From Process Management to Process Innovation

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Slides for the SunGard Energy Webinar delivered on January 13th, 2009.

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From Process Management to Process Innovation

  1. 1. From Business Process Management to Business Process Innovation Michael zur Muehlen, Ph.D. Director, Center of Excellence for Business Process Innovation Stevens Institute of Technology Hoboken NJ Michael.zurMuehlen@stevens.edu www.sungard.com/energy Wednesday, January 14, 2009
  2. 2. Motivation Drivers for Business Process Management (BPM) Compliance Performance Mandated compliance (e.g. SOX) Business Process Improvement Desired compliance (e.g. ISO, ITIL) Engineering of Process-aware IS Wednesday, January 14, 2009
  3. 3. How do you make a Cup of Coffee? Wednesday, January 14, 2009
  4. 4. The Nescafé Process Wednesday, January 14, 2009
  5. 5. The Espresso Machine Process Wednesday, January 14, 2009
  6. 6. The Starbucks Process Wednesday, January 14, 2009
  7. 7. BPM Questions Wednesday, January 14, 2009
  8. 8. BPM Questions  How do we design and communicate this process? Wednesday, January 14, 2009
  9. 9. BPM Questions  How do we design and communicate this process?  How do we know that we perform this process well? Wednesday, January 14, 2009
  10. 10. BPM Questions  How do we design and communicate this process?  How do we know that we perform this process well?  How do we know that we manage this process well? Wednesday, January 14, 2009
  11. 11. BPM Questions How do we design and communicate this process?  How do we know that we perform this process well?  How do we know that we manage this process well?  How do we know that we maintain compliance?  Wednesday, January 14, 2009
  12. 12. BPM Questions How do we design and communicate this process?  How do we know that we perform this process well?  How do we know that we manage this process well?  How do we know that we maintain compliance?  How should we organize and govern process  improvement efforts? Wednesday, January 14, 2009
  13. 13. BPM Questions How do we design and communicate this process?  How do we know that we perform this process well?  How do we know that we manage this process well?  How do we know that we maintain compliance?  How should we organize and govern process  improvement efforts?  Which standards and technology are relevant? Wednesday, January 14, 2009
  14. 14. Process Life Cycle Business Process Business Process Innovation Management Business Process Business Process Monitoring Automation Wednesday, January 14, 2009
  15. 15. “Innovation is about imposing a discipline of value creation in an organization” Tom Koulopoulos Wednesday, January 14, 2009
  16. 16. Wednesday, January 14, 2009
  17. 17. BPM and Business Value Information Business Technology Value Wednesday, January 14, 2009
  18. 18. BPM and Business Value X Information Business Technology Value Wednesday, January 14, 2009
  19. 19. BPM and Business Value X Information Business Technology Value en ab les s te ea cr Process Change Wednesday, January 14, 2009
  20. 20. Wednesday, January 14, 2009
  21. 21. Great! Now What Do We Do With It? Wednesday, January 14, 2009
  22. 22. Process Innovation Project Autograph Usage-based Insurance Billing New Process New Technology New Value Proposition Wednesday, January 14, 2009
  23. 23. Process Innovation Project Failed Lack of Standard Process Expensive Technology Customers not ready Wednesday, January 14, 2009
  24. 24. Learn from Outside Telecom Billing Process Free GPS Rate depends on mileage driven Industry-strength Billing Process Wednesday, January 14, 2009
  25. 25. Relationship between BPM and Strategy Financial FINANCIAL Objectives are Primary Objectives Paramount Wednesday, January 14, 2009
  26. 26. Relationship between BPM and Strategy Financial FINANCIAL Objectives are Primary Objectives Paramount CUSTOMER Customers Seek Value Value Proposition and Pay for it Wednesday, January 14, 2009
  27. 27. Relationship between BPM and Strategy Financial FINANCIAL Objectives are Primary Objectives Paramount CUSTOMER Customers Seek Value Value Proposition and Pay for it PROCESS Processes Enable Value Regulatory / Innovation Operations Customer Social Creation Wednesday, January 14, 2009
  28. 28. Relationship between BPM and Strategy Financial FINANCIAL Objectives are Primary Objectives Paramount CUSTOMER Customers Seek Value Value Proposition and Pay for it PROCESS Processes Enable Value Regulatory / Innovation Operations Customer Social Creation Strategic Change Strategic Job Agenda IT Families LEARNING & GROWTH Processes shape and are shaped Human Information Organization Capital Capital Capital by maturity Wednesday, January 14, 2009
  29. 29. The BPM Maturity Model Business Process Management Maturity Strategic Governance Method IT People Culture Alignment Process Process Roles and Process Design & Process Design & Process Skills & Process Values & Improvement Plan Responsibilities Modeling Modeling Expertise Beliefs Process Process Strategy & Process Decision Making Process Education & Process Attitudes & Implementation & Implementation & Capability Linkage Processes Learning Behaviors Executions Executions Process Metrics & Process Process Control & Process Control & Responsiveness to Performance Collaboration & Process Architecture Measurement Measurement Process Change Linkage Communication Process Process Process Process Output Leadership Management Improvement & Improvement & Process Knowledge Measurement Attention to Process Standards Innovation Innovation Process Process Project & Process Project & Process Process Customers Process Social Management Program Program Management & Stakeholders Networks Controls Management Management Leaders Source: Rosemann & DeBruin 2006 Wednesday, January 14, 2009
  30. 30. Customers don’t care about processes per se, but about their value proposition Wednesday, January 14, 2009
  31. 31. Is This Value? Wednesday, January 14, 2009
  32. 32. Is This Value? Wednesday, January 14, 2009
  33. 33. This is Value! Wednesday, January 14, 2009
  34. 34. Underwriting On Demand Text2Insure Provide Travel and Car Insurance via SMS Provides Quote within 60 seconds Reply “BUY” Call from agent within 10 min for payment details Cover2go Accidental Death Insurance Fees taken from cell phone bill Wednesday, January 14, 2009
  35. 35. Process and Risk Management Process-oriented Risk Management Process Risk Risk-oriented Process Management Wednesday, January 14, 2009
  36. 36. Risk Management and BPM Compare Frew (2006) Wednesday, January 14, 2009
  37. 37. Risk Management and BPM BPM Risk Management Focus on providing value for Focus on ensuring value for stakeholders stakeholders Performance depends on effectiveness Risk is an inherent property of of business processes business processes Performance is influenced by process Risk is mitigated by process design design Feedback is obtained through Feedback is obtained through Risk Performance Indicators assigned to Indicators assigned to systems and systems and processes processes Performance objectives are achieved Risk is mitigated through optimized through optimized processes processes Compare Frew (2006) Wednesday, January 14, 2009
  38. 38. Risk Management and BPM BPM Risk Management Focus on providing value for Focus on ensuring value for stakeholders stakeholders Performance depends on effectiveness Risk is an inherent property of of business processes business processes Performance is influenced by process Risk is mitigated by process design design Feedback is obtained through Feedback is obtained through Risk Performance Indicators assigned to Indicators assigned to systems and systems and processes processes Performance objectives are achieved Risk is mitigated through optimized through optimized processes processes Compare Frew (2006) Wednesday, January 14, 2009
  39. 39. From Core to Commodity: Recipe  Treat the Process as a Service  Define a Standard Interface  Create Value at the Front-End  BPM enables OpRisk Management  Compliance can be an Asset Wednesday, January 14, 2009
  40. 40. Takeaways BPM means two things: Performance and Compliance  Processes define services  Processes are services  Core processes can become commodities  Process management creates problem solvers  Industrialized processes enable innovation Wednesday, January 14, 2009
  41. 41. From Business Process Management to Business Process Innovation Michael zur Muehlen, Ph.D. Center of Excellence in Business Process Innovation Howe School of Technology Management Stevens Institute of Technology Castle Point on the Hudson Hoboken, NJ 07030 Phone: +1 (201) 216-8293 Fax: +1 (201) 216-5385 E-mail: Michael.zurMuehlen@stevens.edu Web: http://www.cebpi.org www.sungard.com/energy Wednesday, January 14, 2009

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