Bpm overview

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This is a typical management approach, for any business entity. It has been proven a success in many corporations.

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Bpm overview

  1. 1. The YTL Corporate Performance Management - preliminary proposal
  2. 2. QUOTE “If you don’t know where you’re going, you’re probably not gonna get there.” Forrest Gump
  3. 3. The Project Team Masilamani R- Project Leader Datuk Dr Rosti Saruwono-Consultant Vasudevan-Consultant Kumar Nagalingam Tahna -project manager Sham-project Assistant, and Two in-house Team Members
  4. 4. Business performance management Business performance management is a set of management and analytic processes that enable the management of an organization's performance to achieve one or more pre-selected goals. Synonyms for "business performance management" include "corporate performance management" and "enterprise performance management”
  5. 5. QUOTE 'Organisations should manage performance with applications designed for business in a simple and easy to use manner that should not be hampered by IT resources or priorities' -Mark Smith, CEO/EVP,Ventara Reserch
  6. 6. Definition Business Performance Management icludes activities to ensure that goals are consistently being met in an effective and efficient manner
  7. 7. BPM Flagsheet Transform Business Objectives into KPI's ● Link Employee Performance to Business Strategies ● Execute Performance and Monitor ● Excell in Higher productivity ● Reduce Response Time ●
  8. 8. Prerequisites of KPI Before identifying the KPI's, the following requirements must be met: A predetermined organisational process Clear business objectives for the process Quantitative and qualitative measurements An active approach to finding and remodifying enterprise variances Possible corrective and enhancement actions, and Possible reporting and rewarding criteria
  9. 9. Balanced Scorecard
  10. 10. Business Performance Management Business performance management has three main activities: 1. selection of goals(this may be done throgh a 'GAP ANALYSIS' i.e. comparing the envisaged future state of the organisation to the current state) 2. consolidation of measurement information relevant to an organization’s progress against these goals, and 3. interventions made by managers in light of this information with a view to improving future performance against these goals
  11. 11. Business Performance Management The biggest growth area in operational Business Intelligence analysis is in the area of business performance management Because business performance management activities in large organizations often involve the collation and reporting of large volumes of data, many software vendors, particularly those offering business intelligence tools, market products intended to assist in this process
  12. 12.  History of BPM Since 1992, business performance management has been strongly influenced by the rise of the balanced scorecard framework to clarify the goals of an organization, to identify how to track them, and to structure the mechanisms by which interventions will be triggered  as a result, balanced scorecard is often used as the basis for business performance management activity with organizations 
  13. 13. Tool categories commonly used for business performance management * OLAP — online analytical processing, sometimes simply called "analytics" (based on dimensional analysis and the so-called "hypercube" or "cube") * scorecarding, dashboarding and data visualization * data warehouses * document warehouses * text mining * DM — data mining * BPO — business performance optimization * EPM — enterprise performance management * EIS — executive information systems * DSS — decision support systems * MIS — management information systems * SEMS — strategic enterprise management software
  14. 14.  Components of BPM  set of management and analytic processes, supported by technology, that enable businesses to define strategic goals and then measure and manage performance against those goal  Core business performance management processes include financial planning, operational planning, business modeling, consolidation and reporting, analysis, and monitoring of key performance indicators linked to strategy 
  15. 15. Components of BPM Various methodologies for implementing business performance management exist. The discipline gives companies a top-down framework by which to align planning and execution, strategy and tactics, and business-unit and enterprise objectives Reactions may include the Six Sigma strategy, balanced scorecard, activity-based costing (ABC), Total Quality Management, economic value-add, integrated strategic measurement and Theory of Constraints.
  16. 16. Components of BPM The balanced scorecard is the most widely adopted performance management methodology Methodologies on their own cannot deliver a full solution to an enterprise's CPM needs. Many pure-methodology implementations fail to deliver the anticipated benefits due to lack of integration with fundamental CPM processes
  17. 17. Metrics and key performance indicators Some of the areas from which a financial service company management may gain knowledge by using business performance management include: * customer-related numbers: o new customers acquired o status of existing customers o attrition of customers (including breakup by reason for attrition)
  18. 18. Metrics and key performance indicators *profitability of customers by demographic segments and segmentation of customers by profitability * campaign management * real-time dashboard on key operational metrics o overall equipment effectiveness * clickstream analysis on a website * key product portfolio trackers * marketing-channel analysis * sales-data analysi by product segments * callcenter metrics
  19. 19. Metrics and key performance indicators * turnover generated by segments of the customers - possibly using demographic filters * * outstanding balances held by segments of customers and terms of payment - possibly using demographic filters * collection of bad debts within customer relationships * demographic analysis of individuals (potential customers) applying to become customers, and the levels of approval, rejections and pending numbers * delinquency analysis of customers behind on payments
  20. 20. KPI Application Though the above list describes what a financialservice company might monitor, it could refer to a tele company or to any similar servicesector company
  21. 21. Examples of KPI's 'Net Revenue” is a typical enterprise KPI 'Unemployment Rate' is a typical government KPI In the Scorecard KPI's are represented by icon's -e.g. A VP of manufacturing may be interested in such items as : i. The no. of units produced ii.The no. of items that fail quality control iii.The amount of by-product generated iv.Raw materials inventory levels v.The current price of raw materials
  22. 22. KPI Display 1.each KPI is typically displayed as a symbol indicating the health of that particular number . e.g. the number of items that fail quality control might be 5o. If the company makes 2 million such items,then this % is acceptable. However, if the company were to make only 75 expensive items of the type,a failur of 50 items indicates a serious issue that must be addressed.
  23. 23. 1.KPI Display 2. KPI may be coloured (cassified into green/yellow/red), simile faces, guages, dials etc. 3. a dashboard indicates the status of performance at a particular point of time 4. a scorecard indicates progress over time
  24. 24. Typical Implementation Steps of BPM Step 1- Establish/Ascertain /Review-mission, vision and strategies Step 2- Identify/Clarify-objectives,core provisions Step 3- Design/Develop the Scorecard Step 4- Develop Strategy and Process Maps Step 5- Identify Business Performance Matrices(KPI's)
  25. 25. Typical Implementation Steps of BPM Step 6- Assess Risks Step 7- Monitor and Report matrices Step 8- Evaluate performance against Targets Step 9- Identify Mitigation/Enhancement Actions Step 10- Perform on going Review and feedback
  26. 26. Application software types People working in business intelligence have developed tools that ease the work of business performance management, especially when the business-intelligence task involves gathering and analyzing large amounts of unstructured data.
  27. 27. Items of generic importance include: 1. consistent and correct KPI-related data providing insights into operational aspects of a company 2. timely availability of KPI-related data 3. KPIs designed to directly reflect the efficiency and effectiveness of a business 4. information presented in a format which aids decision-making for management and decision-makers 5. ability to discern patterns or trends from organized information
  28. 28. Tool categories commonly used for business performance management include: * OLAP — online analytical processing, sometimes simply called "analytics" (based on dimensional analysis and the so-called "hypercube" or "cube") * scorecarding, dashboarding and data visualization * data warehouses * document warehouses * text mining * DM — data mining * BPO — business performance optimization * EPM — enterprise performance management * EIS — executive information systems * DSS — decision support systems * MIS — management information systems * SEMS — strategic enterprise management software
  29. 29. BPM Customer Expectations Goal-alignment Baseline Cost and risk Customer and stakeholder Metrics Measurement methodology Results
  30. 30. Enterprise Performance Mangement(EPM) a)Places control in the hands of the business users b)Enables organisational alignment, and c)Executes strategy The organisation can clearly define and communicate strategy and goals across the enterprise
  31. 31. BPM Tools a) Balanced Scorecards Navigate through organised scorecards,and Drill through performance b) Strategy and process Maps-create strategy and process maps -Communicate and visualise strategy and work processes -Link map to strategies, themes, matrices. Subprocesses or supporting resources
  32. 32. BPM Tools c) Business Performance Matrices Create detailed view of KPI's and business performance matrics, complete with status, trends, histotical data, supporting information and feature rich charts and graphs Align with other business processes by linking to strategic initiatives, risk elements and quality and process activities Large projects can easily be managed by creating KPI's and metrics in a central library to be reused throughout the organisation
  33. 33. Holistic View of BPM Corporate direction-vision,mission & strategies Balanced scorecards, dashboards and Matrices management Enterprise reporting Initiatives, plans and Projects Risk Management, and Other Advanced Approaches
  34. 34. Alternative Strategies for BPM Consulting A1. Use a versatile EPM software to facilitae and save time and cost A2. Use a custom designed EPM process to address client needs directly A3. Use a hybrid approach, incorporating both methods listed above
  35. 35. Highlights proposed softwares may include,'Corporater' -It has, scorcards,KPI dashboards,performance reports,Employee scorecards and more Flexibility to include context sensitive information e.g. the CEO's message Make the scorecard simple and easy to understand Make it visually appealing
  36. 36. Review of Presentation on BPM The BPM Suite: A) Balanced Scorecard-4 perspectives - financial - customer - internal processes - learning and growth BSC actions: . create strategy .create process maps .communicate .visualise strategy .visualise work processes .link maps to strategic themes .link maps to matrics .link maps to sub-processes or supporting resources
  37. 37. Review of Presentation on BPM B) Performance Dash Board 1. A rich mix of -initiatives -KPI's -numbers and inks for key performance information 2. Performance dash board enables -superior visualisation of performance info., and -acts as the gateway to the score cards
  38. 38. Review of Presentation on BPM 3.Results: - quick problem identification, through use of a combination of dynamic scorecards and strategic initiatives - thus it brings in more value for the time spent on analysing performance
  39. 39. Review of Presentation on BPM KPI's, Matrices, Measures: Use the KPI to, - design a simple and complex dashboard likeviews to, -create the flexibility or interchangeability -use standard models and adhoc models to enable the organisation to accurately measure business performance at different levels
  40. 40. Review of Presentation on BPM D) Initiatives Management -to drive management through actions -mange tasks and milestones -link objectives to initiatives -link objectives to KPI's and measures -standardise the process -communicate the process in meeting goals and milestones -track and monitor the human and financial resources used by your initiatives -focus your resources on initiatives that deliver the most value -create initiatives dashboard and scorecards that summarise the status of sub-objectives and initiatives
  41. 41. Review of Presentation on BPM E) Risk Management -manage factors that potentially stand in the way of meeting objectives, goals and targets by adjusting risks to your performance management for quick reference model -enhance the safety of your employees -protect property and environmentStregthen your brand reputation -assign risks to users e.g. risk may appear on user's 'MY Page'
  42. 42. Business Plan Template the Why-What-Who-When-How model
  43. 43. KPI trend for Ageing Analysis
  44. 44. Identify and enumerate all KPIs For each KPI, establish what is to be achieved by the use of this KPI # For each KPI, define the method of measurement # For each KPI, define what data will be used to measure and where that data is # For each KPI, define the algorithm that converts data to KPI # For each KPI, define the normalization or criteria # For each KPI, identify the organisational units to which the KPI applies # For each KPI, define the organisational reporting hierarchy
  45. 45. Identify and enumerate all KPIs * For each KPI, define the reporting requirements (table output, graphical output etc) * From the KPIs, identify and enumerate all data sources * For each data source establish how “live” the data is and define its input * For each data source establish the connection mechanism to its KPI object * As appropriate set up a data connection mechanism for the data source * Define an appropriate security model that will allow appropriate personnel access to appropriate data
  46. 46. Identify and enumerate all KPIs each KPI, define the reporting requirements (table output, graphical output etc) * From the KPIs, identify and enumerate all data sources * For each data source establish how “live” the data is and define its input * For each data source establish the connection mechanism to its KPI object * As appropriate set up a data connection mechanism for the data source * Define an appropriate security model that will allow appropriate personnel access to appropriate data
  47. 47. The BPM deployment waves touch upon all of the aspects of the organization that need to be dealt with to effectively change the culture. A sample scenario of waves is as follows: 1. Conduct general awareness sessions to explain what is coming and why. 2. Provide basic BPM project training focused on up-front definition and planning skills. 3. Introduce basic standard BPM project processes and templates. 4. Roll out BPM coaching services to help BPM project personnel utilize the training and templates effectively. 5. Align the rewards and recognition systems by tying a portion of the staff’s performance review and bonus criteria to thesuccessful implementation and use of the BPM project methodology.
  48. 48. The BPM deployment waves touch upon all of the aspects of the organization that need to be dealt with to effectively change the culture. A sample scenario of waves is as follows: . 6 Implement a document repository to hold the common processes, templates, best practices, standards, etc. 7.Reinforce management governance processes to ensure that senior and middle management are implementing the new initiative within their organizations. 8.Introduce ongoing and random project audits and periodic organization assessments. 9.Teach advanced BPM management classes focused on more sophisticated processes such as quality management, metrics management, risk management, etc. Support the new training concepts with more sophisticated processes and templates. 10.Build a BPM support organization to handle the BPM project methodology in the long-term.(this may be placed under the corporate planning or other centralised monitoring group) This work can be combined into three or four waves implemented over a period of time.
  49. 49. Summary Deploying Business Performance Management project processes and building capability in the organization requires much more than simply training the staff and then walking away. There is a process that must be followed to understand the work required to move the organization to your future vision. Once the work is understood, it should be divided into manageable project/phases to have a better chance of success. The smaller projects/phases are then implemented in successive waves on an ongoing basis throughout the organization.
  50. 50. Measure? * To determine how effectively and efficiently the process or service satisfies the customer. * To identify improvement opportunities. * To make decisions based on FACT and DATA
  51. 51. Measurements Should: * Translate customer expectations into goals. * Evaluate the quality of processes. * Track our improvement. * Focus our efforts on our customers. * Support our strategies.
  52. 52. T Targets * Targets need to be set for all measures * Should have a “solid basis” * Give personnel something for which to aim * If achieved will transform the organization * Careful not to develop measures/targets in a fragmented approach: i.e. Asking people to increase customer satisfaction has to be backed up with the knowledge, tools, and means to achieve that target.
  53. 53. The Leadership Team * Develops the division’s vision, strategy and goals * Develops organizational objectives and targets * Provides leadership, endorsement and vision for the project * Clears barriers to scorecard progress
  54. 54. The Core Team * Drafts the strategy map and scorecard * Works with employees to develop measures supporting strategic objectives * Works with the Leadership Team to plan and implement the Balanced Scorecard in the FAS Division
  55. 55. The Balanced Scorecard and The Big Picture * Activity Based Costing * Economic Value Added * Forecasting * Benchmarking * Market Research * Best Practices * Six Sigma * Statistical Process Control * Reengineering * ISO 9000 * Total Quality Management * Empowerment * Learning Organization * Self-Directed Work Teams * Change Management
  56. 56. PERSPECTIVES FINANCIAL/REGULATORY To satisfy our constituents, what financial & regulatory objectives must we accomplish? CUSTOMER To achieve our vision, what customer needs must we serve?
  57. 57. PERSPECTIVES INTERNAL To satisfy our customers and stakeholders, in which business Processes must we excel? LEARNING & GROWTH To achieve our goals, how must we learn, communicate and grow?
  58. 58. INTERNAL To satisfy our customers and stakeholders, in which business processes must we excel? LEARNING & GROWTH To achieve our goals, how must we learn, communicate and grow?
  59. 59. REFERENCES Kaplan, Robert and Norton, Edward. The Balanced Scorecard. Harvard Business Publishing, 1998 Kaplan, Robert and Norton, Edward. The Strategy-Focused Organization. Harvard Business Publishing, 2001 Buckingham, Marcus and Coffman, Curt. First, Break All the Rules The Gallup Organization, 1999 Brown, Mark. Keeping Score. Mark Graham Brown, 1996 http://www.afd.calpoly.edu/afd/Strategic_plan/ http://cqi.csusb.edu/

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