Addendum M (Army Business Transformation)
The goal of Army Business Transformation is to free human and financial resources that can be better applied toward accomplishing our warfighting requirements and accelerating other aspects of transformation. Desired effects include:
- Maximize return on taxpayers’ dollar;
- Foster a culture that drives costs down versus driving budgets up...”Defending the Nation is more important than defending the budget”;
- Change fundamentally how the Army does business;
- Create a culture of continuous improvement that provides greater capability to our warfighting force;
- Realize significant reductions in cost and cycle time; and,
- Achieve significant quality improvements.
The confluence of the strategic environment, the global war on terror, and modernization create the context for business transformation. The Army is challenged to meet these diverse demands in a fiscally constrained environment. Status quo is not an option.
The Army takes a holistic approach to Business Transformation (BT). BT is approached from a combination of three focus areas: Continuous Process Improvement (CPI), Organizational Analysis and Design (OA&D), and Situational Awareness (Figure 1).Continuous Process Improvement (CPI) aims at increasing quality, productivity, reliability and safety, while reducing costs and cycle time. CPI focuses on transforming business processes across the Army value hierarchy to support enhanced capability. It assesses how work is currently completed and develops improved processes to perform the job more efficiently and effectively. The Army is leveraging Lean Six Sigma (LSS) as the Army-wide selected process improvement technique. LSS combines performance improvement principles of waste elimination (lean) and reduction in variation coupled with consistent, repeatable performance (six sigma).
Organization Analysis and Design (OA&D) examines the function and structure of organizations performing those value-based processes, and redesigns or realigns organizational elements as needed to reduce redundancies and enhance resource efficiency. OA&D creates a world-class organizational structure that: focuses on the customer; concentrates on the core business; organizes around the work; differentiates between strategic level staff work and operational work; establishes the correct number of organizational layers; establishes clear accountabilities, authorities, and critical systems or roles; defines the nature of required working relationships; and develops and implements a change management strategy.
Situational awareness supports the organization and its processes with the ability to generate actionable knowledge through the use of timely and accurate information about the Army enterprise, its processes, and external factors. This combination of approaches produces a synergistic effect, increasing effectiveness while improving efficiency.
Professional development provides leaders with the requisite skills, knowledge, and experience to lead the Army enterprise and all its associated organizations. The intent is to develop multi-skilled leaders – pentathletes – who excel in all aspects, from warfighting to statesmanship to enterprise management. This effort facilitates Army progression to a learning organization by strategically investing in educating, training, certification, and developmental assignments of personnel.
This approach to business transformation includes a robust set of enablers to ensure that business transformation enhances our Army culture. The three enablers are:
- Performance Measurement drives accountability, visibility, and transparency in assessing progress; establishes organizational direction, inspires and motivates the organization, prioritizes effort, and encourages organizational alignment. Performance Measurement is predicated upon the principle, “What gets measured, gets done.”
- Risk Management assesses the likelihood that a risk event will occur, and executes mitigation strategies to reduce likelihood of occurrence and plans for contingency action. It balances investment priorities against risk over time and recognizes that trade-off decisions (e.g., assess priorities, allocate resources) are required with any decision.
- Change Management manages the people aspect of change to build and sustain commitment to the Transformation effort. It synchronizes tools of communication, education, leader accountability, stakeholder involvement, and performance management to build commitment of stakeholders.
Overlaying the transformation effort is the governance process which provides the framework for building, aligning, and institutionalizing the culture of business transformation. Governance establishes an enterprise framework of limits that define business rules and align work output units with Army strategic goals. It implements the decision processes, controls, and enforcement necessary for Business Transformation, such as key performance measures, timelines and milestones to track progress. Governance makes decisions to approve, continue, or terminate BT initiatives while embedding the warrior ethos throughout the Army enterprise to create a culture of innovation that challenges status quo and seeks Continuous Process Improvement.
For additional information please visit http://www.army.mil/ArmyBTKC/index.htm