Business Process Management Case Study: Arizona Public Services
Business Process Management (BPM) is an integral part of core business operations. Understanding how BPM affects processes is paramount to the success of a business. Therefore, studying past integration of BPM within a crisis situation can help you better understand the value of Business Process Management.
In one case study from an Arizona Public Fire (APS) substation, a catastrophic fire destroyed five transformers. The fire caused millions of dollars in damage, affected the lives of 400,000 customers and required an entire rebuild of the substation. Here is how BPM was integrated into finding a workable solution to this disaster:
Goal
APS agreed to incorporate leading business process management practices into its substation maintenance processes, as part of the corrective action plan that was approved by the Arizona Corporation Commission (ACC). By agreeing to do this, the goal was to increase reliability by ensuring the substations were maintained in an effective and efficient manner. The fire provided a “burning platform” (literally and figuratively), that required APS to determine the gap between leading and current practices within substation maintenance.
Issues
APS faced a series of challenges because of core company values. The company had employees that have an average of 17 years of service and was undergoing tremendous growth; Arizona was the second fastest growing state in the country. During this crisis, the company was also serving more customers than ever before; the number of APS customers had doubled every 20 years. In 1980, APS had 400,000 customers and, in 2005, customers topped one million. It is projected that APS will serve 1.6 million customers in 2020. The number of APS employees had remained largely unchanged during this time, but studies were showing that a large percentage of APS employees were eligible for retirement within the upcoming years. Therefore, APS was faced with a diminishing work force and an emerging work force that might not be able to fulfill the needs of the business.
One final issue of concern: how will employees enroll into a BPM initiative, and once the first part of the initiative has been completed, how can daily efforts be integrated for continuous improvements?
Solutions
In order to align with the recommended leading practices, APS brought in an expert to document the current processes and understand the issues, opportunities and unanswered questions of the organization. After the current process was documented, the focus turned to addressing the issues and creating a “future state” process. The processes had owners who attended process meetings along with teams who represented a SIPOC perspective (Suppliers-Input-Process-Output-Customers). The two layers of management above the section leaders also attended the sessions periodically to show support and provide the incentive from leadership.
By implementing business process management best practices, significant changes in work distribution and job duties took place. Team leaders were extremely supportive of the growing pains that were expressed by some employees; reassignment was an option for employees who had difficulty with the transition. In 2007 substation maintenance met or exceeded all reliability metrics. Before the process effort, 80% of their work performed by APS was reactive. Now, 20% of the work performed is reactive. Through the end of September 2008, APS was poised to establish their best year in reliability measurements that track average number of service interruptions per customer.
