Process Maturity Model Can Help Give a Business an Edge

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By Sripad Srinivasan and M.A.N. Murthy

Most competitive businesses around the globe are focusing on their processes for quality improvement, cost reduction and delivery-time reduction. They also are looking at other ways of achieving an edge over competitors, such as certifications like ISO, CMM/CMMI, PCMM, ITIL, COPC, etc. Still they may not be as successful as they would like. The primary reason is because these organizations fail to look at their business processes as a whole. They only look at the software development process or business transaction process or some other specific function of the business. It is important to improve the entire gamut of business processes to achieve the desired competitive edge.

The answer can be found in creating a framework for the business processes. This framework emphasizes on the service level agreement (SLA) and metric definition for each business process. In other words, the organization needs to focus on improving the maturity level of key business processes.

Overview of Business Processes

Figure 1: Business Framework

The essence of any organization is people working together to achieve common goal. For the overall effort to be successful, decisions and actions must be coordinated among individuals and between groups. They also must be consistent and yield satisfactory results at reasonable cost. Generally businesses follow an approach or framework which is a top down structure from planning to action, as illustrated in Figure 1.

It should go without saying that the framework of any modern business must rest on an organizational commitment to quality. Six Sigma, Kaizan, Business Excellence, Total Quality Management and similar philosophies/methodologies foster a quality and continuous process improvement culture.

One good definition of a process is "a sequence of steps performed for a given purpose." Thus, a process is a predetermined course of action and a standing plan for people to follow in carrying out repetitive administrative tasks in a systematic way. They are a translation of general plans and policies into standard patterns of decisions and action. They establish the owner, the timing and sequence of activities. A business process can be described as a collection of related, structured activities or processes (a chain of events) that produce a specific service or product for a particular customer or customers (internal or external). A business process usually cuts across several functions for support, e.g., IT, finance, legal, etc.

Importance of Business Processes

Link Between Functions: Processes play a prominent role in coordination of activities between individuals and departments. They establish formal lines of communication and cooperative effort between organizational units. The organization plans groups and aligns functions vertically. Processes operate horizontally and vertically along the lines of organization. Thus output of one process becomes an input for another.

Cost of Transactions: It is cheaper to handle repetitive activities by standard practices. Work can be explained and delegated to people easily and individual cases can be processed more quickly at a lower unit cost. There is lesser need for supervision and a simplified task for the administrator.

Consistency of Actions: Processes ensure consistency among decisions and actions of same type for multiple occasions. This is important for internal control and while dealing with external customers.

Reliability of Information: Information for making decisions and plans and guiding actions must be reliable. Standard processes are needed for collecting, recording, storage and transmission of information. If they are well-designed, the information will be reliable.

Assurance to Top Management: Processes provide adequate assurance to the top management that the activities that are to be done will be done at the proper time in a proper way.

Description of Process Maturity

Process maturity is an indication of how close a developing process is to being complete and capable of continual improvement through qualitative measures and feedback. Thus, for a process to be mature, it has to be complete in its usefulness, automated, reliable in information and continuously improving.

The maturity of a process or activity can be defined to be at one of five levels, from Level 1 (the least mature) to level 5 (the most mature). The processes at higher levels also address the features of the lower levels. The ground level is Level 0 where no process exists for the activity.

Level 0 – Person-Dependent Practices: This is for cases where the activity being performed is not documented. In other words, it is not recorded either in outline or in detail. The activity is entirely person dependent and the sequence, timing and result may vary during repetition. This requires a lot of supervision. There is no guarantee of either achieving the desired result or adhering to timelines. The activity is entirely ad hoc, with little communication between functions. The effectiveness of the activity is entirely dependent on individuals. Knowledge transfer may or may not happen if there is any change in the owner of the activity.

Level 1 – Documented Process: At this maturity level, there is a document that has been reviewed and approved by the supervisor or the approving authority as the standard process. But it may be doubtful that the activity being performed is as per the document. This is may be because of a process drift or some drastic change since the document was drafted.

Level 2 – Partial Deployment: Here, the activity that is documented is being deployed, but there is inconsistency in the deployment. The process may not be deployed in totality. That is, it may not be deployed at all the intended locations, or though all functions, or by all the intended owners, or all the activities defined in the process are not being performed. This would mean that the document has not been designed to cater to such variations. There is inconsistency in results of different process owners.

Level 3 – Full Deployment: At this level, there is no inconsistency between the documented process and the deployed process. The process documented and deployed caters to all the intended locations, owners and all the activities that need to be performed. The process also shows seamless linkage between functions and other processes wherever there needs to be any interaction. This means that the process shows greater consistency of actions and better communication between functions.

Level 4 – Measured and Automated: The process has set itself goals such as adherence to timelines, customer satisfaction, cost, etc. The process also is being measured against its goals. The process is system-driven by enablers such as using enterprise resource planning or customer resource management or any other custom-made software.  

Level 5 – Continuously Improving: The goals set for the process are being analyzed for achievements and improved regularly. The timelines, cost targets, satisfaction levels are being achieved regularly and the targets also are being tightened by using continuous quality improvement techniques such as Six Sigma, Kaizan, etc. The enabling system also is being improved and being made error-free by strategies such as poka yoke (mistake proofing).  

The table below summarizes requirements to arrive at the different maturity levels.

Table 1: Maturity Level Snapshot
Maturity Level	Person Dependent	Documented Process	Partial Deployment	Full Deployment	Measured & Automated	Continuously Improving
Level 0	Yes	--	--	--	--	--
Level 1	--	Yes	--	--	--	--
Level 2	--	Yes	Yes	--	--	--
Level 3	--	Yes	--	Yes	--	--
Level 4	--	Yes	--	Yes	Yes	--
Level 5	--	Yes	--	Yes	Yes	Yes

From the inception of an organization through its growth, the maturity of its processes usually improves. But this may not be the case for all its business processes. Some may still be at the lower levels. This shows that the organization has not had an all-round maturity of its processes. There also are instances where the maturity level may drop if not monitored or if the documents are not revised, according to changes the business undergoes. Thus a fully established business can contain processes at different levels.

Figure 2: Business and Process Growth

Improving Business Process Maturity

To have an all-round improvement of business processes, the Six Sigma DMAIC methodology can be used:

Define: It is important to align the applicability of the maturity levels to the organization. Design a questionnaire to map the maturity level of each business process. Below is a suggested format for the questionnaire. Applying the questionnaire to each process will obtain the maturity level for that process.

Format for Maturity Level Questionnaire
Level	Question	Status (Yes/No/NA)
Level 1	> Is the activity/practice documented as per the business's standard format? > Is the document approved by the appropriate authority?
Level 2	> Does the documented process cover at least one of the intended locations of the business? > Does the documented process, deploy/practice at least some of the process steps or sub-processes?
Level 3	> Is the process that is documented deployed/practiced fully, including all the process steps? > Is the process that is documented deployed/practiced fully in all the intended locations of the business? > Does the documented process necessitate cross-links with other processes and functions? If so, does it deploy such links in totality? > Is the process linked to other intended processes or functions?
Level 4	> Have goals been set to adhere to timelines, customer satisfaction, cost? > Are there metrics for the measurement of the goal? > Can the process be automated? If so, is it automated and enabled by the software tool and documented accordingly?
Level 5	> Is the measurement of the quality goals analyzed and improved upon on a regular basis? > Does the metric have a positive trend? And are there steps being taken on improving the trend? > Is the software enabling the process, being upgraded as per user requirements?

Measure: A cross-functional team should be assigned to utilize the questionnaire and audit processes to arrive at each one's maturity level. All the activities and processes performed by the business should be audited by the team based on the questionnaire. Note, if a process is at a higher level but still does not meet some lower-level maturity criteria, it will still be deemed to be at the lower level. (e.g., if a process is automated (Level 4) but is not deployed fully, then it is at Level 2.

Analyze: The measurement of the processes will indicate the current overall level that processes are at and the gaps that exist. This needs to be addressed. Analysis must be conducted and a plan of action must be made on how to bridge the gap and raise the maturity level of specific processes, thus improving the overall level.

Improve: This is the most important phase in the methodology. The plan of action designed must be put into effect. This could include redefining or redesigning processes, identification of owners, automation, etc.

Control: If processes are not monitored at defined intervals, maturity levels may drop. Thus a control plan must be generated and based on the plan, subsequent audits of maturity levels of processes must be performed and the processes improved accordingly.

Identifying Business-Critical Processes

To improve all business processes, an organization needs to spend a great deal of money, effort and time. Thus, it is more reasonable for an organization to prioritize business processes and enhance the business maturity gradually. Business-critical processes are the ones that have a stronger impact on the overall Maturity of the organization.

Business-critical processes can be arrived at by the following steps:

1. Analyze the areas that the organization has an impact on. Generally, it has an impact on quality, timely delivery, compliance (regulatory/statutory/certification), cost and people.
2. Arrive at a rating scale and a weighing scale for the high impact areas.
3. Rate all high impact processes.
4. Arrived at the total process criticality value by summation of the ratings for the processes.
5. Identify cutoff value and sort the processes above the cutoff value.

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