TAU (Transformation as Usual) is the new BAU (Business as Usual)

“Change is the only constant in life.”?Heraclitus, Greek Philosopher

The accelerating pace of change, increasing competitive pressure and global disruptive events (such as COVID19) are increasingly impacting BAU activities leading to the concept of TAU (Transformation as Usual).

It is not longer sufficient to just run the day to day operation well, there is an increasing??need to actively manage, monitor and optimise BAU activities. In addition, the increasing level of changes (in some cases transformative changes)?are putting pressure on BAU activities/team requiring tight collaboration and integration between Projects and BAU (during project delivery and transition to BAU).

Hence, the need for organisation to evolve from a BAU to TAU mindset and operating model to become more efficient/productive and embrace, support Project initiatives.

Change (and Innovation) is mostly driven by projects mostly sitting outside BAU operational functions/ teams. There is inherent?tension between BAU and Change, as Projects by definition are about driving change- challenging and changing the status-quo. The concept of TAU (vs BAU) is to minimise this tension and to ensure successful collaboration between BAU and Change (Project) teams- both working in tandem to drive and achieve the strategic?change agenda.

BAU is not as exciting ( often treated as overhead) as strategic projects but remain business critical to ensure that there is a business (to pay for the projects)

We can broadly categorise different types of BAU and Change work

• BAU Maintain-??maintaining asset (physical assets, intangible asset such as the brand..)
• BAU Fix – fixing issues, dealing with customer complaints, repairing an asset
• BAU Run work-??servicing customer, conducting marketing activities, paying suppliers…
• Small change-??adding product or system features, updating product design, small process improvements
• Large change- Transform work— complex and transformative change activities??cross functional, touching multiple operational aspect, operating model changes, M&A??
• Divestment- another category, depending on size of divestment it can be part of small or large change?

Is it a project of BAU activity ?

Picture extract from article "How to define a project and balance it with run the business"

https://meisterplan.com/blog/project-portfolio-management/define-project-run-the-business/

BAU Definition

The term “business as usual” [BAU] refers to day-day activities a business conduct to run and maintain its operations, those activities are routine, fixed, repetitive and on-going (no end point).?

In comparison, change activities are mostly Projects driven, time-bound, transient with a specific goal and delivering a unique product/service with a defined purpose and budget. BAU are inherently less risky vs Change activities. Projects have?Delivery Risk and potentially introduced new risk in the business once completed (once transitioned to BAU).

Business as usual work tends to get less scrutiny and oversight than Project change work, given their lower risk nature and not being linked to investment return target metrics. A company would not have ‘business case’ or investment return target for its Finance, or HR function as an example. However, Projects within the Finance or HR function would have had to pass a business case checkpoint process and demonstrate value creation (to gain funding approval)

The key is that BAU activities don’t drive large change (Projects do), they might drive small and incremental changes. Change activities can emerge from BAU (being close to customer and running of the operations). Projects are about changing the business (from a current sate to a future state). However, as discussed above, there is an increase demand/ask to BAU team to support change (Project) activities as well as pressure to become more cost efficient/more productive (whilst continuing to maintain the baseline reliability/performance).?

Noting that BAU teams also conduct and drive projects, albeit mostly smaller, less complex and more tactical in nature. The big, transformational projects would be picked up and driven by specialised project team with specific funding.

Example of BAU activities (repetitive activities that keep a company runningA)

Routine/repetitive

• Conducting Marketing campaigns?
• Financial reporting and budgeting
• Delivering Customer service
• Paying suppliers, processing payroll
• Recruiting and hiring

Small changes

• Product/service enhancements (e.g adding features)
• Minor software patches
• Small process optimisation

Some BAU activities might be disrupted by unforeseen events (e.g cyber attacks, natural disasters…) that would divert BAU team towards fixing and managing those events (in some cases temporary Taskforce would be set up, often organised as a Project).

Increasingly, organisations are experiencing increase level of change across all operational functions that require a change of BAU team mindset to a TAU mindset - from running/maintaining the baseline to supporting change and becoming more efficient.

Why is it important to categorise activities between BAU and Project ?

There are a number differences between BAU and Project being :

• Funding source (BAU paid by businesses operational budget vs Project being discrete funding)
• Funding model (BAU not required business case/investment return compared to Change projects requiring Business Case/Delivery Plan)
• Delivery management (BAU being repetitive and routine vs Change projects going through different life stage- from Ideation, Planning, Build, Testing, Delivery
• Financial implication (BAU spend mostly likely to be all Opex vs Project potentially can be capitalised – CAPEX)
• Governance management (BAU requiring less intense oversight vs Change Projects requiring active oversight, usually by TMO or PMO office)
• Risk management (BAU is about mitigating risk vs Change Project being about managing risk)
• Resources management ( BAU requires functional expertise vs Change work conducted by Project teams)?

Connecting Change program/projects to BAU

Change projects need/rely on BAU to be successful. Project delivery team should embed BAU resources, test/pilot deliverables within BAU functions and ensure smooth transition to BAU.

Embedding change into BAU is the key to achieving the objectives and desired change outcomes.

So BAU and Project Change activities are closely inter-linked (and intertwined)

• Change might emerge from BAU work, often changes are identified by BAU teams
• Projects, once competed transition back to BAU (introducing change to BAU)
• Project team would need input from BAU teams- for research, testing, piloting the changes
• Projects have the potential to introduce operational risk, requiring BAU involved in delivery risk management
• Projects have the potential to introduce new BAU on-going cost (to maintain and run new assets, process, system, product/services introduced by the Project)

“According to respondents, 20 percent of value loss occurs after implementation, once the initiatives have been fully executed. To mitigate this loss, the results suggest that embedding transformation disciplines into business-as-usual structures, processes, and systems can help—and that this is a more common practice among successful transformations”

Losing from day one: Why even successful transformations fall short,” McKinsey & Company, Michael Bucy, Bill Schaninger, Kate VanAkin, and Brooke Weddle.

BAU vs Project staff

BAU staff do the same job?consistent day in day out activities. BAU work is managed by functional teams with technical expertise, grouped together in a Division (e.g Finance team working in the Finance Department)

Change work is conducted by Project teams requiring specialised skills- Project Manager, Scheduler, Risk manager, Change Manager. Those are specialised team members versed in working on tasks with discrete start and end dates and with strong communication, stakeholders engagement and influencing skills

Therefore, there are different skills and expertise required for BAU vs Project based work and re-deploying BAU staff into project roles is often difficult -??requiring re-training to work in a new environment driven by??time, cost and delivery pressure.?

Using BAU staff for Project work enables the creation of TAU mindset. BAU staff??embedded from a period of time in projects acquire a better understanding of the need to improve, evolve and acquire project management skill-set as well as mindset to challenge the status-quo (once returning to their BAU function).

Managing BAU vs Project (Change) work

By definition (as explained), BAU work is repetitive and on-going within functional areas. However, they do have cross-functional dependencies and linkage to change activities.

It is important for a business to?manage BAU demand and performance and have visibility of Projects impact on BAU

• Include BAU activities on key Planning agenda (such as QBR for organisation practicing Agile)
• Understand BAU performance (cost efficiency/productivity)- as improving underlying BAU activities would free up capacity (and money) to invest in Project change initiatives
• Map out Project milestone deliveries to ensure that BAU can cope with the change (and that BAU is aware/across changes coming their way)
• Map out BAU to Project dependencies – as project delivery is likely to also have BAU team input as part of the project delivery (e.g Pilot, Proof of concept testing, Customer research…)

Monitoring and Optimising BAU work

Whilst there are lot of articles and research on how to optimise Projects, there is relatively little information relating to managing and optimising BAU work (and corresponding success metrics)

At its core, BAU work is about meeting expected service levels (SLAs-service level agreement) and delivering consistent / high quality outputs. It is about generating stability and predictability in day to day operations. It is about maintaining the consistent and high level of day to day operational performance of the organisation (maintaining the baseline performance) through operational excellence.

There would an expectation of driving incremental improvement, however this is not always clearly unless target are set and staff are incentivise to do so. Hence, the need to move to a TAU mindset/operation to encourage incremental changes and improvements and track improvements above the baseline performance.

Tracking BAU performance through KPIs

Whilst Projects are tracked via Project Management success metrics (Time/Cost/Quality) and via OKRs, BAU performance is about tracking business health via KPIs along the following dimensions

• Satisfaction : Customer satisfaction metrics (e.g NPS), employee satisfaction
• Reliability : IT system uptime, SLAs achieved
• Efficiency : function costs as % revenue (benchmarked to industry peers)
• Consistency : delivering BAU activities on time, no overdue activities…
• Productivity??:??revenue per sales force, marketing cost per acquistion
• Quality – example quality Assurance score

It is ensuring performance levels remains withing baseline expected. It should incorporate KPIs relating to continuous improvement target to improve business health.

Optimising BAU implies driving productivity gain which would are likely requiring a Project to extract productivity gain- hence the close relationship/ interlink between BAU and Projects- investing in Projects that would create the system/process/operating model for BAU to harvest/extract.

It would also be important the mix types of BAU (Fix/Run/Maintain) and BAU cost to the organisation (quantum of resources allocated to BAU activities) to look at BAU cost from a benchmarking cost efficiency lens approach. For instance, how much is our Financial operational function is costing (as % of total expenses) vs peers in our industry.

Conclusion?

Organisation should not neglect managing and monitoring BAU activities work as BAU is the foundation of business success (and pay for Changes).??BAU needs to be actively managed and monitored to ensure (drive) continual predictability and efficiency.

Increasingly, BAU should be though as TAU due to increase level and pace of change pervading more and more operational functions requiring??organisation to pay more attention, and demand more (in terms of productivity/efficiency) from their BAU activities and BAU staff.?