From Business Process Management
                              to Business Process Innovation
                            ...
Motivation



                                         Drivers for
                              Business Process Manageme...
How do you make a Cup of Coffee?




Wednesday, January 14, 2009
The Nescafé Process




Wednesday, January 14, 2009
The Espresso Machine Process




Wednesday, January 14, 2009
The Starbucks Process




Wednesday, January 14, 2009
BPM Questions




Wednesday, January 14, 2009
BPM Questions

              How do we design and communicate this process?




Wednesday, January 14, 2009
BPM Questions

              How do we design and communicate this process?
              How do we know that we perform...
BPM Questions

              How do we design and communicate this process?
              How do we know that we perform...
BPM Questions

                  How do we design and communicate this process?
             
                  How do we...
BPM Questions

                  How do we design and communicate this process?
             
                  How do we...
BPM Questions

               How do we design and communicate this process?
             
               How do we know ...
Process Life Cycle

     Business Process                Business Process
     Innovation                           Manage...
“Innovation is about
                 imposing a discipline of
                       value creation
                    i...
Wednesday, January 14, 2009
BPM and Business Value




                              Information   Business
                              Technology  ...
BPM and Business Value




                                            X
                              Information       B...
BPM and Business Value




                                                 X
                              Information   ...
Wednesday, January 14, 2009
Great!
                 Now What Do We
                   Do With It?

Wednesday, January 14, 2009
Process Innovation




                Project Autograph
                Usage-based Insurance
                Billing
   ...
Process Innovation




                Project Failed
                Lack of Standard Process
                Expensive T...
Learn from Outside




                Telecom Billing Process
                Free GPS
                Rate depends on mi...
Relationship between BPM and Strategy

          Financial           FINANCIAL

          Objectives are                  ...
Relationship between BPM and Strategy

          Financial           FINANCIAL

          Objectives are                  ...
Relationship between BPM and Strategy

          Financial           FINANCIAL

          Objectives are                  ...
Relationship between BPM and Strategy

          Financial           FINANCIAL

          Objectives are                  ...
The BPM Maturity Model

                                                                  Business Process Management
    ...
Customers don’t care about
          processes per se, but about
            their value proposition



Wednesday, January...
Is This Value?


Wednesday, January 14, 2009
Is This Value?


Wednesday, January 14, 2009
This is Value!


Wednesday, January 14, 2009
Underwriting On Demand



               Text2Insure
                      Provide Travel and Car Insurance via SMS
      ...
Process and Risk Management



                                    Process-oriented
                                    Ri...
Risk Management and BPM




          Compare Frew (2006)




Wednesday, January 14, 2009
Risk Management and BPM


                                BPM                    Risk Management
          Focus on provid...
Risk Management and BPM


                                BPM                    Risk Management
          Focus on provid...
From Core to Commodity: Recipe


               Treat the Process as a Service
               Define a Standard Interfac...
Takeaways


                                 BPM means two things:
                              Performance and Complianc...
From Business Process Management
                              to Business Process Innovation
                            ...
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From Process Management to Process Innovation

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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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