How to Manage your Procurement Business Processes

The Procurement Professional's Guide to Business Process Management

Managing Business Processes: What a Pain…

Business Processes: most agree it’s important to manage them for operational excellence. Nobody really does. Why? Because, in its classical form, Business Process Management (BPM) is a high friction process. Realistically, BPM is inaccessible to most in the modern organization when pitted against the demands of day-to-day operations. BPM is also an activity that is important but rarely urgent. Therefore, it resembles an unkept New Year’s Resolution… We know we should be doing it but we always put it off…

Not convinced? Well, “Process” can be such a loaded word, meaning different things to different people… Let’s agree on a common definition of Business Process Management and its objectives before I lay out my arguments.

Defining Business Process Management and its Objectives

I define Business Process Management (BPM) as the active and systematic management of an organization's business processes to help achieve its strategic goals. BPM involves design, modeling, execution, monitoring, and improvement of business processes to increase efficiency, effectiveness, and agility. It’s about creating a common understanding of:

  • Business process objectives -> What is the point of executing this process?

  • Business process steps -> What are the activities to execute this process?

  • Business process inefficiencies -> Where does this process fail to live up to expectations?

  • Business process improvement opportunities -> What can we change/optimize for higher process performance?

Business Processes themselves are sets of activities and decisions that accomplish a specific organizational goal (for example, placing requisition, approving it and cutting a purchase order). If business processes help us accomplish our goals, then my argument is that there is most definitely value in ensuring they are actively managed and performing optimally. This is why I argue it’s hard to be against the noble goal of managing our processes. But, as usual, the devil is in the details…

Why is there Friction in Business Process Management?

If you’re a Business Process Management purist, you live in your own world… I know… I’ve tried discussing BPM at parties and ‘BPM Island’ can be a very lonely place 😂

Here are the main reasons people’s eyes gloss over when you talk about business processes (and not even at parties… but in a business setting):

  • Leading modeling nomenclatures (languages) are complex

    • As an example, Business Process Modeling Notation 2.0 (BPMN 2.0) has 9 core shapes that can be used in combination to create a virtually limitless number of distinct meanings.

    • This is useful if you are trying to automate a business process using an application that can read BPMN 2.0. It is also very useful if you don’t want anyone to understand what the heck you are talking about.

  • Modeling languages were created by engineers for engineers

    • For business folks who are not excited by charts like the one above, the prospect of learning a new language seems irrelevant to their job. It is not immediately clear how investing time and effort into learning modeling and BPM will drive tangible benefits.

  • Complex process modeling usually requires specific software

    • You can spend as much money as you want on process modeling software (e.g., ARIS: the Cadillac of process modeling). This type of software can come with some interesting functionality (e.g. pull reports of all the tasks, transactions and/or systems associated to a given role, proceed to value stream mapping for efficiency saving calculations, etc.). However, when licenses are expensive, the software is not available to everyone in the company by default which centralizes process management expertise and creates gatekeepers…

    • Theoretically, you can do process modeling in Microsoft Visio, which is much more accessible, but even then, Visio is not always standard issue for corporate users. How many times have I heard… “I can’t open your Visio file. I would have to request it from IT.”

These reasons create a dynamic where you need fairly technical business analysts to model and manage your business processes. And since a good business analyst is always in demand, well… The processes are designed once during a project (if at all…), and then stored away in expensive software. They quickly become obsolete and irrelevant as business operations evolve while the business analyst is doing something else.

How can we minimize the friction typically associated with BPM to maximize the value for the Procurement team?

Making Business Process Modeling More Accessible

We have two choices to solve this problem:

  • Raise everyone’s capability level to the required level of competence

  • Lower the complexity of process modeling/management to everyone’s existing capability level

The younger, more naïve me might have been a cheerleader for option #1:

However, the older, more realistic me knows that a quick win is only possible with option #2. The trick is to achieve option #2 while leaving room for your organization to grow into option #1 if and when it is needed. How do we do that? With two key changes to “classic BPM”:

  1. We democratize access to business process modeling and management

  2. We put our business process management process on autopilot

So, let’s go. Here is my low-effort, high value framework to get you managing your Procurement business processes. Right now. With your existing tools…

Aside: I almost put a paywall right here… But then I thought to myself that that would be very cruel… Especially given all the interest this topic has generated… So here goes… This is a freebie.

However, if after reading you tell yourself: “Oh wow! This is awesome. I’m going to start using this right away”, consider a premium subscription. It allows me to spend the time needed to make this “awesome” happen.

A Simplified Modeling Notation

The first step is to democratize business process modeling by making it as simple as possible while still being useful. Too much simplicity will render it useless. Finding the balance is important.

To achieve this, I’ve put together a notation with 4 core shapes that have a single meaning. These are:

The next step to make sense of your process is to place the shapes within a Swimlane diagram. Swimlanes represent the roles of the people who accomplish the process activities. Think of a Swimlane diagram as an Olympic swimming pool. As the process is executed, the tasks switch from lane to lane depending on who needs to execute each particular task. Here’s an example:

In this example, you can see that the requester should execute activities 1,2 & 3, the Tactical Buyer should execute activities 4,6 & 7, the supplier should execute activity 5 and Shared Services will execute the follow-on process “Purchase Order Processing”.

This is all you need to get started with modeling. These 4 shapes will allow you to model 90% of your business process scenarios.

However, you will quickly brush up against the limitations of these 4 shapes as you start modeling. Therefore, I’m also including a few additional optional shapes and symbols that are needed as your skill and maturity level increase. This list has been refined over the last decade in my own system implementation work. You’ll very rarely need another shape in the context of modeling a Procurement business process.

Here are the definitions for all shapes in my Simplified Modeling Notation. Don’t mind the modeling level for now… It will make sense a bit further in the article as things come together.

Here is the same Simplified Swimlane Diagram example as above but with the added symbols to illustrate how they would be added to the mix:

I’ve used additional symbols to add more context to each activity:

  • System logos have been added to the lower right corner of system activities that need to be performed in a specific system

  • System transactions have been added to the top right corners of system activities, where applicable (this isn’t always relevant depending on how your system works)

  • Relevant reference documents have been added to the bottom left corner

  • Numbering has been added to the top left corner of all activities to facilitate discussion with stakeholders and references to activities in further documentation

For more complex processes, I also add a second slide with the detail of what happens in each activity:

To maximize comprehension from a business reader, this beats BPMN 2.0 every time… Case in point, here is an example of a BMPN diagram1. All potential eventualities are mapped which makes the process model crowded and difficult to understand:

The goal of my simplified notation is for you to make it your own so it is useful in the context of your business. It’s adapted to a business audience instead of catering to the fact that system eventually needs to read the diagram… The only thing to watch out for is to not add too many additional elements… Remember, the goal is to find the balance between simplicity with usefulness.

Using Simplified Tools

Once we’ve established a simple, common language that will achieve our objectives, the second step is enabling the use of this notation in an accessible tool. I’ve tried multiple tools for this over the years… For better or for worse, as you will have guessed from the above, the best tool for this task is Microsoft PowerPoint. Why?

  • It is standard issue on all corporate laptops with the MS Office suite

  • You can easily create templates, share and export PDFs

  • You can easily collects comments from stakeholders directly in the document

  • You can easily create hyperlinks between shapes, slides, files

  • Everyone has a decent baseline of experience with the tool

I’ve also used Visio for this purpose but even Visio’s barrier to entry/usage is too high in my opinion. In multiple instances, I’ve had modeling or review tasks die on someone’s to do list because they didn’t want to invest the time to learn Visio or couldn’t secure a license fast enough. However, if your team’s digital literacy is high, Visio could be a good second choice.

Putting Business Process Management on Autopilot

Now that we’ve removed the barriers to entry for process modeling, what’s next? The next step is putting Business Process Management on autopilot. How do we do that?

  • Schedule a recurring weekly 1-hour Procurement Business Process Improvement meeting.

    • Some weeks it will be cancelled, some weeks will be vacation and some weeks folks won’t have done their homework because it is “busy season” in your business… But, using this approach means that, at minimum, you’ll be working on optimizing your business processes 45-50 hours a year (which is much more than today!).

  • Participants

    • This will depend on your specific context. Start off small with a subset of people involved in the processes which are currently causing you the most problems.

    • Use this as a starting point to get a cadence and conventions going; to prove the concept. Naturally, it will expand to include others who want the benefits of the exercise as you prove the method. If you’re a CPO, you can start this “Top Down” with a relevant category management team. If you’re a Procurement Director or manager, you can start this “Bottom Up” with your team. The only key is to start small.

  • Agenda

    • For the first meeting, the topic is simply going over the BPM concepts, the modeling notation and to decide which processes should be tackled first.

    • For all subsequent meetings:

      • Before the meeting. A volunteer models the process on the agenda (As-Is or To-Be based on your problem/objective). They send it for pre-read to the group (in the early days, pick processes that either needs to be reviewed or optimized to diminish the occurrence of operational issues). Participants prepare as they can by reading the material and forming an opinion on the process and its problems before the meeting.

      • During the meeting. The modeler walks through their process. The other participants ensure they understand the intention and bring up any wording or modeling issues that are misaligned with the objective of the modeler (e.g., your wording for X activity isn’t descriptive enough based on what you just explained). The goal is get to a common comprehension of what is on the page. After the walk-through, brainstorm on the current process issues and potential solutions (Do the problems stem from People, Process or Technology?). As modelers get better with the template, you can copy the draft process slide and model changes/options on the fly during the meeting. After the brainstorm, certain action items will naturally emerge to explore process improvements:

        • Changing the nature of an activity

        • Adding/Removing an activity/stakeholder

        • Upskilling stakeholders on what happens in the rest of the process to affect input/output quality

        • Lodging a request for a system change

        • Deciding on the process and/or stakeholders for the next workshop (might be the same one or if you’ve worked through the issues, move onto a new one)

      • After the meeting. Update the invite for the following week’s meeting with the relevant stakeholders/topic. The modeler drops their up-to-date model in a designated shared location (Drive, SharePoint, etc.) and the process starts over again automatically.

Simply establishing this cadence and making a point of discussing business process optimization once a week in your function will cultivate process improvement thinking in your team. I don’t know about you but when I buy a car, suddenly I start seeing it everywhere. When you start talking regularly about business processes, people start seeing everything in terms of processes. It’s like learning to see the Matrix!

How to Store your Business Processes

As you document more processes and your ‘collection’ increases, you’ll need a way to store them. You’ll want to organize them in a logical Business Process Hierarchy (BPH) so they can be catalogued, referenced and retrieved easily. This isn’t too important in the beginning so don’t get too bogged down with this step. However, when you get there, you can use my Pure Procurement Value Chain as a starting point and evolve from there based on your context (e.g. your processes will almost certainly vary from this template but level 1/2 should be very similar).

If you’ve been following closely, you’ll notice I reference “levels” in both my Simplified Modeling Notation and Procurement Value Chain figures. As you start modeling, one of the keys to tying everything together is defining the granularity levels of the different models and how they relate to one another. This is useful for:

  • Ensuring all modelers are modeling with the same level of granularity in their models

  • Storage of the models

Think of it as defining the “Google Maps” settings of your Procurement organization. Level 1, the top level, is the Procurement process in its entirety. As you press “+” to go to Level 2 or level 3, what level of granularity should appear in the models at that level? I recommend using 5 levels, as defined by the Amercian Productivity & Quality Center (APQC):

The above definition means you can realistically get away with 2 model types:

  • A Procurement Value Chain (PVC - which covers levels 1, 2 & 3)

  • Process Models (which connect the PVC to the process activities via the process name for level 4)

Level 5 is the task/execution level. It’s rarely useful to model this level of detail. If you need this amount of detail to optimize an activity, then create a procedure or work instruction for the exact fields to fill or buttons to press and reference it in your process model.

Once you’ve got this conceptual structure, it doesn’t really matter where you store your models. Whether in SharePoint, a shared drive or another file storage tool, create a folder structure that mirrors your BPH. Control access as needed.

Level 1 - Parent folder (e.g. Procurement, as a function)

Level 2 - Process Group folders (e.g. Sourcing)

Level 3 - Process folders in the correct Process Group folders (e.g. Sourcing Pipeline Management)

Level 4 - PowerPoint process models, stored in the Process folder of the same name (e.g. Sourcing Pipeline Management - Model). You can use hyperlinks (via the Process Interface shape) to link to other models/processes as needed within the PowerPoint models themselves.

Level 5 - If procedures/work instructions or other supporting documentation is needed, include them in the same folder as your Level 4 process model.

Making the BPM Process Evolve Over Time

As you gain maturity in business process management, you will realize that:

  • Certain processes need to be combined and/or separated to fit into the conceptual business process hierarchy you’ve created for yourself (or the BPH needs to be modified)

  • There’s additional useful information you’d like to capture in your existing models or in reference documentation

When this inevitably happens, don’t get discouraged (“Oh we did it all wrong… Let’s throw everything in the trash.”). This is a good sign! It means you are making conceptual connections between the different processes in your Procurement organization. Your realizations are pushing you to question whether your current shared vision of reality is accurate or not and whether it needs more detail. This is and of itself has great value. The closer your team’s vision of reality is aligned with actual reality, the better.

Here are a few additional reference documents you can experiment with, depending on where you are hitting snags:

  • RACI (Responsible, Accountable, Consulted & Informed) Chart

    • This is especially useful for processes with lots of stakeholders that require lots of collaboration to achieve the objective

  • Documented Service Level Agreement (SLA) & Key Performance Indicator (KPI) with targets for key processes and/or activities

    • It’s one thing to know what the sequence of steps are for a given process. It’s another to set the expectations for process performance.

  • Procedures (or work instructions) as mentioned above to support Level 5 tasks (step-by-step, click-by-click instructions).

    • You can use the “Steps Recorder” application which comes standard on Windows if you don’t have dedicated work instruction software. You can then copy/paste into a corporate word template.

    • Your “procedures” can also be videos created with free screen capture software if that’s more engaging for the process at hand

If you are interested in getting my templates for the above documents, let me know in the comments of this post 👇 and I’ll put it in my backlog for the future.

The other thing you can do is start including objectives around BPM in your performance management process. For example, everyone on your team might have the objective of leading the documentation and/or review of X number of processes within a given period. This formalizes your commitment to BPM and raises your standards to the next level.

Business Process Management is a process. It’s never done. The value lies in doing the modeling, revising and optimization with a team to craft a common comprehension of your shared reality. The result of having all the models is certainly a nice to have but it’s only a byproduct of the process. Besides, you’ll never have ALL the models done… I can promise you that.

Pulling It All Together

So, there you have it. This is how you can start modeling and managing your Procurement businesses process right now by:

  • Democratizing access to business process modeling and associated tools

  • Putting the business process management process on autopilot

Is this method perfect? No. BUT! It’s certainly the most practical if you ACTUALLY want value from managing your Procurement business processes. It helps you define:

  • Business process objectives -> The “Why” we execute these processes

  • Business process steps -> The “How” we execute these processes

  • Business process inefficiencies -> Where do these processes break down?

  • Business process improvement opportunities -> How can we make these processes better?

By cultivating a BPM mindset with your team, what you are really doing is creating a common comprehension of your shared reality. This fosters better communication which leads to higher levels of operational excellence and accelerates the continuous improvement velocity within your function.

You can always get better tooling when you’ve proven to your organization that there’s value in this exercise. Nothing will be lost and you can upgrade your models to suit your new audience’s requirements as needed (e.g. BMPN for process automation software).

Fall in love with the BPM process and your processes will fall in love with you… (Awwwww…)

Does this resonate with you? What questions do you have? What barriers would prevent you from implementing this solution in your business right now? Let me know in the comments.

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