PEARSON CASE STUDY

How Organizations are Using APQCs Process Classification

Framework SM (PCF)

Brandon P. Burgess
Principal Process Engineer - Global Change and Process Excellence
Pearson

Krishnan Krishnaiyer
Vice President - Global Change and Process Excellence
Pearson

Interview conducted on July 30, 2014.

BACKGROUND
ORGANIZATIONAL BACKGROUND
Pearson is a global learning and publishing company with over 40,000 employees in more than 80 countries.
Pearson provides learning materials, places of learning, technologies, assessments and services to teachers,
professionals, and students. Pearson Education, its largest segment, publishes textbooks and related material.
Pearson also provides financial information and business news through its FT Group, which includes The Financial
Times, the FT.com website, and The Economist (50 percent-owned).

PEARSONS CHALLENGE AND WHY THE PCF

In mid-2013, Pearson started an enterprise resource planning (ERP) implementation project that focused on fi-
nance and operations. By the third quarter of 2013, two regional groups (hereafter referred to as groups A and B)
were initiating different ERP implementations, utilizing two separate consultants to assist in the project, and using
divergent approaches to map the underlying processes for implementation. The global change and process excel-
lence (GCPE) team (providing project management, change management, and process engineering support
throughout the organization) was approached to bring process synergy to these initiatives.

In October, 2013 Krishnan Krishnaiyer, vice president of GCPE, and his team began consolidation of the ERP imple-
mentation efforts. The first step was to research models available for standardizing business processes around ERP
systems and to provide a robust and sustainable implementation plan (e.g., Baldrige and project phase model). In
his research, Krishnan discovered APQCs Process Classification Framework (PCF) for education. Though the PCF
was predominantly aligned with education facilities or schools, rather than school services and the publishing in-
dustry, Krishnan and Brandon Burgess, Pearsons prin-
cipal process engineer, determined that using the PCF
would meet the companys needs for standardizing What is the PCF?
processes and creating a common language for ERP
The PCF is a list of activities organizations use to articulate
implementation. To implement an ERP system, best
work processes. By using a common language to define all
practices suggest having clear underlying business pro-
the tasks inside of an organization, the framework stand-
cess documentation with established process govern-
ardizes an approach to a number of crucial needs, such as
ance. The PCF provides the team with an unbiased
process management, benchmarking and content manage-
standard. For the ERP project, it enabled the team to
ment.
approach groups A and B with an objective, research-
Without such a pre-defined list, multiple business
based framework independent of the cultural differ-
ences that existed in the similar processes across these units within a single organization could have duplica-
two groups. tive interpretations of even the most basic processes,
such as invoicing. Redundancies lead to varying defi-
nitions for the underlying measures, such as
"inventory management. This, in turn, can under-
mine any ability to manage a process consistently
across an enterprise.

K05430 2 2014 APQC ALL RIGHTS RESERVED

CREATING A STANDARDIZED PROCESS FRAMWORK

Creating standardized processes is the first step to enable an effective ERP implementation. To accomplish this and
create buy-in, the team used the PCF as the foundation and common language to facilitate the co-development of
finance and operations processes with a methodology that is comprised of four stages: diagnose, design, deliver,
and sustainknown at Pearson as 3DS (see Figure 1). The PCF is an output of the diagnose stage.

3DS Methodology High-Level Stages in Relation to the Global Process Excellence Workshop

Figure 1

3 2014 APQC ALL RIGHTS RESERVED

3DS Methodology
Pearsons 3DS Methodology
In the engagement model, the team leverages a
standardized 3DS methodology in all its continuous
improvement projects. The model (Figure 2) encom-
passes:

four high-level stages of the methodology

diagnose, design, deliver, and sustain;

four workflow stages for example, in the diag-

nose stage, the workflow focuses on gathering data
and defining value for the customer;

three impact areas project, process and

tools, and people; for example, the design phase
directly impacts the process and tools used by the
customer and the delivery phase affects the people;

and three key capability owners project

management, process engineering, and change man-
agement are responsible for the respective stages
of the methodology. For example, change manage-
ment is responsible for the deliver and sustain stag-
es.
Figure 2
The Four Stages
Diagnose
At the diagnose stage, the team gathers information on the current problem or opportunity and tries to determine
how to make changes that will add value for the business or customer. For the ERP implementation project, the
team looked at the current finance and operations processes, how and to what level they were being documented,
and how they aligned to PCF categories, process groups, process, and sub-processes. The GCPE team found that a
lack of standardization of process levels, as some of the process flowcharts were desk top procedures (DTPs). The
primary value the GCPE team could add to the project was to create a single finance and operations process hierar-
chy and detailed process maps at the lowest level of the process hierarchy that could be leveraged for the solution
design and implementation.

Design
In the design stage, the GCPE team develops the process model and metrics needed to monitor implementation and
success. The GCPE team uses its process mapping methodology in a collaborative workshop to:

1. assess the current state of the processes,

2. create and agree on a target operating model process map that will be implemented, and

3. create a plan that includes a list of action items with owners and due dates.

The team executed the design stage of the 3DS model in their global process excellence workshop (see below for
more information on this workshop).

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Deliver
The focus of Pearsons deliver stage is on implementing the project and communicating changes. For example, the
business team would implement the new processes by executing the action items that result from the workshop.

Sustain
The sustain stage is the monitoring of implementation and ensuring that the project is being successfully completed.
At this point, the GCPE team works with the sponsors and/or project managers to track implementation, the bene-
fits, and return on investment of the new processes.

Global Process Excellence Workshop

The global process excellence workshop is the vehicle used to engage the business team in the 3DS methodology.
The business team engages in a four-phase collaborative and iterative continuous improvement management meth-
od, as outlined in Figure 3.

Global Process Excellence Workshop

Figure 3

Stakeholder Engagement and Workshop Planning

The first phase of the workshop aligns with the diagnose stage of the 3DS methodology. The team engaged the ERP
implementation sponsor and stakeholders from groups A and B and two consultants to complete a scope document.
The completed document provided the foundation for the workshop structure and obtained the sponsors agree-
ment to use section 8.0 of the PCF, which covers finance processes.

Stakeholder Engagement
The two main purposes of the stakeholder engagement and scope document are to generate buy-in and to ensure
the workshop adds value for the customer (sponsor and stakeholders). The scope document (Figure 4) also is used
to:

outline what work needs to be done,

identify current gaps,

gather informationincluding any work previously conducted on the project by the

two groups, and

identify potential solutions.

5
 Workshop Scope Document Template

Figure 4

The workshop scope document includes the following information categories:

1. General Informationincludes the name of the workshop and the key participants (e.g., sponsor, project man-
ager and change management staff if applicable, and participants from various stakeholders).

2. Business case/problem statementoutlines the purpose and/or what the problem or opportunity is.

3. Scopesets the boundaries of the effort.

4. Goals and objectivescreates clarity on what the team wishes to accomplish in the project; including require-
ments for quality, cost, change readiness, communications, etc. The goals and objectives should also identify who
is the end-user or customer (internal or external) of this process and/or change.

5. Available budget and resourcesoutlines the available budget and level of investment in the project.

6. Metricsidentifies the key performance metrics needed to improve as well as baseline(s) for monitoring.

7. Deliverableslists the desired outcomes and artifacts necessary for the team to implement the project. For
example, in the ERP implementation, the deliverables were an agreed PCF, target operating model process maps,
action items, and a workshop summary presentation for communication.

8. Communications and Othernotes any additional information relevant to the project and a defined commu-
nications plan.

In addition to outlining the workshop needs, the GCPE team works with the project sponsor to ensure that the right
people participate in the workshop. The team and sponsors identify the stakeholders (subject matter experts, tech-
nical specialists, change management experts, and individuals who understand or represent the upstream and

6
downstream activities). They also document the workshop team members and their areas of expertise within the
scope of the project in a team member map (Figure 5). The information captured in the scope document and team
member map is then used to plan and execute the workshop.

Example of the Team Member Map

Figure 5
Workshop Planning
The GCPE team uses the scope document, all relevant inputs (e.g., the current process used by the two groups, the
PCF, and the initial ERP implementation work), and its facilitation materials (methodology and previous projects) to
plan the workshopagenda, workshop materials, and tracking metrics.

Collaborative Process Mapping

When all the background research and planning are complete, the GCPE team facilitates the workshop and collabo-
rates with the team members to develop the new processes. The duration varies according to the scope and com-
plexity of the process in focus. For the ERP implementation, the team conducted a two-week workshop in Hong
Kong, because it was a neutral location and relatively close to groups A and B. Figure 6 illustrates an example of a
typical workshop agenda.
Process Excellence Workshop Agenda

Figure 6

7
Set the Foundation
The global process workshops start with an introduction to the relevant concepts (i.e., Lean Sigma and the PCF), the
3DS methodology, the process mapping method to be used, and the goals and objectives of the workshop.

Explicit goals for the ERP project:

Project alignmentintegrate the ERP initiatives for groups A and B and develop standardized processes for
record to report (R-to-R) and procure to pay (P-to-P)

Reusable templateteam creates one ERP process template for the two groups, which can then be rolled out
to the other regions

Process alignmentalign all processes to the PCF

Reporting/governanceestablish common data structures for seamless reporting and a single governance
model for process, data, and systems changes

Reduce costs and integrationreduce IT costs by using one ERP system and provide a single data hub and
reporting systems to integrate all regions

Process Mapping
During the process mapping exercises, the team uses the PCF to align the processes, uses the process maps already
developed (if any), develops a common understanding of the process life cycles, and engages in open discussion.
The focus of the ERP implementation workshop was on the finance processes (section 8.0 of the PCF); specifically,
the R-to-R and P-to-P processes. The team started their alignment discussion with a level-one category (8.0) and
then moved onto the next level. At level two, the team used a business process management perspective to outline
the entire finance cycleP-to-P, R-to-R, and order to cash (O-to-C). Then, they chose one of the level-two catego-
ries and drilled down (using the PCF as a reference guide) to outline the sub-processes and tasks and to decide
which were relevant to Pearsons business. Throughout the mapping discussions, the team also assessed how each
process, sub-process, and task aligned to the organizations strategy; looked at how it would work in the technology
delivery component of the ERP implementation; and noted any action items they would need to implement the new
processes.

Communication
When the process maps were complete, the team worked on the outputs and deliverables of the workshop. The
deliverables are generally standardized and include:

agreed-upon process maps that are aligned with the PCF;

a workshop summary, which includes:

goals and objectives of the workshop,

summary of what was accomplished,

list of next steps;

a list of action items at the operational level, necessary to implement the

process map (Figure 7); and

key metrics to track the success of the project.

8
 Example of an Action Item List

Figure 7

The action items list serves as the detailed implementation plan for the project and enumerates all the tasks neces-
sary to overcome any roadblocks, is used to generate adoption of the processes within the businesses, develop sup-
port content for the processes, create desktop-level workflow instructions, and integrate the processes in the ERP
system. Each activity is mapped to the process classification number, has an owner and deadline, and indicates its
priority classification.

Prioritization typically is based on two components (1) when the task needs to be complete, and (2) dependencies
between action items required for completion. High-priority items typically must be completed within 30 days and
must address roadblocks. Medium-priority items need to be completed within 60 days and may be needed for sub-
sequent tasks, while low-priority actions are longer-term items that need to be finished in approximately 90 days.

The next steps, in contrast to the action items list, are the high-level to-do items following the project. They can in-
clude larger scale tasks like creating a change management strategy for roll out or indicate additional workshops for
other related processes. For example, the next steps for the ERP implementation workshop included:

communicating the process map across stakeholders;

aligning the PCF to forms, report, interface, conversions, extensions, and workflow (FRICEW);

consolidating back-office service structure;

developing DTPsthe how-to instructions for the routine tasks associated with each
process step;

engaging change management resources (for groups A and B) for change impact assessments and roll out;

engaging group internal audit/global program management office to build in quality assurance, mitigate risk, and
ensure appropriate audit controls are in place as before deployment; and

conducting additional process workshops for the accounts receivable and inventory processes.

9
Business Team Implementation
The workshop team members, equipped with agreed-to process maps, action items, and next steps, move forward
to implement the new processes. In some cases, the GCPE team will also identify additional experts to provide sup-
port for project and change management to assist in the implementation.

Process Team Monitors Implementation

The GCPE team is responsible for the high-level monitoring of the projects implementation, interacting with the
sponsor to ensure everything is on track, and to adjust the implementation plan based on changes in the business
environment, organizational strategy, or roadblocks. However, depending on the scale of the project, the day-to-day
management of the implementation is the
responsibility of the sponsor (for smaller Action Item Summary: Illustrative Example
scale projects) or a project manager (for
larger, cross-regional projects). Regard-
less of the scale of the project, the GCPE
team will assess the implementation on a
monthly basis to track the action items,
adjust the plan, and intervene if there is
no progress on the implementation. The
caveat is that if action items span months,
they will conduct the assessments quar-
terly. The GCPE team monitors two key
components to track the projects suc-
cess: the action items lists and the project
metrics. The progress of the action items
are displayed in two charts. The high-level Figure 8
pie chart (Figure 8) shows the status of
the action items (e.g., abandoned, in progress, or completed). The chart enables the team to get a feel of the state
of process implementation at a glance.

The second tracking tool the team uses is a tracking chart (Figure 9), which is updated any time there are changes
to the action items list. This chart enables the team to dive deeper, understand what items are being completed
based on their priority status, and
Action Item Summary Tracking Chart : Illustrative Example
track activity status over time
(indicated by the red and green ar-
rows); ultimately helping the team
pinpoint problem areas that need
intervention.

In addition to monitoring the de-

tailed activities of implementation,
the GCPE team also monitors the
success rate of the project based on
the key metrics (e.g., customer satis-
faction, quality, cost, or delivery)
identified in the scope document.

Figure 9

10
BUSINESS RESULTS
Overall, the team reports successful use of the PCF to
establish standardized processes and to promote a
common process language throughout the organiza-
tion. This has assisted Pearson with its ongoing efforts
to achieve one of its strategic goals, which is called
One Pearson. Pearson has grown through acquisi-
tions, which has resulted in fragmentation of business
acumen, processes, and reporting. Using the PCF, the
GCPE team was able to align two groups to a single
process, common set of work instructions, and
streamline data management for a reporting process;
ultimately moving one step closer to achieving One
Pearson.
In addition to achieving its standardization goals, the
PCF also enabled the team reduce the amount of time
needed to create the process maps and simplify its
finance and operation processes. As noted in Figure
10, groups A and B had 27 distinct processes for the R
-to-R life cycle at the beginning of the workshop. Ini-
tially, the team had tentatively agreed that they
would come out of the workshop with 33 processes.
Using the PCF as a guide, they discussed and deter-
mined which processes and sub-processes aligned
Aligned Process Maps (Before & After Process
Excellence Workshop)
Figure 10
11
with how Pearson conducted its R-to-R. This ultimate-
ly enabled the team to discard redundant processes
and include only those that added value to the busi-
ness and customers, which resulted in only 21 pro-
cesses.
The team plans to continue using the PCF and process
workshops to standardize the processes for PCF sec-
tions 2.0 (Develop, Deliver, and Assess Curriculum,
Assessment, and Instruction) and 4.0 (Design and
Manage Operations).
Finally, the GCPE team indicates that it will also con-
tinue to use the PCF for benchmarking its processes
to identify improvement opportunities. Pearson be-
lieves that the PCF will assist in providing a framework
for such benchmarking activities and serve as an oper-
ationalizing tool that enables employees to embrace
and implement change. The GCPE team is currently
proposing adoption of the PCF across the global or-
ganization.
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