The Traits of BPM: Six Fundamentals Necessary for Successful Process Improvement Initiatives

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The Traits of BPM: Six Fundamentals Necessary for Successful Process Improvement Initiatives

  1. 1. The Traits of BPM: Six Fundamentals Necessary for Successful Process Improvement Initiatives Gaining A New Awareness of Your Business… Howard Webb Director, Advisory & Consulting Prolifics
  2. 2. ABOUT PROLIFICS ADVISORY AND CONSULTING SERVICE 2
  3. 3. Advisory & Consulting Services 3 The purpose of Advisory & Consulting is to help guide, coach and equip our clients to succeed in improving their business processes through the discipline of Business Process Management.  BPM Readiness Assessments (1 to 2 weeks)  Establishment of BPM Centers of Excellence (Office of BPM)  Strategic BPM Planning (Business and IT)  Facilitated Process Improvement Workshops  Business Analysis in the context of process improvement  Training and guidance in the use of Blueworks Live  Identification and definition of business rules  Data Architecture and Business Process alignment  Ongoing, longer-term BPM consulting/mentoring engagements  Industry-specific expertise Services We Provide
  4. 4. WHAT IS BUSINESS PROCESS MANAGEMENT? 4
  5. 5. Business Process Management 5 BPM is Not a Methodology, a Standard or a Technology, nor is it a Project with a discrete start and stop. Six Sigma Lean Lean Sigma Balanced Scorecard Kaizen Rummler-Brache TQM Etc… Etc… ISO 9000 Websphere BPM 8.0 Pega Aris
  6. 6. Business Process Management 6 “Business Process Management (BPM) is a holistic management approach that encompasses all aspects of a business including Strategy, People, Processes and Technology, in order to deliver value to customers and other stakeholders.” BPM is about fundamentally changing the way you view and manage your business “Operational Transformation is the next frontier of business advantage.” Peter Fingar and Joseph Bellini
  7. 7. Current Trends 7 “Broadly speaking, investing in better coordination and management of process work has been on the rise, while incremental approaches are slowly declining, or at least being integrated into larger, organization-wide BPM initiatives..” * bpm six sigma Lean six sigma Enterprise architectureService oriented architecture *BPTrends, The State of Business Process Management, Celia Wolf, Paul Harmon : www.bptrends.com
  8. 8. Challenges  Limited resources  Competing priorities  Standardization (methods, technologies)  Increasing demands from both the business and customers  Management demand to show ROI  Gain process maturity and foster an environment of continuous improvement  Struggling with complexity and change 8
  9. 9. Realizing Your Business Strategy  The only way organizations can deliver value to their customers is via cross-organizational business processes  How well we execute our business strategy is determined by how well we manage and execute our business processes 9
  10. 10. Traditional Management Model  Redundant activities/duties  Misaligned incentives/ compensation  Isolated measurement model  Limited reuse  Multiple breakpoints  Multiple moments of truth  No cross-organization controlCorporate Dept A Etc.Dept B Departmental Silo Perspective Traditional Hierarchical Management Customer Customer
  11. 11. The Customer Experience 11  Discontinuous thinking leads to disjointed customer experiences… How many people or departments did I have to talk to just to get my issue resolved? “Before I transfer you, is there anything else I can help you with?”
  12. 12. Process-Oriented Model  Begin and end with the customer experience in mind  Incentives based on end-to- end process performance  Fewer handoffs, fewer breakpoints  Few moments of truth  Process measures providing visibility Corporate Function A Etc.Function B Cross-Departmental Perspective Customer Process 1 Process 2 Process 3Customer
  13. 13. “At the heart of business process change is the notion of discontinuous thinking – of breaking away from the outdated rules and fundamental assumptions that underlie operations. Unless we change these rules, we are merely re-arranging the deck chairs on the Titanic.” Mike Hammer Changing the Business Model
  14. 14. Recognize the Signs of Process Failure  Even the best of processes become out of date and require modification  Strategy not embraced, not clearly articulated  Unclear, limited communication mechanisms  Top down and bottom up  Functional metrics (or none at all)  Manual controls (checking and re-checking)  Personal systems – Technology not keeping pace  Spreadsheets  Desktop databases  Process workflow implemented through email systems  Staff working excessive overtime  Poorly or non-integrated systems  Frequent reorganizations
  15. 15. “We trained hard, but it seemed that every time we were beginning to form up into teams, we would be reorganized. I was to learn later in life that we tend to meet any new situation by reorganizing; and a wonderful method it can be for creating the illusion of progress while producing confusion, inefficiency, and demoralization.” Petronius (c. 27-66 AD) • Aid to Nero - Emperor of Rome Recognize the Signs of Process Failure
  16. 16. Business needs to become more ‘Self Aware’ 16 In Psychology The Gestalt ‘Cycle of Awareness’ is the notion that there is a process by which people start with a PERCEPTION of their environment This is followed by an AWARENESS of their actual needs and desires
  17. 17.  Business should be no different  People have a PERCEPTION of how things (processes) are occurring within their organizations  AWARENESS comes when we begin to examine those processes and find that they may not have been operating anything like our perceptions  We were unaware:  How long things were actually taking  How much waste we were generating (time, cost, resources)  The opportunities we were missing  Our customers’ opinions of our products or services were not what we thought  Our processes were not really aligned with our business strategy  Losing a handful of key people could bring our business to a standstill  How reliant we were on personal systems (e.g. spreadsheets, email) Business ‘Awareness’
  18. 18. Business ‘Awareness’  With new insights, business leaders can begin making decisions with greater understanding, awareness and confidence  Decisions about what needs to change to realize goals and objectives  Which areas of the business are causing the greatest constraints on performance  How best to apply technology  How to organize to achieve improved process execution  What needs to be done to ensure customer satisfaction  How to maintain a competitive advantage in today’s global market  How to react quickly and efficiently to opportunities and external threats
  19. 19. Six Key Areas of Business Awareness 19 Strategy Process Performance Customer Change Technology
  20. 20.  Gain and share understanding of your business strategy, goals and objectives  Make strategy real from senior management through everyone in the enterprise  Clarify, Communicate, Execute  When decisions are made whether it be a reorganization or investment in new technology, FIRST understand how those decisions:  Fit into the business strategy  Will help achieve the goals and objectives  Strategy Awareness is when everyone in the organization can state explicitly where you are going and:  Why their role is important  How they contribute to strategic success Strategy Awareness
  21. 21.  Process Awareness is knowing how your processes ARE being performed, not just how you THINK they are being performed  How long they take  How much they costs to execute  How many people are needed  What controls are in place  How standard the tasks are  Before making any business or technology decisions…  Understand your processes  Model (visualize) them for clarification and communication  Verify what and how things are being done Process Awareness
  22. 22. Process Models  Processes are invisible  They need to be modeled (visualized)  For understanding and clarity  To communicate what is actually happening  As a baseline for change…where we are today  To provide direction for where you want to go  Process models are the blueprint of your business  Would you build a house without a blueprint?  Why would you attempt to run a multi-million dollar business without one?
  23. 23. “Give the power to manage and change processes to your business process owners …and focus on how to enable faster change.” Business Process Management –The Third Wave By Howard Smith and Peter Fingar  Initiate, encourage and back process change  Understand what the process should do  Promote process value  Define and monitor process performance  Work for the best interest of the enterprise (end-to-end process) not just the department Process Owners
  24. 24. Organize Around Process Teams  Fewer handoffs means fewer break points  Teams cross-trained to support process activities vs. individual ‘heroic’ efforts  Team responsibility vs. blaming individuals  Process owner responsible for empowering teams  Teams are rewarded based on process performance
  25. 25. Performance Awareness  Performance Awareness is the discipline to identify key performance indicators (KPI’s), actually measure process performance AND tie it to continuous improvement  A recent industry survey* revealed a shocking 50% of respondents say they never or rarely define performance measurements  A stunning 65% say that “dedicated” process managers never or rarely use data to measure the success of their process execution! *Source: BP Trends, February 2010: “The State of Business Process Management 2010”.
  26. 26. Measure Success “When you can measure what you are speaking about and express it in numbers you know something about it ; but when you cannot measure it, when you cannot express it in numbers, your knowledge is of a meager and unsatisfactory kind.” Lord Kelvin
  27. 27. Individual Performance 27
  28. 28. Team Performance 28
  29. 29. Business Monitoring 29
  30. 30. What Should be Measured  Your customer doesn’t care about  Your production costs  How many calls your call center can take per day  About your cool new data warehouse  They care about getting the products and services they asked for, at a fair price, when they were told they would get them…and when they need help, they get it  Don’t ask me “Is there is anything else I can help you with?” when you haven’t helped me at all!  Start with the Customer… Measure results not activities
  31. 31. Customer Awareness  Look at your business through the eyes of your Customer…Would you want to do business with your company?  What is your organization’s definition of a Successful Customer Experience…is it the same as your customer’s definition?  Design your process around your customer…they are the reason you have a job
  32. 32. How we see ourselves is often different than how our customers see us…
  33. 33.  Start looking Outside In vs. Inside Out  Outside In thinking gives a whole new perspective on your business  Does the customer care that we are doing this? Change Your Perspective ‘The Outside-In Corporation’ – Barbara Bund
  34. 34. Tear Down the Silos Hours, Days, Weeks, Months? Who is your Customer? Sacred Cow
  35. 35. Simplify Business Processes  Complexity leads to  Us doing the wrong things  Losing sight of the customer  The customer losing interest in us “Simplicity is the ultimate sophistication” Leonardo da Vinci  Simplifying business processes means enabling and managing business decisions  Extract business rules from business processes  Encapsulate business rules in decision models  Enable ownership of processes and decisions
  36. 36. Understand what is important to your Customers Change Your Perspective
  37. 37.  Awareness that things over which you have no control are going to change what you do  No matter how good you think your business is today, things change  Market conditions change  Political environments change  Your processes become stale, under-performing  Continually monitor your processes in the context of both internal and external forces  Your competition is not sitting still…do you want your customers as badly as they do?  Do you want someone else to take your job because the process needs improving? Change Awareness
  38. 38.  Recognizing the need to change is a first step in recognizing the need for Business Process Management The Need to Change Internal Forces External Forces
  39. 39. Take Action 39  Take swift and informed action  Show return and business value quickly  Quick wins are essential  Don’t fall into analysis paralysis and don’t get bogged down on ‘future state’ debates  You don’t have to boil the ocean…Think big, act small  Focus on the greatest constraint based on your process objectives  Theory of Constraints ‘The Goal’ – Eli Goldratt But…you Must understand your processes for it to work.
  40. 40. Change and Decision Management 40
  41. 41. Technology Awareness 41
  42. 42. Key Components of Business Process Management  Model Business Processes  BLueWorks Live • Scoping • Visualize Processes  Orchestrate Process Workflow  Business Process Manager 8.x • Adding execution components to business process models • Implementing process workflow  Externalize Business Rules  WebSphere Operational Decision Manager (ODM) • Implementation and management of business rules  Monitor Performance  Websphere Business Monitor  Cognos 42
  43. 43. Typical Process Problems 43 Executive Management Customer Service Invoice Reconciliation Teams Finance and Ops Account Administration 1. Unstructured Tasks and Communication (ex: Paper or email) 2. Inefficient Working Environment Spans Systems 3. Inconsistent Prioritization 4. Incomplete or Inaccurate Data Flow Between Systems 5. Lack of Control Over System and Business Events (Exceptions) 6. Poor Visibility into Process Performance 1 2 3 5 4 6 1 2 3 4 5 6
  44. 44. BPM Brings Order to the Chaos 44 Executive Management Customer Service Risk Management Teams Finance and Ops Account Administration 1. Automate workflow & decision making 2. Reduce errors and improve consistency 3. Standardize resolution across geographies 4. Leverage existing systems and data 5. Monitor for business events and initiate actions 6. Real-time visibility and process control Customer Benefits: • Huge Reduction in Manual Work, Errors • Faster, More Consistent Issue Resolution • Easier to Manage the Business • Consistent Case Handling 1 2 3 4 5 6
  45. 45. Parting Thoughts  Processes are invisible, they need to be modeled to be understood and communicated  Process ownership is critical to success  Externalize your business rules  Measure and monitor process performance  Manage business processes not departments  Leverage BPM technologies for maximum process improvement  BPM is a journey not a destination  Always focus on the Customers Perspective 45
  46. 46. Parting Thoughts 46 “There is only one boss. The customer. And he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else.” Sam Walton
  47. 47. 47 And visit these useful links on the Prolifics Web site:  Case Studies: http://www.prolifics.com/case-study-technology.htm  Webcasts: http://www.prolifics.com/webcasts.htm  Podcasts: http://www.prolifics.com/podcasts.htm  Service Brochures: http://www.prolifics.com/service-brochures.htm  Technology Blog: http://expert-tech.blogspot.com  Twitter: http://www.twitter.com/prolifics  Prolifics TV: http://www.youtube.com/prolificstv Howard Webb practice director, advisory & consulting prolifics | office: (646) 380-2948| mobile: (314) 602-3341 Howard.webb@prolifics.com | yahoo IM: hwebb_prolifics

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