The Business Book

218

IF YOU DON’T KNOW

W H E R E Y O U A R E ,

A M A P W O N ’ T H E L P

THE CAPABILITY MATURITY MODEL

B

usiness processes are a

series of actions taken to

achieve an outcome. The

objective might be to produce a

product, to pay an invoice, or to

serve a customer, for example. Adam

Smith was one of the first people

to describe business processes,

when he dissected the many

manufacturing processes used in

an 18th-century pin factory. From

describing the different actions, he

developed the idea of division of

labor, where work can be divided

into a set of simple tasks performed

by specialized workers, in sequence.

Continuous improvement

The sequence of steps in a process

can often be visualized as a flow

chart. As Watts Humphrey, inventor

of the capability maturity model

(CMM), pointed out, it is always

“good to know where you are” in

the process. Humphrey developed

the idea that continuous process

improvement is based on many

small evolutionary steps, rather than

large, revolutionary innovations.

His CMM provides a framework for

organizing these evolutionary steps

into five levels of development,

each of which prepares the way for

the next. The CMM was developed

IN CONTEXT

FOCUS

Business processes

KEY DATES

1899 US engineer and

management consultant Henry

Gantt develops the Gantt chart

to illustrate a project schedule.

1970s Data-flow diagrams are

developed to allow structured

analysis of how data moves

from one process to another.

1979 Philip B. Crosby develops

a quality-management

maturity grid in his book

Quality is Free.

1988 The Capability Maturity

Model (CMM) is described by

Watts S. Humphrey in an

article published in the journal

IEEE Software.

2003 In Business Process

Management is a Team Sport,

Andrew Spanyi claims that

strategy should drive business

process design, which, in

turn, should drive

organizational design.

In level 1 of the Capability

Maturity Model, initial

processes are ad hoc

and poorly controlled.

In level 2, processes start

to be applied to projects

and are repeatable.

In level 3, processes become

defined and can be

proactively implemented.

In level 4, processes are

measurable and can be

managed.

By the time level 5 is reached,

processes can be optimized

through careful monitoring.