- The significance of knowledge (theoretical introduction, if you’re impatient, feel free to skip to the next part)
When compared with the industrial economy, BPM implementations in the knowledge economy face much different challenges. This is because in its essence, knowledge is much different than capital. Some of these differences include:
- the same piece knowledge can be used by multiple individuals at the same time – this is not possible with capital or tangible assets
- the use of knowledge leads to more knowledge – the use of capital just depletes the capital
- the verification of knowledge leads to more knowledge – capital likes to be counted, but this achieves nothing in particular
Nevertheless, managers in organizations often aspire to force a similar level of strict control on knowledge management as in the case of finance management. In effect, this leads to a situation in which companies forget that the principle form of capital in the knowledge economy is not financial capital, but intellectual capital! And because unused capital results in loss, organizations which rely only on the knowledge of their management finds themselves at a loss as well, which radically lowers their chances of market success. After all, what chances would a company have in the industrial economy if it only used a mere fraction of its capital? What chances does an organization have in the knowledge economy when it relies solely on the knowledge of its management and therefore:
- uses a mere fraction of its knowledge potential?
- does not use knowledge, so it does not multiply knowledge?
- does not verify and refresh knowledge, so it generates loss as a result of having no access to more recent knowledge or using outdated knowledge?
Knowledge can be obtained from outside, but this solution has its costs and we can never be sure whether this sort of knowledge has not “gone stale” and no longer provides competitive advantage, because the competition has moved on to something else. We could also create a research and development department in the organization, but practical experience shows that such departments quickly lose touch with the realities of the market. Both methods of gathering knowledge should be used, but they are not sufficient enough in the knowledge economy.
- The goals of traditional BPM implementations, or how it was in the past and how it sometimes is to this day
It would seem that there is no better choice than to verify and refresh knowledge on an ongoing basis. From the perspective of the traditional, static approach to business process management implementation, managers in companies are convinced that it is enough to design processes and then purchase and implement an automated system which will ensure their execution. The goal of such an implementation is often to “optimize” or “raise the effectiveness of” the processes of a given organization. It often takes the form of a one-time “action”, after which the motivation to enhance processes is lowered and the usual routine sets in once more. The method of implementation described above leads to process optimizations which are limited to removing errors and reducing losses identified at the time of modeling, or, in other words, limited to using knowledge owned at the time of implementation. However, the faster the changes, the faster falls the value of unused and unrefreshed knowledge. In the age of hypercompetition, this value might even “fall below zero”, because old, outdated knowledge might hinder the creation of new products and services.
In the most optimistic scenario, implementations take into account the “ongoing adjustment” of processes. Such adjustments are usually introduced by the organization’s management, here called process “leaders” or process “owners”. In other words, we are still dealing with using a mere fraction of the organization’s intellectual capital. At the same time, the new knowledge that is generated in an organization is being “filtered” by the management, whose own knowledge is the foundation of current business processes. Try to imagine how fast and effective the management is at discarding its own knowledge in favor of knowledge generated by its workers. It’s not going so well, is it?
- Obtaining knowledge from processes, or what will the future bring
The easiest solution which enables the rapid verification and collection of new knowledge rests on allowing for the creation of new knowledge in the process of performing work itself. This would require empowering process executors to introduce changes to existing processes on the basis of their expertise and innovativeness. Of course, the scale of such changes should be limited and controlled. This also calls for another reformulation of the goal of BPM implementations. The goal should be directly tied to knowledge management as the foundation of an organization’s long-term competitiveness. It could be worded as the “ongoing rise of effectiveness and competitiveness in the organization” or the “optimization of using and managing all available knowledge”. The goal should make it quite obvious to all members of an organization that the aim is not just to create and verify knowledge, but also to quickly uncover and distribute it, so that the organization is able to use knowledge before the competition. In more precise terms, the company should be able to quickly uncover and distribute knowledge on an ongoing basis – the process should be ongoing, because changes themselves are unending. It should be stressed that what we have in mind is discovering knowledge which has already been used in practice, as this will enable us to measure and present the effects of its use in an objective fashion. Thanks to Process Mining, dynamic BPM has gained a tool which allows for quick, objective analysis, followed by the use of knowledge created by a large number of process executors.
By changing the goal of BPM implementation, we gain two additional advantages:
- much broader use of the organization’s intellectual capital
- faster, objective analysis of the results of using knowledge
Or perhaps I’ve missed something? Do you have better ideas on how to verify and refresh process-derived knowledge?