Addendum J: Business Transformation
The goal of Army Business Transformation (BT) is to free human and financial resources for higher priority operational needs. Through the use of business transformation we are improving support to our people while reducing waste and inefficiencies. Desired effects include:
- Maximizing return on taxpayers’ dollar
- Fostering a cost-management culture that drives costs down versus driving budgets up
- Creating a culture of continuous improvement that provides greater capability to our war fighting force
- Realizing significant reductions in cost and cycle time
- Achieving significant quality improvements
The convergence of the evolving strategic environment, the Global War on Terror, and modernization create the context for business transformation. In an environment with an increasing number of requirements and diverse demands, the Army’s challenge is provide the right forces with the right capabilities. In a fiscally constrained environment, maintaining the status quo is not an option.
The Army approaches business transformation holistically from a combination of three focus areas as depicted below: Continuous Process Improvement (CPI), Organizational Analysis and Design (OA&D), and Situational Awareness.
Continuous Process Improvement (CPI) aims at increasing quality, productivity, reliability, and safety, while reducing costs and cycle time. It 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’s forcing function for CPI is Lean Six Sigma (LSS), which combines the principles of Lean (reducing / eliminating waste) with Six Sigma (increasing quality) to improve process efficiency. The Army-wide LSS deployment provides the Army with valuable transformational tools and techniques that:
- Are industry best practices
- Are used to train military and Civilians for use in the workplace
- Apply easily to any process: manufacturing, acquisition, logistics, administration, or service
- Allow the war fighting support force to deliver the products and services our changing Army needs more efficiently and effectively
- Result in resources being freed up and applied to other missions
The primary LSS method used for identifying and implementing process change is known as Define, Measure, Analyze, Improve, and Control (DMAIC).
Organizational Analysis & Design (OA&D) assists the Army in the creation of a professionally led, value-driven, and well-managed organization that will consistently:
- Provide a properly designed organizational structure that fosters individual creativity and job satisfaction
- Train, educate, and develop our Soldiers and Civilians as a top priority to produce competent leaders to run all facets of the enterprise
- Ensure that all levels of the organization add value
- Develop new concepts and procedures for introducing innovation into the existing work system
- Be responsible stewards of all human, financial, and information resources
The OA&D Team is currently managing an enterprise-wide business transformation of elements of the Generating Force. This initiative includes a fundamental redesign of Generating Force basic business functions, followed by a systematic application of LSS concepts to existing organizational processes, culminating in the redesign and fielding of an organizational structure designed to foster individual accountability as it relates to day-to-day work force management.
During the initial phase of the organizational assessments for a number of Army organizations, the OA&D Team’s recommendations have eliminated redundancies, pinpointed bottlenecks, and identified significant realignment opportunities. The second phase of the OA&D assessments will consist of a “deep dive,” or an in-depth analysis of the major recommendations identified in the first phase, to determine if additional tailoring of organizational processes would add value.
Situational Awareness generates actionable knowledge about the Army enterprise, its processes, and external factors. When applied to processes, it 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 who excel in all aspects, from war fighting to statesmanship to enterprise management. This effort facilitates the Army’s evolution as a learning organization by investing in educating, training, certifying, and cultivating developmental assignments of its people.
This approach to business transformation includes a set of enablers to ensure that business transformation enhances our Army culture. The three enablers are:
- Performance Measurement which 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 which 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 to allocate resources) are required with any decision.
- Change Management which 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.
Army Business Transformation provides the framework for building, aligning, and institutionalizing the culture of the Army headquarters. Governance establishes an enterprise framework that defines business rules and aligns work output units with Army strategic goals. It implements the decision processes, controls, and enforcement necessary for Business Transformation, such as performance measures, timelines, and milestones to track progress. Governance makes decisions to approve, continue, or terminate business transformation initiatives to create a culture of innovation that challenges the status quo and seeks continuous process improvement.
For additional information please visit http://www.army.mil/ArmyBTKC/index.htm