What is SIAM? Everything You Need to Know

December 15, 2021 - 7 min read

Kelechi Udoagwu

For many years, IT organizations have kept most of their proprietary technology and service providers, such as server-racking and software development, within the company. But with today's fast-paced innovation across industries, organizations have realized the need for leveraging external expertise and advantages from no-code tools.

Outsourcing competencies are necessary for specific operations such as cloud storage and Software as a Service (SaaS). However, once you have onboarded suppliers, partners, and vendors, maintaining an end-to-end overview of ongoing projects and services is the next challenge. This is where Service Integration and Management (SIAM) comes in.

What is SIAM?

According to the SIAM Foundation Body of Knowledge, Service Integration and Management (SIAM) is a management methodology applied in projects and work environments that involve services sourced from several providers.

The simple answer to “What is SIAM?” is that it's an acronym for “Service Integration and Management.” It is a method used to create focused and strategic communication channels between teams and vendors collaborating on projects within a company.

SIAM empowers organizations to onboard project-specific resources, such as specialists and experts. In many IT organizations, the same vendors work with the team on different projects. Through Service Integration and Management, it becomes easy to manage the external support through predetermined processes, workflows, and management styles.

Hiring and managing so many internal team members for individual or small projects can be challenging and is no longer advisable thanks to the global adoption of remote work. For this reason, most organizations hire vendors and suppliers that provide essential professional services and meet project requirements under service-level agreements (SLAs).

SIAM ensures that all collaborators providing services to your organization or working on any collaborative project are coordinated and aligned. Participants in SIAM can be broken down into three broad categories:

Customer organization: The organization employing vendors is known as the customer organization. Analyzing this organization, one can identify the services, vendor dynamics, and management that must be outsourced.
Service providers (operational): These are the service providers offering their services to the customer organization. Service providers may be internal or external. External service providers are not part of the organization; their performance is managed with contracts and SLAs. Internal service providers are a part of the organization and are managed through internal agreements and targets.
Service integrator (tactical): The service integrator role integrates and manages all the services providers in the company. It aims to create a cross-service, end-to-end system with operational governance over the service providers and vendors with a clear understanding of the customer organization's requirements.

SIAM models explained

SIAM models depend on factors such as:

The complexity of the systems within the organization
Application of the SIAM Service Integration and Management services
SIAM expertise that can be outsourced or handled internally

Depending on these factors, four SIAM models can be adopted by any organization:

Internal service integrator

In an internal service integrator, the control of all service providers is managed within the organization. This requires the customer organization to have a high SIAM expertise in internal teams to manage all suppliers and vendors. Internal service integrators are great for saving costs.

External service integrator

An external service integrator is a third party responsible for managing the vendors in the customer organization. In this situation, the service integrator is a SIAM expert with sufficient experience. External service integrators may be expensive and contribute significantly to the company's costs.

Hybrid service integrator

The hybrid service integrator model consists of internal and external integrators. For smaller, less critical projects and vendors, the company uses internal SIAM resources. For bigger projects and vendors with greater impact, the company hires SIAM specialists and experts. Companies often start with a hybrid service integrator model and then shift to an internal model after significant knowledge transfer and experience.

Lead supplies as service integrator

In this SIAM model, a key supplier or vendor manages other vendors for the customer organization. This requires a high level of trust between the organization and the managing vendor. However, once trust has been established, it becomes a highly efficient mode of Service Integration and Management.

Advantages of using the Service Integration and Management models

SIAM Service Integration and Management can solve many management issues in organizations today. When it comes to vendor management, SIAM brings many advantages:

Creating defined roles and responsibilities for all involved teams, vendors, and partners
Establishing an adequate level of transparency, communication, and collaboration among internal and external teams
Setting a single point of authority to monitor the performances of vendors and service providers
Increasing cross-vendor communication, workflow automation, and quick resolution of issues
Helping the customer organization leadership surpass their innovation and project goals by formalizing relationships with specialist vendors eager to contribute their value
Elevating the quality of the product or service offered by the customer organization
Bypassing the costly, labor-intensive quality assurance practices needed when managing individual vendors
Establishing a company standard to measure vendor performance
Streamlining workflows and processes across the company and taking end-to-end ownership of the product so there is minimal service disturbance

What is SIAM? Everything You Need to Know 2 — Photo by Surface on Unsplash

Challenges of using SIAM models

It is crucial to understand the challenges SIAM models may bring before choosing the best option for your organization. You may replace existing problems with new ones if your systems are incompatible with SIAM best practices.

To avoid challenges, ensure you tackle the following points when creating your Service Integration and Management plan:

Misalignment of SIAM goals between key stakeholders
Lack of clear understanding of the SIAM models and application in the involved teams
Lack of concrete SIAM metrics to track project success

If the points above are not considered, the customer organization may fail to implement SIAM successfully, leading to undesirable results such as:

A higher SIAM implementation budget in comparison to results achieved
Depreciation in the quality of the product or service
Pre-existing tools and processes are better than the new SIAM model
An inability to scale the SIAM model to address company needs

Understanding the potential risks and SIAM best practices makes it possible to overcome these common challenges and mitigate them.

SIAM best practices

The goal of the SIAM model is to optimize processes for maximum efficiency, better quality, and quick delivery in teams. However, this is not always the outcome.

To succeed with Service Integration and Management, one must follow SIAM best practices. These include:

Making use of a vendor agreement: A vendor agreement ensures that the interests of both the parties, i.e., the company and the supplier, are protected.
Starting small: Test the SIAM models and SIAM technology with small projects and vendors to estimate how ready your organization is for a change.
Identifying impact: Some vendors may be more important for your company than others. Identifying strategic service providers will help you make the most of your SIAM strategy.
Adopting a relationship mindset: While not all vendors have a high impact, it is helpful to build a collaborative relationship with your external collaborators. This creates a positive environment and aligns your vendors to your company's goals.
Ensuring you have a multi-vendor approach: The entire point of the SIAM Service Integration and Management approach is to ensure the customer organization can work with multiple vendors without any problems. To make this happen, the company must create an environment open to collaborating with these vendors.
Putting the right tools in practice: Companies must choose the right service and performance management tools to ensure transparency and accountability in the SIAM model. Even if each vendor uses different tools, you should have a robust project management tool like Wrike to centralize and streamline the organization's SIAM initiative.

Why you should use Wrike for SIAM solutions

A well-structured SIAM model establishes an environment of cooperation and collaboration that can exponentially increase the output of your organization. Good SIAM models define the roles and responsibilities of internal and external teams and keep everyone aligned and on track with the project goals and timelines.

Wrike helps implement SIAM seamlessly by providing a single source of truth for cross-functional, multi-sourced teams, increasing productivity, transparency, and trust between the customer organization and vendors.

Wrike enables both parties to take end-to-end ownership of the product or service and ensures smooth operations throughout the project duration. With intuitive SIAM technology like Wrike, you can get your expected outcomes from your vendor agreements.

Wrike helps manage necessary vendor processes such as business relationship management, information security management, audit, control, and quality assurance. Using Wrike, you can ensure all your vendors and service providers, such as software development, networking hardware, and even cloud services, are streamlined and aligned.

Are you ready to set up and implement a SIAM strategy for your organization? Get started with a two-week free trial of Wrike today and get your vendor relationships on the right track.

Kelechi Udoagwu

Kelechi is a freelance writer and founder of Week of Saturdays, a platform for digital freelancers and remote workers living in Africa.

#IT #Vendor Management

Project Management 10 min read

What Are KISS Principles in Project Management?

Think about the last time you had a “Eureka!” moment. Was it because you discovered something sophisticated, complex, and hard to understand — with all sorts of bells and whistles along the way? Probably not. More likely, your last lightbulb moment made you slap your forehead and say, “Why didn’t I think of that before?” Our best innovations and ideas often come when we adhere to a principle with a clear message: “Keep It Simple, Stupid.” The emphasis on simplicity has a long history. Occam’s razor, a problem-solving principle dating to the Middle Ages, holds that all other things being equal, challenges should not be multiplied beyond necessity. In modern parlance, we say: “The simplest explanation tends to be the true one.” In business, the KISS principle serves as a reminder that we human beings tend to overthink things. We like to fix systems that aren’t broken. We like to give input where none is needed. We like to add steps to processes to make them feel more “optimized,” even if those steps will only slow things down. But what does KISS stand for, and what does it look like when applied in the real world of project management? What does KISS stand for? KISS stands for “Keep It Simple, Stupid.” The message is just as simple: Don’t make your business processes any more complicated than they have to be. You’ll just end up creating more work for yourself. Even worse, a new initiative you’re launching might produce worse results if you add too much complexity along the way. KISS serves as a handy reminder that complexity doesn’t always reflect improvement. Project managers often like to think that toying with the formula means we’re constantly getting better. But in pursuing diminishing returns, we sometimes make things worse. Leonardo da Vinci once said that simplicity is the ultimate sophistication. Improvements in business are ultimately about finding those elegant solutions that should make us slap our heads and say, “Duh — why didn’t I think of that?” What is the KISS principle in project management? In project management, the KISS principle or KISS rule is a constant reminder to emphasize the simplest way forward. You adhere to KISS when you avoid attaching unnecessary steps to a process that doesn’t need them. The principle of KISS comes from specific projects in the U.S. military. Some trace the term KISS as an acronym that dates back to the U.S. Navy in the 1960s. According to some, Rear Admiral Paul Stroop had a simple assignment: reduce the cost of naval aerial weaponry under his watch. Stroop could have looked for cheaper equipment and materials. He could have renegotiated with vendors. Instead, he realized that the processes the Navy was using were too complicated. There were too many steps, too much red tape. To simplify, he set an example by asking the people under him to adhere to the acronym: Keep It Simple, Stupid. Another source traces the origins of the KISS project to Kelly Johnson, lead engineer at Lockheed Skunk Works. Johnson let the designers at Lockheed know their designs had to be simple enough that a soldier in a combat situation with basic training and tools should be able to fix it. In battle, there was no room for complexity. Wherever KISS started, the principles hold true today — no matter what kinds of projects you manage. “Keep It Simple, Stupid” examples But that’s the Navy. But what is the KISS principle like when used in business? Consider the example of Tesco, a UK supermarket with a reputation for innovation. Before rolling out one of these famous innovations, Tesco applies three questions: Is the innovation better for customers? Is the innovation cheaper for Tesco? Is the innovation simpler for staff? They’re not game-changing questions. They’re not complex. In fact, they’re all head-slappingly simple. Yet by implementing these questions consistently, Tesco identifies great new ideas and throws out the ones that don’t keep things simple. “Tesco’s secret sauce for innovation simplification was, appropriately, astonishingly simple: the company made people — and held people — accountable for simplicity,” writes Michael Schrage for the Harvard Business Review. “Keep It Simple, Stupid” examples aren’t limited to grocery stores, however. When asked about his “business success formula,” systems manager Thad Eidman said it boiled down to a four-step process: Get a customer Make them happy Get a referral Repeat There’s a reason “KISS” isn’t “KIS.” The final “s” serves as a reminder that as human beings, our knowledge and intelligence have limits. If a simple solution works, our interference can sometimes complicate and distort what would otherwise be an elegant way to handle business. KISS serves as a reminder to remain humble in the face of what actually generates results. Advantages of using the KISS rule Simplicity may sound obvious, but the consistent application of the KISS rule has all sorts of advantages: More emphasis on action: When you keep a process simple, it means spending less time on planning, thinking, and meeting. There are some projects that require consistent dedication to action and nothing else. An easier customer experience: At Tesco, one of the core KISS questions is whether a new innovation will be better for the customers. And if it’s not, Tesco throws the entire initiative away. If you’re just as strict about your KISS principles, you’ll make sure every new initiative passes a similar customer or team experience test. Less opportunity for problematic complications: KISS is just as useful in the worlds of IT and software engineering, where unnecessary complications only add new variables that can throw a wrench in the engine. More creativity: KISS might sound like it’s antithetical to creative projects. How are you supposed to thrive creatively when a project manager wants to emphasize only the practical elements of the project? But consider this quote from jazz great Charles Mingus: “Creativity is more than just being different. Anybody can play weird; that's easy. What's hard is to be as simple as Bach.” Sometimes, the best solutions — even in creative disciplines — are the simplest ones. KISS in software engineering Software engineers often like to point to a quote from Antoine de Saint-Exupéry: “Perfection is achieved not when there is nothing more to add, but when there is nothing left to take away.” KISS in software engineering is especially important because any unnecessary complication is an opportunity for the code to go wrong. Engineers also stick to a similar acronym, YAGNI: You Aren’t Gonna Need It. This is a warning against adding functionality that people don’t need; it only gets in the way of a simple, clear user experience. Engineers work to avoid “feature creep,” or the slow, consistent additions of new features to software that move it away from its core functionality. A software engineer might point to the best software and how simple it is. For example, Google earned its status as the top search engine, not because of its bells and whistles, but because of its minimalistic home page and delivery of the highest-quality results. In software, additional complexity has real costs. Add too many features, and the software may take too long to load. Add too many bells and whistles, and the user may find it difficult to onboard, leading to less use. In a paper on simplicity in software engineering, Ben Mosely and Peter Marks once said the following: “Considered next to testing and reasoning, simplicity is more important than either.” Their reasoning? An investment in simplicity makes any future consideration for that software easier to understand. Complexity, meanwhile, can make it more difficult to update software, add features, subtract features, or do anything that the end-user might consider an improvement. How to keep things simple with Wrike When KISS was still a new concept, project leaders could make an immediate improvement in their teams’ performance by posting the KISS mantra on the wall. These days, you might need more. Using Wrike to help with your project management efforts, you can use built-in features to perform the following: Eliminate silos by maximizing visibility across the entire team, removing the complexity of sharing files between different teams. Use Kanban boards to organize projects by simple due dates, which gives you one dashboard for reviewing everything that needs to be done today. Build an approval system that auto-assigns files to certain people for review. This will reduce the amount of “red tape” involved with every project milestone. Use your favorite apps. Wrike works well with over 400+ add-on apps, ensuring that you won’t have to use new third-party solutions if you already have a communications tool that’s working for your team. Simplicity looks easy from the outside. But on the inside, it takes real commitment. Complexity quickly crawls into our projects. We think that the more busywork we take on — the more steps we add to our personal formula — the more sophisticated our project must be. But good project management is about finding the elegant solution that simplifies rather than complicates. “Keep it simple, stupid” should be more than an occasional reminder. It should be a way of doing things that informs your actions as a project manager. Want to try using a tool that can help you adhere to the keep it simple principle? Sign up for Wrike today and see how simple project management can be.

Project Management 10 min read

Everything You Need to Know About Rough Order of Magnitude (ROM) Estimates

A rough order of magnitude estimate, also known as ROM, is an estimation of a project’s level of effort and cost to complete. ROM estimates take place early in a project life cycle and guide strategy and planning choices. In this article, you’ll learn more about ROM estimates and how they are used in project management. Plus, keep reading to discover examples and how Wrike could be used to assist in creating a template for your own rough order of magnitude. What is the rough order of magnitude? A rough order of magnitude estimate is a general estimate of a project's level of effort and cost. It's usually performed during the selection and approval stage of a project. Generally, it’s used for estimating a project budget that doesn’t have a lot of detail. Project estimating is a vital aspect of project management because it helps determine the total budget for the project and whether or not it’s feasible companywide. It also helps keep track of the project's milestones and budget at the very beginning (more on that later). A rough order of magnitude is most commonly used for project screening. ROM is typically meant to be given to executives who need a high-level overview of how much work might cost. This is especially helpful when they don’t yet have the mandate to do a deep dive into the scope and requirements of the work. Comparing the ROMs of different projects helps identify which projects should be prioritized and which ones should be shelved. It can also help uncover and prevent scope creep later on. This tool also helps decision-makers at other levels of the organization make informed choices regarding the project's complexity and costs. That information is critical for proper scope planning before project kickoff. It’s important to know that a ROM estimate is often used for information purposes at the beginning of a project and it’s suitable for use for the lifetime of the project. How to make a rough order of magnitude estimate Estimating a ROM is often thought of as an art. They are quick to make, but the trick is learning how to make them well. Those who are more experienced in coming up with these estimates may have their own way of executing this process. Regardless of how well you understand the rough order of magnitude, it is important to consider the various factors involved in developing one. These include: A guesstimate range of what resources the project will require based on the information you have on hand Opinions from experts and/or higher-ups who hold a stake in the project A variance of at least -25% to +75% Keep in mind that, when calculating ROM, the goal is to provide a rough estimate that is largely accurate even if it’s not necessarily convenient for your plans. By this, we mean you may find it tempting to choose figures on the more conservative side in order to achieve a more desirable outcome. Unfortunately, using inaccurate stats defeats the entire point of creating the estimation in the first place. Great research can help illuminate areas of your rough order of magnitude estimate where it may be tempting to let bias enter into the equation. All that being said, a ROM estimate's variance is not significant enough to deter you from creating one. A ROM estimate provides a starting point for moving forward in much the same way a budget estimate is also used to determine your base. For example, instead of just presenting single-point estimates, managers should present budgets as a range. Remember: the estimate is derived from the available information. If information is missing, you’ll have to make do with what you do know for sure and move forward from there. In fact, you can expect to improve the estimate as the project moves forward. During the planning and implementation phases, the requirements and information will be refined. As you go along, you’ll learn through trial and error what the reality of the project actually is. Rough order of magnitude techniques One technique for creating a rough order of magnitude estimate is known as a definitive estimate. A definitive estimate is a technique that involves estimating an individual project phase or task's level of effort. Planning with this information upfront makes it easier to plot out workloads on visual charts while keeping your team on the same page. This step typically takes a number of hours to complete, but it is a successful way to get an accurate idea of the time and cost of any project. Other popular techniques and procedures for estimating costs include PERT time estimation, COCOMO, and function point analysis. Program Evaluation Review Technique (PERT) PERT charts are used to plan out tasks that will take a certain amount of time to complete. They can also be used to coordinate team members. Constructive Cost Model (COCOMO)COCOMO is a regression model that can be used for estimating the various factors involved in tech and software project management. It is typically used for estimating the size, effort, cost, and quality of a project. Function Point Analysis (FPA)Function Point Analysis is a method of estimating a company's clear business significance. It helps in the evaluation, management, and control of software development. When estimating ROM, it is best to try and estimate in buckets of time and costs. Doing so helps minimize the number of, well, numbers that are required to provide a complete and accurate estimate. Rough order of magnitude examples There are two ways to think about estimating ROM. You can create effort ranges or buckets with approximate figures that any task can fit into. Alternatively, you can use historical data to guide decision-making. Here are some hypothetical rough order of magnitude examples: Creating buckets In this example, a project manager will define effort ranges such as small, medium, and large. Within each range is a total number of hours, personnel, and/or budget needed for tasks that fall in that category. For example, a small bucket may indicate that a task will take two to four hours and is relatively simple or affordable to complete. It all depends on the specific project. Here is a very simple example. Let's say you're considering eating a sandwich for lunch. You know that tasks such as spreading peanut butter and jelly onto two slices of bread would fall into the small category — low effort, low time, and perhaps even a single knife instead of two. However, if you noticed that you're currently out of bread and you know it would take 20 minutes to drive to the store, that task would fall into the medium category because it would take considerably more resources to complete when compared to the spreading task. Historical data Historical data means pulling information from past projects. These projects may have similar tasks, goals, or outlines. This information is good to have on hand in your project management solution. You can use data from projects that didn't go as well as you'd hoped in order to refrain from repeating his mistakes. You can also use data from projects that went above expectations to see where you can replicate those choices here. Let’s continue with our sandwich example. You may have found that in the past when you were craving peanut butter and jelly, it was worth it to you to make the drive. In fact, it also allowed you to run several other errands (a.k.a. projects) at the grocery store. Based on this historical data, you may find that, despite the effort involved, the payoff was worth it in the end. So choosing this path again will be profitable. First-hand experience First-hand experience refers to how experienced the person creating the rough order of magnitude is in this particular field, project type, or as a project manager in general. An expert who understands project management will likely come up with a more accurate ROM than someone on their first day of work. First-hand experience is valuable because you have plenty of anecdotal evidence to back up your estimations from other related projects. It's also helpful because it allows planners to be intuitive about the process and consider the people involved. For example, you may find that a particular supplier often experiences delays. Although the supplier representative promises otherwise, you've seen it happen time and time again. Knowing this, you can factor that into your rough order of magnitude. Now we’ve come full circle with our peanut butter and jelly project. You may have learned from first-hand experience that, despite your intense craving for it, these sandwiches aren't actually worth it for you. You may even have regretted eating them right after you finished and wished you’d opted for a turkey sandwich instead. Knowing this, you may draft an estimate that confirms the amount of resources and effort needed will not have the ROI expected and it would be better to not move forward with it after all. This information isn’t something you can necessarily track with a report. It’s simply a memory of what you’ve experienced in the past. Using this knowledge will help you make better, more informed decisions in your ROM with information you can’t find elsewhere. How to use ROM in project management Project estimation techniques help managers identify the most critical elements of a project and provide them with accurate estimates. These techniques can also be used to plan for resource allocation. It is important that you have an estimate in place before you start a project. Without an estimate, you may not know how long it will take or what resources will be needed. Cost is often one of the most challenging constraints in project management. Having enough money to complete the project is one of the most critical factors in managing it. Creating a ROM will help you understand whether or not it’s financially viable before you even begin. Another key component of a project is time. Having the ability to determine the duration of the work and when specific tasks will take place is very important to project planning. By estimating your project schedule, you can arrange for the people and resources that you need when they are needed. It also allows you to set expectations for the clients. You can create a rough order of magnitude for any project. But there are several project management situations in which it may be necessary to come up with a ballpark idea of what resources will be needed: Larger than normal projects where you will need to provide more detailed information about the project Projects that involve teams across different countries where there may be varying costs and exchange rates Projects that are customized to the client or unique to your team where the product or service is innovative and the scope of the project is being managed through Agile project management methods Even if your project doesn’t fall into one of these categories, a ROM can be used to determine whether or not it’s viable. This is helpful when you’ve got limited resources and more than one project to choose between. Using Wrike to create a rough order of magnitude template Wrike is a project management tool that streamlines the process of organizing, creating, and coordinating a rough order of magnitude. First, start by checking for any historical data from relevant projects you’ve successfully completed. All Wrike users have access to their own detailed project reports. If you have historical data, you can go straight to a more detailed cost figure. It will give you a more accurate and detailed estimate. If you don’t, continue creating your ROM. Then, start breaking the big components of the project down into smaller pieces. Some planners use the top-down approach or the bottom-up approach, both of which can be accomplished with the help of Wrike. A top-down estimating technique breaks down a project into discrete phases and tasks. This method works by estimating the overall time for the project, as well as the phases and work tasks that will be completed within that time frame. If a client tells you that the project has to be done in six months, a top-up approach allows you to estimate how much time you can dedicate to each activity within the project. A bottom-up estimate is a technique that works by estimating multiple tasks and aspects of a project. This step-by-step process combines the various estimates into one final project estimate. In project management, orders of magnitude are typically referred to as broad-brush categorizations of sizes. So use a range when adding in timelines for individual phases and expenses. Tip: don’t forget about project costs spent preparing the ROM and the project management itself. This will take up about 20% of your estimated total time allotted to the project. Next, go above and beyond by using Wrike to calculate risk. Project risk is a set of events that could significantly affect the quality or schedule of a project. It can be triggered by various factors such as unforeseen delays, budget cuts, and legal issues. By estimating the risks involved in a project, you can plan for how those risks will affect the project and develop a risk management strategy later on if you feel that the ROM is convincing enough to adopt the project. Tip: If you’re stuck, talk to your finance department to see if they can help you get a better idea of what things cost. Finally, consider what project planning may look like. Project planning for Agile projects is usually done in phases, with estimates being created initially before the beginning of the sprint. These estimates are then updated during the sprint. Estimation can also happen during a sprint retrospective, where you update the backlog based on the outcomes of the previous sprints. It can also be done during the sprint planning session. The project team is responsible for estimating projects and managing the estimates. They are also involved in the development of the project's documents and databases. Having one central hub for all project estimates makes it easier to organize and communicate your vision and ROM results. As you progress through the project, you should start to produce smaller ranges for accuracy. Over time you will reach a cap for each category that is both realistic and attainable. As the project details become more detailed, the accuracy of the ROM estimates decreases until they are no longer accurate. In conclusion The more data you have about your project, the better it is to draft current project estimates. A project estimation tool can help you build up estimates and track against actuals. It can also help you improve your estimates by recording errors and lessons learned. Discover how Wrike can help you improve your planning and execution with our free trial.

Project Management 10 min read

What is a SIPOC Diagram & How is It Used?

At first, creating a new business process seems simple. But even if you’ve identified a complete, linear path from your suppliers to your customers, you may start to notice complications. Wrangling a list of departments that need to get involved. Figuring out how to transfer a product from one department to another. Finding a way to simply codify it all so you don’t end up with 40 versions of the same basic business process document. To solve the problem of complexity, many companies turn to the SIPOC diagram. Working from a SIPOC template helps create a “blueprint” for any new business process you want to create. Done right, you’ll gain a clear understanding of what needs to happen to launch a new product or service, down to the smallest details. But it won’t work until you know how to mold that SIPOC diagram into a rock-solid plan. What does SIPOC stand for? SIPOC stands for Supplies, Inputs, Processes, Outputs, and Customers. It refers to an A-to-Z approach to the entire business process. This is useful for high-level management because it helps you document any new business process from a bird’s-eye view. You might have also heard COPIS, which is the entire process in reverse. Why start with “Customer” at the beginning? Some companies want to emphasize the customer’s experience and reverse-engineer their business process around that. For others, SIPOC’s chronological order makes more sense. Without supplies and inputs, there are no outputs and customer-facing products or services. Think of SIPOC as an essential way to distill the business process down to its core steps, from A to Z. What is a SIPOC diagram? A SIPOC diagram is a workflow chart that illustrates every stage of your SIPOC. This brings the SIPOC meaning in your business from an abstract acronym into a visualization of workflow. According to some statistics, visualization like this can boost performance by as much as 89%. In other words, SIPOC diagrams help you see a new business process before you implement it. A SIPOC process can be as comprehensive or as simple as you like. But at the very least, it will need to include a component part of each of the following: Supplies: What are the tools, products, services, or raw materials that need to be a part of the business process to create an end result for your customer? List them all here. Inputs: Are there data inputs that need to go into the process at this stage? What do you need to add or modify to the existing supplies? Processes: Here’s where you’ll list the essential functions of your business as you carry out the new directive. What processes can be automated? Which ones will be manual? Will you have to hire new workers to handle the processes and inputs? Answer those questions here. Outputs: This is where you should think about maintaining standards, as well as installing processes for quality control. Any testing you do with your products/services before they go to market will take place here. Customers: This stage doesn’t simply refer to the point of purchase. Think about the entire customer experience. In fact, you might even want to consider doing a few COPIS exercises just to get a sense of what you want the end result to look like before you build the process around it. SIPOC diagram example We’ve put together a step-by-step illustration of a SIPOC diagram below: Keep in mind that a SIPOC can be as big or as small as you need it. This is just a high-level diagram dividing the key components into five steps. But under every step, you can list all sorts of essential variables to create the comprehensive results you’re looking for. If that’s too abstract, let’s take a simple but specific example. Let’s say your business process is going to the grocery store. Here’s what that could look like: Supplies: Fully stocked grocery store, address of the grocery store, car to drive you there, money to purchase groceries. Inputs: List of ingredients. Scheduling a time to visit the store. Process: Purchase groceries, return home, put groceries away. Outputs: List of recipes. Food preparation. Customers: Happy, well-fed family. It might not translate to something as complex as a 500-employee business. But a trip to the grocery store helps solidify exactly what a SIPOC diagram is: a blueprint for getting things done. What are the benefits of SIPOC diagrams? Dwight D. Eisenhower once said that plans are worthless, but planning is essential. The idea? You may need to adapt your plans when the rubber meets the road, but the act of preparing plans is what prepares you to handle any obstacles. The SIPOC diagram forces your business to do the essential work of planning. By creating a SIPOC diagram, you see the entire workflow from beginning to end. Along the way, you can fish out blind spots, brainstorm new ideas, and reduce red tape that isn’t necessary to create the end results you want. But the act of sitting down and planning isn’t the only benefit of SIPOC diagrams. Here are a few more to consider: Cost savings: There’s a reason you don’t build a house until you have blueprints in place. When you make a mistake in the blueprints, you can erase them and not lose thousands of dollars in labor and costs. Think of SIPOC as your blueprint for business processes and you’ll understand why you want such a clear picture of a business process before you begin. You’ll identify many of the potential bugs before they have the potential to cost you serious money. Beginning the process: With SIPOC diagrams, you’re already beginning the planning stages of developing your business. You’re already brainstorming suppliers, considering which departments need input, and thinking about the key people who will be part of the process. When you’ve effectively built out a SIPOC diagram, your end result will be a blueprint that’s ready for feedback and adjustment. Making strategic decisions: Along the way, a SIPOC forces you to see business processes as a result of cause and effect. Some data suggests it helps you identify patterns as well. This puts you in the position of making strategic decisions at the outset. How will the supplies you acquire affect which customer segments you target? Will you need to hire people to provide key inputs that you don’t already have at your company? What challenges should I be aware of with SIPOC analysis? A SIPOC analysis is low-cost and high-benefit — it only takes advanced planning. But it doesn’t mean there won’t be challenges along the way. One key challenge: untangling knots. With a SIPOC diagram, you have to answer cause-and-effect questions. And sometimes, it can be difficult to handle these without the ability to experiment in action and see which solutions work best. The temptation is to skip the SIPOC analysis and get straight to taking action, but this can lead to its own problems. The best way is to complete the SIPOC as much as possible. You might also refer to a Gantt chart to help supplement this issue. Another key challenge is communication. You have to keep key decision-makers in the loop with SIPOC diagrams, and if you make business process decisions without their input, it can not only introduce complications but friction. Visualizing data has a way of making communication effective — after all, a picture is worth a thousand words. Harvard Business Review refers to data visualizing as “visualizations that really work.” How is SIPOC used in project management? You’re probably already getting a grasp of how a SIPOC diagram can help make project management more streamlined, efficient, and stress-free. But, there are a few more things to keep in mind to reap the benefits for your projects. Use specifics: Don’t say, “we will need enough graphite to put in our pencils.” Get specific about how much graphite you need if you’re building pencils. A good template for handling the Supplies and Inputs variables is to use formulaic statements. For example: “We will build X-quantity of Y-material into Z-units before moving to the next stage of the process.” Don’t leave the work of estimating quantities to the future. That’s what SIPOC is here for: to create your blueprint. Document the types of customers you have and what they need: Project management without an emphasis on the customers’ experience is ultimately an internal-facing process. But it’s not completely SIPOC unless you include customer considerations. Make sure you know who your target customer is. What are their concerns? What problems are you solving? Knowing these questions and feeding them into the rest of the process will help you innovate in ways that wouldn’t be apparent if you were solely focused on the first four stages. Record your progress: Even if you don’t nail a SIPOC analysis on the first try, record your progress every time you and your team sit down to discuss the details. Remember to think of your SIPOC diagram as a blueprint. You wouldn’t get halfway through sketching the plans for a house and then say “we’ll remember this when we sit down again.” Document every step you’ve specified, including any key numbers and people you’ve identified as part of the new process. Gather feedback: Once you have a SIPOC ready to go, it’s time to involve any key decision-makers who might have a say, even if they’re not going to make key decisions in the process itself. Take a scientific approach. Your goal is to poke holes in the process and come up with solutions before implementation. Once you have a thoroughly vetted SIPOC diagram in hand, you’ve defined your new business process in full. This isn’t to say it will go perfectly smoothly when you launch. But when something does go wrong, you’ll have a much clearer picture of what needs to be done to get back on track. Rather than making your processes rigid, the end result of a SIPOC diagram is that you make yourself more flexible and adaptable. You’ll build a business that can adjust on the fly. You might throw out old plans once in a while. But if you approach it the right way, the simple process of planning can take you anywhere.

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