events or failures. It should be a continuous process so that it can adapt to environmental changes. Business transformation does not change the effects of major events or failures; instead, it prevents their occurrences (Hammer and Stanton, 1999). For example, I have experienced a manager in an organisation within my neighborhood which saved a lot of money, and when the market conditions were severe, several companies closed down due to lack of funds but the company that saved some money went through the troubling moments without any major problems. This shows that the major problems are difficult to overcome, but they can be prevented through anticipation and continuous change process. A good example is also seen in the Pinnacle West case study when a burning platform occurred due to a fire that broke out in 2004 in one of the company’s work station. It was not necessary to initiate changes at this time. Instead, the organisation initiated an investigation to determine the root cause of the burning platform. The intention of the assessment was to prevent such a problem in future. The assessment was carried out on the maintenance practices. It was determined that in order to prevent the burning platform or major events, it was necessary to provide a continuous improvement on the maintenance practices. Continuous audit should be carried out to determine the condition of the equipments of the organisation. Why do organizations seldom embark on major transformations when there is no “burning platform? Organizations rarely embark on major transformations when there is no burning platform because they do not focus on process improvement. Organisations mainly initiate transformations upon the occurrence of a strategic platform; hence they prefer bottom-up transformations and only when the transformation is relevant to a specific part of the organisation (Hammer and Stanton, 1999). For example, Brown encouraged the bottom-up approach and initiated process changes only to the information services organisation. Organisations do not value process improvements and transformations because they involve changes that can only be reversed with major costs. Therefore, they are not ready to take the risk of major business transformation unless there is a real burning platform that encourages them to develop a business transformation process. Business transformation is also a very ambitious process that creates a substantial gap, and may cause discontinuity in current business operations. 4. Is Brown’s hesitation in pushing the top-down agenda justified? Brown’s hesitation to push for a top-down agenda is justified because the economic situation was not certain and the company was just facing a major burning point. The root-cause assessment and bottom-up approach was an important approach at such a time when business transformation required a lot of changes. The process changes could lead to a shift in the entire business operations (Hammer and Stanton, 1999). This could result in unpredictable outcomes, so Brown needed to be careful in his process change approach. Serious problems such as economic downturns may cause serious financial problems and impediments to growth. With declining profit, the company needed a careful approach rather than a top-down approach. The second justification for Brown’s hesitation to adopt a top-down agenda is that the timing was not right to focus on top-down approach (Raghu, 2010). There was no serious strategic or burning platform that needed serious business transformation. Some other companies which tried this approach when there was no serious burning platform failed, e.g. Pacific Gas and Electric. Furthermore, Brown lacked infrastructural network to adopt a successful top-down approach. There was also the problem of fighting a traditional functional approach that was not process oriented. Lack of well-trained and motivated employees, and key process infrastructure such as career paths led to employees’ hesitation and lack of motivation to implement the process changes. The grass root approach used by Brown proved to be successful as seen through the TOAN project and the Edison Award. Therefore, Brown should stick to its current process improvement until such a time when the infrastructure is ready for a major transformation. References list Raghu, T.S. (2010). Creating a Process-Oriented Enterprise at Pinnacle West. Ontario: Ivey Management Services. Hammer, M. and Stanton, S. (1999). How Enterprises Really Work. Harvard Business Review, Nov-Dec. Read More