Introduction to the BPM Life Cycle Maturing BPM Efforts Dr. Michael zur Muehlen Stevens Institute of Technology Center for Business Process Innovation April 16, 2011

2

“If it doesn’t make three people angry, it is not a process”

Beyond Reengineering (Michael Hammer, 1996)

3

§  Analysis Frameworks provide context §  Transactions perform work, Analytics manage work §  The diagram isn’t everything §  Improve your capabilities in 3 areas:

§  Process Maturity §  Process Management Maturity §  Organizational Maturity

Key Takeaways

Analyze

5

5

“Most businesses have just 3 core processes: 1.  sell stuff 2.  deliver stuff, and 3.  making sure you have stuff to sell and deliver”

Geary Rummler

Enterprise As A System

Enterprise

Management System

Operational System

Operational Information System

Suppliers

Goods and Services

Money

Custo-mers

Planning and Control System

Mgt. Information

Dire

ctiv

e

Management Information

System R

eporting

Organizing Content: Framework

7

Contracting

Purchasing

Strategy & Governance

Receiving

Invoice Auditing

Accounts Payable

Marketing

Sales

Shipping

Billing

Accounts Receivable

Warehousing

Support Processes (Accounting, HR, IT etc.)

Design

9

The Process Problem

Source: WW Grainger

Process Abstraction Levels

Process Groupings

Business Activities

Core Processes

Business Process Flows

Detailed Process Flows

Level A

Level B

Level C

Level D

Level E

Level F

Objectives Business Activities

Delivery Units Products

Processes Systems

Scorecard

Sub Processes Roles System Functions Operational Process Flows

Detailed Processes Transactions Detailed Roles

Delivery Teams

Ownership Services Process Groupings

Core processes

Source: British Telecommunications plc 2006

What

How

Implement

12

12

“Vision without execution is hallucination” Thomas Alva Edison

13

The Developer’s Perspective

14

The Architect’s Perspective

15

What the Customer Wants

Manage

17

“All models are wrong, some are useful” George P.E. Box

Process Analytics

Enterprise IT Infrastructure

ERP ECM BPM

Legacy

EAI

Custom

Business Process Analytics

Business Activity Monitoring

Dashboards

Process Intelligence

Simulation

Data Mining

Optimization

Event Detection & Correlation

Event Bus

Process Controlling

Historical Analytics Rule-based

Notification

External Event Sources

Processing of Context Events

Improve

Targets

•  Improve your Process Performance •  Improve your Process Management Performance •  Improve your Organizational Performance

Theory of Constraints

1.  Define the goal - performance or compliance? 2.  Define key metrics – cycle time, wait time, resource utilization 3.  Identify the constraint – find the bottleneck activity/resource 4.  Exploit the constraint – maximize use of the bottleneck 5.  Subordinate to the constraint – limit upstream throughput 6.  Elevate the constraint – invest and improve 7.  Avoid inertia – start the process again

Process Management Maturity

Governance Method IT People CultureStrategic Alignment

Process Roles and Responsibilities

Process Design & Modeling

Process Skills & Expertise

Process Values & Beliefs

Process Improvement Plan

Decision Making Processes

Process Implementation &

Executions

Process Education & Learning

Process Attitudes & Behaviors

Strategy & Process Capability Linkage

Process Management

Standards

Process Improvement &

InnovationProcess Knowledge

Leadership Attention to

Process

Process Output Measurement

Process Metrics & Performance

Linkage

Process Control & Measurement

Process Collaboration & Communication

Responsiveness to Process Change

Process Architecture

Process Management

Controls

Process Project & Program

Management

Process Management

Leaders

Process Social Networks

Process Customers & Stakeholders

Business Process Management Maturity

Process Design & Modeling

Process Implementation &

Executions

Process Improvement &

Innovation

Process Control & Measurement

Process Project & Program

Management

Source: Rosemann & De Bruin 2008

Organizational Performance

FINANCIAL

PROCESS

LEARNING & GROWTH

CUSTOMER

Value Proposition

Operations Customer Innovation Regulatory / Social

ChangeAgenda

Strategic IT

Strategic Job

Families

InformationCapital

HumanCapital

OrganizationCapital

Primary Objectives

BPM Coordinates Processes

Processes Enable Value

Value Generates Cash Flow

Maturity is determined by

People and Technology

BPM shapes and is shaped by

organizational maturity

Organizational Performance

PROCESS

LEARNING & GROWTH

CUSTOMER

Value Proposition

Operations Customer Innovation Regulatory / Social

ChangeAgenda

Strategic IT

Strategic Job

Families

InformationCapital

HumanCapital

OrganizationCapital

BPM Coordinates Processes

Value and Fiscal Responsibility are

in balance

Organizational Mission is Paramount

Maturity is determined by

People and Technology

BPM shapes and is shaped by

organizational maturity

Fiscal Constraints

FINANCIAL

MISSION

Mandated Objectives

BPM Life Cycle

Stra

tegy

Re

visi

on

Process Metrics

Export for other reporting purpose

ProcessImplementation

ProcessDesign

Process Enactment

Process Evaluation

Process Models

Impl

emen

ted

Proc

esse

s

Mea

sure

s fo

r Im

prov

emen

t

Process Metrics

Mea

sure

-m

ents

Process Monitoring

Goal Specification,Strategy Definition

Targ

et M

etric

s

Modeling and Specification

Build Time / Integration

Run Time / Task and Resource

Allocation

Business Activity Monitoring

Process Mining / Warehousing

OrganizationalAnalysis

§  Analysis Frameworks provide context §  Transactions perform work, Analytics manage work §  The diagram isn’t everything §  Improve your capabilities in 3 areas:

§  Process Maturity §  Process Management Maturity §  Organizational Maturity

Key Takeaways

Thank You!