The relationship between business, process, IT, quality and operations

The relationship between business, process, IT, quality and operations

This article is the full text of Huawei’s rotating CEO Xu Zhijun’s speech at the Huawei Business Management Outline Seminar:
The company has made it clear that the goal of corporate development is to build a process-based organization. How to understand it? I think the goals of process-based organization building can be broken down into: value creation process is simple and efficient, organization and process matching are efficient, management system integration is efficient, operational management is excellent, a quality culture of continuous improvement and a project culture of contract delivery have been formed. The company has been working towards this goal since the IPD (Integrated Product Development) and ISC (Procurement, Integrated Supply Chain Management and Inventory Control) reforms more than ten years ago. The company is currently developing IFS (Internet Financial Services), CRM (Customer Relationship management) change is an important means to achieve this goal. In addition, in order to achieve the goal of process-based organization construction, the company has established quality and operation organizations in organizations at all levels. This is a very important measure to achieve process-based organization construction. It is also necessary for the whole company to have a correct understanding of some basic concepts such as business, process, IT, quality, operation, etc. and the relationship between them to guide us in correct actions. For this reason, I have compiled my speeches on business, process, IT, quality, operations and other concepts in the business management outline seminar for your reference.

1. Business flow exists objectively. All business flows related to customers are naturally from customer to customer.

First of all, the concept of business flow is introduced. In order to achieve value creation, the E2E (end-to-end) business process of an enterprise starting from inputting customer requirements to delivering products and services to customers to obtain customer satisfaction and realize the enterprise's own value is business flow. Business flow exists objectively. When designing its own business process, every company tries to find a real and reasonable business flow to adapt to this business flow.
As long as an enterprise sets a strategy and selects a business model, its business flow is determined. Regardless of whether it is described and defined by business processes, business flows naturally exist, and all business departments work in business flows or supporting activities that support business flows. . All roads lead to Rome, but there is always the shortest way. After so many years of practice in the industry's R&D process, after optimization and practice, everyone's current R&D processes are similar, and there is no difference. When we deal with Motorola, Nokia Siemens Networks, and IBM, we find that after so many years of practice, our R&D processes are basically the same. There is no difference. We all find real and objective business flows through continuous optimization and improvement through practice. Then objectively build the process around the business flow.
All customer-related business flows naturally go from customer to customer. When we work around business flows, we must target customers and be customer-centered. Because we originally create business value around customers and cannot be separated from customers.
Identifying business flow is very critical. In process, IT, quality and operation work, business flow is the origin and foundation of all work. If you grasp the business flow tightly, you will not deviate from the direction of the work. The process describes the business flow, IT carries and enables the business flow, data is the information flowing in the business flow, quality requirements are attached to the business flow, quality management is based on the business flow, and operations are also carried out based on the business flow.

2. Process is a way of expressing business flow. It is a summary and solidification of excellent work practices. The purpose is to achieve successful replicability when different teams execute the process. The more in line with the business flow, the smoother the process will be.

I have talked about two cases. One is our ITR process (online problem handling process). In the past, we did not pay attention to customers at all. All problem grading was based on technical level grading based on different problems of different products, and then they quarreled with each other. The quarrel was confusing, but in fact the problem was triggered by the customer, who was the most anxious. We don't pay attention to the impact of problems on customers, and evaluate the level based on the impact on customers, but we quarrel internally. Everyone who has done R&D in the past has had arguments with GTS (because R&D has this assessment indicator).
Later, the biggest change in the online problem handling process and IT system was: rating the fault based on the customer's rating. The customer was well aware of how many of its users were affected. The ranking is based on the three elements of quantity, time and importance. According to these three elements, the grades are automatically graded. Then all IT and all processes are centered around quickly understanding problems that occur online and quickly solving online problems. All internal assessment matters are put aside for now. The process and IT system should first solve this problem, and then assess it if it can be assessed, and forget it if it cannot be assessed. The process IT system supports the company to quickly respond to customer needs, know the problems that occur online, upgrade them, and solve them quickly. Everything else must give way to this purpose.
The second is the delivery process. When we originally carried out the LTC reform, we asked whether the delivery process should be included in LTC. We thought that our delivery process was already very good, and we only needed to modify it on the original basis. At that time, the delivery process was based on an optimization project, which was based on optimizing the original process. Later, when the project team looked at our delivery process, they saw something more and more wrong. The CHARTER in the first project and the CHARTER who later reported to 3T were completely different and completely different. Among them, we found that we basically have no delivery process, only one project management process and one site process. Without a delivery process, it is equivalent to no R&D process in R&D, only one R&D project management process.
Later, I finally figured out that the delivery process needed to be reorganized. I didn't know the direction when I first started working on it, and I didn't know how to handle the delivery process? Later, I once saw the end-to-end process of T-MOBILE's entire network deployment. I took a look and found that this process is similar to what we want, isn't it? So why don’t we use T-MOBILE’s process as a reference? Originally, network deployment was the customer's business, and we were only called upon by them. From the moment a customer identifies their needs to the delivery and operation of the network, it is their own business. We only complete one, two or more links in their entire process. So I proposed that our delivery process should be viewed from the operator's perspective and from the operator's own process. Later, they invited consultants from Deutsche Telekom to come over and truly look at the entire process from the operator's perspective, from clarifying requirements to operation and maintenance guarantees, and designed the delivery process based on the operator's perspective. For European operators, our delivery is only one link in the operator's entire network deployment process. For operators in places like Malaysia, they lack the entire end-to-end process, so we need to do a few more steps.
The business manager should know these best, but the process IT department cannot figure them out. A process is a representation of business flow. The closer it is to the business flow, the smoother the process will be. If the process happens to fit the business flow, there should be no need to simplify the process. The objective existence of business flow is 5 links. If you must reduce it to 3 links, or insist on artificially making it into 7 links, then it must return to its 5 links. Therefore, the process must objectively represent the objectively existing business flow. The closer it is to the objectively existing business flow, the smoother the process will be, the more streamlined it will be, and the more realistic it will be. If the process runs counter to the objective business flow, it would be better not to engage in the process, but it would be completely redundant to engage in it. We used to have a lot of online problem-solving processes, all of which were internal quarrels and were all for internal management. We need to understand the real business flow more and more thoroughly.
In addition, in the past, we tied the process to the department, which made us very passive: we would change it when the department said it should be changed, and we had to change the process when the department made changes. Our current new idea for process design is that departments cannot be seen in the process and are not directly linked to the organization. Only roles are defined in the process, and the organization must carry out the process roles. We emphasize that the process determines the organization, which means that the organization must first carry out the responsibilities of each role defined in the process. At the same time, the organization cannot straddle two processes. Don't make the process carried by the organization one section here and one section there, either one section or two sections. Don't make it one section on each side.

3. Data is information running in the process, and IT uses technical means to solidify the process.

After understanding the business flow and process, let’s talk about data. Data is critical in processes, IT, quality and operations, but companies currently don't pay enough attention to it. What flows in the business flow is information. The carrier of information is data. Data includes structured data and unstructured data (documents). Data is the output of each operation activity of the business flow. For each job link, the output of the job needs to meet the needs of the downstream. If a job activity does not output the data required by the downstream, then this activity is equivalent to being done in vain, because the quality requirements of the link are not met, and the downstream needs Remediation will cost more. The ideal state is that each operation link matches its unique value and outputs just the right information needed by the downstream, with no redundancy or missing information, and meets the quality requirements of the operation link. Although the IPD reform has been going on for more than ten years and has effectively supported the company's development and growth, it did not pay enough attention to data in the early days. Therefore, there was no
systematic sorting out of the product's information architecture and data standards, and there was no analysis of the data in the business flow. The flow is systematically sorted out. As a result, there is no data-based combing to define the deliverables and data of each link of the IPD process, and there is no data flow-based combing to define the IT application architecture and interfaces in the IPD field. As a result, the IT and tool construction in the early stage of the IPD field is very messy and inconsistent. integrated. The experience and lessons of IPD tell us that sorting out information in business flows is the prerequisite for process definition, the basis for the definition of IT application architecture, and the prerequisite for IT system development. The integration of main processes is essentially the integration of data. Data management is at the core of processes and IT, so data needs to be given sufficient attention.
Data is the information that runs in the process. A common phenomenon at work is that the entrance of information is not managed, so that what enters the process is a pile of useless things. The process is clear, but because the things inside have no value, the process is useless. Information is critical and must be secured at the entrance.
In addition to the need to pay attention to data for process integration, data is also the basis of company operation and management. If the basic data is inaccurate, the report data required for various operations and management will also be inaccurate, cannot accurately reflect the essence of the business, and cannot effectively guide operation and management.
What is IT? IT is an enabler that carries business processes and realizes automatic transmission and integration of business data. IT carries business flows and data. IT supports each job and the data output by the job. Through IT, it realizes the integration of data and the automation of processes. Instead of relying on people to input and convert data, because people make mistakes. , but IT systems don’t, and are more efficient than people. Therefore, the highest state of process-oriented organization construction is that the entire business flow is end-to-end and fully supported by IT, so that all operations and all data are carried by IT and are integrated and automated from front to back.
IT uses technical means to carry the process, and uses technical means to solidify the process and improve the operational efficiency of the process. What is run in IT is a fixed process, and what is essentially running is business. A process without IT support can easily become a pile of paper and difficult to execute. Of course, not all processes need to rely on IT. IT should only be used if there are many people using it and there are efficiency issues. If only 20 or 30 people in a department are using it, it doesn't necessarily require the help of IT.

4. The definition of quality is compliance with requirements, and quality requirements must be built into the process. Internal control, information security, and network security are specific forms of quality requirements.

Quality management guru Philip Crosby said that the definition of quality is meeting requirements. Any business must pursue quality, and quality requirements must be built into the process following the business flow. In order for the delivery of each link to just meet the downstream requirements, it is necessary to define the input and output deliverables of each operation link and their quality requirements, and based on quality management methods, ensure that each operation link meets the quality requirements. Quality management includes quality planning, quality control, and quality improvement. Quality planning is dedicated to planning how to achieve quality requirements, quality control is dedicated to ensuring that quality requirements are achieved, and quality improvement is dedicated to how to better achieve quality requirements. In order to let each operation link know the quality requirements of its operation, quality standards and Checklist need to be defined. At the same time, it is necessary to build and accumulate enabling content such as tools, methods, instructions, etc. that support the operation link to achieve the delivery requirements. These are the How to do part that supports the operation link to achieve the delivery requirements (the delivery requirements belong to what).
Quality is divided into process quality and result quality. If process quality is not built into the process, it will be impossible for quality to exist outside alone after all the business has been completed. Whether it’s quality requirements or quality standards, we have to build them into the process. There are also requirements and standards for process quality, so they can be guaranteed. The quality of the results can only be ensured by ensuring the quality of the process. Management based on process quality can bring about result quality. The pursuit of result quality forces us to control process quality at the source.
Internal control is an internal requirement to prevent corruption and control risks. When we first engaged in internal control, we separated internal control from processes. Internal control was in full swing here, and process was in full swing there. Later, when problems were discovered, the two were merged. Internal control is the risk management and corruption prevention required within our company. There are essentially two points: one is called separation of duties, which aims to prevent corruption and financial risks; the other is critical control points, where there must be control elements and control procedures. Internal controls must also be built into the process. Internal control is not feasible if it is outside the process and not within the process. Our original process department supported the process construction, and the internal control department supported the internal control construction. The two departments did their own thing. Later, after the problem was discovered, we merged the process construction and internal control construction departments. As for what SACA and CT do? Just like quality management, it depends on whether the internal process control requirements are followed when the process is executed to critical control points and when SOD is required.
Information security is an internal management requirement that manages and protects core assets. Where do core information assets originate? It is generated in the business process. Therefore, information security must also be built into the process. In the past, information security management was like building the Great Wall. It took many years to build it, but it was impossible to prevent it. More than 100 documents were issued. Later, the EMT resolution was issued, which changed the management thinking of information security 180 degrees, requiring not to defend everywhere, not to build the Great Wall, but to first defend only core assets. To prevent core assets, you must first identify them. Only when they are identified can they be protected. To identify and protect them well, it must be based on processes. The Information Security Department has changed its mind and stopped building the Great Wall. It has cleared out more than 100 information security documents, which is why everyone feels better.
At the same time, the two responsibilities of information security and sharing are placed in the Information Security Department, which requires both information security and information sharing. The assessment indicators of the Information Security Department are both information security and sharing, which is much better. Now when I go to various departments, few people report that they can’t see anything when it comes to information security. Since it is not a core asset, it will be shared. If it is a core asset, it will be shared in an environment where core assets are protected. By assessing the sharing rate, it is not particularly extreme and is much more reasonable. Information security must be built into the process. Wherever the process goes, the core information assets will be defined and protected. How to define core assets? Defined by business units and based on processes. The same goes for cybersecurity. For network security, we emphasize that products must have network security capabilities and defense capabilities in each process.

5. Operations aim at business goals, follow the process over and over again, and achieve business goals through continuous and periodic business operation management activities.

We have discussed process, IT, data and quality before, let’s talk about operations next. The so-called operation refers to the continuous cyclic activities in the operation process of the business. The goal of operation is to create value for stakeholders. To put it bluntly, operation is the process of running the process and management system. Without operation, the process and management system are dead (static), and the value creation of the enterprise cannot be realized, and the business goals cannot be achieved. Therefore, in an enterprise, operations are everywhere, ranging from the operation of an enterprise to the operation of a grassroots organization. Operations management is the planning, organization, implementation and control of the operation process. The objects of operation management include business processes (such as IPD, LTC) and management systems. The essence of operation management is to achieve effective management of the operation process and operation system. Maximizing input and output, so its goals of focus include: quality, cost, expense, efficiency/benefit, cycle/speed, flexibility, customer satisfaction, etc., which ultimately supports the business success of the enterprise.
In an enterprise, the strategic planning process DSTE is the top-level process, which organically integrates strategic planning, business planning, finance, HR, process and IT from strategy to execution to achieve the organization's business goals. Carrying out operational management around DSTE to achieve the organization's business goals is the most important part of operational management, which can also be called performance operational management. The basis for operational management based on DSTE to achieve the organization's business goals is operational management based on various business processes, such as operational management based on IPD, LTC, ITR and other processes, such as projects, project groups, and project portfolios carried out under LTC Operations management to achieve the business objectives of each project and program. When talking about different scopes of operations, you can add attributives in front of operations to distinguish them, such as project operation management, sales operation management, marketing operation management, knowledge operation management, customer satisfaction operation management, etc. In many cases, operations can also be omitted. Such as sales management, project management, quality management, customer satisfaction management, knowledge management, etc. These management activities themselves are an integral part of operations management.
If we don't follow the process, it's not an operation. Our IPD system is clear and fully understood in terms of operation. All our business is carried out within the process. But we actually haven't reached a consensus in the region, which includes business management, sales management, process quality, and process management. Doesn’t sales management revolve around the sales process? Doesn’t business management manage contract quality? These are all merged in the product line. As long as it revolves around process, there needs to be corresponding supporting organizations. Our operational organization must be all in operations, and the core is to follow the process in order to be successful.
After following the process, if it is found that it does not match the business scenario, as a supervisor, if it is within the scope of his authorization, he will directly optimize it; if it is outside the scope of his authorization, if it is obvious that there is a problem with the process and it does not match the business scenario, he should promote the optimization. . Of course, you must first follow the process before raising issues with the process. If the process is not followed, it is empty talk to say that there is a problem with the process. If someone says to me that there is a problem with a process, I will ask him which process is the problem. There are many problems with Huawei's processes. You have to tell me which process has problems. Only by following the process and going around the process can you know where the problem is. If you don't follow it, it is impossible to know that there is a problem with the process, and it is impossible to promote and optimize the process. How do you know where the problem is because you haven't transferred it yet?
This is operations, with several purposes, one is to go round and round along the process, and the second is to solve or promote the solution of problems when problems are discovered during the compliance process. If we are really not the slaves of the process, but the masters of the process, we will pay attention to how the process is, whether the process conforms to the business scenario, and whether there will be any problems after our process compliance. Then our company's process compliance and process optimization The soil has improved.

6. The process determines the role, and the organization carries the role. Only when the process and organization match can the operation be efficient.

Let’s talk about some of my understanding of the match between organizational design and process. In process and organizational changes, the following process needs to be followed:
The first path is to start from the strategy, design the selected business model based on the strategy, determine the main business flow, and identify the key capabilities of the business flow, based on the gaps and gaps in key capabilities Prioritize the planning of changes, conduct process design based on changes, and match organizational design and processes based on organizational design principles. From the perspective of an enterprise's organizational and process architecture design, the ideal design should achieve: From a horizontal perspective, how each process achieves global consistency among various Business organizations; From a vertical perspective, how each Business organization achieves each business Organic integration of processes. The main business process is a process that directly creates value for customers. All organizations must either work in the main process or support the main business flow to create value for customers. Otherwise, such an organization is redundant. How do various functional organizations participate and support it? Project-based operation is the most effective way. In fact, any business organization achieves its business goals through projects/groups. The project is the most basic management unit. It is the project/group that executes the main business process, and each The purpose of portfolio management includes portfolio design, trade-offs, and prioritization to meet customer needs and maximize resource input and output. Therefore, each functional organization needs to participate in cross-functional department projects that execute the main business stream to create value for customers.
The design of each functional organization needs to be based on the following core concepts: Each functional organization must be responsible for the E2E results, not segment to segment. The organizations are not a relay match, but similar to a football match. They jointly participate in the project and pass the project. A group of cross-functional organizations that work together to execute key business streams to achieve business goals. The design of the functional organization is based on one or several professional areas (according to management needs) based on the capabilities required by the business flow. In order to allow each functional area to have a complete process view of the E2E it executes, Discipline (professional area) can be introduced. The concept of HR, for each professional field, corresponds to a job category of HR (such as software, hardware), and can also correspond to a functional department. Process definition What, Discipline definition How to do, Discipline construction can be authorized to various functional departments for construction. Therefore, process authorization can be divided into two dimensions. One is to authorize the main business flow based on the division of operating organizations, and the other is to authorize each functional organization based on the division of Discipline.

7. The business manager is the person responsible for the process. The consulting company and the process IT department provide process experts and provide professional services in the form of consultants.

In the past, the representative office reported to the boss that the process was too long and there were problems with the process. The first thing he criticized was the process IT department, so the process IT department was always criticized. Recently we have discussed clearly that the person responsible for the process is the business manager, so I suggested to the boss that if he sees a problem with any process again, he should call the business department manager directly and scold the business department manager. Since we have defined that the person responsible for the process is the business manager, if there is a problem in the future, we should first go to the business manager. It is impossible for the process IT department to develop a process alone for everyone to use. Only the process developed by the business department and the process IT department can be used and the business department can execute it. We have made it clear that the person responsible for the business process is the business manager. If there are any problems with the process in the future, we should go to the business manager to solve them. If you are not the executor of the actual business, you should not dictate the processes of the business department. On the contrary, it will lead to more opposition and dissatisfaction.
We emphasize that business departments should lead the design of processes. Why do we still need process IT departments and consulting companies? It's because our understanding of business is still one-sided. How do we understand our business? It's what we do ourselves, that's what our responsibilities are.
When we sorted out the process of government affairs, we found that the government affairs department only changed what it originally did into its own process. Later, after we hired IBM as a consultant, we found that the entire Government Affairs Department was missing 70 to 80 percent of the things it was responsible for. After we put together the business framework with the help of consultants, we found that a lot of work had not been done. It turns out that legal affairs are also like this. Our legal affairs are only concerned with litigation and not prevention. Since the perspectives of business managers at all levels only focus on what they have done, what they have understood, and what they have thought about, it is difficult to be comprehensive, so we need consulting companies. Consulting companies have done similar things in other companies. They know what links other companies have. They can give us a benchmark, suggest whether we need to consider these links, and give some suggestions.
What does the process IT department do? There are experts in the process IT department who can guide business departments on how to design and perform processes, as well as some matters that need to be paid attention to in process construction.
Whether we are doing changes or process optimization, it should be a combination of business departments, process IT departments, and consultants. The combination of these three is very valuable. However, we emphasize that it is the business department that takes the lead. Only the business department is willing to do something in its heart. Only when it is done well will it be willing to implement it, and only if there are problems after implementation, will it be willing to face it. Otherwise, if a process is imposed on the business department, the business department will not be able to implement it, and may only oppose it. As long as there is a little difficulty, they will blame the process.
Finally, the core still needs to ask ourselves: Are we slaves to the process or masters of the process? If we are the masters of the process, then the process is not something external and is not passively required. We will actively build, optimize and promote the process. At the same time, only by correctly understanding the relationship between business flow, process, IT, quality, and operations can we build processes more effectively, follow processes, build quality in the process, and solidify the process through IT to effectively implement the purpose of enterprise management. Process organization construction.