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  • 1. Business Process Management: Closing The Gap Between Rigor And Relevance By Steve Tieman Estee Lauder Companies
  • 2. Overview
    • Background
      • Est ée Lauder Companies (ELC)
    • Early BPM Implementation Of Product Lifecycle Management
      • SOA Before The Term Was Known At ELC
    • Enterprise Wide BPM And SOA
      • Strategic Modernization Initiative (SMI)
    • Leveraging BPM Throughout ELC
    • Selling BPM And SOA To Senior Management
    • Conclusion
  • 3. Background On Estee Lauder Companies (ELC)
    • One of the world’s leading manufacturers and marketers of quality skin care, makeup, fragrance and hair care products
    • Formed in 1946 by Mrs. Estee Lauder in Queens, NY
    • Annual sales of over $7.04 billion (FY 2007)
    • Products sold in over 130 countries and territories
    • Over 25,000 products in the brand portfolio
  • 4. Background On Estee Lauder Companies (ELC): Brands
  • 5. Part 1 Early BPM Implementation Of Product Lifecycle Management At Estee Lauder Companies
  • 6. Part 1─Early BPM Implementation Of Product Lifecycle Management: Scope
  • 7. Part 1: Organization Scope
    • 50 Organizations
    • 25 Brands
    • 36 Affiliates
    • Over 5600 Concurrent Projects
    • 20 SKUs Launched Each Day
  • 8. Part 1: High Level Event Network
  • 9. Part 1: Benefits & Enablers
    • Service-Oriented Architecture: Major Cost Of Goods Improvement
      • Item Master
      • Bills Of Materials
      • Recipes
      • Component Specifications
      • Artwork Mechanicals
      • Direct Material Sourcing/Contracts
    • Business Process Management: Major Speed To Market Improvement
      • 38 Workflow Driven Major Sub-Processes
      • Common KPIs
      • Common Back-Office Organizations
      • Common Measurement And Reporting Platform
    • Automation: Major Productivity And Accuracy Improvement
  • 10. Part 1: Challenges To Further Leverage BPM And SOA
    • Key Improvement Opportunity Is In The Upfront Planning Process
      • Current process is documented and understood to be sub-optimal
      • ARIS/SOA platform can be leveraged as enablers
    • Challenge Is To Implement BPM Within The Creative Organizations
      • Significant cultural challenge
      • Concern that creativity may be compromised
      • Difficult to fault current practice based on 50 years of continuous success
    • Collaborative approach is promising, but . . .
      • Too slow based on the current organization structure : ”hand offs”
      • Very difficult to execute as the brand grows larger
    • Can BPM Be Used To Drive Changes To Organization Structures?
      • How?
      • Suggestions?
      • Success Stories?
  • 11. Part 2 Strategic Modernization Initiative (SMI): Enterprise Wide BPM & SOA At Estee Lauder Companies
  • 12. What Is SMI?
    • The Strategic Modernization Initiative (SMI) is Estee Lauder’s first implementation of SAP
    • Key enabler to support sales growth to $10 billion and beyond
    • Five major business processes are being standardized under SMI:
      • Master Data Management
      • Budget To Report
      • Procure To Pay
      • Demand To Build
      • Order To Cash
    • Pilot (Aveda) Went Live In May 2007
  • 13. Business Objectives For SMI
    • Improve Efficiency (SOA And BPM)
      • Reduce the number of hand-offs
      • Minimize the time spent on compliance activities
      • Shorten time and effort by reusing “libraries” and standardized templates
      • Implement automated work flow processes
      • Reduce waste and rework by implementing clear roles, responsibilities, and processes
      • Minimize tactical tasks and focus on higher value strategic activities
    • Improve Effectiveness (SOA)
      • Real time availability of accurate information through one global source
      • Leverage benchmark analyses
    • Improve Operations (SAP Platform)
      • Better customer service
      • Better forecasting
      • Better collaboration with Suppliers and Customers
  • 14. SMI Application Landscape
  • 15. ELC Approach To BPM And ARIS As The Entrance Point To SOA
    • Identify All Processes
      • Start with existing leading practice models, e.g., SCOR
      • Adapt these models to your company using ARIS
      • Integrate the adapted models to SAP using ARIS EPC (Event Process Chain) methodology integrated with Solution Manager
    • Subdivide Processes Into Sub-Processes
      • Identify process strings based on valid business practices
    • Normalize Sub-Processes To Become Services
      • Identification of all the process steps is a product of the EPC development process in ARIS
      • Process steps are linked to transactions in Solution Manager
      • Ensure that a transaction is limited to a single process step
  • 16. Scope Of The Business Processes Standardized Within SMI
    • 6 process groupings:
      • Master Data Governance
      • Budget To Report
      • Procure To Pay
      • Demand To Build
      • Demand Planning
      • Order To Cash
    • 114 major primary processes
      • E.g. Manage Procurement Contracts And Requests For Quotations
    • 680 fundamental integrated processes ─Process Strings
  • 17. Benchmarking Experiences During Past Two Years
    • Benchmarked BPM With 13 Major Corporations
      • All have implemented SAP
      • All have established BPM organizations
      • All are anticipating SAP upgrades in next 1-2 years
    • Broad Conclusions
      • Existing SAP implementations are poorly documented
      • Increased BPM rigor is anticipated as a requirement for success
      • Difficult to get senior management “buy-in” for longer than a “one time” effort
    • Can rigorous BPM be implemented without another “Y2K or SOX”?
  • 18. Part 3: Vision For The Next Steps Leveraging BPM Throughout ELC
  • 19. Vision For The ELC Business Process Management Landscape
  • 20. Conventional Business View Of The Aveda Call Center Process
  • 21. Conventional Technical View Of The Aveda Call Center Application
  • 22. Conventional Management View Of The Aveda Call Center Key Performance Indicators
  • 23. Conventional View Of The Aveda Call Center Infrastructure Monitoring Metrics
  • 24. Changing Conventional BPM Practice For Application Management
    • Challenge: No Effective Common Language Among Technical And Business Team Members
      • Business Process Procedures are in words. Words that are misinterpreted, not kept current with changes, and at too high a level to be actionable by technicians
      • Many specialists must be assembled and “socialized” in order to solve a performance or functional issue within a single process string. They have to have visibility of the entire process to be able to merge these technical “silos”
    • Result: Agility is limited, cross training is cumbersome so personal growth is compromised, and development costs are higher because there is very limited transparency between the process and infrastructure
  • 25. Changing Conventional BPM Practice For Business Team Members
    • Challenge: Measurements Of KPI Actual Performance Are Not Available On A Real Time Basis And Do Not Effectively Support Root Cause Analysis
      • Consist of periodic reports that require significant manual work to generate
      • Not linked to actual transactions and individual end users
    • Result: Cannot effectively determine why the KPIs are not met or analyze reasons for differences between end user performance because there is very limited transparency between the process and the KPIs .
  • 26. Changing Conventional BPM Practice For Infrastructure Operations
    • Challenge: Availability And Performance Metrics Do Not Relate To The Business KPIs
      • Based on infrastructure, not business process
      • Based on averages, not maximums
      • Based on synthetic transactions, not end user reality
      • Existing diagnostic tools do not support BPM
    • Result: Proactive monitoring of the environment is not optimal because there is very limited transparency between the infrastructure performance metrics and the KPIs .
  • 27. Conventional Business And Technical Views Of The Call Center Business Process: How Can This Be Mapped ?
  • 28. Answer: Enhance The EPC To Support All Stakeholders, i.e., Implement Business Process Monitoring
  • 29. Part 4: Selling BPM & SOA To Senior Management Driving A Stand Alone ROI
  • 30. Driving A Stand Alone ROI
    • BPM And SOA Are Direct Enablers For 50% Of The SMI Business Case
      • Current BPM/SOA is focused in Sourcing And Financial organizations
    • Incremental Benefits Within The IT Organization
      • IT Employee efficiency
      • Improved service to the user community
    • Incremental Benefits Within The ELC User Community
      • Continuous process improvement can drive productivity increases of 200%-300% for system intensive tasks based on PLM experiences
      • SOA enables leveraging the work products from the ELC Suppliers
    • Current State Of Business Process Monitoring Technology May Now Support The Vision
      • Exploring ARIS PPM/E2E Bridge Platform
      • Exploring HP/Mercury Platform
      • Exploring Computer Associates Platform
      • Others To Be Discovered
  • 31. Conclusion
    • Thanks to:
    • Estee Lauder Companies
    • IDS Scheer
    • 5th International Conference on Business Process Management
      • Dr. Michael Rosemann
      • Conference Attendees

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